Finance Committee on Oct. 5th, 2006

[John Schmeiser, Executive Vice-President, Canada West Equipment Dealers Association]

Good morning, Mr. Chairman and committee members. Thank you for the opportunity to make a presentation on behalf of the Canada West Equipment Dealers Association.

Our trade association represents 400 equipment dealers in western Canada. We're primarily rural-based, and in a lot of situations our dealer members are the largest employers in the community. We are one of 18 organizations that comprise the North American Equipment Dealers Association. On behalf of our dealer members, I am pleased to make this submission to the Standing Committee on Finance as it considers Canada's place in a competitive world.

Our dealer members retail equipment that is primarily used in agricultural and farming practices. Our members are sensitive to the changing needs and demographics of farmers. We have seen many technological advances in the equipment that is offered for sale. As members of the committee know, farming today is vastly different from thirty, twenty, and even ten years ago. However, government policy affecting our industry has not moved as fast. Therefore, we recommend that consideration be given to the following measures aimed at helping Canadian businesses grow and flourish.

We request that the capital cost allowance schedule be increased to 40% in the first year, from the current 30%, for investments in new agricultural equipment. The current marketplace sees quicker turnover of equipment, and the current rate of 30% is not reflective of today's environment. Currently, the 40% CCA is provided to heavy trucks, and the same ratio should be put in place for agricultural equipment.

Furthermore, there have been recent initiatives in the United States that have seen rapid acceleration of the depreciation schedule. There is a new initiative, led by the North American Equipment Dealers Association, to have agricultural equipment fully depreciated after a five-year period, as opposed to the current seven years, and there has been a receptive ear to this message in Washington. Such a change in Canada would see all sectors in the agricultural equipment market benefit—the manufacturer, dealer, and customer. The major benefactors of this change would be our farmer-customers. Today's farmer and the innovative farmer of the future are trading in their equipment at a faster rate than in the past, and an increase in the depreciation rate is warranted to reflect the current purchasing pattern.

Earlier I stated that our government taxation policy has not moved as fast as the changes in our industry. Current CCA rates provide us with a great example that this statement is true. According to CCA guidelines, harnesses and sleighs have the same depreciation rate as a $300,000 combine—and in your packages, I have given you a little visual to prove the point. We encourage the committee to bring the CCA rates for our industry out of the stone age and make them as up to date as their state-of-the-art tractors and combines.

We believe an increase in the CCA rate to 40% will result in farmers reinvesting in their equipment quicker and faster. This benefits the manufacturer, the dealer and the customer, but also the environment, as more and more of the efficient and sophisticated equipment enters the market and replaces older and inefficient technology.

We also support an increase to the small business deduction, as we feel it is not current with today's needs and demands of business. Not only benefiting our industry, it affects all small business, and a significant increase in the SBD is overdue to ensure that taxation levels keep current with the growth in the economy.

Our industry is facing severe employment challenges. We encourage the facilitation of an investment tax credit to assist with the burden of training employees. This would assist our members in upgrading the skills and capabilities of our workers who are counted upon to service the new and innovative equipment that is offered for sale.

Enacting a provision of tax credits to journeymen technicians for the purchase of the tools that are essential for their employment is our final recommendation. Currently in place only for apprentice technicians, the same benefit should be extended to all technicians who require constant upgrading of their tools to perform repairs on new and innovative equipment. Although there was merit at the time in providing tax credits for tools for apprentices, we feel the time is now to extend this benefit to all technicians.

In closing, I would like to add that we have discussed these provisions with the Association of Equipment Manufacturers in Canada, as well as the Canada East Equipment Dealers Association, and they support our proposals in this submission. Each of these issues has been addressed through resolutions that passed unanimously at our annual general meeting.

I would like to thank the committee for the opportunity to make this presentation on behalf of our equipment dealer members. Thank you.

[The Chair, Conservative, Brian Pallister]

Thank you very much, Mr. Schmeiser.

I thank all of you for excellent presentations.

We'll move to questions now, and Mr. McCallum will begin. You have seven minutes, Mr. McCallum.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you, Mr. Chair.

As I said to the first group, in my pre-politics life, I used to visit Saskatoon often and had a great time, so I thank you all for the opportunity to come back.

I'd like to begin with Marlene Smadu.

I guess there is a bit of a philosophical difference in Ottawa between those who see health and education as watertight provincial jurisdictions and those who see more of a pan-Canadian role for the federal government. I take it you're in the latter group, but I'd like to just ask you if you could briefly confirm if that's true, and tell me why.

[Dr. Marlene Smadu]

The Canadian Nurses Association fully respects the jurisdictional authority over health and education, but in particular in the area of health, we do have the Canada Health Act, which is federal legislation that requires a federal role in terms of ensuring that the Canadian health system is in fact that: a Canadian health system. People may question whether or not we have a system, but I think we have to work toward that, so that the principles of the Canada Health Act—universality, portability, and all the other principles—are actually held up and so that we as provinces and as providers are accountable to them.

I think the other important issue is that at least in the case of nurses, the Government of Canada is the fifth-largest employer, so it needs to be in the discussions if for no other reason than that it also is very concerned about the number of health providers that it has. I think that's sometimes lost in terms of the government's role.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

You've painted quite a drastic picture. I've heard it before, but you presented it very clearly about huge nursing shortages in the U.S. as well. I didn't hear you say this, but are you suggesting that Canada or the Government of Canada should have a large program of trying to bring in many foreign nurses from overseas? Is that a part of your proposal?

[Dr. Marlene Smadu]

No. We belong to the International Council of Nurses, which has a position statement against unethical recruitment of nurses from developing countries, so I would defer to my fellow witness. We're not there to go and poach nurses or rob nurses from other places. But we clearly do have immigration into Canada, and we've actually worked with federal government funding in the past to look at how to facilitate internationally educated graduates coming into work in the Canadian health care system.

We've often been accused, as professionals, of having blocks where there is not an ability for the physician who is trained in Russia or the nurse from Bosnia to be able to practise here. The federal government, then, does have a role, in its responsibility for immigration, to facilitate that easy transition of people into the Canadian health care system as workers.

[John McCallum, Liberal, Markham—Unionville, ON]

But not a big push. Okay.

Mr. Steeves, I certainly agree with you that the long-term infrastructure needs of municipalities are critical and have to be addressed. I'd raise two issues.

First of all, if the government continues with having only a two-year time horizon in its budgets, how can you address long-term needs and do your planning when the maximum time horizon in the budget is two years?

[Gord Steeves]

Exactly. Part of what we're asking today and what we're suggesting should be in the budget is that the federal government commit to a longer-term window for probably exactly the reasons you're insinuating. Municipalities need bankable sources to commit to long-term plans, right?

[John McCallum, Liberal, Markham—Unionville, ON]

I guess I'm insinuating very subtly, yes.

The second point is that there are always choices to made and we can't have everything—

[Gord Steeves]

We're hoping we can.

[John McCallum, Liberal, Markham—Unionville, ON]

—so if you had a choice between public transit in the form of federal government investments and actually helping to construct public transit on the one hand, versus tax breaks to give people transit passes on the other hand, do you have a preference between those two instruments?

[Gord Steeves]

From the perspective of municipalities, I would have to say that our preference would be to build the actual infrastructure that we require, the funding. We take no issue with the idea that a federal government might want to introduce initiatives for people to buy transit passes, but that certainly wouldn't alleviate the necessity for the infrastructure funding required.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

Mr. Graham, I was interested in your comments on greenhouse gas emissions, but I wasn't quite clear on your position. One of our colleagues has said that if you don't have compulsory rules or a price, the atmosphere becomes a garbage can. Would what you're proposing in that area have teeth, or would it be purely voluntary?

[Clyde Graham]

It's for the government to propose a regime, but what we're saying is that we have to make that regime work in practice. We certainly have been working very closely with the government—the previous government and the current government—to discuss how to—

[John McCallum, Liberal, Markham—Unionville, ON]

The government has the responsibility. My question is, what is your view? Do you want the government to bring in something with teeth or something that is purely voluntary?

[Clyde Graham]

Teeth versus voluntary? I think that if the government sat down with industry and talked about voluntary targets, industry would be very willing to move forward on that basis.

[John McCallum, Liberal, Markham—Unionville, ON]

Voluntary targets, like the auto sector.

[Clyde Graham]

I can't speak for the auto sector.

[John McCallum, Liberal, Markham—Unionville, ON]

What if there were a parallelism, in the sense that the emission targets were compulsory for both auto and energy--would that be acceptable?

[Clyde Graham]

I don't represent either the energy industry or the auto industry, so I'm at a loss. We have proposed an environmental performance agreement with targets for greenhouse gas emissions. We've submitted that to the government. We've worked with your administration and with the current administration on what we could do realistically to meet those targets.

I think that—

[John McCallum, Liberal, Markham—Unionville, ON]

Okay, sorry. He's telling me my time is up.

I apologize, but I just want to end by pointing out to Mr. Javed that this Development Assistance Accountability Act was in fact produced by my colleague, Mr. McKay, and I do think it will improve the accountability of foreign aid.

Thank you, Mr. Chair.

[The Chair, Conservative, Brian Pallister]

Thank you for that promotional advertisement. We'll resume regular programming.

Mr. St-Cyr, you have seven minutes.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Thank you, Mr. Chairman.

Thank you to our witnesses for having taken the time to meet with us this morning. My first question is for Mr. Javed and it is on international cooperation.

When he was leader of the opposition, Stephen Harper signed, along with the leader of the Bloc québécois and the leader of the NDP, a letter calling on Paul Martin to focus Canada's international assistance on the goal of fighting poverty.

A bill was recently passed in the House that will focus international assistance on reducing poverty. The terms are exactly the same. However, Mr. Harper and his party voted against it.

When do you think Stephen Harper was right? Was it when he signed the letter supporting this or was it when he voted against it?

[Hamid Javed]

My answer for that would be that he was right the first time, and I hope the majority of you people in the Parliament, while the Conservative Party has a minority, are able to push him back to his promise that Canada, as a very rich country, should be able to do more than what it has done so far.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

For your information, the bill was adopted by a majority and it is our hope that the government will comply with the will of the House, just as it demanded when it was in the opposition.

You talked about literacy in your presentation. In terms of development assistance priorities, would you say that literacy is a fundamental factor in the fight against poverty or would it be a secondary factor and one that we should consider only after having dealt with other priorities?