Thank you, Mr. Chair.
I wish to first of all thank the committee members for providing the Canadian Construction Association with the opportunity to appear before you in connection with your annual pre-budget consultations.
The Canadian Construction Association, CCA, represents some 20,000 individual member firms operating in the non-residential sector of the construction industry from coast to coast to coast in Canada.
You have our submission. It focuses this year on three main areas: supporting apprenticeship training and increasing labour mobility; increasing industry productivity through the use of a targeted tax incentive; and finding a more efficient way to fund infrastructure at the provincial and municipal levels.
Let me speak first of all on apprenticeship training. Very briefly, CCA, like the federal government, would like to see more employer engagement in apprenticeship training. However, according to Statistics Canada, 99% of the firms operating in the construction industry in Canada are small businesses; 60.4% are micro businesses with fewer than five employees.
The real question or challenge for us, then, is how we incent SME employers to engage in apprenticeship. It's CCA's belief that we should take a page from the successful tax incentive program used in the United Kingdom, which specifically incents small and medium-sized business enterprises to engage in a first apprenticeship experience. We think the federal government is best positioned to do that by enhancing the apprenticeship job creation tax credit that is already in existence.
As to supporting labour mobility, most employers will reimburse an employee, once hired, to relocate. But what about cases in which there is no compensation or in which an EI recipient needs help to travel to look for work? It is estimated by the building trade unions that a tradesperson can incur $3,500 annually in non-compensable mobility expenses, presenting a significant obstacle to moving outside their local labour markets. We believe that a change to EI policy to permit unemployed construction workers on EI to obtain an advance from their approved benefits to support employment searches outside their local area would do a great deal to incent labour mobility.
Third, concerning capital cost allowance, we are recommending that the permissible depreciation rate for class 38 assets—mobile equipment, usually diesel-powered in the construction industry, for earth-moving, compacting, and excavating—be moved from 30% to 50% to better align with the true productive life of these assets. In fact, we have situations in which projects will not allow that type of equipment on the site if it's more than three to four years old, for environmental purposes alone, or diesel emissions.
Next, as regards federal infrastructure programs, simplify the application approval process by instituting a single window for applicants, “applicants” being primarily municipal and provincial governments. In 2016-17, Infrastructure Canada alone was managing 15 different infrastructure programs.
We believe the gas tax fund should be modernized to ensure that it keeps pace not only with inflation but also with population growth, since the allocations are made based on the census, which only occurs every five years or so.
Concerning construction innovation, we support the ask of the Canadian Construction Innovations group, which calls for the development and implementation of a comprehensive innovation strategy for the construction sector. The CCI's pre-budget submission is with you.
Just in closing, I can't resist a final word on the proposed corporate tax reforms to Canadian-controlled private corporations. Given that 99% of CCA businesses are small businesses that are greatly impacted by these proposals, let's get past the rhetoric on both sides and have meaningful consultations, rather than work to some arbitrary deadline. Those consultations must take place prior to the enactment of any reforms. It's no good to say we're going to have a reasonableness test for family employees and to go and negotiate with CRA after the fact—been there before, don't want to do it again.
With that, Mr. Chair, I'll conclude my presentation and will be happy to answer any questions the committee might have.