Finance Committee on Oct. 26th, 2010

[Denis St-Pierre]

Look at proposed section 56.4 and the Fortino and Manrell decisions at the Supreme Court. They were taken...well, one, at the FCA, was taken out of proportion.

This is just an example of when people get carried away when they write: 56.4 is a perfect example.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

And for other people in the room--except for me--who don't know what 56.4 is...?

[Denis St-Pierre]

It's for when you sell a business and you sign a non-compete or something like that. It was blown out of proportion. It made for a very convoluted and long piece of legislation, retroactive to October 7, 2003.

There's an example. You wanted one: that's one.

Madame Presseault has some comments as well.

[Carole Presseault, Vice-President, Government and Regulatory Affairs, Certified General Accountants Association of Canada]

Thanks, Denis.

Mr. Pacetti, I thank you for your question.

If you look at something more simple--I don't get 56.4 either--the total tax contribution survey that was conducted by Pricewaterhouse for the Council of Chief Executives looked at this pot of taxes collected. A total of $10 billion was collected in taxes. Of the 46 taxes borne by the participants in the survey, 24 of those taxes generated 6% of income for the government. That doesn't make sense.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Another one that I remember from my tax courses was the capital gain versus investment income. I know that somebody was saying to perhaps reduce capital gain to even 37.5% instead of 50% taxable.

How about if we just tax everything at the same rate and reduce the taxable rate? Would that be an easy mechanism to rectify some of the complexities of the Income Tax Act?

[Carole Presseault]

I think there are a lot of ways that we can simplify it, and I think this tax panel needs to spend some time looking at it from every point of view, government and taxpayer.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Okay. Thanks, Carole.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Pacetti.

Monsieur Carrier, vous avez deux minutes.

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

I have a follow-up question for Mr. Stothart, from the mining industry.

There is a great deal of media attention these days in Quebec regarding shale gas exploration. We hear that the mining industry is quite invasive, and that has raised significant public reaction. You are no doubt aware of that file.

I would like to know whether you think the mining industry is doing things correctly or not. Should it have done things otherwise in order to obtain public support for this type of gas extraction that is currently in the exploratory phase in Quebec?

[Paul Stothart]

Thank you for the question.

It's not an area where we have active members of our association. It is an area where there's an awful lot of investment taking place, especially in the United States, but also in other parts of Canada.

The argument is that in the U.S. the use of more natural gas could help to significantly reduce the use of coal and therefore reduce their greenhouse gas emissions. That's why there have been such significant investments in the U.S. in this area; it's viewed as a way to reduce their overall carbon footprint. That would be the environmental argument around that.

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

So none of your members are currently exploring or extracting that type of gas.

[Paul Stothart]

No, it would probably be companies within the Canadian Association of Petroleum Producers--the oil and gas association.

[The Chair, Conservative, James Rajotte]

Very well, thank you.

I thank all of you for being with us this morning, and for your presentations and responses to our questions. If there's anything further you'd like the committee to consider, please submit it to the clerk.

Monsieur St-Pierre, reducing the size of the Income Tax Act in some way would be very helpful.

Thanks, all of you.

Colleagues, we will suspend for two minutes and have the next panel come forward.

[The Chair, Conservative, James Rajotte]

If I can encourage colleagues and witnesses to take their seats, please, I will continue with our pre-budget consultations.

We have five organizations for this panel. First of all, we have the Green Budget Coalition; second, the Pembina Institute; third, the Canadian Housing and Renewal Association; fourth, the Canadian Community Economic Development Network; and finally, we have REAL Women of Canada.

Thanks to all of you for being with us here this morning. You each have five minutes for an opening statement. We'll start with the Green Budget Coalition.

[Andrew Van Iterson, Manager, Green Budget Coalition]

Thank you, Mr. Chairman and honourable committee members, for inviting the Green Budget Coalition to speak to you today. I'm joined by our chair, Barry Turner, from Ducks Unlimited Canada.

As you likely recall, the Green Budget Coalition is unique in bringing together 21 of Canada's leading environmental and conservation organizations, representing over 600,000 Canadians in groups such as Ducks Unlimited, Nature Canada, Équiterre, and the Pembina Institute.

Since 1999 we've been working cooperatively with the government to help advance strategic measures to advance long-term environmental sustainability. Our efforts were acknowledged in the 2005 federal budget.

We have identified four prime investment and savings opportunities for budget 2011, each of which is pivotal for ensuring prosperity for Canadians now and in the future. What is particularly unique about our recommendations, and which is probably different from most of what you've heard, is that one of our recommendations would help pay for most of our other three. They address a conservation plan for Canada, catalyzing energy efficiency growth, Canada's freshwater resources, and opportunities to save money by cutting environmentally harmful and counterproductive subsidies.

We're supporting the development of an ambitious, integrated conservation plan for Canada, focused on protecting Canada's remarkable ecosystems, wildlife, and wilderness heritage for future generations. This builds on the government's Speech from the Throne commitment last March to “build on the creation of more than 85,000 square kilometres of national parks and marine conservation areas as part of its national conservation plan”.

Developing such a conservation plan will require federal leadership to bring together federal, provincial, and aboriginal governments, conservation organizations, industry representatives, and individual Canadians to develop a shared vision and a common path forward. At the same time, it's important to keep funding some of Canada's current conservation programs and to provide some funding for Parks Canada to continue moving forward in creating new national parks.

Fresh water is also central to Canadians. The government is continuing to make progress on this in most of its annual budgets, which we've appreciated. We're highlighting four opportunities this year, which range from only $5 million, a one-time cost to start a national water efficiency program similar to the WaterSense program in the United States, to also protecting endangered species and a recommendation for waste water infrastructure. One of the keys there is that there are still a billion dollars in existing infrastructure funds that could be put towards upgrading water infrastructure in municipalities across Canada.

The other prime area I want to bring to your attention is a suite of counterproductive environmental tax and subsidy programs that still exist, but at best no longer justify their cost, and at worst really do damage the environment. There are four areas we're highlighting. One is tax subsidies for oil. There are four examples in our more detailed recommendations, all of which were mentioned in a memo from Deputy Minister of Finance Michael Horgan to Minister Flaherty on March 18. So we're not inventing these. These have been very prominently acknowledged as key subsidy measures. This would allow us to fulfill our commitments to the G-20 to phase out inefficient subsidies.

We'd also like to see an end to subsidies to AECL around nuclear power. If there's a deal to sell AECL, it should be done with an agreement that Canada is no longer on the hook for future liabilities.

As well, $250,000 annually continues to go to the Chrysotile Institute in Quebec to promote subsidies that are widely acknowledged as environmentally harmful to human health.

Fourthly, there are some key measures we can take to harmonize our tax treatment of primary mineral extraction with recycling, which is the way of the future.

Overall, I would just encourage the committee to ask for this in your report, and to ask the finance minister to invest in a conservation plan for Canada in energy efficiency and our freshwater resources, and to pay for most of these investments by ending outdated and counterproductive subsidies to oil, nuclear power, speculative mining exploration, and the Chrysotile Institute. These measures will help create a truly sustainable, healthy economy for Canadians today and in the future.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now hear from the Pembina Institute.

[Tim Weis, Director, Renewable Energy and Efficiency Policy, Pembina Institute]

Thank you, honourable Chair and members of the committee. I appreciate your having me here today.

I've handed out a small presentation, which you can go through.

I want to start by mentioning what the Pembina Institute is and where we're coming from. This is an important year for us, because this is our twenty-fifth anniversary. We were born in the wake of one of Canada's worst environmental industrial accidents, the Lodgepole blowout just outside of Edmonton, which was a sour gas blowout. It is still one of Canada's worst industrial accidents.

We were formed as a group that worked on keeping an eye on oil and gas but also promoted sustainable energy alternatives. One of the key alternatives I want to talk about today is investing in energy efficiency. We're a non-profit group and we're based across Canada. The handout I've given you gives a link to our publications, all of which are available online.

The other thing that I think is a bit unique about what we do, as you can see in one figure in our presentation, is the actual work we've done on the ground. These are some projects on renewable energy and energy efficiency that I have been involved in with first nations communities, so I can speak a little bit from the point of view of having done some of these projects and about some of the barriers we've encountered in trying to do them.

One of the things we've recognized, particularly in working with some of the smaller communities, is that the federal government really does lead the way in a lot of these programs. Having programs and support from the government really is key to catalyzing action.

On our next slide, you can see that one of the things we're up against is that an entire suite of energy efficiency programs comes to the end of its life this year. All of the ecoENERGY programs basically are coming to an end on March 31, 2011. What I want to emphasize is that there's a big opportunity for us as Canadians to reinvest in energy efficiency and to make it a priority going forward. Some of these programs have been very successful in catalyzing change, and I think it's important that we build on that momentum and not lose it.

I think there's a real concern that if there isn't reinvestment in this upcoming budget, a lot of that momentum, a lot of the industry that's been developed around those programs, could be lost. Not only is there an environmental danger, but there are jobs that could be lost, jobs that have basically grown up around some of those programs.

I think what's important, and what is the way we need to see this, is that investing in energy efficiency for companies, as well as for Canadians, is effectively equivalent to a tax cut. It's a permanent tax cut. If it's money you're not spending on energy every month, if it's money your business isn't spending on energy every month, it's money you have in your pocket to be reinvesting in Canada, to be reinvesting in the country.

I think that's the way we need to be perceiving energy efficiency. This is effectively a long-term tax cut. It's also one of the fastest and most efficient ways to reduce our emissions, whether it's greenhouse gas emissions or other air emissions. I think there's a strong case to be made for investing in energy efficiency.

As I said, we've made some gains, but there's still a lot to do. The ecoENERGY program for houses has been fairly successful. It's been in place since 2002. We've only retrofitted about 8% of homes in Canada. What we need to do is look at how we can get that to 100%. Most homes in Canada could easily be using 30% to 50% less energy than they're currently using.

We need to get beyond the investments we've made. How do we get the entire country up to code or up to a higher level of efficiency? We need to be working on an overall strategy, and I think that's where the progress that started with the Council of Energy Ministers really needs to be moving faster.

As I said, a whole suite of programs is coming to an end this year. I think it is important. The federal government has shown leadership in setting the bar, and we've seen all sorts of provinces follow suit and develop complementary programs. Really, the federal government has been an important leader in energy efficiency in the country.

I think a whole suite of things needs to happen. I don't want to dwell on them all right now, but I do want to talk about two key issues that I think are tangible and can be done right away.

The first is to reinstate the ecoENERGY program for retrofits for homes, because that has been a very successful program. We have a whole industry of retrofitters and builders, which puts a lot of Canadians to work and at the same time saves money for Canadians. Setting targets to get all the way to 100% in retrofits is going to be important. That means starting where we're at right now, at 8% in retrofits, and figuring out how we're going to get to 100% within the next 30 years.

The other policy that I want to mention is the idea of green bonds and what that would be. It's effectively like Canada Savings Bonds; Canadians could invest their money in green bonds, but basically use that money to allow businesses and homes to overcome the capital hurdle that is a barrier to a lot of investments in efficiency. That would be another key area.

The reason we're putting this forward this year is that we recognize we're working in a difficult fiscal environment. This would be a way of overcoming the capital barriers to investing in efficiency, but doing it at a minimum cost to the government. We think those are two very practical things that could be done in the short term.

I appreciate your time.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

Now we'll hear from the Canadian Housing and Renewal Association.

[Jody Ciufo, Executive Director, Canadian Housing and Renewal Association]

Thank you.

Good morning, Mr. Chair and members of the committee.

My name is Jody Ciufo. I'm the executive director of the Canadian Housing and Renewal Association. With me today is Dallas Alderson, our manager of policy and programs.

For over 40 years the Canadian Housing and Renewal Association has been the collective voice for the full range of affordable housing issues and solutions across Canada. Our members come from all parts of the affordable housing sector and include non-profit housing providers, municipalities, provincial and territorial governments, non-profit support services, and businesses. We speak for those who believe in and work towards safe, adequate, secure, and affordable housing for all Canadians.

On their behalf, I want to focus today on three main points from our brief. First, I want to acknowledge and thank you for your past federal funding. Second, I want to tell you that this funding has made a real difference in making housing more affordable for people across the country. Last, I want to urge you not to turn your backs on this success; I ask that the federal government keep funding affordable housing and working to end homelessness.

First of all, thank you for the $2 billion investment in affordable housing over the past two years that was made as part of the economic stimulus measures. Our members--housing providers, municipalities, and provinces--are doing as much as they can, as fast as they can, to build and repair affordable housing, because the need in our communities is so high.

We value as well the significant investment in three major federal programs: the affordable housing initiative, which is a major source of capital funding for building new affordable housing; the CMHC renovation programs, often referred to as RRAP, which offer funding to preserve the housing that already exists; and finally, the homelessness partnering strategy, which puts money in the hands of communities to deal with the still increasing numbers of individuals and families who are homeless. Together, all three total almost $400 million each year.

However, the backbone of the federal government's long-term predictable investment in affordable housing is approximately $2 billion each year. This funding lets housing providers offer rents that are lower than market value. Through long-term operating agreements with social housing providers, federal subsidies allow over 600,000 households to access affordable housing.

My second point is that this funding has made a tangible and quantifiable difference to Canada: to our economy, to our society, and to our citizens. We have time for only the briefest of examples, but in Toronto, federal homelessness funding let more than 2,400 people move into permanent housing directly from Toronto's streets, parks, squats, and ravines, and a year later, 91% of them are still in their homes through the city's Streets to Homes program. That was done through the assistance of federal funding.

In 2006, the most recent period for which data is available, 1.5 million households, or almost 13% of all households in Canada, lived in core housing need. Core housing need means that these are people who can't find a home that costs less than 30% of their household income, that doesn't need major repairs, and that actually has enough bedrooms for everyone who lives there. While the number is still far too high, I want to tell you that it's almost 1% lower in 2006 than it was in 2001, and that's in large part due to the federal investment I've just described. These programs have made a real difference, and they need to be sustained, integrated, and in some cases bolstered to ensure that these gains aren't lost.

And so we come to our third point, which is to urge MPs to keep the success going and to maintain federal funding of affordable housing and homelessness programs. The economic downturn is all the more reason not to cut federal support for these programs. There is normally a lag between a downturn and the full effects of unemployment on people's living conditions, as moving from our homes is the absolute last resort for most of us. It's essential that those gains not be erased. While the overall decrease in the rate is good, some of us still are more likely than others to live in core need: lone-parent families, aboriginal households, and immigrants.

Finally, homelessness is still on the rise, despite the gain in core housing. It has already been announced that some programs are going to end. This is worrying us because the real backbone, as we've said, that $2 billion worth of long-term operating agreements, absolutely needs to continue.

These expiry agreements are already running out. For instance, the Métis Urban Housing Corporation has had to sell 30 units that they owned in order to have enough money to fund repairs to the things they already have. So 30 households now have had to leave safe, secure, affordable housing. This is the tip of the iceberg. Without the continued funding, this will happen across Canada.

Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

Now we'll hear from the Canadian Community Economic Development Network.

[Michael Toye, Executive Director, Canadian Community Economic Development Network]

Thank you, Mr. Chair.

Members of the committee, thank you for the opportunity to present our recommendations today. I'm joined by Stacia Kean, a member of our board of directors from PARO Enterprise Centre in Thunder Bay, as well as Lynne Markell from the Canadian Co-operative Association, a member of our policy council.

Founded in 1999, the Canadian Community Economic Development Network is a national association of local organizations working on integrated approaches to economic and social development in their communities. We have several hundred members in every province and territory across the country, a membership representing an approach to development that integrates economic activities--the provision of needed goods and services--with social and environmental goals at the organizational and community levels. This is a movement for social innovation that has been growing both in Canada and internationally in recent years and is successful in large part because it inspires Canadians to take action on the challenges facing their communities.

The 2010 National Summit on a People-Centred Economy, held this past June here in Ottawa, brought together the leading national organizations and the community economic development cooperative and social economy sectors to produce joint recommendations on how to scale up the capacity for social innovation through community enterprise.

The recommendations outlined in our brief are, first of all, to create new investment and capital sources for community enterprises; to incorporate community enterprises into federal policies and programs and procurement; to provide stable, flexible support for community development organizations; to extend business development programs to community enterprises; to include community enterprises in the federal plan for poverty reduction, which the House is currently looking at; and to support community enterprises in international development.

Community enterprises have an important contribution to make to a stable and equitable recovery from the economic downturn. Canada has a valuable opportunity to adapt and implement policies and programs that have proven successful both internationally and in various provinces here at home. These recommendations are practical steps that will allow communities greater flexibility to innovatively design local solutions to complex challenges of poverty, shrinking labour markets, and fiscal constraints.

I'll now allow my colleague Stacia to illustrate some of the potential of these recommendations.

[Stacia Kean, Member of the Board of Directors, Canadian Community Economic Development Network]

Good morning, Mr. Chair and honourable members.

I'll give you some examples. I work in northern Ontario. Mike talked about needed goods and services. As a good example, we're working with the True North Community Co-op, which provides locally produced goods and services, particularly around food security, into northern communities. They currently have a model in Thunder Bay, a storefront operation with over 100 members, and we're working with this group to expand that model into first nations communities, where food security is a priority and a challenge.

I have another example with me. I don't know if this is a needed goods and service, but it is in northern Ontario. These are called “Nipigon Nylons”. I always bring them to Ottawa. I definitely come from northern Ontario—I bring my wool socks with me.

[Voices]

Oh, oh!

[Stacia Kean]

This is an example of a group that we work with. It's a community enterprise. It's a group of women who meet and together have produced these socks and have introduced them into Nipigon, a small community outside of Thunder Bay's tourism strategy. Over the last two years, they've seen an increase in tourism activity in the area, which could be in part attributed to this program.

Some of the other benefits that come out of this are that it's a business, it's a linked business, and it's a business that's working for community development in also supporting micro-enterprises at the same time that it's providing really valuable training in skills to people who participate.

Another good example is that, of this group of women, one of the women has now run for and been elected to her city council.

We have these women who are initiating more community enterprises, having pickerel dinners, and baking blueberry pies. It's an example of how community enterprise generates more enterprise, and it's an example of how people involved in these programs who might otherwise have been more on the outskirts, or outside of their community and what's going on in the economy, are getting involved, generating real business revenues, and becoming really active important civic people in their community.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now hear from REAL Women of Canada, please.