Finance Committee on Oct. 16th, 2017

[Penelope Rowe]

It's all about attitude and opportunity.

One of the things we've learned through the work we do is that there are some young people who are all over every opportunity. They are the sharp kids who have already made up their minds, and they're progressing. The question we have to deal with is the young people who haven't really found a way yet.

The program we offered this summer, called AMPLIFY, was quite extraordinary. These were young people who were primarily from small communities, from households where work may not have been the norm, and we found that just giving them a job where they were connected with people who cared about them made them blossom. It was that mentorship. It was that connection.

Sometimes that can happen well in the private sector, sometimes it can happen well in the public sector, and sometimes it can happen well in the non-profit sector, but if the program is not well designed, we're not going to find the young people who will take advantage of it.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you.

[Penelope Rowe]

I do have one other comment on the summer program.

The advantage of it is that a lot of the funding—not all, but a lot—goes to non-profit organizations, so there is a reach into small and rural communities, which are very different from Brampton, obviously. We have communities in this province where there is no private employer. Even if that were the job of choice, it wouldn't exist for young people. To get young people their first job, very often you have to work with community organizations.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you.

My next question is for the St. John's Board of Trade.

This morning our government announced a reduction in the small business tax rate from 10.5% to 9%. What are your comments on how you think that will help the great people of this province?

[Dorothy Keating]

Obviously the fact that the government has kept its promise to reduce the small business rate as it had said is very much going to be appreciated by small business. Not to take away from that or negate it, I think the most important thing with business is certainty in taxation, and right now the environment in which our members are living is an extremely uncertain one at this point. The fact that the government has now kept that particular promise and has reduced the rate will obviously be met with appreciation by the small business community, but it is even more important to remove the instability that is currently being faced by small business owners now through the proposed tax changes.

[Raj Grewal, Liberal, Brampton East, ON]

I agree with you that the tax code should be clear, concise, and predictable. Those comments have been made to the minister and the powers that be as well.

If you look at the economic numbers, the economy has been thriving. We are leading the G7 in economic growth. We've created 437,000 jobs since we came into power. I did my research on the Newfoundland economy before I came here, and it's not the same story in this province. One of the biggest challenges you guys have in this province—and correct me if I'm wrong, because by no means am I an expert—is your aging population and increasing health care costs. Another is getting talent to stay in this province. Even people who are born in Newfoundland are going to university in other provinces and settling in other provinces.

Have you any strategy for the federal government? There's the Atlantic growth strategy, which we are working on, but as local experts, what do you think the province and the federal government should be doing in order to kick-start this economy to get it going?

[Nancy Healey]

Certainly immigration is critically important. We have more people set to retire than we do to enter the labour force, and the university here—

[Raj Grewal, Liberal, Brampton East, ON]

When you were answering my colleague's question, you mentioned something on unskilled labour and immigration. Could you provide a little more detail on those comments? I agree 100% with you that we sometimes focus way too much on skilled labour when we just need people to drive trucks and taxis and stuff like that.

[Nancy Healey]

I'll answer both ways on this.

The university has done a phenomenal job here in Newfoundland. It has one of the lowest tuition rates in the country. It has served to attract both international students and students from across the country. The trick is keeping them here and mentoring them.

We have what is called the connector program, which we've been doing off the side of our desk for a while. It is just to introduce people. It tends to be a lot of international students who come through that program. It introduces them to business people and sectors or areas where they want to work. We've had about 60 people come through. We're only supposed to set up connections, but 20 of them have become employed. We are hoping to get that program funded through the LMDA and for that money to come through. That sort of program has worked with phenomenal success in Halifax and in Prince Edward Island.

We need to come up with ways to help integrate the local community with the graduate students who are coming through.

As I said, the immigration program tends to be express entry, and the point systems tend to go toward skilled labour. One of the things we have advocated for is similar to what happens if an individual, say, speaks French; he gets into Canada right away. In the same way, if you indicated you'd like to go to a rural or remote part of Canada, be it northern Ontario or Saskatchewan or Newfoundland and Labrador, you should get points for that as well. We encourage medical doctors and the like to go to rural parts of Canada. Why can't we do that with our immigration program? There are ways to do that.

You're right about the challenges facing this province from the aging demographic. That's why one of our biggest concerns is with respect to the level of debt that this province and this country have. We have a huge geography. There are huge levels of personal debt. The aging demographic means more demands on health care. We have a tsunami coming our way, and if we don't get our debt under control, we won't be able to survive any of the challenges that come our way.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you so much.

[The Chair, Liberal, Wayne Easter]

We'll have to end there.

Ms. Rowe, you mentioned a program in the last round of questions. I didn't catch the name and I can't find it in your remarks. What was the name of that program?

[Penelope Rowe]

It was called the AMPLIFY program. It was funded through the provincial government, of course with federal money, under the LMDA program. It was targeted to young people who were at risk. It was a pilot program initiated this year. We're in the process of analyzing our results now, but it seems to be quite extraordinary—the capacity of a few weeks' work to actually engage young people fully and to help them move forward by engaging both their interests and education and their ability to work and to create networks of friends and work with people they've had no previous social contact with.

There was one comment I should have made when you asked the question about federal programming and supporting non-profit organizations. One area in which there could be a huge improvement is the procurement policies of the federal government. You could look more carefully at social procurement and breaking down the way in which contracts are put forward in order to enable smaller employers. This could apply to the private sector as well as the non-profit sector. We have a lot of homework to do there.

[The Chair, Liberal, Wayne Easter]

Okay.

Under the labour market development program, the federal government transfers $3 billion to the provinces. I sometimes wonder if we're getting the best bang for the buck there. In any event, that's what the bottom line is.

[Penelope Rowe]

We'd be happy to be engaged in a review of that.

[The Chair, Liberal, Wayne Easter]

Okay.

With that, I want to thank each and every one of you for your presentations and your responses to questions.

We go to the next panel at 10:45, so we will suspend until then.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

We'll reconvene. I want to thank the witnesses for coming, and some of you on short notice. There were some cancellations so I know some people didn't get a whole lot of notice to get here today. I certainly want to thank you for coming. For those who presented a brief prior to mid-August, we appreciate that as well. Those submissions are part of the pre-budget consultations and will be considered. Members have them on their iPads.

Before we go to the presentations with our four panellists rather than six—we'll have a little more time—I'll ask members to introduce themselves and where they're from just to give you a little perspective on how we criss-cross the country.

Mr. Boulerice, we could start with you. Do you want to introduce yourself?

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Good morning everyone.

I am the member for Rosemont—La Petite-Patrie, a riding in the centre of Montreal, in Quebec.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

My name is Tom Kmiec. I'm the member of Parliament for Calgary Shepard.

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

I'm Dan Albas. I'm the member of Parliament for Central Okanagan—Similkameen—Nicola, from the sunny Okanagan, and I'm happy to be here in St. John's with you all.

[The Chair, Liberal, Wayne Easter]

I'm Wayne Easter, a member of Parliament from Prince Edward Island, a central part of the island, the riding of Malpeque where good oysters come from and a lot of other good stuff too.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

I'm Jennifer O'Connell. I'm from the riding of Pickering—Uxbridge, which is just on the east side of Toronto in Ontario.

As I said in the earlier panel, my local connection is that my mom's side of the family is still here in Upper Island Cove, so I'm half Newfoundlander.

[Raj Grewal, Liberal, Brampton East, ON]

My name is Raj Grewal. I'm the member of Parliament for Brampton East, right beside Pearson International Airport. I do not have a local connection, but I'm really excited to be here.

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

Good morning, everyone.

My name is Greg Fergus. I am the member for Hull—Aylmer, a Quebec riding which is close to Ottawa. This is not my first trip to Newfoundland and Labrador, but it is the first time I am here as a member of the Standing Committee on Finance. It's a great pleasure to listen to you.

[The Chair, Liberal, Wayne Easter]

Thank you, members. We will start with the fisheries and marine institute of Memorial University of Newfoundland, with Mr. Bonnell.

Go ahead, Carey.

[Carey Bonnell, Head, School of Fisheries, Fisheries and Marine Institute, Memorial University of Newfoundland]

Good morning, Mr. Chair, and committee members.

The views I am going to be expressing today are my views, but are grounded in my capacity as the head of the school of fisheries here at the fisheries and marine institute of Memorial University, and in my capacity as industry co-chair of the Canadian seafood value chain round table.

The seafood value chain round table provides leadership to the Canadian seafood industry by providing a forum for value chain participants to identify significant industry impediments, collaborate on solutions and innovation, and influence decision-makers. Its vision is for a prosperous and competitive Canadian seafood industry that's a world leader and the preferred supplier of high-value seafoods domestically and internationally.

In February 2016 I actually appeared before your committee in Ottawa as part of the pre-budget consultation process at that time. Today what I'd like to do is reiterate some of the key points I had raised in my prior session and highlight some of the key progress that's also been made in terms of both industry development as well as government support.

The Canadian fish and seafood industry, both the wild capture fisheries and the aquaculture sector, is an important producer of high-quality food and a significant contributor to Canada's economy, especially in rural, coastal, and aboriginal communities. Thousands of Canadian families, businesses, employers, employees, and their communities depend on this industry to provide for their well-being. In total, more than 76,000 Canadians were employed in harvesting and production in the seafood processing sector in 2015.

The seafood industry in Canada is very much export oriented, with nearly 80% of its production exported to foreign markets in 2015, making it the highest export-oriented sector of the food manufacturing industry in Canada. In 2015 the industry exported about $6 billion of high-quality seafood. In fact, the numbers for 2016 are now out, and I believe we're at about $6.6 billion. For 2015 we were ranked as the world's eighth largest seafood exporter. Approximately 65% of those exports were destined to the United States, followed by China and the European Union at 11% and 10% respectively. Overall, the Canadian seafood industry is very proud of the contribution it's making to the Canadian economy and to global food security.

In my prior appearance before your committee, I highlighted that the sector is not without its challenges and that there are certainly steps the Government of Canada could take to help expand the global competitiveness of the sector and leverage its economic potential. At the time I outlined two key areas for priority investment, namely, around market readiness and social licence.

On the topic of market readiness, the seafood industry in Canada is extremely excited about the expansion of the Government of Canada's efforts around global trade agreements such as CETA, which has now been ratified; its ongoing efforts around TPP; the Canada-Korea agreement, which is in place; as well as the potential for a free trade agreement with China. As an export-oriented industry, these agreements provide Canadian seafood producers with improved market access opportunities through the reduction and elimination of prohibitive tariff barriers, ideally resulting in increased industry competitiveness.

However, significant market readiness barriers exist in the Canadian seafood industry that impact its ability to fully leverage the potential of these trade agreements as well as other global market opportunities. Examples include the need for improved market intelligence that supports the market development needs of the industry, which is a particular issue for SMEs in this country, as well as the need for investment in innovation and automation in the sector. There is also the need for a strategy to address labour retention challenges in the industry given the current demographic profile, which is very pronounced in this particular region of the country right now, but an issue which I would say is across the country.

On the topic of social licence, there is a need for continued engagement and investment on the subject of science requirements for eco-certification in particular. Issues around traceability and eco-certification are now considered requirements for global market access and represent a non-tariff trade barrier if Canadian producers cannot meet robust international eco-certification standards.

Key public investments in fisheries and oceans science, including sustainable aquaculture development, are critical to ensure that the industry continues to meet and exceed best practices globally.

Related to these challenges, I was very pleased with the announcement earlier this year of the federal-provincial cost-shared Atlantic fisheries fund. The seven-year, $400-million-plus fund aims to help Atlantic Canada's seafood sector transition to meet the growing market demand for products that are of high quality, value added, and sustainably sourced.

I am also pleased that a national component has been created under this fund to support market access and development issues for the Canadian seafood sector. I believe that component will be funded in the range of about $30 million.

There are also two key points that I would like to make related to the Atlantic fisheries fund. First, I believe it's critical that initiatives supported under this fund be principally focused on advancing the competitiveness of the seafood sector in Canada. Key metrics that we need to be focusing on include increasing value per kilo of catch, increasing utilization per kilo of catch, as well as overall industry productivity improvements.

Second, this fund, in my opinion at least, cannot be looked on as a one-time investment. Comparable seafood-producing nations such as Iceland and Norway, which in many ways are recognized as the gold standard, have been heavily investing in the competitiveness of their seafood sectors for decades now. We need sustained comparable investments in Canada to keep pace.

We are currently living in a period of unprecedented global change that will significantly impact seafood production in the years ahead. For example, the Food and Agriculture Organization of the United Nations, or the FAO, currently estimates—and this is a really conservative estimate—that an additional 40 million tonnes of aquatic food will be required by 2030 just to maintain current per capita consumption. It is also estimated that the average price of traded seafood products is expected to grow by 30% by 2022, based on factors such as increased health awareness, rapidly expanding middle-class societies, as well as growing disposable incomes globally.

In conclusion, the Canadian seafood industry is well positioned to address these grand challenges by providing high-quality, safe, and healthy sources of protein to the global community. Key strategic areas of investment and policy supports by the Government of Canada present a tremendous opportunity for Canadian seafood producers to take advantage of globally expanding markets for sustainably and responsibly sourced seafood.

Thank you very much.