Finance Committee on Feb. 18th, 2016

[Brian Kingston]

We would favour a couple of things. First, trade enabling infrastructure is key, so ports, rail, roads, transportation. For example, Port Metro Vancouver is looking to expand its Roberts Bank terminal. That's a good example. That will help shipping flows to the Pacific, so it's very important. Energy infrastructure is also extremely important. Those would be two areas that we would prioritize right now.

[The Chair, Liberal, Wayne Easter]

We'll have Mr. McColeman. Then we'll come back to Mr. Sorbara and close off.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Thank you, Chair.

Mr. Kingston, my colleague just spoke about infrastructure spending, but infrastructure spending, if it's to be effective.... Do you see it being effective in the short term from where we sit today? Do you think it's possible to get projects out the door fast to be able to make an impact? I know it's just to mitigate a slow-moving growing economy, but at a lower level.

What are your views on that?

[Brian Kingston]

We do not think that infrastructure spending right now.... The lag time is too long to counteract the current downturn. Most studies show that you need about 12 months for infrastructure spending to actually have an impact on the real economy. Obviously, this is debatable, but the multiplier effect can take some time.

Spending right now won't help the economy at this moment. There are long-term infrastructure needs, hence the reason we support investment there, but I wouldn't necessarily categorize infrastructure spending now as a stimulus to help our current economic issues.

[Phil McColeman, Conservative, Brantford—Brant, ON]

In other words, I guess I relate it to some of the needier parts of the country, such as Alberta, Newfoundland, and New Brunswick, and to those types of communities where they need immediate help but infrastructure isn't going to do the job. Is that a fair analogy?

[Brian Kingston]

It's a fair analogy unless there are projects that are truly shovel-ready. We use that term a lot, but I think there are very few that are truly in that position.

[Phil McColeman, Conservative, Brantford—Brant, ON]

You represent the business community. I know that one of the things that has been discussed at this committee, amongst other data that we're aware of, is that a lot of corporate wealth is sitting on the balance sheets of corporations.

In corporate decision-making, uncertainties are often some of the reasons why people sit and put that wealth on the balance sheet. They're not certain. They're not certain about the future of, let's say, taxation. Carbon taxes would be one thing, just to cite an example, as would environmental impact assessments if a corporation is going ahead with a project that would require something like that.

How do you see this affecting investment decisions, this kind of thinking within the corporate world?

[Brian Kingston]

You're exactly right. Certainty is what absolutely drives major business investment decisions. Look at the current downturn in business investment in Canada. A lot of that is stemming from the oil and gas sector, and it's obvious why that's the case. When the price of oil has declined and there seems to be no level at which it's going to stabilize, that will hold back major large-scale investment.

A clear economic environment and certainty around regulations and taxation, that's what helps businesses make those long-term investment decisions.

[Phil McColeman, Conservative, Brantford—Brant, ON]

I'd like to move to Ms. Baldwin.

I want to go to that sick-leave days conversation you had with my colleague. In my past, I had the learning curve experience of being on a governance body of municipal employees. One of the challenges we had was the accumulation of these sick days, with people literally taking a significant amount of time before they retired to use up those sick days before they went into retirement. It was a systemic issue within the organization.

I have just a quick question. What are the statistics as far as the public service goes in terms of days absent from work versus the larger private sector? Are the statistics the same? Do we see the same usage within the public service as we do for those who have these same programs in the private sector?

[Jeannie Baldwin]

Yes. Thank you for the question. It's the same.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Thank you.

That's it.

[The Chair, Liberal, Wayne Easter]

Okay. We'll save a little time.

Mr. Sorbara.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Mr. Chair.

Mr. Kingston, our platform advocated an infrastructure investment going from $65 billion to $125 billion over 10 years. What we've advocated for is long-term sustainable funding in social and green infrastructure. I do agree with you that we need to have infrastructure that allows goods and services to move to markets and to ports. Look at the gridlock that happens in the GTA every day and what the estimated cost is there.

I do think there's an argument for infrastructure to flow now. We just saw the OECD downgrade the economic outlook for the entire world, not just Canada. We're part of the world. We're an open economy. I do think that needs to be stated. It needs to be now, but it also needs to be flow-through for those few years.

I was interested in your comments on a review of the tax system. Can you expand on that front? Also, going back to infrastructure, would you not agree that it is an enabler for long-term economic growth?

[Brian Kingston]

To comment on your last remark, it absolutely is an enabler of long-term economic growth, for sure; hence the reason we support infrastructure spending.

Regarding tax, basically we've found that in the past 10 budgets, and going back even further than that, almost every government has introduced some sort of tax expenditure in one form or another. This has made the tax system very complicated, and not only for large corporations. It's made it complicated for everybody; I just see it through the lens of the large company. When they're dealing with this number of taxing points—as I mentioned earlier, there are 56 different taxing points—it just gets extremely expensive and complicated to comply with Canadian tax legislation.

We're calling for a comprehensive review where we look at the whole system. We are in a new global economic environment right now. Our economy has changed from the economy that our tax system was based on previously. If we could take, from scratch, a review of our tax system and design one that we think would help the Canadian economy into the future.... I think we should really embrace that and see.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Just quickly, I'd like the Business Council's view on the temporary foreign workers, or TFW program. We've had a lot of feedback on that program. I'm hearing it in my riding. It seems not to be working as it was designed. I'd like a quick comment there.

Then to Ms. Forget, are there some studies you can send us on this guaranteed income? I'm an economist by training, and I really want to look at that and read it. We believe in evidenced-based policy-making, so I would like to get more information on that.

[Brian Kingston]

Just for clarification, what element of the temporary foreign workers program are you asking about?

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

I'd just like your general view of the program.

[Brian Kingston]

I'm not the best-positioned person to speak on the temporary foreign workers program. I can say, though, that we continually hear the need for Canadian businesses to attract the best talent in the world. Our immigration system needs to be designed to allow that to happen.

[The Chair, Liberal, Wayne Easter]

Ms. Forget, did you have anything to add?

[Dr. Evelyn Forget]

I can send that.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Yes, if you could.

[The Chair, Liberal, Wayne Easter]

Okay.

Before I go to Mr. Liepert, on the stimulus spending through infrastructure, you left the impression that it really wouldn't create that stimulus until a little more long term. But with the massive layoffs in some of the energy sector and in others that have skilled workers, it would at least fill a gap in employment, would it not, in terms of some of those infrastructure projects?

[Brian Kingston]

It all depends on the speed with which the money can flow.

[The Chair, Liberal, Wayne Easter]

Okay.

Mr. Liepert.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Mr. Chairman, I'll be very brief.

I just want to let Ms. Johnston know, in my home city of Calgary, that although no one has any questions, I do think I can speak for this entire group around the table when I mention the great work the Sheldon Kennedy Centre does in Calgary.