Evidence of meeting #118 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was research.

On the agenda

MPs speaking

Also speaking

Jerome St-Denis  As an Individual
Ron Watt  As an Individual
Kamal Mann  As an Individual
Jesse Helmer  Councillor, City of London
Robert Baker  Vice-President, Research, McMaster University
Shirley de Silva  President and Chief Executive Officer, Sarnia Lambton Chamber of Commerce
Elise Maheu  Director, Government Affairs, 3M Company Canada
Mark Fisher  President and Chief Executive Officer, Council of the Great Lakes Region
Nicole Rayner  Senior Manager, Taxation , 3M Company Canada
Monica Shepley  Manager, Policy and Advocacy, Sarnia Lambton Chamber of Commerce
Satinder Chera  President, Canadian Convenience Stores Association
Margaret McGuffin  Executive Director, Canadian Music Publishers Association
Tovah Barocas  Vice-President, External Relations, Earth Rangers
Tobi Day-Hamilton  Director, Communications and Strategic Initiatives, University of Waterloo, Institute for Quantum Computing
Christina Dendys  Interim Executive Director, RESULTS Canada
Matthew Marchand  President and Chief Executive Officer, Windsor-Essex Regional Chamber of Commerce
Martin Laforest  Senior Manager, Scientific Outreach, Institute for Quantum Computing

9:25 a.m.

Liberal

The Chair Liberal Wayne Easter

Thank you very much.

We're turning now to Mr. Fisher, from the Council of the Great Lakes Region. Mark Fisher, go ahead.

9:25 a.m.

Mark Fisher President and Chief Executive Officer, Council of the Great Lakes Region

Thank you, sir, and thank you for the opportunity to appear before you today.

As the record shows, my name is Mark Fisher. I'm the president and CEO of the Council of the Great Lakes Region. I'm also pleased to have with us today one of my board members, Rakesh Naidu, the COO of the WindsorEssex Economic Development Corporation.

The council was established in 2013 with the help of Gary Doer, Canada's ambassador to the U.S., and his U.S. counterpart, David Jacobson. Our goal is to bring government, business, academia, and the non-profit sector together to find new ways of growing the Great Lakes economy while protecting the environment. We achieve this mandate by conducting insightful public policy research, convening dialogues with diverse interests at events such as our Great Lakes Economic Forum, and serving as a strong voice on regional matters.

My introductory remarks today will focus on the importance of the Great Lakes economy and, more importantly, on what more we can do to strengthen our long-term competitiveness and sustainability.

I'll begin with a number: $6 trillion. That's U.S. dollars, and it's the estimated value of the region's economic output in 2016. It's pretty big. Did you know that if the Great Lakes region were a country, it would be the third-largest economy in the world, behind only the U.S. and China?

Home to 107 million people, this region directly supports 51 million jobs, or a third of the combined U.S. and Canadian workforce. Over 50% of Canadian and one-fifth of U.S. manufacturing is based in the region, including over half of Canada's SMEs—roughly 650,000. Ontario and Quebec account for roughly 58% of Canada's $22 billion in agriculture and agrifood trade to the United States. The Great Lakes region is also an important energy hub, from clean natural gas to nuclear energy to hydro power.

Twenty of the world's top 100 universities are Great Lakes institutions. They help to attract three-quarters of Canadian and a quarter of U.S. R and D spending. There is a growing services sector in the areas of health care, education, engineering, legal services, and banking. In fact, though manufacturing employment is down roughly 15% from pre-recession levels in the Great Lakes region, education and health care are up by 21%, and professional services are up by 16%, according to BMO.

What's more, education, health care, and professional services have added 2.5 million jobs over the last 10 years, dwarfing the nearly one million job losses in manufacturing. Contrary to popular belief, the Great Lakes region is thriving and serves as the economic engine of the U.S. and Canadian economies.

However, the global economy is changing at an accelerated rate, and in unimaginable ways. We need to keep pace and figure out a way to get ahead of the curve, so where do we go from here?

First, we need to continue to support advanced manufacturing, invest in technology advancements, and get our SMEs export-ready.

Second, we need to build smart, energy-efficient transportation systems and increase our connectivity to global markets through supply networks and value chains.

Third, we need to accelerate investment in public and private sector R and D, as well as the backbone infrastructure that drives innovation, such as data science, analytics, and computing.

Fourth, we need to build a skilled and mobile workforce to respond to short-term labour gaps and long-term demographic headwinds.

Fifth, we need to double down on protecting and restoring the Great Lakes and investing in Great Lakes science and monitoring. Securing a clean environment, as well as an innovative and connected economy, will be our competitive advantage.

Sixth, we need to invest in high-growth sectors such as advanced manufacturing, sustainable food production, and services like tourism. If we can make these investments and do so by leveraging provincial and city investments in these and other areas, we will be positioning the Great Lakes to compete and win in the new economy.

Thank you. I'm happy to take your questions, especially with respect to the modernization of NAFTA. I also have a more detailed backgrounder that I'll leave behind; I'm more interested in your questions today.

9:30 a.m.

Liberal

The Chair Liberal Wayne Easter

Thanks very much, Mark, and thanks to all of you for your presentations.

We'll start with seven-minute rounds. We have five panellists. We should have time for three in a second round.

We'll be starting with Ms. O'Connell. You have seven minutes.

9:30 a.m.

Liberal

Jennifer O'Connell Liberal Pickering—Uxbridge, ON

Thank you.

I want to start with you, Councillor Helmer. Thanks for your presentation. I too was a regional councillor and deputy mayor in Ontario, so I somewhat understand the issues here. Also, being from a smaller community outside of Toronto, I know what it's like.

In the sense of infrastructure funding, one of the big issues that we had in our region, the Durham region, was the fact that the federal government put the money forward, but the provinces ultimately were choosing a lot of the projects. Do you have a similar concern in terms of how the money is flowed? You mentioned that it's really how it's flowed that's important. Do you have any comment in terms of the distribution once it gets to the provincial level and then how it flows out within the province?

9:30 a.m.

Councillor, City of London

Jesse Helmer

In terms of phase one, I would say that it went fairly well. That was on a small scale, compared to what will happen in phase two. I think there's some concern about the abilities of both the provincial government and the federal government to process all of the information that is going to be coming forward for infrastructure projects.

What I would say is that I think the programs are designed very well to allow municipalities to choose the projects that are important to them and to put those forward and have them funded. On that front, it's great. In terms of actually concluding the agreement in a timely manner, Ontario was pretty late in agreeing, and that really put us under the gun in the construction season we have in terms of delivering the projects on time, by the end of March. We will have some projects that will go over because of the lateness of the agreement.

Concluding the agreement bilaterally with Ontario is going to be really important for how well we can deliver phase two projects.

9:30 a.m.

Liberal

Jennifer O'Connell Liberal Pickering—Uxbridge, ON

One of the suggestions I made to the minister in moving forward on agreements with provinces is to also demonstrate how they're being regionally distributed. I agree that the municipalities have to decide on the projects, but we also have to make sure that the funding is being distributed across....

Durham region sounds very similar to London in the sense of the housing backlog in terms of maintenance, let alone new builds. In terms of wanting those future phases in the agreement with the provinces, do you think your municipality or the region would agree to have some type of mechanism or accountability to demonstrate regional diversity? Keeping in mind, obviously, that where there are large populations there are going to be greater needs, there has to be some demonstration of regional disbursement being somewhat equitable.

9:30 a.m.

Councillor, City of London

Jesse Helmer

Very briefly, I would say that's the challenge in a country such as Canada: designing national programs that support the variations we have at the local level and at the regional level. It can be very challenging. I do think that needs to be recognized.

On the transit front, I think it's working very well. It's a very clear allocation based on ridership. I think a formula approach there works well.

For other things, such as housing funding, the circumstances are a bit different. It's not as though you can just count up per capita and divide it up so easily in terms of needs. I think you have to recognize the unique circumstances of smaller municipalities, mid-sized ones like London, and then larger cities. I think that is important.

9:30 a.m.

Liberal

Jennifer O'Connell Liberal Pickering—Uxbridge, ON

In regard to the housing question, one of the suggestions I've heard recently was for not only an injection of cash, although that's important—and I think our government has made significant announcements on that—but for also loosening up some of the abilities for housing corporations, for example, to use some of the capital asset to borrow against it and allow for those types of maintenance and upkeep, or even if the housing is owned by the municipality.

That's been a suggestion. It's not just about cash. It's also about loosening some of the regulations in terms of what a municipality or a corporation can do, a public corporation, in the sense that a lot of these are run in conjunction with municipalities. It's around how they can loosen up those regulations to allow the flexibility of renewal, really, in some of these locations. Is that something your city, your region, or your housing corporations have talked about? I don't know exactly how it's set up here.

9:35 a.m.

Councillor, City of London

Jesse Helmer

I would say that it's an interesting idea, and it might help with the London and Middlesex Housing Corporation, which is the owner of the social housing, but in London we have not waited around for those changes to happen. We've set up a housing development corporation owned by the municipality. It's focused on the creation and regeneration of existing units. It is separate from the owner of the social housing units. It tries to work with Middlesex housing but with also private sector partners to create new units. It is able to do things—like borrowing in a different way—that the housing corporation is not able to do.

The housing development corporation is a good, innovative approach that we've taken in London. I think that's possible for people right now with the existing rules.

9:35 a.m.

Liberal

Jennifer O'Connell Liberal Pickering—Uxbridge, ON

Thank you. My last question is for you. I'm sorry. I don't mean to pick on you, but this is my wheelhouse in terms of budgets.

You spoke about phosphorus in Lake Erie. We have the same problem in Lake Ontario along the Ajax and Pickering watersheds. There's some debate in my area in terms of the cause, but I think studies have shown that it's wastewater discharge. The region doesn't think so, but many municipalities do.

Is there a similar cause and concern in terms of the cause of the phosphorus coming in? For us, it caused all different kinds of issues in terms of the algae and all of that. What local municipalities were asking for was better upgrades to the wastewater sewage plants, essentially. Is that the ask in terms of upgrading these facilities to deal with some of the issues of the runoff going into the lake?

9:35 a.m.

Councillor, City of London

Jesse Helmer

In London we approach this issue at a regional level, because it's certainly a regional problem.

The sources of phosphorus going into the watershed are many. In London, around 15% is coming from urban sources, so we certainly contribute our fair share to the problem. A lot of that is coming through the wastewater treatment plants, and it's certainly coming through when we have overflow events. In some areas of our city that are older, we have combined sewers that are overflowing. They flow directly into the river. It's a very bad situation. We're working to separate those, and that's part of resolving the issue in terms of phosphorus.

There is a push at the provincial level, and I think almost an expectation, that we'll move to tertiary treatment for all wastewater treatment plants. We believe we have a better way of doing it that is cheaper and is going to solve the problem. We want to pilot that. In London, we have a great firm, Trojan Technologies, that works on wastewater treatment and sells all over the world. They have a suggestion about how we can bolt their technology onto our existing plants. It's going to be a lot cheaper. It probably will get us down to 0.1 milligrams per litre of phosphorus, which is a reduction of about 75% in what we have coming out of the wastewater treatment plants now. If that works, I think it will help with the urban sources.

The other parts of this are primarily rural. In southwestern Ontario, you are in the heartland of agriculture. There's a lot of farming going on, and there's runoff that comes from those operations. That's tougher to deal with, because a lot of it's coming off private properties owned by many different people, and a lot of the solutions are not easy to implement on private property.

Some of the solutions, such as tertiary treatment, are expensive. We don't think that's the right approach. We want to go with a more cost-effective approach that's going to let us achieve those targets. Hopefully, that pilot will prove out and other municipalities can benefit from it.

9:35 a.m.

Liberal

The Chair Liberal Wayne Easter

Thank you, Jen.

If any of you want in on any of these questions, just raise your hand. You will notice members on their iPads from time to time. We have all the submissions on iPads, so people will be going back to look at the original submissions.

Mr. Albas is next.

9:35 a.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Thank you, Mr. Chair.

Again, thank you, everyone, for your presentations today. They're very illuminating.

I'm going to start first with the Sarnia chamber of commerce. Thank you, Ms. de Silva and Ms. Shepley, for being here today. I certainly appreciate the fact that 95% of your members are small businesses and they're who you're here to represent.

I've done a lot of travel throughout Canada, as many of the other members have, and what I hear from many business owners is, first of all, that because of the uncertainty, they are not hiring. Second, they are not investing, because they are waiting for the changes. As you've said, the government has given some indications of what it'll do, but, as you also said, the devil is in the details. Are you concerned that your entrepreneurs are not going to be hiring and that they're not going to be investing until they have complete certainty as to where these changes are going?

9:40 a.m.

President and Chief Executive Officer, Sarnia Lambton Chamber of Commerce

Shirley de Silva

Absolutely, it's a concern. What we've been hearing from our membership through our surveys, focus groups, and one-on-ones is that uncertainty is just not good for business. As a result of it, there are just so many questions, and not only at the federal level. If you compile those questions with the challenges at the provincial level as well, you can see that small businesses are feeling completely overwhelmed.

They're overwhelmed with changes that they really don't have time to understand because they're busy running their small businesses and they're overwhelmed by the burden of additional red tape that they have to deal with.

Also, farmers are concerned. They're overwhelmed in terms of how they can pass on their family farms to their children. How can they do that?

It's just grinding things to a halt. A lot of businesses are saying that they're just stopping at this point and waiting to see what will happen.

9:40 a.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Also, of course, I'm a big believer in free trade. I believe that both sides benefit when we do this, but I think one of the challenges we have right now is that with many of the problems, both provincially in Ontario and federally, and with the lack of certainty, new regulations, and new costs being added on, it's pushing many entrepreneurs to open operations in the United States instead.

Do we have reciprocal people coming here to invest? I've had a number of economic development officers say to me that it's difficult to attract new foreign direct investment when they hear the language that's being used against locals. They seem to say that if we don't appreciate our own people investing in our communities, why would they? Are you hearing that similar kind of sentiment in terms of very much a disinterest in investing in Sarnia?

9:40 a.m.

President and Chief Executive Officer, Sarnia Lambton Chamber of Commerce

Shirley de Silva

I don't know if I'm hearing a disinterest in investing in Sarnia, but I'm hearing that the different initiatives that are being taken at the federal level—and at the provincial level as well, to add to it—are pushing businesses away from Ontario. In our area, we have one of the larger plants that's deciding if it should locate in Sarnia or elsewhere, south of the border. I believe that a lot of the changes that are taking place have an impact on those types of decisions. I agree with you, actually.

9:40 a.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Okay. Thank you very much for your testimony.

Councillor Helmer, I certainly appreciate your taking the time to be here to represent your municipality today.

I have some questions further to those asked by MP O'Connell. First of all, in terms of dealing with the federal government, you said that you wanted to work on phosphorus, but the infrastructure investment portal requires a 20% municipal payment. You'd like to see that removed. It's been my experience that oftentimes it's that way or the highway, so to speak.

How do you get your 20% together? In British Columbia, all municipalities are forced to have master plans. They're forced to track their infrastructure. They're becoming much more adept at doing so. Have you done a core service review? Have you been tracking these things? Ultimately, a 20¢ dollar is still an opportunity you can't miss.

9:40 a.m.

Councillor, City of London

Jesse Helmer

Yes. We're very fortunate at the City of London. We have a lot great staff, especially in the finance and engineering area. They have been way out in front for many years in terms of asset management plans and planning out on the infrastructure side what the condition of the assets are, when they need to be replaced, and what kinds of problems we have. Right now we have a pollution prevention and control plan under way. It's across the entire city. It's not just phosphorus, but all kinds of infiltration into the river system.

It is getting near the end. What we know so far from that work is that the bill for a lot of these capital works is very, very high. It's over $200 million to do all these different improvements throughout the city. It will take probably between 10 and 20 years to implement all those things if we rely on the capital funding that we have now. If there's federal funding to do that, we can do it a lot sooner and solve the problems a lot quicker.

We do have a good understanding of what is required, and we do have the money set aside to do those projects and cover the 20% piece. It's really to make sure, for provincial priorities that are regional in nature, that we're not relying only on the municipalities to cover those costs through the green infrastructure fund and that some of it comes from the provincial allocation.

9:45 a.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

In my area, Mayor Colin Basran of the City of Kelowna has called for any excise tax that will be added to marijuana to be split three ways, rather than the fifty-fifty sharing that the Prime Minister and Minister Morneau seem to endorse, recognizing that the costs are mainly provincial and municipal. Do you think the current fifty-fifty cost-sharing is appropriate, or do you think it should be expanded so that municipalities that have to deal with RCMP or policing costs and whatnot should be compensated?

9:45 a.m.

Councillor, City of London

Jesse Helmer

Let me switch gears a little bit. I'm the chair of our health unit in London and Middlesex, and certainly when we met with Mr. Blair when he came in to talk about the government's approach, one of the issues we raised with him was how we were going to pay for the enforcement side of these things. A lot of it falls on the health unit to do some of the inspections in these pieces.

A public health approach to cannabis is fine from a public health perspective. We support that kind of regulatory approach. However, we have to pay for it. We need to make sure that the funding flows. In Ontario the public health units are funded primarily 75% from the province and 25% from municipalities. We need to make sure that the marijuana revenues are covering off those costs that will be borne by municipalities on both the policing side, as you've pointed out, and the public health side, which will not be insignificant.

9:45 a.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Do you support the current approach, or would you support having a larger share, whereby municipalities have some revenue to offset some of those costs?

9:45 a.m.

Councillor, City of London

Jesse Helmer

I expect that it will be an issue we'll have to sort out with the province. I think the federal government.... You know, there's a lot of variation in terms of how things are delivered in different provinces. I think it's reasonable for them to be dividing it up that way for now, but I do think we're going to have to talk with the province about it. Do you really need this 50%? We're covering policing. We're covering a big chunk of public health. What is this money actually going to be applied to in terms of costs at a provincial level?

9:45 a.m.

Liberal

The Chair Liberal Wayne Easter

Thank you.

Mr. Boulerice is next.

You may need to use your translation devices, folks.

9:45 a.m.

NDP

Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC

Probably, unless you can understand the language of Molière.

Good morning, everyone. I'm happy to be with you today. Thank you for making presentations before the Standing Committee on Finance.

I confess that this is my first time in Windsor, and I hope that Mr. Chair could give me some free time this afternoon, so that I can see some of the city and its beautiful spots.

My first questions will be for the London representatives, Mr. Helmer and Mr. Thompson. My first two questions are related, since you talked about challenges and problems in several areas. I first want to focus on transportation, public transit and traffic congestion. As a Montrealer, I can tell you that you are not alone in having to deal with those challenges. I am sure that people from Toronto could say the same. There are environmental challenges involved, but there are also economic challenges. Clearly, when people are late for work or goods cannot be moved properly, our collective productivity drops.

What are you seeing for your London urban region in the announcements made concerning public transit infrastructure? Do you think that what has been announced meets the needs, or would you need some additional help without which you won't be able to meet that challenge?

9:45 a.m.

Councillor, City of London

Jesse Helmer

We're very pleased with the direction that the public transit funding is going in for the City of London. We have about a $500-million need immediately with rapid transit. That's a project we're going to have to build out over eight to 10 years. We need roughly $200 million, maybe a bit more, from the federal government. The way the program design is happening for phase two, it looks like that's going to cover that off and allow us also to do other things we might need to do on public transit. Things are looking good on that front.