Finance Committee on Nov. 21st, 2013

[Jim Stanford]

We have over 300,000 across Canada—

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

That's because you just amalgamated with the Paperworkers—

[Jim Stanford]

Yes.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

—which has, of course, Suncor.

[Jim Stanford]

We have a good group in Alberta.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Now you represent Suncor, one of the largest employers in Canada and one of the largest employers in Alberta—

[Jim Stanford]

Yes.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

—with 80,000 workers. Congratulations on that. I know that was a big coup for you.

You have a large number of union members in Alberta. I like to say that I represent more union members than anybody else in the House of Commons, more than probably all of them combined, I'd like to say, but I know that's not true.

I just know there are a lot of union members up there, because I was one once and most of my family have been. It's very important to union members in relation to the continuation of the oil sands and the oil sector generally. That's why I want to talk a little bit to Ms. Kenny specifically.

I do want to say, Mr. Whyte, that I was very impressed with something you said. I think it illustrates what's going on in Fort McMurray and generally across the busy places in Canada, which is that skilled jobs cannot be there without unskilled jobs to support them. I can't tell you how true that is in Fort McMurray. We have hotel rooms and hotel floors that close, restaurants that close Mondays, Fridays and Saturdays because people can't get employees, so what happens? Nobody goes there. We can't get skilled workers to come because the quality of life is so bad.

Ms. Kenny, can we talk just briefly about pipelines? I'm a big believer in pipelines, because I see 500 or 600 train cars going to Vancouver, crossing over roads. That's six or seven separate cars. I know they were having problems back in the 1990s and in the early 2000s with trains. Now we have more trains full of oil going down there than ever before. We all know what happens if those trains are not treated properly and the safety aspects are not taken into consideration.

We also have a lot of trucks. I understand there are about 110 to 120 trucks a day that go to Vancouver airport with jet fuel, because we have no capacity to do that in Canada; they're coming from the United States. We're discounting our oil by $30 million to $50 million a day, which by my calculation is for sure somewhere around a new school every day in Canada that we could afford to build if we had pipeline capacity to the west coast.

Can we talk about how great pipelines are compared to trucks and rail for Canadians?

We don't have a lot of time, but I know you could spend a long time on it.

[Dr. Brenda Kenny]

I am going to answer this with a focus on a long-term strategy, and clearly a metre under the ground, the cost efficiency opportunities and the Canadian leadership around safety in pipelines are second to none in the world.

In Canada we will need sustained energy infrastructure even as we transition to alternative forms of energy. Any of the big energy reports point to a very long run on the use of fossil fuels as we continue to mitigate GHG emissions.

It's fundamental to Canada that we have good energy infrastructure. Pipelines are absolutely the way to go on that. That's why you see so many separate projects under proposal, the most current one being the northern gateway that will have a decision from the independent panel by the end of this year, and one will consider then where to go.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

In fact, isn't it fair to say that if we shipped all of our oil and fuel by pipeline, we would lower emissions dramatically on the basis of taking the trucks off the road? Even though on trains it's very efficient, pipelines would lower our per capita use and our intensity of taking oil from the oil sands dramatically.

[Dr. Brenda Kenny]

My understanding of the comparators on the transition is that it is true, but I think it's also really important to look at the overall use of energy around the world. Oil sands in terms of production represents 0.15% of global GHG emissions.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

It's getting better per barrel every day.

[Dr. Brenda Kenny]

Absolutely. We look at all measures we can in terms of efficiency. On the pipelines our job is safe, environmentally sound delivery, and they are getting better all the time. We really need to take a look at this on a global level and understand how we play into that.

Technology is a fundamental part of that, both in the upstream and in the pipelines themselves.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

We do have the safest pipeline system in the world for new pipelines.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Jean.

Monsieur Côté, s'il vous plâit.

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

Thank you very much, Mr. Chair.

I want to thank all our witnesses for joining us.

Mr. Stanford, in his essay, “The Price of Inequality”, economist Joseph Stiglitz discussed the issue of young people entering the workforce during a crisis and the ensuing difficulties. I would call that a gap in employment integration of young people. Once they face the initial difficulties of entering the labour market, those problems accumulate, and it becomes very difficult, if not impossible, to remedy the situation.

Could you tell us a bit about that problem in Canada currently?

[Jim Stanford]

In my submission, I haven't pulled out the numbers on youth unemployment or youth labour market participation specifically, but that research is readily available. I know my colleague, Ms. MacEwen, has done a lot in her work. She might like to comment.

The lasting effects of non-participation and non-employment by young people are very severe for them, for their families, and for their communities. Even their lifetime earnings can be negatively affected because even if they do eventually get a job and start working their way up the ladder, they have had a five-year delay before they start to get the earnings that would normally come with experience.

The international evidence, even from fields like criminology or health studies, shows that type of disengagement from society, the isolation, as well as the poverty, has tremendous long-term impacts not just on those affected but on all of society.

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

Thank you very much.

Mr. Pineault, during our study on inequalities, Toronto-Dominion Bank's Chief Economist, Craig Alexander, talked about the conclusions drawn by Michael Wolfson, professor at the University of Ottawa, regarding the 0.01% of the population that had increased their income drastically in some 15 years.

In your study, you said that there was an ever-widening gap. In relation to that, let's recall the Gini coefficient, which broke in the 1990s as a result of the Chrétien government's actions. Could you comment on the fact that the vast majority of Canadians are no longer participating in economic activity or recovery?

[Eric Pineault]

What this study is trying to show is that there are two recoveries—one of which is a real economic recovery that is very weak and trapped in stagnation. Everyone—be they business people or workers attached to that economy—sees their income stagnate. They have a rising amount of debt that is not sustainable. That's the first part of the story. The debt I am talking about is not related to homes. I am not talking about real estate debt.

Let's now talk about the other part of the story. The financial economy is doing great, interest rates are very low and banks have recovered very quickly. The situation is great for everyone whose income is attached to that financial economy. You can see that most of the growth is headed in that direction. The bit of growth and the profit rate Erin was talking about earlier transform into financial income.

So if you depend on a financial rent in one form or another—stock options, dividends, capital gains, investments, and so on—you will be doing very well. Unfortunately, most Canadians live off their income. The figure of 0.01% represents people who live off that financial economy, and they are doing very well. The implemented tax policies helped them because their income is not taxed in the same way. As you know, $1 of income translates to $1 in taxes, while $1 of capital gains means $0.50 or $0.75 in taxes, depending on where it comes from.

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

Mr. Weir, this week, we heard the testimony of Justin Smith, from the Calgary Chamber of Commerce. He put forward a very interesting point of view regarding the government's activities. Instead of making massive cuts, he thought it was much more realistic to match the growth of government expenditures with economic activity.

Given what you laid out in your chart regarding the investments of government corporations, what do you think about Mr. Smith's position?

[Erin Weir]

I would like to clarify Mr. Smith's position. According to him, government spending should be linked to the GDP.

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

Definitely.

[Erin Weir]

I think that's a good idea. It's better than what the government is currently doing. It is cutting expenditures, and thereby hurting our economy. I think it would be preferable to increase public spending in order to provide the necessary services and to support our economy.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Côté.

Mr. Saxton, please.

[Andrew Saxton, Conservative, North Vancouver, BC]

Mr. Chair, I have the good news that I'll be sharing my time with you since you've been such a good chair today.

My first question is for Garth Whyte, president and CEO of the Canadian Restaurant and Foodservices Association. Thank you, Mr. Whyte, for being here today.

Our government has been focused on job creation. I think it has proven to be very successful, given that we have the best job creation record in the G-7 with over a million net new jobs created since the recession in 2009. I would like to ask you how freezing EI premiums and extending the hiring credit, which is designed to help employers to create jobs and hire more employees, especially small business, has helped your industry.