Finance Committee on Nov. 1st, 2010

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

But is it also true for oil?

[David Collyer]

Which? Is the tax treatment....?

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Is it better? You're claiming it's a better.... I'm trying to distinguish your testimony here. You're claiming that it's more competitive in the U.S., and you want to level the playing field and have used gas as the example. Oil is a very large part of your membership in the industry. Is it true for oil as well?

[David Collyer]

The gas market situation is very different. The same type of treatment applies to an oil well drilled in the United States versus an oil well drilled in Canada, so the same issue applies.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Does CAPP have an official policy on setting a price on carbon right now?

[David Collyer]

CAPP's position on the price of carbon is that we need to be very mindful of where the U.S. policy goes. We would not rule out a price on carbon, but in the approach to competitiveness and how we approach carbon policy in Canada, we need to be very mindful of where our neighbours to the south are going. We need to be driven by competitiveness, again, and making sure that we keep jobs in a competitive economic environment on Canada.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

“Mindful”; I assume that you're watching. I suppose that's your policy. You don't want....

One of your members, British Petroleum, already books a $50 price on carbon in their estimations for new projects. If CAPP's mission is to enhance the economic sustainability of the Canadian industry, would it not, with all the indications going on globally and Canada's actual commitments at the UN to put a price on carbon, be wise if CAPP joined with some of your members who have called for a national energy security plan?

[David Collyer]

CAPP has spoken out about the need for a national energy strategy, and we support that view. We also are very mindful of the need on the ground to reduce carbon emissions, and our industry has done a great job of that I think over the past many years.

We would argue strongly that for those industries that compete in the U.S. market, it's very important that we have a carbon policy that is not necessarily exactly the same but that is aligned with and compatible with that of the United States, because we're competing in that market.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Cullen.

Mr. Brison, please. It's a five-minute round.

[Scott Brison, Liberal, Kings—Hants, NS]

I have a couple of questions, first of all for CAPP. We had a discussion earlier today, and I'm very interested in tax measures to incentivize investment in clean conventional energy. In 20 years, 80% of the world's energy will still come from conventional sources, so we need to develop those technologies.

Would you consider it helpful in terms of that shift to cleaner energy technologies if we had a revenue-neutral tax reform package for your industry that would cut some of the subsidies Mr. Cullen was referring to, some of the ones that currently perhaps incentivize dirtier energy in terms of its carbon content, and then move it towards enhanced subsidies, accelerated capital allowance, on some of the cleaner measures—for instance, carbon capture and storage, as an example? Wouldn't that make sense in terms of helping transform your industry to competitiveness in a global, carbon-constrained economy?

[David Collyer]

I guess the first comment I'd make is that we don't accept the presumption that our industry is heavily subsidized. There's been a lot of material on the record that makes the case, at least from CAPP's perspective, that in fact we are not subsidized.

Again, we think competitiveness matters and that we ought to be looking at how our industry is taxed, how our policy on carbon and other environmental matters in Canada compares with that of the United States in particular, because that's a significant market for us.

Those are the things I would focus on, as opposed to suggesting that we move “subsidies” from one area to another. We don't accept the notion that our industry is in fact subsidized.

[Scott Brison, Liberal, Kings—Hants, NS]

We can have a longer discussion on that.

I have a question for Mr. Lord on the accelerated capital cost allowance to help build out high-speed Internet broadband to underserved communities. Would, for instance, a 75% accelerated capital cost allowance make a difference for the 20% of Canadians who live in communities that don't have high-speed Internet? It doesn't go as far as the 100%, but it ensures that the builders would have some skin in the game. Do you think that would be helpful?

[Bernard Lord]

I certainly believe it would be helpful. Whether it's 50%, 75%, or 100%, they do have skin in the game either way, because they do make the investment, and these are a sizeable investments. In the last three years, over $11 billion in private sector money has been invested to build out the networks without any government subsidy. That's just in the last three years.

Currently in Canada, 99% of the population are covered by wireless services, and 93% have access to high-speed wireless. Our objective is to bring it as close to 100% as possible. There are some limits because of our geography and the dispersed population, but I think 99% is certainly realistic.

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you. I think my time is up.

Mr. Davidson, we will talk further on the importance of attracting foreign students to Canadian universities. I think you're absolutely right in this.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Brison.

We'll go to Monsieur Carrier, s'il vous plaît, pour cinq minutes.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Thank you, Mr. Chair. I will move on to another speaker in order to spread out the questions among our witnesses. I have a question for the representatives of the Royal College of Physicians and Surgeons of Canada. We have not heard from them yet—or perhaps just once.

I am all in favour of research. It should be encouraged in the country. In fact, that is one of your recommendations. However, you want to defend the creation of a national entity that would be in charge of promoting innovation. When you talk about a national entity, I am not sure what you mean by that. Is it an agency, a crown corporation that would define the direction of the research, which is not being adequately done right now? Do you think that the research you want to encourage in the different provinces, is currently inadequate and that it would take an agency to reflect on that and tell the provinces what direction to take?

[Dr. Andrew Padmos]

I'd like to ask Madame Danielle Fréchette to answer that question.

[Danielle Fréchette, Director, Health Policy and Governance Support, Royal College of Physicians and Surgeons of Canada]

Thank you very much.

We are proposing to create a national institute to oversee the quality of research. There are many innovations in various parts of the country that are monitored with varying degrees of attention. Saskatchewan is a good example of a province where innovation does not get shelved, but ends up in the hands of doctors and health care professionals. We are not talking about promoting research.

Another one of our recommendations is to increase funding to the Canadian Institutes of Health Research. These are two different concepts.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

When an entity is created there are costs involved just to manage and define this research. That is one more budget that could otherwise be allocated to research. Are you aware of that?

[Danielle Fréchette]

What we are considering is an institute that would allow us to truly exploit the research in areas where we are making a lot of headway. Good practices in place in a small town could be applied to the rest of the province or elsewhere in Canada. It is a question of making better use of the money already being invested in the health care system. As Dr. Padmos was mentioning earlier, we are not doing a lot to promote the incredible investment we are making in health care.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Okay.

I have a question for Mr. Blakely about construction jobs. You are recommending that the government finance travel expenses for workers who have to go and work somewhere other than close to their home. Do you not think it would be better for the jobs to be spread out more around the country, rather than force people to leave...?

I have been to Newfoundland where it is common for workers to go to Alberta to find work because there is a lot of incentive from the companies for them to do so. However, this creates a lot of problems for the people who have to move around like that.

Do you not think it would be better for the government to spread around the budgets or incentives? Take for example the automobile industry. In the past two years, the government has invested $10 billion to save jobs in that sector. However, in Quebec, the forestry industry has been left to its own devices and a lot of jobs are being lost.

[The Chair, Conservative, James Rajotte]

You have a minute left.

[Robert Blakely]

There are two things, sir.

First, I am not asking that the people of Canada give a handout to a construction worker somewhere so that he can go and get a job somewhere else. If he is prepared to stand the cost of doing it, he has to get himself somewhere else, keep himself somewhere else, and work. I am asking that he get a tax credit for doing that. He could get that tax credit if he were an independent contractor, an engineer, a lawyer, a doctor, or a number of other people. That's really the tax fairness angle.

On the issue of whether we should better align where things are built in this country, the short answer to that is yes, but one of the difficulties is that if the tar sands mine is in a certain place or the potash mine is someplace else, you can't take the product all that far to process it. You refine it where you mine it.

[The Chair, Conservative, James Rajotte]

Okay.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

We could have a government that thinks about encouraging industries—