Finance Committee on Oct. 26th, 2011

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Thank you very much.

In one of your recommendations you talked about green bonds. Can you link that maybe with the bonds and the benefit that we would get?

[Paul Kariya]

I think first and foremost I want to lead off that our sector in British Columbia has not been heavily subsidized. I know in other jurisdictions there have been subsidies for renewables. Having said that, I think it's important that if we're going to make the transition economically, we need to spur on development in clean technologies, clean energy, and so forth. One tool to use, as well as tax measures, is something like a green bond. We need to help make that transition to a cleaner economy, and I think a tool like green bonds can help.

I recognize that during a tough economic time all of that is a tough sell, but again we need to make that transition.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Thank you very much.

For the B.C. Child and Youth Advocacy Coalition, thank you very much for your presentation. It's very important. Can you maybe expand on what kind of investment you're looking for in terms of early childhood care and learning?

[Louisa Sanchez]

Firstly, we are looking for an increase in supported parental leave for 18 months and a top-up for low-wage earners who cannot now afford to even take a year's leave available through employment insurance because 55% of a low wage is not enough to live on.

Secondly, we are looking for a significant investment of federal funds in child care through provincial agreements, or directly, to support parents' ability to work and their children's right to quality care and learning. Too many parents are unable to return to work after the birth of a child because there is either no space available or it is too expensive. High-quality child care after a period of supported parental leave is the essential building block that is missing in Canada's support for families with young children.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Also in your report you wrote about child impact assessments. Can you give us an example of how that would work?

[Louisa Sanchez]

Too many Canadian children live in poverty, which is a violation of their rights in such a wealthy country as Canada. We have been asking for the maximum child tax benefit to be increased to $5,400 per child per year. It's currently about $3,485. This change would lift thousands of children out of poverty. A budget that assessed the impact on children of this aspect of the tax system would identify the cost-effectiveness of lowering the child poverty rate and reducing income inequity. The evidence on cost-effectiveness is there for all to see in the higher cost we all pay for health care, education, and the justice system when children grow up in poverty and social exclusion increases.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Mai.

We'll go to Ms. McLeod, please.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you.

It's certainly my pleasure to be here. Even though I'm a British Columbian, I haven't been to Prince Rupert before, so it is a treat to come and see this beautiful part of the country. Last night was a very interesting evening, for sure.

I want to ask a quick question to Mr. Kariya. You didn't mention geothermal hydro. Is that not part of your organization? I think there are enormous benefits or opportunities within British Columbia. Is it part of your organization, and is there good opportunity?

[Paul Kariya]

We do have geothermal members, and British Columbia is a terrific spot for geothermal hydro. The problem is that within the cost curve on fuels we have so many other options in the marketplace that are cheaper and easier. Wind and hydro are now cost-competitive with anything that B.C. Hydro produces. Unfortunately, ocean and geothermal hydro are not yet there. In time they will be, as the marketplace responds to the true cost of electricity.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you.

My next question is to either the Canadian or British Columbia Mining Association.

Certainly mining plays a critical role in the riding I represent. You mentioned accelerated capital cost allowance, the flow-through shares, and the mining exploration tax credit. You might be aware that we have an ongoing debate within Parliament on the raising of taxes on businesses up a couple percent. So could you briefly talk about a competitive tax structure and what that might do to your industry and its robustness?

[Pierre Gratton]

One way to look at this is to look at what is currently happening in Australia. Canada was the largest destination for mineral exploration spending until about 1992. Then things started to turn, and Australia took over first place. In 2002 Canada became number one again, and we've been number one ever since.

Right now there is an outflow from Australia because of tax measures being taken there with super-tax policies. The carbon tax they introduced has been very controversial. Canada is a beneficiary of this. Australia is probably our largest competitor in the world, and now we attract the largest share of global exploration and investment. The $137 billion I referred to is just potential new mining investment, and it speaks to the importance of having a competitive tax climate.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you.

You both talked about the environmental assessment process. We've certainly moved forward on the major projects office, but can you talk about the reality on the ground of what the companies face in the environmental assessment process? Obviously you always want to completely protect the environment and have good integrity in the process, but at the same time reduce the redundancies and the inefficiencies of the system. How far along are we in that process, and where should we be going?

[Pierre Gratton]

We made some really good strides last year with amendments that were long in coming—amendments made to the Canadian Environmental Assessment Act that put the Canadian Environmental Assessment Agency in charge.

Now, this may sound funny. We have had the agency for years, and probably most people thought they ran environmental assessments. Actually, they didn't. If you're a mining company, one of the biggest sources of delay was trying to get the EA started. You'd pound on the door of Fisheries and Oceans Canada or Natural Resources Canada or Environment Canada and say you need an EA and could they please start it.

It would fall on an individual department to put up its hand and say it would do it. None of them wanted to, because it was a big undertaking and a lot of time and resources were involved.

Last year the agency was finally put in charge, and it was given the resources necessary to manage environmental assessment. We have seen the elimination of about 18 months of delay from the federal approval process in Canada as a result, because it was estimated that it took 18 months just to start.

What this also means, and then I'll turn it over to Karina, is that now the federal and provincial governments can actually harmonize, because the feds aren't a year and a half behind. What we're seeing on the ground in B.C. is a much improved process.

Do you want to add to that?

[The Chair, Conservative, James Rajotte]

Very briefly.

[Karina Briño]

We have certainly seen an improvement in terms of the relations, the collaboration, the scoping of projects, and who is going to be involved and when. However, I think we would still be interested in looking for perhaps one process that would be able to meet the requirements of both levels of government in a way that is going to keep the integrity of the evaluation and the assessment, but without the duplication of the company going through that process twice.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Mr. Brison, please.

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you very much, Mr. Chair.

Thank you to each of you for your valuable interventions today.

Mr. Gratton and Ms. Briño, do you believe that British Columbia is a good place to do business, and a good place for the mining industry?

[Karina Briño]

Absolutely. I mean that seriously.

British Columbia has certainly gained some momentum in terms of its reputation, in terms of mining practices and policies that have been implemented lately. We still have a long ways to go.

We have seen that in the increase in mineral exploration investment, and also in companies that are still operating in B.C., wanting to continue to expand and grow.

[Scott Brison, Liberal, Kings—Hants, NS]

Certainly we see the growth in industry leaders like Teck over the last few years, in fact garnering investment from some of the best international investors in sovereign wealth funds in the world, like CIC as an example.

The capacity to attract capital to British Columbia mining and enterprise has actually grown in the last couple of years.

You mentioned tax policy as a determinant in that, which leads me to the carbon tax of the Campbell government, subsequently endorsed by the Clark government, that was implemented in British Columbia. In fact the right-of-centre magazine The Economist referred to it on July 21, saying that “The carbon tax has been good for the environment, good for taxpayers, and it hasn't hurt the economy.”

So you have to consider tax policy in full, whether you have flow-through-share provisions, competitive corporate tax rates, and potentially putting a price on carbon with a predictable carbon tax.

Would you say, Mr. Kariya, that putting a price on carbon in British Columbia has helped create jobs in your industry?

[Paul Kariya]

Most definitely. I recognize that with my colleagues to the left, and others, traditional natural resource industries—forest sector and that—have some difficulty with an aggressive carbon tax. We're saying we need to make inroads, that this is the way we need to go, but we need to do it in a way that is sensitive to the economic welfare of the province. But we need to get going on it.

[Scott Brison, Liberal, Kings—Hants, NS]

I really appreciate seeing the consensus here that the answers to meeting the world's insatiable demand for energy—China and India—needs an energy mix, combining conventional energy with new and alternative energy.

What is the potential for Canada to become a global leader, particularly in the area of clean conventional energy? Given that we are already a leader in conventional energy, that seems to be area where we ought to be putting a significant amount of focus, whether it's in carbon capture and storage, sequestration technologies, or coal gasification. In 20 years we're still going to see coal being a significant part of the global energy supply.

What is the role for Canada to develop, export, and commercialize the technologies to develop cleaner coal technologies and cleaner mining, cleaner extractive sector technologies?

[Pierre Gratton]

Let me first address the carbon tax issue, just to clarify. We are an energy-intensive industry, so a tax on carbon can be quite punitive to those sectors that are energy-intensive.

A carbon tax as a measure is probably one of the simplest ways to put a price on carbon—

[Scott Brison, Liberal, Kings—Hants, NS]

Predictable.

[Pierre Gratton]

—in a carbon-constrained future. But the issue is that if B.C. does it alone, it gives an advantage to other jurisdictions that don't have a carbon tax. The question then becomes how to create a level playing field, which B.C. has attempted to do by staying relatively revenue-neutral by reducing corporate taxes at the same time. However, I think many industries would say that although it may have been revenue-neutral overall, it wasn't necessarily so for the industry. But that can be done; you can try to shift the tax base to give more of a price on carbon.

There is an awful lot of R and D going into carbon sequestration, but I don't know if there are specific timelines when we think we'll be able to achieve that. It's part of Canada's challenge--and Paul can add to this—that because we have a fairly small population over a vast area, the economics of renewables can be more challenging.