Finance Committee on Oct. 4th, 2006

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you.

Mr. Budnarchuk, you obviously believe the GST is a barrier to retail operations.

[Steve Budnarchuk]

That's a good question. Any significant increase in the cost of books is going to have an impact on sales, of course. If we reduce the price of books by that remaining 6% GST, that should incrementally begin to increase the unit sales of books across the country. Yes, absolutely.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you. I appreciate that.

Mr. Blais discussed a massive capacity problem, essentially, in the system here. We see that coast to coast. If there were a single investment where we should really invest in health care, is it strictly capacity--beds and so forth--that would take the pressure off things like emergency rooms and so forth? Where should the investment be?

[Bernie Blais]

I would be investing in people. We need human resources critically. Yes, there is a shortage everywhere, but I can tell you, in Calgary, when they talk about a shortage, they have one physician for every 700 people. We have one for every 5,000, so it's a different shortage. I think we need to invest in developing health professionals, doctors, nurses, physiotherapists, pharmacists, and those things.

[The Chair, Conservative, Brian Pallister]

Thank you very much, sir.

We'll continue with Mr. McKay for four minutes.

[John McKay, Liberal, Scarborough—Guildwood, ON]

I'm also a bit of a devil's advocate. Mr. Del Mastro anticipated my question somewhat. This is a community that's swimming in cash. You had Ralph bucks coming out last year; you have massive surpluses; you're about to change monarchies, and it seems to me that here your presentations would have been much more usefully made to the Conservative Party convention. It seems to me the issue is that you don't have enough revenue-raising capacities to meet your needs.

And you hit on a few things, Mr. Wallace, about development taxes and things of that nature.

Is there any conversation going on between the province and the municipalities and the regional health authorities so that you can raise money? There's tonnes of it here, but you don't seem to be able to get at it. It seems to me to be a taxing authority issue rather than coming to the federal government and asking for them. All the federal government does is write one massive cheque to all the provinces and walk away, particularly from health care issues. The federal government doesn't deliver much in the way of health care, other than for aboriginals and things of that nature.

I'd be interested in knowing whether in fact there is any conversation on reallocation of taxing authorities.

[Melissa Blake]

Certainly there is. I'm a member of a number of different groups of mayors across the province. City mayors have that issue. One of the areas they were hopeful on was the backing off of the province in relation to education revenues; there's some push-back on the provincial side of that. We've made our specific application through the urban municipality association for our tax considerations to segregate the machinery and equipment. They require Municipal Government Act changes and they require the will of the province, or the whim of the province, to do so.

In relation to the amount of revenues that go back to the province from the royalties, I think we contribute, from this region, about $1 billion currently, doubling next year as the production increases and going up as we go along. But essentially what we're looking at is about $3.9 billion going back into federal revenues as well, so I think you participate at a good extent as well with the economy generated from the Wood Buffalo region and other oil sands developers. That's where I come back down to; it's nice to sign a cheque over to the province, but it doesn't always get to the municipality. My suggestion on the regional tripartite agreement would be a very specific three-way unison that could achieve what's important on the strategic agenda.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Then you'd get into a really bizarre exercise for regions like my friend's here, from Dartmouth, which don't contribute quite as massively to federal revenues. Would they in fact receive something less? You'd open up a can of worms that would be just horrendous.

[Melissa Blake]

I appreciate that, and the concern I have is the risk that happens if this community is unable to move forward. We won't be able to support the oil sands to the extent that we would like to, so instead of producing one or two million barrels per day, that may be what we're able to achieve is what we have for resources available, whereas if we had additional support, the three and five million per day may become more of a reality. It comes down to whatever is determined as priorities. We appreciate the differences you have to deal with across the nation. Again, we're just trying to articulate what the opportunities are.

[The Chair, Conservative, Brian Pallister]

Madam Ablonczy, four minutes.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Thank you, Mr. Chairman, and thanks to all of you for your presentations.

We came to Fort McMurray deliberately because all of us, including myself, wanted to see and hear firsthand about this kind of anomaly in our country--a good one, in many ways. But as you pointed out, there is a bit of a downside. My colleagues have asked these questions, but I want to address it again, maybe a little bit more bluntly than some of my colleagues have.

Here we have a province that's literally rolling in wealth, certainly from the perspective of many other provinces, yet we have people at the table talking about things the province is responsible for: health care, housing, the municipalities. It's a little bit incredible to some members of the committee who come from parts of the country that really are struggling in a lot of these areas as to why our own province wouldn't be looking after these needs. You all must have talked to the province, and I know you've given some of these answers, but can you just sum up why the provincial government isn't looking after this? Why would you be coming to the federal government for this kind of assistance? It seems difficult to understand.

[Melissa Blake]

Thank you.

Certainly we have been making efforts--very aggressively in 2005, but pre-dating that to 2002--to articulate the challenges and opportunities we have, the kind of investment we could experience here, which we've more than realized and intend to continue, and then the offsets to the impacts, whether it's health, education, housing, or what have you.

We have tried very diligently. We've had a number of meetings. We've made different proposals and pitches with respect to housing, with respect to revenue possibilities. We've had to go to the Alberta Energy and Utilities Board to intervene and say that if we can't address these issues, we can't support continued investments. We've done that on two occasions and we're looking at a third in the near term.

[Bernie Blais]

I support what Mayor Blake just said. We are at the AEUB hearings as well for the first time, the first region ever to appear. It's like a risk-management issue. You as a federal government and you as a provincial government have to decide whether you can invest because at some point our municipality and our health system will not be able to sustain oil sands development. When you're looking at David and Goliath issues, it may have to slow down, because we are not able to deliver the required services.

So it is a serious risk-management issue for the federal and provincial governments. If they want to achieve high revenue growth, then they have to support the infrastructure required to support families and employees within this community.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Thank you.

Another facet of this will occur to a lot of members of the committee: you have a number of corporations and companies making a good profit up here. Do they have a role to play in addressing these issues? You must have had discussions with them. What's the upshot of that?

[Melissa Blake]

Thank you.

The region has collectively engaged in the Athabasca Regional Issues Working Group, which coordinated the preparation of the Wood Buffalo Business Case 2005. They had a very good understanding--when they signed on to the agreement back in 1996--that it would generate all this increased activity. Governments would have the responsibility to take care of what they did; their responsibilities were to create the investment to deliver the assets. So there's some discussion about whether that has happened effectively or not. They certainly are participants on the corporate citizenship front. Again, we've had significant investment, $2.5 million from two different companies, but it's still just a blip in the projects we're trying to achieve.

They now understand, because of our moves to intervene, that it needs to change. We think there's greater opportunity for their participation, and there may very well be an appetite for that as well; we're trying to come to the jurisdictional resolution to collectively achieve that.

[The Chair, Conservative, Brian Pallister]

There's enough time now to accommodate three more two-minute rounds, and I'll give the floor to Mr. Pacetti.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you, Mr. Chairman.

Ms. Blake, a quick question. You talked about taxing on a development project basis. If I can make the analogy to a municipal project, somebody is going to put together a housing project and they go to the municipality and make a deal: “If you guys want to develop this particular sector, you have to put in the sewers, you have to put in a park, and you have to construct the roads.” On a larger scale, if you allow somebody to develop the oil sands, can't you say, well, you have to build a highway and you have to put in all the infrastructure? Couldn't it work the same way, and you transfer all the responsibilities to the industry, the private sector?

[Melissa Blake]

Thank you. We hadn't pursued this from the angle originally suggested by Mike and what you're suggesting now as well. If there are opportunities there, we'll certainly embrace them.

We know about the fair share deal in B.C. We've tried to figure out how we might be able to apply something like that. My understanding is that in the analysis we've done, we don't have that provision under our Municipal Government Act to go that way. Industries are already responsible for provision of their own infrastructure on-site, so they create water treatment systems and so on. One example is Imperial putting $400 million into a fly-in, fly-out operation. I would rather see that $400 million going into our community and find a better linkage for people to achieve--

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Like somebody in the health sector.

[Melissa Blake]

It's not within my purview to do that, but it's certainly my strong inclination.

[The Chair, Conservative, Brian Pallister]

We continue with Madam Wasylycia-Leis for two minutes.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

It seems to me there's a huge role for the federal government, notwithstanding the wealth of the Province of Alberta. The Government of Canada could actually require this whole project to be slowed down until proper planning takes place. The federal government could play a role in terms of...it used to play a role in terms of social housing and providing funds to meet acute needs. It can play a role in terms of a direct transfer on the education side to meet skills shortages, to help colleges. It could play a role in terms of incentives to get health care professionals into the region, instead of just studying the skills shortage.

The message you've left us is that we should go back and try to demand that the federal government address these issues.

The other one is climate change. We haven't really dealt with greenhouse gas emissions. There are lots of ideas here about carbon emissions control--that's a role for the federal government, and that has an impact on the health system. Is there anything we've missed and anything you want to add to what I've just said, or does anyone disagree?

[Some hon. members]

Oh, oh!

[Melissa Blake]

They always do that, don't they?

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

They do, yes. Just ignore them.