Finance Committee on Nov. 19th, 2013

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Jean.

Mr. Côté, please go ahead.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Thank you kindly, Mr. Chair.

My questions are for Mr. Smith, in Calgary. I'm delighted to be speaking with you, and I'm glad that the technical problems were sorted out.

It's great to have you with us, because Calgary and Quebec City have a number of things in common, including a very low unemployment rate, worker recruitment problems and housing issues. lf Gary Bettman was on board, we could, one day, have a professional hockey team to rival the Flames.

Your approach was very interesting. I quite appreciate the fact that, when it comes to managing government spending, you favour a more realistic, consistent and predictable approach. This week, the Parliamentary Budget Officer revealed that program funding had again not been spent. Even money allocated specifically by the government and infrastructure money had not been spent.

Like Quebec City, Calgary is facing challenges when it comes to infrastructure renewal and development. Could you comment on the whole issue of unused funds, which could be classified as further budget cuts by the federal government?

[Justin Smith]

Thank you, Minister.

I agree. I'd like to see another Canadian NHL franchise, although I don't think it would take a professional team to beat the Flames at this point in the season.

Unfortunately, I can't comment specifically on any unspent funds or funds that have not been drawn down. I'm just not as familiar as I should be with the issue.

Infrastructure improvements and federal infrastructure funding for the city of Calgary are extraordinarily important, mainly for the reasons I outlined earlier. We're facing unprecedented growth challenges, which are putting great strain and pressure on the existing infrastructure in our city. It's necessitating not only expansion, but also repairs and improvements to the existing infrastructure. All funds are certainly necessary and should be drawn down on.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Mr. Woodside, do you have anything to add in response to my question?

[Brad Woodside]

There really shouldn't be any unspent money. There's a great need in this country for a number of things. Housing is just one type of infrastructure. There shouldn't be a whole lot of money left over.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Very good.

How much time do I have left, Mr. Chair?

[The Chair, Conservative, James Rajotte]

Two minutes.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

I'm coming back to you, Mr. Smith.

I'd like to ask you about something else, since you are part of the Calgary Chamber of Commerce.

A few weeks ago, the Deputy Governor of the Bank of Canada, Tiff Macklem, talked about how the economy was underperforming and mentioned the major challenges facing Canadian exporters, among other things. One out of five companies turns its back on foreign markets after experiencing a failure or opts to refocus on the domestic market. That's a major obstacle for many business in the Quebec City area. Is it the same for Calgary?

[Justin Smith]

In the city of Calgary specifically, I believe that manufacturing represents only about 6% of the municipal economy, which is lower than other large municipalities in Canada. I don't think it's as much of an issue—although exporting in general is extremely important. That's not simply access to markets for our energy resources, but being competitive and more productive from a workforce perspective so that our exports are competitive on a global scale. It's extremely important.

There are challenges that our exporters across the country are facing. These may vary to some extent by industry, by sector, and by particular challenge, but I'd agree that there is a similarity between Quebec and Calgary.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Thank you very much, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Côté.

I'm going to take the next round.

I'll continue with you, Mr. Smith. I'm a fellow Albertan. I represent the riding of Edmonton-Leduc. I have both an urban area in Edmonton and rural areas, as well as some smaller communities.

In your presentation, your second recommendation talks about labour shortages being a top barrier to competitiveness.

Would you agree that for both rural and urban Alberta this is the number one challenge facing businesses?

[Justin Smith]

I would agree.

We recently had a meeting with the Alberta Chamber of Commerce. Representatives from both Edmonton and Calgary as well as rural municipalities and rural areas were present, and that was certainly a common theme.

The labour shortage in Alberta is unique. I understand that this is a problem facing Canada as a whole, but whereas our eastern counterparts are facing more a skills gap in which the particular skills needed in the workplace are not readily available within the workforce, that's simply not the case in Calgary or in Alberta overall. We have very low unemployment, which suggests that it's truly a labour shortage overall that is the problem, both in heavily populated urban centres as well as in rural areas of the province.

[The Chair, Conservative, James Rajotte]

And that would be for all types of skill sets; that's what I hear from businesses from my area. Whether it's in Edmonton in manufacturing or in the hospitality industry, the number one issue they raise with me is constantly on the labour side.

I appreciate your recommendation on EI. I would say that the government has made some changes in EI and has faced a fair amount of political criticism for them. I would echo the comments from my colleague Gerald Keddy.

I want you to comment, because the temporary foreign worker program is often a subject at this committee. Two criticisms levelled at that program are very constant. One is that it lowers the wages of Canadian workers, and the second that it takes jobs from Canadian workers. I can tell you, and I just want you to tell the committee from your perspective, from Calgary, that there simply would not be businesses operating in my constituency, if it weren't for that program.

Frankly, I go through areas.... In Niscu in my riding, I will walk through, and they'll say they have two shifts operating. Why is the third shift not operating? It's because they cannot find enough people. Plant managers actually ask me for resumés of people who would like to work on that third shift, so that the company could then employ more people, be more productive, pay more taxes, and be all around beneficial to the economy.

So I want you to comment on the temporary foreign worker program from an Albertan and a Calgary perspective.

[Justin Smith]

Fine.

I should be clear that the recommendations that were submitted to the committee were submitted by my predecessor. I've simply been in this position for the last month or so.

But I will comment and say that any efforts on the part of our federal government to increase the pool of skilled and unskilled labour in Alberta is a welcome and noble effort. As you say, this is a serious and critical problem for our businesses. It's leading to great uncertainty. It's reducing levels of investment by companies; it's reducing their will to expand. That uncertainty is a risk to the future growth and sustainability of Calgary and Alberta's economy. Any effort on the part of the federal government to increase that pool of skilled and unskilled labour is welcome, from my perspective.

[The Chair, Conservative, James Rajotte]

I appreciate that, Mr. Smith.

In my time remaining I'd like to follow up with Mr. Phillips on Mr. Keddy's question about Farm Credit Canada. I certainly appreciate that organization and all that it does, especially in rural Canada.

But I think, Mr. Phillips, that what you're saying is that if you look at the Business Development Bank, it acts in a complementary lending role, whereas FCC acts in a competitive lending role. FCC has actually gained much more of the market share over the last number of years from credit unions and other financial institutions. You are simply saying that it should be in a complementary role; that FCC should continue to exist, loan, and invest, and that we should look at its mandate; that its mandate needs to be reviewed.

I just want to give you an opportunity to clarify that.

[David Phillips]

That's correct, Mr. Chair. In fact, you could say that the FCC is the only bank in Canada that does not undergo a regular mandate review. The BDC and EDC must undergo reviews every 10 years; commercial banks undergo reviews every five years. There's no requirement that this take place in the case of FCC. We think it should join others in having its mandate reviewed on a regular basis.

[The Chair, Conservative, James Rajotte]

Who should do that review? Should it be the agriculture committee; should it be the finance committee? Do you have a preference in terms of that review?

[David Phillips]

I think we're more concerned that the review take place. But I think it is a banking type of institution, so it would be entirely appropriate that it be with the finance committee.

[The Chair, Conservative, James Rajotte]

Okay, thank you for that clarification.

I'll go now to Mr. Rankin, for your round, please.

[Murray Rankin, NDP, Victoria, BC]

Thank you.

Thank you to all of our witnesses. I know we have only a scarce amount of time, so I'd like to begin with Mr. Woodside.

I'd like congratulate the Federation of Canadian Municipalities for a first-class presentation. Drawing our attention to the housing issues, I think, was very timely. I want to illustrate that and ask you a specific question.

I believe that you've called for a long-term housing plan, talking particularly about the scheduled expiry of $1.7 billion in federal housing initiatives, which you've graphically indicated in your presentation.

I want to suggest how accurate that is for my community. You live in the east; I live on Vancouver Island. The Greater Victoria Coalition to End Homelessness recently released a report saying that 10.9% of Victorians are in what they call severe housing need—more than 50% of their income has to go to housing—and that 27% are in core housing need, wherein they have to pay 30% of their income. Yet the federal government's homelessness partnership strategy discriminates against Victoria because of its arcane funding formula. For example, $4.50 per person goes to our community. Across the strait in Vancouver, it's $9.00 per person, because they go after cities, not regions, which of course is a significant issue.

When you talk about the need for renewing this funding for the housing plan and making that kind of investment, what specifically do you see the federal government contributing? What do you see them needing to do to address these problems?

[Brad Woodside]

First of all, I think we have to acknowledge the fact that we have a problem in this country from coast to coast to coast. I think all the federation has ever asked for, when we deal with these national issues, is that everybody, whether urban or rural, east or west or north or south, be treated fairly and equitably.

I cannot answer your question as to why in your area there's a difference between the rate there and what it would be in Vancouver. Maybe you should question some of the committee members here. I don't have an answer to that.

[Murray Rankin, NDP, Victoria, BC]

Well, I think that within the Federation of Canadian Municipalities there's been some concern about the funding formula for this partnership strategy.

[Brad Woodside]

Yes, there is.

[Murray Rankin, NDP, Victoria, BC]

I thought you might have some thoughts on this. But in the time available, let me say that I really appreciate your referring today to the “housing right”—you called it a human right.

[Brad Woodside]

I did, sir.