Finance Committee on Feb. 23rd, 2009

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

Thank you, Mr. Chevrette.

Mr. Patry, you said that the members of the CSN feel that this budget is unacceptable for workers, Quebec women, basic rights and for Quebec more specifically. You talked about equalization payments and other topics, but also about Hydro One.

Could you tell us more about how this agreement benefits Hydro One, in Ontario, whereas Hydro-Quebec does not benefit? Hydro-Quebec also carries out transportation activities, but this budget does not take that into account.

[Pierre Patry]

I was as surprised as you to hear Mr. McCallum say that this budget needed to be adopted as a result of the economic crisis. A cooperation agreement was reached on December 1 between the Liberal Party and the NDP, supported by the Bloc Québécois. In our opinion, this agreement was a much better way to get out of the crisis than the current budget. There were other solutions than the budget.

Before the current economic crisis, there was an environmental crisis. The current budget allocates a lot of funding for infrastructure projects, and we recognize that this is good. However, we would have liked there to have been more money to develop green energy. The budget allocates $1 billion over five years, which is quite derisory if we compare that amount to the funds allocated to infrastructure.

I want to come back to the issue of equalization. Hydro One's profits are not coming from natural resources, but rather from corporate dividends, for example from energy transmission, but Hydro-Quebec is not getting the same treatment. This creates an inequity between Ontario and Quebec in this regard, all the more so because Quebec will experience significant cuts under equalization which was one of the things, if not the major element, that resulted from the partial resolution of the fiscal imbalance. We feel that this adds to Quebec's difficulties.

[The Chair, Conservative, James Rajotte]

Merci, Monsieur Patry.

Merci, Monsieur Laforest.

We will now go to Mr. Dechert, please.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Thank you, Mr. Chair.

A number of speakers today have referred to the state of our economy and, in particular, the loss of manufacturing jobs in our economy, throughout Canada. I want to point out that the 2009 budget contains multiple provisions to support and encourage manufacturing in all sectors in Canada.

In particular, there are significant new investments in road, bridge, and border-crossing infrastructure, and also measures to eliminate tariffs on a range of manufacturing machinery and equipment. There are funds for the development of manufacturing in southern Ontario under the southern Ontario development fund. There are, as we know, funds for support for the auto industry, in conjunction with the Ontario government.

I wonder if Mr. Bradley could comment on how many of these initiatives might impact the Canadian trucking industry.

[David Bradley]

Obviously, I indicated in my comments that we're a derived demand industry, so anything that contributes to increased aggregate demand in the economy helps our industry. Clearly, we're suffering from the impacts of the ravages that have been imposed on our traditional customers: the manufacturers, the forestry sector, and the retail sector.

To the extent that those things help, so be it, but at the same time, for us to remain competitive as a nation, and also with the onus that's placed on our industry in terms of our own safety and environmental performance, we do think there are some things germane to our sector that need to be dealt with as well.

As far as I'm concerned, this budget discussion is over. We need to be planning now for the 2010 budget, so that's the context in which I raised those things.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Sure. I understand your point. Certainly there's always more that can be done. I want to thank you for your presentation and I'm very confident that the Minister of Finance and others will look at those suggestions very carefully as they go forward towards the next budget.

The government's projection is that the changes in, for example, the elimination of tariffs on imported machinery will affect close to $2 billion in annual imports of machinery and equipment and provide over $440 million in savings for Canadian industry over the next five years. These will lower costs for Canadian producers in a variety of sectors, such as forestry, energy, and food processing, many of which must purchase specialized equipment from overseas to modernize their operations and enhance productivity.

I'm assuming that when this equipment comes to Canada from wherever it's coming from, it has to be moved, and your industry would be very much involved in moving this equipment in, so hopefully that $2 billion in new manufacturing equipment will benefit your industry as it moves into Canada. I certainly hope it will.

Thanks very much, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Dechert.

We'll go now to Mr. Mulcair for seven minutes.

[Thomas Mulcair, NDP, Outremont, QC]

Thank you, Mr. Chair.

I too am pleased to welcome those who are making presentations today, namely Mr. Patry and Mr. Chevrette, who respectively represent the CSN and the forestry sector.

I will start with a question for Mr. Patry. Earlier, Mr. Chevrette mentioned that more than 40,000 jobs were lost in the forestry sector alone in Quebec. Could you indicate how many jobs were lost in the manufacturing sector in Quebec over the last three or four years?

[Pierre Patry]

In the past three years, approximately 140,000 jobs in manufacturing have been lost in Quebec.

I would also like to confirm what Mr. Chevrette has said. We have the Fédération des travailleurs et des travailleuses du papier et de la forêt. Three years ago, there were 14,000 members working in this sector, now there are only 9,500. This gives you an idea of the magnitude.

When we include indirect jobs for the industry as a whole, we can state that this sector has experienced massive job losses.

[Thomas Mulcair, NDP, Outremont, QC]

The Liberals are trying to have a clear conscience by saying that it is urgent. However, I would like to say that we are talking about jobs that were lost over the last three years, before the current crisis hit in August or September 2008. This is not something that has just happened.

[Pierre Patry]

No, indeed, this is not new. This sector is undergoing a structural crisis, but the economic crisis has doubled the difficulties experienced by this industry. That is why we are also asking for improvements to the EI program for these workers, but also for others. It is great to extend the EI program by five weeks, but individuals who are not eligible for EI will not be able to get those extra weeks. We also want to help older workers because there are a lot of them who will not be able to find a job, despite the fact that some positive measures are being implemented. So, we need to find a way to allow them to make ends meet until they retire.

[Thomas Mulcair, NDP, Outremont, QC]

Are you aware that the Conservative minister said that EI benefits were lucrative? That is why she said that they should not be too easy to get, because people will stay home in order to get these lucrative benefits. Did you hear that?

[Pierre Patry]

No, I had not heard that before today.

[Thomas Mulcair, NDP, Outremont, QC]

It is no mistake. She continues to say this. She has said so several times in the House.

Welcome, Mr. Chevrette. You and I have often had an opportunity to engage in what was at times lively debates because we were on opposite sides, but I must confess that, this time round, we are really on the same side, particularly as far as your analysis is concerned.

I am, in fact, going to ask you an old politician's question. Have you ever seen a government persist in publicly maintaining a lie such as this one, namely, that NAFTA and the Softwood Lumber Agreement would constitute an obstacle to the type of assistance you are seeking from the committee? Personally, I have never seen that in my lifetime.

[Guy Chevrette]

Me neither. Personally, you can understand why I am somewhat at a loss because, unfortunately, this statement has taken root in public opinion. As the saying goes, “Keep throwing us mud at the wall, some of it will stick.“ But this is false.

If I were to give you a loan at the going commercial rate, how could I have any influence over the price or the market with the Americans? That does not hold water, for someone who takes the time to stop a little bit and think about it, nothing more.

[Thomas Mulcair, NDP, Outremont, QC]

I do not know whether you are able to do this, but I would ask you whether or not this is possible. You referred to some legal opinions. For example, certain presentations from people in the group that testified here just before you focused on the illegal nature of the objectives of the Conservatives, with the help of the Liberals, to take away a fundamental right from women. It might help us if you were able to present us with one of these legal opinions—yours or those of the Government of Quebec, if it agrees. That would perhaps enable the people on the other side to see their way clearly with respect to this question.

[Guy Chevrette]

Yes, perhaps we could do this because I can tell you that the government is attending the same conferences as we are, with their lawyers, when it is a question of analyzing legalities. As you know, forests are exclusively under provincial jurisdiction and international trade is the responsibility of the federal government. So, every province is taking every possible precaution and must be consulted by the federal ministers. So why is it that the representatives of the federal government are currently going around stating that it is impossible to give us loan guarantees at a commercial rate? This does not make sense. In addition, they have access, I am sure, to the same advisors.

[Thomas Mulcair, NDP, Outremont, QC]

One of the main arguments used by the Americans, when this whole dispute began, pertained to the unsustainable and unviable nature of our forestry practices. Unfortunately, the Coulombe report tended to repeat some of these accusations.

I would like to give you an opportunity to talk to us a bit about what you have done for the Quebec forest in recent years, in order to make production more perennial, sustainable and viable.

[Guy Chevrette]

I must say that Quebec is quite advanced on many fronts, in that it already has a protected area network that amounts to 8%; it already has pilot projects on ecosystem management; a plan for the woodland caribou is being formulated; it already has a chief forester who monitors forest activities each day; and cutting in the forest has dropped by 23% overall. We are also establishing a comprehensive system that will probably be implemented at the end of this year. At present, 16 groups in Quebec are working in partnership. They include hunters, fishers, outfitters and municipal unions. We also have one union involved, the FTQ, and I think the CSN has also been invited to join a group. In the end, we will probably have some twenty groups working together to safeguard the health and longevity of our forests, with a forest management system that is viable and sustainable.

I would remind the committee what sustainable development means. It does mean protecting the environment, but it also involves social, human and economic considerations. If you are somewhat familiar with Quebec, you will know that it owes its existence to the forest industry. When you take the forest industry away from all these small towns, all the towns cease to exist, and people simply have to leave. By the time we reach the end of the crisis at the end of 2009—we were talking about labour earlier, and you also mentioned it a number of different times—we fear we may have lost 2,000 to 3,000 field workers. We simply will not be ready for the economic renewal. The federal government has to get involved.

[The Chair, Conservative, James Rajotte]

Merci.

We'll go now to Mr. McKay, please.

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

Thank you, Chair, and thank you, witnesses.

My first question is to Mr. Bradley. Last week Canadians were quite rightly charmed by President Obama and reacted quite positively to his visit. However, one of the things he said, which seems to be somewhat problematic for us, is that they continue to have their concerns about security at the border. I was wondering whether you and your membership had noticed any thickening of the border in the last little while.

[David Bradley]

It depends on what you mean by the last little while. Obviously over the last number of years we've seen a gross thickening of the border. We're waiting to see what we can learn from Secretary Napolitano's report, which so far has not been released to us. I can tell you that right now it's not having much of an impact in terms of delays because quite frankly there's no freight moving. I'm concerned that when things do turn around--we all hope they will at some point--we'll find ourselves in the soup again.

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

It's a bit perverse: no business, no problems at the border.

My second question is to Ms. Morris. You and Mr. Boyko don't seem to see this $2 billion in exactly the same light. Mr. Boyko's criticism of this $2 billion was that he didn't like the way the splits were happening among the institutions. He didn't like the fact that there had to be some matching moneys put up. He didn't like the weighting of the money to science over humanities. And he had a number of other criticisms. So I was just wondering whether you accept his criticism or if you think that you'll be happy to take the money whichever way you get it.

[Claire Morris]

In our pre-budget submission we used all of the work that's been done over the last several years by the Canadian Association of University Business Officers to put the case forward that there is $5.1 billion worth of accumulated deferred maintenance required by our universities. The average age of a Canadian university is 32 years. You know that's the time at which major systems start to fail.

Of that $5.1 billion, $2.4 billion worth of maintenance has been identified as urgent and priority. So our estimation is that with the $700 million that comes to us in year one and in year two, we will begin to address some of those needs. I can understand that there's not enough to meet everybody's needs across the country's universities and colleges, but we feel we have a very well-documented case for what's required on our university campuses.

On the issue of the range of infrastructure that will be addressed, we have argued--and I said it in my statement--for the infrastructure investments to be available across a broad range of research and teaching facilities. That's how the infrastructure needs have been assessed.

On your third point, with respect to the matching formula, we're well aware of a number of provinces having come forward with their own commitments with respect to post-secondary infrastructure. New Brunswick's made a major announcement on investment. Ontario has done the same, as have provinces across the country. We're hopeful that constitutes a good part of the matching that would be required. We believe both the provinces and the federal government recognize the infrastructure needs that are there.

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

Mr. Boyko, in light of what Ms. Morris has said, do you accept her analysis?