Evidence of meeting #103 for Finance in the 42nd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was airports.
A video is available from Parliament.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Thank you.
I have just enough time left to ask Ms. Gadamsetti a question about student loans.
Here is a simple but eloquent example. As we know, Bombardier received an interest-free loan of $350 million. However, we still have difficulty convincing the government to make interest-free loans to students.
In your opinion, do all students in Canada also deserve interest-free loans, like some Canadian companies receive?
Chair, Board of Directors, Canadian Alliance of Student Associations
Currently, we are trying to help students in terms of loans and grants. I'm focusing on those who need them most. At this point, we've seen really encouraging models come forward in Ontario and New Brunswick, and I'm under the impression that Alberta as well is putting on trial the idea of targeting financial aid in the form of non-repayable grants based on a sliding income model. At this point, we're not really looking at equity necessarily, but we're looking at equality, because the need is so great. If we were to consider options like that without first addressing the backlog of barriers, especially financial, for students to enter the post-secondary, I think we would be backtracking a little bit and having to reconsider those options eventually. At this point, we're really very focused on making sure that access is equitable across all communities.
Liberal
Jennifer O'Connell Liberal Pickering—Uxbridge, ON
Thank you, Mr. Chair.
Following up with Ms. Gadamsetti, you spoke about mental health assessments in that recommendation. Since the objective of this study is focused on recommendations that we can make to the minister around growth and the impediments to it, certainly if someone can't complete their education that could be an impediment to growth. I'm curious to know if you're aware of jurisdictions that have done this and if there are any measurables in terms of success rates. If you have the mental health assessments and services up front, do you have any measurables of the ability of a person to then complete their studies and go on and be successful?
Chair, Board of Directors, Canadian Alliance of Student Associations
Absolutely. I am a registered nurse myself, as well as a student returning back to post-secondary, so I've seen the impact this can have first-hand.
Speaking specifically within the post-secondary realm, currently we're asking the federal government for help because, across the country, access to such support is not equitable and we think this is a shared responsibility. While some provinces might be able to better offer support, others aren't. Just as students, for example, are able to access financial aid in terms of grants for physical disabilities, and any sort of assessments associated with that, or aids associated with that, we want to make sure that mental health is prioritized just as much as physical health.
We've seen incredible success in terms of students accessing those granting programs through the Canada student grants program, and we would like to see that expanded to include mental health as well.
Liberal
Jennifer O'Connell Liberal Pickering—Uxbridge, ON
Thank you.
Mr. Masterson, your third recommendation for the 100% ACCA minimum of one full business cycle. Can you maybe explain this a little bit further? I'm not in manufacturing, so what is the kind of investment that would be typical? I know you spoke about this somewhat with my colleague, Mr. Sorbara. I think this is quite interesting. What are some of the costs and what I'll call the rewards on the other side, and how that measures in productivity?
President and Chief Executive Officer, Chemistry Industry Association of Canada
The opportunity and the reward, as I talked about, is getting our historic and, perhaps, even greater share of an immense quantity of investment into Canada. We've heard Minister Morneau and the advisory council on economic growth talk about Canada basically falling woefully short on where we should be with foreign direct investment, so we're providing some advice on what levers can be pulled. What's the reward? We're talking about an individual project anywhere between $6 billion to $10 billion Canadian of new investment, thousands of jobs during manufacturing, and hundreds of jobs for 40 years thereafter.
Turning to the specifics of 100% ACCA and the cost and benefit back to government, I'll turn it over to Mr. Podruzny, our tax expert.
David Podruzny Vice-President, Business and Economics, Chemistry Industry Association of Canada
We have a study on file that's listed in our submission. What happens— and I'll pick a smaller one. Bob's picked some big ones—is a $4-billion investment that's under active consideration will take about five years to construct.
In the meantime, all that capital, all the investment, is inactive, but if the companies could recover some of that in rapid writeoff against other expenses, it would allow them to borrow in that particular case, per billion dollars, about $220 million less right up front. That cash flow allows you to make that much more investment. It's just a good way to incent the industry, yet get all the taxes back within the next year.
Liberal
Jennifer O'Connell Liberal Pickering—Uxbridge, ON
That was my question. So it's not a full writeoff, it's just deferring payment, essentially.
Vice-President, Business and Economics, Chemistry Industry Association of Canada
Precisely.
Liberal
Jennifer O'Connell Liberal Pickering—Uxbridge, ON
Thank you for that clarification. It's helpful.
Mr. Lancastle, I'm curious. It might not be in your purview or part of what your organization is looking at but in appraisals, I have a concern that, in some of the hot markets, the appraisals then lead to assessment values and property values. Is your organization involved in making recommendations at the provincial level? I think in your testimony you spoke about ensuring that they're accurate appraisals and not just reactions to specific hot markets. Are you doing any work in advocacy at the provincial level to make sure this is being reflected so property taxes, for example, are not also just being tied to hot market bubbles?
Chief Executive Officer, Appraisal Institute of Canada
A significant portion of our membership works in the assessment community for provincial and municipal assessment authorities across the country.
One of the elements in our professional standards is a new standard for mass appraisal, which is the methodology that is applied to arrive at assessed values. Obviously our organization is working very closely with provincial and municipal governments across the country to help make sure that those assessments are as accurate as can possibly be accommodated within a mass appraisal environment. You're never going to get a value that is going to be as accurate as an individual assessment and appraisal of a property at a point in time. However, the application of a strong methodology for mass appraisal can help to make sure that there is a higher degree of accuracy.
It's always really important to recognize, as well, that any appraisal, whether it be an individual appraisal or a mass appraisal, is a point-in-time valuation and markets can fluctuate, as you've noted. It then falls to municipalities and provincial assessment authorities to respond to changing realities within their marketplace. Our organization works actively with all of them as required to help support that process.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Thank you to all our witnesses for your testimony here today.
Mr. Lee, you've mentioned the need for governments to start getting serious about supply: the federal government, GST, HST depending on which province. Could we not just incentivize by raising the rebate you get for housing?
Chief Executive Officer, Canadian Home Builders' Association
Yes, certainly. When it was introduced many years ago, in the early 1990s I believe, it was supposed to be with the intent that it would get adjusted as prices went up; so would that rebate. Of course, prices have clearly gone up as we were talking about, and it has never changed. We've advocated for it for a couple of decades.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
As more housing gets built, then that means also we'll get more GST revenue. That's one way the government could easily incentivize it. Again, that would make affordable housing, regardless whether it's for social housing or just new housing stock at market price. That would be a good solution.
You've also mentioned the impact of the proposed changes Mr. Morneau is contemplating and doing a consultation on. I've been speaking to people in my riding, and some developers have said, much as you have said, that it takes three years sometimes for them to be able to bring a project to completion. Three years of finding the property, getting the right designs, doing the public process, all that stuff, everything you've talked about that slows everything up. Then you finally can build.
During that time, most of the money that was used as the down payment or financing is in a passive instrument to make sure you don't have churn by inflation. They'll hold everything from money market funds to bonds to stocks, depending on whatever the selection process is.
I've been told by certain financial institutions that they will factor in tax liabilities and basically lend less. If you have a million dollars set aside for a new project, they will say that if you have tax liability you have to factor that in. I think there are a lot of hidden costs we have toward your industry specifically.
In Kelowna, a lot of jobs come straight from construction. When someone says that the way developers and construction companies hold cash or the way they hold passive assets is going to discourage them from doing that, does that worry you about overall construction going down as well?
Chief Executive Officer, Canadian Home Builders' Association
Yes, absolutely. It's a critical part of how the organizations operate. Frankly, three years in some jurisdictions would be enviable, because in some places it takes longer than three years to get product online. It can be almost as much as a decade in some of the more complicated and complex areas.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
If more money is going toward paying taxes and less toward actually building buildings, that means fewer jobs. Do you think there's a direct correlation there between someone's ability to save to invest in a new development and the ability to put people to work?
Chief Executive Officer, Canadian Home Builders' Association
We do. We think there's a direct correlation to fewer jobs, fewer small businesses, fewer local businesses. It's a big risk.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
You're speaking specifically on these new proposals regarding passive investment. They will have a direct and real impact, not just on the owners of these companies but on their employees.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Thank you.
I'd also like to talk to Ms. Gadamsetti.
Thank you very much for your work here. I've actually taken some courses recently. One was a macroeconomics course, one was a micro. The micro actually had an open-source textbook that had many Canadian examples in it, because professors across Canada decided to work and put that in. The macro was an e-book that was paid for. I found that if something were available in between...where there was a little more professionalism in the open-source, but there was a lot of Canadian context. I certainly appreciate your suggestion to see more investments for basic.
It's my understanding that professors and most colleges and universities have very stringent rules that say you have to buy textbooks in U.K. English and not American English.
Have you heard that?
Chair, Board of Directors, Canadian Alliance of Student Associations
I cannot confirm that.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
Some publishers have actually said that makes it more difficult for them because they then have to reprocess and republish a similar textbook to that made in the United States. Words like “labor” or whatnot have a slightly different spelling here in Canada. That might be something you might want to talk to the provinces about as well.
