Finance Committee on March 10th, 2008

[Claudette Carbonneau]

We have not done any particular research on this issue, but we do support our central councils. Usually, they are the organizations associated with renewal committees in the regions of Quebec. In fact, those kinds of concerns may exist at the local level. In any case, this is certainly an excellent avenue for consideration. It would be excellent if efforts to diversify the economy also had a sustainable development focus.

[Thomas Mulcair, NDP, Outremont, QC]

For example, forest biomass could be used to produce ethanol.

[Claudette Carbonneau]

That is one of the suggestions we have made, particularly to the federal government. We have told the government that tax measures acting as an incentive for that kind of approach would be very useful. I understand that with this budget, the only commitment to measures other than debt reduction is the very short-term allocation of a portion of the surplus, which is quite significant. We need assistance very urgently.

The industry has been in crisis for several years now, and people have been unemployed all that time. Less than two weeks ago, I visited a number of communities like Saint-Michel-des-Saints, which had nothing other than the forest industry. Those communities are heart-rending. Even the Community Development Trust has been a long time in coming. We have been asking for help for years. So let's make that help available to communities and workers, and give them the means to help themselves, as quickly as possible.

[Thomas Mulcair, NDP, Outremont, QC]

You are quite right. Every time we talk about communities, or about the opening or closure of a sawmill or plant, we forget that hundreds of families are losing their source of income. I was also thinking that, in terms of sustainable development, the notion of generating clean, renewable energy from biomass would also protect us from any potential recourse from the U.S. Even though the NDP is strongly opposed to the softwood lumber agreement, the agreement is there, and we have to deal with it.

Are you aware of what happened at Chantiers Chibougamau? Were you asked to take any action there?

[Claudette Carbonneau]

No, not directly. They are affiliated with the FTQ.

[Thomas Mulcair, NDP, Outremont, QC]

I understand. The company's situation is a very real concern in the Chibougamau region. You cited the community of Saint-Michel-des-Saints as an example of the problems that arise in single-industry communities. We see those situations over and over again. You are quite right in pointing out that the small amount of assistance now being given is coming somewhat late in the day.

I would like to tell you about something that happened on the Hill. As soon as we were back in the House, this was the first question we put to Minister Lawrence Cannon. He replied rather haughtily that I should be well aware such assistance could not be provided outside the budget. We were therefore very surprised the following week to see that the first thing the government did was just that—create the trust outside the budget. So, where there's a will, there's a way. We at the NDP fully agree with you on supporting families, and on the needs people have day to day. Unfortunately, that empathy is cruelly lacking in the current government's approach.

[Claudette Carbonneau]

I would like to suggest two priorities. There is POWA—the Program for Older Worker Adjustment—which I mentioned earlier. Urgent action should be taken and the available funding increased. To help you see the scale of things, I can compare the $1 billion the Canadian government is providing over three years for all of Canada with the $2.2 billion the Quebec government alone provided in recent years to help in this area. And some areas are still in a very bad way. I fully support the statement made by the representative of the Fédération des chambres de commerce, who said that the distribution of financial assistance must take into account each region's economic weight. What Quebec is receiving represents a far lower percentage than its industrial economic weight and is far too little to meet the needs of those in difficulty.

[Thomas Mulcair, NDP, Outremont, QC]

Yes, exactly. When you know the proportion of forestry jobs that are located in Quebec, you can only act accordingly. Finally, I'd like to say to you that you are absolutely right to insist, because we really need a POWA that meets the needs.

Thank you very much, Ms. Carbonneau.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We'll now move on to Mr. McCallum for five minutes.

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

Thank you.

Thank you to all the witnesses for coming here, especially those who travelled a long way from northwestern Ontario.

Just to put my cards on the table, my first question is to Mr. Leitao. Perhaps I should say that when I was chief economist at the Royal Bank, for a good part of that time he was the assistant chief economist, until we both moved our separate ways.

[Mike Wallace, Conservative, Burlington, ON]

You went down. He went up.

[Voices]

Oh, oh!

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

Good luck.

My question is about your comment that you agree with giving money to people but not to companies. I kind of agree with that in a perfect world. If the planet had no assistance for farmers, aerospace, or any other industry anywhere on the planet, I think the planet would be a better place.

As I think Mr. Laneville mentioned, aerospace clearly gets huge subsidies in the U.S. and Europe. Farmers get huge subsidies in the U.S. and Europe. Governors in the southern states give out lots of money to try to lure auto plants and other companies down there.

Aren't we being a little naive if, in the face of the whole world giving subsidies or direct assistance in a certain industry, we are the puritans who say, “Not a penny”? Isn't that just a recipe for losing lots of jobs?

[Carlos Leitao]

Certainly I didn't want to give that impression. We shouldn't be the last Boy Scouts on the face of the planet. We have to be realistic and not naive.

What I meant when I said that the government should focus its new assistance on individuals and not on corporations is that we already have in place quite a number of tools to assist businesses. Whether it's the auto industry, whether it's even the forest products industry, EDC or BDC, there are already quite a large number of tools or ways to support industry. I don't think we need a new program.

In terms of new programs, in terms of ways to use money in a rather quick fashion, I would direct that at individuals, particularly older workers in single-industry towns.

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

Thank you. That's an interesting nuance. And I'm glad you're answering questions about banks these days and not me.

[Carlos Leitao]

We are a small bank, so that's all right.

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

Mr. DesRosiers, what's your view on this general issue of support for individual companies or not, especially given the fact that south of the border so much of that support is occurring?

[Dennis DesRosiers]

I was deeply involved in the Toyota investments coming to Canada. I remember the officials there saying, “Do you understand why the U.S. south has to provide the incentives they do when we go down there?” Why? “It's because they can't compete with Ontario.”

Don't forget that. Ontario is one heck of a spot in which to manufacture vehicles, and these states in the U.S. south really struggle with that.

The other thing is that the auto assembler sector in the U.S. south is actually declining in its nature. They had two very major plant closings. Ford closed a major plant down there last year, and General Motors is closing a plant down there this year. It's going to knock probably a quarter of their production base out. Both of those plants were originally subsidized; both of those plants ultimately didn't survive. These subsidies need to be longer term, and they tend not to be, so how do you manage to get sustainable development?

You go through all your infrastructure costs, your human resource costs, your light, heat, water, and so on, and Ontario is very competitive and we're doing quite well with that.

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

In terms of Ford, General Motors, or Chrysler to locate in Canada versus the southern U.S., isn't the fact of the high dollar hurting our competitiveness in attracting such investment?

[Dennis DesRosiers]

There's no doubt that our high dollar is going to pose a real challenge in the future, but also, these are highly capital-intensive industries that can manage to survive in a high-dollar economy.

It didn't stop Toyota from coming. Do you not think Toyota knew the dollar was strengthening when they announced their billion dollars for Woodstock? You'd better believe they did. They may not have anticipated it getting as strong as it did, but they're putting a billion dollars in the ground in order to compete in any jurisdiction. They hedge exchange rates by being in very many different jurisdictions.

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

Thank you very much.

[The Chair, Conservative, Rob Merrifield]

Thank you.

Monsieur Laforest, you have five minutes.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you, Mr. Chairman.

I find it quite interesting to note that in a way, what Mr. Laneville and Ms. Carbonneau said is pretty consistent with what the representatives of the chambers of commerce, unions and workers of Quebec said. It's quite striking that what brings you together, ultimately, is a negative assessment of the situation both for workers in various regions of Quebec and for companies in need of assistance.

Mr. Laneville, you pinpointed specific steps that should be taken. Ms. Carbonneau, you referred to a program for older worker assistance, or POWA, and various regions.

Mr. Laneville and Ms. Carbonneau, if nothing is done, what will happen, in your opinion? Without gazing into a crystal ball, what have the people you represent said about this? In my riding, which is hard hit by the forestry and manufacturing crisis—and I draw a clear line between the two industries—there are pulp and paper mills and sawmills. That's the mainstay of the economy there.

Perhaps Mr. Laneville could go first.

[Jean Laneville]

I'd like to point out that the Fédération des chambres de commerce represents all economic sectors. The manufacturing sector and the forestry sector account for only part of our membership. However, those members are mainly located in resource regions, in regions far from Montreal and other major urban centres.

Where the unions and our federation come together is on the issue of economic development. Support for regions, whether through the tax system, direct assistance or equalization, has always been around, in every country. The current hardship in the manufacturing and forestry industries is being felt in the regions; that's where things are heating up. Our members are asking us to watch out, because the future of our cities and companies and the survival of the regions are at stake.

In our opinion, we have to be careful not to wind up with companies only in the major centres. If we are to have a vision of economic development, social justice and so on, we have to come to the assistance of regions that are experiencing difficulties. The government fully understands their economic situation. These are often single-industry towns. If they are specialized in pulp and paper, and overnight they have to absorb the impact of the value of the dollar and foreign competition, we have a serious problem. We have to help them out with this.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you.

Ms. Carbonneau.