Finance Committee on Oct. 26th, 2006

[Mike Wallace, Conservative, Burlington, ON]

Okay.

I'm going to skip back to Mr. Nantais. You brought up Canada's Clean Air Act in your presentation. I appreciate the economic advice you've given us. I was a little bit unclear. I heard a big kerfuffle over mandatory requirements from my friends across the table when we first introduced Canada's Clean Air Act; I'm hearing something different today.

My understanding--and I live in Burlington, so I have a lot of Ford workers in my area, and I want to clearly understand--is that right now you have a voluntary pact with the federal government that is part of Canada's Clean Air Act. Is that a correct statement?

[Mark Nantais]

I don't know if it's part of Canada's Clean Air Act, but it's certainly in place with the federal government.

[Mike Wallace, Conservative, Burlington, ON]

Okay. Then we're looking at going from voluntary requirements to mandatory requirements in 2010. Are you telling me today that you don't think your industry can meet those targets?

[Mark Nantais]

On the voluntary program?

[Mike Wallace, Conservative, Burlington, ON]

No, on the mandatory. If they're doing them voluntarily, why can they not meet them mandatorily in 2010?

[Mark Nantais]

I didn't say that. I didn't address that aspect at all. Because we're a very integrated industry, it all depends on how one intends to regulate us. What I didn't get to say was when you look at new vehicles and their contribution to greenhouse gases in Canada in terms of the totals, it's less than 1%. So that means we could shut down and not sell one more new vehicle in Canada and we'd still have 99% of the problem to deal with.

We would ask ourselves...we can have a voluntary program, which is our preference. It would be modelled after or aligned with the U.S. regulatory requirements; it gives us much more flexibility, fewer regulatory costs in Canada. If the government chooses to regulate us, then there's a way to regulate versus not and a way of doing it properly, because we are such an integrated industry--that's what's so critical as we go forward--and it's a principle we will be insisting on in the forthcoming consultations.

[Mike Wallace, Conservative, Burlington, ON]

Okay, I appreciate it.

Do I have more time?

[The Vice-Chair, Liberal, Massimo Pacetti]

Twenty seconds...fourteen....

[Mike Wallace, Conservative, Burlington, ON]

Would you rather be playing hockey, Mr. Seiling, or not?

[Some hon. members]

Oh, oh!

[Mike Wallace, Conservative, Burlington, ON]

That's my time. I'll give it up. Thanks.

[The Vice-Chair, Liberal, Massimo Pacetti]

I wasn't sure. So you are the Mr. Seiling--

[Mike Wallace, Conservative, Burlington, ON]

Yes, he was with the Leafs, the New York Rangers. There you go. Get his autograph later.

[The Vice-Chair, Liberal, Massimo Pacetti]

I'm not a Toronto Maple Leafs fan, but I have your hockey card.

[Some hon. members]

Oh, oh!

[The Vice-Chair, Liberal, Massimo Pacetti]

It's much more valuable.

I just ate up five seconds.

Ms. Wasylycia-Leis, for seven minutes, please.

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

I'd like to mention he's also from St. Jacobs, my hometown, and a very important part of our country.

I wanted to start with Rod Seiling on the question of the GST visitor rebate. You've outlined in your brief that this cutback, if proceeded with, could be quite devastating to the tourist industry.

I can't stop it, since it requires a ways and means motion. It's before the House; it hasn't been called. I'm wondering what you can say to convince my colleagues across the way to vote against this motion or to not call it, so we don't have to deal with this blow to our economy.

[Rod Seiling]

We would suggest that it isn't a cost saver; it's actually going to end up costing the government money. The numbers they're using...the $78.5 million is really only a part of the issue. That takes up the revenues and costs dealing with the individual travel. No account was taken of the meetings, convention business, or the tour and travel. Those are the most important segments of the whole visitor rebate program, and those numbers never touch your books.

We believe the real number is somewhere around $1.28 billion that is used in the visitor rebate program. Every country that has a VAT system in the tourism industry offers rebates, so what you've done is to give us an automatic 6% increase in our costs, and I can tell you, our competitors are already using it. It hit the web the next day: Canada's pricing just went up 6%. Not only is it going to cost you that direct revenue, but it is also going to cost in lost opportunities. In terms of jobs, in terms of the taxes on goods and services of those visitors who would have chosen to come to Canada, they are not going to come any more because this is such a competitive business. Every country in the world has identified tourism as being clean, as being green; it's an export industry. What you've done is make us uncompetitive, and you've done it with numbers that aren't even correct.

We would ask you seriously to take a look at it. Wherever the numbers came from, they're wrong. The impacts are way more significant and the numbers are much higher than you've been led to believe.

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

Thank you. That's very helpful.

Let me ask you a question, and perhaps Pamela as well. We often have this debate in our committee about whether it is wise to take all your surplus and put it against the debt, to pay it down, or find an approach where you put some against the debt, some toward programs, some toward tax cuts, and so on.

I am glad Mike is here, because in fact we just debated this yesterday and he said, show me some area where you could put this money into a program that would actually grow the economy and help bring down the debt just as fast as if we put all of our surplus against it directly. I would think tourism might be a good example of that and also arts and culture. So I wouldn't mind both of you commenting on the return on investment one gets by focusing on your areas of concern.

[Pamela Brand]

Thank you very much for that question. I just want to say that film and television--and I'm talking about film and television audiovisual in particular, not books, music, and publishing, which is a much larger part of the cultural industry, If you put that all together, there's a lot of return on investment to the government for the investment it puts into the cultural industry--but for film and television in particular, it is now a $5 billion industry. It is part of Canada's knowledge economy. It creates very highly skilled, highly paid, and environmentally benign jobs across the country.

There are 73,000--almost 75,000--people across the country within film and television and related industries. Economically, the investment in the CTF, and certainly the investment through the production services tax credit, which means productions coming in mostly from the U.S. but also from other countries that are done in Canada.... I don't have those numbers with me, but I was told by the previous Minister of Finance, his senior bureaucrat, that it is now a revenue-making program for Canada, unlike the Canadian tax credit, which is for the indigenous production, but indigenous production needs a little more of a boost so that it can catch up with the service production.

Also, there are cultural objectives, which are not always easy to express clearly, but film and television and culture really is a way.... This gentleman beside me was speaking about branding Canada. There's no more powerful and effective way of branding Canada than through its books, its music, its film, and its television.

If you want to have an image of Canada presented around the world, the most cost effective and efficient way of doing that is through film and television, which goes throughout the world. Film is in the theatres all over the world. Television goes directly into the homes. There are mass audiences. The Americans are very good at it. With the investment the Canadian government would put into film and television, we could be as good, because with the minute resources we have compared to America and the European Union, we have famous directors and creators around the world. We hear about them all the time.

There's the economic as well as the cultural policy objectives, and as far as nation building goes....

Are you going to cut me off now, or are you getting bored?

[Mike Wallace, Conservative, Burlington, ON]

No, keep going. I'd like to see what's left of Judy's seven minutes.

[Voices]

Oh, oh!

[Pamela Brand]

All right, I'll stop.

[The Vice-Chair, Liberal, Massimo Pacetti]

Ms. Brand, the only person who'd cut you off would be me.

I think Judy still has thirty seconds.

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

Good.

I wonder if Rod would just answer as well.

Thank you very much, panel.