Finance Committee on Oct. 3rd, 2011

[The Chair, Conservative, James Rajotte]

Thank you. Merci.

We will go to Mrs. McLeod, please.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you, Chair.

It's great to be here--although I'm not sure whether we're going to be out of here. We might get to enjoy Newfoundland longer than we'd anticipated.

[Voices]

Oh, oh!

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

At any rate, it's great to be here.

I would like to start with you, Mr. Zurel. If I look at your brief, what I'm hearing is that absolutely it's important to tackle the deficit. It's important to tackle the inefficient spending of government. We have people who are saying not to do anything in terms of government and government expenditures. I think what I heard from you is that we need to do that work, and if things really become a challenge, any stimulus should be focused in specific areas that are going to be revenue-generating.

Is that what I heard you say?

[Jo Mark Zurel]

I couldn't say it better than that. You've got it perfect.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Okay.

You mentioned that the private sector can deliver many functions. Do you have any examples that you can give?

[Jo Mark Zurel]

Well, sure.

You already see right now where government will outsource things like road building to the construction industry participants. They can do that work because that's what they do every day. It's not a core part of government, but it's something the private sector can deliver efficiently through an RFP and a tender process. Other types of examples would be things like CRA call centres.

Part of the challenge with the government delivering services directly that are not necessary to be delivered is that the cost of government employees is high, with very high benefits and so on. We're saying that, particularly around here, we have a shortage of workers. As someone else said--I think it was the construction gentleman--we have a shortage of people to fill jobs, and the government has a lot of people who have great skills. The private sector really struggles to find enough people, because we cannot compete with these really high pensions, post-employment benefits, time off, and so on.

If such things as call centres were outsourced, we believe that would put more people into the economy. It would be more efficient, and we would have more people out in the economy generating wealth rather than consuming it.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Again, this is certainly an area of perhaps disagreement around this table, so it's always good to talk about this. We continue to believe that the reduction in corporate taxes is essential for business.

From the people you represent, can you speak to that?

[Jo Mark Zurel]

Certainly.

It's important that Canada and the Canadian provinces maintain a competitive tax regime. When we're looking at the United States and other competing governments with which we compete for work and workers, we see that Canada right now, in its tax regime, is reasonably competitive in terms of general levels. There are some inefficiencies and some taxes that are more productive than others. Taxes on capital and that sort of thing are regressive taxes that discourage investment, but things like the consumption taxes we have make sense. The government needs to collect taxes to be able to deliver programs. We fully support that. We don't see that Canada has a substantial problem with regard to its taxes. We have to keep reviewing it and looking at it when comparing our rates and our structure to those of our competitors to ensure that we maintain our competitiveness. Right now, the bigger issue for us is that we're spending more than we're bringing in. We need to solve that from the perspective of our spending and not with taxes.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Okay.

Mr. Meulien, you were talking $100 million a year. What have you had in the past? If you have two seconds, do you have a regional centre in Newfoundland?

[Pierre Meulien]

We've averaged between $80 million and $100 million per year. It's been sporadic over the years. This is not out of whack with the average that we've been receiving from the federal government.

The regional centre here is in Halifax. It covers the four provinces of the Atlantic region. It's Genome Atlantic.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. McLeod.

Mr. Jean, go ahead, please.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thank you, Mr. Chair.

I appreciate being here today.

I have to say, Jo Mark Zurel, that you sound Albertan. It's no surprise to me that we have such a good connection between Newfoundland and northern Alberta, because you sound just like my chamber of commerce does. I would agree with everything you say, and I'm glad to see you here.

My question is really for Bob in relation to the construction trades industry. I'd like to suss out a little bit more. I proposed the same thing back in 2008 at a human resources committee, and I hit the front page of every newspaper in Atlantic Canada, which suggested that we were trying to steal people from Atlantic Canada for Fort McMurray. I'd rather not see a repeat of that if anybody is in the room.

I have to say that I was quite shocked at the response of people, because Fort McMurray was built by Newfoundland. The oil sands were built by Newfoundland. I had 45 years there, and I spent my entire time with people from Atlantic Canada. I don't really understand why we don't have a program at this stage. I know we have been looking at one for some period of time. Are you speaking specifically of long-term relocations or short-term relocations? In Fort McMurray, of course, we have people in for 20 days and then out for 10 days. They go back to Moncton or St. John's, or whatever the case may be.

[Robert Blakely]

I'm talking more about the short term.

If you look at the long term, there's a program under the Income Tax Act under which you can claim the cost of a move. If you look at the short term, at those guys who are in for 28 days and out for seven or whatever, most of what they're doing is found. The fellow who shows up to go to the shutdown at Syncrude, which is going on now, comes on his own dime and lives in a motel for a while. Lots of the fellows who are going to be working there left from here, St. John's, five days ago in a car. They will drive to Edmonton. They'll get a dispatch slip. They'll hang around until it's time to go to work--catching their own rabbits, as they say in the trade. They'll go to work and then drive back. And there is nothing to support them.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

I agree with you. I think it's low-hanging fruit that we could actually deal with to encourage people to go back and forth.

Most people indicate to me that when they want to come out to Fort McMurray they've usually just finished UI so they don't have any money. They say, “I need money before I can go out. You have a job for me, but I need $1,000 or $2,000 to move my family or just to come out there and try it for a while.”

Has your organization looked at anything in conjunction with unemployment insurance to either up it to a certain period or...?

[Robert Blakely]

Honestly, Brian, my pitch for the last six or seven years has been, give us a grubstake so we can get the guy to work. That didn't go over very well with the last three governments, so I changed tack a little bit and said, let's try the tax credit idea.

You're exactly right: the guy in Corner Brook who was going to go work on the shutdown has run out of pogey and needs a grubstake to get him there. In some cases, the local union will give him enough money and he'll pay it back when he comes in, or he gets it from Aunt Susie or somewhere. Among our skilled trades what we're really doing is creating a system of applied begging, and I don't think that's appropriate.

I mean, if I were king, I would let people have a tax credit net of what the employer has paid—that came out of their own pocket—and if someone needs $1,000 or $2,000 to get to the job, I'd do that.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

So you would tie it in some way with unemployment insurance, either extend it for three months...? Is that what you're suggesting, as long as they relocate?

[Robert Blakely]

Yes.

[The Chair, Conservative, James Rajotte]

You have one minute.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Also, housing is an issue when they get onsite or when they're in different communities. I don't want to pick out Fort McMurray.... This is the future of our country. We're going to be sending people from Alberta who are actually the sons and daughters of people who have moved from Newfoundland to Fort McMurray and have stayed there--

[Robert Blakely]

They'll be coming to Argentia to go to work.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Exactly. They are going to come back to Newfoundland to work.

So I think it's clear, whether it be in the Northwest Territories, Yukon, Newfoundland and Labrador, or Fort McMurray, that if we do not do something in relation to our skilled workers, we are going to have a major problem with baby boomers retiring. In Syncrude, I cannot tell you how many people I know who have left Fort McMurray in the last five or six years and who were hired in the eighties.

[Robert Blakely]

We're there right now. The fact that there was no work in Alberta, Ontario, or Atlantic Canada in the eighties and the nineties means that we didn't invest in apprentices. We are now paying the piper for that.

The integration of nearly 300,000 new workers into the construction industry over the next five years is an enormous task. The truth is that most people never see the construction worker, but if you want to turn on your iPad and do something with the Internet, it doesn't work unless we've built the generating station. Without us, there are no comfort stops along the Internet highway.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Jean.

We'll go to Mr. Marston, please.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Thank you for joining us. I really appreciate it.

Mr. Zurel, you made the comment about high benefits, high pay, and the competition. There's another side to that coin: when government services are provided in a community, those incomes are invested in your community.

The unemployment rate is 7.3% currently. When you add in those who have given up looking for employment, it is 11%. I'm not sure about Newfoundland; for a long time, it was even worse than the rest of Canada.

The Federation of Canadian Municipalities says there's a deficit of over $130 billion in infrastructure in our country. From your presentation, I gather that you look for strategic investment from the federal government. The government set a narrow timeframe to reduce the deficit. We're suggesting that they should extend that out and invest in infrastructure, undertaking that deficit of $130 billion, in order to employ Canadians right now. What would you think of that?