Finance Committee on Oct. 17th, 2012

[Alicia Milner]

Absolutely, and we've seen that already. We know that with the larger, one-off users, like Vedder in B.C. or Robert in Quebec, at the right scale—physically, the scale is about 20 trucks—the all-in cost, including the station, is lower than for diesel. We know that now. The challenge is how to get the user from zero to 20. Fortunately, we've had these two leaders in the east and the west, and with some support, too; in Quebec, the province had a measure—accelerated capital. We know we need something to help the end-users get over that initial barrier.

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

I understand that there is a bus manufacturer in Quebec that so far has manufactured about 800 buses that are used in the oil sands, particularly in Fort McMurray, which is in my riding. Is it Prévost Car? Which company is it? Do you know?

[Alicia Milner]

Yes, that's probably Prévost, which I think is a division of Daimler.

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

Do they have this kind of technology or are they working on it because the transportation there is—

[Alicia Milner]

In Europe, yes, and in Canada, not yet, but we have the first coach-bus manufacturer, MCI, in Winnipeg now offering it. It's probably a matter of time, particularly with the U.S. market growth.

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

Thank you very much.

[The Chair, Conservative, James Rajotte]

You have two minutes.

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

Thank you, Mr. Chair.

My next question is in relation to the Prospectors and Developers Association of Canada. In particular, what is happening with the companies you represent? They obviously have a dramatic impact on our gross domestic product. They also have a dramatic impact on our trade.

My understanding is that there are more Canadian companies that own and operate abroad than there are foreign companies operating in Canada, by a much higher margin, so we are a success story in the world. Your ask is in relation to making the exploration tax credit permanent. Is that correct—the 15%?

[Tom King]

Yes.

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

What would be the consequences on employment and TSX share prices, etc., if that were made permanent but at a lesser percentage, for instance, around 10%? Would there be a dramatic impact on the industry?

[Tom King]

As a point of clarification for the members who aren't familiar with this, the METC only provides a credit for exploration activity within Canada, so it won't have an impact on those companies that operate outside of Canada.

In terms of its significance and really what it is, it's looking at the impact of the after-tax cost to an investor. It's about the Canadian government sharing part of the risk in that field. Also, it should be noted that the 15% is taxable, so after tax it's really something like 8%, and probably slightly less, so—

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

Would there be significant consequences?

[Tom King]

The reality is that it would impact the investment. Would it be significant to deter...? I would suspect not.

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

Thank you.

[The Chair, Conservative, James Rajotte]

We'll go to Mr. Mai, please.

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

Thank you, Mr. Chairman.

Ms. Bittman, on the question of job creation, you started by saying that job creation in Canada should not begin with job losses.You say that with the cuts the government has put forward, we will lose about 40,000 positions in the private sector, and that's on top of the 19,200 positions in the public sector.

Also, with respect to the cuts that were made, you mentioned that there are some issues that will have an effect on safety in terms of regulating bodies. For instance, you talked about food safety, environmental assessment, and safe transportation infrastructure. Can you tell us a bit more about the impact of those cuts?

[Shannon Bittman]

The bottom line on this government's deficit action reduction plan is that there are literally indiscriminate job cuts right across federal departments and agencies; it's not looking carefully at where the cuts should be made. The institute has on many occasions offered to work with the government to identify efficiencies. As of this date, we've still had no take-up on our offer.

The institute would not take issue with the government planning efficiencies, but what we do take issue with is arbitrary cuts that put Canadians' health and safety at risk. We're all aware of examples where Canadians have died because the regulatory system hasn't worked well. More job cuts obviously impact Canadians' health and safety.

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

Are you now aware of all the cuts that will be done? Where do you think it will affect Canadian safety in terms of cuts? You have propositions. Apparently the government is not listening. Where do you feel that we might be most affected in terms of cuts?

[Shannon Bittman]

The bottom line is that the government is being very secretive with respect to where the job cuts are happening, to the extent that we haven't been consulted and we haven't been able to offer our input to mitigate the impact on Canadians. Even the Parliamentary Budget Officer, Kevin Page, recently threatened to take the government to court to make the government more open and transparent with respect to where the job cuts will be. Quite frankly, our hands are tied, because we're not being consulted.

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

Do you also feel that this impacts environmental assessment? Obviously, when we think about the future, we think about protecting our children and we think about the environment. Do you think these will also be affected by the cuts or by how the government has gone forward with the budget?

[Shannon Bittman]

Our members have been very hard hit by cuts to Environment Canada. Obviously, to the extent that our members' jobs are being cut, services to Canadians are being cut. That obviously puts at risk future generations of Canadians.

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

Thank you very much.

Ms. Milner, I'll go quickly, because I don't have a lot of time.

You mentioned in your brief that the government should “recognize the importance of emerging 'green energy' industries that will play an important role in transitioning the economy to a lower carbon future”.

What has been done or what hasn't been done? What do you recommend the government do on that front?

[Alicia Milner]

To date, this is one of the challenges we see for alternative fuels. If you look back at 20 years of government spending, for energy use and transportation it's more than 95% crude oil. We may read a lot about electric vehicles, fuel cells, and other options, but at the end of the day, it's tremendously tough to get these things into the market.

With natural gas, I think this particular option happens to be at the intersection of a few things. One is the supply change I mentioned.

The other thing that's coming that will favour this and makes the investment right now the right window for the private sector are tighter marine regulations in 2015 and 2016. Again, there will be three compliance options there. That will be an issue for both the Great Lakes and the east and west coasts. Natural gas can already meet the requirements plus provide a GHG benefit. That's the other thing that industry is looking at to say, look, it's not just one part of the market now that the pieces are starting to fit together more effectively, but it's a very tough task.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Mai.

We'll go to Ms. McLeod, please.

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

Thank you, Mr. Chair.

I too would like to thank all the presenters. I'll start by picking up where Mr. Jean left off and talk a little bit about the mining exploration tax credit.

It was introduced in 2000, and it was renewed. It looks like it costs the Treasury about $100 million a year. Give me your best argument on why we should move forward in renewing it again for next year.