Finance Committee on Sept. 28th, 2017

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Okay.

I'd like to move to Mr. Marshall.

You mentioned specifically that last year's budget contained measures that reduced Canada's global competitiveness in the mining sector, and you listed some of the ways in which last year's budget harmed global competitiveness. What do you think is the most important signal that could be sent, perhaps, with this year's budget, to improve Canada as a destination for investment money, and the jobs and economic growth that would go along with investment in mining?

[Brendan Marshall]

Just for clarity, when I was giving my remarks, I noted a few measures from last year's budget that were supportive. The air of uncertainty right now that is dampening Canada's attractiveness as a destination for mineral investment is multi-faceted. Right now—it won't be a surprise to anyone around this table—there are a number of ongoing consultations, and given the magnitude of some of those individual consultations, whether they be on regulatory reform, climate change, or the rail freight legislation that's currently before the TRAN committee, any one of these individual pieces of legislation in its own right has the potential to have a major impact one way or the other on our business. The fact that there is a plurality of them currently ongoing creates a greater level of uncertainty.

I'm looking forward to budget 2018. MAC has persistently requested tax reform with respect to enhancing certain elements of the competitiveness or cost-effectiveness of doing business in Canada. I laid out three such measures in our speech. The first is to phase out dividend withholding tax, the second is to incorporate a substantial shareholder exemption, and the third is to make reforms with respect to tax payable on mining audits. These are measures that, in our view, would bring Canada into line with our principal international competitors, that are also competing for the same pool of global mineral investment.

[The Chair, Liberal, Wayne Easter]

Mr. Dusseault.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

I would like to thank you for being here today.

My first question is for you, Dr. McInturff, and it relates to the plea that you made very admirably on behalf of women's organizations in Canada. Could you please remind me of the amount of spending per Canadian? Could you tell us what target, per capita, should be set as a target for the coming years? Are there any comparisons in the world regarding women's organizations in terms of spending per citizen?

Perhaps in anticipation of the upcoming budget, it may provide something to look at, an ambitious target to deliver and achieve. It may not happen in the first year, but in the long term.

[Dr. Kate McInturff]

Absolutely. The per capita number I have is based on spending across agencies and departments. I should be clear that not every department fully discloses where its grants go, so it's my best estimate. That was just for spending on violence against women. That came to just under $5 per capita.

A good comparator for that actually comes from the provincial level of spending on violence against women. In Ontario, for example, it's closer to $16 per capita. As a goal, if we just as a federal government matched the per capita spending of our provinces, it would come to something closer to $500 million than what we currently spend through the women's program, which is $18 million. If you add in all the other departments and agencies, obviously it would be a bigger number.

The other good comparator would be the Dutch MDG3 fund. That was a gender equality fund, and I spoke about some of the results we've now had from the assessment of that fund. The Dutch invested the equivalent of just over $100 million in that fund. That was about 10 years ago, so we could shoot for higher than. I can see a women's program fund at that level, at $100 million, being—I wouldn't even say ambitious—a nice modest, achievable goal for the next year.

I know this government really has invested significantly in infrastructure support for women's shelters and buildings. It has invested $100 million over, I believe, five years to address violence against women. When the problem is costing us over $12 billion annually, we can do more there. We need staff in those shelters, and we're not investing as much as we could.

In terms of investment, it's not just in women's organizations but female employment and participation in our government. If we just moved the nearly 700,000 women who are involuntarily in part-time work into full-time work, they would bring in an additional $19 billion in wages. If we paid the women, who were working full-time last year, the same hourly wage as their male counterparts, they would take home an additional $42 billion. We would be putting over $60 billion back into our economy.

We're not asking you for a tax break. I'm actually asking you to put women in a position to pay more taxes, and spend more money in their communities and drive GDP growth. That's not just me. We've had a recent piece of research from the International Monetary Fund, which is not a radical feminist organization, and it estimates if we close the gap in labour force participation just by seven percentage points, our real GDP level could go up by 4%.

I want to echo the comments of Mr. MacDonald that these investments pay off. They pay off for productivity, they pay off for women, and they pay off for those women's families. If women are bringing home a paycheque that's 30% higher, that goes into the family budget. By and large, men and women live together. This isn't about stealing from Peter to pay Paul, right? This is about Peter and Paul living a better life together.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Kennedy, I would like to ask a question about aquaculture. It could have been longer, but time is limited.

What is the status of aquaculture in Canada? What opportunities are there for potential growth and consumption of fish? I think the rate is increasing, and with good reason, I guess. It's good to eat fish. What is the status of the situation, and what is the growth potential for Canadian fish consumption?

[Tim Kennedy]

Right now, the value of the farmed seafood sector compared to the value of the traditional fishery is about 30%. We're increasing every year. Again, in Canada at the moment, about 50% of the seafood consumed is farmed.

Across the country, we have approximately 19,000 direct and primary processing jobs based on aquaculture. We believe from our projections that in 10 years we can actually increase that by about 14,000. That would be pretty close to doubling it. There's a great opportunity. For instance, just two days ago, the Premier of Newfoundland announced that they want to double their production in Newfoundland. I don't know if you saw that announcement. There are great opportunities there. There are also great opportunities in Quebec, northern Ontario, and all across the country.

Again, as some of my colleagues up here said, these are high-paying jobs and they're full-year jobs. These are not jobs for three months of production. These are jobs for the full year in aquaculture, and they're in remote locations that really need these jobs.

That's where we are right now.

[The Chair, Liberal, Wayne Easter]

Thanks to both of you.

Mr. McLeod.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Mr. Chair, and thank you to the presenters.

My question is for the FCM. As a former mayor and a former member of the Government of the Northwest Territories, I find that the issues you're bringing forward are issues that I worked on for many years. I recognize the huge deficit in our municipalities in terms of what we have for infrastructure, which is compounded even more in the north because a lot of those communities are aboriginal communities. They're public communities; they're not reserves, but they are aboriginal communities.

The issue of housing, I would say, is almost a crisis situation in the north, and the housing issue of course causes other issues. People have studied the results or the impacts, and they feel that if we could house everybody properly, we'd solve 50% of our social issues.

We have been seeing some good investments in the last couple of budgets. We are seeing some activity on our roads. Our municipal roads and some of the bridges are being fixed up. Also, we're looking at ways to try to adapt to some of the climate change effects that are challenging us.

I'm very happy that you're in front of us here today. We've had many people parade through these halls and the House of Commons in talking to ministers and the Prime Minister and raising the issue that funding for our part of the country, the north, can't be based on population. It can't be per capita. We've seen how that works, and it really doesn't give us enough to do anything. That argument has been there, and we've also heard a lot of arguments that in some of this funding we're going to see coming forward there has to be some flexibility to make it work for us.

I also agree with your argument that communities have to play a major role in project selection, so tell us, how could budget 2018 enable communities to play this role?

[Brock Carlton]

There are a few issues there. Certainly, as I said in my comments, we're looking to budget 2018 as part of the movement to define more clearly what was committed in budget 2017, so that the program definitions around the integrated bilateral agreements and the eligibility criteria, etc., are made very clear, and also so there's flexibility in the delivery of the programs and the money that was committed in 2017.

You're absolutely right: the local flexibility is essential. You're also absolutely right in that the north has huge problems that require special attention. We believe that budget 2018 is just part of the process of further deepening the federal-municipal partnership so that those local needs can be addressed in ways such that the decisions are made effectively. Part of it means that the federal government needs to continue to pressure the provinces and territories to engage the municipalities, as we have said, and some of that will play out through the integrated bilateral agreements.

I think it's also really important for the north that budget 2018 further define, through the national housing strategy, how the $15 billion for housing money that was committed in 2017 will actually roll out. This is a critical piece of the puzzle, as you rightly said, for the north and for Canada generally.

I've just come from spending most of the last two days with Minister Duclos on the question of poverty reduction. Housing is a fundamental element of that. The rolling out of the national housing strategy in terms of the allocation of dollars, the design of the programs, and how those dollars will roll out are critical questions that urgently need to be answered. Budget 2018 will be just part of the process along the way of making sure that all of this responds to local needs.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you for that.

My next question is to the Mining Association of Canada. I strongly believe that the best program we could have for people in the communities all across Canada is a good opportunity. I've watched the mining industry provide that in the north. Some mines have some very creative solutions to get people hired in the communities who maybe don't quite meet the skill set or the education levels required. They're introducing literacy programs right at the mine site. So many things are making it easier for people to get a job there, and I applaud that.

I think there's potential in the north that we haven't even tapped into yet. There's so much opportunity, so much promise there, but we have a number of barriers. You've raised a few that the mining industry recognizes, but I was hoping you were going to talk about roads that are needed in the north. Sometimes they're good, but roads for us that are going to stay there forever will be better in the long run. We don't have a whole lot of them. We've seen the investment for Whati Road that's going to allow Fortune Minerals to move forward. It's unlocked that potential for them.

We also need to see the negotiations and settlements of land claims resolved. Land tenure issues have to be resolved so the aboriginal government can stand shoulder to shoulder with industry and government to take full advantage of opportunity.

I really like the growing numbers of indigenous hirings. Tell us what measures can be taken in our next budget 2018 to ensure that indigenous people continue to participate in mining and those numbers grow. It seems to be an area that is doing well. They've done all the right things. How do we make it better?

[Brendan Marshall]

I couldn't agree more. Infrastructure is critical for doing anything in the north. There's a massive deficit. MAC industry research in that area demonstrates that it costs two to two and a half times more to do the same project in the north as it does in the south, so dollar for dollar it's more difficult to attract that same level of investment up north.

I think the decisions that the government has made most recently in Yukon, the Tlicho Road, are very positive. We are hopeful to see a similar investment coming down the pipeline in Nunavut.

With respect to indigenous populations, training is key. We have companies that are investing $500,000 a month in training. They have developed “unique in the world” programs to reach out and meet northern indigenous Canadians where they're at and facilitate community to various different types of opportunities on the site.

We think that the ASETS program is a really important contribution from the federal side to indigenous work-site-specific training. We know that this program in the most recent budget was extended for one year, but is subject to a review. We'll be following that and participating in that review. We think that expanding and better enabling that program to deliver more for indigenous Canadians in workplace training would be a very positive step.

[The Chair, Liberal, Wayne Easter]

We'll have to leave it there.

Mr. Albas.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you, Mr. Chair.

I just want to thank each one of our witnesses here for the work that you do helping educate parliamentarians, as well as the government.

I'm going to start first with FCM. Brock, thank you for being here today. We talked a lot about tax implications today, but I think your membership...when I speak to local mayors, councillors, etc., I think the government has put out a lot of rhetoric around how they're going to support, but to me it seems they've made the processes by which you apply much more complicated. People don't know if they apply to the provinces, apply to the federal government. Are they going to go through an infrastructure bank, which they don't understand?

Is this a problem that you're hearing from your stakeholders?

[Daniel Rubinstein, Acting Director, Policy and Research, Federation of Canadian Municipalities]

Our members and Brock spoke to the importance of this integrated bilateral agreement process right now, and it's really about making sure that there is clarity at the local level for municipalities in how these programs will roll out. We are encouraged by the letters that Minister Sohi sent to his provincial counterparts that specified that municipalities and provinces will need to jointly identify projects. That's an innovation over previous programs, so we're seized with the importance, both from our own members participating in that process at the provincial level, and engaging with the federal government about that.

On the infrastructure bank, similarly we've been in touch with the agency that's establishing the bank and making sure that our members understand what the bank will deliver as it's rolled out.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Well, again, simplification obviously isn't there, because you're still pursuing that clarity. I appreciate that some things do take time.

My next question is to both the Mining Association of Canada and Forest Products Association of Canada, two industries that I don't believe toot their own horn enough about how innovative they are. When you look at the geographic or geospatial systems, mapping, all sorts of different technologies, robotics, having just-in-time to make sure that efficiencies are up, so that when we're on a down cycle, we're getting the best leverage from it....

Derek, can you please point out a few of the different things that make your industry so innovative?

[Derek Nighbor]

Thank you. I wish my comms guy was here.

I appreciate that, and you're right, it's something we talk about internally in the membership. One of the things I'm proudest about—and I don't think people really understand it—is just how involved the planning process is to manage the harvest. Across the boreal forest, we deal with individual species-at-risk issues, like the caribou one that's going to be hot this fall. We're managing for 85 mammals across the boreal, over 100 different species of fish, over 300 different types of birds.

Plus, we're managing to suppress fires, to manage pests—pine beetle in the west, spruce budworm in Quebec and Atlantic Canada—and trying to get ahead of the next pest that might come. It's managing for wetlands preservation so the ducks do well, etc. With the involved way...and the amount of planning, we're not mowing down trees, which is what some people like to suggest.

With regard to the other complicating factor, the chief forester from B.C. was talking at a conference this morning about the forests and that they are not static. When we're dealing with warming temperatures, we now see deer in parts of the country move into areas that they weren't before, which means the wolves and the cougars are now following them. The predator–prey relationships are changing. Nutrition conditions in the forest are changing. We're dealing with a very, very complex environment.

I think that's the one piece that I would table before I turn it over to my colleague from mining.

[Brendan Marshall]

It was mining technology that built the Canadian space arm. That's one tangible example. We have companies that are looking to do the first totally electric underground mine in North America. We have companies in the Northwest Territories that have facilitated a composting system that reduces power on site but also leaves biomass for reclamation purposes in a terrain where there is very limited overgrowth. The downstream supply chain effects for reduced emissions, reduced transportation costs, reduced land movement have an accumulatively positive effect. That's Dominion Diamond, by the way.

I think Mr. Easter is signalling that I may be at the end of my time, but I really appreciate the question. Innovation is key. When you are taking a percentage out of rock that in some cases is less than half a percent, the amount of energy that's required, the amount of innovation and intuition to be able to do that when in certain cases it's upwards of two kilometres underground, is an ongoing constant engagement of reducing costs, managing project deliverables in a multi-faceted shifting environment.

[The Chair, Liberal, Wayne Easter]

Before I go to Jennifer, on this question to the Forest Products Association of Canada on innovation, your recommendation number six is “Support the implementation of recent budget announcements relating to innovation and transportation.” It partly relates to something that the Federation of Canadian Municipalities said as well.

I made a note when you were talking. On the problem of rolling out this infrastructure and so on, are we talking money or are we talking process? I don't mind admitting at all that one of the problems I have with Ottawa is process. We're processed to death. How do we get something done?

My question to both of you is whether there is a problem there. You talked about all the innovation you do, Derek, and that's all great, but in the budget announcement there was support there. Are you saying there's a problem? Can you fill us in on that?

[Derek Nighbor]

So much of what Brock talked about.... We are seeing the coming to life of a number of things out of budget 2017, so I think there is an element of process on the infrastructure side for us. About a third of our overall costs are related to transportation, getting the goods from the forest to the mill—which in some communities could be 500 kilometres apart—then to market, Port of Vancouver, China, or whatnot.

The infrastructure bank funding.... We see huge opportunities for efficiencies at ports, huge opportunities for new capacity on rail, so that's one part of the equation. The other is this issue around superclusters and innovation, and supporting the transformation. With the housing bust in the U.S. in 2008-09, and the move to digital from paper, in our sector we now have to find new product areas for our wood fibre. Biospace is a big space for us there, and through the supercluster program we see some huge opportunity. We have an application in; we are just waiting on ISED.

[The Chair, Liberal, Wayne Easter]

Okay. I don't know if you want to add anything, Brock. Go ahead.

[Brock Carlton]

Sure, just very quickly.... We are always looking to simplify the process, so those conversations are ongoing. The government and the department have been very receptive to the discussions.

I should just caution that there are times when.... There is an assumption that the timing when federal dollars get spent is an indication of inefficiency or slowness, when in fact we should never lose sight of the fact that the federal government reimburses expenses. Infrastructure dollars to the municipalities come after the expenses are made, and oftentimes after some of the work has been done. The timing of federal dollars is not a clear indicator of inefficiencies.

[The Chair, Liberal, Wayne Easter]

Okay, thank you.

Ms. O'Connell, go ahead.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Dr. McInturff, I have a couple of questions. You mentioned the Dutch investment of $100 million and what that meant, and you also talked about the not-great per capita amount that is being spent. I appreciate that you gave a larger, not per capita number in terms of what you would like the federal government to spend, because one of the issues I find.... I come from a semi-rural riding, and sometimes access for rural women is even harder, so if the federal government creates a per capita amount and then it trickles down—provincial, municipal, police, etc.—rural Canada would get even worse. Could you speak to that point?

In the Dutch model, with the $100 million, you said that it changed the lives of hundreds of thousands of women, even outside the country. Could you elaborate on that a little?

[Dr. Kate McInturff]

Sure. The Dutch fund was set up after the millennium development goals were established, to support achieving the gender equality goals that were part of that. It was funding for women's organizations outside of the Netherlands, in low-income countries. Ten years ago, it was approximately the equivalent of $100 million. Those impacts were in other countries.

In fact, Canada has had its own women's funds in other countries. It has funded a women's fund in Pakistan and helped women change the legal system so they were recognized as witnesses in court. The women's fund supported by Canada in Paraguay helped women's organizations make domestic violence a crime. There is really good evidence that it is very effective.

Direct money to women's organizations also addresses.... Those organizations are best placed to say.... For example, I learned from someone who works on violence against women in a rural setting that a shelter is not always the right answer for women in rural Canada. Sometimes, what they need is home visits or other kinds of programs that speak to the reality that they live, which is different from that of women in, say, downtown Toronto.

Women's organizations are part of their communities. These are members of our communities, so they are very effective in understanding how to target their programs and services, and not so process-y in doing that. They are already there, and they already know, because they've been working with those communities for decades and they can deliver that.

We can talk about per capita spending, but I will say that, if we increased our spending through the women's program to $100 million.... I've actually calculated what difference that would make to our debt-to-GDP ratio, and you have to go out about 13 decimal points to see it. It's a lot of money to an individual, but in terms of the scale of the federal budget, it's really doable. It's doable right away.