Finance Committee on May 22nd, 2013

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

This is the problem. We want to have a common securities regulator in Canada. We are the only major industrialized country in the world that does not have one. This does create risk for people in Canada. We need to fix the risk.

Right now the de facto national securities regulator in Canada is in Ontario. It's called the Ontario Securities Commission. The Ontario government, of whatever stripe—Conservative, Liberal, whatever—has not agreed to accept the passport system. That has been true now for 15 years or so. That dog won't hunt, so we have to come up with something else.

[The Chair, Conservative, James Rajotte]

You have one minute.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I have time to ask you one last question, Minister.

I would like to come back to this question of eliminating the tax credit for the worker's fund, Fonds FTQ. This is not in Bill C-60, but it is in the budget. It seems that you have set a deadline of May 31 of this year for consultations with different groups. All the groups that we have heard so far on this question have been opposed to this decision, especially associations representing private venture capital corporations.

The gradual elimination of the tax credit will only start in two years. Why then impose such an early deadline of May 31 for consultations on a subject that is so important and controversial?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Many of the things that are in budgets from year to year are controversial. That should be of no surprise.

We think that consultation time is adequate. It's more than several months of consultation. I find these consultations tend to go on indefinitely if there isn't some sort of deadline for them. We used to write essays in university, and if there was no deadline they didn't get done until the last moment.

That's why we have a deadline for consultations.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Caron.

Mr. Jean, please.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thank you.

Thank you, Minister, for your appearance today.

Recently the CBC indicated that youth unemployment could cost our economy $23 billion in the next 18 years. Workopolis has indicated that 31% of all employers polled suggest that the people coming forward from universities are unprepared or very unprepared to enter the workforce.

I know we've done a lot, Minister, in preparing youth. I recently met with some EU parliamentarians who were suggesting that depending on the country, anywhere from 20% up to 60% of the youth in Europe were unemployed. I know our rate is 13% or 14% and holding fairly steady at that. It's one of the lowest in the world, certainly within the G-20.

But since 2006 we've helped 2.1 million youth get employed. We have an economic action plan of 2013 that has several measures, including the $70 million to support 5,000 more paid internships, $18 million to enable the Canadian Youth Business Foundation, and of course the recent announcement of 36,000 jobs for the Canada summer jobs program.

First of all, is this enough, Minister? What more can be done? How would you see the Canadian Youth Business Foundation helping youth enter the job market more effectively?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

We know that the job market is becoming more entrepreneurial. This is what the Canadian Youth Business Foundation is all about, and they're very successful at it. The foundation has worked with 5,600 new entrepreneurs. Since 2002 they've helped to create 22,100 new jobs across Canadian communities, producing $157 million in tax revenue. That's why we wish to continue to support this organization, for the entrepreneurial side.

Overall, of course, we want to grow the economy of Canada. That's why we want to maintain that balance between working toward a balanced budget and getting there in 2015, so that we keep the top credit rating in the world. We'll keep the economic, fiscal, and investment respect of the world here in Canada, at the same time incenting those parts of the economy that need some help, including manufacturing, which should help young people get jobs in that sector.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Minister, this would include business resources, start-up coaching, pre-launch coaching, financing for pre-starts, and mentoring generally?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Yes, that's what it says right there.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

It does indeed. As you can tell, I'm reading it. I was so excited about it.

I see, in fact, Minister, that it's an emulation, I would suggest, of what's been happening in Alberta for the last 15 or so years, working with the high school students and youth coming out of high school and university. It seems to be a very successful program, because we do have one of the lowest youth unemployment rates in the country. I certainly think it's something that can be emulated in other parts of the country.

Do you see this being enough to move the youth unemployment rate down to a more satisfactory level, even though we're one of the lowest in the world?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Well, regrettably, the modern-day youth unemployment rate always runs above the adult unemployment rate. This is true generally, and it's true in Canada as well.

I am worried—and this is one of the reasons for the job grant program—about the number of young people coming out of college training or university educated people who are having difficulty getting the first opportunity. That's why we brought in the internship program in the budget this year and increased the funding for apprenticeships. People need a chance to get in the door and to show what they can do. We'll watch those programs carefully in the next year. Hopefully they'll meet with success and we can do more of them.

[The Chair, Conservative, James Rajotte]

You have one minute.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Minister, the knowledge infrastructure program, of course, was very popular across the country, and it's an unprecedented amount of investment in training for young people that we've done over the past few years. Do you see this as a serious and positive relationship with our government and the universities and colleges across the country in regard to being able to work together with the provinces to actually accomplish this goal?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Yes, the knowledge infrastructure program that you're referring to as part of the economic action plan was incredibly successful. There was a buildup of work to be done at universities and colleges, and they were prepared to do it.

As you know, one of the goals back then in 2009 was to get the funding out the door as quickly as possible so that jobs would be created. The officials here in Ottawa did a great job, particularly at Treasury Board, and the universities and colleges did a great job. They were the best sector of the Canadian economy at getting the money out the door, using it for infrastructure that has long-term benefits and increasing employment.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you very much, Mr. Jean.

Mr. Côté, you have the floor.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Thank you Mr. Chair.

Thank you for being here to answer our questions, Minister.

Mr. Flaherty, I would like to address the question of iPods and other music devices. You said that these devices benefited from a tax or customs duty exemption in the long term. Can you confirm that? If we talk about merchandise under tariff item number 9948.00.00, can you confirm that no custom duties will be imposed on MP3 players and other merchandise of this type in the future?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

I would never confirm anything indefinitely for the future. My crystal ball is too cloudy for that.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Let's say in the near future, then.

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

We have no plans to do that. No.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

You admit, then, that custom duties or other tariffs could be applied to this type of devices, through a preferential tariff for example.

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

There's no intention to do so.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Just a moment, I perhaps misunderstood your answer.

There are tariffs on these devices. Does the government make money from these types of devices in this category?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

I don't know every device in that category. I do know that iPods are not taxed as long as the vendors follow the tax rules. They have to follow the Canada Revenue Agency rules, and end-user certificates are required. If they obey the law, then there's no tax. If they don't obey the law, then they can incur liabilities.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Yes, let's talk about certificates. Should we not be worried that so much information is collected for this category of materials?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

I'm going to ask my official to talk about end-user certificates, which are of limited interest.