Finance Committee on Oct. 22nd, 2009

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

So if we're going to target, digital media is one area to concentrate on.

[Dr. Sara Diamond]

Yes, and we should also target design. It uses digital tools, but it's very much across the sector.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Okay.

Councillor Carroll, it's good to see you again. Thank you for your comments.

[Shelley Carroll]

Yes, I apologize.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

I represent the city of Mississauga, which, as you know, is part of the GTA. Additional funding for GO Transit, Union Station, VIA Rail improvements, the Toronto-York Spadina subway extension—I hope all of these things were helpful and a step in the right direction.

[Shelley Carroll]

Absolutely.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Thank you.

With respect to a national strategy, are you talking about more money for transportation, or is there more to it than that? Every city has different transportation problems.

[Shelley Carroll]

We are talking about more than that. All those expenditures are welcome. That program, which falls under Metrolinx, remains about $40 billion underfunded. It's because of the one-time nature of it that we always fall a bit short of completing the plan.

We remain the only G-8 country without a national transit strategy, which is an ongoing comprehensive plan that leads to a national economic development strategy. It is centred on economic hubs having coordinated transit strategies that get people to and from work and allow cities to grow around the hubs.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Are you suggesting that the federal government get in the business of deciding what modes of transportation are used and where that money should be placed? Or should it just be left with the cities to decide?

[Shelley Carroll]

I think the strategy could be, again, a small policy exercise. I think there are many models. We need to move quickly. There are many models for you to look at, similar to health.

Yes, there's a provincial role to be played in terms of looking at economic regions and the economic distribution of your dollars. But it's clear that investment in transit gets you there, both in terms of building employment centres and in terms of building healthy cities. Cities can play a tremendous role.

For all those transit gifts you're sending us, we are adding either matching dollars or two-thirds dollars. So we're making that contribution. With our money and our residents' money, we're saying that with a predictable, long-term commitment from both other orders of government, you would really begin to see Canada's large cities flower internationally.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you.

I know that we're well over time, but I think the Liberals are going to give Mr. Menzies an opportunity to ask a question or two.

[Ted Menzies, Conservative, Macleod, AB]

That is so kind of you, John. Thank you.

I will be very succinct here.

I think we need to recognize Mr. Frew's contribution today in coming to Toronto.

The last time we had a pre-budget consultation with Minister Flaherty, the Canadian Cattlemen's Association sent someone all the way from Saskatchewan to present in Toronto. It's interesting, because at that time, we were still dealing more with BSE issues than we were with the hog industry.

It's certainly a stacking of challenges you're facing. We've tried to put into place something that's effective. I know that dollars for an exit strategy seems like a last-ditch effort to try to salvage an industry.

I'm very interested in what your proposal is here, but has the Canadian Pork Council, Martin Rice et al., looked at this? Are they supportive of it? Does it make sense to them?

[Andrew Frew]

Again, for most of the members, I think the original ask from the CPC was for $30 a hog. I believe, Mr. Menzies, you would likely have seen that.

That was fair value. The way we derived our formula was that we extrapolated from the $30 a hog based on what we've been told. We work with members of Parliament in our area, who say, “Don't come to this government with a problem, come with a solution.” So over many nights, we ran through some numbers. Yes, the numbers are for Ontario, and I can appreciate that this is a federal committee. Could this work? Probably eastern Canada would have common numbers or western Canada would have common numbers.

The pork industry has supported this economy. We talk about infrastructure dollars. That's out of our pockets. I was at a meeting the other day, and--without using numbers--a farmer stood up and said that he has lost x dollars. Everything he has done since the day he started farming he has borrowed against. If he walks away tomorrow, he walks away with zero. He's in good shape compared to a lot of the industry.

I'm not here to criticize the programs that were announced. I don't think there's enough time today to deal with that. But the hog industry, I think, actually deserves more respect than it has gotten.

My opening quote sat on the wall in the office for years. I always said that if I ever make an important presentation, I think I'll use it.

We in this country have to decide whether we are going to produce our own food. Yes, we export food, but we've shown the numbers and the value. In 2005, there was a grains and oilseeds payment. It was a big number--$800 million and some.

I believe you're a grain farmer from the west, Mr. Menzies.

[Ted Menzies, Conservative, Macleod, AB]

You've done your homework.

[Andrew Frew]

You were competing with the U.S. Farm Bill, and you couldn't sell.... I'm going to take a stab here, but you were selling barley for $80 a tonne, and you might have had to truck it to a terminal elevator out of your pocket too?

[Ted Menzies, Conservative, Macleod, AB]

Yes.

[Andrew Frew]

To answer the previous question, why do we have so many hogs? There were too many people who could make money in the hog industry buying grain at less than the cost of production. In Chinese production--not to pick on China--or in other countries, it was cheaper for them to raise the hogs by subsidized world grain and grow them. That's changing.

Four years ago we could buy corn...and we sell corn. We took this hit four years ago in the grains and oilseeds sector. A farmer who just raised hogs, whether in Ontario, in the States, or anywhere in the world, couldn't not make money raising hogs. When you're buying corn at $120 a tonne, let's say, and that was a pretty good number, and turn around and sell that pig for.... Corn today is worth $190. Those people who just buy it to value-add, that money is not going to be there. Farms like ours that are value-added--we grow the grain, we feed it, we use manure to fertilize--we've dug deep pockets. The hole just can't get any deeper.

With respect to the City of Toronto, I believe the GTA has one of the biggest food processing networks in the world. Burlington has half our hog slaughter in the province. If we can't provide 100,000 hogs again in Ontario numbers, we can't keep Burlington, or Quality; or somebody has to close. Then we're going to be in this situation again.

I really think farmers have subsidized cheap food for too many years in this country, and we need help now.

Thank you.

[Ted Menzies, Conservative, Macleod, AB]

Thanks for getting that on the record.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. Menzies.

Thank you all for coming this morning. I apologize, because we did keep you here a little longer than expected. We thank you all for your presentations, your responses to all our questions, and the information you provided. It was a very interesting panel.

Colleagues, we'll see you back here in less than 45 minutes, please, for our 1:30 panel.

Thank you.

[The Vice-Chair, Liberal, Massimo Pacetti]

Good afternoon. We're here for pre-budget consultations.

Look who's the chair, yes; I'm here replacing the normal chair. He will be absent for about 30 minutes, so please bear with me.

As our chair said earlier, this is our last city in our multiple-city visit. I hope you can enlighten us and keep us interested in what you have to say. The challenge is on all the witnesses. You've been told that you have five minutes for your presentations.

We're here pursuant to Standing Order 83.1, pre-budget consultations for 2009.

I'm going to ask that everybody keep it to five minutes. When there's a minute left, I'll try to indicate that you have a minute left.

We will be starting with the Toronto Board of Trade. The second group will be Holcim Canada Inc., and then it will be the Economics of Technology Working Group.

Then the fourth witness will be the Tax Executives Institute; the fifth, Mr. MacDonald; the sixth, the Woodcliffe Corporation; and the seventh, Opera.ca.

Ms. Wilding, five minutes, please.

[Carol Wilding, President and Chief Executive Officer, Toronto Board of Trade]

I'm Carol Wilding, and I'm the president and CEO of the Toronto Board of Trade. With me is Mr. Brian Zeiler-Kligman, our director of policy.

Thank you for the opportunity this afternoon.

As a quick background, founded in 1845, the Toronto Board of Trade is Canada's largest chamber of commerce, connecting 10,000 members and more than 200,000 business professionals and influencers throughout the Toronto region. We advance the success of our members in the entire region by facilitating opportunities for knowledge sharing, networking, business development, and city building. At the outset I want to emphasize that Canada's cities, particularly Toronto, are critical to our economic success.

Last year the Competition Policy Review Panel noted the importance of Canada's cities to our global competitiveness. As we look to strengthen the current economic recovery, the federal government needs to recognize and support Canada's cities as economic drivers for the entire country.

The board has three recommendations for the 2010 budget: first, the development of a national transit strategy; second, further assistance with programs and supports for integrating foreign-trained professionals; and third, coordinated federal and provincial green economy strategies.

Our first recommendation is the development of a national transit strategy. The board commends the significant contributions this government has made to Canada's public transit systems, investments that are unmatched in recent memory. The gas tax fund, which this government made permanent in 2007, is the first permanent federal transfer to municipalities for infrastructure investment. Substantial money has also been devoted to public transit under such programs as the Building Canada fund. Since 2007 over $2 billion has been committed to transit projects in the greater Toronto region alone. As a result of these actions, federal capital contributions for transit have gone from no funds in 2001 to nearly 25% of all capital contributions in 2007.

The board is encouraged that the federal government is investing in our transit system, but these capital contributions have come through one-off announcements rather than as part of any formal strategy. With the amounts currently being invested, the federal government is essentially spending close to what would be needed under a national transit strategy but without gaining the recognition for investments that would come from a clearly articulated strategy and without providing municipalities with certainty regarding the funding.

The board's proposal, set out in our submission, builds on the gas tax fund and it would be distributed based on population and ridership. The monetary request is based on the Canadian Urban Transit Association's calculations of needed investment in our transit system.

The board's second recommendation concerns the integration of foreign-trained professionals. Failure to integrate our skilled immigrants has economic impacts on the entire country. An RBC Financial Group study found that if immigrants had the same likelihood of employment at the same average income as native-born Canadians, personal income would be $13 billion higher and there would be almost 400,000 net new workers.

The federal government has recognized the need to be involved in this area. The Canada-Ontario immigration agreement is a landmark agreement. To date nearly one-third of the funds have not been spent, largely as a result of capacity constraints, with nearly half of the $920 million committed by the federal government to be flowed this year. The board urges that these remaining funds flow quickly and effectively.

The next Canada-Ontario immigration agreement should include timelines for spending funds and penalties for the failure to do so. It should also direct funds towards the creation of a suite of programs and support for employers, particularly small and medium-sized businesses, for the recruitment and retention of foreign-trained professionals.

Finally, the green economy represents enormous opportunities for Canadian companies. We are moving to a lower-carbon world. Massive amounts will be spent worldwide in future years on green technologies and other innovative services, and we must seize the opportunities for Canada.

The federal and provincial governments should build on the tremendous synergy conveyed through their respective 2009 economic stimulus packages by exploring the advancement of coordinated legislative, regulatory, and fiscal policies to advance a green economy strategy. This recommendation emerged from the greater Toronto region economic summit, which was held by the board of trade last May and attended by over 250 delegates, including a number of federal officials, such as Senator Art Eggleton and Hon. Jim Flaherty.

That concludes our recommendations. We'd be happy to answer any questions.

[The Vice-Chair, Liberal, Massimo Pacetti]

Great, thank you. It was right on time.

Mr. Galloway, please, from Holcim Canada.

[Bill Galloway, Senior Vice-President, Government Affairs, Holcim Canada Inc.]

Thank you, Mr. Chairman, and thank you, members of the committee.

I'm here today with Angela Burton, who is our vice-president of communications and public affairs. I'm senior vice-president with Holcim Canada.

Before I move on to talk about our recommendations, I'd like to take a moment to review the history of Holcim and make you a little more familiar with Holcim Canada. We entered Canada in 1951 and we built our first cement plant in Quebec City. We were really drawn to Canada, and as a company based on the St. Lawrence Seaway, we used St. Lawrence as our company name.

Since then, through various investments and strategic acquisitions, we built a plant in Mississauga, Ontario. We are now one of the largest vertically integrated building supply companies in Canada with more than $1.3 billion revenue in 2008. We're owned by a Swiss company called Holcim. Holcim operates in 70 countries around the world and has 85,000 employees.

In 2009 we became a private company. Although Holcim is traded publicly worldwide, we're private and wholly owned by Holcim. We took the Holcim brand name to trade globally in cement. You know it locally here as Dufferin in the construction aggregate and concrete sectors, and you would know it locally in Quebec as De-Mix .

Naturally, infrastructure is very important to us, and the overall results of our restructuring of our economy as a result of the recession is very important to us as a company and very important to our employees. After a decade of strong performance, it's very important that government has engaged and continues to engage to ensure that companies like our own are able to survive through this significant restructuring of our economy.

As outlined in the submission, the U.S. recession has really prompted a lot of the impact that we've seen in Canada and we've seen as part of Holcim. One example is that the Detroit-Cleveland market is a natural market for a company like Holcim coming out of Mississauga, but to try to search out and react to the lack of demand in the U.S., we are now shipping cement from both Mississauga and Joliette to anywhere from Newfoundland to Alberta. Even with that we're down roughly 30% in volume over the course of this year.

We also believe that the Government of Canada has to stay the course. We're very happy with what has transpired with the infrastructure programs and the work that is being done on cap and trade. I think if we can stay the course by maintaining, accelerating, and supplementing these existing programs that are already up and running and proving successful, it will be beneficial to a company like Holcim and beneficial to Canada.

Our first recommendation does deal with tax. We would like to see extending the temporary 50% straight-line accelerated capital cost allowance rate to manufacturing or processing machinery and equipment acquired in 2010 and 2011. This provides real tangible support. Accelerating payback delivers significant tax relief and translates into measurable improvements in cash flow.

Additional measures, such as adjustments to payroll taxes, providing temporary super deductions for contributions to meet the unfunded pension liabilities, and favourable tax treatment for trust funding for post-retirement health care benefits would provide important additional support.

Last on the tax front, expanding the scope of scientific research and experimental development into areas such as environment and resource conservation would not only support companies financially but would also make a significant contribution to meeting our environmental objectives.

Moving on to infrastructure, we have seen infrastructure work in the past....

We're getting close?

[The Vice-Chair, Liberal, Massimo Pacetti]

We're done. Thank you. You missed the one-minute sign.

We'll move to the Economics of Technology Working Group, Mr. Rosenberg.