Finance Committee on Oct. 22nd, 2012

[The Chair, Conservative, James Rajotte]

Unfortunately, we are over the member's time, so just briefly wrap up.

[Chris Aylward]

I agree. Canadians are telling us the same thing, especially in small-town Canada, which is being greatly affected by these cuts.

[The Chair, Conservative, James Rajotte]

Thank you.

Mrs. McLeod, go ahead, please.

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

Thank you, Chair.

Thank you also to all the witnesses. There were very diverse presentations today, and so you can imagine the challenges that we as a finance committee have in coming up with the right decisions to move forward in a positive way.

My first question is to Mr. Collyer, because your recommendation was fairly succinct.

First of all, there would probably be a cost to the change of classification. Have you analyzed not only the cost but also....

If this change were made, you would expect that it would also increase competitiveness. Have you done any scoping out of costs and increased competitiveness and volume?

[David Collyer]

Yes. I would make a couple of comments in response to that question.

The first is that over the longer term, investment in these LNG facilities will deliver significant economic benefit. We have included in our submission, based on 5 bcf per day—which is a reasonable estimate, I think, of what might come forward in B.C.—$500 billion in GDP, three million person years of employment, and $150 billion in taxes and royalties if we look back upstream as well, so there are some very significant economic impacts.

There is no question that there is a competitiveness dimension of this. I mentioned how the tax treatment in Canada differs from that in the countries with which we're competing, Australia in particular. On any particular project, there would definitely be an accelerated near-term tax writeoff. If you compare the 30% to the 8% declining balance, I think in the fullness of time, that's de minimis. That's relative to the relative economic benefit that would come forward.

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

Okay, thank you.

I have another probably complex question with hopefully a fairly quick answer, because I want to ask Dr. Raza a question afterward.

You talked about a recovery driven by the private sector, and our government agrees with you in the private sector’s having to move things forward. We have created within our budget some modest reductions of 5% to 10%. You listened to other people in how the government chooses to spend its money and how we actually create the revenue to fund all the programs we dearly want to have, whether they be in health care or education. Can you give your quick insight into that area?

It's complex. It’s a quick question, and then hopefully I'll have time for Dr. Raza.

[David Collyer]

I'll give you a very quick answer.

The oil and gas sector creates huge revenue streams to government and Canada, both provincially and federally. That allows governments to fund numerous programs, be they health care, education, or others. By creating a competitive tax environment that attracts investment to Canada, a significant generation of revenue will allow funding of other programs.

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

Great. Thank you.

Is there still some time?

[The Chair, Conservative, James Rajotte]

You have nearly two minutes.

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

That’s perfect.

Dr. Raza, we're quite proud that as we're moving through these challenging times, we made commitments to increase transfers to provinces at 6% to 2016-17, and then 3% after that. It's one area that we really have protected as a federal government in terms of moving forward with the health care transfers.

I absolutely agree that innovation provides a huge opportunity. My first question is this: were the different projects you talked about funded through Health Infoway Canada, or were they funded provincially?

Second, you talked about the federal government role. The Canadian Nurses Association came forward and suggested that we select five health and system indicators and that we set up this collaborative pan-Canadian work with the professionals and with the provinces in creating those five indicators—

[The Chair, Conservative, James Rajotte]

You have 30 seconds left for him to respond.

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

Maybe go with the last one first.

Would you support that idea? Would it be something we could do?

[The Chair, Conservative, James Rajotte]

Give a brief response, please, sir.

[Dr. Danyaal Raza]

I think that's a great idea.

One of the very exciting things that's happening in health care is interprofessional care. Nurse practitioners are taking a more active role in providing patient care, and pharmacists are administering vaccines in Ontario. There are all these ways that we can understand each other's scope of practice and, in fact, improve care while maintaining or reducing costs. Something like that sounds like a strategy along the same lines, and that's something that I think is certainly worth the effort.

[The Chair, Conservative, James Rajotte]

Thank you, Mrs. McLeod.

Mr. Brison is next, please.

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

Thank you, Mr. Chair.

I'd like to start with the Canadian Association of Petroleum Producers.

This is my first question. With shale gas opportunities across Canada, does a progressive policy around shale gas represent an opportunity to geographically diversify petroleum wealth in Canada, which typically today is associated with a fairly small geography?

Ms. Nash spoke about issues of equality, but one of the things is equality of economic opportunity. Does the shale gas opportunity potentially give us that capacity?

[David Collyer]

I think the short answer is yes.

I would make a couple of observations. The first is that a healthy gas market that works for both producers and consumers is what we need. That will attract investment, and it will attract investment across the country in areas where there is the shale gas opportunity.

Our view is that at the moment, given the abundance of shale gas in terms of supply and the oversupply relative to the markets, enhanced market development—be that through conversion of coal-fired generation in the U.S., be that through other market initiatives in Canada, or be it through LNG exports—is going to make for a healthier natural gas market in Canada that will benefit both consumers and producers and allow more diversity and supply development.

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

Some see shale gas in the U.S. as contributing to the eventual U.S. recovery in two ways. One of these is cheaper energy, which is good for the economy broadly, but there's also the creation of jobs associated with it. I think that's something we have to watch and be aware of in Canada.

On the health care side, Doctor, I appreciate your intervention and your saying that you'd hope that the government moves quickly on the 2014 health care accord. I'd say it's very late in the game. Leading up to the 2004 health care accord took a lot of negotiation with the provincial governments, a lot of consultation, a lot of work. I was speaking with a provincial finance minister earlier today, who expressed to me that there's very little dialogue going on currently. He actually expressed that in the government's unilateral decision to reduce the growth of transfers to the provinces for health care, the government in fact lost an opportunity to leverage on that discussion in order to demand greater accountability.

Do you see that as the federal government actually pulling back from its traditional role not just in funding, but also in terms of accountability?

[Dr. Danyaal Raza]

I don't know if I'm able to comment on its traditional role, but I certainly agree that the federal government's role should not be limited to just writing cheques to provinces. There's an important role for setting national standards.

We are a bit late in the game, perhaps, but I certainly would encourage the federal government to reach out to provinces. It's something that provincial premiers were asking for when they met in Halifax not too long ago. Some provinces are starting to discuss bulk buying agreements of pharmaceuticals to reduce costs, and in fact the health minister has indicated interest in doing it for the areas of health care that the federal government is directly responsible for: aboriginal health and the Canadian Forces.

There are some areas for overlap, and we would encourage this committee to consider those when they develop their recommendations and take them to the Minister of Finance and when they have conversations with the Minister of Health.

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

Mr. Aylward, the recovery in Canada, or what recovery we're seeing, is pretty uneven. A lot of it is based on provinces with natural resource wealth, Saskatchewan and Alberta having more robust growth than, for instance, the Maritimes. Do you see the cuts to the public service and the public service jobs as contributing to the growing inequality in the regions?

Those represent a bit, if you will, of an equalization of opportunity: good, well-paying jobs in the regions. Is there a risk that a lot of those cuts will be felt more strongly in the region without Ottawa being cut as much? Would it actually be the regions that really need those jobs?

[The Chair, Conservative, James Rajotte]

If we want our witnesses to answer, we do need to give them some time. Mr. Aylward, you have about 20 seconds.

[Chris Aylward]

For sure, small-town Canada is being hit tremendously hard by these cuts. When you take federal jobs out of communities like Montague, Prince Edward Island, or Saint Andrews, New Brunswick, it has, as I said, a devastating effect on those local economies because there's a trickle-down effect. The coffee shop owners are going to be out of business within months when you take federal jobs out of communities like that. Store owners and service workers are going to be out of work due to these federal cuts. There's a tremendous trickle-down effect, especially in small-town Canada.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Mr. Hoback, please.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair, and thank you, witnesses, for being here this afternoon.

Chair, I'm going to straighten out the record on some misinformation here, and then I'll get to questions for the University of Saskatchewan, because that's a very important facility in the province of Saskatchewan. They do great work.

You know, I'm very disappointed that the NDP and their union bosses keep proceeding with this fear-and-smear campaign in the red meat sector. They've spread information here today that's not true. In fact, I'll straighten out the record right now. I hope anybody listening to these meetings will listen to what I have to say.

You know, 170 of the 700 new inspectors are in the meat program. None of the cuts to CFIA were front-line food safety inspectors. In Establishment 38, the one in question, there are 40 inspectors and six vets, and that's a 20% increase since 2006. If you want the facts—and I tell the NDP to do this—go to www.inspection.gc.ca. It's right there and it's transparent; you can see it. I find it really frustrating that they'd try to use fear of the food system to create a political advantage, which is surely disappointing.

I'm going to go to something more positive, and that's the University of Saskatchewan, a positive school. I think you'd understand—

[Chris Aylward]

Could I respond to that, please?