Evidence of meeting #33 for Finance in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was infrastructure.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Mark McQueen  Board Director, President and Chief Executive Officer of Wellington Financial, Canada's Venture Capital and Private Equity Association
  • John Gamble  President, Association of Consulting Engineering Companies
  • Susie Grynol  Vice-President, Policy and Public Affairs, Association of Consulting Engineering Companies
  • Claude Lajeunesse  President and Chief Executive Officer, Aerospace Industries Association of Canada
  • Robert Simonds  President, Canadian Association of Fire Chiefs
  • Geoff Smith  Director, Governement Relations, Canadian Electricity Association
  • Richard Rémillard  Executive Director, Canada's Venture Capital and Private Equity Association
  • Jayson Myers  President and Chief Executive Officer, National Office, Canadian Manufacturers and Exporters
  • Michel Arnold  Executive Director, Option consommateurs
  • Anu Bose  Head, Ottawa Office, Option consommateurs
  • Vaughan Dowie  Executive Head of Public Affairs, McGill University
  • Mark Cohon  Commissioner, Canadian Football League, 100th Anniversary Grey Cup Festival
  • Chris Rudge  Chairman and Chief Executive Officer, 100th Anniversary Grey Cup Festival
  • Michael Clemons  Representative, 100th Anniversary Grey Cup Festival
  • Barbara Cameron  Associate Professor, York University, Centre for Feminist Research
  • Kathleen Lahey  Faculty of Law, Queens University, Centre for Feminist Research
  • Jean-Michel Laurin  Vice-President, Global Business Policy, Canadian Manufacturers and Exporters
  • Sandra Crocker  Assistant Vice-Principal, Research and International Affairs, McGill University

4:55 p.m.

President, Canadian Association of Fire Chiefs

Robert Simonds

Certainly, that is a valid consideration. We recognize that in any organization, with the bell curve, you have those who are contributing much more than those who perhaps are not contributing as much. In our discussions with the senior officials from the finance department, we have spoken about a variety of considerations to recognize those graduated service provisions.

At this juncture, because we've been before government since 2003 with this, our sense of urgency is to get that recognition for the volunteer firefighters. And we have great flexibility in terms of how we can achieve that.

4:55 p.m.

Conservative

The Chair James Rajotte

Thank you.

I just have one clarification, and then we do have to change the panels. I was just asked to clarify, Mr. Lajeunesse, when you mentioned a $12 billion figure. Is this a goal, is this assigned, and this was stated to you by whom? Who stated the $12 billion figure?

4:55 p.m.

President and Chief Executive Officer, Aerospace Industries Association of Canada

Claude Lajeunesse

Minister MacKay and the employees within the Department of National Defence have all advanced that figure as a target that was absolutely reasonable and reachable.

4:55 p.m.

Conservative

The Chair James Rajotte

So it's a target. There is nothing written down and there is no--

4:55 p.m.

President and Chief Executive Officer, Aerospace Industries Association of Canada

Claude Lajeunesse

No. This is not a traditional IRB program. There is no guarantee of that. The only guarantee is the past, as I mentioned. The past is the guarantee of the future, and our company has exported 80% of its wares. It will continue to do that and it will be successful. It is the most innovative in the world.

4:55 p.m.

Conservative

The Chair James Rajotte

Okay. I thank you for that clarification.

I want to thank all of you for your presentations and your responses to our questions.

We do have to do a very quick turnover with the panels, so, colleagues, we will suspend for a couple of minutes and bring the next panel forward.

Thank you.

5 p.m.

Conservative

The Chair James Rajotte

I'll call the meeting to order again. I will ask colleagues and witnesses to please take their seats.

Just for members' information, and also for the information of our guests, unfortunately, we do have votes, at least three of them, at six o'clock. The bells will ring at 5:30 p.m. I'm hoping, if we get unanimous consent, that we can have the committee sit as close to 6 p.m. as possible, but we will be interrupted by votes at that time. I just want to make sure members are aware of that.

We have with us five organizations: the Canadian Manufacturers and Exporters, Option consommateurs, McGill University, 100th Anniversary Grey Cup Festival--some of you may have noticed the Grey Cup in the room--and we have the Centre for Feminist Research.

Thank you all for being with us here today.

We will start with Mr. Myers from the Canadian Manufacturers and Exporters. You each have five minutes maximum for an opening statement.

5 p.m.

Dr. Jayson Myers President and Chief Executive Officer, National Office, Canadian Manufacturers and Exporters

Thanks very much, Mr. Chairman.

You have a copy of our pre-budget submission. It recommends four major tax measures that we think would help to encourage investment in productive assets in research and development, new machinery and equipment, new technology, and workplace training, as well as a tax credit that we think would facilitate compliance with regulatory initiatives.

These are extremely important tax measures, we think, particularly for manufacturers and exporters, the leading sector in terms of productivity growth, the leading edge of competitiveness, the group that does 75% of our R and D and that brings 90% of our new products to market. Also, these are important tax measures for encouraging investment, innovation, productivity growth, and economic growth for the Canadian economy as a whole to sustain standards of living and to pay for all of the other social services and public services that Canadians expect and receive.

What I wanted to share with you today very quickly is the analysis upon which our recommendations are based in a series of graphs, one showing the track of business investment in R and D and business investment in new machinery and equipment, but the most important thing here are these graphs on page 2 of the handout.

This really shows the importance of cashflow for business. It's cashflow that drives R and D spending, and it's cashflow that drives investment in new technology. For me, as an economist, if you can see a relationship on a graph...you'd know that it's a very close relationship here, but it's also a very consistent relationship in that businesses and manufacturers in Canada spend a fairly consistent share of their cash in terms of new technology and R and D.

For public policy, if we are going to strengthen that performance, what we have to do is take measures to leave more money in the hands of the companies that are making these investments by boosting cashflow through tax measures that also increase the rate of return and make these investments more attractive. This is the analysis that stands behind our recommendations.

Both myself and Jean-Michel Laurin, who's accompanying me--Jean-Michel is our vice-president of global business issues--would be happy to answer any questions.

5:05 p.m.

Conservative

The Chair James Rajotte

Thank you very much for your presentation.

Now we have Option consommateurs.

5:05 p.m.

Michel Arnold Executive Director, Option consommateurs

Mr. Chair, ladies and gentlemen, I am the Executive Director of Option consommateurs. Today, I have with me Ms. Anu Bose, who looks after our Ottawa office.

I would like to thank you for giving us the opportunity to provide our observations and recommendations for the 2011 budget.

Option consommateurs is a not-for-profit association based in Montreal whose mission is to promote and defend the basic rights of consumers and ensure that they are respected. Each year, we meet hundreds of consumers for whom the direction of and the decisions made in the budget have very concrete implications. We have shared our recommendations with you in a brief we submitted last August. Today, we would like to present some of them to you.

5:05 p.m.

Anu Bose Head, Ottawa Office, Option consommateurs

Our submission in August was based on more optimistic forecasts of recovery.

In his speech to the Windsor–Essex Chamber of Commerce, Bank of Canada Governor Mark Carney indicated that even though our recovery was far stronger than that of our G-7 peers, it was due largely to short-term recovery in housing and consumer spending and to the federal government's two-year stimulus program.

Consumer spending and government spending are not expected to provide the same degree of stimulus to the economy as before. The Conference Board of Canada recently reported that the consumer confidence index fell for the fourth straight month. Currently it is at 18.5 points below where it stood in January, when the recovery was stronger.

5:05 p.m.

Executive Director, Option consommateurs

Michel Arnold

Canadian households are carrying an increasing amount of personal debt. Debt as a proportion of disposable income of Canadian households has reached a high of 146% in the first quarter of this year. This means that for every dollar earned, a Canadian household owes $1.46. Meanwhile, the rate of personal bankruptcies has increased significantly. According to the latest report from the Certified General Accountants Association of Canada (CGA), it rose from 20.5 per 10,000 inhabitants in 1990 to 56.6 in 2010. Today, many families are afraid of being unable to repay their mortgages or to meet their other obligations. Obviously, this has an impact on their behaviour as consumers. Consumer spending accounts for more than 60% of Canada’s GDP.

The same report by the CGA noted that households are increasingly using credit to buy the same quantity of durable goods and more likely to use credit to finance their current consumption. The situation of vulnerable consumers is more troubling. By this we mean the unemployed, working poor, single parent families, seniors and students.

In Canada, the recovery in employment is modest. According to Mr. Carney, if the country has regained all of the 400,000 jobs lost during the recession, this statistic should be interpreted with caution as often many of the jobs generated are part-time. Furthermore, well-paid jobs in manufacturing are now a thing of the past.

According to the demographics, an aging population will result in increased spending for health care, retirement benefits and other benefits for these citizens. Retirement incomes have been adversely affected by the economic downturn, even in the middle class seniors with savings. In addition, older workers have difficulty finding employment. The harmful effects of long-term unemployment on family dynamics are well known. According to Citizens for Public Justice, approximately 500,000 Canadians have exhausted their EI benefits without finding new work. The same source reports that food and shelter prices have increased faster than the overall consumer price index.

5:10 p.m.

Conservative

The Chair James Rajotte

You have one minute.

5:10 p.m.

Executive Director, Option consommateurs

Michel Arnold

Option consommateurs is concerned about the widening social inequality in the country and, as a result, I would like to make a few recommendations for the budget.

The first recommendation is to eliminate the employment insurance waiting period and extend the benefit period to meet the changing nature of unemployment in Canada.

Then, our second recommendation is to convene a job creation summit with participation of all stakeholders, from provincial premiers to representatives of unemployed workers.

It is also important to rigorously assess all retraining programs for relevance to the job market and for value for money for taxpayers' dollars. Literacy, numeracy and financial literacy should be part of all retraining programs.

We propose increasing the maximum benefit payable under the GIS (guaranteed income supplement) program, to increase the GST credits and, finally, to use the powers given to the Minister of Finance to reduce the imbalance between large institutions and individuals by ensuring that issuers of credit cards increase minimum payments balances.

Of course, you'll find more recommendations in our submission, particularly on safeguarding and improving the health and safety of consumers, the terms and conditions for student loans, eliminating the problem of chronic underemployment among highly skilled immigrants.

I am now ready to answer your questions.

5:10 p.m.

Conservative

The Chair James Rajotte

Merci beaucoup.

We will go next to McGill University, please.