Finance Committee on Oct. 31st, 2011

[The Vice-Chair, NDP, Hoang Mai]

Good morning, ladies and gentlemen.

We are here for a pre-budget consultation. This is the 22^nd meeting of the Standing Committee on Finance. We are in Toronto. Although I am not from this city, I want to welcome you all here.

Today, we will be meeting with representatives of the Canadian Vehicle Manufacturers' Association, the Canada Company, the Canadian Energy Pipeline Association, Electric Mobility Canada, Spectra Energy and Financial Executives International Canada.

You'll each have five minutes to present your brief and then after that we'll have a round of questions from the members.

We'll start with Canadian Vehicle Manufacturers' Association.

[Mark Nantais, President, Canadian Vehicle Manufacturers' Association]

Thank you very much, Mr. Chairman.

Good morning, members of the committee. My name is Mark Nantais. I am president of the Canadian Vehicle Manufacturers' Association. We're certainly pleased to be here and certainly welcome your comments on our recommendations for the federal budget 2012.

In 2010 CVMA member companies Chrysler, Ford, and General Motors produced 65% of all vehicles manufactured in Canada and accounted for roughly 50% of all vehicles sold. Currently our member companies produce 22 different light-duty vehicles in six high-volume assembly plants along with a variety of high-volume components, including engines and transmissions, at four additional facilities. Through their sales, assembly, and research activities, as well as their head offices, CVMA companies directly employ 35,000 Canadians and support an additional 50,000 retirees. For every one assembly job, seven other jobs are created in the economy. We know of no other sector that has such a high job multiplier.

Our suggested budget actions are as follows.

Recommendation one: Budget 2012 should re-introduce competitive, flexible automotive investment funds to attract new automotive investments as well as investments that upgrade and retain the existing Canadian automotive footprint. Company decisions are now being made every three years or less, and the next horizon for new investments is already upon us. The existing competitive challenges facing Canadian manufacturers related to a high Canadian dollar, high commodity prices, and high energy costs will all affect the auto industry’s ability to compete for new investments. Given that the automotive innovation fund is scheduled to sunset soon and that Canada must compete globally for automotive production mandates, an automotive investment incentive program that is not just equal to but better than competing jurisdictions around the world remains a necessity. We actually have examples if you wish to get a sense of these types of incentives.

Recommendation two: Budget 2012 should eliminate the green levy excise tax and focus on policies that deliver environmental benefits through measures aimed at getting the oldest and most polluting vehicles off the road and encouraging the use of clean and renewable fuels. The green levy was introduced in the 2007 budget under the vehicle efficiency incentive before the new fuel efficiency standards were to take effect in 2011 in order to achieve revenue neutrality of the auto eco-rebate program, which was actually established in that same budget. Two significant milestones have since occurred. First, the government has eliminated the eco-auto rebate program in 2009, no longer requiring the green levy to achieve revenue neutrality. So what we now have is the introduction of a new additional tax on vehicles that have some of the best fuel economy and segments equipped with the most advanced and comprehensive safety systems. The auto industry has consistently argued against the adoption of the so called “feebate” programs, such as the green levy, given the inability to meet the stated environmental objectives, not to mention suppressing new vehicle sales. This view has been supported by the National Round Table on the Environment and the Economy and Natural Resources Canada.

Second, as mentioned, the government implemented this past September much more stringent vehicle greenhouse gas regulations for the 2011 through 2016 model years, and further expressed its intention to regulate even more stringently for model years 2017 through 2025. This measure will drive significant improvements in new fuel efficiency and reduce greenhouse gas emissions of the fleet, as all vehicle segments will be required to improve performance and reduce emissions. Underscoring the urgency of the elimination is the fact that under the green levy consumers will soon be paying even more tax, even though the vehicle's performance may have improved or remained unchanged. Natural Resources Canada actually intends to adopt new vehicle fuel consumption testing protocols and label values, which will determine how much tax is paid in order to facilitate testing of more advanced technologies and provide fuel consumption values that are actually more meaningful to consumers and world driving conditions. This will have the effect of increasing the public's fuel consumption values and increase the tax.

Recommendation three: Budget 2012 should introduce a consumer incentive for a defined period to encourage the purchase of advanced vehicle technologies with complementary incentives that promote the necessary refuelling and recharging infrastructure to support the introduction of a broad range of alternate renewable fuels and a greater electrification of the vehicle.

In closing, we understand you receive a wide range of policy proposals as part of the budget consultation process and we would suggest full economic studies and corresponding public consultations before implementing major policy shifts. One such example is the unilateral tariff reductions under the guise of harmonization with the United States, of which the impacts on local industries may be uncertain. Given the importance of trade to Canada's economic health, the only time tariff reductions should be considered is in the context in negotiating bilateral or multilateral free trade agreements that result in new market export opportunities for Canadian-produced products.

Unilateral action would undermine Canada's current bilateral negotiations, which are intended to provide market access benefits to both of the involved parties under negotiated and mutually agreed upon terms, conditions, and timelines.

Thanks very much, Mr. Chairman.

[The Vice-Chair, NDP, Hoang Mai]

Thank you, Mr. Nantais.

Next is the Canada Company.

[Blake Goldring, Chairman, Canada Company]

Thank you, Mr. Chairman.

Good morning, everyone.

On behalf of Canada Company, with “many ways to serve”, I very much appreciate the opportunity to appear before you today.

My name is Blake Goldring. I'm the founder and chairman of Canada Company. Our organization was created in 2006 to bring business and community leaders from across Canada together to support our Canadian military and their families.

Canada Company is apolitical, and we take no government money.

Some of our initiatives that you might know include our camps for the children of deployed soldiers, and also the scholarship fund, which provides post-secondary school funding for children of military parents who have been killed serving on an active mission.

Today we're here to seek your support for a fair and effective compensation program for the employers of Canada's military reservists. We believe that such a program is necessary to recognize the sacrifices made by both reservists and their employers and to strengthen a relationship that is vital to Canada's safety and security. Most important, this program will send a strong signal about the importance of reservists' public service by sharing its true costs across society.

The Canada Company submission is based on recommendations made by the C.D. Howe Institute that were recently endorsed by the Pratt report and the Canadian Defence & Foreign Affairs Institute. This institute is supported by major employer groups, including the Canadian Chamber of Commerce, Canadian Council of Chief Executives, and the Canadian Federation of Independent Business.

Whether serving in peacekeeping or nation-building efforts or in combat zones, military reservists are a growing component of Canada's security at home and abroad. Last year the C.D. Howe Institute issued a report that showed that existing federal and provincial job laws created to protect jobs of deployed reservists actually dissuade employers from hiring reservists. We believe that the stick, as embodied by the current patchwork quilt of various employment legislation across provinces, must be accompanied by a carrot, our proposed compensation program. By that I mean that incentivizing employers and covering their true costs will improve overall conditions for reservists and signal to employers that their efforts and costs are important to our society.

The costs incurred by employers include recruiting and training a replacement, overtime costs to cover absences, productivity loss, and retraining costs of returning soldiers. These costs are particularly challenging for smaller businesses, which find them more difficult to absorb within their operations. That is why our proposal is tailored primarily for smaller companies.

Reservists are also affected by the current system, sometimes choosing not to deploy in deference to employer opposition, hiding the reservist's status, and finding fewer employment opportunities. The conclusion of both the C.D. Howe Institute and the Pratt report found that the system needs to be changed, or else the employer pool will be eroded and will further increase pressure on our military planners to recruit and retain reservists.

Our proposal incorporates the best of the learning from the programs in the United Kingdom and Australia. Based on 2011 deployment levels, the C.D. Howe Institute projects that a fair and effective employer compensation program can be implemented at the per annum cost of $8 million. This cost-effective program will more equitably distribute employee deployment costs across society rather upon than a small number of employers; second, it will ensure a vibrant pool of reservists by improving their reservist employment opportunities and working conditions; it will ease reservist deployment and transition back to civilian life; it will enable DND to make better personnel decisions and plan for the future; and most importantly, it will send a clear signal that the public service of a reservist is noble and a good thing to do.

In conclusion, the men and women who serve as military reservists make many sacrifices to protect Canadian values at home and abroad. We think the time has come to implement an employer compensation program that demonstrates our appreciation for this essential public service.

Mr. Chair, we thank you and the committee members for your consideration of this important initiative and for your continued support for Canada's military.

Thank you.

[The Vice-Chair, NDP, Hoang Mai]

Thank you, Mr. Goldring.

Now we have the Canadian Energy Pipeline Association.

[Brenda Kenny, President and Chief Executive Officer, Canadian Energy Pipeline Association]

Thank you.

Good morning. I appreciate this opportunity to present to the committee and to share with you perspectives from the Canadian Energy Pipeline Association.

We represent companies that transport 97% of all the oil and natural gas produced and used in Canada. Our membership currently operates more than 100,000 kilometres of pipelines in North America.

Pipelines are the only feasible and by far the safest means to transport large quantities of oil and natural gas over land. We know from many energy forecasts that we will need to deliver that energy for a long time to come. These energy highways are the means through which Canada achieves lucrative energy revenues and trade and energy security for its citizens.

I'm here to speak to you about the 2012 budget, but just for some background I'd like to lay a brief foundation first. The Canadian economy, during the recent period of uncertainty it has come through, and the 2011 budget have turned the federal government toward a more long-term outlook. Minister Flaherty has stated that our long-term focus is now shifting from protecting jobs and output to creating the right conditions for more long-term jobs and stronger growth.

Canada is in a more favourable position than many countries, in part because of the government's having chosen a prudent approach. Economic recovery is a big part of that. CEPA's proposals for the next budget will enable economic growth and job creation while representing the goal of fiscal restraint.

Our recommendations fall into two main categories. The first is to continue reform of regulatory processes and laws to ensure that public interest decisions, including environmental protection, are achieved through timely, efficient, and predictable processes. The processes must focus on effectiveness and efficiency and guarantee the necessary capacity within government to move private sector projects through government decision making in a timely manner. This will enable job creation and economic development to the benefit of all Canadians.

The second recommendation category is that for existing pipelines we must ensure that the regulatory capacity and tools are in place to safeguard critical infrastructure, protect communities, and enable reliable energy security and trade as well as environmental protection.

With that in mind, our first specific recommendation is to renew funding and the mandate of the Major Projects Management Office for a three-year period. This is a critical function, which allows executives across government to continue their work on the whole-of-government approach to regulatory coordination and crown consultation. The funding is necessary to advance modern and efficient regulatory practices and enable reporting on results across departments and jurisdictions.

I urge the government to maintain this commitment and to ensure that appropriate personnel are in place. A failure to adequately resource the MPMO and key regulators will undermine the timeliness of decisions, placing hundreds of millions of investment at risk. We ourselves are forecasting close to $40 billion in projects for the next several years.

The second recommendation is to focus environmental legislation to improve regulatory performance. Canada's existing laws related to energy and environment have been assembled over many years and are somewhat of a patchwork quilt. Some of those include the Canadian Environmental Assessment Act, the Fisheries Act, the Species at Risk Act, and the Migratory Birds Convention Act. They've each been developed and implemented one at a time to address specific issues. Today we need an updated framework of legislation so that all of the individual decision components can make sense together.

We believe that the reforms should include an integration of decision-making processes to pursue optimal environmental incomes, to support efficiency gains and timeliness within government, to direct resources where they have the greatest effect, and to ensure that crown consultation for aboriginal peoples is in place effectively.

Third, we must protect that infrastructure. In particular, we need the National Energy Board to have in place the enforcement tools and capacity to ensure that “call before you dig” is mandatory and that the right tools are there to encourage appropriate behaviour for excavators.

Do I have one minute?

[The Vice-Chair, NDP, Hoang Mai]

You have 40 seconds.

[Brenda Kenny]

Ninety percent of the NEB's costs are recovered, so these are costs we're inviting for ourselves, and they're important for safety.

In closing, as I mentioned, we are aware of a number of pipeline proposals, on the order of $40 billion. They are there to transport hundreds of billions of dollars of investment and revenue from the upstream sector to meet energy security downstream. The recommendations we have put forward to focus on regulatory reform are critical to creating the jobs, and that level of investment is profoundly important as a privately funded stimulus package for Canada.

Thank you.

[The Vice-Chair, NDP, Hoang Mai]

Thank you very much.

Electric Mobility Canada, please.

[Michael Elwood, Chair of the Board of Directors and Vice-President, Marketing, Azure Dynamics, Electric Mobility Canada]

Thank you very much, Mr. Chair.

Good morning, everybody, and thank you for having us here.

I'm the chairman of Electric Mobility Canada. I've been in this position for about six years now, and we've been advocating for the use of electric traction as an alternative to fossil fuel and as part of Canada's future for transportation. Over the past number of years electric traction has become very popular around the world. In fact, most G-8 countries around the world have adopted strategies and initiatives to put electric vehicles into everyday transportation use, both for consumers and commercial application. However, we've not been in that position here in Canada, and today I'd like to just go through a few things: some environmental economic opportunities, and then four recommendations, as proposed.

From an economic point of view, we've already heard that Canada has a very lucrative business in the development of OEM vehicles. We do know that very well. Our opportunity, and with electric traction as we go forward, is to continue to maintain those jobs and actually increase them. In the last little bit, the Chevy Volt has come out, and 20 companies in Ontario participated in the development of the Chevrolet Volt by providing components and engineering to that vehicle. The Ford Transit Connect electric vehicle was developed in Vancouver. It has created jobs in Vancouver and it continues to create jobs in this country.

A number of others have been announced. Toyota will be developing their RAV electric vehicle in Ontario. So we're really there as a player. We know we have the capabilities from a personnel point of view and our capabilities are great that way. We need to continue on with that by supporting it.

From an environmental point of view, electric vehicles, even in a province where we are not purely hydro, still produce a 30% improvement to the actual tailpipe. There are four provinces in the country where hydro-electricity is used. In that case we see a 95% improvement at the tailpipe. So from an environmental point of view, considering that transportation is about 28%, I believe, of gross GHGs, if we really want to make an impact, for sake of a better term, it's low-hanging fruit for us to really look at transportation as an area where we can make an impact today.

As far as the electric grid goes, back in 2009, with the grace of Industry Canada and Natural Resources Canada, we were championed to put together Canada's electric vehicle technology road map, which we delivered in 2010 and handed off to the Deputy Minister of Natural Resources. In that, we called for an aggressive target of 500,000 plug-in vehicles on the road in Canada by 2018, and this both in consumer and commercial application. If that were the case, we consulted with all of the utilities across the board, and there would be absolutely no need for any additional supply. What we would need is distribution. We need charging infrastructure and we need infrastructure, but we don't need to develop anything additional right now to get us to our early target. As we go down the road, yes, there will be a need for more. What we would like to see there is more renewable energy use.

The Government of Canada has been effective. They've worked with us on things, and we're thrilled that they've been there. They've also introduced a couple of programs that have supported the electrification of vehicles.

One other area is Canada's green highway. We're looking for Canada's green highway to go from coast to coast to coast and produce alternative fuel stations.

These are our recommendations, very quickly:

Number one is codes and standards. We need codes and standards and we need them quickly to get vehicles into the marketplace.

Number two is charging infrastructure. We would like to see a program put into place where home charging and commercial charging are supported by the federal government.

Our third recommendation is really a simple one, and that is that the federal government lead by example. In other jurisdictions fleets in the federal governments have really been looking at plug-in electric, battery electric, or hybrid electric vehicles in the best category.

Last is the promotion of the green highway from coast to coast to coast, building alternative fuel stations.

Thank you very much for your time.

[The Vice-Chair, NDP, Hoang Mai]

Thank you, Mr. Elwood.

We will now hear from Spectra Energy.

[Tim Kennedy, Vice-President, Federal Government Affairs, Spectra Energy]

Mr. Chair and members of the committee, thanks very much for the opportunity to be with you this morning.

I'd especially like to thank the clerk for scheduling us so early so I can get home to carve pumpkins this afternoon with my kids.

Spectra Energy is the leading North American natural gas delivery company. Headquarterd in Houston, we have deep roots in Canada. This year Union Gas, a Spectra Energy company that serves over 1.3 million customers and more than 400 communities in Ontario, is celebrating its centennial.

Spectra Energy Transmission West, also known as Westcoast Energy, operating in British Columbia for over 50 years, is engaged in a $1.5 billion expansion.

Maritimes and Northeast Pipeline, a Spectra Energy joint venture, continues to deliver natural gas to Atlantic Canada and the U.S. northeast.

In total, Spectra employs 3,400 people in Canada and pays close to $300 million in annual taxes in the country. We also have a unique perspective on North American energy issues, as our president and CEO, Greg Ebel, is a Canadian, who was once chief of staff to Deputy Prime Minister Don Mazankowski.

For the 2012 budget, Spectra Energy has submitted a concise brief for the committee's consideration. We have asked for two things: first, that the committee support proposed changes to part VI.1 of the Income Tax Act and other related provisions, specifically to address the disparity that now exists between the corporate tax rate and the tax treatment of dividends from certain preferred shares.

Utilities, and Spectra Energy in particular, have large capital programs and often use preferred shares as part of the mix of debt and equity to finance that spend as well as their ongoing operations. Under part VI.1 of the act, imposing taxes on certain preferred dividends paid by the company, to offset the cost of this tax companies are also entitled to a tax deduction. The original intent was that the value of the tax deduction should equal the value of the tax companies pay under part VI.1. The rate of the part VI.1 tax and the related deductions were set at a time when corporate tax rates averaged 40%. Since that time, corporate income tax rates obviously have come down, and the changes to the part VI.1 tax and the related deduction have not kept up with these changes. This situation has been acknowledged over the years by various governments, and beginning in 2003 legislation was proposed to deal with this issue, but it has never been passed.

Second, we ask that the committee support the flowing of investment tax credits to partners other than the general partner in a limited partnership under the SR and ED, the scientific research and experimental development program. We believe this proposed change can be addressed quite easily and will assist with increasing innovation in our sector.

The current SR and ED application system penalizes the limited partnership structure and unnecessarily restricts innovation investment. Generally, all taxable income, losses, or other tax attributes generated by a limited partnership are allocated to all partners. However, under the Income Tax Act, where a limited partnership carries out SR and ED activity, the corresponding investment tax credits flow only to the general partner, as do the SR and ED deductions when the limited partnership is in a loss position. This condition can make it difficult or impossible for the general partner to use the investment tax credits, as usually a general partner's only source of income is the income allocation from the limited partnership.

We, like many other companies, use the limited partnership model because Canada does not have consolidated tax filing. This issue likely would not be a problem if there were consolidated tax filing, and we urge the committee to continue to support Canada's moving in this direction.

There is one final issue we would like you to consider--and I'm going to echo my colleague Brenda Kenny--which is not in the pre-budget submission but which is a matter of urgency for you as policy-makers. With the U.S. domestic natural gas supply set to potentially displace traditional Canadian supplies—and we're looking at a pretty narrow window, in the next 10 to 15 years—Canada must find new international markets. Unless Canada takes swift action in the face of intense international competition, thousands of jobs and billions of dollars in economic activity, in British Columbia in particular but in the rest of Canada as well, are threatened with being locked in.

Substantial reform is needed for our project approvals process to help Canada compete. Such reform does not mean lowering our standards but only reducing unnecessary duplication now built into the system, which deters investment.

Spectra Energy's three proposed areas of improvement include requiring time limits on all large projects; having a single comprehensive crown consultation with first nations; and continuing jurisdictional departmental coordination to reach the one project, one assessment goal.

We ask that each of you and each party support these recommendations in order to make Canada's regulatory system the best in the world. We are committed to being constructive partners in this process.

Thanks for your service to Canada and your time today.

I look forward to your questions.

[The Vice-Chair, NDP, Hoang Mai]

Thank you, Mr. Kennedy.

We'll now go to Financial Executives International Canada.

[Michael Conway, Chief Executive and National President, Financial Executives International Canada]

Good morning, Mr. Chairman and committee members.

I'm Michael Conway, chief executive and national president of Financial Executives International Canada. FEI Canada is a voluntary membership association comprised of 2,000 chief financial officers and senior financial executives from across Canada.

The recommendations we present to you today are the result of the collective efforts of FEI Canada's tax committee, whose chair, Peter Effer, VP tax at Shoppers Drug Mart, is with me here today.

FEI Canada understands the critical importance of maintaining stability while the government works to achieve its fiscal policy goals. We agree with the government's continued commitment to fiscal prudence. It is imperative that the government focus its resources to achieve maximum impact for its spending. In order to be able to continue offering many of Canada's current social benefits, the escalating cost of which is driven by aging demographics, Canada needs to continually strive to get a better bang for its buck.

In our written submission to you, we highlighted three initiatives that FEI Canada believes the government should adopt, as they will be critical to achieving an efficient tax environment.

First, FEI Canada believes the government should encourage innovation. FEI Canada agrees with the Jenkins report that innovation is the ultimate source of long-term competitiveness of business and quality of life of Canadians.

There are various ways to encourage innovation through funding. Tax credits could be provided to angel investors who fund qualifying innovation expenditures. Help can be provided to companies that incur costs that lead to innovation.

In this regard, one efficient way to encourage innovation would be to use a mechanism the government already has that works well, and that's the scientific research and experimental development program, or SR and ED. But improvements need to be made to it, as the SR and ED credit is currently too complex and narrowly focused. It should be recognized that innovators need support beyond the early R and D stage, and that activities leading to product commercialization should be eligible for SR and ED claims. After all, it's commercialization of research that leads to economic activity.

The current program discourages small private corporations from accessing public capital by reducing the available tax credit from 35% to 20% when a company becomes public. FEI Canada recommends that public companies be entitled to the same tax credit entitlements as private companies.

Finally, we like the Jenkins report recommendations to simplify the SR and ED program by basing the tax credit for small and medium-sized enterprises solely on labour-related costs.

Mr. Chairman, that point makes a good segue into a request we made to the committee last year. For the benefit of both business and government, we need to reduce the complexity of the taxation system and its compliance requirements. In my appearance before the committee last year, I compared Canada's first tax act to the rather hefty volume we have today. The government should do exactly what it did last year to review red tape in R and D spending--namely, a task force could be established to thoroughly review the federal Income Tax Act. Tax simplification will cut the administrative burden shouldered by both business and the government, which funds the CRA. Having more clarity will reduce the number and cost of tax disputes for both sides.

This will be particularly helpful for small and medium-sized businesses, and will help this key sector of the economy, which employs millions of Canadians and generates the majority of Canada's GDP. The best way to start simplifying the tax system would be for the government to continue work commenced last year on the taxation of corporate groups.

As we stressed in our comments during the consultation process, a tax loss transfer system for corporate groups would make the system far more fair, as tax planning is generally not affordable to small business. Allowing companies to file one consolidated tax return would further reduce the administrative burden for everyone involved--corporations and the tax department.

In conclusion, we believe our recommendations will foster innovation, streamline government, and reduce time spent on compliance so we can focus on generating economic activity and job creation.

Thank you.

[The Vice-Chair, NDP, Hoang Mai]

Thank you, Mr. Conway.

Now we'll go to members for questions.

We'll start with Mr. Julian.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you very much, Mr. Chair.

I would like to thank the committee members for their welcome this morning. This is my first meeting with the finance committee.

I would also like to thank the witnesses for coming.

Mr. Nantais, I appreciated your presentation on the automotive innovation fund. Of course the NDP were strong supporters in putting this proposal forward and putting in place the innovation fund.

I would like you to speak just a little bit more to what the impacts have been in terms of the automotive sector generally, including job creation and investment, as a result of the fund over the last few years.

[Mark Nantais]

Mr. Julian, thank you for your question.

Indeed, the AIF has been essential to new automotive investment in this country. Were it not for some of that investment fund being made available, some of the new investments in flexible manufacturing facilities and research and development activities in Canada would not have happened, pure and simple.

Now, as global companies, manufacturing incentives are probably more important now than ever in our history. Any country that either has an automotive industry now or wishes to have an automotive industry is providing huge incentives to attract new investment or maintain what they have. Just look south of the border in the United States. The most recent example is the Volkswagen plant in Tennessee. It got 57.7% of its total investment paid for. That is huge.

If we want to be competitive and retain jobs and the spin-off benefits associated with an auto industry, we need to be competitive. In fact, we need a competitive edge when it comes to manufacturing incentives. That is why we continue to recommend that the AIF be re-established, and that it be flexible and have sufficient capacity to compete with these other jurisdictions that are very successful, with the incentives they are providing. So the AIF, from our perspective, is essential for Canada's auto industry.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

You talked about global investments of $7 billion with the multiplier effect. Do you have any sense of the impact on jobs?

[Mark Nantais]

From roughly 2002 through 2009, Chrysler, Ford, and General Motors invested almost $9 billion in new investment. So we were able to retain the roughly 35,000 direct jobs in this country for those three companies.

Other incentives that went to Toyota primarily also generated new jobs at both the Cambridge plant and the Woodstock plant. These are all good things for all manufacturers. When you look at the seven-to-one job multiplier and the spin-off effects through our supply chain, jobs go on to be much greater than that.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you.

I'm struck by the similarity between your presentation and the presentation of Mr. Elwood. He was speaking about an overall investment of about $79 million over a two-year period. In your presentation you talked about a competitive consumer incentive. Do you have any sense of what the fiscal impact would be of what you're proposing? Is it similar to what Mr. Elwood is proposing?

[Mark Nantais]

We haven't tallied it up per se, but if you took the incentive that is available to consumers in the United States of $7,500 and multiply it by the number of projected sales, it would give you a sense of what that would mean in total. Mr. Elwood could probably speak more to that issue.

We're talking about incentives not just for the electrification of vehicles, but for various technologies that will be necessary to achieve the GHG reduction standards we are now facing. That will include everything from ethanol from cellulosic processes to natural gas vehicles, but it will be inclusive of plug-in hybrids, as well as dedicated electric vehicles. That's what we will need to do to meet these new very stringent standards on a go-forward basis.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you very much.

Mr. Elwood, do you have a sense of the impact on jobs from that investment in electric vehicle capacity?

[Michael Elwood]

Thank you for your question. It's a very good one.

The Aspen Institute has put numbers down that for every 10,000 vehicles that go out on the road, there are 250 jobs. So based on our road map, the 500,000 vehicles that would hit the streets of Canada would probably account for 125,000 direct jobs. We're not sure about indirect and downstream jobs, because it all depends on how much we assemble in the country and what work is done in the country. That's about the number.

[The Vice-Chair, NDP, Hoang Mai]

Thank you very much.

Now we'll go to Mr. Adler.

[Mark Adler, Conservative, York Centre, ON]

Thank you, Chair.

I'd like to begin by welcoming all of my colleagues to Toronto, home of the Stanley Cup-bound Toronto Maple Leafs this year.

The best thing about being in your hometown is you can sleep in your own bed and not in a hotel.

I would like to make a comment that the great frustration with five minutes is that you have so much that you want to speak about to all of the witnesses, but it's not possible within the timeframe.

I would like to begin by saying, Mr. Goldring, that what you're doing with the Canada Company is absolutely extraordinary. Over the weekend, with the death of another Canadian soldier and with Remembrance Day coming up next week, we saw how important the work you do is. Our men and women in uniform are truly heroes, and because of what they do, we're allowed to do what we do here, so it's always important to keep that in mind.

I would like to begin with Mr. Conway.

Some have said, and we heard just this morning from Statistics Canada, that our economy grew by 0.3% in August, so it seems like we're on the right track. There is a lot of potential danger out there, in terms of what is happening in Europe—particularly in Greece and now with Italy, a G-8 country that could potentially also have issues.

Some have said we should be raising taxes and going into deficit spending. What is your opinion on that? Do you agree that this would be killing jobs, that it would be detrimental to our economy? Or do you think that is a road we shouldn't be going on and that we should maintain the track we are on in getting our deficit under control and balancing our budget by 2015–16?