Finance Committee on Oct. 19th, 2017

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

How many minutes do I have left, Mr. Chair?

[The Chair, Liberal, Wayne Easter]

You're out of time, but we'll follow up on this discussion. You can come back in here in a second, Greg.

On the CFI program that's ending, Mr. Baker, what is that project called? You could send that to the clerk.

[Dr. Robert Baker]

I can certainly send it to you.

[The Chair, Liberal, Wayne Easter]

Go ahead, Greg.

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

I have a quick question for Mr. Fisher.

Thank you for your testimony. A heated discussion is ongoing, and I would like to talk to you about it.

If Mr. Trump decides to end NAFTA, and if the House of Representatives is unable to ensure the long-term viability of that agreement, what will become the default system? Will it be the policy of the most favoured nation, or will it rather be the Canada-U.S. Free Trade Agreement?

[Mark Fisher]

That's a good question. I don't think that issue has been talked about enough. My understanding is that the Canada-United States free trade agreement would not come into force if NAFTA were to be terminated, and that the default would be most favoured nation status through WTO rules.

[The Chair, Liberal, Wayne Easter]

Ms. de Silva wants in, I believe. That will be the last one for this round.

[Shirley de Silva]

Thank you.

I wanted to share with you that we did appreciate the consultations, but where we saw problems was simply in the way they were handled. For example, for the proposed legislation, the change on income splitting, for example, was not received by businesses as though it was just a proposal. It really came across as though it was a done deal, and that this was the way it was going to be moving forward.

Also, the rhetoric that was used was borderline offensive. I thought I'd just share that. Many small businesses, doctors, physicians, and dentists expressed to us that they felt they were being considered cheats or were looking for loopholes to dodge the system when they were actually simply using the process that was in place to run their business in the way they do.

[The Chair, Liberal, Wayne Easter]

We've heard that loud and clear, Ms. de Silva.

With that, we will conclude this panel and start the next panel at 10:45.

I thank each and every one of the witnesses for coming, for presenting, and for answering questions.

Thank you very much.

The meeting is suspended.

[The Chair, Liberal, Wayne Easter]

We shall reconvene.

As everyone knows, these are the pre-budget consultations in advance of the 2018 budget. I want to thank all the witnesses for coming. To those who presented submissions in early August, we appreciate those as well. They are on members' iPads. You will see them looking at their iPads to refer to them every once in a while. They are all part of the pre-budget consultations as well.

Before I start, we'll go around the room and introduce the members so you have an idea of where they're from and what area they represent. It gives a cross-section of the country.

We'll start with you, Ms. O'Connell, from Ontario.

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

I'm Jennifer O'Connell. I'm the member of Parliament for Pickering—Uxbridge, just on the east side of Toronto.

[Raj Grewal, Liberal, Brampton East, ON]

I'm Raj Grewal, the member of Parliament for Brampton East. It's good to be back in Windsor.

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

My name is Greg Fergus. I am the member for Hull—Aylmer, a riding across the river from Ottawa, on the Quebec side.

[The Chair, Liberal, Wayne Easter]

I'm Wayne Easter, the member of Parliament for Malpeque, Prince Edward Island, which is the riding between Summerside and Charlottetown.

Go ahead, Mr. Albas.

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

Thank you, Mr. Chair.

Welcome to everyone.

My name is Dan Albas. I'm the member of Parliament for Central Okanagan—Similkameen—Nicola in the interior of British Columbia. I'm very happy to be here. I was fortunate enough to come last year with my interim leader. It's a fantastic city you have here.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

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

[The Chair, Liberal, Wayne Easter]

Go ahead, Alexandre.

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

Good morning, everyone.

My name is Alexandre Boulerice. I am the member for Rosemont—La Petite-Patrie, which is located right in the middle of the Island of Montreal.

[The Chair, Liberal, Wayne Easter]

Again, thank you for coming.

We'll start with Mr. Chera, from the Canadian Convenience Stores Association.

[Satinder Chera, President, Canadian Convenience Stores Association]

Thank you very much, Mr. Chair, for the opportunity to present the convenience channel's recommendations for the upcoming budget.

Let me first start by acknowledging the measures announced this week by the government relating to small businesses, particularly around rate reduction, which we had recommended. I'm very happy with the series of announcements that have come out this week. The remarks we put out earlier this week on those measures are in your kits. I'm certainly looking forward to working with all parliamentarians, including the Minister of Finance, to provide additional feedback as we get it from our members.

I'm going to speak directly from our slide deck, which is in the kit you have before you. The first four slides really give you an overview of the convenience retail channel in Canada.

Let me start with the number of convenience stores throughout the country. I'm very proud to represent a channel that, through over 27,000 retail locations in the country, provides goods and services to Canadians in urban, rural, and remote parts of the country. I also want to take the opportunity to thank many of you who helped us and supported us on national Convenience Store Day at the end of August, when we raised over $80,000 for the Children's Wish Foundation to help children in need.

In terms of employment, we have a nearly even split between full-time and part-time employment among the 27,000 locations. Approximately 234,000 jobs are directly attributable to the retail locations across the country.

As you see on the slide on taxes collected by convenience stores, our channel collects over $22 billion in taxes for all levels of government in Canada. It's something that certainly, as one of my members said, “We don't get paid to do this”, but we do it. It's an obligation that we take very seriously.

This takes me to the first issue I wanted to raise with the committee, credit card fees. That is on slide 5.

Our members use a number of methods to collect dollars from their customers, most notably credit cards. I think I've spoken to this committee before about the fact that Canada has among the highest credit card fees in the world, ranging anywhere from 1.5% to 4% per transaction. We certainly would like to see these fees come down. We believe that if other jurisdictions such as Europe and Australia can bring them down to 0.3% or 0.5%, Canada can certainly do the same.

We support Minister Morneau's review of credit card fees. Our understanding is that his review will conclude at the end of this year, and it's certainly our hope that, in time for the next budget, there will be some good news for retailers with respect to those fees.

On slide 6, in terms of some of our regulatory concerns, there are two bills currently in Parliament that are of concern to us. One is Bill S-5, which is the vaping and plain packaging legislation. We are very worried that this legislation will make the illicit tobacco market even worse while adding additional costs to small-business retailers, and at the same time doing very little to correct the unfair advantage vape shops currently have vis-à-vis convenience stores when it comes to selling vape products.

On slide 7, I want to highlight that as the largest channel for selling age-tested products, most notably tobacco and lottery, our members take their responsibilities very seriously. We have training modules in place that our members take on an annual basis. It was our channel that abided by Health Canada's rules on e-cigarettes, preventing them from being sold in our channel.

On slide 8, you will see some of our specific concerns and the feedback we received from our members with regard to plain packaging. Most notably, at the very end security concerns have been highlighted by our members, as well as increased costs to their businesses. Again we want to impress upon the committee and the government that our channel should not be an afterthought with some of these policies, but that in fact they will have a serious impact on them.

On slide number 9 we highlight the illicit market in Canada, which is fairly big. I would note that the government's marijuana policy specifically does not recommend plain packaging and also recommends low levels of taxation, which is counter to what you find with the tobacco policies that are being advanced. Certainly we believe that action needs to be taken on the illicit market first and foremost, to bring it under control, before Bill S-5 is looked at.

Slide number 10 looks at vaping, specifically providing for a level playing field, which we don't think currently exists in the legislation.

Moving on to slide 11 and 12, with regard to Bill S-228, which is currently moving into the House of Commons, there are serious concerns around the downstream implications for our members. For example, will employees under age 17 now be prevented or prohibited from handling products such as a box of chocolates or a bag of chips? These are some of the concerns that our members have. Will they have to change the layout of their stores to abide by the rules that could be coming as a result of this legislation? Again, there are a lot of unknowns, and the feedback we're getting from our members involves questions on the government's intent on this front.

I would say that our channel is committed to working with the government and all parliamentarians to ensure that there is a wide selection of goods available in convenience stores. In certain communities, convenience stores are the only game in town.

One of the things we have recommended in the past—and we will continue to do so—is to provide targeted tax relief, including measures that can help convenience stores to carry fresh fruits and vegetables.

On my final slide, committee members, you will see our list of recommendations. The issues I've just spoken to are provided in more detail on the left-hand side of your kits.

I would be more than happy to take any questions you might have. Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Satinder.

We turn now to the Canadian Music Publishers Association, with Ms. McGuffin.

Welcome.

[Margaret McGuffin, Executive Director, Canadian Music Publishers Association]

Thank you for the opportunity to take part in these consultations. More than that, on behalf of Canada's music publishers, I would like to commend the government on the new creative Canada framework.

We are a membership-based organization committed to providing opportunities for our music publishers and to promoting their interests and those of their songwriting partners. These companies all represent and invest in thousands of Canadian songs and songwriters who are heard daily on the radio, on streaming services, in video games, and in film and television productions around the world. By combining this country’s talent, entrepreneurial expertise, and global reach, we strive to advance the music publishing industry and our songwriting partners by providing a competitive edge, both at home and abroad.

Indeed, Canadian music publishing companies have recently grown their revenue to $280 million; that's a growth of $120 million in 12 years. The industry is transforming itself into an increasingly export-driven endeavour, with two-thirds of our revenues coming from foreign sources.

We are asking the government to contribute to the ongoing growth of the music publishing sector. Minister Joly recently announced an investment of $125 million in Canada's creative export strategy. CMPA welcomes this funding. It will go a long way toward growing the businesses of medium and small-sized music publishers in Canada.

We recommend that a portion of this future trade money be directed to a fund that benefits all music companies, including the music publishers who are driving this growth. In our ongoing discussions with Canadian Heritage, we continue to stress that our needs are different from those of the rest of the music sector.

The news that the Canada Music Fund will be modernized is definitely something we welcome. This increase is helpful, because the music publishing industry is a focus of increased global competition, and the Canadian sector is very much in need of better access to capital to compete internationally, particularly for the acquisition of catalogues of musical works, which are a key to revenue generation.

Specifically, we would like to see the music entrepreneur components of the music fund enhanced. Despite our strong track record, the maximum annual contribution that a publisher can receive is currently out of step with the rest of this sector. We would recommend that the Canada music fund increase its support to Canadian entrepreneurs to finance the development of their companies and the creators they invest in. We would like to see an increase from approximately $24 million to $30 million a year, and we would like to see music publishers have the ability to access other federal programs that provide access to capital, which would allow them to grow and compete internationally.

We also welcome the support for the protection of creators' intellectual property and fair compensation for those who help contribute to Canadians' creative content. Changes to the Copyright Act are needed to ensure Canadian works are competitive with international standards, and reform of the Copyright Board is essential so that we can have a thriving music publishing industry. The government needs to act quickly to allow us to remain globally competitive. We seek a wide-ranging review of the Copyright Act and hope to see a detailed commitment to reform the act from innovation Minister Bains and Minister Joly. Initial signals have been positive, and we appreciate that our voices are being heard.

Thanks to our partnership with the federal government, in the past year we were able to sponsor trade missions to L.A. and Germany. I just returned from Berlin. The Canadian Music Café showcases our country's talent to screen-based industries worldwide, and our music tech summit is becoming a very important part of our calendar. These projects have been a success, and we are greatly enhancing global opportunities as an innovative sector.

Our goals are closely aligned with the government's cultural and economic strategies. We are convinced that Canadian creative industries represent a key and growing innovation sector. We hope to be able to continue working to expand and improve Canada's music publishing industry and take full advantage of the progress that Canadian publishers and songwriters are already achieving internationally.

In closing, we hope to see you all at meetings in Ottawa, November 6-8, as our global partners meet to discuss copyright, sector growth, and much more.

I would like to thank you for this invitation. I'm happy to answer your questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Margaret.

We now turn to Ms. Barocas, from Earth Rangers.

[Tovah Barocas, Vice-President, External Relations, Earth Rangers]

Thank you, Mr. Chair, for inviting me to speak to members of the committee today. My name is Tovah Barocas, and I'm the vice-president of external relations for Earth Rangers, which is the only national charity in Canada focused on empowering children and families to take action for the environment.

Earth Rangers is committed to engaging Canadian families in learning about and protecting species and their habitats, as well as addressing the impacts of climate change. For Canada to become a world leader in protected areas and in mitigating and adapting to climate change, public engagement is critical. With the digital community of 170,000 members and their families, in-school programs that reach 250,000 students annually, and a national television presence that garners millions of impressions, Earth Rangers reach is unmatched in the conservation community.

We are well positioned to help nurture and sustain a culture of environmental ambition, which is an important foundation to the Government of Canada's belief that the environment and economy go hand in hand.

Given Canada's dependence on our resource-based economy, it is critical that families understand the intrinsic link between our country's environment and economy. Through partnerships with industry, Earth Rangers effectively promotes sustainability and the need to balance environmental considerations and economic growth. This includes educating our audience on issues like sustainable forest management, land reclamation, and carbon offsets.

One of the most powerful and effective ways we reach children with these important messages is through our no-cost, in-school programs offered across Canada. From rural areas to inner cities, and most recently in the far north, we have grown to reach 900 schools in only four years, in large part due to our partnership with Environment and Climate Change Canada.

These in-school programs are complemented by a robust and active membership base, which includes francophones, indigenous peoples, and new Canadians. We have surpassed our initial goal of activating 150,000 members ahead of Canada's 150th birthday. Earth Rangers currently has over 170,000 members across Canada. These members put what they learn into action in their communities through various sustainable activities and fundraising initiatives.

Our partnership with Environment and Climate Change Canada not only contributed to this growth but also supported our French-language program in Quebec and our successful pilot program in northern Canada, which reached schools in Yellowknife, Whitehorse, and Iqaluit.

In addition to our work with the federal government, Earth Rangers has also developed new partnerships with provincial governments in Ontario and Alberta, as well as with various private sector partners.

Success in achieving Canada's climate change conservation and biodiversity goals is significantly dependent on sustained public education and engagement. Earth Rangers harnesses the inherent optimism and altruism of children through a program that provides tangible activities and outcomes for them to engage with their families and communities. The sense of pride and accomplishment that results from seeing the impact of their actions drives the ongoing participation of kids and parents and, in turn, our growth as an organization.

We believe that Earth Rangers is well positioned to help nurture and sustain a culture of environmental ambition and to help avoid the polarization that can happen around some of the policy choices that are needed to achieve important goals related to both conservation and decarbonization. Across the country, people need continuous reinforcement of the idea that our society can achieve environmental ambitions and fulfill economic hopes as well.

To meet these goals, Earth Rangers would like to diversify our programming and how we offer it to ensure we are reaching all Canadians with our conservation messages. This plan for growth and inclusion is the basis of our 2018 pre-budget request, which centres around three core initiatives.

The first is cultivating a generation of engaged, environmentally minded Canadians through the growth of our membership program. We have set an ambitious target of expanding membership from 170,000 youth to 300,000 young Canadians by 2020.

The second is expanding our digital programming to ensure we are able to reach youth in all parts of Canada, including rural and remote communities.

The third is developing new, long-term, indigenous-focused programming that will build off our successful programs in northern communities. It is important to note that we are not only focused on bringing our programs to indigenous communities, but also on educating and building an appreciation among non-indigenous youth for the rich history and contributions indigenous people have made and continue to make toward protecting our environment.

I would be pleased to elaborate on these three goals as a part of the question-and-answer period.

Given the important targets Canada has set for climate change and protected areas, we believe there is a significant need to communicate with and educate Canadians on the importance of conservation today for a healthy environment tomorrow.

We see a role for Earth Rangers to help communicate this with our expansive and growing audience of young Canadians and families across the country.

We want to establish a partnership with the Government of Canada that provides long-term, reliable, and sustainable funding to achieve our shared objectives. To that end, we have asked the Government of Canada for a commitment of $6 million over three years as part of the 2018 pre-budget process.

This funding would directly support the expansion of our programming, allowing us to engage more youth and their families across Canada in a real, tangible way.

We are confident we can build on the success of the last four years to communicate the importance of climate change adaptation, conservation, and the environment to children and families across the country.

I would like to invite you to ask more about our programs and about how, with your continued support, we can partner in engaging families on climate change education, action, and results.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Tovah.

From the Institute for Quantum Computing, we have Mr. Laforest and Ms. Day-Hamilton.

Welcome.