Bill C-38 (Historical)

Jobs, Growth and Long-term Prosperity Act

An Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures

Part 1 of this enactment implements certain income tax measures and related measures proposed in the March 29, 2012 budget. Most notably, it
(a) expands the list of eligible expenses under the Medical Expense Tax Credit to include blood coagulation monitors and their disposable peripherals;
(b) introduces a temporary measure to allow certain family members to open a Registered Disability Savings Plan for an adult individual who might not be able to enter into a contract;
(c) extends, for one year, the temporary Mineral Exploration Tax Credit for flow-through share investors;
(d) allows corporations to make split and late eligible dividend designations;
(e) makes the salary of the Governor General taxable and adjusts that salary;
(f) allows a designated partner of a partnership to provide a waiver on behalf of all partners to extend the time limit for issuing a determination in respect of the partnership;
(g) amends the penalty applicable to promoters of charitable donation tax shelters who file false registration information or who fail to register a tax shelter prior to selling interests in the tax shelter;
(h) introduces a new penalty applicable to tax shelter promoters who fail to respond to a demand to file an information return or who file an information return that contains false or misleading sales information;
(i) limits the period for which a tax shelter identification number is valid to one calendar year;
(j) modifies the rules for registering certain foreign charitable organizations as qualified donees;
(k) amends the rules for determining the extent to which a charity has engaged in political activities; and
(l) provides the Minister of National Revenue with the authority to suspend the privileges, with respect to issuing tax receipts, of a registered charity or a registered Canadian amateur athletic association if the charity or association fails to report information that is required to be filed annually in an information return or devotes resources to political activities in excess of the limits set out in the Income Tax Act.
Part 1 also implements other selected income tax measures and related measures. Most notably, it
(a) amends the Income Tax Act consequential on the implementation of the Marketing Freedom for Grain Farmers Act, including the extension of the tax deferral allowed to farmers in a designated area who produce listed grains and receive deferred cash purchase tickets to all Canadian farmers who produce listed grains and receive deferred cash purchase tickets;
(b) provides authority for the Canada Revenue Agency to issue via online notice or regular mail demands to file a return; and
(c) introduces a requirement for commercial tax preparers to file income tax returns electronically.
Part 2 amends the Excise Tax Act to implement certain excise tax and goods and services tax/harmonized sales tax (GST/HST) measures proposed in the March 29, 2012 Budget. It expands the list of GST/HST zero-rated medical and assistive devices as well as the list of GST/HST zero-rated non-prescription drugs that are used to treat life-threatening diseases. It also exempts certain pharmacists’ professional services from the GST/HST, other than prescription drug dispensing services that are already zero-rated. It further allows certain literacy organizations to claim a rebate of the GST and the federal component of the HST paid on the acquisition of books to be given away for free by those organizations. It also implements legislative requirements relating to the Government of British Columbia’s decision to exit the harmonized sales tax framework. Additional amendments to that Act and related regulations in respect of foreign-based rental vehicles temporarily imported by Canadian residents provide, in certain circumstances, relief from the GST/HST, the Green Levy on fuel-inefficient vehicles and the automobile air conditioner tax. This Part further amends that Act to ensure that changes to the standardized fuel consumption test method used for the EnerGuide, as announced on February 17, 2012 by the Minister of Natural Resources, do not affect the application of the Green Levy.
Finally, Part 2 amends the Air Travellers Security Charge Act, the Excise Act, 2001 and the Excise Tax Act to provide authority for the Canada Revenue Agency to issue via online notice or regular mail demands to file a return.
Part 3 contains certain measures related to responsible resource development.
Division 1 of Part 3 enacts the Canadian Environmental Assessment Act, 2012, which establishes a new federal environmental assessment regime. Assessments are conducted in relation to projects, designated by regulations or by the Minister of the Environment, to determine whether they are likely to cause significant adverse environmental effects that fall within the legislative authority of Parliament, or that are directly linked or necessarily incidental to a federal authority’s exercise of a power or performance of a duty or function that is required for the carrying out of the project.
The Canadian Environmental Assessment Agency, the Canadian Nuclear Safety Commission, the National Energy Board or a review panel established by the Minister are to conduct assessments within applicable time limits. At the end of an assessment, a decision statement is to be issued to the project proponent who is required to comply with the conditions set out in it.
The enactment provides for cooperation between the federal government and other jurisdictions by enabling the delegation of an environmental assessment, the substitution of the process of another jurisdiction for an environmental assessment under the Act and the exclusion of a project from the application of the Act when there is an equivalent assessment by another jurisdiction. The enactment requires that there be opportunities for public participation during an environmental assessment, that participant funding programs and a public registry be established, and that there be follow-up programs in relation to all environmental assessments. It also provides for powers of inspection and fines.
Finally, the enactment specifies that federal authorities are not to take certain measures regarding the carrying out of projects on federal lands or outside Canada unless they determine that those projects are not likely to cause significant adverse environmental effects.
This Division also makes related amendments to the Environmental Violations Administrative Monetary Penalties Act and consequential amendments to other Acts, and repeals the Canadian Environmental Assessment Act.
Division 2 of Part 3 amends the National Energy Board Act to allow the Governor in Council to make the decision about the issuance of certificates for major pipelines. It amends the Act to establish time limits for regulatory reviews under the Act and to enhance the powers of the National Energy Board Chairperson and the Minister responsible for the Act to ensure that those reviews are conducted in a timely manner. It also amends the Act to permit the National Energy Board to exercise federal jurisdiction over navigation in respect of pipelines and power lines that cross navigable waters and it establishes an administrative monetary penalty system.
Division 3 of Part 3 amends the Canada Oil and Gas Operations Act to authorize the National Energy Board to exercise federal jurisdiction over navigation in respect of pipelines and power lines that cross navigable waters.
Division 4 of Part 3 amends the Nuclear Safety and Control Act to extend the maximum allowable term of temporary members of the Canadian Nuclear Safety Commission from six months to three years. It is also amended to allow for a licence to be transferred with the consent of that Commission and it puts in place an administrative monetary penalty system.
Division 5 of Part 3 amends the Fisheries Act to focus that Act on the protection of fish that support commercial, recreational or Aboriginal fisheries and to more effectively manage those activities that pose the greatest threats to these fisheries. The amendments provide additional clarity for the authorization of serious harm to fish and of deposits of deleterious substances. The amendments allow the Minister to enter into agreements with provinces and with other bodies, provide for the control and management of aquatic invasive species, clarify and expand the powers of inspectors, and permit the Governor in Council to designate another Minister as the Minister responsible for the administration and enforcement of subsections 36(3) to (6) of the Fisheries Act for the purposes of, and in relation to, subject matters set out by order.
Division 6 of Part 3 amends the Canadian Environmental Protection Act, 1999 to provide the Minister of the Environment with the authority to renew disposal at sea permits in prescribed circumstances. It is also amended to change the publication requirements for disposal at sea permits and to provide authority to make regulations respecting time limits for their issuance and renewal.
Division 7 of Part 3 amends the Species at Risk Act to allow for the issuance of authorizations with a longer term, to clarify the authority to renew the authorizations and to make compliance with conditions of permits enforceable. The Act is also amended to provide authority to make regulations respecting time limits for the issuance and renewal of permits under the Act. Furthermore, section 77 is amended to ensure that the National Energy Board will be able to issue a certificate when required to do so by the Governor in Council under subsection 54(1) of the National Energy Board Act.
Part 4 enacts and amends several Acts in order to implement various measures.
Division 1 of Part 4 amends a number of Acts to eliminate the requirement for the Auditor General of Canada to undertake annual financial audits of certain entities and to assess the performance reports of two agencies. This Division also eliminates other related obligations.
Division 2 of Part 4 amends the Trust and Loan Companies Act, the Bank Act and the Cooperative Credit Associations Act to prohibit the issuance of life annuity-like products.
Division 3 of Part 4 provides that PPP Canada Inc. is an agent of Her Majesty for purposes limited to its mandated activities at the federal level, including the provision of advice to federal departments and Crown corporations on public-private partnership projects.
Division 4 of Part 4 amends the Northwest Territories Act, the Nunavut Act and the Yukon Act to provide the authority for the Governor in Council to set, on the recommendation of the Minister of Finance, the maximum amount of territorial borrowings and to make regulations in relation to those maximum amounts, including what constitutes borrowing, the relevant entities and the valuation of the borrowings.
Division 5 of Part 4 amends the Financial Administration Act to modify, for parent Crown corporations, the period to which their quarterly financial reports relate, so that it is aligned with their financial year, and to include in the place of certain annual tabling requirements related to the business and activities of parent Crown corporations a requirement to make public consolidated quarterly reports on their business and activities. It also amends the Alternative Fuels Act and the Public Service Employment Act to eliminate certain reporting requirements.
Division 6 of Part 4 amends the Department of Human Resources and Skills Development Act to establish the Social Security Tribunal and to add provisions authorizing the electronic administration or enforcement of programs, legislation, activities or policies. It also amends the Canada Pension Plan, the Old Age Security Act and the Employment Insurance Act so that appeals from decisions made under those Acts will be heard by the Social Security Tribunal. Finally, it provides for transitional provisions and makes consequential amendments to other Acts.
Division 7 of Part 4 amends the Department of Human Resources and Skills Development Act to add provisions relating to the protection of personal information obtained in the course of administering or enforcing the Canada Pension Plan and the Old Age Security Act and repeals provisions in the Canada Pension Plan and the Old Age Security Act that are substantially the same as those that are added to the Human Resources and Skills Development Act.
Division 8 of Part 4 amends the Department of Human Resources and Skills Development Act to add provisions relating to the social insurance registers and Social Insurance Numbers. It also amends the Canada Pension Plan in relation to Social Insurance Numbers and the Employment Insurance Act to repeal certain provisions relating to the social insurance registers and Social Insurance Numbers and to maintain the power to charge the costs of those registers to the Employment Insurance Operating Account.
Division 9 of Part 4 amends the Parks Canada Agency Act to provide that the Agency may enter into agreements with other ministers or bodies to assist in the administration and enforcement of legislation in places outside national parks, national historic sites, national marine conservation areas and other protected heritage areas if considerations of geography make it impractical for the other minister or body to administer and enforce that legislation in those places. It also amends that Act to provide that the Chief Executive Officer is to report to the Minister of the Environment under section 31 of that Act every five years. It amends that Act to remove the requirements for annual corporate plans, annual reports and annual audits, and amends that Act, the Canada National Parks Act and the Canada National Marine Conservation Areas Act to provide that that Minister is to review management plans for national parks, national historic sites, national marine conservation areas and other protected heritage areas at least every 10 years and is to have any amendments to a plan tabled in Parliament.
Division 10 of Part 4 amends the Trust and Loan Companies Act, the Bank Act and the Insurance Companies Act in order to allow public sector investment pools that satisfy certain criteria, including pursuing commercial objectives, to directly invest in a Canadian financial institution, subject to approval by the Minister of Finance.
Division 11 of Part 4 amends the National Housing Act, the Canada Mortgage and Housing Corporation Act and the Supporting Vulnerable Seniors and Strengthening Canada’s Economy Act to enhance the governance and oversight framework of the Canada Mortgage and Housing Corporation.
This Division also amends the National Housing Act to establish a registry for institutions that issue covered bonds and for covered bond programs and to provide for the protection of covered bond contracts and covered bond collateral in the event of an issuer’s bankruptcy or insolvency. It also makes amendments to the Trust and Loan Companies Act, the Bank Act, the Insurance Companies Act and the Cooperative Credit Associations Act to prohibit institutions from issuing covered bonds except within the framework established under the National Housing Act. Finally, it includes a coordinating amendment to the Supporting Vulnerable Seniors and Strengthening Canada’s Economy Act.
Division 12 of Part 4 implements the Framework Agreement on Integrated Cross-Border Maritime Law Enforcement Operations between the Government of Canada and the Government of the United States of America signed on May 26, 2009.
Division 13 of Part 4 amends the Bretton Woods and Related Agreements Act to reflect an increase in Canada’s quota subscription, as related to the ratification of the 2010 Quota and Governance reform resolution of the Board of Governors of the International Monetary Fund, and to align the timing of the annual report under that Act to correspond to that of the annual report under the Official Development Assistance Accountability Act.
Division 14 of Part 4 amends the Canada Health Act so that members of the Royal Canadian Mounted Police are included in the definition of “insured person”.
Division 15 of Part 4 amends the Canadian Security Intelligence Service Act to
(a) remove the office of the Inspector General;
(b) require the Security Intelligence Review Committee to submit to the Minister of Public Safety and Emergency Preparedness a certificate on the Director of the Canadian Security Intelligence Service’s annual report; and
(c) increase the information on the Service’s activities to be provided by that Committee to that Minister.
Division 16 of Part 4 amends the Currency Act to clarify certain provisions that relate to the calling in and the redemption of coins.
Division 17 of Part 4 amends the Federal-Provincial Fiscal Arrangements Act in order to implement the total transfer protection for the 2012-2013 fiscal year and to give effect to certain elements of major transfer renewal that were announced by the Minister of Finance on December 19, 2011. It also makes certain administrative amendments to that Act and to the Canada Health Act.
Division 18 of Part 4 amends the Fisheries Act to authorize the Minister of Fisheries and Oceans to allocate fish for the purpose of financing scientific and fisheries management activities in the context of joint project agreements.
Division 19 of Part 4 amends the Food and Drugs Act to give the Minister of Health the power to establish a list that sets out prescription drugs or classes of prescription drugs and to provide that the list may be incorporated by reference. It also gives the Minister the power to issue marketing authorizations that exempt a food, or an advertisement with respect to a food, from certain provisions of the Act. The division also provides that a regulation with respect to a food and a marketing authorization may incorporate by reference any document. It also makes consequential amendments to other Acts.
Division 20 of Part 4 amends the Government Employees Compensation Act to allow prescribed entities to be subrogated to the rights of employees to make claims against third parties.
Division 21 of Part 4 amends the International Development Research Centre Act to reduce the maximum number of governors of the Centre to 14, and to consequently change other rules about the number of governors.
Division 22 of Part 4 amends Part I of the Canada Labour Code to require the parties to a collective agreement to file a copy of it with the Minister of Labour, subject to the regulations, as a condition for it to come into force. It amends Part III of that Act to require employers that provide benefits to their employees under long-term disability plans to insure those plans, subject to certain exceptions. The Division also amends that Part to create an offence and to increase maximum fines for offences under that Part.
Division 23 of Part 4 repeals the Fair Wages and Hours of Labour Act.
Division 24 of Part 4 amends the Old Age Security Act to provide the Minister of Human Resources and Skills Development with the authority to waive the requirement for an application for Old Age Security benefits for many eligible seniors, to gradually increase the age of eligibility for the Old Age Security Pension, the Guaranteed Income Supplement, the Allowance and the Allowance for the Survivor and to allow individuals to voluntarily defer their Old Age Security Pension up to five years past the age of eligibility, in exchange for a higher, actuarially adjusted, pension.
Division 25 of Part 4 dissolves the Public Appointments Commission and its secretariat.
Division 26 of Part 4 amends the Seeds Act to give the President of the Canadian Food Inspection Agency the power to issue licences to persons authorizing them to perform activities related to controlling or assuring the quality of seeds or seed crops.
Division 27 of Part 4 amends the Statutory Instruments Act to remove the distribution requirements for the Canada Gazette.
Division 28 of Part 4 amends the Investment Canada Act in order to authorize the Minister of Industry to communicate or disclose certain information relating to investments and to accept security in order to promote compliance with undertakings.
Division 29 of Part 4 amends the Customs Act to allow the Minister of Public Safety and Emergency Preparedness to designate a portion of a roadway or other access way that leads to a customs office and that is used by persons arriving in Canada and by persons travelling within Canada as a mixed-traffic corridor. All persons who are travelling in a mixed-traffic corridor must present themselves to a border services officer and state whether they are arriving from a location outside or within Canada.
Division 30 of Part 4 gives retroactive effect to subsections 39(2) and (3) of the Pension Benefits Standards Act, 1985.
Division 31 of Part 4 amends the Railway Safety Act to limit the apportionment of costs to a road authority when a grant has been made under section 12 of that Act.
Division 32 of Part 4 amends the Canadian International Trade Tribunal Act to replace the two Vice-chairperson positions with two permanent member positions.
Division 33 of Part 4 repeals the International Centre for Human Rights and Democratic Development Act and authorizes the closing out of the affairs of the Centre established by that Act.
Division 34 of Part 4 amends the Health of Animals Act to allow the Minister of Agriculture and Agri-Food to declare certain areas to be control zones in respect of a disease or toxic substance. The enactment also grants the Minister certain powers, including the power to make regulations prohibiting the movement of persons, animals or things in the control zones for the purpose of eliminating a disease or toxic substance or controlling its spread and the power to impose conditions on the movement of animals or things in those zones.
Division 35 of Part 4 amends the Canada School of Public Service Act to abolish the Board of Governors of the Canada School of Public Service and to place certain responsibilities on the Minister designated for the purposes of the Act and on the President of the School.
Division 36 of Part 4 amends the Bank Act by adding a preamble to it.
Division 37 of Part 4 amends the Corrections and Conditional Release Act to eliminate the requirement of a hearing for certain reviews.
Division 38 of Part 4 amends the Coasting Trade Act to add seismic activities to the list of exceptions to the prohibition against foreign ships and non-duty paid ships engaging in the coasting trade.
Division 39 of Part 4 amends the Status of the Artist Act to dissolve the Canadian Artists and Producers Professional Relations Tribunal and transfer its powers and duties to the Canada Industrial Relations Board.
Division 40 of Part 4 amends the National Round Table on the Environment and the Economy Act to give the Round Table the power to sell or otherwise dispose of its assets and satisfy its debts and liabilities and to give the Minister of the Environment the power to direct the Round Table in respect of the exercise of some of its powers. The Division provides for the repeal of the Act and makes consequential amendments to other acts.
Division 41 of Part 4 amends the Telecommunications Act to change the rules relating to foreign ownership of Canadian carriers eligible to operate as telecommunications common carriers and to permit the recovery of costs associated with the administration and enforcement of the national do not call list.
Division 42 of Part 4 amends the Employment Equity Act to remove the requirements that are specific to the Federal Contractors Program for Employment Equity.
Division 43 of Part 4 amends the Employment Insurance Act to permit a person’s benefits to be determined by reference to their highest earnings in a given number of weeks, to permit regulations to be made respecting what constitutes suitable employment, to remove the requirement that a consent to deduction be in writing, to provide a limitation period within which certain repayments of overpayments need to be deducted and paid and to clarify the provisions respecting the refund of premiums to self-employed persons. It also amends that Act to modify the Employment Insurance premium rate-setting mechanism, including requiring that the rate be set on a seven-year break-even basis once the Employment Insurance Operating Account returns to balance. The Division makes consequential amendments to the Canada Employment Insurance Financing Board Act.
Division 44 of Part 4 amends the Customs Tariff to make certain imported fuels duty-free and to increase the travellers’ exemption thresholds.
Division 45 of Part 4 amends the Canada Marine Act to require provisions of a port authority’s letters patent relating to limits on the authority’s power to borrow money to be recommended by the Minister of Transport and the Minister of Finance before they are approved by the Governor in Council.
Division 46 of Part 4 amends the First Nations Land Management Act to implement changes made to the Framework Agreement on First Nation Land Management, including changes relating to the description of land that is to be subject to a land code, and to provide for the coming into force of land codes and the development by First Nations of environmental protection regimes.
Division 47 of Part 4 amends the Canada Travelling Exhibitions Indemnification Act to increase the maximum indemnity in respect of individual travelling exhibitions, as well as the maximum indemnity in respect of all travelling exhibitions.
Division 48 of Part 4 amends the Canadian Air Transport Security Authority Act to provide that the chief executive officer of the Authority is appointed by the Governor in Council and that an employee may not replace the chief executive officer for more than 90 days without the Governor in Council’s approval.
Division 49 of Part 4 amends the First Nations Fiscal and Statistical Management Act to repeal provisions related to the First Nations Statistical Institute and amends that Act and other Acts to remove any reference to that Institute. It authorizes the Minister of Indian Affairs and Northern Development to close out the Institute’s affairs.
Division 50 of Part 4 amends the Canadian Forces Members and Veterans Re-establishment and Compensation Act to provide for the payment or reimbursement of fees for career transition services for veterans or their survivors.
Division 51 of Part 4 amends the Department of Human Resources and Skills Development Act to add powers, duties and functions that are substantially the same as those conferred by the Department of Social Development Act. It repeals the Department of Social Development Act and, in doing so, eliminates the National Council of Welfare.
Division 52 of Part 4 amends the Wage Earner Protection Program Act in order to correct the English version of the definition “eligible wages”.
Division 53 of Part 4 repeals the Kyoto Protocol Implementation Act.
Division 54 of Part 4 amends the Immigration and Refugee Protection Act and the Budget Implementation Act, 2008 to provide for the termination of certain applications for permanent residence that were made before February 27, 2008. This Division also amends the Immigration and Refugee Protection Act to, among other things, authorize the Minister of Citizenship and Immigration to give instructions establishing and governing classes of permanent residents as part of the economic class and to provide that the User Fees Act does not apply in respect of fees set by those instructions. Furthermore, this Division amends the Immigration and Refugee Protection Act to allow for the retrospective application of certain regulations and certain instructions given by the Minister, if those regulations and instructions so provide, and to authorize regulations to be made respecting requirements imposed on employers in relation to authorizations to work in Canada.
Division 55 of Part 4 enacts the Shared Services Canada Act to establish Shared Services Canada to provide certain administrative services specified by the Governor in Council. The Act provides for the Governor in Council to designate a minister to preside over Shared Services Canada.
Division 56 of Part 4 amends the Assisted Human Reproduction Act to respond to the Supreme Court of Canada decision in Reference re Assisted Human Reproduction Act that was rendered in 2010, including by repealing the provisions that were found to be unconstitutional and abolishing the Assisted Human Reproduction Agency of Canada.

[Kirsty Duncan, Liberal, Etobicoke North, ON]

Thank you.

How do you anticipate that these additional environmental impacts from oil sands are to be reduced under the changes proposed in Bill C-38?

[Tom King]

Thank you.

Initiated in 2000 for a five-year period, the METC was reintroduced in 2006 and subsequently renewed for two years. It has since been extended on a yearly basis. We were pleased to see the mineral exploration tax credit included in the March 29 federal budget. Bill C-38 would extend the tax credit for an additional year to flow-through share agreements entered into before April 2013.

It is important to note that the METC can only be earned on grassroots exploration conducted in Canada, incurred within a defined time period, and renounced under flow-through share agreements entered into within defined time limits. It should also be remembered that any METC claims are subject to taxation in the year subsequent to the taxation year in which they are claimed. Thus the after-tax saving is closer to 7.5% to 8% versus the actual 15% of the credit.

In conclusion, I'd like to thank this committee for giving our association the opportunity to speak today. We would be happy to answer your questions.

[Tom King, Co-Chair, Finance and Taxation Committee, Prospectors and Developers Association of Canada]

Thank you.

Good evening, Mr. Chair and committee members. I thank you for the invitation to appear before this committee and to offer comments on part 1 of Bill C-38 on behalf of the Prospectors and Developers Association. I am co-chair of the association's finance and tax committee, and an associate partner, tax, at KPMG LLP.

The Prospectors and Developers Association of Canada, with more than 10,000 members, both individual and corporate, exists to protect and promote mineral exploration and development and to ensure a robust mining industry in Canada. The Canadian mining industry is a great success story and a fundamental driver of Canada's economy. In 2010 the mining industry employed 308,000 people, contributed $36 billion to the national GDP, and paid $5.5 billion to governments in taxes and royalties. The mineral exploration and mining sector is the lifeblood of many rural and remote communities throughout Canada, and is the largest private sector employer of aboriginals in Canada.

Canada's mining industry plans to invest $136 billion in projects over the next decade on new domestic projects and on the expansion of existing ones. Canada is recognized as a leader in mineral exploration, development, financing, mining, and related technologies, services, and activities. In 2011 we led all countries with 18% of the world's mineral exploration spending. Australia is second at 13%.

The TSX/TSX Venture Exchange is number one in equity capital raised for mining and number one in listed mining companies with 58% of the world's total. At the end of 2011, 43%, or 1,646, of the 3,837 companies listed on the TSX/TSXV exchange were from the mining sector. In comparison, the number of mining companies listed on the Australian stock exchange is 700, and on the New York Stock Exchange and AMEX it's only 141.

Mineral exploration is the essential first step in the mining cycle, and Canada has a number of features that attract investment. We have good geology, a skilled workforce with new training initiatives, and a competitive tax system that includes flow-through share financing and the mineral exploration tax credit, the METC, both of which are unique to Canada.

The METC is important for mineral exploration financing. PDAC's members are primarily small and medium-sized enterprises that rely on equity financing to support early-stage, higher-risk exploration activities. In our pre-budget submissions and consultations, the PDAC recommended the continuation of the METC, asking that it be made permanent in order to provide greater certainty to investors and exploration companies. The METC and flow-through share financing continue to serve a critical role, as they allow junior companies to raise needed capital, keep investment in Canada, and sustain grassroots exploration activity.

The fragile state of the global economy is having a negative impact on company share prices and their ability to raise high-risk financing. Further, project costs are rising as a result of exploration, development, and production taking place in more complex ore bodies and deeper-lying deposits with lower grades and at more remote locations. Without sufficient investor support, companies will carry out less exploration, causing an impact on service companies and individuals, particularly those in rural, northern, and aboriginal communities. As costs rise, financing becomes more critical.

With respect to exploration and equity financing, flow-through shares and the mineral exploration tax credit offer individual Canadian investors an additional incentive to support the higher-risk ventures.

[Peter Meisenheimer, Executive Director, Ontario Commercial Fisheries' Association]

Thanks for the invitation to be here.

I'm going to begin with a digression. Earlier in May I received a call to come to Ottawa to speak about Asian carp before the Standing Committee on Fisheries and Oceans, on a date that fell in the middle of a week that my wife and I had booked for holidays. She was very understanding and I came to Ottawa. It went very well. We decided we would take our holidays later in the month, and that would be fine. We were in the middle of them last week when I got a phone call from your clerk telling me that I was hopefully going to be able to come here on Monday evening to testify for Bill C-38's hearings. So somebody here owes my wife flowers.

Nonetheless, my invitation didn't arrive in time for me to put together a brief, and if my remarks have the feel of a stream of consciousness address, I apologize in advance, and I apologize to the translation services also for not having notes. I will be speaking exclusively in English.

I'm the executive director for the Ontario Commercial Fisheries' Association. I represent fisheries in Ontario, on the Great Lakes and its connecting waterways on Lake Nipigon and a number of inland waters in the province. We've been an industry that's been well-established in Ontario in its current European fishery form since the 18th century, and there is abundant evidence in the historical archeological record of a commercial fishery in Ontario for centuries before European contact.

We're nationally small but locally very important, and in some cases very important to the history, the culture, and the economy of the communities where we are engaged in business. I will say at the outset that I think the fishery in Ontario is unique and instructive. We prosecute the fishery alongside an extraordinary mix of other economic activities, large and small. We do it in water bodies that are much smaller in scale than some of the other fisheries that are prosecuted on the coasts and elsewhere in the country, where the impacts of other activities can become magnified by the scale of the habitat in which our fisheries exist.

As such, the full range of bad things that can happen when you get it wrong have happened to us over the years. It's perhaps for that reason that at least as it relates to the Fisheries Act provisions of Bill C-38, there was a great deal of consternation about the uncertainty that was being introduced into the mix by this legislation.

Let me give you a bit of history. Fish and fisheries have not done well in the interaction between our industry and other industries, whether they be other resource extraction industries or manufacturing or any of the other ways that people make money, big and small, in Ontario. That's true especially as it relates to habitat destruction and degradation.

Here's an example. There was an enormously productive spawning reef in the lower reaches of the Detroit River that produced vast quantities of cisco, white fish, and any number of other fish that were an important part of the Lake Erie fishery. That was dynamited for navigational purposes early in the 20th century, which would have been bad enough, except that instead of removing the blasting spoils in trucks, they just spread it over the remaining reefs in the river, which would have been available otherwise to the fish as spawning habitat had they removed it from the water and taken it away. They completely obliterated all possible spawning habitat from the lower reaches of that river.

The reason they did that was not that they were bad people; the reason they did that was that it was convenient. I suspect that for the most part, people in responsible positions in that project understood full well that they were eliminating spawning habitat at the time. They didn't have to, so they didn't. It was cheaper to do it the way they did, so that's how it got done.

We may think that we do things differently now, but I submit to you that when money is tight and budgets are close and circumstances are straitened and the competition is biting at your heels, people don't tend to do inconvenient things unless they have to. If there's a fudge factor that's involved, well, it gets invoked if it can be.

There are more examples. There were spawning reefs all over the Great Lakes that were removed for gravel and cobble to build roads, to build buildings, to do all manner of good things. Many of the buildings of a historical nature in Ontario that we admire were built with materials that were extracted in that manner. They're gone forever. Those habitats cannot be reclaimed except at enormous expense.

The number of wetlands in Ontario that have been demolished in one form or another, whether by filling them in to build on, by digging drainage channels through them to drain them dry for agriculture or other land use purposes, by any number of very ingenious techniques that have been devised—each and every one of those was a fisheries habitat, either directly or indirectly.

The point is that these things don't happen so much anymore. The reason they don't happen so much anymore is the result of a number of pieces of legislation or regulation, but overwhelmingly, the most important piece of regulatory paper that we have to stop that kind of thing from happening, and the reason that it is so rare, is section 35 of the Fisheries Act. That is a lynchpin of fisheries management in this country, and certainly in Ontario.

I have just recently been through an extremely worrisome exercise in Lake Erie again, which has over 80% of the commercial fishery in Ontario, where there were a number of proposals to put hundreds of wind turbines on the western basin of Lake Erie, which is the nursery of the lake. It was being pushed very aggressively by a provincial government that fancies itself to be environmentally sound, and they seem sincere in seeing themselves that way. They believe that renewable energy is an environmentally good thing. The hammer we had was the Fisheries Act, section 35 specifically, and boy, did we wield it.

When I look at the sorts of things that are being proposed now, my first reaction is that it's not very clear. It's not at all clear where this is going to land. I have to tell you, there is an awful lot of accumulated wisdom out there that could help you come up with a system for revising the Fisheries Act, and particularly the habitat regulations, because we think they could stand to be improved as well. There is a lot of wisdom in the industry. There is a lot of wisdom in academia. There is a lot of wisdom within the staff you employ within the public service and in other levels of government.

But it requires a proper process. It requires full stakeholder engagement from all sides. It requires detailed agendas to be drawn up and worked through in a way that does not put us in a position where the law of unintended consequences comes home with a vengeance.

I am somewhat mollified by some of what I have heard about some of what I was worried about in the bill, but when I read the remarks of the minister with regard to what constitutes habitat, what constitutes a fishery, my worries are brought back with force.

I would say that we feel strongly that the Fisheries Act is due for a revisit, but a new Fisheries Act should incorporate strong safeguards for fisheries, potential fisheries, and fisheries rehab through science-based management, and I would echo Mr. Rees's comments about science and programs like the Experimental Lakes Area, which was instrumental in saving the fishery in Lake Erie. We wouldn't have saved it if we hadn't had the Experimental Lakes Area project, and full stakeholder engagement.

Do I have any time left at all?

[Terry Rees, Executive Director, Federation of Ontario Cottagers' Associations]

Thank you, Mr. Chair, members of the committee, and members of the public.

I'm disappointed I'm not addressing these comments and concerns, frankly, to the fisheries committee, and instead that these important matters are being considered as part of an unrealistically complicated, unprecedented omnibus finance bill. The timing and design of this approach short-circuits the democratic process, and it certainly doesn't allow for the type and amount of reasoned discussion that fundamental important public policy deserves.

The considerations in Bill C-38 related to Fisheries and Ocean's activities, mandate, and resources could have significant long-term impacts on the essential underpinnings of our communities and our economy. Despite the significant displeasure with this approach, I'm here to speak on behalf of the tens of thousands of waterfront property owners who help to form the backbone of our rural economies.

First some background. My specific interest here relates to my role with the Federation of Ontario Cottagers' Association. Our organization is a not-for-profit established 50 years ago to represent the interests of rural waterfront owners in the province of Ontario on all facets of community life. We currently count amongst our supporters 500 community groups that represent 50,000 families. In total, the residential waterfront community numbers approximately 250,000 families across Ontario. We also work collegially with waterfront organizations in a number of other provinces, and with industry, other not-for-profits, and government as part of numerous committees related to water, biodiversity, mining, land use planning, and resource management.

Our interests include fire and crime safety, safe boating, risk management for volunteers, sound land use planning and rural practices, and, most centrally, the promotion of sustainable and healthy rural waterfront communities. We are vested parties. We have member associations in over 380 of Ontario's 444 municipalities and many in Ontario's northern unorganized territories. All told, there are about 15,000 kilometres and 50,000 hectares of privately held waterfront lands in Ontario, which are some of our most ecologically sensitive lands. The residential waterfront property community owns over $75 billion of residential real estate and contributes over $600 million annually in municipal and school property taxes.

For over 50 years our primary interest has been on supporting thriving and sustainable communities and specifically the health of our precious aquatic resources. In addition to supporting private land stewardship, we rely on the rule of law to ensure our natural resources are managed and cared for. Our community inherently knows, and it has had it confirmed by at least two U.S. university studies, that cleaner water is positively correlated to higher residential property values and directly impacts the use and enjoyment of our homes and the health of our families.

Today I wanted to relay our specific concerns related to the proposed changes to the Fisheries Act and the significant negative implications that may result. The habitat provisions in section 35 of the Fisheries Act prohibit the harmful alteration, disruption, and destruction of fish habitat. That's been the basis for ensuring aquatic resources are not impacted by shoreline or in-water projects and that our fisheries are allowed to thrive.

Clause 142 of the proposed budget implementation act diminishes the existing law and as a result is bad for Canadians. It does this first by limiting prohibitions to only commercially important fish. Complex natural systems require healthy food webs made up of a variety of species, and I note that the large majority of at risk fish species aren't commercially fished. Secondly, clause 142 establishes a prohibition based on serious harm that's permanent. We feel this new definition is both unclear and ill defined, and thus is subject to interpretation and will be challenged. Defining a serious harm that's permanent is problematic and will not simplify things.

Most provinces don't have laws making it an offence to harm fish habitat, and for those that do, these laws can be weak and discretionary. For many provinces, like Ontario, they rely on the Fisheries Act and their own regulations to protect habitat, and use it to ensure environmental assessment of major projects like mines, which are excluded from provincial environment assessment laws.

While an important piece of Canadian law, section 35 of the existing Fisheries Act is still overly discretionary and should be strengthened, not weakened. The act should be revised to require that industrial undertakings are economically and environmentally sustainable, they take a precautionary approach, and repair or avoid harm to aquatic habitats and species.

The proposed changes to the Fisheries Act are regressive. Instead of embracing ecosystem-based management, the changes narrow the provisions to protect fish and fish habitat to focus only on identified fisheries. Instead of limiting discretion or guiding decision-making under the act, they create a framework for suspending the application of conservation provisions altogether.

The national laws on our fisheries should provide a clear national standard for protecting fish and fish habitat. Yet clause 134 of the budget implementation act allows for certain provisions of the act or regulations to be completely relegated to provincial discretion, in which case the federal fisheries law is suspended and provincial law applies in its place.

Whatever its shortcomings, the existing law has breadth and consequences for offenders that are significant, including fines and jail terms. This is a deterrent that is potent and powerful.

I would like to conclude my remarks with some commentary about the investment our government is making in natural resources research.

Our water resources and the life they sustain are our most valuable resource. Our freshwater resources, our lakes and rivers, sustain our industry, are fundamental to agriculture, and are the foundation for all life on earth. Yet overall, we have a limited understanding of the dynamics of freshwater and their long-term health.

For almost 50 years, Canada's Experimental Lakes Area has been an incredibly valuable aquatic research facility, unlike any research facility like it in the world. This dedicated area of 58 small lakes in northwestern Ontario and their watersheds are an important natural outdoor laboratory to study the physical, chemical, and biological processes in actual lake ecosystems. The ELA has one of the longest, most complete, and unique sets of information on water quality in the world. This data is crucial for monitoring and developing sound environmental and industrial policy. Research at ELA makes, and has made, important contributions to decision-making on many issues, and these include: restricting phosphorus inputs to lakes, which combats undesirable algal blooms; it contributed to the Canada-U.S. Air Quality Agreement, which is a policy that limits air pollution from sulphur and nitrogen oxides and reduces acid rain; they've studied greenhouse gas production in hydroelectric reservoirs, the effectiveness of proposed legislation to restrict mercury air pollution, and the effects of releasing endocrine disrupting chemicals into our waters. These issues can dramatically impact our economy and Canadian society.

Investing in this important facility and its researchers will provide benefits through better understanding of our freshwaters for years to come.

The notion that private industry or universities will be able to dedicate themselves and maintain this research over the long term is simply false and unrealistic. The government must reconsider the decision to close this facility and reinstate our commitment to the knowledge it provides our industry, our governments, and civil society.

Canada's federal government needs to provide the conditions for rational and sustainable growth. This means providing clarity and accountability to everyone who has a stake in Canada. It also means a commitment to the scientific underpinnings that will drive innovation, strong and informed public policy, and a healthy and prosperous population.

Thank you.

[Jamie Ellerton, Executive Director, EthicalOil.org]

Good evening, Mr. Chairman.

Thank you to the members for having me here today.

My name is Jamie Ellerton. I am the executive director of EthicalOil.org. We are a Canadian non-profit organization that advocates for ethical oil from Canada's oil sands and other western liberal democracies. Ethical oil is produced in countries with high environmental standards that are peaceful nations, where workers are treated and compensated fairly, and have respect for human rights. Conflict regimes, by contrast, oppress their citizens, operate in secret with no accountability, and have little, if any, regard for the environment. What we do is important, but I do not claim that it is charity. It is political, and it is simply not on the same moral plane as true charitable endeavours.

Government accords charities the privilege in exchange for the charitable work they do. The benefits that come with that privilege are quite generous and result in foregone revenue to the government. In Canada there is not a consensus on ethical oil, and promoting one side in a political debate is not charity. I will quote from the Canada Revenue Agency:

...in order to assess the public benefit of a political purpose, a court would have to take sides in a political debate. In Canada, political issues are for Parliament to decide....

Now, stop for a moment and imagine. If arguing one side of an issue were a charitable act, then arguing the other side would be a charitable act too. Let me read you such an example. The example is deer hunting. It comes from Canada Revenue Agency's policy statement CPS-022, about political activities. I quote:

The main reason why the courts rule out political purposes for charities is a result of the requirement that a purpose is only charitable if it generates a public benefit. A political purpose, such as seeking a ban on deer hunting, requires a charity to enter into a debate about whether such a ban is good, rather than providing or working towards an accepted public benefit.

If you have to debate whether or not something is charitable, it is not. Mr. Chairman, that policy statement was published in 2003 under Prime Minister Chrétien. This is not a matter of partisanship. It's about the neutral application of tax laws. Politics should never enter into it.

In 1989 Revenue Canada revoked Greenpeace's charitable status because it engaged in prohibited activity. Greenpeace then set up another charity called the Greenpeace Canada Charitable Foundation, which also saw its charitable status revoked in 1998. It had nothing to do with the PC or Liberal governments of the day. It was the CRA doing its job in enforcing the Income Tax Act.

Given this history, why are we discussing this today? The Government of Canada wants to make sure charities are following the rules they agreed to when they applied for charitable status, a classification that gives them generous benefits such as tax-free status and the ability to offer donors deductible receipts.

Mr. Chairman, Ethical Oil has noticed increased political and partisan activities of several organizations that we believe are in violation of charities law for their political and partisan activity. To that end, we have written several complaints to the Canada Revenue Agency detailing how we believe various Canadian charities are violating the law. Whether it's a representative of the David Suzuki Foundation appearing in a TV advertisement for a political party, or Environmental Defence making 50,000 phone calls in one electoral district to attack one member of Parliament, we do not believe this work to be charitable.

Concerns have been raised that this legislation attacks free speech. I do not believe this to be true. No charities doing charitable work have anything to fear from Bill C-38. Charities that are complying with the law today will continue to be if Bill C-38 is passed. What the bill actually does is this. For those organizations that have been given the privilege of charitable status, which includes a generous subsidy from Canadian taxpayers, it requires registered charities to provide greater transparency into their activities in exchange for that privilege.

That is why Ethical Oil supports the initiatives contained in Bill C-38 and hopes to see its passage through Parliament.

Thank you, Mr. Chair.

[Dennis Howlett]

I would recommend that all of the clauses of Bill C-38 that seek to curb political engagement of charitable organizations be removed.

Thank you.

[Dennis Howlett, Coordinator, Canadians for Tax Fairness]

I'm the coordinator of Canadians for Tax Fairness. I thank you for the opportunity to share our concerns regarding this omnibus budget bill.

Since I have very limited time, I'll address just two points: one, the need for a revenue-side solution to the deficit problem; and two, the need for government policy to support increased lobbying and political engagement by charities, not curtailing it as Bill C-38 is possibly going to do.

The first point, we need fairer taxes to increase revenue, reduce the deficit, and close the income gap. Austerity is the wrong prescription for an ailing economy. Cutbacks in government spending and layoffs of large numbers of public servants jeopardizes the weak economic recovery.

The main reason for the government deficit is not runaway government spending but ill-advised tax cuts. Thanks in part to corporate tax cuts that have lowered the federal corporate tax rate from 21% in 2006 to 15% today, non-financial Canadian corporations are now sitting on about $500 billion of surplus cash. They are not investing for the most part in job creating expansion because there is weak consumer demand for their goods and services. What they need more than tax cuts are policies that would boost consumer spending. Increasing unemployment, as this budget is expected to do by up to 70,000 full-time jobs if you include both the public and private sectors over the next three years, will not help to boost consumer demand.

The underlying weakness of consumer spending is due in large part to the growing gap between rich and poor. Wealth has become far too concentrated in the top 10% or even 1%, and middle- and lower-income Canadians have seen their income stagnate or decline. The rich, the very rich, can't spend as much as ordinary Canadians because there are very few of them.

What would help our economy, and business in particular, would be policies to redistribute wealth. One of the most effective ways to do that would be to make taxes fairer.

Canadians for Tax Fairness contributed to the alternative federal budget 2012, which included a tax fairness plan that proposed: increasing tax rates on top incomes; reversing the race to the bottom with corporate tax cuts; eliminating unfair tax preferences, and closing tax loopholes and access to tax havens; applying financial activities or transaction taxes; introducing an inheritance tax on large estates; and starting to introduce smart and progressive green taxes.

These tax measures and elimination of subsidies to oil companies could raise an additional $50 billion a year that could go toward reducing the deficit and implementing new programs, such as pharmacare, child care, climate change action, and a poverty reduction plan.

This budget bill has hardly any new revenue measures at all. It is unfair to try to balance the budget by spending cuts alone, which will adversely affect middle- and lower-income Canadians. We need a more balanced approach that would include revenue-side solutions as well.

The second point is to encourage public policy engagement by charitable organizations. I'm surprised and outraged by the attack on the rights—and I would add the responsibility—of charitable organizations to engage in advocacy on public policy issues. The real problem is that we have far too few charitable organizations contributing to public policy dialogue.

As the Canada Revenue Agency noted in their 2003 policy statement on political activities of registered charities:

Beyond service delivery, their expertise is also a vital source of information for governments to help guide policy decisions. It is therefore essential that charities continue to offer their direct knowledge of social issues to public policy debates.

The $5 million allocation in the budget for special audits by CRA, to see if charities are adhering to the 10% limit on advocacy, and additional restrictions in reporting rules for charitable foundations contained in Bill C-38 are sending the wrong message—that government doesn't want to hear from non-government organizations, especially if they disagree with government on environment, gender equality, or poverty issues.

I would have thought that many Conservatives who subscribe to the principles of liberty and limiting the power of big government would have wanted to expand democracy and citizen engagement, not curtail it.

[David Collyer, President, Canadian Association of Petroleum Producers]

Good evening, Mr. Chairman and members of the subcommittee. My name is Dave Collyer. I'm president of the Canadian Association of Petroleum Producers. We represent Canada's upstream oil and gas sector, and our members produce more than 90% of Canada's petroleum resources.

I certainly welcome the opportunity to provide our perspective on Bill C-38, part 3, responsible resource development.

This bill is extremely important to our industry. It's going to help attract the investment required by the oil and gas sector to create Canadian jobs, economic growth, and energy security in an increasingly competitive global market. I want to really emphasize the global competitive environment in which we operate. LNG is perhaps a good example—a tremendous opportunity, we believe, to export natural gas from Canada's west coast. But our competitors in Australia and other countries are not standing still, nor are markets necessarily waiting for us to supply those particular markets. We need to be competitive, and a key part of that is the regulatory regime under which we operate.

In our view, the bill sets out a framework for legislative change that will significantly improve the regulatory review process for natural resource development projects without compromising Canada's strong record of responsible environmental performance and environmental outcomes.

Our industry is the largest single private sector investor in Canada. We invest over $50 billion each year, and we employ well over half a million Canadians. We foresee opportunities to maintain or in fact increase that level of investment going forward. In fact, there are over $120 billion in oil sands development projects in the queue. However, we will only attract that investment and the investment capital required to grow our industry if we're internationally competitive.

As we all know, capital is mobile. I think it's rather sobering that a variety of domestic and international authorities, including the International Energy Agency and the World Economic Forum, have characterized our current regulatory system as being overly complex, redundant and open-ended, and a significant threat to Canada's ability to attract the capital necessary to develop our abundant natural resources.

The current regulatory process has often led to project delays and cost escalation, which both defer and reduce the employment and revenue benefits accruing to Canadians from these investments. In some cases, projects have unfortunately been cancelled or deferred for many years without any discernible improvement in environmental performance or outcomes. In our view, that is clearly not in the public interest. CAPP is very encouraged by the measures within Bill C-38, which, if properly implemented, will address many of those issues.

We strongly disagree with those who allege that Bill C-38 will result in lower environmental standards or turn back the clock on environmental regulation. The existing regulatory processes, to review and approve, or not, industrial activity in Canada have developed incrementally over many years, resulting in a patchwork of requirements that are confusing, overlapping, often conflicting, and ultimately uncertain. The existing process undermines competitiveness, negatively impacts project economics, and does not contribute to better environmental outcomes. More regulation is not necessarily better regulation; in fact, it's often quite the opposite.

From our perspective, the key elements of Bill C-38 are the following.

First is one project, one review, with review by the best-placed regulator by enabling equivalency and substitution. In our view, that will remove unnecessary overlap and duplication, and it certainly does not mean a lower standard of environmental review.

Second is significant consolidation of regulatory review bodies for those projects that are under federal oversight, which, from our perspective, is a sound, common sense reform—a risk-based regulatory review process that focuses resources and effort on higher potential impact projects and in fact reallocates resources in a manner that should improve environmental outcomes for those projects that have the potential to have a higher environmental impact.

The final key element is greater clarity and predictability in the regulatory review process, specifically in regard to timelines, which is going to provide much greater certainty to project proponents in terms of the costs and resources they need to devote to the regulatory review process and should shorten the timeline between the identification of a project opportunity and the point at which a proponent can make a final investment decision, thereby reducing uncertainty and complexity in the overall decision-making process.

I have just a couple of thoughts on implementation. I'd like to emphasize that the benefits that arise from this legislation outlined in Bill C-38 will only be realized if this legislation and supporting regulations are effectively and efficiently implemented in a manner that delivers the intended outcomes. It will be important to ensure that adequate federal resources are dedicated to fully implement the intended regulatory changes on an aligned, whole-of-government basis, and additionally, that collaboration and alignment among federal, territorial, and provincial government departments and agencies will be critical to delivering the intended outcomes, particularly as they relate to equivalency and substitution.

To conclude, in our view, we must continue to grow Canada's resource sector for the benefit of all Canadians, to provide jobs, economic growth, and substantial revenue to Canadian governments. As an industry, we will continue to do this responsibly and with a commitment to continue performance improvement under environmental policy and regulation that will deliver the outcomes Canadians expect and that compare very favourably with those of other countries with whom we're competing for investment capital.

We look forward to less but better process that will deliver more jobs, a stronger economy, and responsible environmental performance. In our view, Bill C-38 represents a practical, efficient, and effective framework for change that is long overdue, and from our perspective, it is time to act on this legislation.

Thank you, and I look forward to your questions.

Telecommunications

[Mike Lake, Conservative, Parliamentary Secretary to the Minister of Industry]

Mr. Speaker, I will talk briefly about recent steps that our government has taken to help provide Canadians with more choices at low prices for the wireless services that have become so important in their everyday lives.

In 2008, our government took action to encourage the entry of new competitors into the wireless market. Since then, new players have launched services and are providing more choice to Canadians. In addition to these new competitors, large telecom companies have made substantial investments to better serve their subscribers. Because of these actions, consumers are seeing the benefits of access to more advanced services, greater choice and lower prices.

We recently announced decisions that will continue to promote our goals of increased competition and investment in the sector and to see that all Canadians, including those in rural areas, benefit.

First, we would amend the foreign ownership rules under the Telecommunications Act, meeting a commitment we made in the 2010 Speech from the Throne. These amendments are included in Bill C-38. We are lifting these restrictions for companies with a small share of the telecommunications market so they can better compete and grow.

Access to capital is an important issue, especially for the new wireless competitors, and our targeted actions would remove a barrier to investment for the telecommunications companies that need it most, so that Canadian families and businesses can continue to benefit from more choices and competitive prices.

In addition, we will support competition and investment in the upcoming auctions by applying rules that will enable new wireless competitors access to the spectrum up for auction.

We will also extend and improve the existing wireless roaming and tower-sharing policy to further facilitate competition. These policies provide access to existing networks and infrastructure and support better coverage and services for consumers.

We believe all Canadians should share in the benefits of advanced wireless services and that rural Canadian families should have access to the same services as those in cities. We are applying specific measures in the upcoming auction to see that Canadians in rural areas have access to the most advanced services in a timely manner. All Canadians should be able to benefit from the fastest mobile speeds and latest devices, such as the newest iPad, PlayBook or smartphone. These are the first such specific measures of their kind in Canada.

Finally, to improve the safety of Canadians and first responders, we will be reserving some spectrum for exclusive use by public safety users across Canada. Our government believes that Canadians, in both rural and urban areas, deserve value for their hard-earned money, and our government is taking action to see that they get it.

[The Chair, Conservative, James Rajotte]

I'm going to call this meeting to order. This is the resumption of meeting number 62 of the Standing Committee on Finance.

Our orders today, pursuant to the order of reference of Monday, May 14, are to continue our study of Bill C-38. I want to thank all of our witnesses for their patience. I apologize for the vote. That was unexpected this evening. We do have eight people to present to us during this session.

We have, first of all, Ms. Vivian Krause. We have Mr. Mark Blumberg. We have Mr. Dan Kelly from the Canadian Federation of Independent Business; and Mr. Dennis Howlett from Canadians for Tax Fairness. We have Mr. Jamie Ellerton from EthicalOil.org; we have Mr. Blair Rutter from the Grain Growers of Canada; and from Imagine Canada, we have Mr. Marcel Lauzière. By video conference we have Mr. Tom King from the Prospectors and Developers Association of Canada.

Again, thank you so much, Mr. King, for staying with us.

We want to thank you all for being with us. You each have a maximum of five minutes for an opening statement, and we will go in the order that I read. We'll start with Ms. Krause, please.

[Jayson Myers, President and CEO, Canadian Manufacturers and Exporters - Ontario Division]

Thank you very much, Mr. Chair.

Good evening, ladies and gentlemen.

Thank you for the invitation to comment on Bill C-38.

Thanks very much for inviting me to appear at this subcommittee and to discuss the implications of Bill C-38 on responsible resource development in Canada. I represent Canadian Manufacturers and Exporters, as well as the Canadian Manufacturing Coalition, a group of about 50 associations that represent all sectors of manufacturing and industrial development in the country. The members of our associations jointly employ over 2.5 million Canadians.

I believe we're at a critical juncture in our economy. The global economy is presenting Canada with many challenges, but also with a historic opportunity to take full advantage of the immense potential of our natural resource wealth. Across Canada, over 500 major projects are under way or are being planned for over the next 10 years, representing half a trillion dollars of new investments in our energy and mining industries and related infrastructure.

These private sector investments will give a very badly needed short-term boost to our economy and to jobs. In the long run, they represent a significant part of our industrial infrastructure, offering long-term employment and export growth. However, they also offer something that is much more significant. Canada's real long-term opportunity is to develop a world-class manufacturing technology and services supply chain for these natural resource projects that will create high-paying, value-adding jobs on the basis of expertise that can be exported globally.

There's been a lot said recently about the impacts of resource development on Canadian manufacturers, and particularly about Dutch disease, the negative impact that a strong dollar has had on Canadian manufacturing—a strong dollar presumably driven as a result of resource development. There's no doubt that over the past decade Canadian manufacturers have faced significant challenges to their profitability and therefore to maintaining employment, to investing in new products and new processes, and to staying ahead in global competition. They face those problems as a result of the challenges of a rapidly appreciating Canadian dollar, the recession, increased competition from low-cost producing countries, uncompetitive regulatory regimes, the decline in the U.S. market, rising protectionism in key export markets, and continued escalation of labour shortages.

Canadian manufacturers are suffering from some of the symptoms of the Dutch disease, but I think this diagnosis is wrong, and I'm afraid that policy treatment based on faulty diagnosis will have damaging impacts on manufacturing and on the economy as a whole.

First of all, the strength of the dollar is a reflection of the weakness of the U.S. economy, which has had a far more damaging impact on Canadian manufacturers than currency appreciation. You can always improve productivity to offset a higher dollar. It's hard to replace 30% of your customer demand, which disappeared in a matter of six months at the end of 2008.

Despite the challenges faced by manufacturers over the past decade, I want to say that manufacturing is far from disappearing. Today, it's an innovative industry, it's flexible, it's driven by customer demand, and it's global, in terms of markets but also in terms of investment. Manufacturing represents about 10% of our total employment, about 14% of our GDP, and about 60% of all of the private sector research done in the country. In fact, today, manufacturers are creating more jobs in the services sector of the economy than ever before, in high-paying services jobs in logistics, in research and development, in technology, in engineering, in design, in financial services, and in business services, for example.

Today, Canada's manufacturers are developing new products for new markets, and many have found new customers as suppliers of the new energy, mining, and infrastructure projects across the country. These projects offer Canadian manufacturers, companies like Berg Chilling, Promation, and Aberfoyle heat treating, run by Harry Hall out in Aberfoyle, new business opportunities in new sectors of the domestic market. They've led to the development of new products and processes. They've provided them with new opportunities to sell, not only within Canada but in new markets around the world.

Rather than seeing natural resource development as a curse, we should recognize the opportunities these projects present to Canadians, do our best to facilitate their development, and ensure that we can leverage them to build new industrial, technology, and services capacity.

We support Bill C-38 because we believe that Canada needs to maximize our economic opportunities while maintaining the right balance between environmental protection and economic growth. We believe the approach proposed in this bill will continue to support responsible environmental protection and oversight, while greatly speeding up approval processes.

The development of our natural resources is a capital-intensive enterprise requiring high levels of investment years before a project begins its commercial activity phase. Today's approach to environmental reviews has created an uncoordinated, duplicative, cumbersome, and uncertain process for both domestic and foreign companies. This process is acting as a direct barrier to foreign investment in natural resources, and it's limiting our members' ability to capitalize on new supply chain opportunities. We believe a better approach is a “one project, one review” process with a clearly defined time period.

Our members have provided some current examples of the problems of duplication and unnecessary delays in the environmental process, whether it's Areva Resources Canada, which has had a 19-month delay in starting new environmental assessments for operating and constructing a uranium mine and mining facilities in northern Saskatchewan, with investments of over $400 million and up to 200 construction jobs; or the Rabaska partnership, for instance, that's proposing to construct and operate a liquefied natural gas terminal near Beaumont and Lévis, in Quebec.

These projects all create significant on-site construction jobs, as well as directly sustaining and creating hundreds of jobs in the manufacturing services and technology sector, and jobs in metal fabricating, jobs in concrete, jobs in environmental technologies, jobs in processing technologies, and in services, finance, engineering, and design. They support job creation across the economy.

While our oil and mines will be here for decades, the investment opportunities in this sector always prove to be very cyclical and sometimes unstable. We have to remind ourselves that Canada is not the only player in the global resource market and that many countries are competing for investment capital. This capital will flow where the environment for investment is the most beneficial. With a potential of over $500 billion in major projects being developed in Canada over the next decade, we need to ensure that Canada welcomes this much needed capital in order for us to develop these resources to allow our businesses to take advantage of this tremendous unprecedented economic opportunity.

While we all agree that the protection of the environment must be addressed through reliable environmental assessments, we believe that efficient regulatory processes can go hand in hand with high-quality environmental reviews and effective regulatory enforcement.

The approach for environmental approvals proposed in Bill C-38 represents, in our view, a responsible and modern approach to regulatory management and oversight.

Thank you very much.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

If it were a bill separate from Bill C-38, An Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012, and other measures, it would have been examined by the Standing Committee on Industry, Science and Technology, is that not correct?

Canada–Panama Economic Growth and Prosperity Act

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

Mr. Speaker, as usual, my colleague made some important points with respect to this trade deal and Canada's role in the world, making fair and just deals with other countries. As has been said, there is no doubt about the fact that Canada is a trading nation. It always has been a trading nation. I am from Nova Scotia. It is a trading province, always has been and always will be.

I have looked at some of the work the government has been doing, whether it be the CETA deal or what it has done on NAFTA, or other free trade agreements. The crux of the problem is that the government does not have a clear policy on what its position is on trade, just that it wants some.

Its negotiators do not have an industrial policy to work from. The European Union has an industrial policy. All other major trading nations in this world have a domestic, industrial policy to work from. They know where the strengths and weaknesses are in their economies. They know what it is that they want from a trade deal, not just the fact that they want a trade deal.

That is extremely important to begin with, to understand where we want to make gains and what the downsides might be in order to get those gains. If we understand them up front, then we understand that during the negotiations we need to make accommodations for the downsides. If we are going to engage in some deal that is going to affect a particular industry, in their wisdom, the negotiators and the government departments responsible may decide that the gains are greater than the losses. Nonetheless there are going to be losses, and they have to prepare for those.

There has to be, built into the deal, accommodation or adjustment strategies for the possible closing of an industry, the laying off of employees, the retraining, the relocation, perhaps, of the people and communities affected.

This is what a fair and responsible trade policy has to look like. It has to be progressive. It has to be fair. It has to be socially just. There has to be a commitment to human rights, to the environment, to labour protections and to making sure that the deal, in the final analysis, is right for this country.

I agree, and I bet there are not too many members on this side who would disagree, with the idea that Canada needs to be out there promoting what Canadians do best, creating new markets, creating new opportunities for our entrepreneurs, our businesses, our ideas, our technology and our resources. I do not think this country, certainly under the government, is doing a good enough job with that.

What are we dealing with here on Panama? We are dealing with a country that is important because it is a country and because there are working people, an environment, a government that is perhaps making some mistakes and doing some things that we are not happy about. Nonetheless, there are hard-working women and men in that country who are trying to provide for themselves, their families and their communities. There is an important ecosystem in Panama that we need to ensure is maintained.

However, in 2008, for example, two-way merchandise between the two countries reached only $149 million, less than 1% of Canada's total trade. Now I am not suggesting because we only do a bit of trade with this country it is not important. I would say just the opposite. It is even more important that we tailor the kind of deal that we do with a developing country like this, so we are all gaining from the experience, so the people of Panama gain as much as the people of Canada and the businesses in Panama gain as much as our businesses.

The problem is the government has put together a deal that is very much like the NAFTA deal. It is like a deal it would do with a major industrialized country. It does not have the kind of sensitivities that are necessary in dealing with a developing country, and those are some of my concerns. It does not deal to my liking with human rights issues. It does not deal appropriately with the environment, with labour rights and, has been stated by successive members of this caucus, it does not deal with the fact that Panama is a tax haven. Panama has been delisted by the OECD. As the member before me stated, it has been black- and grey-listed because it will not provide information and there is no transparency with respect to financial transactions. Even with this deal, the Government of Canada tried to get the Government of Panama to sign a taxation information agreement that would make its information more transparent and it did not happen. However, it is a free trade deal and the current government is a free trade government and it is going to sign it come what may.

It was interesting listening to my colleagues. We talk about pushing for environmental protections, human rights and labour rights. I began to think about what we have been talking about in this House in the past number of weeks and months. How many times has the government brought in back-to-work legislation? Twenty-one times, completely and utterly taking away the right to free collective bargaining for working people in this country. The Conservatives are getting rid of science. They have shut down the Freshwater Institute; the Centre for Offshore Oil, Gas and Energy Research, gone; the National Round Table on the Environment and the Economy, gone; the National Council of Welfare, gone; the Fisheries Resource Conservation Council, disbanded last fall. These were organizations that provided valuable scientific and fact-based research to help governments and to help the private sector, to help communities make sound decisions and conduct themselves in ways that make our communities and our countries stronger.

The government has brought in a piece of legislation we are dealing with right now, the Trojan Horse bill, Bill C-38. It has stuffed an unprecedented amount of legislation into that bill. Seventy pieces of legislation would be changed. The Canadian Environmental Assessment Act would be completely repealed. The Fisheries Act would be changed substantially to the point where it would hardly be recognizable. EI would be irreparably changed. Is it being changed in the face of discussion and debate? Not one iota. The government unfortunately is engaged in relations with countries like Panama and it has absolutely nothing to hold to that country because the way it is conducting itself is anti-democratic and opposed to human rights. That is why it should be subjected to all kinds of criticism from this side and from others in this country.

[The Chair, Conservative, James Rajotte]

I call this meeting back to order, the 62nd meeting of the Standing Committee on Finance, going through Bill C-38. We are on part 4, division 40, the National Round Table on the Environment and the Economy Act.

We have two officials from Environment Canada to give an overview of this section. Welcome to the committee.