Finance Committee on May 25th, 2026

[Alex Ciappara]

You started your question around tax policy, so I'll begin there.

The last review of the Income Tax Act was in the 1960s, when manufacturing was a leading economic sector in this country. Now IT has taken over, and it's very much an IT-based economy. I think we need to review the corporate tax policies, and the government actually believes as much. It made a commitment to review corporate tax policies in its last—

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

I'm sorry to interrupt, but my time is running out.

I'll ask my question again: How are banks adjusting? I'm not talking about the government.

How are you adjusting now, or how will you adjust in the coming days, months or years to ensure your lending models support businesses and sectors? The government says it wants to invest in defence. These are the kinds of sectors that need to be opened quickly.

That was more my question.

[Alex Ciappara]

A couple of years ago, the banks joined together and started up the Canadian Business Growth Fund because they identified that there was a gap in growing innovative companies. They all contributed to the Canadian Business Growth Fund, and it's been stood up.

We've also been advocating on behalf of the industry to lower risk weights for businesses. I received a question earlier about lending to businesses. As an advocacy organization, we've been trying to get the regulator to reduce risk weights so that banks don't have to hold as much capital when they're making loans to businesses. Banks already have authorized $300 billion in financing for SMEs. Their approval rates are about 90% for SMEs, so they're very willing to lend.

We've also been advocating for reducing risk weights on venture capital companies. This is where a lot of the innovation is coming from, which you alluded to, to improve productivity. We're hoping OSFI will take us up on that policy request.

Those are a couple of examples.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

Thank you.

Ms. Oliver, in the last budget, we asked that the $150 fee, in particular, be eliminated. Quickly, do you think we're not going far enough?

[Jessica Oliver]

No. The promise was to eliminate the fees, but also to speed up the process. I think it's totally necessary and we should start with that. Provincial regulations evolve more quickly and are more iterative. I think it's another way of doing business in 2026, but it's important the government—

[The Chair, Liberal, Karina Gould]

Thank you, Ms. Oliver. I have to cut you off there.

Thank you, Mr. Lavoie.

To finish off this hour, I'll give the floor to Mr. Garon for two and a half minutes.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you very much.

Ms. Oliver, I'd like to talk about stablecoins. The government has tabled a framework bill on the matter, and now the question is whether stablecoins should be regulated by the provincial regulatory authorities or the federal government.

From what I understand—and I'd like to know if I'm right—payment tools fall under federal jurisdiction and securities fall under the jurisdiction of Quebec and the other provinces. Some of the criteria that allow us to determine whether we're talking about a security include whether there's a return and the possible speculative nature of the instrument. This means if a stablecoin generates a return or is speculative, such as the Bitcoin, it must be regulated by the provinces.

The federal framework is explicit: There cannot be a return. That implies the provinces must regulate stablecoins if there's a return, but since stablecoins are backed by assets that generate a return, that raises concerns. That's a long question, but I really want to know if I understand correctly.

How can we develop these payment tools while ensuring they can generate a certain return, even if the return is predictable, stable and risk-free, while respecting provincial jurisdictions?

[Jessica Oliver]

Because of time, I'm going to speak in English so that I can go faster.

We were absolutely supportive of the stablecoin act from just our own experience. Our clients already hold U.S. denomination stablecoins on our platform. We see that, whereas the vast majority of the assets they hold with us on the investment side are buy and hold, 250% of the total stablecoins that we typically hold move on and off in a given month, so the behaviour is very different, as you say, as a payment instrument.

We have encouraged the provincial government, which is our principal regulator, to make it clear that a federally regulated stablecoin, in a one-to-one back that meets all those requirements, is not a security and is not covered under, for example, the Ontario Securities Act.

There is still a role for provincial jurisdiction. For example, the Tetra project that Wealthsimple and Shopify and National Bank and Shakepay are invested in is an Alberta regulated trust company, and they are the issuer—

[The Chair, Liberal, Karina Gould]

Thank you, Ms. Oliver. We're going to have to end it there.

On behalf of the committee, I would like to thank all of our witnesses for this hour. We will take a very brief suspension as we prepare for our final panel of the evening.

Thank you.

[The Chair, Liberal, Karina Gould]

Colleagues, we need to get started, because at eight o'clock, we have to stop for a very important reason. I know all Quebeckers have an important game to watch at eight o'clock, and maybe—

[Greg McLean, Conservative, Calgary Centre, AB]

Not just Quebeckers.

[The Chair, Liberal, Karina Gould]

I know. All Canadians are going to do something extremely important tonight at eight o'clock. This means we have to start to finish on time.

With that, I'd like to welcome everyone back and welcome our final panel of witnesses for this evening.

We have Huw Williams, director of public affairs for the Canadian Automobile Dealers Association. We have Helen Tooze, the senior policy researcher for the Canada Climate Law Initiative. We have Brian Kingston, the president and chief executive officer of the Canadian Vehicle Manufacturers' Association. We have Stefania Seccia, executive director of advocacy and public affairs for the Women's National Housing and Homelessness Network.

Before we begin, I would like to remind everyone of the following points.

Please wait until I recognize you by name before speaking. For those participating via video conference, click on the microphone icon to activate your mic, and please mute yourself when you are not speaking. For those on Zoom, at the bottom of your screen you can select the appropriate channel of floor, English or French for interpretation. For those in the room, you can use the earpiece and select the desired channel.

I would like to remind all of our witnesses that committee members may ask questions in either French or English. If you will need interpretation, please take a moment now to prepare your earpiece and select the listening channel you need in advance in order to take full advantage of the time allotted for questions and answers.

All virtual witnesses have conducted a mandatory witness onboarding test.

We will now proceed with your opening statements. Mr. Williams, we will begin with you. You have five minutes.

[Huw Williams, Director, Public Affairs, Canadian Automobile Dealers Association]

Thank you, Madam Chair.

I say this for all our dealers in Quebec, Montreal and across Canada, and it's the same in English and French: Go, Habs, go!

[Voices]

Oh, oh!

[Huw Williams]

That I get to say that on the parliamentary record is a real pleasure.

First of all, thanks to all of you for being here. I've been watching the committee all day. It's one of the great things about Parliament that the MPs come together and try to find solutions. We have dealers in your ridings, and we're certainly happy to have the opportunity to talk to you today.

We have 3,500 dealers and 175,000 employees coast to coast to coast, and we literally keep Canadians and Canadian businesses rolling. We sell two million new cars, over three million used cars and do 20 million service and parts appointments yearly. We're very active in all of your communities.

With respect to what's going on with the United States, the Prime Minister has called it a “rupture”, and indeed, auto dealers are right at ground zero for that rupture. We're seeing the impacts. We are being hit not just by the tariffs that have been imposed in retaliation. We're also hit by steel and aluminum tariffs, which are pushing costs up through the roof. I'll say it here, on the record, that we ran our first trade mission down to the U.S. to deliver the message to the U.S. that these tariffs are hurting car dealers on both sides of the border, hurting customers on both sides of the border and hurting the car industry on both sides of the border. We have to be very cognizant of that as we go forward.

I'm going to hit four areas of concern that we need to have addressed while we're under pressure.

The first is the luxury tax. You'll note that the government took the luxury tax off private jets and yachts. We think it's close to nonsensical that we have kept that tax on luxury vehicles.

We've made the argument for a very long time now that we have a perfectly balanced tax system in the country. If you buy a car that costs more, you pay more—and significantly more. That's the way the system should work. The system should not be picking winners and losers. There used to be a luxury tax on jewellery. That was removed. I would suggest to the committee that just for equality, during a time when we're under pressure here, we need to remove the luxury tax on automobiles, just as we've done with other products. The HST is a perfect tax to address that.

Also, the luxury tax is a trade irritant with Europe. The Europeans held off on a trade deal with Australia because of the luxury tax, and the Australians, in response to that, ended the tariff levy and made adjustments for the luxury tax down there. Let's look at it from that lens.

The EV mandate is the next issue that I think needs to be addressed. The government made the right move on eliminating the EV mandate. We're very pleased with that. The Prime Minister's announcement was very welcome. We were very public about that.

The challenge now is that we need a process that consults with the manufacturers on real and realistic targets for a path forward for the future. The problem with the last EV mandate wasn't that we needed an EV transition. Dealers are all in for an EV transition, but we have to do it at a pace that makes sense for Canada. That can be done only through consultations with the manufacturers.

I'll underline for you the third issue, which is in the heavy truck industry. We have a real problem with the 2027 model year. The U.S. administration has moved out of alignment with Canada. As it stands now, without a really aggressive regulatory fix on the Canadian side, we will not be able to sell any heavy-duty trucks in Canada, starting in model year 2027. The orders for model year 2027 start at the end of August, and we are facing a crisis. We sell 30,000 18-wheeler semi-trucks a year, and those keep construction, agriculture and mining going. I saw several of them on my way up to Parliament Hill today. You cannot build Canada without heavy trucks. We need a fix there.

Finally, the technician shortage is an issue that I want to highlight for you. We have a worldwide shortage of technicians. Canada and Canadian dealers have had to resort to bringing in temporary foreign workers in this space: highly-skilled individuals who can repair automobiles going forward. We're working hard to recruit and retain and to support educational institutions, but in the meantime, we need some latitude and an understanding that temporary foreign workers in our sector are important to keep the country rolling. Without them, we won't be able to service police, ambulance and other emergency vehicles. We need a pathway for those temporary foreign workers to stay longer than their original contracts and a pathway to immigration.

Thanks for the time.

[The Chair, Liberal, Karina Gould]

Thank you very much, Mr. Williams.

We will now continue with Ms. Tooze for five minutes, please.

[Helen Tooze, Senior Policy Researcher, Canada Climate Law Initiative]

Thank you, Madam Chair and members of the committee.

My name is Dr. Helen Tooze. I'm a senior policy researcher with the Canada Climate Law Initiative, which is a collaboration between law faculties at the University of British Columbia and York University. The CCLI provides businesses, regulators, directors, trustees and other fiduciaries guidance on climate governance, enabling them to make informed decisions during their transition to a net-zero economy.

We appreciate the opportunity to appear before you as part of the pre-budget consultations. Our submission focuses on a central economic point. Climate-related financial risks are not abstract future concerns. They are present, material and increasingly relevant to Canada's competitiveness, investment environment and financial stability.

Canada has an opportunity in the 2026 budget to strengthen confidence, attract capital and support long-term economic resilience. To do that, we recommend three targeted measures.

First, the federal government should amend the Canada Business Corporations Act regulations to require large and mid-sized federally incorporated companies to include climate transition plans that address climate-related risks and opportunities in their financial statements. These plans help maximize opportunities by guiding business strategy, informing capital expenditures and supporting authorities' macromonitoring of transition and physical risks in the financial system, as well as in the wider economy. As mandatory financial disclosures fall under the remit of the CBCA, it is the proper vehicle through which to make these changes.

It's important to note that this is not about imposing public disclosure requirements on CBCA-registered businesses, but rather about private disclosures only to their shareholders. Moreover, our proposal will impact only the 2% of companies that already have the scale and the resources to manage climate risks and provide investors with the comparable, decision-useful information they require. This leaves the vast majority of micro and small CBCA-regulated companies unaffected.

Second, Canada should make the made-in-Canada sustainable investment guidelines mandatory. A credible taxonomy is essential for attracting private capital, reducing greenwashing and providing investors with clarity about which activities support Canada's transition. Canada will require a significant annual investment to achieve its net-zero goals by 2050. We're talking about around $140 billion annually. Voluntary guidance alone will not provide the certainty needed to mobilize capital at that scale.

Third, the government should amend the pension benefits standards regulations to require federally regulated pension plan administrators to adopt transition plans and explain their climate resilience policies and how they apply to the investment portfolios they manage. Pension fiduciaries have a duty to prudently manage risk over the long-term horizons as well as the short-term horizons. Clear, baseline standards for climate governance would help protect planned assets and beneficiaries. Together, these measures would not dictate investment choices. Rather, they would improve transparency, comparability and accountability across the financial system. They would help direct capital towards resilient Canadian businesses that support sustainable growth and align Canada with leading international markets already moving in that direction. They would also give the federal government an important opportunity to show leadership.

As Canada seeks to build new and enhanced economic relationships with middle powers and trusted partners, our climate-related financial policy should be credible, comparable and consistent with the standards emerging in those markets. Strong, clear rules on transition planning, sustainable investment and pension governance would signal that Canada is a reliable partner for long-term investment in a sustainable economy. The 2026 budget is an opportunity to make climate policy credible, predictable and economically practical.

The CCLI urges the committee to recommend these measures so that Canada can better manage financial risks, strengthen competitiveness and unlock the investment needed for a prosperous and resilient future.

Thank you. I look forward to your questions.

[The Chair, Liberal, Karina Gould]

That's great. Thank you so much, Ms. Tooze.

We'll now continue with Mr. Kingston from the Canadian Vehicle Manufacturers’ Association.

You have five minutes.

[Brian Kingston, President and Chief Executive Officer, Canadian Vehicle Manufacturers' Association]

Madam Chair and committee members, thank you for the invitation to appear here today as part of your consultations.

The Canadian Vehicle Manufacturers' Association, CVMA, is the industry association representing Canada's leading manufacturers of light- and heavy-duty motor vehicles. Our membership includes Ford, General Motors and Stellantis. CVMA members have been operating here in Canada for over 100 years. They're responsible for most auto production in this country, having built 100 million vehicles since 1945. Today, they are the largest employers, investors and innovators in the auto manufacturing sector in Canada.

The consultation comes at a critical time for the Canadian economy. U.S. tariffs and trade uncertainty are weighing on both exports and investment, weakening the growth outlook. The Bank of Canada projects that the economy will remain in low gear for the next three years, with annual growth below 2%. Trade disruptions are particularly damaging to the export-dependent automotive sector that operates based on an integrated North American supply chain. Over 90% of Canadian vehicle production is destined for the U.S. market. According to the Center for Automotive Research, a U.S.-based auto think tank, U.S. tariffs are going to cost the auto industry $188 billion U.S. over the next three years.

Considering this, securing access to the U.S. market is foundational to the success of the auto industry and the broader Canadian economy. Simply put, there is no auto industry without U.S. access and North American integration. Diversification cannot replace the U.S. Canada's market is too small to justify large-scale manufacturing.

Our top priority is the removal of the U.S. section 232 tariffs, the elimination of Canada's retaliatory tariffs and the renewal of our trilateral trade agreement, CUSMA.

In the face of these unprecedented trade challenges, Canada must do everything possible to strengthen conditions for auto investment by focusing on what we can control. We recommend the following actions.

Number one is to eliminate the Canada-China strategic partnership. The agreement negotiated with China to allow 49,000 EVs into Canada—that's equivalent to 30% of EVs sold here last year—will undermine Canada's auto sector and put the integrated supply chain at risk. China does not adhere to many of the rules-based trade and investment principles that have been foundational to the success of the industry here, and there are no guardrails in this agreement to ensure a level playing field for manufacturers that have invested in Canada, or to protect Canadians from cyber-risk.

Number two is to reduce regulatory complexity. Environmental compliance costs now rival the tariff burden facing auto manufacturers in Canada. Manufacturers must comply with duplicative EV sales mandates, stringent emissions regulations and over 80 designated material products or categories for extended producer responsibility regimes. These add costs and have marginal environmental benefits. The federal government should ensure that regulations are outcomes-based, applied once and designed to limit compliance costs. If governments are to succeed in creating one Canadian economy, action is required now to ensure one national approach to vehicle emissions regulations and EPR regimes.

Number three is to extend and amend the clean electricity and clean manufacturing investment tax credit to 2040. Auto is a very long lead-time industry, and an extension of the tax credit to 2040 would provide certainty for investment. To provide greater flexibility, incentive and benefit, the ITC eligibility should be broadened to include all qualifying manufacturing to incentivize large-scale investments and the costs of new machinery and equipment.

Number four is to boost EV demand. The federal government's EV affordability program, EVAP, was a critical component of the automotive strategy that aimed to achieve 75% EV sales by 2035. However, the program is set to expire in 2030. That's well before the ambitious 2035 government target, so we recommend that budget 2026 provide long-term funding and a path forward for the incentive to support both the 2035 sales target and the 2040 target that the government has established.

In summary, budget 2026 should position Canada as one of the most competitive jurisdictions in the world for auto manufacturing and investment.

Thank you.

[The Chair, Liberal, Karina Gould]

That's great. Thank you, Mr. Kingston.

We will now conclude the panel with Ms. Seccia from the Women's National Housing and Homelessness Network.

You have five minutes.

[Stefania Seccia, Executive Director, Advocacy and Public Affairs, Women's National Housing and Homelessness Network]

Madam Chair and members of the committee, thank you for the opportunity to appear today.

My name is Stefania Seccia, and I'm the executive director of advocacy and public affairs at the Women's National Housing and Homelessness Network. The people we represent—women, two-spirit, trans and gender-diverse people navigating housing insecurity across this country—deserve to have their experiences heard in rooms like this one, so thank you for making the space for it.

The women's network started a little over five or six years ago in a conference room with lived experts, scholars, researchers, housing providers and academics who don't normally talk to each other within the housing sector. We realized that there was no national voice on women and gender-diverse housing issues across the country that was unified. We decided to become that voice and to do it through research, community engagement and movement building.

We share this government's commitment to building Canada strong, but that genuine strength comes from within. It's the kind of strength required of a young trans person when they find themselves homeless for being who they are, a mother with two children fleeing violence in search of a safe place to call home, a newcomer navigating the shelter system with no safety net to catch them, or a couch surfer trading sex for shelter.

These are not experiences happening in isolation. They are the direct result of stepping back from ambitious affordable housing investments since the eighties and nineties, from co-ops, non-profit development, social, non-market and deeply affordable housing. Those past governments deferred the problem, and those costs landed elsewhere—in emergency rooms, in shelters, the child welfare system and the criminal justice system—in more expensive and less effective ways to address the core issue, and those very things have become pipelines into homelessness itself.

I don't envy the position you are in, but you have an opportunity, albeit an obligation, to make different choices—to invest in long-term solutions that reach the people who need it most and to invest upstream in stable and deeply affordable housing solutions that are not gender-neutral.

This past year, as intervenors in the Neha review panel process, we were part of one of the most significant participatory human rights engagements on housing this country has seen. The panel heard from over 500 individuals and groups. We went into shelters, prisons, encampments and communities. It produced not just data, but a real-time, on-the-ground account of what housing rights violations look like for women, two-spirit, trans and gender-diverse people across the country. The panel delivered a road map of recommendations to address the gendered housing crisis.

Just last week, a landmark court ruling came down from the Ontario Superior Court of Justice that homelessness has been recognized as a ground of discrimination in Canada. The court was unambiguous, and in Justice Gibson's own words, he called for “increased resources from all levels of government and other stakeholders”, and of homeless folks, he said, “They are Us.”

I also want to note that this is linked directly to the international agreements Canada has signed, where the progressive realization of the right to housing means investing maximum resources possible to address the issue.

We need a revitalized national housing strategy after 2027, one with an accurate definition of affordability and clear targets for ending homelessness. We need Build Canada Homes to be a rights-based delivery system that allocates at least 40% of deeply affordable units to women and gender-diverse people, populations chronically underserved and undercounted. We need the urban, rural and northern indigenous housing strategy to be grounded in for-indigenous and by-indigenous solutions and delivered by those communities. We need sustained federal investment through WAGE to keep the shelter and survivor-serving sector from collapse.

What we need and what this budget can deliver are clear timelines, measurable targets and an unequivocal commitment to ending homelessness.

We spent decades getting into this crisis, and we will not get out of it in a single budget cycle, but you can signal that you are done deferring. We are ready to build not just something that lasts but something that is accessible, sustainable and gender-responsive.

Thank you.

[The Chair, Liberal, Karina Gould]

Thank you very much, Ms. Seccia.

We're going to start with questions.

Mr. Lefebvre, you have the floor for six minutes.

[Éric Lefebvre, Conservative, Richmond—Arthabaska, QC]

Thank you, Madam Chair.

Thank you, witnesses, for joining us.

I'll start with you, Mr. Kingston.

You said there would be no automotive market without a U.S. market, and the priority should be to renew the Canada—U.S.—Mexico Agreement.

Why do you think that's the priority?

[Brian Kingston]

The Canadian economy and the Canadian auto sector are totally dependent on access to the U.S. market. We can talk about other suggestions to strengthen the economy domestically to make Canada a more competitive place, but we build more than we need and we export 90% of our production into the U.S. It's the largest, wealthiest, most diverse economy in the world.

If we don't have access to the U.S., we simply don't have an industry. All you have to do is look back to pre-auto pact times, 60 years ago, when we didn't have free trade in vehicles with the United States. It was a much smaller industry and it was less efficient, so it's fundamental. Without U.S. access, the industry is not what it is.

[Éric Lefebvre, Conservative, Richmond—Arthabaska, QC]

You'll agree with me we should put more energy into renewing the Canada—U.S.—Mexico Agreement, instead of taking two or three trips around the world to try and find small agreements.