Finance Committee on Sept. 17th, 2009

[Thomas Mulcair, NDP, Outremont, QC]

Where do you get your $2.4 billion calculation?

[John Clayton]

That is a combination of all the provincial sales taxes, tobacco taxes, and federal excise taxes put together. I would be happy to have my finance department provide you with that. I'm not a finance expert myself.

[Thomas Mulcair, NDP, Outremont, QC]

Are the figures that are produced now with regard to the number of smokers lower because we're not taking into account the amount of contraband tobacco properly?

[John Clayton]

Sorry, I don't understand.

[Thomas Mulcair, NDP, Outremont, QC]

When we produce figures on the percentage of Canadians who smoke, are they still accurate, or are they undervalued in terms of the reality of the situation because of the fact that so much of it is coming in illegally and can't properly be accounted for?

[John Clayton]

I'm not sure. The only thing I would say is that the most recent CTUMS data put out by Statistics Canada is indicating that there is a slight increase in some places in people smoking, which some of the public health groups claim is a result of very low-priced product being available.

[The Vice-Chair, Liberal, Massimo Pacetti]

Okay, thank you.

Merci, Monsieur Mulcair.

Mr. McCallum, five minutes.

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

Thank you, Mr. Chairman.

Thank you to all the witnesses.

My first question is to John Clayton.

Mr. Clayton, my understanding is that the government some months ago, with a certain amount of fanfare, came out with this enhanced stamp as an essential component of its attack on contraband. I can't understand how an enhanced stamp, given the complexities and all of the issues in contraband, will have any significant effect on the problem. What is your position on that?

[John Clayton]

At present for the baggies coming off the first nations reserves, none of the regulations are being applied. It's very difficult for me to see how suddenly a new stamping put on all the legal products is going to have an impact on the contraband trade.

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

I don't think you have to be a genius to figure that out. So how can the government possibly claim it will have any impact whatsoever on the problem with this new stamping thing, which it seems to have announced with much fanfare as a major solution to this issue?

[John Clayton]

I agree.

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

Thank you.

Maybe the government side could comment at some point on that.

My next question is to Mr. Blakely and it relates to infrastructure. I would like to just say very briefly what our position has been and then ask you if you agree, or what your position is.

We've essentially had two criticisms of the government infrastructure program. On the one hand, they failed to get money out the door. On the other hand, they've been all over the map and not strategic. So what we had suggested was that we'd have essentially two parts of the infrastructure. One would be based on the gas tax transfer mechanism, and the money would go much more directly to the municipalities and shovels would get going faster. The second component would be more strategic, whether it's fast trains or other strategic projects that are important to the country as a whole.

In light of what I just said, I wonder what your view is.

[Robert Blakely]

Without trying to sound partisan at all, our two criticisms really were that it wasn't rolling out fast enough and we have this fear that the bulk of the stimulus money is going to hit at a time when the economy has recovered, which is the wrong time.

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

Exactly.

[Robert Blakely]

The second portion is that we think the money should be used strategically. It should be tied to other initiatives that the Government of Canada has: a better transportation system, looking at the reduction of greenhouse gases, energy efficiencies, targeted and focused spending. It isn't enough to give every riding a new hockey rink. That's not what we should be doing.

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

Right, and the ridings that get new hockey rinks tend to be Conservative ridings, we've noticed.

[Robert Blakely]

I can't speak to that. I would say this: if they need a hockey rink, we promise we'll build it and we'll build it with quality construction.

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

That comment was a little bit partisan but not untrue.

If I could come in a more neutral way back to you, the trouble with things that are strategic, like a fast train or whatever, is that inherently they can't be done immediately; they do take time. On the other hand, the job losses are happening now, and we need the construction in 2009, this year, not two years from now. That's why I said two components. The gas tax transfer mechanism would be quick, and the other component would be less quick but more strategic.

Would you agree with that rationale?

[Robert Blakely]

Yes.

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

Why do you think the money has been so slow in getting out the door? Gerard Kennedy, our infrastructure critic, spoke to hundreds of mayors across the country and found out that only 12% had actually flowed. Why is it so slow?

[Robert Blakely]

I don't think it lies at the feet of any particular group. The fact that the money flows from the federal government to provincial governments that have to get the provinces on side with a number of provincial matching schemes makes it more and more difficult. We need a number of projects that are really on the shelf, engineered, and ready to go. Nobody has that, because they've never had the money to do the engineering and the background work to have the project ready to take off.

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

But we already had a model in place under the gas tax transfer mechanism.

[Robert Blakely]

I agree with that.

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

So I contend that had they used that for a part of the funds, it would have got spent a whole lot faster.

Would you agree with that?

[Robert Blakely]

Yes. Having a permanent infrastructure that allows infrastructure money to flow through it makes a lot of sense. The Province of Ontario, Infrastructure Ontario--that's a brilliant idea.