Finance Committee on Oct. 31st, 2011

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

That was an excellent panel. I just want to commend you all for your contributions today.

I was preparing for Mr. Adams, but I guess I'll go to....

The question I wanted to ask was in regard to an initiative that our Prime Minister had begun with the President of the United States, and that was for regulations for harmonization. In the car business, harmonization is probably important, but I would suspect that possibly in the retail business it's important too.

Maybe you could share with the committee why that's important and where you'd like to see that harmonization between our two countries continue. Obviously that's going to extend further.

[Diane Brisebois]

First of all, we should say that retailers are pleased with the discussions that are taking place. For the first time in a long time, we're looking at truly harmonizing business practices and standards.

Where it affects retail the most is in the development of standards. For example, if a certain product has regulations in the United States that are different from those in Canada, it is then difficult for retailers to purchase those goods and to sell them. It makes the goods more expensive. It's more difficult to import.

So a variety of issues are being discussed at this time. I know you wanted to ask a question specific to the auto sector, but I can tell you that it's an important initiative for the retail sector as well.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

So you're very pleased. Okay.

Mr. Adams, I wanted you to clarify something with the committee. You're with the Association of International Automobile Manufacturers of Canada. That's different from the organization we had earlier today, the Canadian Vehicle Manufacturers' Association.

Just quickly, what's the difference?

[David Adams]

Our membership represents the 16 international automakers in Canada. We have everybody but the Detroit-based automakers in our membership.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Now, you have a number of Toyota facilities and a number of Honda facilities. In terms of strength as it relates to employees, how would you rank Ford, let's say, and Toyota in order on--

[David Adams]

Are you talking in terms of quantity of employees?

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

No, we'd better not get into that one; I'm talking in terms of employment. You have a number of plants in Woodstock, and you have some in--

[David Adams]

There are two plants in Cambridge and one plant in Woodstock for Toyota. There are three plants, if you include the engine plant, in Honda's facility up in Alliston.

I guess if you look at the plants from the other side, you would have the Oakville plant for Ford. You would have the Oshawa plant for General Motors. You would have Chrysler facilities in Windsor and in Brampton.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Are you getting pretty close to the numbers of the Detroit Three as far as employees are concerned? We used to call them the “Big Three”, but we call them the “Detroit Three” now.

[David Adams]

It's gotten a lot better, for sure. I think if you look at production, for instance, our production from our member companies makes up about 35% to 37% of overall production. That has increased from maybe around 10% in the not-too-distant past.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Pretty significant. But the charge in the past was always that although the cars are manufactured here, there's very little done outside of manufacturing. The parts are all produced in Asia. Is it that still the case, or is that changing?

[David Adams]

I think what you're seeing, certainly with Honda and Toyota, in terms of manufacturing, they have also brought their supplier base here to a large extent as well. I think if you were to look at what is the most Canadian car, if there is such a thing, it would probably be the Honda Civic, because Honda also has their engine manufacturing facility up in Alliston, and the engine, of course, is a very high cost component of a vehicle. So yes, I think as time moves on we'll be seeing manufacturers bringing in their supplier base to serve that manufacturing facility.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Is it still a healthy climate? Can we still produce cars here in Canada? There's an awful lot of competition. We were talking about that this morning. The incentives seem to be strong in the United States and in other countries. Can we still produce cars here?

[David Adams]

There is absolutely a lot of competition, and that's the real challenge. When we have moved to a NAFTA region, for instance, even though a lot of my members are classified as importers, only about four of my members don't produce any vehicles within the NAFTA region. About 51% of all the vehicles that my members sell in Canada are produced somewhere in the NAFTA region. Our challenge as a country is how do we secure the next plant in Canada? We have seen a lot of the investment in recent times go into the southern U.S. states, which are right-to-work states, which are putting billions of dollars on the table in tax relief and what have you. So it is a very competitive environment, as you've highlighted, to secure new investment in Canada.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Van Kesteren.

Mr. Mai, go ahead, please.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Thank you, Mr. Chair.

Mr. Smoke, when I hear what you as the students' representative at the National Aboriginal Caucus have to ask when you come here with your requests and you're being told what is better for you, I find it very difficult, and I appreciate the difficulty you have in negotiating with the government to get rid of the funding cap.

Can you explain to us how those negotiations have been and why you think the government is not helping you on that issue?

[Patrick Smoke]

We do have support from the opposition. The Conservative government is very wary about that simply because they're trying to balance their books, but what they fail to realize is they have treaty obligations to make sure we do become an educated population. As well, they're seeing the dollars we're asking for, $260 million additional annually, but what they're failing to realize is that there will be benefits that will come with that, a $400 million investment back into the economy over the next 20 years.

As well, 48% of the aboriginal population is under the age of 24, and over the next 15 years 300,000 aboriginal people can enter the workforce, and being a strong educated population just means Canada can be that much stronger. We're trying to present that message to the people who have been elected as well as to the senators, and we do have support from some members of the Conservatives as well as from the NDP.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Just to let you know, here on the finance committee we've been meeting with other associations, not just aboriginal, not just first nation, but the Canadian Federation of Students, colleges.... They're all for it, and we still don't understand why that is still an issue, why that has not yet been resolved. So hopefully we'll manage to do that.

Regarding the question for the Canadian Chamber of Commerce, I think we all agree that tax simplification is essential. We're suggesting maybe having a commission to study the whole system and try to figure out how we can actually implement tax simplification and maybe close some of the loopholes.

Would you be agreeable to that?

[Tina Kremmidas]

Definitely agreeable to that.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

To the Toronto Board of Trade, here in the opposition we've been saying that there's no strategic national plan regarding transport or mass transit. We've been pushing forward on that issue. Can you explain to us if anything has been done since then, or from the government side if there's a national plan, and if not, what needs to be done?

[Richard Joy]

Our point is that currently there is no national transit strategy or urban transportation infrastructure strategy. We are calling for one. We also acknowledge that within a broader infrastructure envelope, much of which has benefited urban transportation infrastructure, there has been a very significant movement in that direction.

I cited the gas tax and the Building Canada fund, and obviously the stimulus funding was also part of that. We're looking to see those dollars formalized in a national transit strategy and the longevity of that plan to be enshrined so there's certainty going forward.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Thank you very much.

I have a quick question for QUEST. We're pushing toward having greener and cleaner energy. How would that tie in with what you are suggesting?

[Brent Gilmour]

Overall, the direction of QUEST is to help manage and more effectively use our energy resources. Drawing on local alternative resources, which is what's encouraged, is all part of that. QUEST would support that. We also recognize that no matter where you are drawing your energy from, what we are really trying to encourage across Canada is more effective use of it in the first place. That's the primary principle we are trying to encourage others to use and apply, which would then allow you to continue to invest in communities, whether it's alternative energy or renewable. It's all in there.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Thank you very much.

[The Chair, Conservative, James Rajotte]

We will go to Ms. Glover, please.