Evidence of meeting #59 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was unions.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Hassan Yussuff  President, Canadian Labour Congress
Gregory Taylor  Chief Public Health Officer, Public Health Agency of Canada
Martha Durdin  President and Chief Executive Officer, Credit Union Central of Canada
Chris Dobrzanski  Chief Economist, President and Chief Executive Officer, Citizens Bank of Canada, Vancouver City Savings Credit Union

3:30 p.m.

Conservative

The Chair Conservative James Rajotte

I call this meeting to order. This is meeting number 59 of the Standing Committee on Finance, and in our orders of the day pursuant to the order of reference of Monday, November 3, 2014, we are continuing our study of Bill C-43, a second act to implement certain provisions of the budget tabled in Parliament on February 11, 2014 and other measures.

Colleagues, we have two panels here today. In our first panel, we're very pleased to welcome back to the committee the Minister of Finance, the Honourable Joe Oliver.

Minister, welcome back to the committee this afternoon. You have two officials with you and we understand that you have an opening statement.

Then we'll have questions from all of the members. Please begin at any time.

3:30 p.m.

Eglinton—Lawrence Ontario

Conservative

Joe Oliver ConservativeMinister of Finance

Thank you very much, Mr. Chairman and ladies and gentlemen. I appreciate the opportunity to meet with the Standing Committee on Finance to discuss Bill C-43, an act to implement certain provisions of economic action plan 2014, tabled in Parliament on February 11.

Canada's Economic Action Plan underscores the government's top priority to create jobs, foster growth and ensure long-term prosperity. A weakened global economy has made that priority even more important.

Last week I presented to Canadians our government's economic and fiscal update. I outlined the state of both the Canadian and the global economies.

In the aftermath of worst recession since the Great Depression, Canada has done well. Since the depths of a recession that cost 62 million jobs worldwide, we created over 1.2 million net new jobs in Canada—one of the strongest job creation records in the G-7.

The federal tax burden is at its lowest level in over 50 years. In 2013, Canada leapt from sixth to second place in Bloomberg's ranking of the most attractive destinations for business. According to KPMG, total business tax costs in Canada are the lowest in the G-7 and are 46% lower than in the United States.

Both the IMF and the OECD expect Canada to be among the strongest-growing economies in the G-7 this year and next. A recent New York Times study found that after-tax middle-class income in Canada, substantially behind in 2000, now appears to be higher than in the United States. In fact, the Canadian middle class is among the richest in the developed world.

But today's prosperity is not a guarantee for tomorrow. This is especially true in a global economy defined by weak, uneven growth, or what IMF director Christine Lagarde has called the “new mediocre”. We must relentlessly take action to remain resilient and secure our prosperity, and that is what we have set out to do.

Therefore, we have to work persistently to remain resilient and ensure the prosperity of our generation, as well as the generation of our children and grandchildren.

First, we are taking action to improve the integrity and fairness of the tax system. Since 2006, and including measures proposed in economic action plan 2014, the government has introduced over 85 measures to improve the integrity of the tax system.

Bill C-43 goes further.

This bill takes the tax system and makes it simpler and fairer for fishing and farming businesses. It empowers amateur athletes to save money—money for their retirement. These kinds of amateur athletes, Mr. Chairman, are the ones who bring home the gold in the Olympic Games and in competitions around the world.

This bill puts in place new tax incentives to encourage clean energy generation. We are doing this by expanding the eligibility for the accelerated capital cost allowance. We're making it easier for Canadian film and video producers to receive the Canadian film or video production tax credit.

Mr. Chairman, we are cracking down on tax evasion, including offshore regulated banks and captive insurance schemes, ensuring that all Canadians pay their share.

Keeping taxes low and fair is an important element of our economic action plan. Another priority is creating jobs.

This is one of our government's priorities. Measures must be implemented to connect Canadians with the skills training they need to succeed.

In Canada, apprentices in skilled trades learn the most through paid jobs in the workplace and receive six to eight weeks of technical training a year.

They can face serious costs, including educational fees, tools and equipment costs, and living expenses. That is why we introduced the Canada apprentice loan in the first budget bill to help connect Canadians with available jobs. This initiative is helping apprentices register in Red Seal trades by providing access to over $100 million in interest-free loans each year to complete their training.

Given that the parameters of the Canada apprentice loan program are similar to those of the Canada student loan program, we believe that both programs should benefit from the same treatment. Specifically, Bill C-43 proposes that the Income Tax Act be amended to extend the existing student loan interest credit—which is a non-refundable tax credit available for interest payments on loans approved under the Canada student loans program and similar provincial programs—to interest paid on a Canada apprentice loan.

By helping Canadians acquire skills that will help them get hired or find better jobs, we are investing directly and wisely in our country's most precious asset—our citizens.

Mr. Chairman, this is only a small sample of the measures contained in this bill.

Let me briefly review a few more. The bill would amend the Telecommunications Act to prohibit service providers from charging their subscribers to receive bills in paper form, fulfilling a commitment in the 2013 Speech from the Throne to end pay-to-pay billing practices. It would establish the Canadian High Arctic research station, a world-class research station that will strengthen Canada's leadership in Arctic science and technology. It would also promote transparency and accountability in the extractive sector both at home and abroad; cut red tape for charitable organizations, allowing them to use new technologies to raise funds for the causes that matter to Canadians; and provide more than $8 million over five years, starting in 2016-17, to create a DNA-based missing persons index.

I take particular pride, Mr. Chairman, in this last initiative. Lindsey's law, which called for a DNA-based missing persons index, was named for Lindsey Jill Nicholls. At age 14 she went missing while on a car ride to meet friends in Kootenay, British Columbia. Her mother, Judy Peterson, has been a courageous advocate for a national DNA-based databank that can compare the DNA of missing persons with that collected through crime scene investigations and convicted offenders. Lindsey's law represents further action on the part of our government to stand up for the victims of crime and their families.

Mr. Chairman, it has been a pleasure to highlight some of the key measures to defend Canadian values and support growth and prosperity. The measures in this legislation are necessary and the benefits enduring.

Thank you.

3:35 p.m.

Conservative

The Chair Conservative James Rajotte

Minister, thank you very much for your presentation.

We will begin with Mr. Cullen, who has five minutes.

3:35 p.m.

NDP

Nathan Cullen NDP Skeena—Bulkley Valley, BC

Thank you, Mr. Chair.

Thank you, Minister, for being here.

Our time is brief, so I'll try to keep my questions short.

You mentioned this in your economic update. What will the falling oil prices cost the federal treasury as of next year, according to your update?

3:35 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

Well, we made an adjustment of $2.5 billion to take account of the decline in the oil price from the time the latest economic forecast was prepared by the 15 independent economic advisers, who independently produce their numbers.

I should say that we didn't have time to go back to all of them. We went back to a few. We consulted some public sources, and we made the adjustments for the decline, making the assumption, which is a very conservative assumption, that the prices at that time would stay for the entire period.

3:40 p.m.

NDP

Nathan Cullen NDP Skeena—Bulkley Valley, BC

So there's $2.5 billion less to spend. As you heard from the Governor of the Bank of Canada, who was in front of this committee just a few weeks ago, Canada may be faced with a low or zero growth recovery scenario in terms of job creation. These compounding factors, with some global uncertainty in Europe and a diminishment in expectations in China, would lead one to be more conservative in promises made by the federal government. Yet your government has gone ahead to make $26 billion to $28 billion in promises over the next couple of years. Is that true?

3:40 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

I don't have the exact number, but I certainly dispute the zero growth employment. As you know, last month, employment increased by 43,000 and the month before by 74,000. Individual months can vary quite a bit; however, when the numbers are that high, we have to take note.

As I mentioned, we've created 1.2 million net new jobs since the depths of the recession. The growth rate in Canada is respectable. Although there are—and I could talk about this if you like—some real difficulties in parts of the global economy, including Europe, in the United States the economy is on the move and the growth is sustainable, in our view.

3:40 p.m.

NDP

Nathan Cullen NDP Skeena—Bulkley Valley, BC

Thank you, Minister—

3:40 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

The surplus that we're projecting, as you know, is $1.9 billion, steadily growing to $13.1 billion by 2020—

3:40 p.m.

NDP

Nathan Cullen NDP Skeena—Bulkley Valley, BC

I'm sorry to interrupt, Minister, but we seek some proportionality in the length of the question and the length of the answer.

Taking two months out of an 18-month trend is a very dangerous thing to do when making projections. The 18-month—

3:40 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

I didn't do that.

3:40 p.m.

NDP

Nathan Cullen NDP Skeena—Bulkley Valley, BC

You referenced the last two months in terms of job growth, but the last 18 months in terms of job growth strictly in the private sector has been worrisome for many and should be worrisome for the government.

My question is this. Has your government done an analysis of the $550-million raid on the employment insurance fund in terms of the jobs impact?

3:40 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

Well, just to finish up, you mentioned that we looked at the last two months. The point is that there's a recovery that's been going on, so we didn't look at what was going on in 2009. We're looking, in making our projections, at taking into account the most recent data, but not the last month, so I was indicating what those numbers were indicating for the economy.

3:40 p.m.

Conservative

The Chair Conservative James Rajotte

You have one minute.

3:40 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

I'm sorry. Your...?

3:40 p.m.

NDP

Nathan Cullen NDP Skeena—Bulkley Valley, BC

I'm offering up what was a very simple question. Has your department done an analysis of jobs impact for the $550 million you're taking out of the employment insurance fund, money that, according to your colleagues, does not belong to the government but to the people who pay into it?

3:40 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

Well, we—

3:40 p.m.

Conservative

The Chair Conservative James Rajotte

Just a brief response, Minister.

3:40 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

The government has relied on the analysis of those who are the small business experts, those who actually represent small business, which is the Canadian Federation of Independent Business, and it estimated that the $550-million EI payroll tax reduction for some 780,000 companies will create 25,000 person-years of employment.

3:40 p.m.

NDP

Nathan Cullen NDP Skeena—Bulkley Valley, BC

Yet it ignored the reality that was presented in the analysis from the Parliamentary Budget Officer, an office that your government set up, which shows that this will cost half a million dollars or more per job. To rely on the analysis of the CFIB alone and not on your own department's lack of analysis or on the analysis of the Parliamentary Budget Officer is, I would say, to ignore evidence that is in front of you as finance minister.

3:40 p.m.

Conservative

The Chair Conservative James Rajotte

Okay.

A last brief response, Minister, please.

3:40 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

Well, we relied on those who know their industry best. They have been telling us for years that the number one killer of jobs is payroll taxes, so we listened to small businesses and will continue to take measures to help create jobs and generate growth.

3:40 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you.

Thank you, Mr. Cullen.

We'll go to Mr. Saxton for five minutes.

3:40 p.m.

Conservative

Andrew Saxton Conservative North Vancouver, BC

Thank you, Chair.

Thanks to the minister, the deputy minister, and the finance officials for being here today.

Our government understands the important role that small business plays in our economy by creating jobs and economic growth as well as paying their fair share of taxes, but opportunities for expansion often lie beyond our borders. How does Bill C-43 help small businesses that wish to expand beyond our borders?

3:45 p.m.

Conservative

Joe Oliver Conservative Eglinton—Lawrence, ON

Thank you for the question.

Currently the Business Development Bank of Canada may assist Canadian small businesses and medium-sized businesses wishing to expand beyond the domestic market, but it can only offer the financing to the parent company located in Canada. Small businesses can expand from coast to coast to coast in Canada, but they are limited when it comes to expanding beyond Canada's shores. Bill C-43 will allow the Business Development Bank of Canada to help finance an SME's subsidiary in a foreign company and support its access to global value chains. Bill C-43 will help all SMEs in Canada expand beyond Canada's borders.

It also aids small businesses to expand into international markets as well as to draw foreign investment into Canada by adhering to the Patent Law Treaty and the Hague agreement. The proposed amendments will standardize and will simplify administrative processes when Canadian businesses apply for a patent, ultimately resulting in lower costs and eliminating red tape.