Finance Committee on Oct. 5th, 2023

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you, Mr. Chair.

The minister would like to come to committee. We are just working on dates.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you, Mr. Chair.

I'll go back to our witnesses.

My colleague, Mr. Hallan, finished off his questions and wasn't able to get an answer, so maybe I can get an answer.

To you, Mr. Cross and Mr. Dehejia, concisely—in maybe a point or two each—what could Canada do to enhance our productivity and to put Canada in a position to start competing?

[Philip Cross]

In my work in this area, I've gone beyond.... I think the problem has become so deep-rooted that it's not a matter of changing a policy or a regulation anymore, and I'm more and more focused on how we talk to and interact with the business community. If we don't change the way in which we talk to these people, we're giving them every reason to leave and go to jurisdictions that are much more business-friendly. I think it comes down to attitudes and to culture more than policies and politics now.

[Vivek Dehejia]

I'd second that. I would say our problems are so structural and so deep-rooted now that a policy tweak here or there won't really make a big difference. We have become a country, sadly, in which entrepreneurship just doesn't thrive, and that's a big problem for us.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you for that.

You point to some larger concerns, which I think are well founded.

I know, Mr. Cross, you've written about that, and I've read some excellent articles about that.

To get back to more of a technical concern, one concern I have is—as you'll know if you've seen the bond market—that Canadian corporations are now going to be able to make more money with zero risk—or close to zero risk, because I shouldn't say anything is zero risk. We already have the issue that we don't have, as Mr. Blaikie just talked about, companies perhaps putting enough money into investment. My response would be to lower taxes to give them a greater return when they take risks, perhaps, as the innovators said, by reworking the SR and ED program. What are your comments on that? It's an open question to you, Mr. Dehejia and Mr. Cross.

[Philip Cross]

My concern is that, yes, we're moving into an environment of much higher interest rates, but I think that's generally going to be a more negative economic environment. Yes, it's going to be more profitable to invest in bonds than to take a risk investing in greenfield projects. In that type of environment, I think it's going to be difficult to tinker at the edges with policies and taxes to get people to take more risk. That's when you should be starting to work on a culture shift and changing the way we talk to corporations, entrepreneurs and foreign investors.

[Vivek Dehejia]

I'd add one comment to that. We lived for 10 years or more with basically free money. That distorted the economy beyond belief. It was cheaper to just buy property than to invest in risky assets. We got this huge property market and these asset price bubbles, which is one reason we're now facing households with debt. The reality is that money is now costly, and I think households and businesses have not wrapped their heads around how to react to this change.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you very much.

I'm going to switch gears and talk to you, Mr. Currie, for a bit. Thank you for all the work you and the farmers do across the country. I think the best farmers are in Northumberland-Peterborough South, but I might be biased.

In all seriousness, one of your recommendations was, of course, to reduce the carbon tax on all fuels, including natural gas and propane. That's Bill C-234, which is currently in the Senate, but I want to talk more broadly than that. Tiff Macklem said that 0.4% of inflation was directly attributable to the carbon tax.

If, in fact, we were able to remove all the carbon tax on your members, would that reduce the input costs and potentially reduce the cost of food in Canada?

[Keith Currie]

I think the easy answer is yes. The one thing about carbon tax is that rural Canadians and farmers pay disproportionately more in tax. For those who live in an urban setting, when they walk out the door to go to the grocery store, they have two choices. They can get in the car and drive and choose to pay the carbon tax, or they can go down the street and get onto public transit.

We don't have that option. We have to drive everywhere, so we're paying disproportionately more. From a farming perspective, everyone who gets charged a carbon tax for a service they provide or whatever the case may be puts that added cost onto the products they're selling to the public. Farmers are price-takers, not price-setters. We don't have the luxury of passing that cost on, so we get piled on by more and more service charges, which narrows our margins even more.

It would be a definite boost, especially if Bill C-234 gets through and you could put the push on the Senate to get this through committee quickly, especially on a couple of senators who are holding this up. We'd really appreciate it.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Lawrence.

Now we're going to our final questioner. It will be MP Baker for this session.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thanks very much, Mr. Chair.

I want to start by making a brief comment. I think that in Parliament, in this committee, members will disagree with each other on a range of issues. When you're in this line of work, you have to learn to let that go, but I can't let go of something that was said, and I need to point it out in the context of what's being discussed here.

In his last intervention, Mr. Hallan was lamenting the fact that Canada wasn't doing enough to bring our emissions down. What frustrates me is that at the same time, his party and his leadership have done everything possible to get in the way of any action to reduce our emissions.

For the folks watching at home, I think it's important that we call that out and that we be clear that as parliamentarians, no matter what our views are on any issue, we're clear about where we stand and what trade-offs we're making. That really frustrates me, especially when we know how urgent this climate crisis is. We've heard about the impact, economic and otherwise, that this is having on folks across Canada.

If the Conservative Party believes it's important that we act on climate, then I'd love to see its support on measures to act on climate change in this country.

With that said—

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

I have a point of order, Chair.

Arguably, I think the only plan that the Liberals have put forward is an environment tax—

[Yvan Baker, Liberal, Etobicoke Centre, ON]

That's debate, Mr. Chair. This is my time.

[The Chair, Liberal, Peter Fonseca]

Mr. Hallan, that's not a point of order. You were not interrupted.

Allow MP Baker....

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you, Chair.

Mr. Chair, I hope you'll give me back the time that I lost because the Conservatives interjected.

I'm very respectful of the members of the Conservative Party when they seek to make points to express their disagreement with the government position. I am now expressing my disagreement, and I would ask that I be given that same courtesy to disagree.

I wanted to come back to our folks from the agriculture community. I want to ask them about some of the extreme weather events and the economic impact. This continues along the lines of the conversation we were having earlier.

Could you talk a little about how—I'm thinking about wildfires specifically, but you may have other examples—that impacted the prices that your members, the farmers, are able to charge for what they're growing and selling?

[Keith Currie]

We don't specifically get to charge whatever we want for our products. That's set by markets. That market comes down...the prices on those markets typically come down to supply and demand.

We all suffered through the wildfires right across the country early in the year. I don't think anyone who stepped outside their house couldn't smell smoke in the air. Certainly, for our western colleagues, that's had an even bigger impact because of the severity of the fires. It's affected the production of the crops. It's affected people being able to go outside and actually work in their fields. There's been productivity loss in that regard as well.

It doesn't matter if the price goes through the roof if you don't have the product to harvest and sell on that market. It's kind of a chicken or egg thing. We like the high prices, but if these weather events are affecting our productivity, then it doesn't matter, because we can't take advantage of these markets.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

I appreciate that. Thank you. I think I have only about a minute left.

You talked earlier about soil health. What are the impacts of some of these extreme weather events on soil health for farmers?

[Keith Currie]

It depends on the type of climate issue you're talking about.

Floods, for example, can have long-term affects, because soil moves.

We've done a good job for decades now on the sustainability front. Part of our biggest frustration is that no one is recognizing what we have been doing over the last number of years. They think we have to do all these things now to solve the problems, but they're not taking into account what we've already done.

I had to go plough a field a year ago for an archeological study on a farm I rented. Do you know you know hard it was for me to find a plough? Nobody ploughs anymore; everybody does no-till.

We do no-till because it's good for the soil. It's good for what we do. It's good for economic reasons as well. As long as we can continue to ramp up those measures of best management practices.... We need things like seed technology development in seed genetics in particular to help improve for wet years and for dry years. That's going to help the sustainability efforts as well.

Fires can also have a long-term effect, depending on what comes out of the air and goes into the ground and how that impacts the growth of the crops going forward. That will also impact livestock farmers if they can't grow the right crops or the more nutritious grasses, etc.

A multitude of effects are happening. The more we can invest in the technology that's going to help us go forward, in particular on soil health.... We don't do a thing in order to sequester more carbon. When we do something for a soil, it has multiple co-environmental benefits. There's water retention and movement, nutrient retention and, yes, carbon sequestration.

That's really what we need to focus on from a soil health perspective: How do we drive that forward?

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Baker. That concludes our session.

We want to thank our excellent witnesses. We have labour, innovators, farmers and academics here with us. It's a real cross-section and there have been many great questions from our members and answers from our witnesses. Thank you for your testimony on this study, which is our pre-budget consultation.

I just want to wish all of you and your families a happy Thanksgiving long weekend.

Thank you. We're adjourned.