Finance Committee on April 18th, 2024

[Don Davies, NDP, Vancouver Kingsway, BC]

How am I doing for time?

[The Chair, Liberal, Peter Fonseca]

You have another minute.

[Don Davies, NDP, Vancouver Kingsway, BC]

Okay.

Professor Lee, I'm old enough to remember the 1980s. In the 1980s, we saw the birth of what was called “neo-liberal economics”. We saw the introduction of that, and I think it has continued to this day. We've had lower corporate taxes. We've pursued liberalized trade, signing trade agreements and removing most tariffs. We've pursued deregulation in everything. We sold off Air Canada and deregulated the airlines. We sold off Petro-Canada. We have fewer regulations today, certainly, than we did in the 1980s. However, spending on machinery and equipment by businesses and on R and D and innovation in Canada has been falling as a share of GDP, dating right back to the beginning of the century.

Can you explain that to me?

[Dr. Ian Lee]

I think I can, and forgive my arrogance. I read a ton on this.

I've come to the conclusion—I think Senior Deputy Governor Rogers, David Dodge and many others have too—that it's because we have too many protected industries. We don't even have free trade in Canada among the provinces. The IMF estimates that if we had genuine free trade between B.C. and Ontario, etc., it would be the equivalent of a 22% tariff reduction. That's massive in terms of the impact on GDP.

We've met the enemy and it's us. We've done it to ourselves. Our banking is protected. Our airlines are protected. The fees are twice as large. I mean, dairy is protected, as we all know, through supply management. We have many protected industries.

I'm as cynical about business as any progressive, and I'm not a progressive. I'm a fiscal conservative. I don't hide it. Corporations—

[Don Davies, NDP, Vancouver Kingsway, BC]

We noted that.

[Voices]

Oh, oh!

[Dr. Ian Lee]

Corporations will not compete if they don't have to. We have to make them compete.

Make them compete. Open it up. Remove all protection for these companies.

[The Chair, Liberal, Peter Fonseca]

Thank you.

That's the time, MP Davies.

We'll give a bit more time to everybody. We have another 10 minutes or so. That's two or three minutes for each party.

MP Chambers, go ahead, please.

[Adam Chambers, Conservative, Simcoe North, ON]

Thanks very much.

Dr. Da Silva, I want to talk a bit about program design. The dental care program today doesn't have a lot of dentists signed up. Do you think it would have been more advantageous to use the existing provincial programs, which already had dentists signed up across the country, to deliver the same benefit?

[Dr. Keith Da Silva]

At least anecdotally from having worked in Ontario and now in Saskatchewan, I think if it was a carbon copy of the provincial plans, you may have fewer dentists wanting to be involved. There's a historic distrust between provincial plans and the dental profession, because they've only ever been clawed back. The issue with administrative burden comes from having to deal with lots of these provincial plans.

I think there's some optimism for the federal—

[Adam Chambers, Conservative, Simcoe North, ON]

Would it surprise you to learn that a billion dollars of this spend is going to administration?

[Dr. Keith Da Silva]

I never heard that, but—

[Adam Chambers, Conservative, Simcoe North, ON]

Yes. Some $750 million is going to Sun Life and almost $200 million is going to Health Canada.

[Dr. Keith Da Silva]

In my public health work, I've done evaluations for a lot of plans, so I know that's a realistic cost for development because of the upfront infrastructure that has to be in place, particularly on the timeline to get this out there.

[Adam Chambers, Conservative, Simcoe North, ON]

We've heard testimony and it's been reported in the news that some employers are trying to carve out those who will become eligible for the plan. Do you think that's a concern?

[Dr. Keith Da Silva]

In our current system, I think it is, because the projection for those who will enrol is based on the idea that there are many with private coverage within the income ranges.

I don't know if there is the capacity at this time to do this should private plans or employment-based insurance start to disappear. I think one of the earlier points made when it was first launched in some of the groups was that this could be—

[Adam Chambers, Conservative, Simcoe North, ON]

It's the uploading of costs.

[Dr. Keith Da Silva]

Yes.

[Adam Chambers, Conservative, Simcoe North, ON]

There are also some provinces advocating for that role now.

If you were, hypothetically, advising a patient with a private plan who called you and said, “Since there's a new federal plan, should I leave my current private coverage and join the public plan?” what would you advise them to do?

[Dr. Keith Da Silva]

I would probably tell them to continue as they are, because they're more familiar with what they have. There are some private plans that cover less as a percentage than some of the public plans, but at the same time, what's covered and what's not are still very new.

If they have an existing plan and services they're comfortable with, I'd say to keep that.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chambers.

Now we'll go to MP Baker for two to three minutes.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thanks very much, Mr. Chair.

I want to come back to Mr. Lee, if I could.

On the topic of competition, I'm of the view that we talk a lot about competition at this committee. In particular, and you mentioned it, my view is that we don't have enough competition in a few sectors in this country—airlines, telecommunications and banking come to mind. I think you mentioned one or two of those in an earlier response.

What would we have to do to meaningfully increase competition in those three sectors?

[Dr. Ian Lee]

Please believe me, thank you.

We have to remove the legislative protections that protect those firms against external competition. I know there are people who will say, “Oh, my goodness” to that. I'm unionized, by the way, at the university, and I hear union colleagues saying, “Oh, my goodness, if they come in, we're going to create massive unemployment.” I don't believe it. I lived through Balcerowicz, when he did the cold shock therapy of 1993 to 1995 and Poland was destitute, impoverished and bankrupt. For 24 months they went through a deep recession, and then Poland took off. No other country, the IMF has evaluated, has been as successful in the post-Communist era as Poland, and they adopted all the pro-market reforms we're talking about.

We have to open it up. I don't believe there will be mass unemployment. The new entrants will employ the Canadians who are laid off by Bell or Rogers—that's great—or the other industries that are opened up. It would create growth and create productivity, not unemployment, if we open them up and remove the legislative prohibitions against foreign firms coming in. Let Verizon come into Canada.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Could I ask you specifically about airlines? I ask because an example has been raised.

All of the sectors we have just talked about have significant barriers to entry, but I want to focus on airlines. Are you recommending open skies in Canada? Should United Airlines, American Airlines, etc., come in and be able to fly point to point in Canada, from Toronto to Vancouver or from Toronto to Montreal, whatever the case may be, on whatever routes they so choose?