Finance Committee on Oct. 6th, 2017

[Ricardo Acuna, Chair, Oxfam Canada]

Mr. Chair, and committee members, thank you for the opportunity to present Oxfam's recommendations for Canada's next federal budget.

Oxfam is an international confederation working in 90 countries in poverty and inequality around the world, through long-term development, humanitarian assistance, and campaigning. We put women's rights and gender justice at the heart of everything we do.

Earlier this year, Oxfam revealed that eight billionaires own the same amount of wealth as the poorest half of humanity. Extreme inequality is also a reality in Canada, where just two men own more wealth than the bottom 30% of Canadians. Growing inequality is bad for all. It makes it harder to end poverty and it has particularly adverse consequences for women who continue to make up the majority of the world's poor.

Our current global economic model relies on women's cheap labour to maximize profits. The hotel industry is a perfect example. Later this month, Oxfam will publish a report looking at how hotels increase their profit margins by squeezing women housekeepers out of decent pay and stable employment, and how they turn a blind eye to work-related injuries and sexual harassment.

We interviewed dozens of housekeepers in Canada, the Dominican Republic, and Thailand about the exploitation they experience.

With a feminist Prime Minister and a government committed to inclusive growth, Canada can begin to help shift exploitative economic models to ensure that all work is fairly paid and equally valued. This can start with concrete measures in budget 2018.

Before outlining specific budget recommendations, let me share the stories of two of the hotel housekeepers we interviewed.

Lei is a young Filipino woman who works as a housekeeper in a luxury hotel in downtown Toronto. Before she led the fight to unionize workers in her hotel, she had to work up to four hours a day of overtime without pay to clean her daily quota of rooms. In luxury hotels, beds can weigh up to 100 pounds. Lei injured her back three years ago and her employer made little effort to reduce her workload. She now suffers chronic pain and worries about what will happen if her body gives out.

We also interviewed Candida, a mother of four in the Dominican Republic. Candida used to work at a luxury resort in Punta Cana where many Canadians vacation. She would leave the house at 5 a.m. every day and would never know when she would return. She worked up to 14 hours a day without breaks, only getting paid for eight. She barely saw her children and the money she earned wasn't enough to make ends meet.

These are just two stories, but around the world, millions of women are being exploited by a system that puts profits before people.

Federal budget 2018 provides an opportunity for Canada to tackle gender inequality in the economy. I'd like to stress our four key recommendations.

First, the government should take gender budgeting to the next level. The government took an important step by introducing Canada's first gender statement in federal budget 2017. Now it's time for Canada to go a step further and ensure that the budget-making process actually contributes to greater gender equality. The government can do so by appointing a council on gender budgeting to advise the Minister of Finance and by strengthening the capacity of government departments to conduct gender-based analysis.

This committee should also ensure that at least 15% of the witnesses in the pre-budget consultations represent women's rights organizations.

Second, the government should increase foreign aid to demonstrate real global leadership on women's rights. The world is looking to the Canadian government for leadership on gender equality, particularly in a context of political backlash against hard-won women's rights in many corners of the world.

This spring Canada launched its first-ever feminist international assistance policy. The policy provides an ambitious road map, but its success will be undermined if it's not backed up by bold, new investment. The government should commit to year-on-year increases to Canada's international assistance envelope in 2018-19, and develop a 10-year plan to achieve the international benchmark of 0.7% of gross national income.

Third, the government should take meaningful action to protect workers' rights both at home and abroad. The world over, women are overrepresented in precarious work that keeps them stuck in poverty. The government should take steps to ensure women earn living wages by raising the minimum wage for employees under federal jurisdiction and awarding federal government contracts only to living-wage employers.

The government must also do more to hold Canadian companies accountable to human rights standards when they operate abroad. It can start by setting up and adequately resourcing an ombudsperson office that is effective and impartial to investigate human rights violations by Canadian companies.

Finally, the government should increase the budget of Status of Women Canada. Evidence shows that women's rights organizations are the best place to advocate for policy solutions to improve the lives of women, yet they are severely underfunded. This may help explain why so few are able to feed into the federal budget-making process. They're simply too time- and resource-strapped. To get us onto the right path, the government should invest $100 million in Status of Women Canada to increase its ability to fund women's organizations in Canada.

We hope the committee will consider these four recommendations to help close the gap in earnings and opportunities between women and men around the world.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you, Ricardo.

We turn now to Mayor Nenshi. Welcome, Mayor.

[Naheed Nenshi, Mayor, City of Calgary]

Thank you, Mr. Chair and members of the committee. I'm pleased to welcome you here in Calgary.

Thank you so much for coming to Calgary today and for the hard work you're doing in developing the budget.

As you know, the economy here in Calgary has been hit hard over the last couple of years. Certainly this summer we added tens of thousands of jobs. We are no longer the city with the highest unemployment rate in Canada, but we're the second highest. Clearly, much work needs to be done to sustain this fragile economic recovery, and all orders of government must work together in order to do that.

It's a weird place for us to be, here in Calgary. We're used to being Canada's economic engine. We're used to having the lowest unemployment rates in the country and bringing our prosperity and sharing it with the rest of the nation. We want to be back in that role, and we look forward to working with you to make that happen.

In my few minutes with you this morning, I want to talk briefly about six items that are very relevant to what we are doing here in Calgary. The first two are around infrastructure.

The first is about phase two of the investing in Canada plan. Let me say that we are extremely grateful for the government's interest in economic stimulus—as well as the previous governments'—and we have been able to deploy those funds into building infrastructure that is desperately needed by Calgarians.

This summer we were able to deploy $2 billion into the economy, thanks to partnerships with the federal and provincial governments as well as good financial savings from the City of Calgary. If you get a chance to travel around Calgary while you are here, you will be cursing the amount of road construction that is going on—guilty as charged. This is a very good opportunity for us to be able to build the infrastructure people need while construction costs are lower than they were two years ago and while people are out of work.

We are very interested in continuing to do that work, and we really do need clarity from the Government of Canada on how and when municipalities can access the funds of phase two of the investing in Canada plan. To give you an example, we are greatly appreciative of our phase one funding. Our pledged phase two funding from the public transit infrastructure program for the green line actually represents the single largest investment in Calgary's infrastructure by the federal government in Canadian history. However, we want more, of course, and one of the things I might highlight is that the City of Calgary has not received any of the nearly $200 million of funding available through the clean water and wastewater fund.

I just want to make the committee aware that the City of Calgary supports the watersheds throughout this region in supplying drinking water to the city of Airdrie, the town of Chestermere, and the town of Strathmore. As well, recently we agreed to supply more water and wastewater infrastructure to the Tsuut'ina first nation. I have often said that I will not be a part of the problem with drinking water on our first nations, and when we can solve it, we will.

Second, I just want to mention quickly phase two of the investing in Canada plan relating to investing in green infrastructure, and I particularly want to speak about that in relation to watershed management. We would be very appreciative of the Government of Canada considering a financial commitment to our overall watershed management, which of course involves flood mitigation upstream of the city of Calgary, managing our water supply in drought years, and climate adaptation-focused projects.

We all know that until the Fort McMurray wildfires last year, the flooding in southern Alberta in 2013 was the costliest natural disaster in Canadian history. While we have done great work in the four years since, within the city of Calgary we continue to need assistance in upstream flood mitigation. Calgary is a city that is built at the confluence of two rivers in a place the Blackfoot called Moh-Kins-Tsis, the elbow. We can't move the city. We can't make room for the river. This is where the rivers are. As a result, it is incredibly important that we do the engineering work on the upstream mitigation.

We've had a lot of conversations on upstream mitigation on the Elbow River, and we are now in the midst of having conversations about upstream mitigation on the Bow River. That mitigation is critical to protecting Calgary's downtown from further flooding events, and it's very expensive, so it is an area in which we will be looking for the federal government to participate. As well, aggressive action was recommended by the province in its August 2017 Bow River water management report that we were very pleased to be part of. We need to continue to make sure we're building resilience against floods.

Third—and you'll hear it from every mayor, of course—is affordable housing. Our role as an economic engine needs affordable housing. We have to make sure we have affordable housing throughout the spectrum. For many years, federal and provincial governments abrogated their responsibilities for building new affordable housing units. We're very thrilled to be working with Minister Duclos on a new national housing strategy, along with my colleagues at the big city mayors' caucus of the Federation of Canadian Municipalities, but we need more.

Calgary is 15,000 units short of meeting the national average of affordable housing units, which was already too low. Only 3% of our housing stock is non-market, and if we're lucky, we build 100 or 150 units at a time. I've been cutting ribbons on eight-unit projects. We really need a very different way of thinking about affordable housing.

I'll go through the last three quickly.

The next one is on addressing poverty. Once again, it is time for a national poverty reduction strategy. I, along with many other mayors of course, have been a proponent of the basic income strategy; however, regardless of whether the political will exists to do that, we need to make poverty reduction a priority across our community and we would love to work with the Government of Canada to do that.

Number five is the legalization of cannabis. You may or may not know that the cities are doing all the work. The provinces recently suggested that the 50-50 split of any cannabis tax revenue is not fair because the provinces have the bulk of the work. Actually, the cities have the bulk of the work. We have to do the zoning, the regulation, the prevention, and most important, the policing, the enforcement. As a result, we need to come up with an equitable share. I would strongly suggest to the Government of Canada that any program around an excise tax on marijuana include direct transfers to the municipalities, not working through the provinces.

One small issue, but one that is very important to us, is that in this city we are experiencing the extraordinary impacts of the fentanyl crisis. We lose three to four people a week to overdose. That's far more than we lose to car collisions and violent crime together. We are very grateful for the health minister's and others' participation in addressing this crisis, but there is one very specific ask we have of you today, and that is funding for the Calgary Drug Treatment Court.

I've recently written to Minister Wilson-Raybould on this. Through alternative measures in the justice system it is an incredibly effective program to help people struggling with addiction, and they have to fundraise for it. They have bake sales to pay for the Calgary Drug Treatment Court. It's just not right. It's an integral part of the justice system. It pays for itself multiple times over, and right now it has to turn clients away. We seek a very small ask from the Government of Canada. It's not even a rounding error of a rounding error of a rounding error, but it is critical to improving people's lives.

With all of that, thank you so much for being here.

I apologize that I was both late and will have to leave early, but if you have questions for me, I will be here for the next 45 minutes or so.

[The Chair, Liberal, Wayne Easter]

That will be pretty close to the end of the panel.

Thank you, Mayor.

Before we go to Mr. Fergus, I have two questions.

The Canadian Association of Petroleum Producers said the investment is below 2014 levels. It may be in the brief, but I couldn't find it. Can you get that number for us? It will be in the record anyway, but how much lower is it?

[Ben Brunnen]

Investment in oil sands was $34 billion in 2014. It is now $15 billion.

[The Chair, Liberal, Wayne Easter]

Okay.

Mayor Nenshi, many years ago when I was solicitor general, I was involved in setting up the drug court in Vancouver's Downtown Eastside, so I'm familiar with that approach. Could you make sure the clerk gets a copy of a proposal for the Calgary Drug Treatment Court? We would appreciate that.

[Naheed Nenshi]

I will do that, thank you.

[The Chair, Liberal, Wayne Easter]

Okay, we're starting seven-minute rounds with Mr. Fergus.

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

Thank you, Mr. Chair.

I want to thank all the witnesses, especially the people from the general public who came to share their point of view. We greatly appreciate it.

Today is the last day of the first half of the Standing Committee on Finance's Canadian tour. Since I have only seven minutes, I'll ask Mr. Brunnen very specific questions.

You mentioned that we have a golden opportunity to promote Canadian oil. You said we had opportunities available worldwide.

You also mentioned that it was important for Canada to find a balance, that countries wanted our oil because it's clean and doesn't cause human rights issues, and that Canada had a good reputation. You said we needed to find a balance by implementing policies that show we're serious about the environment. Can you elaborate on this?

[Ben Brunnen]

I am sorry, Mr. Chair, I did not hear the question.

[The Chair, Liberal, Wayne Easter]

You didn't hear it?

Mr. Fergus, please start over

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

You mentioned that Canada had a good reputation with regard to our oil exports and petroleum products. You mentioned that we needed to find a balance and show that we not only have clean oil, but also a clean reputation.

You mentioned that Canada needed to find a balance and implement environmental policies to develop a greener economy.

Can you elaborate on this?

[Ben Brunnen]

The opportunity for Canada and the interest, I think, in the reputation globally really links to our strong commitment to regulatory stringency as well as environmental protection.

My comment there really relates to the reality that our industry, the oil sands sector in particular, invested substantial amounts of resources, probably more than any other sector in environmental technology, as well as mitigating things such as GHG emissions, etc.

The opportunity is relatively substantial to be expanding upon this. The members of the Canadian Association of Petroleum Producers formed COSIA, Canada's Oil Sands Innovation Alliance. They invested $1.3 billion in environmental technologies, and we're seeing the results. Our costs are coming down, and our footprints are getting less environmentally adverse, if you will.

Oil sands oil on a well-to-wheel basis is now comparable with the average in North America for any crude from a GHG perspective, and that's the result of the technology that's gotten us there. There are some transformative technologies that are out there right now, such as solvents and partial upgrading that can bring our GHG footprint down by as much as 80% more. That is very substantial, and can add a lot of value, but these are very expensive demonstrations.

Oil sands is a technology investment, and SAGD in particular has only been in production for the last 15 years. It was largely as a result of major R and D investments, and the right fiscal framework that got us to where we are.

The next phase is de-risking the technology we need for companies to invest in it on a commercial level. That's what we're talking about, so not an insignificant amount of capital.

What I've suggested and asked of this committee is a commitment to identifying those research and development opportunities, for improving our environmental performance, and defining those as clean technology.

This is very similar to what the federal government advanced in 2015 for clean energy, a capital cost allowance that enables companies that are investing in reducing our environmental footprint and GHGs to be able to write off that capital that changes the investment dynamics, and removes the disincentive to innovate, and encourages companies to continually improve.

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

Thank you.

I have two more questions. The first is for Mr. Roy.

Mr. Roy, your comments were very interesting. In my constituency, in the Outaouais region, MosaïCanada 150 was just held. It was an extraordinary and outstanding floral exhibition, and it was very popular. The exhibition attracted over 1.2 million visitors this summer, even though the weather was dreary and terrible.

The people came regardless. It was a major success. I completely understand when you speak about the importance of this type of festival across the country. It's very important for economic development.

Despite these successes, why do you want the economic development agencies, and not the Department of Canadian Heritage, to fund the festivals?

[Martin Roy]

First, thank you for your interest.

It's true that we have a member in your region, namely, the Gatineau Hot Air Balloon Festival. I'm also in contact with the Lac-Leamy Sound of Light.

Regarding your question specifically, I would say that we've had a number of discussions with the government and with public servants. There's nothing to prevent us from dealing with the Department of Canadian Heritage. If that's what the government wants, of course we'll agree. However, the fact is that not all our events are cultural.

The program we want isn't necessarily a cultural program. It's an economic and tourism program that recognizes the value of these events from an economic and tourism perspective. The program is similar to the existing programs in both Quebec and Ontario. You know that, in Quebec, we have a funding program for festivals and events that falls under the tourism department. Ontario has the famous Celebrate Ontario program. After the necessary changes have been made, we want to see something similar at the federal level. There has been a great deal of debate regarding the organization we could fall under. As I told you, the Department of Canadian Heritage is an option.

In recent years, we've raised the possibility of creating a Canadian council of major festivals. It would be similar to the Fame Council. However, in these discussions, in particular with members and people in the government, we've considered the regional economic development agencies the most appropriate vehicles. These agencies already work in tourism, including in Quebec. They have already been involved in tourism.

However, there are a wealth of possibilities, including Destination Canada, which may also accommodate the program. We're open to these discussions. For the moment, we're focusing more on the goal than on the vehicle.

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

Thank you.

My last question is for Mayor Nenshi.

Like many other people and many other mayors, you talked about the importance of affordable housing. During this tour, we have also heard from many business people. I would like you to explain to us why this is so important for Calgary. I imagine that, if people and workers do not have access to affordable housing, it would not be possible to sustain the economy.

Can you tell us a bit more about this please?

[Naheed Nenshi]

I hope I understood you correctly. There was a little bit of noise right there. I will answer in English.

We're very proud of our work in managing the watershed around the city.

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

My question was really about affordable housing.

[Naheed Nenshi]

Oh, logement abordable. I thought you said “l'eau potable”. I'm happy to talk about that too, but we can talk about logement instead. I can talk about both of them, if you like.

The challenge, of course, in Calgary is that we're not seeing the same problems that we're seeing in places like Vancouver and Toronto, where the market rate of housing has become completely unattainable, but we're on the same path, and so we see a situation where as the price of homes increases, people end up having to rent for longer before they get into home ownership. When people are renting for longer, the market rate of rent increases, which means that people are seeking subsidized housing for longer. People who are working are seeking subsidized housing for longer, which of course means that those who are homeless and seeking subsidized housing can't get in, and the homeless shelters get clogged up.

A real housing strategy needs to approach all of these. Mr. Legge, in addition to being the president of the Calgary Chamber of Commerce, is also the chair of an organization called Attainable Homes Calgary, which is all about moving people from renting into home ownership, people who are working but who have modest income. In addition, one of my big policy failures is increasing the market's allowance for housing in secondary suites in Calgary, a market solution. But really, we have not had a good focus on that bottom level of government or non-profit-supported housing, and so we have two simultaneous problems here. The first is that the houses from the last big building boom of affordable housing in the 1960s and 1970s are getting very old, and governments of all stripes have not been investing in the required life-cycle maintenance.

Here in Calgary, as people move out of those, I am searching for money to renovate them. Otherwise, I have to take them off the market. So we need a real focus on renovating and upgrading the existing housing stock along with building new units, and we have to look at multiple ways of developing those new units at a lower price. We're looking at innovative ideas. I'm working with an organization right now called Homes for Heroes for homeless vets. It is looking at micro housing and temporary housing for these vets, but really we need the money to prime the pump to both build those units and repair the existing ones. Fundamentally, if we can't do that, then when I'm trying to attract Amazon.... Its workers are not going to live in affordable housing but some of those people are going to need rental units, and if the rental units are clogged up, we won't be able to get them. We really have to have supply releases across the spectrum.

[The Chair, Liberal, Wayne Easter]

We're going to have to cut it there.

Mr. Kelly.

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

Thank you.

What an excellent panel we've just had. I have much that I would like to question each one of you about, but time is going to be our enemy here.

I'm going to start with the mayor. Your Worship, thank you for coming here today. It's a very busy time and a big day coming up—

[Naheed Nenshi]

Thank you.

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

—and I'm glad that I'm in town and will be able at least to vote in the advance poll.

In your remarks you mentioned the green line. Yes, indeed, we know this was the largest investment in infrastructure by the federal government in the history of the city of Calgary when, in the summer of 2015, the previous government announced $1.53 billion to cover the anticipated one-third of the cost of the green line. You said yes, and you want more. I heard that, but why do you want more for the green line? The one-third was what was asked for, and it was the understanding—and I was at the announcement—that it represented one-third of the total cost of the green line, not something more than half a green line that money is now to cover.

[Naheed Nenshi]

It's a little bit before your time, but I'm happy to explain a very strange turn of events, the strangest I have seen in my time as a politician, which is that particular announcement by the then federal government prior to a federal election was the first time I've ever had a government phone me and ask, “How much money do you need?” My answer was, “Well, we only have a class five estimate. We've only just started on this work, because we were not anticipating accelerating this.” The question I got was, “How much to you need?”

We gave our best class five estimate, which is, obviously a very, very early estimate. Then, working with the new governments provincially and federally, as well as with the communities and with engineering, we talked about what needed to make sense for the community. It was decided that we needed to do this right the first time. That means that we had to tunnel under the Bow River, which added an enormous amount of cost to the project because a new bridge was found not to be feasible and a street-level LRT running through downtown Calgary was found to increase congestion to unacceptable levels for car traffic. As a result, after multiple years of major consultation, that class five estimate has now been revised to an estimate with which we're very comfortable. That allows us to build the hardest part of this project first.

We had someone suggest as recently as yesterday that we ought to not build the hard part and that we ought to not bring the line downtown, which doesn't make any sense at all because then you would be connecting to an existing line at its most congested point where you can't get on the train during rush hour. I'm very, very comfortable with the decision that the city council took in deep consultation with the community that we want to build the hard part first.

Now there are 10 years of construction here, and we're waiting on timing from the Government of Canada on the funding from the public transportation infrastructure plan; however, we anticipate that the funding will match the funding of the province, which is an eight-year term. That means that years nine, 10, 11, 12, and 13 will give us the opportunity to really be able to move forward with continuing the construction on the easier parts. As we get $100 million at a time, we'll build a station at a time. The city is committed to continue to do that, and we'll get closer to your riding as well in so doing.

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

Indeed, the people in my riding heard the announcement, and they came away with an expectation that, for $4.6 billion, they were going to get a complete green line, and I—