Finance Committee on April 18th, 2024

[Dr. Amrinderbir Singh]

I think this includes a diverse range of metrics, including from what areas people are coming to receive service, and where. I think I'd be most interested personally to see data related to whether people living in their home communities are able to receive services right where they are.

I'd like to see data related to income levels, socio-economic status and how much people paid out-of-pocket, because I know there are income categories on which the copayment is decided. Evolving data on that would also be helpful for future directions. Then we'd see whether there is hesitancy among patients to accept treatment based on out-of-pocket expenses, or this is seen as a positive, and more and more people are receiving the care they need.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Davies.

We want to thank our witnesses, Dr. Singh and Mr. Laberge, very much for their testimony. On behalf of the finance committee, we really appreciate it.

We are going to transition now to our final panel for the day, so we'll suspend and get those witnesses in as quickly as we can.

[The Chair, Liberal, Peter Fonseca]

Welcome back. We are here with our final panel for today.

We have with us Mr. Ian Lee, associate professor at the Sprott School of Business, Carleton University. He is no stranger to this committee.

We also have here in person, from the Canadian Association of Public Health Dentistry, the immediate past president, Dr. Keith Da Silva.

Welcome, Dr. Da Silva.

We are going to start with Professor Lee. Please provide your opening remarks to the members, and then we will go to Dr. Da Silva.

Mr. Lee, please go ahead.

[Dr. Ian Lee, Associate Professor, Sprott School of Business, Carleton University, As an Individual]

Thank you, Chair Fonseca.

First, I have my disclosures. One, I do not belong or donate money to any political party at any level in Canada. Two, I have taught at Carleton University for 37 years, teaching the strategy capstone course that evaluates the competitiveness and value creation of industries and firms across the United States and Canada. Three, over the last 30 years, I've taught the EMBA over 100 times in multiple developing countries that experience very low economic growth, massive inequality, corruption and poverty at levels not seen in Canada.

As I am not here to plead on behalf of any interest group, business or NGO—after all, I'm not a lobbyist—I will deal at the level of the macroeconomic, philosophical direction of the budget implementation bill.

The fundamental problem, in my judgment, with the previous budget and the current budget is the overarching belief in the following fundamental principles. One, the top-down or centralized decision-making by politically directed non-market bureaucracy using the public funds of citizens produces superior outcomes to decentralized private decision-making by investors taking risks with their own money. Two, superior economic growth and prosperity will be realized by expanding the role and size of the public sector to direct and guide, substituting their decisions for private strategic decisions by corporations and investors. Three, fairness is defined as treating business investors or risk-takers as equal or possibly inferior to employees, requiring taxation to equalize investors with employees.

In my judgment, each of these fundamental assumptions in the budget bill is wrong, false and destructive of the greater public good in Canada. The market economy, from its origins in the late 1700s to the present—250 years of economic theory and practice—and the over 50 Nobel prizes in economics have taught us that a decentralized economy of private investors and decision-makers making private decisions concerning capital investment, research and development, production, pricing, distribution and innovation produces the incredible standard of living of the high-income OECD countries, documented by the World Bank.

The “hockey stick of human prosperity” was named and documented by growth scholar Professor McCloskey of the University of Chicago and the University of Illinois in over 250 peer-reviewed research articles. I urge you to read her article called “How Growth Happens”. However, it was Joseph Schumpeter, the brilliant economist at the University of Vienna, then Harvard, who taught us the why and the how.

Competition causes firms to endlessly, ceaselessly innovate in order to differentiate their product offerings and achieve a sustainable, competitive advantage—the holy grail of any private firm. This process creates “gales of creative destruction”, the famous phrase of Schumpeter. It is not profit maximization, as claimed by critics unschooled in growth theory and economic philosophy. Schumpeter taught us that there are five types of innovation: product innovation, process innovation, business model innovation, source of supply innovation, and mergers and divestments, which I would call “corporate strategy innovation”.

The budget unwittingly undermines every type of Schumpeterian innovation by attempting to displace and replace private producer or investor strategic decision-making concerning these types of innovations. This replaces private investors with the very worst kind of economic policy decision-making and political decision-making and has false assumptions concerning the superiority of knowledge, understanding and decision-making in private markets.

In any large economy, there are literally trillions of economic decisions that occur daily. Many are as trivial as the decision to go to Tim Hortons for a coffee. It's an economic decision. However, the trillions of microeconomic individual decisions aggregate to macroeconomic trends and macroconsumer behavioural trends—the domain of strategy and value creation.

It is a conceit that people at the top of the non-market sector possess knowledge superior to the wisdom of crowds and to the outcomes of thousands of markets reflecting the decisions of millions of consumers and investors. There is no factual basis to this conceit. There is no supercomputer in the world fast enough or powerful enough, nor any AI algorithm or great leader smart enough, to process, aggregate and understand the meaning of the trillions of economic decisions in real time and then respond with the appropriate strategies and policies.

This explains the failure of every centrally managed economy everywhere, and we don't even have to look to the famous U.S.S.R. We can look at the failures of Argentina. We can look at the failures of Turkey and the failures of Venezuela.

What must be done—because I'm running out of time—

[The Chair, Liberal, Peter Fonseca]

Professor Lee, we have to wrap it up in 10 seconds.

[Dr. Ian Lee]

Can I just give you my five things that must be done?

[The Chair, Liberal, Peter Fonseca]

No. We're well over time. I would let it go, but—

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

I want to challenge the chair.

[Voices]

Oh, oh!

[The Chair, Liberal, Peter Fonseca]

—Professor Lee, as you know, you'll have a lot of time during questions from the members.

Now we're going to the Canadian Association of Public Health Dentistry.

Dr. Da Silva, go ahead, please.

[Dr. Keith Da Silva, Past President, Canadian Association of Public Health Dentistry]

Thank you to the chair and to the committee for having me here today. I was more than happy to trade in the snow in Saskatoon for the rain here in Ottawa this morning.

My name is Keith Da Silva. Right now, I'm the only dually trained pediatric dentist and dental public health specialist, which gives me a unique perspective of the private and the public sides. I'm the past president of the Canadian Association of Public Health Dentistry. You heard from our president earlier today. In that role I was fortunate to be part of a number of different task forces and working groups, and still am as it relates to the CDCP. I've been involved with it from the start.

I want to start by acknowledging and appreciating the magnitude of this moment. This is a historic investment in oral health care, one that will have the potential to improve the health and quality of life of a lot of Canadians who can't afford care. What I don't want to lose in this moment—and I don't think we're talking about it enough—is that there is widespread recognition for really the first time, in the media, in public platforms and even in committee meetings like this, that oral health is an integral component of our overall health. It's something we can't lose anymore, and it's really a paradigm shift: No matter what the policies or programs become, we can't undo that we know this is important for our overall health.

As a clinical pediatric dentist, most of my practice was a safety net. I would treat children from low-income families—and this used to be in Toronto—who couldn't be treated anywhere else, whether that was because they were too young, their behaviour didn't allow them to be seated in the chair or other practices could not take the insurance they were on due to reimbursement rates. It was a difficult time for a lot of these children, especially in Ontario, where fees were being reimbursed somewhere in the 30% to 40% range. These were children with a mouth full of cavities and who often required us to take them to the operating room to have all their teeth fixed. Aside from the risk that comes with treating children under general anaesthesia, it's also a costly and inefficient way to have teeth fixed, and it really does strain the overall hospital system.

I cared for a lot of children with special needs. These are also individuals who have many challenges accessing care. I believe you heard from Joan Rush today about that. Again, that could be due to their coverage, financial resources, lack of specialized facilities or just the training and comfort level that some providers have because they don't have the expertise to do it. My experience providing care for these children and their families is really what led me from pediatric dentistry to incorporating dental public health, because I couldn't overlook some of the barriers they were facing when getting treatment.

While my clinical focus is on pediatrics, in public health, I have expanded to address access to care for seniors, particularly in long-term care facilities; for all low-income individuals; and, in Saskatchewan, where I currently am, for those living in northern areas of the province. Without question, the cost of care is the most profound barrier right now to oral health care. No individual should ever have to choose between paying rent, buying groceries and having a tooth fixed when it comes down to it.

I believe that the $13-billion investment in the plan will make dental care more affordable for a lot of Canadians, particularly those who have been priced out of the private system. However, I must emphasize that the launch of this plan and investment in this plan should be looked at as the initial step of what will be a long road going forward to improve oral health outcomes.

Of particular concern for us is that, although care will become more affordable for many, this doesn't always mean it's going to become more accessible. There will still be many Canadians who enrol in the program who won't have dentists or oral health care providers living in their communities, so they will still have to travel or they won't have access to the specialized care they need. Again, this is meant to be a start. We can't solve every problem in one plan, but these are things we don't want to lose.

We will still need to do more to incentivize members of the oral health care team—the full team, which includes specialists, dental hygienists, denturists and dental therapists—to get them where they're needed the most, as well as support training and educating the next generation of professionals. I'm optimistic the oral health access fund will address some of these issues with some creative solutions going forward.

Before concluding, I want to leave you with three points. I'm sure many of these have been addressed today.

First, we still need to do a better job of emphasizing prevention. Both public and private plans, by design, are geared towards diagnostic and treatment services, but they're very lights on preventing disease. We still need to develop—and this doesn't have to be solved in any one plan—a system of surveillance, health promotion and prevention. I truly believe, from my own experience, that we can keep kids out of emergency rooms and hospital rooms with a more targeted approach to prevention.

Second, there's lots more to be done with this plan to evaluate it in real time and—this is the harder part—make changes as we get more data. Some initial questions will need to be addressed: Are the right services covered? Is there an evidence base for these services? Are Canadians enrolling in the program, and if not, what are the barriers to that? For those who are enrolled, are there difficulties accessing services, and if so, how do we fix that?

Lastly, I'd be remiss if I didn't say that this plan will not succeed without the acceptance of the full scope of dental professionals. There are still some barriers to that. I'm very encouraged by the level of engagement. I don't think there have been this many stakeholder meetings and this much engagement with all of the national professions and provincial professions, so there is progress in that. Although there are barriers, I think they can be overcome over time, but there is still work to be done.

In closing, I thank you for allowing me to speak here today.

[The Chair, Liberal, Peter Fonseca]

Thank you, Dr. Da Silva.

I know members are eager to ask questions. We're going to start with our first round. Each party will have up to six minutes to ask questions.

We are starting with MP Hallan for the first six minutes.

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

Thanks, Chair.

Mr. Lee, thank you for being here.

The Prime Minister, the finance minister and the Bank of Canada all at one point said that interest rates would be low for a very long time. After that, we saw 40-year highs in inflation and the most aggressive interest rate hikes seen in Canadian history.

In a BNN Bloomberg interview during that time, you talked about how much unprecedented government spending was happening, and you predicted much of what we're seeing today with high interest rates of up to 5%. You said that it was government-engineered and that it would get to this point.

Can you expand a bit on what happened? I think a lot of mortgage holders today who are renewing at double or triple the rate or the ones who can't afford their mortgage want to know what happened.

[Dr. Ian Lee]

I did say that at the time. This wasn't Monday morning quarterbacking, as we know four years later. When we drove the rates down to a quarter of one point and the finance minister and the Prime Minister were saying to borrow because they were going to stay at these levels, I instantly realized that they had made a mistake. Let me explain why.

I did my research. Rates had never in the history of Canada or the United States gone down to a quarter of one point. I went all the way back to the U.S. Civil War and they never went down to a quarter of one point. In Canada, in the Great Depression, which was 10 years—much longer than the pandemic and with a third of the population out of work—they didn't go down to a quarter of one point.

My point is that rates were so low that it was inevitable that they were going to go up. It was not possible, by any rational analysis of the historical record of interest rates, that they would remain at basically zero. I was very critical of that, and I lived through the seventies, when rates went to 20% to deal with the inflation of the government at the time, which hit 14%.

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

You talked about productivity. We see in Canada that GDP per person has declined for six straight quarters. GDP per capita has the lowest growth in the entire OECD. The Bank of Canada's senior deputy governor, Carolyn Rogers, has said that this is a “break glass” emergency situation.

Can you explain how productivity got so bad in Canada? Why it is lower today than it was in 2018? What is the impact of some of the economic uncertainty and higher taxes on that productivity?

[Dr. Ian Lee]

I've been talking about this in my classes for literally 35 years. I've studied and read, I think, every major document in our country on this topic, going all the way back to the seventies and eighties. I've come to the conclusion—and I agree with the senior deputy governor of the Bank of Canada—that reduced competition, because we have so many protected industries, is a major contributor. I'm not suggesting it's the only contributor.

This is straight out of Schumpeter again. If you're not forced to compete, then you're not going to compete. You're not going to innovate. Why would you innovate if you don't have to innovate? We have created a lot of protection in multiple industries, which is allowing these industries not to innovate.

To your second question—again, the research on this is very clear—displacing and crowding out the private markets with government spending that's classified as investment is not going to increase productivity, at least from any of the evidence I have seen. We have a crisis in this country. That's not just from the senior deputy governor of the Bank of Canada. David Dodge has talked about this. John Manley, the former Liberal, has talked about this. Bill Morneau has talked about it.

This is not a Conservative view. The numbers are shouting at us that we have a profound problem that's going to hurt our young people.

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

I think I have enough time for one more question.

Mr. Lee, I want to talk about something you brought up in another BNN Bloomberg interview. You said that during the pandemic, untargeted universal government programs were “squandering” Canada's resources.

We know Canadians are in a cost of living crisis right now. This government is constantly creating big government programs. A lot of the government's existing and announced programs don't increase productivity, make Canada more expensive or don't create jobs.

What effect do you think these large programs have on affordability and productivity in Canada?

[Dr. Ian Lee]

I have been very critical of them, and not because I'm opposed to helping people who need help. Of course we help them. That is the Canadian way. We have been doing this my entire life. As my late mother, who grew up in the Depression in Saskatchewan, reminded me, there was no public health care. There was no old age pension in the thirties. There were none of the programs we have now.

This is not about dismantling the social programs for people who need help. However, universality, which is giving money to high-income people and upper-middle-class people like professors, is simply wrong. It is just wrong to say that I should be getting free medicine from the taxpayer when I have a private insurance plan.

We should be targeting it to people who need help at the bottom, not privileged people like members of Parliament, professors and public servants. That's squandering desperately scarce public funds, when we should be targeting them and then focusing on growth to create the economy and growth of the future. That is going to generate, by the way, tax revenues for governments to then redistribute among various consumption programs.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Lee.

We're going to MP Morantz.

You have one minute for one question.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Professor, in my one minute, I want to ask if you agree with the following statement, which is a quote from Milton Friedman: “A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.”

Do you agree with that, and do you think it applies to Canada today?

[Dr. Ian Lee]

I do. I studied Milton Friedman when I started my master's and Ph.D. I went back as a mature student at the age of 30. I'm a high school dropout, by the way. I was really stupid and irresponsible when I was a teenager. I learned my lesson and realized that education is key.

I studied Milton Friedman. I also studied a lot of the thinkers from that period, in the eighties, and the economic deregulation reference of the Economic Council, because it was a very fertile time. I've also taught in former Communist countries and former centrally planned economies. I don't believe you can have one without the other. They are joined at the hip.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Morantz.

MP Dzerowicz.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

I want to thank both of our speakers today.

My first question is for Dr. Da Silva, although you kind of ruined it. At the end of your talk, you had your three recommendations. I'm going to be touching on one of them.

When I was a kid, long ago but not too long ago, I could not afford to go to a dentist. A lot of people at my school could not afford a dentist. Every year, we had public health nurses come. They were trained in dental hygiene. They would teach us how to brush our teeth, and they did that every year. They showed us a video and a couple of slides, and they literally gave us a toothbrush and told us how to brush our teeth. They walked up the rows in the gym to make sure that we were doing it properly.

I think there must have been a dentist there, because I remember individually going up to the dentist and the dentist looking at each of our mouths. The next day, you would get either a yellow paper or a red paper. The red paper meant you should see a professional dentist, who would say you needed braces. Every year I cringed, because every year I got a red slip of paper. However, there was no way I was going to show it to my parents, because there was no way we could have afforded dentists.

It sounds like a sad story, but the good news is that I never had a cavity until I was 21 years old. Also, because my parents had no money—I don't know if they meant to fool us, but they fooled us—they told us that dessert only ever happened on Sundays, so we only ever had sugar on Sundays. I think that played a big role in why I had my very first cavity when I was 21 years old.

The question I have for you is how we ensure a continued emphasis on prevention and keeping teeth healthy while we introduce this really excellent Canadian national dental care plan.

[Dr. Keith Da Silva]

Thank you for that.

School-based systems, I think, have always been shown to work for finding kids who have high needs. Some provinces have targeted school-based programs where providers go to schools in areas where they know the risk is going to be higher. In Ontario, for example, some areas might have screening and fluoride. Varnish is applied, and depending on the scope of practice for the dental hygienist or dental therapist, they can offer treatments within the schools. Saskatchewan used to have probably one of the most world-renowned school-based programs through the sixties, seventies and eighties. The challenge is that they are costly to run, and given all the pressure that provinces have, those tend to be cut or stripped down first.

The idea is that there need to be parallel systems within the provinces and within local municipalities. This requires partnerships with school boards, but not just focusing on children. We do a pretty good job with oral health prevention and screening for our younger kids, particularly those in kindergarten up to grade 7. Once they hit high school, we lose track of them, and that's even more so for seniors in long-term care, where we're not going to assess their needs as readily.

It's about combining resources. It doesn't have to be just the oral health professionals involved in this. We need to partner with any caregivers, like nurses and physicians, who can look in the mouth to identify problems so patients can get into the system, whether it's to be referred to their dentist for private care or enrolled in a public program. That broadens how we get patients into the programs they need, and then they can get care.

It starts by looking in the mouth, whether it's in the schools or the areas where that's needed the most.

[Julie Dzerowicz, Liberal, Davenport, ON]

Let's not lose that. That's very important. I think the reason it was done when I was younger was that it was the only thing the school system, the health care system, could afford, because it didn't cost a lot of money. We want to do that. Also, whatever I learned in grade school, I very much carried through in high school. I just want to say that as a reminder to us all.

Thank you for your leadership, by the way. I really appreciate all the work you have done.

My second question is for Mr. Lee.

Mr. Lee, you might be the guest most invited to the finance committee. I've been on this committee for almost four years now, and I think I've seen you for just about every single study.

We're here to talk about the fall economic statement, so I want to ask you a question on that. We have heard a number of industry guests who have come before us talk about the fall economic statement. They very much support the investment tax credit, and they have been very vocal in telling us to get going in approving the fall economic statement and Bill C-59.

Would you agree with them?