Evidence of meeting #15 for Finance in the 41st Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was transit.
President, Sellick Equipment Limited, Association of Equipment Manufacturers
That's probably a better question for my CFO, who is my twin brother. But nobody likes to see an increase in taxes. You've got to understand that in our association, the big percentage of our members are in the U.S.; the smaller percentage is in Canada.
There again, maybe my colleague might want to comment on that.
Conservative
The Chair Conservative James Rajotte
Maybe we'll return to this later.
Mr. Giguère, you have five minutes.
NDP
Alain Giguère NDP Marc-Aurèle-Fortin, QC
Good morning, Mr. Chair.
My thanks to the witnesses for joining us today.
My first question goes to Mr. Sellick.
Since Canada has lost no fewer than 300,000 jobs in the manufacturing sector, you will understand why we want to encourage you to get those jobs back.
The CCA, the two-year capital cost allowance for manufacturing equipment...In my tax law practice, I have noticed, in terms of lifespan, that it is generally only a matter of two or three years before new equipment has to be modified. The fact that the duration of the allowance is two years simply recognizes that, in a modern economy, the shelf life of a piece of equipment before it is modified is about two years.
President, Sellick Equipment Limited, Association of Equipment Manufacturers
The shelf life, what you're referring to, is more than two years.
President, Sellick Equipment Limited, Association of Equipment Manufacturers
Yes, we would have to make modifications in software and upgrades.
NDP
Alain Giguère NDP Marc-Aurèle-Fortin, QC
Thank you very much.
My next question is for Mr. Bowie. You were telling us about a local problem with the Canadian Coast Guard. If I am not mistaken, the decisions to be made will have an effect in 10 to 15 years.
With climate change, the opening of the North-West Passage, mining in the far north, offshore development problems that are only going to get worse, and the ever-increasing amount of shipping off Canada's coasts, we can see that the Canadian Coast Guard already is no longer up to the task, broadly speaking.
If decisions on major changes are not made right now, there is no way that it will be able to assume its responsibilities in 15 years.
President, Canadian Shipowners Association
Thank you, Mr. Giguère.
I certainly agree with your observations. The demand for coast guard services not only in icebreaking but also in other areas of search and rescue, and in many other sectors of the economy, is increasing as the use of the waterways continues to grow and new opportunities open up. As an industry that depends so much on the coast guard for services to keep products moving in our economy, we share your concern about ensuring there is sufficient funding going forward.
The fleet is relatively old. Many of the ships in the system will require replacement over the time you're talking about. There really needs to be a fleet renewal plan. Sufficient attention given to a fleet renewal plan today would enable us to respond to those demands in the future.
NDP
Alain Giguère NDP Marc-Aurèle-Fortin, QC
Basically, the problem is that we are replacing one ship with another. At the moment, the Canadian Coast Guard is not able to provide ocean-going tug service should a supertanker run into difficulty in Canadian waters and need help.
We do not have ships of that kind. The Canadian Coast Guard's present plan does not call for any. It is all very well to consider replacing 15 helicopters with 15 others, but that does not consider what the needs will be when the helicopters arrive.
There are no projections for what the Canadian Coast Guard will have to be doing in 15 years. In all the documents I have seen, I have read nothing about that. Even the increase in Canadian coastal shipping is not considered at the moment.
President, Canadian Shipowners Association
I understand that the coast guard is looking at their fleet renewal plan. The issue is finding the financing to address that plan into the future. That's the key issue this committee should be looking at.
Thank you.
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Thank you.
My comment may be seen to rebut Mr. Marston's. Certainly infrastructure is absolutely critical, but I don't think there was consensus that we need to do a massive new stimulation program. We've made gas taxes permanent; we have the big naval procurement plan; and we have our Building Canada continuing. There was no consensus that now is the time for huge new stimulus spending. I just wanted to make that point.
Mr. Shaw, yesterday we heard a witness, and he talked about how the Government of Canada subsidized the oil companies with a billion-dollar tax incentive. Can you confirm that oil companies pay their fair share of taxes, that they have the same opportunities for write-offs that other companies have, and that there is no special giant subsidy for the oil companies?
Vice-President, Natural Gas Policy Development, Encana Corporation
Thank you for that. It's not my area of expertise, but I will make a comment.
I think when you start looking at the whole picture, at the royalties paid by companies--in Canada, it's only for natural gas--at the investments, and at the manufacturing in Ontario, which is directly related to the oil sands and natural gas, it's up to about 40%.
When you start looking at the overall investments by oil and gas companies, it is very significant. On the employment side, which is very significant, one of our issues will be a skill shortage. But clearly, I think the oil and gas companies have contributed significantly.
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Thank you.
I'm going to go to Mr. Bateman next.
I'm going to show my age a little bit. It was in the 1970s, and the family was putting in a pool. I think we were one of the first to use solar panels to heat the pool. At the time, not only was the infrastructure for using solar panels versus using traditional heating systems comparable, but it was an absolutely good way to go in terms of payback over time. That was in the 1970s, and at that time the business case was there for something simple like heating a pool. Why hasn't that taken off, given the business case?
Policy and Research Advisor, Canadian Solar Industries Association
For low-temperature applications, solar thermal currently offers similar or better performance than the conventional alternatives, in many cases. For commercial space heating, solar air technologies are currently being marketed in the North American market at rates that are lower than heating oil and other conventional fuels. At present, in most cases, solar thermal technologies do not compete with the market rate for natural gas, but in many other applications beyond natural gas there are a number of different comparable applications.
For the generation of electricity, again, there are a number of different applications where, on a large scale, the price of electricity can be close to 35¢ or 40¢ per kilowatt hour, which would be comparable to some new fossil fuel builds, if externalities were included. There are also remote applications, where they do not have access to the grid, where solar electricity would be comparable to the conventional alternatives.
October 6th, 2011 / 10:05 a.m.
Conservative
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
In Kamloops we did an eco-home. It was an absolutely great partnership with CMHC and the local builders. It was net energy, and it was just phenomenal in terms of the solar panels. They were quite attractive looking.
You have a suggestion. Do you have any programs that you could say are currently inefficient? Because of course we have a shortage of cash in terms of the government. Is there something where you would suggest a shift of the focus?
Policy and Research Advisor, Canadian Solar Industries Association
With the conclusion of the ecoENERGY suite of programs on March 31 of last year, there has been an extension of the residential program. In the absence of that, the policy framework for solar energy is reliant on the two tax provisions mentioned in my presentation. Both the association and our membership have experience in many different jurisdictions around the world, and we'd be very pleased to explore some of the other demonstrated successes and give the committee some information on how they could be applied within Canada today.
Conservative
NDP
Brian Masse NDP Windsor West, ON
Thank you, Mr. Chair.
I'd like to thank the committee for coming to Windsor to hear from the witnesses. And I thank the witnesses for being here as well.
This is my riding, and I'm very pleased to see out the window Highway H2O, which is very important. As Mr. Bowie has noted, if we don't get those icebreakers, Mr. Westcott, we might go back to the days of rum-running, which took place there. They'll be literally driving the cars over the ice fields. It's important to note that without that plan, we're going to lose a lot in the economy.
I want to go to Mr. Sellick, being the local person here. I would like to ask you a question about the capital cost reduction allowance. A number of us on this committee went across Canada for our manufacturing study and called for a five-year plan for that.
What we have to make, as a governing society, is choices. If we're cutting revenues through corporate taxes, and at the same time requests for infrastructure incentives and other types of subsidies keep coming in at the level they are, we won't have those revenues. If you had to make a choice in terms of jobs and employment, and you'd lost over 20 workers, despite having lower taxes over the last number of years, would you choose the capital cost reduction allowance or the modest corporate tax cut change? What would be preferable to you to actually put people back to work in your shop?
President, Sellick Equipment Limited, Association of Equipment Manufacturers
We'd like to see the two-year plan made permanent. That's what we would prefer.
NDP
Brian Masse NDP Windsor West, ON
And that would be more likely to put people back to work on your shop floor?
I think that's what we really need to focus on as a nation: what are the things that are specifically going to drive job creation.
