Finance Committee on Nov. 19th, 2012

[John Lounds]

We wouldn't have a sense of what it would be in terms of a calculation. Clearly, all growing material sequesters carbon. The more that happens, you will end up with a...except for all the buffer you have to build into it with regard to disease, fire, etc., that may impact upon it. That's why we have been experimenting to look in more detail at what exactly that looks like in one particular forest that we have in British Columbia. We will have to see how that goes. It's not a very simple thing to be calculating.

[The Chair, Conservative, James Rajotte]

I can imagine that. I would encourage you, as an organization, to have something—even a ballpark figure—that you could present.

[John Lounds]

The 3,200 square kilometres that we have, to give a sense of size, is actually about more than four times the currently mined oil sands area in northern Alberta. It's not an insubstantial amount of land that is being conserved. If we can figure out how to both develop our economy and put forward conservation measures at the same time, we are off to the races.

[The Chair, Conservative, James Rajotte]

Thank you.

I would like to continue this discussion. It has been a very good one. I unfortunately have to end our panel here.

I want to thank all of our witnesses for being with us here this afternoon. Thank you for your presentations and your responses to our questions.

Colleagues, we will suspend for a couple of minutes and bring the next panel forward. Thank you.

[The Chair, Conservative, James Rajotte]

I will call this meeting back to order, and I encourage colleagues to find their seats, please.

We are continuing our discussion of pre-budget consultations 2012, pursuant to Standing Order 83.1. This is the 92nd meeting of the Standing Committee on Finance. This is our second panel today.

We have five organizations presenting: first of all, the Boys and Girls Clubs of Canada; second, the Canadian Climate Forum; third, we have the Canadian Institute for Military and Veteran Health Research; fourth, the Canadian Restaurant and Foodservices Association; and fifth, we have the Retail Council of Canada.

You each have five minutes for your opening statement.

We will begin with the Boys and Girls Clubs of Canada and work our way down the line.

Please begin.

[Dr. Rachel Gouin, Manager, Research and Public Policy, Boys and Girls Clubs of Canada]

Thank you.

Good afternoon, everyone. My name is Rachel. I'm with Boys and Girls Clubs of Canada. I'm very grateful to be speaking here today.

Canada is facing an unprecedented demographic shift that will require its young people to be educated, skilled, and able to enter the workforce. The country's economic recovery and growth depends, in part, on its workforce and on young Canadians' ability to do their part. We know Canada's youth have great potential, but some of them struggle to achieve that potential because they lack the services and supportive relationships that would make the difference between the streets and a job, between dropping out or pursuing post-secondary education, and between the job they can get and the job that will inspire them to give their best.

No single measure will prepare young people to succeed in school and enter the workforce, but quality after-school programs are part of the solution. Such programs improve school outcomes, help young people build job skills, expand social networks, and gain the experience they need to enter a competitive job market.

Boys and Girls Clubs of Canada are leading providers of quality after-school programs that support the healthy physical, mental, educational, and social development of children. Our association of 100 clubs reaches some 200,000 children, youth, and families each year in 650 community locations across Canada. Low-income families represent 60% of those we serve. Clubs are located in neighbourhoods where we're most needed, including large city centres, suburbs, remote rural communities, and first nations reserves.

Boys and Girls Clubs are safe and supportive places. When you speak with Cornwall community Police Chief Daniel Parkinson, he'll tell you that crime has gone down 40% as a result of the Boys and Girls Clubs presence in the community. Young people have access to more recreation programs, support to succeed in school, and leadership and employment opportunities, and that has made all the difference. Twice now, the Cornwall club has partnered to run the Skills Link program for local youth.

At the national level, Boys and Girls Clubs of Canada is working with the private sector to invest in our young people's success. In partnership with Kal Tire, we're helping to address the skilled trades shortages. The Skilled4Success program offers on-site job shadowing, connections to community members working in the trades, career planning information, and support in pursuing a certified apprenticeship. There are 12 Boys and Girls clubs across the country that are offering the program in this first year of our partnership.

We want young people to succeed. We're engaging with government and the private sector to make this happen. Our full recommendations are in the brief we've submitted to the committee, but I'd like to highlight a few here.

We want to underline the importance of Canada's youth employment strategy. Programs such as Career Focus, Skills Link, and Canada Summer Jobs enable clubs to provide youth with valuable work experience. The Skills Link program is especially relevant to clubs because it promotes the human capital and employability of a population that faces many barriers to employment. We would see great benefit in enhancing this program.

Youth who struggle with mental health problems and illnesses need extra support. We encourage the government to help create opportunities for these youth to work in a supportive environment, thus ensuring they have a strong start in the workforce and they increase their labour market participation. A program similar to Skills Link, offered to organizations and businesses that can provide a supportive workplace, would be extremely valuable.

We also need to make sure that young people stay on a positive life path. A criminal record can be a real barrier in a young person's prime earning years. It's incumbent on us to ensure that few young people see crime as a viable option. We urge you to enhance the funding to the youth justice fund and the youth gang prevention fund, and ensure that employment opportunities are part of gang prevention efforts.

We also ask you to bolster the national crime prevention strategy to help communities reach young people before they enter the justice system.

[The Chair, Conservative, James Rajotte]

One minute.

[Dr. Rachel Gouin]

Increased funding on its own won't be enough. It takes years to build the kinds of relationships that will save a young person's life and make the difference between them choosing the streets or the Skills Link program at their local club. Programs that are achieving results in communities that need them should be able to access longer-term funding. We hope to see a change in policy that will allow long-term and stable investments in demonstrated results. We understand that Motion 407, presented by the MP for Surrey North, is an effort in this direction.

There's much we can do to ensure that Canada's young people succeed, enter the workforce, and contribute to the economy. Communities, non-profit organizations, the private sector, and government all have a role to play in securing a prosperous and enriching future for our young people, and for all Canadians. Together we can make a little more investment, with a long-term view, go a long way towards that goal.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now hear from the Canadian Climate Forum, please.

[Dr. Gordon McBean, Chairman, Board of Directors, Canadian Climate Forum]

Thank you very much, Mr. Chair.

I am pleased to have the opportunity to make a presentation, and I am really speaking to the brief we've submitted.

The Canadian Climate Forum is a non-governmental organization dedicated to accelerating the uptake and use of knowledge about Canada's weather and climate systems as they are now and as they will be in the future. This is for the benefit of our economic and social societies and structures, and also, as I said, for the benefit of our children and grandchildren, because the climate, our weather, will affect them now and through the course of their lives. We've seen in very recent events the impact, for example, of Hurricane Sandy just three weeks ago on people, children, and the elderly in the United States. These kinds of events have huge economic and social implications—$50 billion is the estimate so far for Hurricane Sandy.

We've had those kinds of events in Canada. The Canadian insurance corporations collectively note that in 2011 they spent $1.7 billion in payouts to compensate people for climate-related disasters involving wind, rain, and water. In the early part of this past decade, the cost of the droughts on the Canadian prairies to the grain growers and other parts of our agriculture community was in excess of $5 billion. The Montreal ice storm cost us over $5 billion when it happened.

We need to know about these events, how they are happening, how they are changing in the future, and in that way be able to provide more information for Canadians and more information for the economic parts of Canada's economy. The estimate is that the Canadian weather-dependent industries exceed, on an annual basis, over $100 billion a year in activities. When you think of Canada as a natural resource-based economy, we are really based on our weather and climate.

I've spent all of my professional life studying weather and climate, and I know how the trees, the nature conservancies, and those kinds of things depend on where the climate is and how it is, and how the weather affects them.

Smog is another issue. The Canadian Medical Association has estimated literally billions of dollars—the last numbers I saw—huge amounts...a $250 billion cost by 2030, in terms of the smog effects on the health of Canadians, including our veterans, who have gone through a long part of their life. It will affect mostly the elderly and the young.

So we need to know about these kinds of things. Research has told us generally what to expect. It can provide us with better information in the future. We just need to continue to support that kind of information.

There was a question earlier from one of the distinguished members of this committee about carbon emissions from forests. The Canadian Carbon Program, previously supported by research funds, actually provided those numbers, and if I'd known that was going to be a question, I would have given you the answer, but I can't off the top of my head. But we know through research pretty well how much does come in and out of our natural forest ecosystems in Canada.

As I said, we need to have a continued involvement in this issue. As a recommendation from the Canadian Climate Forum, I will call for a policy focus on the potential impacts of weather, our day-to-day stuff and how it is changing, which is what we call climate, as developed within key sectors: the economic development of the Arctic, for example; the energy sector—the need to adapt to weather and climate to reduce these impacts. There are benefits of a changing climate. The agricultural community, for example, needs to know what crop is going to grow next year. By knowing that, we can advise them.

I've worked with the Ontario Federation of Agriculture through many meetings over the last decade, working with them on how we can better pick the crops that will grow most effectively 10 years from now as opposed to 10 years ago. So we need that solid and sustained investment in new knowledge, key facilities, and knowledge workers, training the population through the Council of Ontario Universities, which was here before, but also the universities from coast to coast to coast in Canada, including the high Arctic.

We need to be able to use this information in ways that are effective, and in that way information networks will be very important.

In recognition of the Canadian scientific brainpower as an asset and a commodity, and its importance, we should be working to foster partnerships, skills development, competitiveness, and international partnerships. The Canadian Climate Forum would be happy to assist and play a role in these kinds of activities.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. McBean.

We'll hear from Ms. Aiken now, please.

[Dr. Alice Aiken, Director, Canadian Institute for Military and Veteran Health Research]

Thank you, Mr. Chair and members of the Standing Committee on Finance.

I'm Dr. Alice Aiken, the scientific director of the Canadian Institute for Military and Veteran Health Research, a professor at Queen's University, and a proud veteran of the Royal Canadian Navy.

I am joined today by my colleague Dr. Stéphanie Bélanger, the associate director, a professor at the Royal Military College, and an officer in the reserve force.

The Canadian Institute for Military and Veteran Health Research, or CIMVHR, is a network of Canadian researchers from across the country who are committed strongly to working together to improve the health and employment outcomes of military personnel, veterans, and their families. We are proud to say that our network includes over 300 researchers and clinicians from over 25 universities across the country, and we are growing.

We are here today to recommend that the Government of Canada invest in the work undertaken by our network. Mental and physical health challenges prevent many Canadians from participating fully in society and contributing to the economy. Veterans and their families are particularly vulnerable. The goal of CIMVHR is to optimize the potential of every one of the more than 700,000 veterans living in Canada.

The evidence shows that this issue needs our focused attention. If we consider the number of people serving, those who have served, and their families, we are talking about two million to three million Canadians who can be positively impacted by the work we are doing. That's not to mention all the others in similar professions, such as police, firefighters, paramedics, and their families.

One major concern is that only 11% of Canadian veterans are clients of Veterans Affairs Canada, which means that almost 90% are part of a public health system that does not understand or address their particular needs.

The researchers working through the CIMVHR network know that good health is critical to gaining productive employment. Working at the coal face between clinicians and researchers, CIMVHR provides a critical platform for ensuring that cutting-edge research is immediately translated into new policies, programs, and practices that improve the outcomes for veterans and their families.

We also provide a much-needed platform for the coordination of researchers and health practitioners working in the area. For example, we've linked the sport concussion community together with defence scientists and practitioners working on blast injury so that they can find the best possible diagnosis and treatment techniques for traumatic brain injury.

In fact, the Ontario concussion network will be presenting a special workshop—on best practices for recognizing, diagnosing, and treating mild traumatic brain injury—to military physicians at our upcoming conference, the military and veteran health research forum, this November 26 to 28.

As a researcher, I am working with a team of collaborators to get information about the unique needs of veterans into the hands of civilian family physicians so that they can better understand this special population. We have the full support of the Canadian Medical Association and will be testing the methodology with 50,000 Canadian physicians in the new year. Veterans' health information will roll out by the end of 2013. We believe this has the capacity to immediately impact the health of hundreds of thousands of veterans.

Dr. Bélanger is the Canadian expert on testimony of war. She is now working with a pan-Canadian team of mental health researchers to determine the parts of these stories that can give insight into the mental health needs of a soldier and how the health care community can best address these needs.

These are only brief illustrations of the very important work the CIMVHR network has embarked upon. Government support for the network is an excellent investment, because it will directly impact the health and workforce productivity of Canadian veterans and their families. It will reduce the costs of health care insurance and benefits provided by VAC, and it will leverage, strengthen, and grow the impact of the work currently being undertaken by our national networkers of researchers and clinicians.

We are asking for a very modest investment of $15 million over five years. We will leverage this funding through public-private partnerships, with industry, through Canadian philanthropic support, and by partnering with research funding organizations and our military allies.

Of this money, 60% will go directly into funding new front-line research that will have an impact in a one- to five-year timeframe—for example, new ways to diagnose and treat post-traumatic stress disorder—and 40% will go to support arm's-length research that validates the many programs, practices, and policies that have been implemented for these beneficiaries.

At CIMVHR, we are committed to making a difference in the health and future of our veterans and their families. Diminishing the impact of combat-related stress, hastening recovery after injury, and getting veterans into good jobs is our mission.

With this investment the government had the unprecedented chance to affect the lives of millions of Canadians.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll hear from Ms. Reynolds now, please.

[Joyce Reynolds, Executive Vice-President, Government Affairs, Canadian Restaurant and Foodservices Association]

Thank you, Mr. Chairman, and good afternoon. It's a pleasure to speak to you this afternoon on behalf of the $65 billion restaurant industry.

The restaurant industry is the fourth largest private sector employer in Canada, with 1.1 million employees. This is more than agriculture, forestry, automotive, manufacturing, mining, and oil and gas extraction combined. Each one of these industries has been the focus of far more government resources and attention than the restaurant industry.

Every $1 million in restaurant sales creates nearly 27 jobs, making our industry one of the top five job creators in the country. Every dollar spent at a restaurant generates an additional $1.85 in spending in the rest of the economy, well above the average for all industries in Canada.

We indirectly employ over 250,000 Canadians. So far in 2012, the restaurant industry is one of the top two job creators in Canada, and its net employment has risen by 28,000 jobs already this year.

One in five Canadian youth between the ages of 15 and 24 work in restaurants. This represents more than 483,000 young people and accounts for more than 40% of the jobs in our industry. The restaurant industry is also the source of first job experience for 22% of Canadians, and nearly one-third of Canadians have worked in the industry at some point in their lives.

Canadians operate restaurants in every corner of the country, from large centres to remote communities, and they continually demonstrate their innovation and drive. For government to focus primarily on industries in crisis or in need of subsidies and bailouts ignores a key group of entrepreneurs and a tremendous opportunity for the Canadian economy.

Restaurants need a home in Ottawa. Currently no government department is responsible for the restaurant industry and no minister champions the industry.

Our primary ask today is the assignment of an assistant deputy minister to be responsible for our industry within a key department such as Industry, and to ensure there is a restaurant lens through which policy decisions are reviewed.

With the short time available to me, I want to key in on three issues, two that were in our submission that was submitted earlier this year.

The first is the unfair tax treatment of restaurant meals. When the GST was first contemplated, the concept was to tax everything sold at the retail level without exemptions. A strong argument was made, however, that since food was essential, it should not be subject to GST. This seemingly reasonable compromise in 1991 has had unintended consequences over 20 years later.

Diane and I cooperate and agree on a lot of issues, but this is one where we have to agree to disagree. Her industry, the grocery sector, has capitalized on the GST exemption advantage by introducing thousands of new products, heat-and-eat versions of almost everything found on restaurant menus. Frozen meals processed offshore are tax-free while meals prepared in restaurants by Canadians are taxed. The rules are arbitrary and they're confusing.

Restaurants introduce Canadians to new cuisine, whether it's African, Thai, or Indian, and once Canadians decide they like these items, groceries come along and package them and sell them tax-free to Canadians. This loophole is unfair and it's hurting restaurants. We are asking for the GST exemption for ready-to-heat meals to be removed.

Second, I want to talk about modernizing our supply management system. The price of milk set by the Canadian Dairy Commission has climbed to unprecedented levels, resulting in cross-border runs on U.S. stores and milk and cheese smuggling operations. Currently, frozen pizza manufacturers are allowed to pay for Canadian mozzarella at U.S. market prices. Fresh pizza makers who must pay up to 30% more for their mozzarella are asking for a level playing field.

CRFA is asking the federal government to modernize the supply management system. It's not only hurting businesses and consumers, but it's also curtailing growth in the market for dairy and poultry products. We think we can help grow the dairy and poultry market in Canada.

Finally, I'd like to focus on credit card fees. It wasn't originally in my submission, but the Visa announcement recently that they are going to significantly increase their prices next year and add another super premium card has our members really incensed, so I felt I needed to bring it to your attention today.

We appreciate that government introduced and is now updating the code of conduct for credit and debit card companies in Canada. While the code of conduct has prevented MasterCard and Visa from introducing reward-based debit cards with much higher fees, it has not curtailed the rising cost of credit card fees and the market share of high-cost premium credit cards that offers rewards to cardholders.

The premium cards carry significantly higher fees that are charged to merchants, even though they see no increase in benefit. In some instances, the credit card can attract a different processing fee once it has been deemed high spend. Merchants are required to accept all credit cards and cannot charge cardholders a fee to offset any of these changes. As a result, premium credit cardholders reap the benefits, and the additional costs are reflected in higher menu prices for all restaurant customers and tighter margins for restaurant operators.

The Competition Bureau has challenged Visa and MasterCard's unfair merchant rules.

Basically, what I'm asking for here, Mr. Chair, is that government take action to eliminate the “honour all cards” rule and permit surcharging, and that it be included in the code of conduct.

[The Chair, Conservative, James Rajotte]

Thank you very much, Ms. Reynolds.

Ms. Brisebois, go ahead.

[Diane Brisebois, President and Chief Executive Officer, Retail Council of Canada]

Thank you, Mr. Chairman.

I'm going to also add a few ad lib notes.

I want to begin by thanking you for inviting us to appear before the committee.

The Retail Council of Canada represents small, medium and large Canadian retailers. Our members manage over 84% of all retail sales in Canada, with the exception of the automotive industry. Our sector generates sales totalling $300 billion. We employ two million Canadians.

Today, we will focus on import tariffs on finished products. To give you an example, we have included in our presentation a list of tariffs that affect the price of hockey equipment.

Mr. Chairman, I'd just like to add at this point, as I move to my presentation in English, that I do agree with Joyce on credit card fees, but that's where I would stop. We can debate the matter a bit later. Even though I do have a lot of time and respect for Joyce, I won't agree on that one. It will at least make the last session today a bit spicier than expected.

The Retail Council of Canada has submitted a proposal to the Department of Finance officials for the elimination of select tariffs where there is much competition for customers' business, where there's limited or no domestic manufacturing here, and where it mirrors the priorities of government, such as the support of health and well-being, sports, and active living that is accessible to people of all incomes.

Mr. Chairman, my remarks will be very short. I would like to ask the committee to support our initiative and our industry request to ensure that we eliminate key import tariffs on finished goods in the upcoming budget.

I would like to draw your attention to the fourth slide that we've provided in your deck, which shows a hockey player in a Canadian uniform and a hockey player in an American or U.S. uniform. Most important, ce qui est important, we show that with existing tariffs in Canada, for identical equipment it costs a family here $200 more to outfit a player in this country versus the United States.

Duty alignment will help Canadian families save over $120 million.

Aligning duties will save Canadian families $120 million.

I will not go through all of the slides. I think we've spoken on this matter quite often, and it will be my pleasure to answer questions at a later time.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll begin members' questions with Ms. Nash, please.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Well, I have to start with you, Ms. Brisebois. As the mother of three sons who are hockey players, it hits close to home. I'm struck by the products you list for which we have higher tariffs than in the U.S. These are products that we don't manufacture here in Canada, so really I guess your point is that these are just a tax against Canadian retailers that isn't based on protecting an industry here in Canada. Is that the message you're giving us?

[Diane Brisebois]

Let me go back for a moment and say that the first round of tariffs and tariff elimination on finished goods was around 1993. Very little has been done since then. The focus, understandably so, was on manufacturing and eliminating as many tariffs as possible for that sector.

But things have changed. We know a lot of the products that are sold in retail stores in Canada, and indeed in the United States, are made in Asia. What is important here is to ensure that there is a level playing field for families who are equipping kids, for example, to play hockey. It's to ensure that in fact those tariffs on finished goods are reduced or eliminated.

[Peggy Nash, NDP, Parkdale—High Park, ON]

I can see a logic where we have an industry here and we're trying to advance and promote that industry, but what I hear you saying is that it's really just the retailers being dinged with this.

Let me ask you another question. There was an increase in the last budget in the personal exemption for trans-border shopping. Is that affecting retailers in border communities? Are you seeing an impact on your membership because people can claim a higher exemption when they go across the border to shop?

[Diane Brisebois]

The greatest impact we've seen—well, the simple answer to the question is yes. Families are very cost-conscious.

However, the impact has been greater—and Joyce would know this as well—on the food sector. The number one item purchased when people shop cross-border, especially one-day shopping, is groceries. Most of those goods—and I know this is not a popular topic—are supply-managed goods: dairy products, poultry, then gas, liquor, and cigarettes. Those products are purchased on same-day trips. The people who are travelling and purchasing those goods are also purchasing other goods as well as staying in restaurants and hotels.

So there's no question that cross-border shopping has a huge impact on the entire community.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Yes, I think the exemption wasn't just for one day. I think the 48-hour exemption went up.

Ms. Reynolds, I hear your comments about the hot mozzarella competition. For both the retail and the restaurant sectors, these are businesses—some are large, but many of them are small entrepreneurs.

I think of my own neighbourhood, full of small restaurants and retailers. They hire locally. Often their products are local products. We've got some celebrity chefs in our neighbourhood whom we prize. You don't want to put barriers on that kind of local commerce because they are hiring a lot of people locally.

I hear a concern from retailers and restaurateurs about credit card fees, that they're incredibly high, and that is certainly an issue that many retailers and restaurateurs have raised, so I appreciate your point on that.

Lastly, I want to ask the Boys and Girls Clubs how we stack up internationally when it comes to youth crime prevention. I don't feel we're putting enough money into that.

[The Chair, Conservative, James Rajotte]

A brief response, please.

[Dr. Rachel Gouin]

I could verify that and report back to the committee. Off the top of my head, I don't know the international stats well enough to be able to see how we compare. But I would be happy to get back to you on that.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Nash.

Ms. McLeod, go ahead, please.