Finance Committee on Nov. 3rd, 2011

[Alexander Wood]

I agree with the Cement Association. I think the measure, as you describe it, is an excellent one. The capacity to undertake the kind of technical assessment that would be required for this has really improved over time, so the ability of the Treasury Board to conduct those kinds of analyses would be very strongly enhanced.

The second point is that the financial models that would go into really understanding the financial economic impact of those choices have also improved. Energy efficiency is an interesting, separate, but parallel model. In some cases there is a high up-front cost with a revenue stream or a savings stream over time that most financial models traditionally have not been terribly good at monetizing, but that is now improving.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Brison.

Mr. Hoback, please.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

Thank you, gentlemen, for being here this morning. I apologize for votes and interruptions. It's just something that happens here in Ottawa at this time of year.

I'll go with the Canadian Cattlemen's Association with my first few questions here. I know that the agriculture committee is working on the next round of Growing Forward 2, the requirements from the industry, and what changes the industry would like to see in that program. Is there anything you want to add at this time on Growing Forward 2 that the Canadian Cattlemen's Association would like to see?

[Travis Toews]

Our priorities with Growing Forward 2 include a focus on research and innovation, ensuring that we have adequate models for tech transfer.

Secondly, we're optimistic about our future in terms of exports. We look for a focus on market development funding, recognizing that there are trade-offs. Our focus is on those areas, as opposed to what I think has historically been a huge BRM component.

[Randy Hoback, Conservative, Prince Albert, SK]

It's kind of interesting that we always hear Mr. Julian talk about how Canada's trade policy has failed, and look at the cattle industry and say, “Man, if we didn't have our trade policy, where would you be?”

Can you maybe help explain to him just how great Canada's trade policy is, and how it's impacting the industry for the Canadian cattlemen?

[Travis Toews]

As most of you know, in 2003 we lost virtually all of our export markets. Since then there has been a concerted effort by both industry and government to recover that market access. We're an industry that depends on market access for 40% to 50% of our production. We depend on market access for every pound of product we sell to maximize the value back to Canadian producers.

So market access for us is key and critical. The emphasis that has been placed on it by both industry and government has achieved some remarkable successes in recent time, and we have a few more to knock off.

[Randy Hoback, Conservative, Prince Albert, SK]

You talked about the different components of the beef sector. You looked at some of these markets when you first heard of them and said, “Well that's a small market, but they grab a certain chunk of meat that we wouldn't necessarily sell here in Canada or somewhere else”. So that has also been very beneficial, I understand.

[Travis Toews]

That's the critical piece about export markets. In order to maximize returns on our cut-out value we have to ensure that every product of the 200 products produced by a fed steer or heifer finds its way to the most valuable market in the world that day. That requires competitive access into every major beef importing region of the world. We're working on that. We're getting there, and our competitiveness is improving as we get there.

[Randy Hoback, Conservative, Prince Albert, SK]

I think the last time we met was in Colombia when the Prime Minister was there promoting trade. You are looking at that market again. It's not a huge market, but it may take certain products we produce here. Hopefully we'll be selling to Colombia.

David, I always find it interesting. I think the NDP are dreaming of a recession so they can do a big round of spending here, because they're saying we need more stimulus. Coming from a province where the unemployment rate is 4%, we're looking for plumbers and electricians. I say at every meeting that we're trying to find these skilled trades to complete what we have in the works right now.

In your industry, are you finding enough skilled trades? What's the impact of not having these trades at this time? Can you give us some highlights on that?

[David Collyer]

It's a challenge, depending on what part of the industry you're looking at. There are certain sectors where it is more difficult to find trades. We've talked with the government about a variety of initiatives that we think are required to address that issue. They would include a different approach to immigration, training and development, and better use of under-represented groups in the workforce.

That being said, we can find the people we need if we work hard at it. I think that will be through the combined efforts of industry and government. I don't think we should use that as a barrier or an impediment to continued growth of the oil and gas sector, or other industries where there is the potential for growth.

As a country we still need job creation, and there are a number of ways we can get at that. We should continue to promote economic growth without significant direct investment in infrastructure or otherwise. It's about creating the right investment climate, and that's where we come back to the competitiveness of the tax system as a key driver.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Hoback.

We'll go to Mr. Mai, s'il vous plaît.

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

Thank you, Mr. Chair, I'll be very quick. Please let me know when I have a minute and a half left, so that I can share my time.

First of all, speaking of sustainable prosperity, we're interested in the green economy, and we've been trying to push that forward. Could you tell us very briefly, if we put a price on carbon, start moving forward, and invest in giving tax credit or capital cost allowance for measures that will bring us forward with regard to the green economy, what the advantages would be for Canada?

[Alexander Wood]

Well, we're strong proponents of putting a price on carbon for the very reason you cite, that it is a policy that would target, first of all, the environmental objective of the policy, the reduction of greenhouse gases. It also would have the effect of inducing economic activity and economic innovation in ways—it has been researched and proven in other jurisdictions—that have brought about those kinds of policies.

Major research projects in a place like the OECD have pointed to the role of carbon pricing in particular, and the role that it can play in inducing technological business innovation. The real-life experience in a place like Europe, with its European trading system, and the carbon tax in B.C. have proven that out.

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

Thank you very much.

For the Green Budget Coalition, we agree with further reducing the federal subsidies for fossil fuel. We also agree with—as I said—introducing a price on carbon. Do you agree with having a cap and trade type of tool in order to put a price and have a market?

[Andrew Van Iterson]

We're supportive of either a cap and trade or a carbon tax. The important thing with either one is that they're implemented properly and designed properly.

Maybe to touch on the subsidies, I want to point out that the International Institute for Sustainable Development did a thorough study using a very conservative WTO definition of subsidy, and they came up with over $1.4 billion in subsidies to the oil industry, and the Deputy Minister of Finance also concurred that there are subsidies.

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

Thank you very much.

Very quickly, has the $25 million investment for Canada's species at risk worked in terms of protecting the species?

[Andrew Van Iterson]

There has been really important progress over the years. The government has been building up a strong capacity to implement the act, but we still need to strengthen that, and do more on the ground species recovery.

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

Thank you very much.

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

Mr. Bosc, just to be very clear, I think that the 1928 law was focused more on sending some rum over the border to the U.S. than on what was needed within the country. Things have changed a lot—just the orders from the Internet—so I just wanted to let you know that we do support the request that you put before the committee. I want to make it clear, and I have wineries bordering on my riding that are wonderful places to visit.

Mr. Toews, you talked about the reductions of research and innovation dollars in 1995 and in 2006 and 2007. The majority of that was under the Liberals. Have you seen any evidence of this government moving to correct that?

[Travis Toews]

The support of the creation of the beef science cluster initiative was a very positive step in ensuring that research dollars could be used more effectively. We're advocating that funding needs to be increased, but we were pleased to see that initiative.

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

Listening to you is just like listenting to the manufacturing or industry sectors. We need more long-range planning, and the research and innovation has to be increased.

[Travis Toews]

I would agree with that.

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

Thank you.

[The Chair, Conservative, James Rajotte]

Okay. Thank you very much.

We'll go on to Mr. Adler, please.

[Mark Adler, Conservative, York Centre, ON]

Thank you, Chair, and I want to welcome all of our witnesses here today.

I want to direct my first question to Mr. Toews. You mention in your presentation that research and development is critical, because it provides the science that we need for trade negotiations. Can you explain the importance of addressing these issues in the framework of formal trade negotiations, and in particular with what's on the horizon in terms of our potential agreement with the EU and with India?