Finance Committee on Oct. 23rd, 2006

[Danielle Irvine]

I can only speak personally. I can't speak for my organization on that.

In Newfoundland we were paying 15% with the HST, and now we're down to 14%. Why not pay 15% again to have all the programs back that we've lost and to get more?

[The Chair, Conservative, Brian Pallister]

I just want to be clear on that, because as you know—

[Danielle Irvine]

That's only me, not my organization.

[The Chair, Conservative, Brian Pallister]

That's fine, because you can tell from the nature of this exercise that what we're all learning is that it's about prioritization. It's about establishing priorities that will benefit Canada to the greatest degree, which involves using revenue wisely. It also involves a balancing act when it comes to tax rates, and that's why I made the point.

Madam Ablonczy.

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

I foresee some interesting talk on the bus. We really do appreciate being here and experiencing your fine Newfoundland and Labrador hospitality. Even though it is raining outside, it's beautiful country, and we're really learning a lot just being here, especially talking to you.

I do want to correct my friend Mr. McCallum. I find that's happening more than it should. I think it's important to put on the record that tax reductions are not crowding everything else out. In fact, program spending increased in the last budget. There's lots of money for everything. And we know that, especially for low-income Canadians, tax reductions, especially GST cuts, are very helpful because of course many pay no other tax, so the GST reduction is the only reduction we can give them.

There are also no cuts to the delivery of literacy. The reductions are made in things like round tables and other tangential activities that do not directly affect the delivery of service. Please be assured that some of the myths around these reductions.... The reductions are actually designed to give more programs to people who need them, and maybe there is a little less activity for people who just want to talk about the delivery of literacy.

I want to get to the airports first. For some reason, airports are on our minds. I don't know if you know the story, but it was quite a challenge getting here, and that has been interesting.

Everywhere we've gone, though, we have heard concerns about airport rents and the fact that people feel that it is basically a tax, because the cost of the infrastructure, the land, has long been met, and now it's just a revenue stream. There has been tremendous concern about that. I'd be more concerned in this part of the country, where this is even more of a lifeline.

There has been some talk from some people about the federal government simply transferring land to an airport authority and letting the airport services regulation left locally. Is that something that you've been looking at, or are you happy to have the status quo, with the reduction in the GST, in airport rent—[Technical difficulty--Editor]

[Rob Robichaud]

If I may, because it's something that—[Technical difficulty--Editor]—the response varies from airport to airport. There are some who believe that if the rents were eliminated—[Technical difficulty--Editor]—to the Government of Canada, while there are others who see a tremendous benefit to taking over their airport. There is a danger, of course, across some of those airports that should they get control of their own airport in different communities, then regulation would be even greater than it is today, because we are, in fact, subject to a lot of regulations in terms of standards.

So there is that, but to say that there is a perception that we should all be—[Technical difficulty--Editor]—I can't say.

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

Okay.

You'll be encouraged to know that is being considered very seriously by the government. I know both the Department of Transport—[Technical difficulty--Editor]

[The Chair, Conservative, Brian Pallister]

Mr. McKay.

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

When the deals were originally negotiated with the government, the airport authorities—[Technical difficulty--Editor]—for the first four or five years. We didn't hear too much complaint at that time about airport rent. Now the airport authorities come along and say, well—[Technical difficulty--Editor]—now we have to pay more rent, but that was the deal in the first place. What's your answer to the general taxpayer—[Technical difficulty--Editor]— Now we have to pay, and the general taxpayer says, “What for, who needs this?” What's your general answer?

[Rob Robichaud]

At the time of transfer, individual airports—[Technical difficulty--Editor]—and when we took over their airport, there was an agreement that every six years—[Technical difficulty--Editor]— For the most part, we didn't really fully appreciate how much across Canada—[Technical difficulty--Editor]

I don't think we knew at that time what would happen, but these facts became known later. They were shocking. Couple that with the fact that things have changed. Operating costs have skyrocketed. We had a number of issues: SARS issues, the Iraq war, fuel prices, increasing regulations. These are all extra costs that airports that transferred didn't know they were going to have to deal with.

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

[Technical difficulty--Editor]—all airports in the Atlantic region have taken a bit of a hit.

[Rob Robichaud]

What we're really saying is that if we were allowed to have that money that would otherwise stay with the federal government, we could reinvest it back into airport itself to better serve—

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

Or you could just—[Technical difficulty--Editor]

[Rob Robichaud]

That might be a possibility. That could be possible if we had that extra revenue coming in or if we didn't have the expense of—[Technical difficulty--Editor]— It's a possibility, absolutely, because it all boils down to the consumer. It all flows down to the consumer.

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

There is a school of thought—[Technical difficulty--Editor]—there's not enough bang for the buck, and one of the reasons there's a threshold—[Technical difficulty--Editor]— Their argument is that you should increase—[Technical difficulty--Editor]—construction is not lucrative enough for the broker and it will only cost—[Technical difficulty--Editor]

[Thomas Hayes]

Sure. Thank you for the question.

The argument has been made recently that the Canadian Venture Capital Association engaged a consultant to study the returns—[Technical difficulty--Editor]—labour-sponsored funds relative to the—[Technical difficulty--Editor]—three-, five-, and ten-year returns of the labour-sponsored funds in the top quartile of performance.

A number of funds never before reported—[Technical difficulty--Editor]—and that's what people generally refer to as—[Technical difficulty--Editor]

I should also point out that between 50% and 60% of deals that have been done in Canada in recent years have been led by labour-sponsored funds, and as you know, this game is cyclical, so it really depends on which part of the cycle you're in—[Technical difficulty--Editor]

[The Chair, Conservative, Brian Pallister]

Thank you.

Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

First of all, I should start with a particular problem. We have heard the types of request—[Technical difficulty--Editor]

[Gerry O'Connell]

Well, I think Canadians—[Technical difficulty--Editor]—and as you well know, a lot of northern Canada depends on the mining industry—[Technical difficulty--Editor]— These resources are depleting really quickly. We need to beef up our discoveries if we want to have an industry here in the future. We have too much in—[Technical difficulty--Editor]— If we don't reinvest in mapping our resources and finding new mines, we won't have much of a future in Canadian mining.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Howell, your proposal talked about attracting exploration resources through marketing initiatives and fiscal incentives to help develop the oil and gas industry. How—[Technical difficulty--Editor]—would you say the provincial government was getting in the way of exploration?

[Ted Howell]

Obviously we are focused right now on exploration—[Technical difficulty--Editor]—lots of exploration and development of mines are one way to offset some of those costs, starting with—[Technical difficulty--Editor]— Both the federal government and the provincial governments can support the industry—[Technical difficulty--Editor]—at the federal level. There are all sorts of representations from the provincial government. So that's on the collection of data, the examination of data. Obviously there are other elements, such as fiscal incentives.

In the past, there have been a series of credits and grants in the interest of trying to attract new players to this region. A series of credits would work very well for companies that are already producing oil here, but a series of credits would not necessarily have the advantage of attracting new players.

[Dean Del Mastro, Conservative, Peterborough, ON]

So a series of credits very similar to...you know, credits aren't that different except that they attract investment. If we were to put that in place, a number of political parties would actually come out and say, hey, you're giving money to big oil.

What do you say to that?

[Ted Howell]

Well, again, that's a point we made initially, which is that it is in the country's best interest to diversify our energy resources, in particular, our non-renewable energy resources. While Alberta is rich right now with the non-conventional oil, it's conventional oil and gas production...[Technical difficulty--Editor]

[The Chair, Conservative, Brian Pallister]

You have thirty seconds, Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

We have been touring across the country, and at every stop Mr. McCallum has encouraged people to sign up and join the “save the GST” club. In 1993 they actually campaigned to abolish the GST, which is a regressive tax. I really find his stand on this quite remarkable, really working to save the GST. If you guys would like to sign up, I think this you'd be the third or tenth people in the entire nation who have actually signed up for it.

Keep it up, Mr. McCallum. I think you might be catching a bit of steam on that one.