Finance Committee on Sept. 15th, 2009

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

Okay, then I'll go to Mr. Johnson.

First of all, Mr. Johnson, I want to congratulate you for your tireless enthusiasm in pursuing these projects.

With respect to your numbers on page 4, can you give some clarification to the committee with respect to the provincial component of the tax forgiveness? It seems to me that you're only dealing with the federal government's contribution to your proposal.

[The Chair, Conservative, James Rajotte]

Just very briefly, Mr. Johnson.

[Donald Johnson]

Basically, the federal tax revenue cost outlined here represents only the cost to the federal government. In addition to that, you'd have to increase that amount by about 50%. Roughly one-third is the provincial government and two-thirds is the federal government. Since this was a federal government finance committee meeting, I outlined the cost only to the federal government. You'd have to add another 50% to that cost to reflect the cost to the provinces.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. McKay.

Monsieur Laforest, s'il vous plaît.

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

Thank you, Mr. Chairman.

Good day to all of our witnesses.

I would like to begin by putting a question to Mr. Weis. In the spring, the Pembina Institute made several recommendations and requests concerning the production of clean energy. In order to support the production of clean energy, the Bloc Québécois last spring proposed the continuation of the Wind Power Production Incentive Program, through the injection of $500 million by the government over the next two years.

Is this comparable to the type of proposals made by the Pembina Institute concerning the production of clean energy?

[Timothy Weis]

I'm not sure I understand the question properly. You're referring to how this program relates to...?

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

There is a program known as the WPPI, the Wind Power Production Incentive Program. This spring, the Bloc Québécois suggested that the government continue this program and allocate $500 million to it over two years.

Is this program comparable to your proposals aimed at improving, among other things, the production of clean energy in Canada?

[Timothy Weis]

I'm not sure that I'm familiar with this particular program. I'm going to have to ask you to repeat the question one more time. I apologize--

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

I am surprised.

I will move on to other questions, then. I could send you documents about this program, which is in the same vein as your recommendations.

My next question will be addressed to Ms. Smith.

You mentioned the daycare program, among others. You said that the increased birth rate in Quebec was due to the adoption of tax measures rather than to the daycare program. It seems to me that the increase in the birth rate in Quebec could be attributed to a mix of these two factors over a number of years.

[Beverley Smith]

You may be right, but both measures are necessary. Funds must also be given directly to parents. You had an excellent family allowance program which you eliminated. We need universal measures, to direct funds to people, both those who choose to stay at home and to daycares. Daycares on their own are not sufficient. We have to separate maternity benefits from employment insurance. It doesn't work well otherwise.

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

We are seeing a second baby boom in Quebec. It is quite large in scope. And so, I think that the measures that were adopted...

[Beverley Smith]

You have a greater need for this in Quebec, because Quebec has the lowest birth rate in the western world.

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

My next question is for Mr. Jules.

You stated that for the past four years, you have made virtually the same request to the Standing Committee on Finance, that changes be made to the Indian Act, which goes back to 1876, or that a new act be passed. You also said that your proposals were always well received by the finance committee.

How is it then, in your opinion, that nothing has changed to date? Have there been any changes?

[Manny Jules]

What I've been doing for the last four years, really, is developing the concept, making sure that there's an economic rationale and that the legal arguments to support and underpin the legislation are there. All of that work is now done and is before the Department of Indian Affairs and its officials. Because it is my initiative to propose this legislation, I've had to make sure that all of the necessary work is done.Ultimately what I would like from the standing committee is support to expedite the proposed legislation, so I welcome your interest and your support.

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

Concerning your demands, I think that it is entirely normal that the first nations be the real owners of the territory they live on, as well as the strategic places or lands they can use for commercial purposes. This is an entirely normal way of furthering their integration into society.

How do you explain that you have been asking for several years for what seems on the face of it a perfectly normal thing? How is it that things have still not progressed?

[Manny Jules]

Basically the way I approach an issue is that the work has to be methodically done. The concepts have to be thoroughly thought through and all of the rationale clearly put forward. As I mentioned, the legal opinion that we had drafted is now before the Department of Justice. They're reviewing that, and it really ultimately entails the machinery of government. Once that review is completed, I would look forward to making sure we can expedite this as quickly as possible.

I truly echo your statements that this is a reasonable approach. As a country, we cannot afford to have first nations live in the 19th century when all of the other institutions have been allowed to flourish in this country. That's why Canada has been able to weather the economic storm a lot better than most other countries have. When you have institutions that are frozen in the 1800s, it's incredibly important that we begin to move, particularly on property rights, which are a fundamental bedrock to building an economy and therefore a global economy with your support.

[The Chair, Conservative, James Rajotte]

Merci.

We'll go to Mr. Menzies, please.

[Ted Menzies, Conservative, Macleod, AB]

Thank you, Chair, and I thank all the individuals who are presenting here today.

I'll be sharing my time with Mr. Wallace.

We all want to delve deeper into this, but we also must first of all apologize. We have about 400 people who want to appear before this committee and we have limited time, so please don't be insulted if I don't ask everyone a question. It's very hard to cover it, but we will read your briefs, and all of your suggestions will be taken into account. So thank you again.

Mr. Weis, it's good to see you again.

I want to follow up quickly on Mr. McKay's comment about lack of investment and the difference between large and small operations as far as wind energy goes. I have a brand new wind operation starting up in my riding. These are new players. They're small, they're not large, but the first phase of two phases will be the largest wind farm in Canada, so thank goodness the riding of Macleod is taking back the title of the largest wind farm in Canada.

You're talking about the subsidies running down. These people are investing several billion dollars. What do they see that we're not hearing about here today?

[Timothy Weis]

The subsidy is still in place. It will be running out of money sometime this year, so projects that are being built and developed right now would be able to access that fund. Projects beyond November and December and into the new year that don't have their contribution agreements already signed or that don't have an agreement already in place are the projects that will be in jeopardy.

[Ted Menzies, Conservative, Macleod, AB]

That's my understanding of phase two, that it's not going to be for a year or two. Is it self-sustaining, then?

[Timothy Weis]

That's a big question.

The renewable developers we work with and with whom we've spoken are all very concerned about what sort of support there will be going forward. Most of the projects in Canada have been developed under the assumption that this program was going to be in place, because it has been fairly stable for the last five or six years. Especially given the investment climate in the United States, I'm hearing developers and wind energy prospectors being told that it's time to start thinking about investing south of the border. I know of groups that are already taking down met towers or meteorological instruments and moving them to the United States just because it's so much more certain down there. So it does jeopardize future developments going forward, unless we can stabilize the policy framework going forward.

[Ted Menzies, Conservative, Macleod, AB]

I'm going to have to go back to these people and ask them if their business plan is sound and based on what they're going to be paid for their power. But thank you for that.

I do agree with the comment you made on the lack of manufacturing. We have one of the largest wind energy industries, but we don't manufacture anything here. My question is--and it has been for a couple of years--how do we entice the manufacturing of the equipment that we need into this country? We're a large user of it.

[Timothy Weis]

We are a large user. The one thing Canada often forgets is that it has the sixth largest electricity system on the planet, so we are a very major player in electricity globally.

Obviously we have the manufacturing capabilities in Ontario in particular and in Quebec. Quebec has already seen some manufacturing develop, and what Quebec has done to encourage that manufacturing is create a large enough market that's stable. Any time we see manufacturing develop in Europe in particular, it's because there have been long-term stable policies, because then you can make those kinds of investment decisions. If you're going to build a factory, you need to know there's going to be a market.

This speaks to the other half of the ask, which is around the stability of the issue and not so much the quantity of it. It's the stability of the policy. If you're going to make manufacturing decisions, you need to know there's going to be a market in the long term. I think that really is key if we want to develop the manufacturing component in Canada.

[Ted Menzies, Conservative, Macleod, AB]

Thank you.

Mr. Jules, very quickly, on the comment you made about opening up the Indian Act, which has been here since 1867, I raised that in a forum in my riding and basically got run out of town, so I wish you luck with your proposal. I have five first nations in my riding and not all of them would be supportive of your proposal, but I think one or two of them would, so I encourage you to continue. I like what I hear in the proposal. I'm sure it needs some fleshing out and needs to gain some support. Thank you for that.

I'm going to turn it over to Mr. Wallace.

[The Chair, Conservative, James Rajotte]

Mr. Wallace, you have 45 seconds.