Finance Committee on Nov. 1st, 2010

[Paul Szabo, Liberal, Mississauga South, ON]

That will lead us to more questions, and I hope you will get them from others as well.

This is for the AFL-CIO. Thank you very much.

This whole stimulus thing has really gotten a lot of attention, obviously, in Parliament. The Parliamentary Budget Officer issued a caution that 25% to 50% of approved projects under the stimulus program may not be completed by the deadline of March 31 next year. Right now, most of them have spent engineering and consulting money, but we don't have shovel-ready types of jobs.

This is pretty serious. How serious is it to the construction industry in Canada?

[Robert Blakely]

If you were to look at our industry—we're a baby boom industry—you would see that 25% of the current construction industry, the people who have built the country for the last 35 years, are going to leave. Not to put too fine a point on it, the people who do the demographics say that on June 16 in the year 2015 we reach the peak of the baby boom leaving. It comes up to 35% of our supervisors, superintendents, and construction managers. So it's about as serious as it can be.

[Paul Szabo, Liberal, Mississauga South, ON]

Okay. Now I share your concern.

I must admit that if I had time I would ask you about undocumented workers and whether or not we have a handle on that yet, but that's for another day.

[Robert Blakely]

The short answer is that we don't, but we haven't for the last 30 years, so it's probably not going to be a big deal.

[Paul Szabo, Liberal, Mississauga South, ON]

I'm sure we share the concern that eventually this is going to hit the fan. We have a lot of people who have no health care—

[Robert Blakely]

I agree.

[Paul Szabo, Liberal, Mississauga South, ON]

—no pension, no EI—

[Robert Blakely]

I agree.

[Paul Szabo, Liberal, Mississauga South, ON]

—and they're a burden on society.

The last question I have time for I want to direct to the Canadian Public Works Association.

We were told at one point, and, Mr. Chairman, I don't know whether I got the number, but it's something like that the deficit in infrastructure spending in Canada is somewhere around $125 billion. The point made was that if we didn't start to address the infrastructure deficit, it would start to have a creep effect on GDP; in fact, that GDP growth would decline by measurable amounts. This caused them some serious concern.

I wonder whether you share that, because if we're going to get out of this mess, GDP has to grow.

[Darwin Durnie]

Mr. Chair, certainly significant numbers--from $20 billion to $150 billion--have been generated in terms of an infrastructure deficit and the impact on the GDP and/or the economy globally and within Canada. There was a lot of investment happening in infrastructure through the $33 billion Building Canada fund that was in place prior to the stimulus funding to try to combat that deficit. If that is coupled with what has been spent on the stimulus fund, I think it bodes well for moving Canada forward and impacting that GDP bottom line, in comparison with what other nations have been able to reinvest from their infrastructure deficits.

[Paul Szabo, Liberal, Mississauga South, ON]

Tell me more about what this deficit is. It seems to me that if what is generally understood as infrastructure in Canada--our highways, for instance--start to erode, there are some negative consequences on productivity and profitability of companies. Trucking companies will have trucks breaking down more often because of bad roads, and bridges will be collapsing. I mean, how long can you go before you ignore a significant infrastructure deficit in Canada?

[Darwin Durnie]

I think the 1990s were a time when it was in vogue to reduce budgets to eliminate debt, and that was at the expense of investment in infrastructure programs. We seemed to have turned the corner on that through the 2000s, and by happenstance, I suppose, the economic stimulus has brought it back.

Infrastructure in its most basic terms can be equated to the shingles on your home. How far can you let them go before the water is coming through the roof and you have to replace all the timbers and the structure of the roof, as opposed to getting up there and replacing a few shingles?

It can be quite subjective. It varies from the maintenance done in this very room, in this edifice, to a highway.

[The Chair, Conservative, James Rajotte]

Great. Thanks very much.

Thank you.

Monsieur Paillé, s'il vous plaît, sept minutes.

[Daniel Paillé, Bloc, Hochelaga, QC]

I have a question for the representative from the Canadian Wireless Telecommunications Association.

Mr. Lord, I want to welcome you as a witness. We never know what the future holds. You are on the right side of the table. Sometimes when I look at the people in government, I think they could use someone like you.

[Bernard Lord]

[Note: inaudible]

[Daniel Paillé, Bloc, Hochelaga, QC]

We will see what the future brings.

I want to first ask you who you represent. What companies do you represent?

[Bernard Lord]

It is my pleasure to answer that question. Thank you for welcoming me to your committee as a witness.

We represent companies that work in wireless telecommunication services in Canada. That includes the traditional wireless service providers: Bell, Rogers, Telus. It also includes new service providers such as Windows Mobile, Public Mobile, Mobilicity, Shaw, and Vidéotron.

[Daniel Paillé, Bloc, Hochelaga, QC]

Okay. You represent the major telecommunications companies that we all know.

[Bernard Lord]

We represent the major companies and the small ones as well.

[Daniel Paillé, Bloc, Hochelaga, QC]

In January, when we were in lockout, I had the opportunity to tour Quebec for pre-budgetary consultations. A broadband network is needed in the regions not just for recreation or chatting on Facebook; it is essential to farmers for managing their livestock. In that sense, we are well aware of this problem.

After mentioning the names of the companies you represent, you said they have paid $130 million in 2010 and $2 billion in the past 25 years. Big deal. There is nothing extraordinary about an industry paying $2 billion over 25 years.

Nonetheless, if I understand your graph correctly, where you compare licence fees in Canada to those in other G7 countries, we see that spectrum licence fees in Canada are 3.5¢ per megahertz per person. Is that right?

[Bernard Lord]

Yes.

[Daniel Paillé, Bloc, Hochelaga, QC]

That is how you come up with $130 million.

[Bernard Lord]

Yes.

[Daniel Paillé, Bloc, Hochelaga, QC]

You tell us that this risks... that it is irritating. You have described these spectrum licence fees as excessive. The word “excessive” to describe the $130 million a year, which represents 3.5¢ on a bill of I-do-not-know how much, paid by Bell, Telus, Rogers, Vidéotron and so forth, is a bit of an exaggeration, is it not?

[Bernard Lord]

Not at all, on the contrary. The cost ends up being passed on to the consumer. It is excessive because Canada pays the highest fees in the world—excuse me, the highest fees in the G7 countries. If we look at developed countries around the world, Australia is the only country that has fees higher than ours. If we compare our fees to those paid in the United States, we would have paid $4 million in Canada instead of $130 million under the U.S. model.