Finance Committee on Oct. 6th, 2017

[Michael Holden]

I would definitely not say that it's been a magic bullet solution. I think this is something that is a necessary step along the way, and it's one of the pieces of the puzzle to unlock the productivity problem, to mix my metaphors.

In this case here, what we're specifically looking for is.... If you think about the technology we use every day, especially the advanced manufacturing technologies that businesses use, the shelf life of those can be short. They're valuable, and I think this kind of a process, in which we encourage business to invest in these potentially risky but also rewarding technologies, is part of the solution.

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

I have a lot of respect for manufacturers. They compete globally; they don't compete domestically. I have one firm in my area that recently completed an investment of over $150 million, creating 400 good middle-class jobs in my riding. He's an entrepreneur who's done very well, and I'm proud to have his firm in my riding doing great things. It employs over 2,000 people and 90% of what it produces is exported to the U.S.

I want to end it there, because I want to move on to the hotel association.

We are seeing a lot of disruptive technology coming onto the market, whether it's Uber or whether it's apps in general. I'm 45, and 12 or 15 years ago if you said “apps”, well, what was that? I still remember going to university and wondering what an email account was. I don't think I'm that old, or at least I don't feel that old.

I do believe in having a level playing field when you look at safety regulations and at employees' rights, protections, and so on. I read your presentation. What can be the main take-aways from that presentation in terms of levelling the playing field while still recognizing the fact that technology is bringing change? We no longer use typewriters and we no longer use the horse and carriage, and we have to recognize that fact.

[David Kaiser]

In terms of the finance committee and the federal role, we feel strongly that the government needs to take leadership.

On the GST/HST issue, those taxes should be collected at the platform level from these digital operators. We think that's important, and we'll signal to the provinces that also have other fees.... Through that mechanism, I think the collection of those taxes would be very efficient.

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

We've done that with Uber. That was in our budget last year, the budget implementation act.

[David Kaiser]

We applaud that direction and we think a similar solution could easily be applied to the sharing economy for short-term rentals as well.

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

I have a general comment. We've had a lot of discussion on the consultation paper that was released. I met with literally half a dozen tax experts to go through it and provide feedback and comments. We are listening. I think we need to be optimistic. I do believe we're listening. We need to get rid of the uncertainty. I think that's the biggest thing for businesses, in the businesses I deal with.

Moving on to the Canadian Energy Pipeline Association, I really appreciated the comment you made about our recognition that there is a low-carbon economy out there and that there's a transition. Also, I believe there is a very large role for the Canadian oil and gas sector and the global gas sector.

I preface this by saying I've covered many of these companies, whether it was Inter Pipeline or Pembina Pipeline on the bond desk, for many years. How can we still develop fields like Montney and Duvernay in this environment that we're in, and do it profitably and with proper regulation?

[The Chair, Liberal, Wayne Easter]

That's a big question.

[Chris Bloomer]

It is a big question.

I'll try to be focused. The first step is to say that this is a massive resource. The second step is to say that we are moving beyond the oil sands. This new resource is natural gas. It's light oil. It's NGLs. Natural gas is a transition fuel, and if you want to look in the very long term, it's going to be key to the Canadian economy. It is a strong export potential in LNG. The light crude is what eastern Canada uses and needs, and that would displace foreign imports.

We have innovated and we have understood this resource at a very rapid pace. We are competitive with the U.S. in terms of our costs of production and so on, but we're going to need infrastructure to make it happen.

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

Thank you, sir.

[The Chair, Liberal, Wayne Easter]

Thank you, both.

Mr. Albas.

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

Thank you, Mr. Chair.

I thank all of our panellists here today. We appreciate your coming and sharing your expertise with us.

I'm going to start with Mr. Bloomer. Mr. Bloomer, in your comments, you mentioned that the National Energy Board had overstepped its mandate in applying upstream as well as downstream greenhouse gas emissions as part of the process for energy east.

Perhaps you could clarify that, because the NEB is a creature of statute and should be following what Parliament has allowed it to do. Can you explain that?

[Chris Bloomer]

The inclusion of upstream and downstream emissions in the first instance, in the interim rules, was not put in the same way as the new committee did. They said that they were going to do a very rigorous analysis of that. That's not really within the NEB's purview. Their purview was not to go and analyze upstream and downstream greenhouse gas emissions. It is outside what they would normally do.

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

When you have a regulator that is supposed to be charged by statute under law to do a particular job, and it starts adding things in, does that create a sense of certainty in your industry?

[Chris Bloomer]

I think it's the opposite.

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

You would think that the government would address that directly and either put it in statute.... I don't think I would like that, but at least it would then be democratically sanctioned by Parliament and we could have that debate. However, to have a regulator go outside its mandate is very concerning to me as a parliamentarian.

[Chris Bloomer]

If I could make a comment on that, what happened with the NEB was that an independent panel was set up. It was the independent panel that made that call. They said that this was what they were going to do within the panel. That's another step removed from what you are talking about. The independent panel made that decision.

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

Did this panel give a reason for why they were going to step into this terrain? From my understanding of it, just from what you've said, that's outside the mandate of the NEB. Who put them in charge of that?

[Chris Bloomer]

That is correct. As an association, when that first came out, our statement was exactly as you have outlined, that it was outside their purview.

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

Ever since I first started in politics, I've always said that business needs two things: opportunity—and this country has so much opportunity—and certainty. I am very unhappy, Mr. Chair, to hear, first of all, that the government has given so much leeway to the regulator and that the regulator has given so much leeway to this panel, because ultimately we have so much that is being piled on—as we have heard from the cattle feeders—that this is now a question of whether or not we can stay competitive.

I'm going to go to the cattle feeders now, if you don't mind.

In regard to your industry, at least in British Columbia, I know many cattlemen. I've been to a couple of cattlemen's association meetings, and the demographics are getting older. There are succession issues around retaining the talent that will be able to move operations forward.

You mentioned as a concern these changes to the Canadian-controlled private corporations. However, I am also concerned about other areas that are not tax-based, like water. For example, many people in my area have said that ongoing regulation issues with the modernization of water acts and whatnot are causing all sorts of issues in the industry. Do you have any issues? They could be tax-based, but they could also be on other fronts that you think governments of all levels need to take a look at.

[Casey Vander Ploeg]

I thought I was going to slide under the radar this morning, but apparently not.

Our provincial members in British Columbia have certainly alerted the national association to—again, it falls into that uncertainty gap—changes to environmental regulations respecting intensive livestock operations.

For a solution on that front, at least what we have suggested to B.C., is that they take the lead from Alberta. Alberta has in place what they call the Agricultural Operation Practices Act, AOPA, which definitively sets down what the environmental standards are for confined feeding operations, whether that be dairy, beef feedlots, poultry, etc. As well, industry has been quite successful in working with government on that front. I would say that if they don't have something similar in British Columbia, then they should get to that point.

I think that feeds off what Mr. Bloomer was saying, too. You know exactly what the regulations are going to be; you come to an agreement on that, and then you work under that. In Alberta they were going to review AOPA this year, but industry and government said, “It's working well so let's leave it as it is and continue operating under it that way.”

The key challenge for cattle feeders are threefold. I mentioned them in the presentation. The first is labour, not just on the farm but in our beef processing plants. The second is local infrastructure for roads and bridges to move our agricultural product into those major pipelines and gateways to market. Third is this piling on of different tax changes that are, frankly, worrisome for agricultural producers.

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

Briefly, I would like to go to the Southern Alberta Institute of Technology. To your point on the international student retention and recruitment, one of the things I see in my area is that there is a lot of contention from local populations who say that foreign students are somehow taking away from existing schools that were built to serve the local population. I think it's really important to say that actually the opposite is true. The capacity is increased, and as we build our international standings in the world, we also draw more money that can support increasing services to local populations.

Could you make a few points? I think the chair is going to cut both of us off.

[Dr. Alex Zahavich]

I appreciate the opportunity to speak to that.

There is a myth about Canadian seats being lost to international students. We've done the calculation, and it's been verified by the Auditor General of Alberta. In terms of the work that SAIT does—I manage about a $75-million level of activity out of a $300-million budget—it provides 1,000 seats for Albertans, bottom line. It's a pretty straightforward calculation. We acknowledge that we do run a relatively expensive model in terms of how we operate things. In applied education, there's a little bit of time on the board and a lot of time in the lab. It's a hands-on type of thing. It's a costly model. But that's 30 cohorts for SAIT, and roughly 10% of our staff as well, who would be at risk if we didn't have that.

It is important to recognize, too, that industry is asking us to globalize our education and our curriculum. We have a very strong inclusivity and diversity program at SAIT. Our students now get exposed to international cultures as part of their curriculum. That's what industry is demanding, and that's why we have the success that we do with our job placements.

I appreciate the question on that.

[The Chair, Liberal, Wayne Easter]

Thanks, both of you.

Mr. McLeod.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Mr. Chair.

Thank you to all the presenters today.

I have a couple of questions but not a whole lot of time. I'll start with a short question for the Saskatchewan Association of Rural Municipalities.

I want to point out that I share your pain with regard to definitions. When people try to fall under the definition of “rural”, that's one thing, but when people start describing themselves as “north” because they live north of Toronto, I don't accept that.

[Voices]

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