Finance Committee on Sept. 28th, 2017

[The Chair, Liberal, Wayne Easter]

Thank you very much, Glenn.

As you said, it is interesting listening to the other panellists. That's what a lot of panellists tell us when we go across the country. When there's a mixture, it's interesting to hear what others have to say, but I think you can also see the difficulty the Minister of Finance has in coming to decisions.

Thank you for all the presentations. We'll start five-minute rounds with Mr. McLeod.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Mr. Chair.

Thank you to all the presenters here today. They were very interesting presentations. Of course I'm very interested in NATA's presentation.

I want to tell you a little story about when I was travelling in the riding.

I went into the small, isolated community of Déline. The plane I was on had 18 seats, I think, and it was only half full as we went into the community. Then we landed, and I had my meetings in the community. The next day, I was scheduled to leave, and the airport was full. Before my plane arrived, people were asking, “Do you want to give up your seat? I need to get out. I need to travel.” When we got on the plane, though, there were only nine of us because the weight restrictions and runway length required the plane to fly at only half-load. The cost to the plane didn't change; we just had to pay a little more. That's the same with freight. The planes are coming in with half loads, and the cost of the freight is incorporated into the the overall cost for the plane. That really adds to the cost of living in these communities.

As we move forward in trying to improve the nutrition north program, one of the biggest factors that we should look at is changing the runway lengths. We're not going to be able to do that through the territorial government's funding because they have already said that they're tapped out.

You talked about an airport capital assistance program. The Emerson report has recommended that also. Could you explain to the committee how the creation of a northern airport capital assistance program could improve productivity and quality of life in the north, and more specifically in the Northwest Territories?

[Glenn Priestley]

I can. Thank you very much for that question.

We mentioned the number of airports that have lighting issues. We have airports in the north that do not have.... There are a lot of places that are very dark, and as an old pilot, I can tell you, there's nothing like seeing those two lines of lights. When you have only one, and half of them are out.... It has now been 10 years that they've been waiting for ACAP funding. There has to be a better way.

Another example—and I'm sorry—is Dawson. It has been waiting for a long time to get paved. The company that flies in there is very lucrative. It flies a lot of people. Because Dawson has been grandfathered to an old standard, it's allowed to operate. The terminal buildings in many of the airports are too close. We need to have flexibility in the standard because you can't pave Dawson until what's called the transitional slope is separated. It's a technicality that's easy to fix, but again what it does is it delays us from getting an airport runway paved.

When we take off out of Cambridge Bay and we're flying to Gjoa Haven to pick up a medevac patient to fly them into Yellowknife, that's not the time for the lights in Gjoa Haven not to work. That kind of stuff happens. You may say, “Well that's okay. We just don't go,” but then there's a patient on the ground whose safety is now threatened. That concerns us.

[Michael McLeod, Liberal, Northwest Territories, NT]

If we had roads, we probably wouldn't have the seriousness of challenges we have in our communities with airplanes. Most communities are using medevacs for ambulance. Air ambulance is the only system we have in most of those communities. We know that the cost of building roads is very high in the north. We are really pushing hard to try to get some of the roads connected, and if we're lucky, we may see some investment. We have seen some already, but we need to see more. For sure, we're not going to be able to connect all of the communities. A cheaper option is to extend the runways, to pave them, and to bring them up to a standard where we can bring in the bigger planes.

Do you have any idea, any estimated dollar amount of the cost to address the northern aviation infrastructure deficit?

[Glenn Priestley]

I don't have those numbers here, but Minister Garneau set aside $400 million for the corridor fund, spread over 10 years. The total for Nunavut alone is approaching $1 billion.

Mr. McLeod, I think the example of Colville Lake is a good one. Perhaps this committee could consider what my colleague from the students' association suggested in the provision of increased funding for the students. For $12.5 million, Colville Lake built a beautiful airport, and they did it by using the local college's construction students. They were getting on-the-job training. To their credit, they got real job experience. I share that with you as an example of how we can get things working better.

[Michael McLeod, Liberal, Northwest Territories, NT]

I'm very familiar with that. I was the minister of transportation when we did that.

[Glenn Priestley]

Good job.

[The Chair, Liberal, Wayne Easter]

Are you two in cahoots, or what?

Now, Mr. Kelly, you have five minutes.

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

Thank you, Mr. Chair.

First of all, I would like to let Dr. Lee have an opportunity to expand on some of the points he made.

One of your key asks here today is the reconsideration of the proposed changes to Canadian-controlled private corporations. You talked about the need for extended consultation. I think that many of us are aware that this is a transformative tax change, perhaps the greatest in over 40 years, condensed into a 75-day consultation, most of which occurred both during the summer months and when Parliament was not in session.

If I understood you correctly, you mentioned that in New Brunswick 82% of physicians have said that they would curtail hours, reduce work, or otherwise not continue to offer additional service. Do you have similar data from any other provinces?

[Dr. Emil Lee]

We don't have data per se. New Brunswickers, being Atlantic Canadians, were the most enthusiastic of those who reacted to this, and we have the best data from them because of their enthusiasm around this, and their concern. As well, probably because of the nature of that province and the need for rural physicians, they were particularly concerned.

Really, the concerns centre around our ability to retain and recruit rural physicians, to make sure that our younger physicians, the residents who are coming up through the system, feel that they are welcome and that they can replace those of us who are nearing retirement in our system.

We have an example of a resident from Canada who went down to the United States to do a fellowship, who is $300,000 in debt and wrote to us saying, “I was planning on coming back to Canada; however, given the uncertainty of the tax changes, I may make a different decision and stay in the United States.” That's just one example.

We also are worried about the ability of our single-parent physicians, for example, who have constructed their lives and their businesses in order to fund their small business. They've also set some aside for their family. Their ability to make that balance work may be significantly changed by this.

What we are saying is that the reaction has been loud and very clear, and not just from physicians. The main thrust is that the entire small business community in Canada has said this is a significant change—as you have said, perhaps the biggest change in 40 years—and we need more time than 75 days.

I speak for certainly our association and everyone at that small business table who says, “We are more than willing to look at tax measures, working in a constructive way”, in much the same way that all of our asks today are constructive, saying that we are willing to work together. Just because we're opposed on one issue does not mean we don't want to work together, but the time is so short that we feel we need to extend that time so we can have more deliberations.

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

I have attended stakeholder meetings and round tables in Nova Scotia and heard many of exactly the same concerns you're bringing forward from New Brunswick: the concern about rural communities and the difficulties in attracting physicians.

Many of the loudest concerns we've heard have been about family practices in small communities and the challenges in retaining those positions. But you represent a group of specialists. How do you see these proposals affecting the specialists, because in the larger centres what we hear, or what I have heard from my own constituents as well as from some who have attended round tables in Calgary, is that people are used to having access to top-quality specialists. Many specialists have expressed other challenges as well, both to me and to others.

Can you give us the perspective of medical specialists?

[Dr. Emil Lee]

I can give you a concrete example.

One of my colleagues, the chair of our board, is in Saskatoon. Their group was in the process of signing a lease—they were almost there—on a clinic they were going to open to treat a number of patients from Saskatchewan. The minute this came out, they said, “No, we cannot sign this.” They pulled out of that and did not open the clinic. They said, “Although there is definitely a need for that, we do not know if we will have the necessary resources in order to man that clinic and treat our patients.” That was a direct result of the proposal.

If you write that large across the country, there is certainly an impact on the productivity of Canadians in the health care sector.

[The Chair, Liberal, Wayne Easter]

Thank you.

We're out of time on that, but I have a question related to extending the consultations. I know that's on the other topic, but I've been saying, “Look, finish the consultations. A lot of people have been heard.”

You mentioned uncertainty. I'm worried it's that uncertainty and not having the clarity of where the government is going to go that is also a huge problem. What is your view on that?

I really hear it from the farm sector as well. They're at harvest, but I think their voices have been pretty loud and clear.

Is it time to bring clarity to the decision on where the government is going, rather than leaving this uncertainty out there?

[Dr. Emil Lee]

If the government were to listen to the small business sector and say, “Yes, we will engage We recognize that there are potential unforeseen circumstances and unintended consequences to this policy. We will not impose something that could have those consequences right now. We will enter into a consultation period,” that would bring a great deal more certainty. Although we don't know exactly where those changes would be, the small business community would feel that the government is listening and hears our concerns, and we'd be more than willing to participate and help.

[The Chair, Liberal, Wayne Easter]

Thank you for that.

Mr. Weir, for five minutes.

[Erin Weir, NDP, Regina—Lewvan, SK]

Thanks very much. I'll continue with Dr. Lee.

Could you tell us what the average income of a radiologist in Canada is?

[Dr. Emil Lee]

It varies from circumstance to circumstance, and we don't have statistics per se on what the income of a radiologist is, but depending on your jurisdiction and the nature of your work, it will vary. What tends to happen is that radiologists will operate in groups. Because each of us has particular sub-specialty expertise—mine is in interventional radiology, which is why I ended up talking about that—we spread out so that.... Because of the nature of billing, sometimes that varies, so we try to even those out.

[Erin Weir, NDP, Regina—Lewvan, SK]

Sure. So I guess my question would be: do you think that an incorporated radiologist making $250,000 per year deserves to pay less tax than an unincorporated radiologist earning the same income?

[Dr. Emil Lee]

We need to actually extend that out from the perspective of the individual circumstances of each of those radiologists. It may be that the incorporated radiologists have taken on more risk, for example. They have taken out leases, mortgaged their houses, mortgaged their resources in order to buy clinics and buy more equipment, whereas the other one has not.

[Erin Weir, NDP, Regina—Lewvan, SK]

Is it possible for a radiologist who doesn't have a clinic but works out of a hospital to incorporate their practice?

[Dr. Emil Lee]

That's a very good question. I believe that in certain circumstances—and it depends on the province you're in—that is possible, but I am not a tax accountant nor a lawyer, so I would not pretend to have a definitive answer on that.

[Erin Weir, NDP, Regina—Lewvan, SK]

Okay, because it seems to me that if you had two people doing essentially the same work and earning the same income, you'd expect them to pay the same amount of tax, whether or not they're incorporated. Does that sound reasonable?

[Dr. Emil Lee]

It's difficult to compare one to the other because the nature of what we do is so different. Some radiologists will take on risk because they have private clinics, for example, or they'll take on additional equipment. Others may not. It's difficult for me to say definitively yes, because to some extent you're comparing an apple and an orange, and it would be unfair of me to do that.

[Erin Weir, NDP, Regina—Lewvan, SK]

Sure. You mentioned the fact that physicians don't have pensions or health benefits, and you were using that as an argument for these tax advantages that aren't available to the vast majority of Canadians for whom incorporation is not an option. Might a better solution be to pay physicians a salary that includes pensions and health benefits?

[Dr. Emil Lee]

It would be beyond my pay grade to suggest that I have the solution to the nature of physician pay, but I can say, as a physician and as a small business owner, that our community would be more than willing to interact with the government to talk about all of the different options on the table, rather than just the few we have in front of us.