Evidence of meeting #62 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was work.
A video is available from Parliament.
NDP
Director, International Trade Policy Division, Department of Finance
I think I can share how we've looked at this. I don't think their internal department calculations—
NDP
Peggy Nash NDP Parkdale—High Park, ON
So you don't expect more bankruptcies or more economic hardship for retailers along the Canada-U.S. border?
Director, International Trade Policy Division, Department of Finance
There haven't been significant changes in the patterns when these have been adjusted in the past. What happened was that people were lining up to pay duties and taxes. In our view this will simply wave through more people who are already making certain purchases. It's not going to incent people to travel to shop duty- and tax-free.
NDP
Peggy Nash NDP Parkdale—High Park, ON
So you don't think there will be an economic impact on the retailers.
Director, International Trade Policy Division, Department of Finance
There hasn't been in the past when similar changes were made. The trips have been steady. If people are making those purchases now, we assume they'll continue to make them and there will be a larger amount of duties and taxes.
Conservative
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Thank you, Mr. Chair.
Certainly if you're spending a night or two it's very different from going across the border for a quick trip back and forth. It's been interesting. It might speak to my age, but I remember that about 15 to 20 years ago people were really concerned about Canada losing to cross-border shopping. Then of course the dollar changed, and all of a sudden we had Americans coming up and spending significant amounts in Canada. It seems to have fluctuated with time.
Is there anything that shows if we're harmonizing with the States? There are probably some numbers in terms of net back and forth. I guess that's my first question.
On my second question, I was slightly over my limit and went through my NEXUS to make sure I'd claimed it. For the sake of retrieving some fairly insignificant dollars of duty, it was certainly very manpower-intensive. There's probably a point when the actual cost and intensity of the manpower to collect $20 is not worth the trade-off.
Can you maybe speak to both those issues?
Director, International Trade Policy Division, Department of Finance
Sure. I think it's a good point. The $50 exemption hadn't been raised since 1995, so it was certainly out of date from that perspective. The way the law was written previously, there was a $50 exemption after a 24-hour absence. If you spent over $50 you had to pay duty and taxes on the full amount. The $50 wasn't exempted, so it was very inefficient.
By increasing this amount, as you said, we will not be collecting small amounts of money at the border, which will allow the border traffic to flow more fluidly.
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Are there any numbers on how much flows back and forth with Americans coming to Canada and vice versa? The harmonization makes perfect sense, but I am curious where the balance is.
Patrick Halley Chief, Tariffs and Market Acess, International Trade and Finance, Department of Finance
I think data is available on Canada from Statistics Canada. We can provide that to the committee if you wish.
Conservative
Conservative
Shelly Glover Conservative Saint Boniface, MB
Thank you.
I just want to clarify something. A number has been bandied about: a $16 billion loss of economic opportunity because of congestion and inefficiencies at the border every year. Is that an accurate number?
Director, International Trade Policy Division, Department of Finance
I don't know. It's not something we looked at in the context of the amendments to the travellers' exemptions. We certainly think this will have a great impact on relieving border congestion, particularly at peak times and in summer months.
Conservative
Shelly Glover Conservative Saint Boniface, MB
So for corporations that are exporting and importing from the two countries, the congestion limits their ability to get to their locations in a timely fashion. That can at times affect economic gains on either side. As I said, I heard that $16 billion is lost every year because of inefficiencies, etc.
Is there any way that you might be able to check on that number?
Director, International Trade Policy Division, Department of Finance
Absolutely. I think there was a number that was associated with the border vision action plan. It may well have been that number. I know it's a significant benefit we're speaking about.
Conservative
The Chair Conservative James Rajotte
I apologize for interrupting, but the bells are ringing. I believe they're 15-minute bells.
Thank you. We'll see you back after the vote.
Conservative
The Chair Conservative James Rajotte
I'm going to call this meeting to order. This is the resumption of meeting number 62 of the Standing Committee on Finance.
Our orders today, pursuant to the order of reference of Monday, May 14, are to continue our study of Bill C-38. I want to thank all of our witnesses for their patience. I apologize for the vote. That was unexpected this evening. We do have eight people to present to us during this session.
We have, first of all, Ms. Vivian Krause. We have Mr. Mark Blumberg. We have Mr. Dan Kelly from the Canadian Federation of Independent Business; and Mr. Dennis Howlett from Canadians for Tax Fairness. We have Mr. Jamie Ellerton from EthicalOil.org; we have Mr. Blair Rutter from the Grain Growers of Canada; and from Imagine Canada, we have Mr. Marcel Lauzière. By video conference we have Mr. Tom King from the Prospectors and Developers Association of Canada.
Again, thank you so much, Mr. King, for staying with us.
We want to thank you all for being with us. You each have a maximum of five minutes for an opening statement, and we will go in the order that I read. We'll start with Ms. Krause, please.
As an Individual
My name is Vivian Krause.
By way of background, I'm a director of a federally registered charity, and I worked with UNICEF for 10 years in Guatemala and Indonesia. In that capacity, I was trained in program management and also trained to watch for the misuse of charitable funds. I have a master of science degree, and over the past year or so, I've written a series of articles published in the Financial Post about the science and the funding of environmental campaigns, particularly the campaigns against B.C. farmed salmon and against Alberta oil.
I support the budget allocation that will allow the CRA to prompt greater transparency and accountability within the charitable sector, particularly among politically active and foreign-funded non-profits, and I'm grateful for the opportunity to explain why.
As I see it, in some instances—and campaigns against aquaculture and against oil tanker traffic are prime examples—environmental activism is being funded in such a way that market and economic interests are being protected. Whether or not this was the funder's intention, this is the net effect of these campaigns.
Ten years ago, I was employed in the salmon farming industry at a time when that industry was under vigorous scrutiny and attack from environmental groups. Several years after I left the industry, I came across a grant that prompted me to look back at the campaign against salmon farming from a perspective that I missed when I worked in the industry, a marketing perspective.
What I found was a grant for environmental organizations to coordinate a media and marketing campaign to shift consumer and retailer demand away from farmed salmon. In hindsight, it became clear to me that by scaring consumers, environmental groups were de-marketing farmed salmon, in other words swaying market share away from farmed salmon. This is precisely what they were funded to do by the Gordon and Betty Moore Foundation, an American foundation that has granted $90 million to environmental groups in British Columbia.
As I tried to piece together the funding of the campaign against salmon farming, I also came across dozens of grants for something called a tar sands campaign. In total I found grants to 40 organizations for $10 million over two years, all from a single American foundation, the Tides Foundation. Earlier this year, Sun News unearthed a detailed PowerPoint presentation from the Rockefeller Brothers Fund in which they explained how the Rockefellers, the Tides Foundation, and other American charitable foundations are funding a tar sands campaign to block the Mackenzie pipeline, the Northern Gateway pipeline, and to block oil tanker traffic, but only on the coast of British Columbia—never mind the dozens of oil tankers that bring oil to the United States on a daily basis. The only tankers that the Rockefeller Brothers are concerned about are the tankers that would transit Canada's strategic gateway to Asia.
By depicting Alberta oil sands as tar sands, environmental groups are helping to create the perception of a dichotomy, albeit a false one, between dirty energy and clean energy. To my surprise, I found that this is exactly what they have been funded to do as part of a strategy to sway investment capital towards renewable energy and away from the competition, fossil fuels.
Part of the rationale for creating the renewable energy industry is to protect the environment, but there is more to it than that. American funders say themselves in their written strategy papers, which I'd be pleased to provide to the clerk, that their agenda is to further the energy security, the energy independence, and the national security of the United States.
Fundamental to the issue of charitable status is that of public benefit. I can see how the campaign to prop up Alaskan commercial fisheries and the communities that depend on them helps to provide a benefit to the American people. I can see the same thing for the campaign to block Canadian oil exports to Asia, but I do not see how it benefits Canada when Canadian charities lend themselves to an American campaign against a Canadian industry.
I have two concerns.
As an Individual
First, I don't see that these campaigns are exclusively charitable, which is what charities are supposed to be. I do see that they're protecting economic and trade interests.
Second, in the tax returns I have reviewed for some charitable foundations, I have found surprisingly high salaries, with payments of millions of dollars to consultants. I have also found relatively large payments to charities where the spouses of directors are involved, as well as questionable payments to PR firms and so-called investment firms where the directors of charities are involved.
As someone who is a director of a charity, I know that the Canadian people are generous and trust the charitable sector. It's important that this trust be kept, so I support the budget allocation to promote greater transparency and accountability.
Thank you for your invitation to testify today.