Finance Committee on Nov. 18th, 2014

[Gerry Gaetz]

Six. We use the same definition as OSFI would use.

[The Chair, Conservative, James Rajotte]

Okay, I just want to get that on the record. I appreciate that.

Next I'll go to the port authorities. Ms. Zatylny, I want to follow up on your presentation, and I appreciate your segue into the next budget.

You talked about the infrastructure need and the Building Canada fund in terms of the federal funding issue. Can you just expand on the infrastructure need from a port authority perspective?

[Wendy Zatylny]

With pleasure, Mr. Chair.

As I've said, the port authorities are operating in a very dynamic and changing environment. There are a lot of factors that are affecting the demand on ports, certainly in terms of the trade agreements that are being signed but also with just the changes in global trade flows, with larger ships that will potentially be going through the Panama Canal, for example. As well, simply much larger ships are being put on the lines. The largest ship in the world right now is 18,000 TEUs. It's 33 metres wide and it draws 32 feet.

The ports have to be responding to these changes both in terms of volume and simply in terms of the size of the vessel that is coming in.

Currently, while we are able to meet the demand, ports are nearing capacity. So we start to see issues that occur and bottlenecks that occur if there are any kinds of surges. We saw that during the wintertime but we're also seeing that currently with labour disruptions on the west coast that are rerouting containers to Port Metro Vancouver and Prince Rupert. By virtue of those ports already nearing capacity, they are starting to have difficulty handling the extra load.

Because of these issues there is a tremendous need for additional investment in simple port infrastructure. The $5.3 billion that we identified with Transport Canada was a scan of port needs. That breaks down to about two-thirds for developmental needs and one-third for rehabilitation of existing port infrastructure.

The port of Halifax has some berth facings there that predate the Halifax explosion. It's probably time to change them.

Those are more difficult to develop a business case for. So, again, while the Building Canada fund has been enormously helpful, and we're grateful for it, there are a couple of issues with it. First, the $100-million threshold is extraordinarily high for most ports to achieve, and second, the ratio of funding still creates a big gap that the ports are forced to fill, and they're having difficulty in filling it.

[The Chair, Conservative, James Rajotte]

Okay, I appreciate that.

I don't have much time left, unfortunately, and I have a lot of questions.

I know this is going to be an ongoing political debate over employment insurance rates, and the politicians are going to say various things. The most reputable organization for a small business in Canada is CFIB, by far. Every political party quotes them with respect to the EI rates, and with respect to credit card rates.

This is what they say. The small business job credit “will result in a 15% net reduction in [EI] premiums paid by small businesses over the next two years”.

“This is a big one”, said Dan Kelly.

This will make it easier to hire new workers or invest in additional training to help entrepreneurs grow their businesses. In fact, CFIB estimates that this credit will create 25,000 person years of employment over the next few years.

I know there are two witnesses on this. But in 30 seconds or a little more, why is CFIB incorrect on this? They've clearly stated their position in support of this policy change.

Mr. Askari or Mr. Macdonald, does anyone want to address this?

[Mostafa Askari]

I will just say very briefly, what I heard from Mr. Kelly after the announcement of this credit. In an interview he said this is not going to change the behaviour or the decision-making of any small firm. Overall, it's money that goes to these firms and they can spend it on something, and that would be the way it might create some stimulus in the economy. But the amount is so small it's not—

[The Chair, Conservative, James Rajotte]

I'm quoting from what he actually says here. I'm quoting from their press release, so....

[Mostafa Askari]

Well, this is an advocacy group. Obviously, I am not going to judge what their motives are for saying that, but—

[The Chair, Conservative, James Rajotte]

Well, their motives are to have small businesses increase in size and hire more people. That's their motive, right?

[Mostafa Askari]

Perhaps, but this is obviously so small. At the micro level, definitely this is not going to provide incentive for any firm to hire or fire anybody, it's so small.

[The Chair, Conservative, James Rajotte]

Okay.

Well, hopefully, we can have them here to address it. As an organization, they praise a policy when they like it, and when they don't like a government policy they're very quick to criticize it, as they do. I will just point that out...as an independent organization.

I will go now to Mr. Cullen, for five minutes.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Thank you, Chair.

Just to follow up on that, I can understand why CFIB would advocate for this. They would advocate for the lowering of EI premiums whatever the reason.

The question I would put is this. The analysis that's been done by CFIB...we asked the federal officials what analysis had been done by the finance department. To be more specific, they said they didn't do analysis on the impact on jobs. I agree with the chair in terms of how CFIB will criticize government policy. They like lower EI rates as a policy. Our question is about the effectiveness. They're targeted, and I think that was to Mr. Macdonald's point that it's poorly targeted and isn't going to get the results that are claimed unless someone can show analysis—proper analysis, not back-of-a-napkin stuff—that it'll actually do what the government claims. The government hasn't bothered to analyze a half-billion-dollar EI program, which causes one concern.

A question to you, Ms. Biss....

First of all, I'm looking at the 160 organizations that have signed onto this, and to your letter opposing this. I have to say it's an impressive list across Canada: multi-faith groups, Christian, Jewish, Muslim, churches of just about every denomination I can think of, anti-poverty groups, health groups, doctors, nurses, front-line women's organizations, women's shelters, French and English, and ethnic groups right across the spectrum. It's unusual for this many groups of this diversity to agree on anything.

My specific question to you is this. A refugee applicant in, say, Ontario—I'm not sure which province you're most familiar with—what would they typically receive in social assistance in a given week? Are you familiar with those numbers? What's being stripped?

[Michèle Biss]

Yes, I can expand a bit on that.

One thing I'd just like to add to your comment is that not only is it interesting the vast number of groups who have signed onto this, it has also been in a very short period of time. Because of the way that the bill has been created, as an omnibus budget bill, those names have been really compiled in, I think, about three or four weeks. That's just something else I'd like to add to that.

In terms of the amount of money that an individual might get from social assistance, including refugees, I will say it's not our area of expertise. We don't deal with individual claimants. But I could say other organizations that we've been working with have expanded on this. For example, for a single person in Ottawa, say, if you're receiving general welfare, I believe that you can receive anywhere between $600 and $650 per month. That includes your housing cost, your food cost, and your personal necessities. We're not talking big numbers here. We're talking enough money to scrap by and pay for your basic necessities.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Thank you.

Ms. Zatylny, the government's had a fairly aggressive trade policy, but you've mentioned this gap over and over again. If 90% of our products are moving through port for this trade, there's a gap between the government's ambitions to move product and the port's abilities to expand to meet those needs.

I'm not trying to politicize this issue. Just talk about the bare facts of what the realities are for Canadian ports if we're seeking to expand overseas, particularly in marine trade. Is that a fair assessment, the reality of what trade may or may not happen versus what the ports can actually accommodate in their infrastructure?

[Wendy Zatylny]

Yes, that is certainly true.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

One of our concerns about the infrastructure fund is that it's backloaded. The government announced a large number, but much of it, the vast majority, falls in the eighth, ninth, and tenth year of the program. Anytime a government promises something eight, nine, ten years from now, it's an easy way not to do something, especially when you're spending money.

Is not the infrastructure money needed now, in terms of helping Canada have a stronger trade balance? We have a negative balance right now.

[Wendy Zatylny]

Absolutely. At the end of the day, infrastructure projects take a while, take a few years to get off the ground. But having the notion or the guarantee that there is federal funding that is coming in really would help get an infrastructure project put together and would help the port authority continue to bring together the patchwork, really, of funding partners that are required to fund a big project.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Very quickly to Mr. Macdonald, someone said that this EI program is decision-based evidence-making. You talked about a three or four times more powerful program through using EI a different way. Could you expand on that and make it a little clearer for me?

[The Chair, Conservative, James Rajotte]

Make your answer very brief, Mr. Macdonald.

[David Macdonald]

Sure thing.

One of the things we've advocated for in the past is to standardize the minimum hours required to access EI as well as universally decrease the number of hours required, in part to address the fact that temporary employment has become a more permanent way of life for most Canadians.

By implementing both those measures, instead of providing the small business job credit you'd likely see a larger impact on employment in Canada.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Cullen.

We'll go to Mr. Keddy for five minutes, please.

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

Thank you, Mr. Chairman.

Very quickly, Ms. Zatylny. The port authorities are set up as a profit-making venture.

[Wendy Zatylny]

In the Canada Marine Act they have a joint responsibility or joint mandate to be profit-making, to operate in a commercial manner, as well as to respond to the strategic economic development needs of the country.

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

I appreciate that the port authorities will take any federal government assistance they can get as far as infrastructure goes, but in reply to Mr. Cullen's statement, you said that you're working at a deficit. How many port authorities in Canada are working at 100% capacity?

[Wendy Zatylny]

I cannot give you an absolute number. What I can tell—

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

Halifax is working at 60% or 50% most of the time.