Finance Committee on March 10th, 2008

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

I'm not sure, Your Worships, if.... The program we're talking about is the Community Development Trust, which is the program announced for single-resource towns, primarily for--we were hoping--forestry, and I'm sure to some extent mining, which seems to be on the upswing, which is probably for the better.

In terms of deliverables, the understanding--and this was from the Deputy Minister of Natural Resources--was that this money will come through intergovernmental affairs and simply be written to the provinces. In terms of details, I do not know if there are any. But normally, the process is to ask the municipalities what the best way is, because it is for municipalities.

With that explanation, would you have anything to elaborate in terms of how you'd like it to come?

[Anne Krassilowsky]

Can I leave with the cheque today? That's the most important thing I can tell you.

You're making me feel not very happy here. I have a bad feeling in my stomach that this is going to roll out in three years and funnel through.

This just floors me. I can't believe we would take that route. We need that money to come now. We have to target it to the necessary....

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Monsieur Crête.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

I might be able to give you some hope by telling you that the first billion was voted for in about two minutes. It just took the political will to do it. On March 31 of this year, $10 billion of the surplus will be used to bring down the debt, unless the government decides to do something else with it.

Would it not be better to use just $3 billion to service the debt, and use the other $7 billion to increase the trust significantly and make that money available very quickly, as you request?

Measures should also be established to help workers. Ms. Carbonneau, I would like you to explain why some older workers can no longer re-enter the workforce in different jobs. Here in the House, we are often told that those workers could find jobs if they were ready to move. I would like you to provide some explanation.

With respect to putting more money into the trust, perhaps the government could invest part of the surplus in other instruments, short-term instruments such as refundable tax credits or something similar, instruments that would bring us to the point where next year we would no longer be in crisis-response mode. It would be better to invest the money now, rather than obsessively pay down the debt.

[Claudette Carbonneau]

I fully understand the concern to ensure that the circumstances do not result in needlessly taking people out of the workforce. I am absolutely convinced that a program can be set up to provide assistance for those who really need it. The forest industry, sawmills and other sectors have large numbers of older workers that often have little education. They are sometimes worn out by a life of performing very difficult work, and cannot retrain in areas that require few skills but a great deal of physical strength. And if we are to be realistic, we have to see that employers are not necessarily eager to hire workers who are 58 or 59 years old.

I am absolutely convinced that, in the current circumstances where companies are closing their doors, the reclassification committees and the know-how developed in professional training programs will make it possible to quickly identify who really needs that help. What's needed is a real income support program, something along the lines of employment insurance, perhaps. That kind of support will not encourage people to remain outside the labour force. For instance, one measure that Quebec unions are agreed upon is a review of the programs after three to five years, to ensure that they are properly targeted. Those are things that can be assessed. Moreover, the programs could be cost-shared. For instance, the former POWA was cost-shared, with 70% of its funding coming from the federal government and 30% from the provinces.

Given the extent of the crisis in the forest industry, Quebec's government has taken some measures to support the workers most severely affected, even though it is not responsible for creating income support programs. It provided a level of assistance similar to the assistance provided by the Régie des rentes du Québec to people who simply cannot work. I feel that extremely appropriate measures could be established. As I have already said, the point is not to take people out of the workforce—we know that Quebec needs workers, and so does the rest of Canada. However, there are circumstances where people simply cannot find work, and if we do not help them, we are condemning them to social assistance and poverty.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

It would be a very significant step if the $1 billion now provided was raised to $2 or $3 billion, and the money was made available quickly instead of being used to pay down the debt. On this issue, I would also like to hear the views of one of the mayors.

[Phil Vinet]

Well, if there are extra billions available, whether you're investing in an older worker or a younger worker, you're investing in Canada. It's linear. The older worker has invested in Canada all of their working life, and the younger worker will invest in Canada the rest of their working life. This is a trade-off.

If I were to comment on the ratio of expenditure of the billions...but maybe I'd be showing my political stripes, and that's not why we're here.

It's important to invest in Canadian people--individually, so that they can invest in Canada. In our case, we're looking at a $12 million investment to start this project immediately, which will result in 500 direct and indirect jobs.

Now, $12 million out of $1 billion? It's not very much.

[The Chair, Conservative, Rob Merrifield]

Ms. Krassilowsky.

[Anne Krassilowsky]

If more money is given for training and retraining, if more money is given to build roads and infrastructure, those are all projects that give jobs. The same people out of a job now will be put back in the workforce, which is good for all of us and good for Canada. It creates its own circle of happiness for everybody. If people have jobs, they don't feel insignificant. It cuts the suicide rate, it cuts the unemployment rate, it cuts Ontario Works, it cuts a whole pile of things. Police costing goes down. It's such a huge picture, but they're all tied to each other.

Phil's jobs in Red Lake affect Dryden and the whole of northwestern in our region. Those 500 jobs are so important right now. We have people in the forest industry, in the trucking industry. They invest a quarter of a million in a depreciating item to carry wood, gravel, back and forth to mills, etc., and it's all for naught. Their investment is going out the window. They're independent business people, and they should have the support of the Canadian government as well.

[The Chair, Conservative, Rob Merrifield]

Mr. Del Mastro, you have seven minutes.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you, Mr. Chair.

Just for the benefit of some of the panel, the government does in fact view these industries as somewhat different. In our own documents we break out manufacturing and forestry, so we do recognize that there are differences between the two industries. But there are similarities as well. They do go through boom and bust cycles.

I'd like to start with you, Mr. DesRosiers, and it's in regard to your analysis. Is there a genesis in Canada for the difficulties these industries are experiencing right now? Why are these industries, the auto industry and the forestry industry, going through difficulty right now? What's happened to affect the demand for their product?

[Dennis DesRosiers]

I can't speak for forestry--I have no knowledge on that side--but on the automotive side, the demand has been there across North America.

The auto industry classically is very cyclical. We currently are on the downside of that cycle, at least in the U.S. marketplace. In some respects those cycles have been useful for the industry; they've been deep enough that a lot of the manufacturers playing to the cycles have had no choice but to stick to the knitting and do the things necessary to survive the down cycles. In the long term that has actually helped them.

Canada is one of the best spots anywhere in the world to manufacture vehicles. This comes from a human resource point of view; we're close to the markets; the competitive nature of our sector from a costing point of view; and the availability of labour. We know how to build good cars.

[Dean Del Mastro, Conservative, Peterborough, ON]

If I went to automotive specifically, I would look at the loss of the third shift for pickup trucks at General Motors in Oshawa. The reasoning given at the time was that there was softening U.S. demand for pickup trucks.

[Dennis DesRosiers]

And no doubt you're going to find those, but you don't stick a policy in place to address a cyclical issue like that. Pickup trucks are down because of the U.S. housing crisis, and it's the contractors who drive pickup trucks. We happen to produce pickup trucks in Oshawa, so we got caught on that.

But as I say, despite that, our production across all models last year was up, not down.

[Dean Del Mastro, Conservative, Peterborough, ON]

Right.

[Dennis DesRosiers]

I keep trying to find this crisis in automotive, and I can't seem to find it.

[Dean Del Mastro, Conservative, Peterborough, ON]

Yes, okay, you hit the nail on the head for me there: pickup trucks down, lumber sales down, and it all comes back to U.S. housing, which is not a problem that's been created out of Canada.

Last year, when I went to the Manufacturing Hall of Fame dinner held in Windsor, Frank and Linda Hasenfratz of Linamar were there. When Frank got up and spoke at the podium, he said specifically that they're not looking for a government bailout of industry. What he said he wanted was a 16% federal government corporate tax rate. Of course, we've indicated that we're going to a 15% corporate tax rate.

You mentioned how Canada is competing on a global basis now for investment. We have to compete globally for automotive production and for parts production as well. It seems that the approach toward setting the proper environment for business to succeed is critically important. You talked about poor productivity in some of the plants that we lost. That was perhaps encouraged by our former high taxation policies, and also the low dollar, which prevented investment into this type of capital.

Very broadly, is setting the proper environment for business, the proper environment to attract investment, the right direction for Canada to go in?

[Dennis DesRosiers]

Yes, but you've also got to educate the auto sector in terms of how to operate in that kind of environment. Remember, if you go through that auto sector, we had an industry that was highly protected with safeguards, and now we're in an industry where we can't do all that stuff we did in the 1960s and 1970s any more. It's illegal from a WTO point of view. Governments don't have the resources. When tariffs are gone, they're gone. You can't bring them back and get rid of them again.

So much of the issue in automotive is educating industry how to survive in an era where you no longer have these crutches available. You've got to figure out how to do it by going into your factories and with your people and investing and innovating and things like that.

A lot of guys are very scared of that. I think there's a lot of need to help those people understand that, yes, the broad environment is being set, we like the accelerated capital cost, we like the innovation funds being put in place, and we like the amount of money put into anything touching human resources. But an awful lot of guys have never operated in that broad framework where we have to figure it out on our own. We've always had our hand held through this. That's a very different kind of transition that we need to go through.

So it's not just setting the environment; it's helping guys understand and compete in that new environment.

[Dean Del Mastro, Conservative, Peterborough, ON]

Understood. Thank you.

Mr. Vinet, I liked your proposal. I find that a very interesting project, quite frankly, and I like the fact that you've done some costing and so forth, and that you're here working for your town. I really appreciate that.

Have you specifically approached FedNor at this point?

[Phil Vinet]

Yes, we have. We've worked with FedNor on the service delivery component. We have to run a water and sewer line, I think it's 2.8 kilometres, and we have to run hydro. That gets us to the site; it does nothing on the 300-acre site itself. It gets us to the baseline.

[Dean Del Mastro, Conservative, Peterborough, ON]

And you're aware that the Community Trust Fund will be directed by the province, so you need to talk to the province about funding under that program. I hope you're successful.

[Phil Vinet]

The Province of Ontario has stepped up to the plate here. They've come in to the tune of about $50 million so far.

[Dean Del Mastro, Conservative, Peterborough, ON]

That's good. But the funds from the Community Trust Fund will come from the province starting here in Ottawa. I want you to know I am supportive, and I hope you find funding from that.

Ms. Krassilowsky, you mentioned Building Canada a couple of times. It's a great frustration for us on the government side that money is booked, but the Province of Ontario has not yet signed on to the program. We hope they do sign on to that program soon, so money can flow to communities like yours and right across Ontario.

One thing that certainly all parts of Canada will be very happy with is that it is now per capita transfer. So Ontario, which used to receive about 22% of infrastructure dollars, will now get a per capita transfer of about 38%. I hope that benefits the people of your community as well.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Mulcair, seven minutes.

[Thomas Mulcair, NDP, Outremont, QC]

Thank you, Mr. Chairman.

My first question is for Ms. Carbonneau. I would like to take this opportunity to welcome her and to thank her for coming here today.

Sustainable development is one of today's hot-button issues. In recent years, it's been given a more prominent place on the agendas of Ottawa and Quebec City. As the mayor of Red Lake was saying earlier, sometimes we realize that there is already an infrastructure in place, and that the circumstances can be turned to advantage and help create new jobs and a new economy. For example, we can find new uses for forest biomass. Given the means of production in the forest industry, vast quantities of forest biomass are often left on the ground when they could be put to good use. The roads and culverts are already built. Moreover, the plant infrastructure, water and electricity are often already available.

Has the CSN studied the issue to see what could be developed in the regions?