Finance Committee on Oct. 25th, 2010

[Nancy Hughes Anthony]

Mr. Szabo, we have not dealt in our submission anywhere with timing with respect to reducing the deficit. I don't think you can draw that from anything. I think the point about this suggested review of the income tax system—and as I said, I can provide you with more detail on this—is that Canadians, particularly Canadian families, have at different times in their lives different capacities to save, and it may be very restricted in their early years and it may be better in later years.

So the whole notion here is to try to get more flexibility into the retirement system, so you have more people participating and being able to participate over their lifespan.

[Paul Szabo, Liberal, Mississauga South, ON]

Okay. I understand that, but I can tell you that your suggestion here that we look at lifetime TFSAs versus an annual limit really doesn't make much sense, since everything is carried forward anyway and you can catch up at any time you want. So the point that you put in here doesn't belong.

Let me go back to the question I asked in the first place, which has to do with the banks' view. I don't think I mentioned a time limit—I'm not trying to attribute anything to you—but I want to address the importance of dealing with the deficit in the context of your apparent support for the corporate income tax reductions to continue forward, which really works against dealing with the deficit.

Can you confirm the banking association's position on the importance of dealing with the deficit and how you rationalize supporting a corporate tax cut?

[The Chair, Conservative, James Rajotte]

Ms. Hughes Anthony, you have about twenty seconds.

[Nancy Hughes Anthony]

Okay.

Our members feel very strongly that the reduction in corporate income tax should not be delayed, that it is legislated, that it is anticipated. It is a very strong driver of revenue indeed, and one can say that it's going to pay for itself over time in terms of increased tax revenue.

In that context, we are very supportive of continuing with these tax reductions to ensure that we are creating the jobs, that we are making incentives for Canadian and international companies to invest here. Therefore, at the end of the day, I would like to think that it's bringing in more revenue.

[The Chair, Conservative, James Rajotte]

Thank you.

Mr. Carrier, you have five minutes.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Thank you.

Good evening, ladies and gentlemen. I would like to ask Mr. Lazar a question.

I would imagine that the Forest Products Association of Canada represents the whole of the forest products industry, correct?

[Avrim Lazar]

Yes, it represents pulp and paper, lumber—the whole industry.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

I was struck by your presentation. I noted that you are not asking for additional money—I hope that I understood correctly. I read your document and I observed that you have expressed certain wishes, and it appeared to me that the situation of the forestry industry did not seem to be very dramatic. And yet, the president and chief executive officer of the Conseil de l'industrie forestière du Québec appeared here a little more than a year ago, asking us specifically for loan guarantees to enable the companies in the sector, which were dying, to survive. Thousands of jobs have been lost in Quebec—this is obviously the province with which I am the most familiar. However, I saw no urgency of this nature in your document.

I also remember that last year, the government, under the Economic Action Plan, allocated $10 billion to save the automobile sector. This was well justified and we all agreed. However, only $170 million was earmarked for the forestry sector, for all of Canada, which we felt was inadequate.

I would therefore like to know your reaction to that, since you represent this industry.

[Avrim Lazar]

Most of the companies in Quebec belong to my organization, so I am able to answer you.

Two points must be considered for the future of the sector. First of all, we must ensure the survival of the current sector. If this were a realistic wish, clearly I would be here to thank you and state that we do not want to lose anything or change anything, that we want to safeguard everything that we have. However, if we want to work in overseas markets, where we sell most of our products, we have to adapt to these markets, to the economy, and that is why we are putting more emphasis on the transformation of the sector. Indeed, the future of our towns, our jobs, our rural regions, depends on these transformations.

Loan guarantees may be useful. However, they may also be extremely problematic with the Americans, under the Softwood Lumber Agreement. This is not a realistic change for the future of the sector. We need to transition to clean energy. That will reduce our costs and change our profile. We need new products such as crystalline nanocellulose, for instance, which is extracted a great deal in Quebec and exported to China. That will change the future.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

I agree, of course, given that the Thurso plant has recently been converted so that it can produce rayon, a fabric made from forestry products. Nevertheless, companies are asking for loan guarantees because they don't have any more money. They are on the verge of bankruptcy.

[Avrim Lazar]

It is understandable that a boss whose plant is about to go under would want to call the government for help in order to save the company. I do respect that, but we have to ask ourselves what justified and really practical role the government can play in the future. If we save all of the plants, they will all be in difficulty, because the market is too small. Which option is better, having one profitable, efficient plant that can compete internationally or maintaining three unprofitable plants?

[The Chair, Conservative, James Rajotte]

You have 30 seconds.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

I would like to ask Mr. Gazzard a question about affordable housing. I agree with your policy and the request that you have submitted to us.

I would like to know what you think about the bill that we presented last week, in which we asked that at least $4 billion of the $8 billion in the CMHC surplus be invested in affordable housing.

[The Chair, Conservative, James Rajotte]

Fine, thank you.

[Nicholas Gazzard]

It is difficult for me to separate the surplus on the CMHC spreadsheet from the general situation of the government. That being said, I do not really have a precise opinion on this issue, which is complicated.

[The Chair, Conservative, James Rajotte]

Merci.

If you have any information on that in the future or if you want to provide a future response, please feel free to do so. If you have a position in the future as an organization, please feel free to provide it to the committee.

We'll now go to Mrs. Block, please.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you very much, Mr. Chair.

I'll just be asking one question and would be happy to share my time with you.

My questions will be for the Grain Growers of Canada and the Western Canadian Wheat Growers Association. After having lived in rural Saskatchewan for 19 years, I truly appreciate your mandate to advance the development of a profitable and sustainable agricultural industry, as well as your belief that government does not owe farmers a living but that farmers deserve a policy environment that will allow them to make a living.

This week we will be voting on extending the time to review Bill C-474. I'd ask that you be really short in your answer. My question is this: what do you think of Bill C-474 and the impact it's going to have on agriculture?

[Richard Phillips]

We appreciate where Mr. Atamanenko is coming from with Bill C-474, but I would have to say that probably every farm group that has appeared before this committee would be staunchly opposed to Bill C-474 and where it's going. I'll just leave it at that.

[The Chair, Conservative, James Rajotte]

Are there any further comments?

Mr. Gust.

[Gerrid Gust]

I don't think you could kill it fast enough. It's completely illogical to have bureaucrats or legislators from other parts of the world telling us how we should do things. If customers have one thing, they can come to us directly. But as a trading nation we have to be able to deal with science and do things properly.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mrs. Block.

Monsieur Patry, I want to ask one simple question. You've pointed out that successive governments have supported the CFI; in fact, it was a former government that established it, and I would certainly credit them for that. But can you just identify for the committee how much in the way of resources has been put into the CFI since 2006 to continue its important work?

[Gilles Patry]

Yes, I can do this. There have been three investments, totalling $1.3 billion, since 2007.

[The Chair, Conservative, James Rajotte]

That's since 2007?

[Gilles Patry]

Yes.

[The Chair, Conservative, James Rajotte]

Okay. I appreciate that information for the committee.

I don't have much time, but I want to ask this to Mr. Lazar. We went to the Domtar facility in Kamloops and learned firsthand of the importance of the green transformation program, which addresses the black liquor issue. I want to ask about the accelerated CCA. I know it's not in your brief, but you and I have worked on this in the past. It's been raised by another group here.

Mr. Lazar, you know what the finance department is going to say and what the Privy Council Office is going to say and what economists across this country will say. We say that it's deferred taxation, and they will say that in fact it's a subsidy that goes to business and therefore we ought not to do it but ought to phase it out.

What I'd like you to do in the two minutes I have remaining is respond very directly to the concerns you know they will raise if this committee chooses to recommend it as a policy idea.