Finance Committee on Oct. 8th, 2014

[Andrew Saxton, Conservative, North Vancouver, BC]

What role do you see public-private partnerships playing in this funding?

[The Chair, Conservative, James Rajotte]

Just a very brief answer, please.

[Brad Woodside]

Not very much at all.

[The Chair, Conservative, James Rajotte]

Okay, thank you. Thank you, Mr. Saxon.

We will go to Mr. Brison, five minutes.

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you very much.

Recently in Edmonton we met with Mayor Iveson, who explained to us the massive need to invest in water and wastewater treatment and the climate change imperative. He told us that the total Building Canada fund would only cover about 10% of the national needs to upgrade.

Mayor Lehman or Mayor Woodside, is that consistent with your thinking or your numbers?

[Brad Woodside]

It would be a very small portion, for sure. Whether it's 10%, or 12%, or 15%, it would be a very small portion.

[Scott Brison, Liberal, Kings—Hants, NS]

I met a couple of years ago with the Mayor of Carbonear, Newfoundland, who was pointing out the climate change damage potentially to roads going in and out of Carbonear. This is something going on in Alberta, and in Fredericton, and in Barrie—this is a national issue that we're seeing.

Mayor Lehman, you've said that we need to invest in and prepare our infrastructure for climate change, and that we're placing our communities at risk and setting ourselves up for huge bills if we don't prepare. That's really important. You're saying then that investments now are going to save a lot of money down the road, and that in fact economically it makes a lot of sense to invest before that damage or further threat goes on.

[Jeff Lehman]

Yes, without question. The insurance industry has been driving us, as cities, to make these changes, and you know when the insurance people get nervous, it's real.

I think the damage to the economy, though, in terms of critical infrastructure that goes offline—whether that's power infrastructure, transportation, or water—putting the entire economy of Canada's largest city, or Calgary, on hold for a week because of the length of time it takes to respond.... I mean, the economic multipliers of that length of delay and that kind of damage would be extensive.

[Scott Brison, Liberal, Kings—Hants, NS]

Should we have climate change adaptation as a line item in the budget, recognizing the cost, and that there is going to be an investment we have to make and start preparing as a matter of sound budgeting?

[Jeff Lehman]

Yes, absolutely. I don't think there is any question that this is a new cost to all of us. The impacts are unquestionable from what we've seen across the country in the last couple of years, and it behooves us to plan for it.

[Scott Brison, Liberal, Kings—Hants, NS]

On the housing side, housing is one of FCM's top priorities this year. The need for affordable housing is not only a big city issue, but a small town and rural Canadian issue. Mayor Dave Corkum from Kentville explained this to me recently when we met. For the home builders, do your members see an opportunity to participate in this needed investment to build affordable housing, and to potentially get REITs involved, and some of the other institutional investors, in helping fulfill that need? Do you see an opportunity to create jobs and growth for your members?

[Bard Golightly]

I don't think it's a simple answer. It's partly an income question and it's partly a supply question.

With respect to the home-building industry being able to provide the services to construct the product, unquestionably they'd be able to be there to do that in spades. The sustainability, though, of that kind of housing would have to be looked at carefully so that the ongoing residency of that could be maintained.

[Scott Brison, Liberal, Kings—Hants, NS]

Certainly.

You mentioned energy efficiency. Did the ecoENERGY retrofit program help your members at the time? Did it create jobs from people renovating their homes to make them more energy efficient?

[Bard Golightly]

It did. Those kinds of things have a further reach, though, than just assisting our members. What they're really doing is reaching out to Canadians who want to improve their own affordability in their own homes. So while it did generate economic activity, what it did do was make housing more affordable.

[Scott Brison, Liberal, Kings—Hants, NS]

Should we bring it back? It was cancelled a while back. Would it be the kind of program we ought to renew?

[Bard Golightly]

Yes.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Brison.

We'll go to Mr. Keddy, please.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Thank you, Mr. Chairman.

Welcome to our witnesses.

I have a couple of questions for Mr. Golightly.

We had introduced, for a period of time, the home renovation tax credit. You mentioned in your comments that you thought it had minimum fiscal cost to the government.

I just want to break down a little bit three points that you made. One was to protect affordability for new residential construction. Second was to tackle the underground economy in home renovation. The third was to support skilled trades development and to advance innovation in housing.

My question is this. Would the former home renovation tax credit not work towards serving all four of those asks? Number one, you would bring your underground economy contractors, of which there is an untold number.... I couldn't guess. I'm going to ask you for a number, so you can come up with it. But however many there are out there, it would force them into the skilled trades, because a lot of them would have unskilled...or maybe good carpenters, but not skilled carpenters working for them, and certainly not journeymen carpenters working. It would also help, on the third point, to advance innovation in housing, because these guys aren't watching what's current; they're not advancing the trade.

I'll stop there to give you time to answer.

[Bard Golightly]

I believe you're posing a question on what the value is in the underground economy. We could get that information or do our best estimate on it. I would appreciate the opportunity to provide that for you at a future time.

You raise a very interesting point. The program would touch all of the areas you inventoried. I hadn't thought of it from that perspective, but it would serve triple duty.

I think the other piece that's important is that we landed up previously, and would again, in a situation where we're delivering quality. We strongly believe that the tax revenue to the government.... The potential is there for it to be not revenue neutral, but revenue positive for the government.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Thank you.

You're making a suggestion that new builds could be GST exempt. My question to you is, what are you asking from your provincial and municipal governments? Is it only going to be an exemption and a tax break from the feds, or are you looking for a tax break from your provincial and municipal governments as well? It can't be simply one level of government paying for it all.

[Bard Golightly]

That's a fair point.

What we're saying, sir, is that we're looking at a tax-on-tax situation right now.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

I understand how it works. What are you looking for from the rest of them?

[Bard Golightly]

All orders of government have to recognize this so that we're not just simply loading one tax on top of another. I think you're right.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

The other question is for the urban mayors' caucus.

Mr. Lehman, you mentioned in your comments—and I'm not quite sure where this comment is coming from—something about funding for pipelines. There is no national funding program for pipelines; pipelines are totally privately funded.

What did you mean by that?

[Jeff Lehman]

It's our understanding that under the Building Canada fund, some of the national infrastructure projects could include energy infrastructure. I stand to be corrected if the government has clarified that.