Finance Committee on Oct. 16th, 2006

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Okay. How about switch green?

[Pierre Sadik]

I haven't seen switch green introduced anywhere. In essence, it supplies that model to the Energy Star appliances we're all familiar with. But where there is currently a small price gap between the efficient Energy Star appliance and the inefficient non-Energy Star model, we try to bridge the price gap.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

If I buy an appliance now in Canada, a fridge, a freezer, or something like that, will it have an EnerGuide label? There's a sticker on it that tells me what the anticipated cost is going to be. Is that correct?

[Pierre Sadik]

That's right. EnerGuide will tell you what the electricity performance is of every model, and Energy Star is a label that certain efficient models receive.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Okay. Am I good for another one?

[The Chair, Conservative, Brian Pallister]

You have twenty seconds.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Very quickly, then, Mr. Epale, you've given us a lot to think about here. It's really important stuff, and it's something that I think a lot of us really agree with.

Very simply, is it safe to say this? The House of Commons recently passed Bill C-293, which made poverty the goal of foreign ODA. Is making the goal of the eradication of poverty a good place to start?

[The Chair, Conservative, Brian Pallister]

I'm sorry, sir, but time has elapsed.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Yes or no, Mr. Chair?

[The Chair, Conservative, Brian Pallister]

We'll continue.

In regard to Mr. Savage's comment on the question about what would happen if the wind stopped, I'd suggest that we might consider Parliament Hill to be a good location for the next wind farm.

We'll move on to Monsieur Paquette, pour cinq minutes.

[Pierre Paquette, Bloc, Joliette, QC]

Thank you, Mr. Chair.

I would like to begin with the Canadian Council of Professional Engineers. I note that you commended the commitment made by the government in its last budget with respect to consulting key stakeholders on the establishment of an agency to assess foreign credentials.

To my knowledge, the professional associations fall within the responsibility of the provinces. In your opinion, what point would there be in having an additional participant -- namely, the federal government -- involved in this highly complex issue? As you well know, we've been talking about it for many decades. What point would there be in getting the federal government involved and what could it bring to the process?

[Marie Lemay]

This is an extremely complex issue that involves a number of levels of responsibility, since it's connected to immigration, employment, and the provinces. Where regulated professions are concerned, the professional associations become additional stakeholders. So there is a wide mix of stakeholders who are all extremely important.

We support this action, because as far as engineers are concerned, we have already begun a process aimed at bringing all the stakeholders together at the same table: the professional associations, national representatives, including our organizations, representatives of provincial and federal governments, and immigration agencies. By bringing all of these people together, we have succeeded in finding solutions which we are in the process of implementing.

It is a real challenge, because it's a problem that takes a long time to resolve. We will not see the impact of the solutions currently being implemented for a number of years. But we must be patient and sustain our efforts. The federal government is another player, because you simply can't ignore immigration; it's a reality.

[Pierre Paquette, Bloc, Joliette, QC]

In Quebec, though, the provincial government plays a role, as a result of its agreement, that the other provinces do not.

[Marie Lemay]

Yes, that's absolutely correct.

[Pierre Paquette, Bloc, Joliette, QC]

I doubt that we will simplify the process if we add another player. In any case, I wish you the best of luck, because I realize how difficult it is.

I have a question now for Mr. Szmurlo from Enbridge Inc.

You referred to two programs that have been abolished: the Wind Power Production Incentive, or WPPI, and the Renewable Power Production Incentive, or RPPI.

When were they abolished and by which government?

You go on to say this:

Should the government decide to introduce tax-based fiscal incentives for WPPI and alternative energy technologies, rather than the contribution-based incentives offered in the past, it would be important to ensure the incentives are not dependent on the taxation status of the investors.

I certainly understand what you mean; in other words, rather than providing cash contributions, people would be given a tax credit. But what does that have to do with the taxation status of the investors?

You then conclude by saying:

Refundability of earned tax credits, which are provided to some tax incentives for research and development, would resolve that shortcoming.

A number of organizations have come here to complain about the fact that tax incentives for research and development are not refundable. Can you tell me what exactly you're referring to here?

[Chuck Szmurlo]

The incentive programs have not necessarily been abolished, but they're under review. We would hope that this review would result in the incentives being reinstated, as they have been in previous years, taking on the same form and nature as the previous wind power production incentive.

With respect to the fiscal status of the companies involved, I think the industry would be best served if the tax status of those companies were irrelevant to the amount of incentive they get. It might be best for Enbridge if there were a tax-based thing that depended on taxability. We're currently taxable. But from the industry's perspective, it would be better if all people were allowed to compete for wind power projects, including those who aren't currently taxable. Even for a company like Enbridge, it's not always beneficial to have a program that's tax-based. For instance, in the United States, we do not participate in wind power projects, because the U.S. incentive is tax based rather than cashflow based, as the wind power production incentive is, and we don't happen to be taxable at the moment in the United States. So we would argue for a level playing field, with all corporations, big and small, taxable and non-taxable, receiving the same sort of incentive.

[The Chair, Conservative, Brian Pallister]

Mr. Dykstra.

[Rick Dykstra, Conservative, St. Catharines, ON]

I wanted to follow up on a question that Mr. McKay asked Ms. Zimmerman with respect to the depth or breadth of the program you've presented here today. Maybe you could speak about whether it's just grapes or whether it extends further than that. We'd also like to hear about the provinces that potentially benefit from the program.

[Debbie Zimmerman]

I wanted to answer the honourable John McKay directly by suggesting that this program we're proposing for grapes will actually pay for the tender fruit and apples as well. The tax is generated from the grapes that go into wine. This is a huge value to the Government of Canada and the Government of Ontario.

To answer the second part of your question, the program affects six provinces in Canada: B.C., Quebec, Nova Scotia, Prince Edward Island, and Ontario, which is the largest player and the largest take in the industry. The majority of the land is tender fruit, apples and grapes.

I'll give you an example. A thousand acres of juice grapes, if transitioned into the higher-quality grapes, will produce $5 million in revenue to the federal government. We're asking the federal government to commit $3 million each year for the next seven years. That's a pretty good return on investment: you invest $3 million and in one year you get $5 million back. This will pay for the transition of the apple industry in Quebec, Nova Scotia, Prince Edward Island, B.C., and Ontario. At the same time, it will assist us, as grape growers, to transition to a higher-quality grape that will provide all of us—all of us—with more taxes to spend in the future.

[Rick Dykstra, Conservative, St. Catharines, ON]

You referred to the program in 1989. I wonder if you could just clarify for us the difference between the pull-out program in 1989 and the program you're recommending or suggesting now.

[Debbie Zimmerman]

Thank you very much.

Again, it's interesting to look at the statistics on the 1989 pull-out program, which was established to transition the grape industry. If anybody remembers the varietals that then went into--and I'm sure nobody in this room drank Baby Duck, or at least won't admit to it....

[Voices]

Oh, oh!

[Debbie Zimmerman]

But I think that clearly, the industry went from $2.5 million in 1989 to $53 million today because of the investment the federal government made in pulling out the grapes, actually pulling the grapes out, and paying the growers. What we're suggesting today is that you're going to help us put the higher-quality grapes back into the ground. We're asking you for one-sixth of what it costs to transition to a grape variety pull-out program, or a grape transition. We don't call it “pull-out” anymore, and that's the distinction. It's a transition into planting vines, rather than pulling them out and being paid to get out of the industry.

[Rick Dykstra, Conservative, St. Catharines, ON]

One of the successes, I guess, in terms of the industry right now--you spoke a little bit about Ontario--is that the industry, from a grape perspective and a wine perspective, is flourishing in British Columbia. How would they benefit from the program, based on the success they're having right now?

[Debbie Zimmerman]

B.C. has had a provincial government program for fifteen years already. What they're asking for, particularly for their apple industry, is to transition to a varietal that's more competitive on the world market.

Part of our challenge as well, and I used the statistics earlier about France, Italy, Australia, and New Zealand, is that they're out-competing us on the world stage. We're asking the government to invest in our marketplace to make us as competitive.

I could answer all the questions you've asked all the presenters today. We will and are prepared to enter into a public-private partnerships where the return on the investment goes back to the Government of Ontario. We use wind machines to offset weather conditions. We are environmentally friendly. And you know what, we want to be competitive, and we're asking for an opportunity to do that with an investment from the federal government. It would also require the provincial government's support.