Evidence of meeting #36 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was employers.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Christopher Worswick  Professor, Department of Economics, Carleton University, As an Individual
Martin Lavoie  Director, Manufacturing Competitiveness and Innovation Policy, Canadian Manufacturers and Exporters
Matthew McGuire  Chair, Anti-Money Laundering Committee, Chartered Professional Accountants of Canada
Fred Webber  President and Chief Executive Officer, Fruit and Vegetable Dispute Resolution Corporation
Guy Parent  Veterans Ombudsman, Chief Warrant Officer (Retired), Office of the Veterans Ombudsman
Sandra Nelson  As an Individual
John McAvity  Executive Director, Canadian Museums Association
Gregory Thomas  Federal Director, Canadian Taxpayers Federation
Blair Campbell  General Counsel, Corporate Secretary, PEI Mutual Insurance Company
Sean Reid  Vice-President, Federal and Ontario, Progressive Contractors Association of Canada
Shaunna Jennison-Yung  As an Individual

4:15 p.m.

A voice

[Inaudible--Editor]...the Leafs.

4:15 p.m.

Conservative

Gerald Keddy Conservative South Shore—St. Margaret's, NS

There's a Leaf comment; I'm still hurting on it, okay?

Mr. McGuire, in your role as chair of the anti-money-laundering committee at the Chartered Professional Accountants of Canada, I'm sure you've had a chance to look at what we've done in this budget. The number of changes to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act that are embedded in here are certainly important for the Canadian government to be able to collect taxes that have been delinquent and deliberately not paid and to really look at international crime and terrorist activity.

We've put in a number of amendments here. First of all, we've strengthened the customer due diligence standards, including for politically exposed foreign and domestic persons. We've closed the gaps of the regime, such as online casinos, to persons and entities that deal in virtual currencies and foreign money services businesses. We've improved compliance monitoring and enforcement. We've strengthened information sharing. For instance, we allow FINTRAC to disclose to federal partners on threats to national security. We've repealed the regulation-making authority pertaining to the ministerial directive power, under part 1.1 of the act, in order to bring part 1.1 into force, and other technical amendments there.

Understanding the nature of what we're dealing with, the underground activity that we're dealing with, and the difficulty of dealing with that, in your assessment I would hope you'd think these amendments go some way in the right direction to actually dealing with this type of criminal activity. But is there anything else we could add to that list?

4:20 p.m.

Chair, Anti-Money Laundering Committee, Chartered Professional Accountants of Canada

Matthew McGuire

Thank you very much for your question.

I do agree that the amendments go a long way in the right direction. One of the important things from my perspective is how far the amendments go to align with the international standards. I would say they get us almost all of the way there.

Where I think we should focus going forward is on effectiveness. In the next evaluation, the FATF will evaluate Canada's measures to control money laundering. By most estimates, about $55 billion is laundered through Canada every year. They will be evaluating not just whether or not our program conforms to their standards but whether or not we're achieving the things we look to achieve.

There are two things that I think are important in that regard. The first is the ability to track our effectiveness. The second is a greater emphasis on civil forfeiture regimes. I'm not sure I'd comment on budget implementation act measures themselves, but I do think more resources in Canada should be put into the prosecution side of things and the civil forfeiture side of things. At the moment, we have the equivalent of a firehose going into a garden hose. FINTRAC is producing incredible intelligence in thousands of cases. We need to be able to act on them in an appropriate way.

4:20 p.m.

Conservative

Gerald Keddy Conservative South Shore—St. Margaret's, NS

Thank you.

Mr. Webber, you raise a number of points. Most of them really involve an ongoing discussion about harmonization with Canadian regulations and American regulations. You represent the fresh fruits and vegetables, the perishable group. Do you also represent other perishables, such as the fresh fish industry or Christmas trees?

4:20 p.m.

President and Chief Executive Officer, Fruit and Vegetable Dispute Resolution Corporation

Fred Webber

No, sir. It's strictly related to fresh fruits and vegetables.

4:20 p.m.

Conservative

Gerald Keddy Conservative South Shore—St. Margaret's, NS

Has there ever been any consideration of expanding that? In my part of the world, and Mr. Cuzner could concur, when it comes to fresh fish, when you're crossing the border out of Atlantic Canada into the U.S., typically one load in every 70 or 80 is stopped for a compliance check. That's a serious problem with a load of fresh fish. Most of the time we don't lose the entire load, but sometimes we lose a portion.

4:20 p.m.

President and Chief Executive Officer, Fruit and Vegetable Dispute Resolution Corporation

Fred Webber

When the DRC model was put forth originally under NAFTA, a portion of our charter...I hate to say “required”, but it did require that we be open to look at other commodity groups. We were approached by a couple of firms in Mexico regarding sugar and coffee. Those were never followed up on.

It is certainly something we could expand into. I think the fruit and vegetable part of it is strictly because both the U.S. and Canada have had these rules in place since the thirties.

4:20 p.m.

Conservative

Gerald Keddy Conservative South Shore—St. Margaret's, NS

Could you give me some idea of how long your dispute resolution can take? If you have a tractor-trailer stopped at the border and you have a high-value product on there, hours are important.

4:20 p.m.

President and Chief Executive Officer, Fruit and Vegetable Dispute Resolution Corporation

Fred Webber

In the vast majority of our cases it's a quick phone call. We handle hundreds, if not thousands, every year just by talking to people about what is the right thing to do.

Probably the strength of what we do, though, is in the default rules that kick in for members. There are times when there is that delay at the border, it's been out of refrigeration for a period of time, and it may no longer be suitable for a supermarket to bring that in and put it in a dry tray. A lot of what we do is to work with the parties to get that product to a secondary marketing chain so that we can mitigate the loss.

The actual disputes we have on paper that go to an arbitrator are really very few. Even for those, on the smaller cases that are less than $50,000, it's usually 90 days from the time it comes through our door until there's a written enforceable decision. The ones that are for more money obviously take a bit more time. They're required to have a hearing and to bring in a little more well-trained arbitrator. But the vast majority of what we do is work with the parties to very quickly resolve it amicably online.

It really is a great industry. I like to say it's the last bastion of free enterprise. People want to do the right thing.

4:25 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you.

Thank you very much, Mr. Keddy.

Mr. Caron, go ahead. You have five minutes.

4:25 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Thank you very much, Mr. Chair.

I would also like to thank all the witnesses for joining us today.

My questions will be for Mr. Worswick first.

Yesterday, we heard the testimony of Dominique Gross, professor at Simon Fraser University and researcher specialized in this area. She said that one of the problems with our temporary foreign worker program is the poor quality of information on the labour market.

Do you agree with that statement?

4:25 p.m.

Prof. Christopher Worswick

Sure. I'm familiar with Dominique's work. I think the issue there, as I understand it, is that it's just very difficult to know....

As I said, if you think about the process, the employer advertises a vacancy at a particular wage. If no one applies, or no one suitable applies, then they can approach the federal government for a temporary foreign worker. I think the issue is how we decide whether that wage is appropriate or not.

My understanding of Professor Gross's idea is that if we had better information, then we'd have a better estimate of what that local wage is for that particular occupation. I'm sure we could improve in that regard, but I think it's also a difficult thing to do.

4:25 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

You also seem to agree with her on another aspect.

I know the reality is different for every sector, but in many cases, Canadian companies do not manage to find qualified Canadian workers because the salary they offer is not high enough. With access to temporary foreign workers being easier and simpler, there is more pressure to have lower wages. Actually, Canadian workers are forced to accept wages that, without this program, would not be as low.

4:25 p.m.

Prof. Christopher Worswick

There are a couple of things I'm comfortable saying. One thing I'm certainly comfortable saying is that with a large temporary foreign worker program, it's hard to see how you get wage growth. If you imagine a situation where the economy's growing, wages should tend up. If employers always have the option to bring in temporary foreign workers, I think at the very least it will slow wage growth. The bigger question is whether it depresses wages, actually causes real wages to go down. My belief is that it can, but I don't think it always does.

4:25 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

In her study, she came to the conclusion that not only did this issue contribute to maintaining the unemployment rate at the same level, particularly in the case of pilot projects in Alberta and British Columbia, but it also had the impact of depressing wages.

You are in favour of implementing application fees for temporary foreign workers. I think the fee is $275. Dominique Gross believes that the amount should be much higher, considering that some programs in Europe are very successful, particularly in Switzerland.

In your view, should the application fees be higher?

4:25 p.m.

Prof. Christopher Worswick

I think we should look at raising them, but as I said earlier I wouldn't do a fixed fee across the board. I think Mr. Lavoie mentioned something earlier about employers being willing to pay more to bring in qualified temporary foreign workers.

One way to think about this is instead of saying you have to pay the temporary foreign worker more, you could have to pay a significant fee, maybe $1,000. I don't know what the right number is. I suspect it's above $275. If you're wondering whether we really want to take that money out of the economy, you could rechannel that into training or use some of it to try to solve the underlying reason we need temporary foreign workers in the first place.

4:25 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Lavoie, are some of your members small and medium-sized businesses?

4:25 p.m.

Director, Manufacturing Competitiveness and Innovation Policy, Canadian Manufacturers and Exporters

Martin Lavoie

They represent 85% of the members.

4:25 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

I remember that when you appeared here before, you talked favourably about the hiring tax credit for small businesses. However, the credit will not be renewed.

What impact will that have on your members?

4:30 p.m.

Director, Manufacturing Competitiveness and Innovation Policy, Canadian Manufacturers and Exporters

Martin Lavoie

That tax credit was much appreciated. Of course, it also helps with the cash flow. I cannot tell what the impact will be, but it will definitely cause a bit of disappointment.

4:30 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you, Mr. Caron.

Mr. Allen, go ahead, please, for five minutes.

4:30 p.m.

Conservative

Mike Allen Conservative Tobique—Mactaquac, NB

Thank you very much, Mr. Chair.

Thank you to our witnesses for being here.

Mr. Webber, I'd like to start with you. I've had folks from the perishable and fresh fruit sector visit my office the last couple of years, and I have a large table-stock potato business in the riding. You talked in your concluding comments a little bit about the risk of nonpayment, especially on the side of bankruptcy and other things and about how the U.S. system is a little better than Canada's when it comes to that.

The first part of it, this harmonization, was one pillar that the folks talked to me about. How much of a problem is that lack of payment to our sellers here in Canada, and does this harmonization pillar get us on the right road to tackling that next?

4:30 p.m.

President and Chief Executive Officer, Fruit and Vegetable Dispute Resolution Corporation

Fred Webber

Just for a bit of a clarification, as you say, there really are two pillars here. The first pillar is dealing with slow-pay or no-pay contract issues between solvent businesses.

4:30 p.m.

Conservative

Mike Allen Conservative Tobique—Mactaquac, NB

Right.

4:30 p.m.

President and Chief Executive Officer, Fruit and Vegetable Dispute Resolution Corporation

Fred Webber

What we're talking about here will get us a long way towards resolving that problem with our neighbours around the world, quite frankly, but particularly with the United States.

In terms of the second part of this, when there is an insolvency, it is a trade irritant. I will say that. It is beyond the scope of the amendments we're talking about here today.

The trade irritant is the fact that since 1984 Canadian sellers have been able to go into the United States and they're treated exactly the same way as U.S. firms are. So when there's a bankruptcy—and I want to stress that there's a very limited trust, because there has been a lot of miscommunication about that—what it really does is trace the accounts receivable through. So if the buyer goes bankrupt and he takes your potatoes and sells your potatoes, they try to find that receivable from the potatoes and bring it back to you.

What we've accomplished here in pillar one will help, but without the trust or some similar tool that will help equate that, I think it will remain a trade irritant simply because Canadians are getting something for free.