Finance Committee on Oct. 8th, 2014

[The Chair, Conservative, James Rajotte]

Mr. Keddy, 30 seconds.

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

To my knowledge there is no existing pipeline in the country that's been nationally funded, but I could be proven wrong on that.

The final question is for the Canadian Electricity Association and its last priority, that of security. We understand that you have a huge business, operated from coast to coast to coast, that has some tremendous security challenges.

Why is it a federal responsibility?

[The Chair, Conservative, James Rajotte]

Sorry, there's just a brief time left, but Mr. Bradley, if you want you can respond to that.

[Francis Bradley]

Certainly.

Electricity is critical because it underpins the Canadian economy, as evidenced by the 2003 power outage. When your core infrastructure goes down, it has impact in the scale of billions of dollars on the Canadian economy

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Keddy.

Ms. Boutin-Sweet, you have the floor for five minutes.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

Thank you, Mr. Chair.

Gentlemen, thank you for being here today. I am going to speak French.

Congratulations, Mr. Woodside, on your new position. I hope things go well for you.

As official opposition critic for housing, I have travelled a great deal throughout Canada lately to talk to people and find out about their major housing issues in the communities. I heard a lot about the rent people pay for units, and the insufficient number of rental units. I also heard about the general shortage of housing and the increase in homelessness.

For some time now the FCM has been asking the federal government to do something about the housing crisis.

What do you mean by “housing crisis”? Could you tell us more about the main causes of that crisis?

[Brad Woodside]

Thank you very much for the question.

For two decades we've seen housing prices skyrocket, while building of rental housing has stagnated and social housing is eroding. The lack of options for all Canadians has put housing affordability at the centre of our economic challenges. At the end of the day, this is a challenge that can be met through predictable long-term housing investments and a partnership between all orders of government.

I think it needs to be said, as well, that a number of the programs are expiring. We are asking that at the very least we stay where are and not go backwards because there is a serious problem now.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

I agree with you perfectly. In fact, I moved a motion on that.

The agreements are about to come to an end. I spoke to many people who live in cooperatives and who are going to be facing that problem. I will give you two examples

In my own riding there is the Odyssée housing cooperative. I spoke with Ms. Carole Parent on this topic. This woman cannot work and she has already reduced all of her expenses. Her housing subsidy is going to end in 2016. At that time her monthly rent is going to increase by $200 from one day to the next.

In Montreal there is also the Cloverdale Village housing cooperative, which is in the borough of Pierrefonds. It is the biggest cooperative in Canada. For the residents of this cooperative, the subsidies will end in one year. That will be when the agreement ends. There are 277 families, that is to say about 1,000 people, who will be affected not only by the end of the agreement, but by the end of the subsidies. They are going to lose their subsidies. On average, their rent is going to increase by $350 a month.

This is the situation throughout the country. Some provinces like Quebec are considering giving these people a helping hand. We cannot very well let them wind up in the street. This is the federal government shovelling problems into the provincial backyard. At a certain point the provinces will no longer be able to cope with the issue and this will wind up on the doorstep of the municipalities.

Will the municipalities be able to deal with problem? If so, how will they do it?

[Brad Woodside]

I don't think that municipalities are really capable of handling anything by themselves, just as it is for the federal government or provincial governments. What the Federation of Canadian Municipalities is all about is creating partnerships, softening or lightening up the challenges that we all have, because it all goes right back down to our communities. That would be the best way to answer that question.

You know, going off text a little here now, I feel so strongly on this. I think affordable housing is a human right in this country, in a country so blessed that it doesn't make sense that we have this many people who can't afford a roof over their heads. And for those who are taking so much of their budget for that housing, it's not fair either. Those are my personal observations.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

Mr. Lehman, do you have something to add on that?

[Jeff Lehman]

Thank you. I'd echo the comments of my colleague from Fredericton.

One of the ironies of a rising economy is that it squeezes people out. What we're seeing in our cities, as mayors, are people who were never struggling with housing costs before who are struggling today. It may seem paradoxical that during a rising economy we actually have a greater problem, but the affordability issue is exacerbated by the current economic condition.

I would quickly add that I believe there are regulatory changes and tax changes that can significantly benefit the program as well. It isn't just a straightforward ask for capital funding. I believe there are more innovative approaches that can expand the supply of affordable housing and, indeed, home ownership in this country.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Lehman.

Thank you, Ms. Boutin-Sweet.

We'll go to Mr. Allen, please, for your round.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you very much, Mr. Chair, and thank you to our witnesses for being here, and a special welcome to Mr. Woodside, a fellow New Brunswicker.

Just for the purposes of Mr. Saxton, if you had a career in radio broadcasting, that would mean that your career had come full circle, wouldn't it?

I'd like to start with you, Mr. Woodside. You talked about the one-third, one-third, and one-third, which has been the traditional funding mechanism we've used for infrastructure, especially in New Brunswick and other municipalities.

With the federal wastewater regulations and other types of things, what is your view on the small municipalities that perhaps don't have the fiscal capacity. I have a number in my riding that are very small. My biggest municipality has a population of less than 6,000, but they're dotted all over the place. They would probably have a significant inability to meet the one-third, one-third, and one-third if they ran into a major issue.

Has there been some discussion about how that might work under the program?

[Brad Woodside]

That's a great question and it has come up. As a matter of fact, in other programs that involved the one-third, one-third, one-third, it didn't necessarily mean that some of the smaller communities even had one-third to come to the table. That's always been a concern.

I think we have to pay extra attention to those smaller communities that don't have that ability. There's no doubt about that. The costs are extremely high and, as has been mentioned, we can't run a deficit every year but have to balance our books, which I think is a good thing.

However, it's going to be very taxing on the smaller communities, and I'm very aware of some of the ones you're talking about in New Brunswick. For some of the bigger ones on the coast, it's billions of dollars as a result of what's been going on for so long. So it's about time we cleaned the environment up, and we're all going to have to work together.

I keep saying, Mr. Allen, that it's all about partnership. If we come in here and expect you to do it all, that's not going to happen. We all have to have some skin in the game, if you will, and that's what we're prepared to do. We may have to work together for some of those smaller communities that don't even have the one-third, that can't afford the one-third.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Perhaps the federal-provincial-territorial component would have to be something we'd have to think about.

I want to go to the CEA because this is going to link back to this, because there was some discussion about disaster mitigation where CEA was talking about climate change adaptation. The infrastructure funds have been expanded a little bit in terms of their categories, so they can be spent on disaster mitigation as well. When you look at some communities that are impacted, quite often they can take those.

I'd like to know where CEA is coming from on the disaster mitigation idea from an infrastructure standpoint. What are the specific things that the CEA is concerned about? I would see that a lot of the disaster mitigation effort would be undertaken by the municipalities, so where is CEA coming from on that?

[Francis Bradley]

That's an excellent question.

In all instances, every emergency event occurs in communities, so our asks specifically with respect to climate change and adaptation at this point in time have to do with the adaptation platform that's under Natural Resources Canada. We are really concerned about our ability, through that platform, to work with all of the stakeholders and be able to work on long-term approaches to adaptation.

The issue we see is that a number of other programs that we mentioned in our brief are sunsetting. In running these activities and funding these programs, the Government of Canada has shown a great deal of leadership in the past. If we are to be able to continue to do so in the future, we believe it has to double down and agree to continue funding these programs when they sunset.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Last, to Mr. Lehman, you talked about investment and stimulating private investment in infrastructure. Can you lay out for me just how you see that happening, because Mr. Woodside basically suggested that maybe that wouldn't work in all cases.

[Jeff Lehman]

No, it's not appropriate in all cases, but there are certain types of municipal infrastructure and energy infrastructure that are ripe, particularly for pension fund, long-term money investment.

Transfer taxation is a major issue. I believe that with reform to some of the tax regulations, we can actually create vehicles to facilitate that investment. The money is sitting there and wants in. It's very interested in infrastructure investment and sometimes there are those tax or regulatory burdens in the way.

It would take me a lot more than 45 seconds, but I'd love to follow that up with you.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

If you wouldn't mind submitting something to the committee on that, that would be great.

[Jeff Lehman]

Yes.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you.

[The Chair, Conservative, James Rajotte]

You can do it through me or through the clerk. We'll ensure that all members get that.

Thank you, Mr. Allen.

Mr. Rankin, go ahead, please.

[Murray Rankin, NDP, Victoria, BC]

Thank you, Chair.

Thank you to all of the witnesses. This has been fascinating.

First of all, to Mr. Laroche from the Canadian Airports Council, I want to ask you sort of a macro question that I think your presentation invited. You talked about the air travellers security charge going to CATSA, in the amount of $1 billion over three or four years. You talked about Ontario raising fuel taxes.

I live in a community near the American border, and the bottom line is we're losing many people to the United States when they go to Bellingham. My family lives in St. Catharines and everybody uses the airport in Buffalo and Niagara for the simple reason that we've priced ourselves out of the market.

Do you have any suggestions for this government in this budget as to how we can address this drain of resources to south of the border?

[Mark Laroche]

First of all, we have to stop increasing these components we have on the price of aviation. They are having a very detrimental effect.

The second thing is that the Canada Transportation Act presents an opportunity to review all these taxes and charges that we've put on, and we have to look at other ways of financing. For example, airport rent is a cost that's transferred to the passenger. We are paying basically 10% on all the revenue we raise. Even if we collect air improvement fees—for expansion, for example—we're paying 10% of the amount we collect to the government. The government is not paying for the renovations or the expansion of our airports. If it were, then it would be normal for our rent to increase. So if we're paying for those expansions, we shouldn't have to pay for them again.

[Murray Rankin, NDP, Victoria, BC]

Thank you. That's helpful.

To Mr. Golightly of the Canadian Home Builders' Association—and this is building on Mr. Keddy's question, I hope—I was intrigued by your recommendation, actually, about the $60 billion home renovation industry and how, if there were just a small tax credit for home renovation, we might be able to capture some of the money that's now going to those you termed “cash operators”, who are evading taxes. I thought that was an excellent suggestion.

Have you put any numbers to this? Have you had a chance to examine what your specific recommendation might be, therefore?