Finance Committee on Oct. 4th, 2017

[The Chair, Liberal, Wayne Easter]

Okay, thank you all.

Mr. McLeod, last panel.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thanks to everybody who has presented here today.

I am very interested in the presentation that was made on clean energy. I listened very carefully. This is an issue that affects us in the north quite a bit. It's a big issue for us. We're seeing the impacts of climate change like nowhere else in Canada, and it's really causing a lot of concern. It's causing issues with our structures and our transportation systems, and it's also causing a lot of problems in the aboriginal communities, the aboriginal population, because climate change has changed the way we've done things historically. Our elders, our leaders, are no longer viewed as the experts on the best place to hunt, how animals migrate, or the best place to cross a river. All that is changed so much that youth don't go to the elders as much. Google, of course, has also played a role in that. The relationship has changed, and it has caused deterioration of the language. Technology has also done that, but this is really a big issue for us. We've been looking at ways to lessen the impact from what we do, because all our communities depend on diesel for power, and a lot of our houses use diesel-generated heat.

We've tried and continue to try solar. Solar is something that has been touted as the way to go across Canada, but we have many months of darkness, so it's a challenge to have solar. It works if you pair it up with something else.

We've looked at wind. Up to now, wind has been difficult because the products usually come from a different country. It's hard to get parts and even harder to find somebody who will install the parts, so it could take you six months to get the parts and then another year maybe to get somebody who will come up to the north, or to find somebody who will come up, so it's difficult to say it's going to work. We are testing. We have a big project going on in Inuvik, and we're moving forward on biomass in some of the southern parts of the territories, and it looks like that will work fairly well.

Geothermal has got potential. The expertise has been very limited in that area. Nuclear is like a swear word if you mention it in the north. People don't even want to explore or discuss that. Although it may have the answers that we need, we can't get past the backlash of that suggestion. We also have all kinds of opportunities there for hydro power if we can find the resources.

I've had the opportunity to try hybrid vehicles, electric-gas vehicles, right up as far north as Inuvik, and they work very well. I was very surprised when I went out at -45°C and the vehicle started. It performed quite well, except the hybrid vehicles that we were testing started spending more time on the back of trucks heading south to get repaired than being used.

We also tried out the smart car. The government's Department of Transportation bought the smart car for the staff to use, but we started to notice the smart car couldn't be found because the staff were hiding it in some of the shops and garages where nobody could find it because they didn't like it. It was not good to drive in snow; that was hard on the vehicle.

When you talked, you said from coast to coast, but we have three coasts. You didn't say anything about the north. I'm keen to see what the potential is for electric cars in the north. We have no way to charge an electric car right now, and the installation of that will be very expensive. Will it work? Has it been tested so that it will work in the north?

[Dan Woynillowicz]

It is a challenge that is not only unique to Canada. There are other nations, as well, that have more remote communities, particularly with harsher environmental and climatic conditions that raise a lot of challenges for these new technologies.

I would say that whether it's with hybrid engines or electric cars, we are not there yet in terms of having the technology to operate in those kinds of conditions. Similarly, on the power supply question, there is no silver bullet “one size fits all” form of generation that can meet a community's needs. Diesel has its drawbacks in terms of cost and local pollution and, as you know, with solar, the sun isn't always shining.

I think the solution on the supply side is likely to be hybrid solutions, a number of different solutions, and they are going to be quite community-specific in terms of whether there is a geothermal resource that can be tapped into or whether there is the prospect of hydro in close proximity, so that you don't have to spend a fortune on transmission.

I think there is a real opportunity for Canada to actually be forging ahead with developing some of these solutions. In the pan-Canadian framework on clean growth and climate change, they do identify the need to assist remote communities to get off diesel and get onto reliable and affordable alternative supplies of energy. At the provincial, territorial, and federal level there are some efforts afoot to do that.

When it comes to electric vehicles, I think we actually need to be doing more to design and test vehicles that work in the Canadian environment, recognizing that it is somewhat unique. There is now a Canadian start-up company called Havelaar, which is designing an all-electric pickup truck, and they are designing and testing it in Canada to meet the needs and the driving conditions Canadians face.

I think we need to continue to encourage more of that. Not only will we be able to capitalize on that here in Canada, but we will be able to export those technologies and those results to other nations that face similar challenges as well.

[The Chair, Liberal, Wayne Easter]

We will have to end it there.

I do have one quick question, because it's come up in a number of presentations both here and elsewhere. As you know, the questions were on productivity and competitiveness. A number of people mentioned training and skills development, which would lead to productivity, etc., and they have mentioned that at a number of locations. It's a request to the federal government.

The federal government, though, already transfers $3 billion to the provinces under the labour market development agreements. That's up for renegotiation now, and it's always a federal-provincial jurisdictional issue. However, should the federal government be laying conditions out on how the money would be better spent so that we get more mileage out of that $3 billion? That's a lot of money, but it doesn't seem to be getting the job done.

Are there any suggestions?

Mr. Black.

[Iain Black]

If I may, I have always been a fan of putting conditions on any money that changes hands between government agencies in particular, so I like this suggestion. There are a couple of things we could suggest.

One is that insofar as we have a labour market challenge where we have under-representation from women and indigenous people, and we need additional immigrants to fulfill a lot of the job challenges that are ahead of us, I think improving access to post-secondary institutions, especially for the groups where we need more participation in the workforce, would be one idea.

The second would be increasing funding for post-secondary institutions that are doing research around innovation and product commercialization. We're really not at the table in this regard with respect to other countries in the world. I would also find a way to link that to the private sector.

[The Chair, Liberal, Wayne Easter]

Mr. Lamman.

[Charles Lammam]

A report was put out earlier this year that looked at all of the tax and spending done to support innovation and skills training. The tally was $23 billion spent by the federal government. The problem, however, is that for almost 90% of that envelope, the federal government hasn't analyzed whether the spending, through taxes and money, is being effective or not.

For me, before we talk about further spending, I think we have to get a better sense of how the money that's currently being put aside for both innovation—which leads to productivity—and skills training is being used. I'm happy to provide a link or the report in question.

I'm going to have to disagree with my colleague here, though, in terms of the conditions argument. I think one of the reasons why public education programs work well in Canada, compared to, say, the United States, is that we do not have conditions on transfers. We have decentralization that allows the provinces and local governments to determine how best to spend the money in order to get maximum results.

We have a problem with regard to health care in that we have money transferring from the federal government to the provinces, but the provinces don't have the ability to fully experiment with what works for their residents.

I think I would caution against further transfers over and above those we do, and particularly those with conditions, because that does two things. One, it reduces the ability of governments at the more local level to experiment, which we have several successful examples of here in Canada. Second, it disrupts the accountability and the transparency of how the money is raised, because one government is raising the money and a different level of government is doing the spending. Taxpayers are going to have a hard time determining who's accountable for this or that initiative. I would strongly caution against a more federally centred approach on these measures, which would—

[The Chair, Liberal, Wayne Easter]

Can you send the clerk that link?

Mr. Holden, for a last comment.

[Paul Holden]

I'll speak to it just briefly.

I would caution against increased conditions, but I would certainly advocate for increased creativity that allows small business owners greater access to some of the training programs that would benefit their employees, and also for creativity that would encourage participation in some of the programs by some of the groups that Iain was referencing earlier. I think it's a question of creativity rather than restrictive conditions.

[The Chair, Liberal, Wayne Easter]

With that, we thank all the witnesses for their presentations and their answers to our questions.

We will suspend for five minutes and bring up the next panel. We'll start at 10:45.

[The Chair, Liberal, Wayne Easter]

We'll reconvene and call the meeting to order.

As the panellists certainly know or they probably wouldn't be here, we're doing pre-budget consultations prior to the 2018 budget. I want to thank you for coming and making your presentations today. Also, thank you to those that presented a pre-budget submission prior to the August deadline. We appreciate that as well and that information certainly is being considered in our pre-budget consultations.

To start and so that you have a tenor of the makeup of the committee, this is a subcommittee of the House of Commons finance committee. We usually travel with seven members instead of the full committee. To give you an overview of the areas of the country we're from, I'm Wayne Easter. I'm a member of Parliament from Prince Edward Island and the riding of Malpeque.

Go ahead, Michael.

[Michael McLeod, Liberal, Northwest Territories, NT]

Hello, everyone, and welcome.

My name is Michael McLeod. I represent the Northwest Territories. I'm a member of the Liberal Party and I'm probably the newest member of the finance committee. I joined in September.

[The Chair, Liberal, Wayne Easter]

Next, we have Mr. Sorbara.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

I would like to welcome everyone.

I'm Francesco Sorbara and I represent the riding of Vaughan—Woodbridge. I've been on the committee since the beginning of our mandate. I look forward to hearing everyone and hearing your insightful and substantive thoughts this morning.

Thank you.

[The Chair, Liberal, Wayne Easter]

Go ahead, Mr. Fergus.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Hello.

I'm Greg Fergus and I am the MP for Hull—Aylmer, a riding in Quebec.

I invite you to use the earpiece if you do not understand French because another member and I will be speaking French.

[The Chair, Liberal, Wayne Easter]

Next, we have Dan.

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

Good morning, everyone.

I'm Dan Albas. I'm the member of Parliament for Central Okanagan—Similkameen—Nicola, obviously from the Okanagan. I'm very happy to be in Vancouver with the finance committee doing outreach and I'm looking forward to your presentations today.

[The Chair, Liberal, Wayne Easter]

Go ahead, Pat.

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

I'm Pat Kelly. I'm the member of Parliament for Calgary Rocky Ridge. I'm pleased to be here as well and I look forward to the presentations.

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

Good morning.

I'm Pierre-Luc Dusseault. I represent the riding of Sherbrooke, which is in southeastern Quebec. I am a member of the New Democratic Party of Canada.

I am pleased to be in Vancouver to listen to your testimony and where there is an NDP government.

[The Chair, Liberal, Wayne Easter]

Thank you very much, all.

We'll start with HealthCareCAN. We'll try to keep the presentations to around five minutes, if we could.

Mr. McMaster, the floor is yours.

[Robert McMaster, Member of the Board of Directors, HealthCareCAN]

Thank you. It's an honour and a privilege to have the opportunity to present to the House of Commons Standing Committee on Finance.

I come to you as vice-president of research for Vancouver Coastal Health, which is the area that we're in now. Also, I am executive associate dean of research at the faculty of medicine of the University of British Columbia. That's my day job. I'm also a board member of HealthCareCAN, which is the national voice for Canada's research and teaching hospitals and health care organizations. HealthCareCAN is centred in Ottawa.

I mention this to you because what I'm talking about does not directly concern Vancouver. It concerns the whole country and really driving innovation in the health care system.

I will touch on three related subjects today. One is health care research and innovation, the second is health infrastructure, and the third is antimicrobial resistance and stewardship. They're all very much related, both in the research area and also in the health care area.

With regard to health care research and innovation, the importance of research and innovation has not been lost on this government. We're really grateful for the initiatives in innovation, and we feel that this really affects and gives a great opportunity for health research to participate.

Canada's life sciences, which include both biotechnology and research should be a dominant force in Canada's economy, yet as the report of Canada's Fundamental Science Review finds, Canada's position in science and innovation has fallen out of step with the G20. Our global position in science is declining across a range of measures relative to our peers. Nowhere is this more important than in the health care sector, which accounts for over 10% of Canada's GDP, contributing to longer lifespans, improved quality of work, and higher productivity for the entire economy.

As a nation, we are failing to provide a thriving environment where our scientists and innovators can drive productivity. Simply put, the decline in funding is untenable for our nation. Particularly affected are early career investigators who are finding it more and more difficult to establish their careers due to the limited funding available for their research. These investigators are our future for driving the innovation of the 21st century.

Our health sector and research institutes are major employers that help local economies thrive. Canada plays host to 777 general hospitals, 304 specialty hospitals, and 115 psychiatric hospitals in addition to 19 pediatric hospitals. These hospitals operate at the leading edge of health research. Every dollar invested in fundamental research is estimated to result in a two-fold to five-fold increase in returns to Canada. This also contributes 20% to 60% to pay for itself, saving the health care dollars within five years. Thus this is an important aspect of research that leads to sustainability and better outcomes for our patients.

With this in mind, HealthCareCAN fully supports the recommendations in the final report of Canada's Fundamental Science Review, which was released last year. As recommended in the report, we recommend that the federal government invest $485 million over four years for investigator-led research. Such an investment will help restore Canada's international competitiveness.

A related topic is health infrastructure. Health care organizations maintain, operate, and use key elements of the country's critical infrastructure. National and international accidents and hazards affect the sector's response to result in a crisis. An example of that would be the SARS infection several years ago where Canada was a lead in actually containing that across the country.

Aging physical and technology infrastructure has been identified as a key risk to Canada's overall resilience in health care. Canada's hospitals face an accumulated deferred maintenance cost of approximately $28 billion. A recent study found that health care facilities are among the oldest infrastructures in use today, with 40% of the inventory being older than 50 years. As you would hope, you would expect up-to-date, state-of-the-art facilities if you happened to be in a health care facility.

With regard to research, for the past 10 years, research hospitals, where the bulk of the research is conducted, have been excluded from directly applying to federally funded infrastructure funds. In a welcome change, the 2016 post-secondary institutions strategic investment fund reversed this trend. We really appreciate this opportunity coming from the current government.

This is not to say that the government does not support research through hospital infrastructure. We are most grateful for the federal support of the Canada Foundation for Innovation, or CFI, which has been a strong supporter of research of hospitals in partnerships with universities. However, it still requires university-affiliated hospitals to obtain proposals to be submitted through the corresponding affiliated university.

I think this model reflects the misunderstanding of the nature of where the research is conducted. Within Vancouver Coastal Health, which would be greater Vancouver, we have over $300 million of health research, much of that federal research, conducted within the hospital system in infrastructure owned by the hospital, not by the universities. If you just go up the street in Richmond, you see that we have a small community hospital. We have research activity there, for example. This is typical across Canada. The major institutes of health research are research hospitals affiliated with a university.

What we are asking is that the government recognize that research hospitals should have the ability to directly compete for infrastructure funding from the government on equal footing. We are not asking for special privileges. We are just asking that the research hospitals be able to apply directly to whatever corresponding program the government has on at the moment. Typically, it would be the Canada Foundation for Innovation, and some of the innovation and infrastructure programs in existence.

We are also asking for $250 million for a second intake of the post-secondary institutions strategic investment fund, to help address the shortfall facing Canada's hospitals.

A third topic, somewhat unrelated to infrastructure but definitely related to innovation, concerns antimicrobial resistance and stewardship. Antimicrobial resistance refers to bacteria, viruses, and other pathogens that acquire resistance to the current drugs. This is a huge emerging worldwide problem that I would like to bring to the committee's attention.

At a basic level, infections are becoming more and more resistant to treatment. At the current rate, no part of modern medicine will be untouched, as many areas involve infection and inflammation. We will enter an era similar to the pre-1940s, prior to the discovery of antibiotics, meaning that many common diseases will not be able to be treated.

The U.K.'s review on antimicrobial resistance found that 10 million people around the world will die annually from infections by 2050, as we have lost the capacity to treat them with the current use of antibiotics. This estimate surpasses cancer mortality on the whole. The cost of ignoring antimicrobial resistance today will be paid many times in lost lives tomorrow.

I should say that Canada is a leader in antimicrobial resistance research. We should be proud of that.

Each year, over 23 million antimicrobial prescriptions are written in Canada. Half of these are estimated to be unnecessary. This leads to the generation of the pathogens' resistance. A better stewardship of antibiotics would benefit our economy, as well as our health. For example, in British Columbia, a 15% reduction in prescribing antimicrobials resulted in $50 million a year of cost savings for society, and $25 million for government.

The antimicrobial stewardship program is currently undersupported. HealthCareCAN has played a key advocacy role on this file and has convened a number of national networks of players, in collaboration with the Public Health Agency of Canada.

With this in mind, we recommend that the federal government allocate $25 million over five years to the Public Health Agency of Canada to fund projects on antimicrobial resistance and antimicrobial stewardship in collaboration with the Canadian antimicrobial stewardship network.

This concludes my remarks, and I'd like to thank you for giving me the opportunity to address you today.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. McMaster, and a special thanks to you and Ms. Travis because I think you were notified less than 24 hours ago that we would have openings for you.

[Robert McMaster]

I am very thankful for those openings.