Finance Committee on Nov. 21st, 2013

[Garth Whyte]

It helps to a significant amount. Many times our members feel like it's death by a thousand cuts, and nothing is more frustrating than to have a tax on payroll. That's what EI can turn into.

I'll digress a bit. I came prepared to talk about employment, and I could talk about deficits. I could talk about the provincial debt, which no one is talking about here, but it's the aggregate debt that's really important.

I could talk about when I worked in finance in Saskatchewan, the founding province of health care, and the founding party had a triple-B credit rating and had to cut health care. Deficits are not compassionate. Deficits aren't how you get out of things. You need to have some balance, and I think we've had some, but there has been a very uncertain recovery. I totally agree with that. The worst thing you can do is create uncertainty, With the freezing of EI premiums, that helps create certainty. It helps us significantly.

By not increasing debt at least federally, it helps us. Provincially, a huge debt load is starting to run. It creates a lot of uncertainty. You can see growth in different provinces differently, and that's why.

Even municipally, we've had some people...they invest across the country, some of our larger members. There are certain cities where they've said they can't invest there. Why? They're afraid. They're afraid what the next tax level is going to be. They're afraid about what regulations they're going to face. They're concerned about the labour force. So they're going to go over here. Those are decisions that are being made.

Meanwhile, the other half of our members are small independents who stick in their local communities and they get hurt.

We need to have this balanced. The certainty that you've helped put in place, I think is very important.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you very much.

I have a quick one-word-answer question for Brenda Kenny.

Brenda, is there a safer, more efficient way to transport oil than through a pipe in the ground?

[Dr. Brenda Kenny]

No.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you.

I'll follow up from Mr. Saxton.

Ms. MacEwen, you referenced the TD report on jobs, which is a very good report. This report says that Canada's job record over the past decade has been robust, especially relative to other G-7 countries. I think we should get it on the record that the report recognizes that. Also, the report very much agrees with what a number of you are saying, that governments cannot act alone. Employers, educators, and employees need to join the fray.

I appreciate your support for what Minister Kenny has said. I heard your comments in response to Mr. Cuzner that you'd support the concept of the Canada job grant if it was new additional money. I like the model of having the federal government, the provincial government, employers, and labour unions with skin in the game to ensure that people get training so that there is not a jobs mismatch at the end.

I have to say as someone who comes from Edmonton—Leduc that there is a labour shortage in my riding. I'd be happy to host any of you out there in Nisku. We could drive around and visit companies like Tenaris in the steel industry that is operating at two-thirds capacity because they cannot find people. They ask me, “James, do you know anyone who will work a shift here in the steel industry? We need people. Do you know anyone? Do you have any resumés for us?” That's simply the reality in my area.

I take issue with some of the comments in the TD report. I'm showing I'm being fair: I disagree with labour unions and with bank economists as well. I wanted you to comment on that.

Mr. Whyte, I wanted you to comment on the Canada job grant that the government has proposed. I'd like to know how you think it should be implemented and whether you support it.

Ms. MacEwen and then Mr. Whyte.

[Angella MacEwen]

What the TD report and Minister Kenny said was that wages haven't increased. There may be labour shortages, but the proper market response to those labour shortages is to raise wages and for employers to increase training if those are skilled jobs. That hasn't happened, so it's not really a labour shortage. They could raise wages.

Minister Kenny said it, not me. He said to raise wages. That's how the market responds to a labour shortage. That's how you signal to people who are unemployed that this is a good job, that there are jobs over here, that it's good money.

The other point is that Alberta is quite a hot labour market and so it can be quite expensive to live there. If you're looking for people to work in the food and accommodation industries, it's difficult to get them there because it's really expensive to live there. You don't move from Ontario to Alberta to wait on tables.

[The Chair, Conservative, James Rajotte]

Okay.

I apologize, Mr. Whyte, I'm way over time. I will come back to you on that question, I hope, at the end of the session.

We will go to Mr. Rankin.

[Murray Rankin, NDP, Victoria, BC]

Thank you, Chair, and my thanks to everyone for being here.

My first questions are for Ms. Kenny of the Canadian Energy Pipeline Association. You refer in your brief to the Canadian Pipeline Technology Collaborative and the CEPA Foundation as well as the objective of increasing collaboration for research and development, which I think is a great thing.

In July 2010, the Kalamazoo spill from a pipeline operated by Enbridge constituted the largest on-land oil spill and one of the costliest oil spills in history. The pipeline carried bitumen from the oil sands. The bitumen sank and the EPA fined the Enbridge company $3.7 million for 22 violations. One of the problems the National Transportation Safety Board investigation pointed out, Ms. Kenny, was the corrosion fatigue of the pipeline as a consequence of carrying dilbit and heavy bitumen. That was what they said was one of the key factors in a cleanup that cost $767 million U.S..

Does your association or the Pipeline Technology Collaborative you referenced study that aspect of it, the corrosion fatigue of pipelines carrying bitumen?

[Dr. Brenda Kenny]

Let me be clear. In looking at the NTSB report, I'm not sure there was any specific metallurgical connection made between the product and that phenomenon. It was carrying that kind of product and that kind of phenomenon can occur on pipelines. There is research into that phenomena, particularly in ways to detect it early so that you can take preventive measures.

There has also been extensive research on whether or not diluted bitumen is corrosive or damaging to pipelines, which is something we're very interested in. We had a commission from the U.K., a global survey of research, on that point. Separately, the American National Academy of Sciences did a full inquiry into it. That plus a number of other points I could go to all conclude absolutely that there is no corrosive mechanism related to dilbit that injures pipelines.

[Murray Rankin, NDP, Victoria, BC]

You reject the national Transportation Safety Board—

[Dr. Brenda Kenny]

I reject the premise in which the quote has been extracted. Dilbit is not corrosive to pipelines. That's been proven very thoroughly in the science by peer reviewed journals as well as other studies.

[Murray Rankin, NDP, Victoria, BC]

I'm sure you're familiar with the International Center for Climate Governance, which last year ranked Canada 38 out of 39 on commitment to address greenhouse gases and the climate crisis.

My question for you is this. Does your association or the collaborative you refer to conduct research on climate change, and if so, to what degree and how?

[Dr. Brenda Kenny]

We have a very active climate change working group, with respect to our own operations. Oil pipelines generally use electric pumps and therefore, in and of themselves are zero emitting. Natural gas pipelines use gas-fired compressors. We're looking for ways to run those more efficiently, and also to do waste heat recovery and other technologies.

I would just add, though, that on a global level, I personally do believe in climate change. I'm active personally on the board, for example, of the Climate Change and Emissions Management Corporation in Alberta, which is where the carbon levy funds $1.3 billion of technology projects.

I think in Canada we do need to recognize that from the oil sands, for example, we are producing just 0.15% of global emissions overall. The World Energy Council recently concluded its conference in Korea. I think that the closing statements from all global energy and environment leaders were very profound about the need to really address the global issues directly.

[Murray Rankin, NDP, Victoria, BC]

Thank goodness someone in your industry sees it that way.

I'd like to ask Ms. MacEwen a question. In your report, you refer to the Canada pension plan, and a point you make, which I thought was really telling, was that there would be considerable savings in the guaranteed income supplement that we taxpayers have to pay for if the government were to go along with that kind of increase.

I'd like you to elaborate a little bit on that recommendation.

[The Chair, Conservative, James Rajotte]

Just make a brief response, please.

[Angella MacEwen]

Sure. It makes sense if we consider pensions to be deferred wages. If you're putting that money away ahead of time to make sure you have a larger pension, then that money won't be paid out to you in the guaranteed income supplement.

You'll have more money when you retire.

[The Chair, Conservative, James Rajotte]

Okay, thank you.

Thank you, Mr. Rankin.

We're going to Mr. Keddy, please.

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

Thank you, Mr. Chairman.

Welcome to our witnesses. This is a good discussion.

I have several questions. The first one is for Angella—and I'm going to say that in Nova Scotia we pronounce your surname as “Mackwen”, but I'm sure that's not quite right.

[Angella MacEwen]

It's not spelled right. There's no k.

[The Chair, Conservative, James Rajotte]

I apologize for that.

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

You made a comment about the wage shortage in Alberta, and I want to try to find some clarification on it. It would seem to me that you're partially right, but not 100% right, in your answer. You basically stated that if you had a wage shortage, you increase wages and that'll be covered. I think, in some instances when there's enough profitability, that's probably correct, but I think what you didn't say is that we're not exactly in normal times yet. We're still coming out of the recession and we're still in recovery mode.

I know many of the companies in my riding on the south shore of Nova Scotia are working on very, very small margins and it's very, very difficult to raise wages. I just wanted to add that. I don't want to put words into your mouth, but would you agree with that?

[Angella MacEwen]

Absolutely. I would say Nova Scotia is a completely different situation from Alberta.

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

Yes, it's a different situation in Nova Scotia, but it's not a different situation if you're still selling.... We all sell in a world marketplace. Nova Scotia sells in the world marketplace, the same as Alberta does.

If you're producing a product that's being sold to the rest of the world, and your margin is still narrow, it's determined by outside forces. That's my point. There may be room to raise wages, or there may not be. I'm suggesting that in a recovery period, there's not.

[Angella MacEwen]

I would suggest that in Nova Scotia, there's actually a wage advantage because the cost of living in Nova Scotia is lower, so you can pay lower wages in Nova Scotia. A business that's exporting something from Nova Scotia has an advantage over a business that's exporting from Alberta.

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

That's not what I asked you, but that's fine.

It's a question of time here. We have five minutes for questions and a lot of questions to get out.

This is for the Canadian restaurant association. Mr. Whyte, you made a couple of statements that I want to pick up on. I want to engage the rest of the group on it. This is not about being a union member or not being a union member, but the many gateway jobs. This is the first job that a lot of young people, especially in more urban settings, will have. I live in a rural setting and there are jobs for young people and sometimes young people don't fill them. Sometimes that's a problem with the family. They don't think they need to do that job and they can get a better one somehow. I think it's a real, serious, and growing problem.

Mr. Stanford made a statement on that at the same time, and I can't find it right now, but it was to the same idea that we're not getting these young people to fill the jobs, so we have a job shortage, I believe, an employment shortage in the country. We have people to fill those jobs. Do we have to start over on the equation? Is it an educational process? Is it a societal process? We've gone wrong, but where have we gone wrong?