Finance Committee on Oct. 16th, 2017

[Mark Lane]

I'll take one specific example, Mr. Chair.

In terms of the Canadian shellfish sanitation program, which I mentioned previously, let's say that today we had more than 80 millimetres of rain. Because Environment Canada doesn't have weather monitoring stations throughout coastal Newfoundland and Labrador, it closes the entire shellfish industry, blankets it, because you can't pick one bay from another in terms of weather monitoring stations.

How does that relate to CFIA? We have a limited live holding capacity in this province. Our industry has to shut down for a minimum of seven days according to the CSSP, and on the seventh day we're allowed to start testing the water through Environment Canada and the shell stock through CFIA. However, again, Environment Canada because of the lack of monetary resources that it has—and the staff do the best they can and kudos to those who do—they go out and begin to test the water.

The problem with the shell stock testing is that we had collected it from somewhere in Green Bay, we had to then ship it to the nearest airport, we had then to fly it to Dartmouth or to Halifax, and we had to get it driven from Dartmouth or delivered to Moncton. It usually takes about another 10 to 12 days to get those back. The entire shellfish industry of Newfoundland and Labrador, because of a single rainfall event, could be closed for two to three weeks. In terms of competing with P.E.I., of course, and the New England states, for example, or others, or just providing a reliable supply to our foreign buyers, it's almost impossible without having a CFIA-certified lab.

Then it goes back to Environment Canada not having the appropriate weather monitoring stations in place, but it's needed, and it's the same for salmon.

[The Chair, Liberal, Wayne Easter]

That's a very valid point.

It's my fault, Greg. Please ask your series of questions.

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

I would like to thank all of you for your very interesting testimony.

I will begin with you, Mr. Foley. Last week, we heard Mr. David Kaiser, who is a member of the board of directors of the Hotel Association of Canada. He spoke about the impact of Airbnb and all of the peer economy on the members of his association, as you did about Newfoundland and Labrador.

According to the information he gave us, only 17% of Airbnb revenue is generated by the actual sharing of an apartment or house. That means that about 80% of Airbnb revenue, i.e. $462 million, is generated by renting an apartment or house where the owner is not present.

Is that figure comparable to Newfoundland and Labrador figures? Is it worse or better? Do you know?

[Craig Foley]

Unfortunately, we don't have the same level of research as Mr. Kaiser would have. In the study he cited, the data was from 11 major centres in Canada. St. John's, Newfoundland, was not one of those. I think Halifax was, probably. The only real information we would have is what we can gather on our own, and that fluctuates by the day. It's not any real hard data.

But, yes, as a general trend, we are seeing more stand-alone accommodations that are not lived in by an owner. People have access to the entire house, and actually, they have multiple units, and that is the trend here. That is really direct competition for the members we represent.

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

Among your members, how many generate more than $30,000 in income a year thanks to B & Bs, or rooms they rent in their homes?

[Craig Foley]

Again, our members wouldn't necessarily be renting rooms in their house unless they're a B and B.

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

I'm talking about B & Bs.

[Craig Foley]

I would suspect that for many of the rural B and Bs it would be $30,000 or below, but again, that is not the significant number of our membership. The ones who are really feeling the pressure would be the people in the major centres—

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

Like St. John's or Corner Brook, for instance.

[Craig Foley]

—Corner Brook, Gander, Grand Falls-Windsor, places like that. That's not to say that rural areas are not feeling the pressure of the sharing economy or whatever the appropriate term is for that now, because it seems to be beyond the sharing economy. If you're the one operator in a rural community and you have competition across the road, that's pretty significant, but where we see those aggregated numbers would be in the major centres.

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

Since $30,000 is the income threshold at which business owners have to start paying GST to the government, even if we decided, as you discussed with Mr. Kmiec, to introduce a level playing field, as we say, would this have an impact? Would it encourage the people who are part of this so-called sharing economy, as compared to your members who do things legally?

[Craig Foley]

Again, because of the complexity of the different levels of legislation and policy, the inequity cannot necessarily be corrected by just one entity.

As an example, we have a member who owns hotel chain. He moved a wall in his business. When other inspectors from different departments came in to inspect that, it required drawings. Then he had to go to an architect. He had the drawings made and came back. Then they had to be signed and redrawn. It ended up that the operator was told to put the wall back up to alleviate much of this cost. It was going to cost up to about $50,000 in this particular case.

Therefore, addressing the equity is not only a tax issue; it's also these other layers of regulation and legislation.

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

Mr. Bonnell, thank you very much for your testimony.

I am from the Outaouais, in Quebec. There are a lot of sawmills in my region, and forestry plays a very important role. I think that your situation here is similar. We want to accent value-added products because we know that that is the way to make a lot of money. In addition, they are cleaner from the environmental point of view, because all of the components of the product are used.

Even if we decide to emphasize that, would private sector entrepreneurs be ready now, with a little help from the federal government, to invest to take advantage of this as they do in Iceland and Norway?

[Carey Bonnell]

I think there's interest. I know there's interest, and I see the industry here. They're talking much more about moving towards more of a value-based approach. They're realizing, particularly with capture fisheries.... I think the argument on capture fisheries in this region is about quality of employment, more so than the number of people employed. In the aquaculture industry, I think a lot of growth is going to occur that's going to create job opportunities. On capture fisheries, we need to create a value proposition that keeps people in the industry. It's about quality of employment, and moving toward that sort of value proposition is critical.

I think one of the challenges we have in overcoming that right now is that the seafood sector, you could say in Canada, but let's say eastern Canada including Quebec, is historically more about production. We buy fish from a harvester, we process it in traditional forms, and we send it to market. We look at niche opportunities, where possible, of course, but that's our focus.

When you're getting into the kinds of things that Iceland is now looking at in terms of getting into pharmaceutical, nutraceutical, biomedical types of applications, the scenarios are a little different and the innovation requirements are different. We need more entrepreneurial engagement.

I look at Iceland and what I see is young entrepreneurs coming out of university, and their energy is going into deriving more value from seafood because Iceland is singularly focused, in many ways, on seafood. We have entrepreneurs coming out of institutions here and they're looking at technology, they're looking at other sectors, and they're not looking at the seafood sector in terms of a value proposition.

I think we have to change that perception and get youth who are coming out of our universities and young entrepreneurs thinking more about that 450,000 metric tons of seafood I just mentioned earlier, and the fact that it's currently a waste product. I'm looking at that as an opportunity to derive value. We have to shift perspectives and become more entrepreneurial. I think the seafood sector would buy into that but it's going to mean newer players and younger innovators coming into the industry who are focusing on that value proposition for it to be successful.

[The Chair, Liberal, Wayne Easter]

Do you have a quick one?

Okay, go ahead. We're over time now. A bit more won't hurt.

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

Thank you for your answer.

Are there any young entrepreneurs' groups at the Fisheries and Marine Institute of Memorial University?

[Carey Bonnell]

We have a group called the Genesis Centre at Memorial that focuses on that entrepreneurial side. Within my institute, we have a marine bioprocessing research lab. We have doctors, post-doctorates, graduate students who are focused on deriving value from waste streams.

My focus now in the coming months and years is going to be to try to match these two different groups, the technology and innovation in deriving value from waste streams, in terms of R and D requirements, with the entrepreneurial spirit from a group like the Genesis Centre, and try to bring those groups together to identify commercial opportunities, because I completely agree with the point that was made earlier.

We're very good at R and D, and we're very at good advancing the ball on that. Commercialization on the seafood side is the exact same story. It has been our biggest weakness. We take all kinds of great technologies, we bring them to the pre-commercial stage, and then we lose it. I think that's where the entrepreneurial piece has to come in.

[The Chair, Liberal, Wayne Easter]

With that, I thank each and every one of the witnesses. I think we had a pretty decent exchange.

We have three people here for the open-mike session, so we'll let the witnesses go.

We'll suspend for one minute and go to the open mike.

[The Chair, Liberal, Wayne Easter]

We'll ask the folks for the open-mike session to take a seat at the table and go to one of the mikes there. That's fine.

Mr. Fuchs, Mr. Dodd, and Mr. Power, come on up and join the circle.

Thank you for taking the time. I think you know how the open-mike session works. There aren't questions from members, but you do get the opportunity to take a minute and put your views on the record, and they will be considered in the mix on the pre-budget consultation.

We'll start with Mr. Matthew Fuchs. The floor is yours.

[Matthew Fuchs, As an Individual]

Thank you very much. I must commend your pronunciation of my last name. It's a hard one to get.

It's so wonderful you came down here to St. John's. Thank you so much for providing this forum for us to be able to speak. I'm here on behalf of the Public Service Alliance of Canada. We're an organization across the country with 170,000 proud members from coast to coast to coast.

It's an exciting time in Canada right now. There are a lot of things being done, and it's an exciting panel this morning. I got to sit in and listen. There's a lot of talk about Scandinavian countries and the things they do right. I'm proud to be here today to talk about something else Scandinavian countries do a little better than we do, but our government has made commitments to follow that same policy decision, and that's providing affordable and accessible child care for every Canadian across Canada from coast to coast to coast.

I'm very happy that our government made a commitment this June with provinces and territories to negotiate an agreement and a separate agreement on indigenous early learning and child care. I think it's absolutely commendable and wonderful the government has taken this on.

The PSAC have some things we would like to see done on this. Originally the amount of funds earmarked only came in at $500 million. The International Monetary Fund put forward a proposal of around $8 billion in Canada. That's a lot to take on, especially for a government with the budget constraints we have, but we would like to see something in the ballpark of $1.2 billion.

You're interested in growing the economy and adding value. One of the ways we can do that is to make more Canadians able to go out and work and participate in the economy. We have parents who have to miss work day to day because of child care needs. There are gaps. We don't have one system that fits all. We have lots of jurisdictional issues. Quebec, like some provinces, is delivering affordable child care to Quebeckers. It would be great if we could do that in Newfoundland and Labrador as well.

We talk about labour shortages. One of the ways we can address labour shortages is by allowing Canadians to have that free time to be able to go out and participate in the economy, start a business, and go to work at any types of work that could be there. Child care jobs are jobs too.

I'm rambling a little, and I'm getting the signal. With that, I want to thank you again.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Matthew.

Mr. Fred Dodd, the floor is yours. Welcome.

[Fred G. Dodd, As an Individual]

Thank you very much.

I'm here to change the subject. I'm here primarily because one of the contributors to this book was the president of Saint Mary's University, Dr. Colin Dodds. Some of you may know him. He basically said that this book that he's written needs to be in front of policy-makers, and that's you folks. The issue is demographic. The second issue is the complacency about the role of small business within that context.

Let's take one minute to put this in perspective. We have 1.1 million business owners in Canada who employ 90% of the private sector workforce. Somewhere between 65% and 75% of those business owners are boomers. Two-thirds of those boomer owners say they have to sell their businesses to help finance retirement. Now the issue I've seen in terms of the tax stuff they just rolled out is that all these people are so rich that we can just take money from them. There seems to be a lack of recognition that most of these savings these guys have is their retirement money.

My issue is pretty simple. If we have 65% to 75% of the total business owner population who are boomers about to retire in the next four to six years, and the critical mass of all boomers reaches 70 years of age in the year 2020—the first wave of boomers will be 75, the second wave of boomers will be 70—they are facing a situation where they have to sell, and guess what. The Business Families Foundation says 84% have no plans to sell their business, no plans to get their money out of the business, no plans for business continuation. My question is pretty simple. If, within that context, these people don't succeed, what happens to the businesses and what happens to the workers?

Now in the bigger context we have 20% of the workforce about to retire because they're boomers themselves, so all of your members are going to face some hard decisions as well. Now it's easy for a typical worker to say, “I'm going to retire”, because it's just a decision. It's not so easy if you're a business owner. You have to have some planning. Guess what. There isn't any planning process available to them.

If we look at that context, we have 84% without a plan and no one to give them a plan. Now that's not just a Canadian problem. It's a U.S. problem, it's a British problem, and it's an Australian problem. As we move into this four- or five-year period, we are about to see massive changes in economic performance, economic demand, tax base, and you name it.

[The Chair, Liberal, Wayne Easter]

We're going to wrap it up there, if we could, Fred. What's the name of the book?

[Fred G. Dodd]

I'll leave it with you.

[The Chair, Liberal, Wayne Easter]

All right, thank you.

Mark Power, go ahead, please.