Evidence of meeting #22 for Finance in the 41st Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was investment.
Chair of the Board of Directors and Vice-President, Marketing, Azure Dynamics, Electric Mobility Canada
Yes, we are. The road map that we've spoken about addressed strengths, weaknesses, opportunities.
NDP
Chair of the Board of Directors and Vice-President, Marketing, Azure Dynamics, Electric Mobility Canada
Absolutely: Electric Mobility Canada. The person can go to our website. It's all there.
NDP
Wayne Marston NDP Hamilton East—Stoney Creek, ON
Okay, that's great. Thank you.
Mr. Conway, I love to get a person here who has the connection with the CEOs of our country that you have. I've been working on a couple of things. One of them is Bill C-331. It addresses the status of pensions during CCAA and bankruptcy and insolvency. Under the current legislation, pensions have no standing whatsoever. And we're trying to move them up the line.
We had Bill C-506 in before, which was asking for super-priority. This current one is not. It's putting us at the top of the unsecured debt, which would protect workers. We saw the Nortel situation, where they lost 37% of their pensions when the company had $2 billion in cash and $4 billion in other assets, not to mention the patents that sold later.
I was wondering what your reaction would be. Under the previous edition of this, there were concerns about companies being able to get investment if this were the law.
Chief Executive and National President, Financial Executives International Canada
Thank you, Mr. Marston.
Pensions are a complicated topic. There needs to be review of many of the elements of pensions to make them equitable on both sides, from the point of view of who pays for the deficit in the plan, if there is one, and who gets to keep the surplus, if there is one.
NDP
Wayne Marston NDP Hamilton East—Stoney Creek, ON
More specifically, we're talking about a company that's going into CCAA or bankruptcy, one or the other, which is a little further down the line in that process.
October 31st, 2011 / 9:25 a.m.
Chief Executive and National President, Financial Executives International Canada
The establishment of a plan has to start upstream, with equitable rules for employers and employees through the piece. We've made previous representations related to the funding of pension plans and the current imbalance in some of the use of the surplus entitlements.
NDP
Wayne Marston NDP Hamilton East—Stoney Creek, ON
One of the problems is that there's a difference of philosophy. For workers, these are deferred wages that are put aside for them. Sometimes the way they're treated by some companies is that it's just another pool of money to pay creditors off.
I'd like to take us a little bit further, though. We've talked about a phased-in doubling of the Canada Pension Plan, primarily because over 60% of working Canadians today have no savings and no pension plan. Now the government has put in the RPP, which is a voluntary program.
Our concern is that we need to have something mandatory. We see the Canada Pension Plan, which is portable, is in every province, and is owned by Canadians, as the best vehicle for doing that. The cost to an employer would be 2.5% after the phase-in period. That's going to be harped on as being another tax, but if we don't take care of Canadians going forward, in 30 or 35 years they're going to hit a wall where we'll wind up paying anyway. Under our proposal, at least the workers will be able to put something in and carry some of their own responsibilities.
I'd like your reaction to that.
Chief Executive and National President, Financial Executives International Canada
I agree. It is a shared responsibility. It shouldn't be a one-way plan. Anything that incents Canadians to make their appropriate savings, so that we won't have a problem as that demographic curve extends, is helpful.
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Thank you, Mr. Chair.
First of all, I'll start with a practical question. Being from British Columbia—in particular, on the island—we seem to have all these imports of right-hand-drive cars. Mr. Nantais, do you have any comments on that? Obviously it's people buying cars locally, but I wonder about the hazards. It's a funny question, but an important one too.
President, Canadian Vehicle Manufacturers' Association
It is an important one, certainly from a safety aspect. When we start importing used vehicles from other jurisdictions—especially something unusual like that, a right-hand vehicle—it creates many problems. If you look at large-scale importation of used vehicles, it can actually be very disruptive to the domestic auto industry. We saw that when the New Zealand industry basically dissipated as a result of Japanese vehicles entering that market. In this particular case, we're seeing more of this happening.
Provincial jurisdictions, particularly in British Columbia, have been very concerned about the safety elements of this. It's really a question of what we will or will not accept in terms of trade on used vehicles.
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Certainly, in terms of the safety aspect, I have huge concerns. Do you have any recommendations there?
President, Canadian Vehicle Manufacturers' Association
We haven't made any specific recommendations, but I know the dealers associations have made recommendations against the continuation of allowing such vehicles into the country, simply because of safety and potential environmental issues as well. When you look at the number of vehicles that come in that don't meet our standards, it could be equivalent to environmental dumping on a large scale. These are concerns that need to be addressed.
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Thank you.
I had the opportunity a few weeks ago to attend some meetings, in terms of the LNG trucks and Westport and some of the trucking companies who have headed down that path. It sounds like there are some great opportunities in terms of costs and decreased emissions. Then I'm hearing about the electrical car—and I think I could guess where Mr. Elwood's thoughts are going. If we had some sort of broad vision, in terms of what we'll look like in Canada 10 to 15 years down the road, is there going to be some sort of complement of electric and maybe LNG? Could we do a bit of pie-in-the-sky in terms of our whole transport system down the road? I'll ask anyone to jump in.
President, Canadian Vehicle Manufacturers' Association
Sure, and maybe I can start there.
One of the key drivers here involves the new regulations for greenhouse gas reductions. They will apply not just to light-duty vehicles, but heavy-duty vehicles as well. Right now in Canada, we're in the process of finalizing the heavy-duty regulations as well.
In order to actually achieve some of these very stringent targets—and by the way, we're kind of the only industry right now that is being regulated in terms of greenhouse gas emissions--with personal transportation making up 12.5% of greenhouse gas emissions in Canada and total transportation being about 27%, the fact of the matter is we're going to need all technology, a full slate of technology. So you will see the NG being part of that. You will see clean diesel being part of that. You'll even see improved internal combustion engines being part of that as you move through 2016, 2017, and ultimately 2025.
Electrification of the vehicle will come along through that process as well. The question will be, where will that stand relative to all these other jurisdictions as we go forward—particularly when you look at diminishing reserves of oil, for instance? I say that's perhaps even more important on a global basis, when you look at developing countries and their thirst for oil.
All these technologies will be absolutely necessary. So you will see, from my perspective, I believe, a complement of different technologies, and they'll be applicable to both personal transportation as well as commercial transportation such as heavy trucks, as in the case of compressed natural gas.
Conservative
President and Chief Executive Officer, Canadian Energy Pipeline Association
Much like the results of the electric vehicle road map, there was also a natural gas vehicle road map completed last year with NRCan, and it could answer a few of your questions on that front.
Chair of the Board of Directors and Vice-President, Marketing, Azure Dynamics, Electric Mobility Canada
If we're going pie-in-the-sky, one of the things that we recommend is Canada's green highway. Canada's green highway addresses exactly what you were saying and exactly what Mark was talking about, and that is building what we call alternative energy stations where you would pull in, whether it's from coast to coast along our main arteries or within cities. It would have a full offering of electrons, biodiesels, liquid natural gas, and fossil fuels, because they all are part of the solution. It's going to take us a long time, especially where vehicles are going. Vehicles are becoming very, very efficient.
NDP
Alain Giguère NDP Marc-Aurèle-Fortin, QC
Good morning, Mr. Chairman.
I want to thank all the speakers. My first question is for Michael Conway.
Canada's current tax legislation is very complex. There are what are called tax avoidance and abusive tax planning schemes. These two relatively legal practices are common among tax experts, as a result of which a person who has earned $250,000 in Canada over a period of 30 years may have paid the same amount of tax as another who has earned only $50,000. This situation indicates a weakness in the act, a certain excessive complexity. And I would say that encourages tax unfairness.
At the present time, does the act really need to be exhaustively reformed or does it merely require some superficial corrections?
Chief Executive and National President, Financial Executives International Canada
Thank you, Mr. Giguère.
It's certain that it's been a long time since our tax act has undertaken a comprehensive review. It's been decades.
Subsequent governments have put in various incentives for a particular point in time, but there hasn't been a comprehensive review of whether all portions of the tax act are providing the incentives they were originally planned for, whether they're still needed--basically, from a business form, whether the business case still makes sense. There are sections in the tax act that conflict with each other.
There's a need for a comprehensive review of the tax act, one that has not occurred—as you know, as a fiscaliste—for a very long time.
This would also address what Mr. Adler talked about. I talked about the need for maintaining fiscal prudence, and I talked about the need for a better bang for our buck. There are savings. There is a capability for simplifying the tax act that would reduce the administrative burden.
The type of administrative spinning of wheels that occurs between taxpayers and the government on CRA discussions because the underlying tax act is unclear and it takes armies of tax auditors and tax specialists to figure it out is not really useful for Canadian productivity.
I think that undertaking such a review would have a capability of eliminating a lot of waste and turn around some of that savings into more productive use of the moneys.
NDP
Alain Giguère NDP Marc-Aurèle-Fortin, QC
My question is for the Canada Energy Pipeline Association.
Currently in Quebec, we have a serious problem regarding Portland-Montreal Pipe Line. They want to reverse the traffic in order to export Canadian oil to the Atlantic market.
Questions are being raised about old pipelines. Is the Canadian pipeline industry dealing with infrastructure problems? Is there a risk of a break, given the age of the infrastructure and its lack of maintenance? Is there an imminent threat? Is there a chance or a major risk of a natural disaster?
President and Chief Executive Officer, Canadian Energy Pipeline Association
Thank you for that question.
The Canadian pipeline systems are among the safest in the world, and safer, by far, than other means of moving liquid or gaseous fuel. We also routinely inspect the inside of those pipelines, which is a standard above regulation, to look for any defect and replace them proactively before there is a problem.
I cannot guarantee that there will never ever be a break, just like when we fly in an airplane, I cannot guarantee there will never be a crash. But I can tell you we are deploying state-of-the-art technologies above and beyond regulations. We pursue the advancement of those, as well as encouragement for continued improvement on standards, each and every day, and the results are very positive.
