Finance Committee on Oct. 20th, 2017

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

Sorry, I don't mean to cut you off. I just have such limited time and I want to get these answers on the record.

What is the money specifically for, if it's not ownership and maintenance, because then the town or the municipalities are somewhat maintaining it generally? What specific types of programs does the $8 million over five years cover?

[Dennis Burns]

Very specifically, in the proposal, we speak to the groomers. The groomers were inserted so you can see what actually makes our trails. We use the snowmobile to ride the trail, but what makes the trail flat and smooth like a highway? It takes a grader to level the product. We use the snow to make the uneven ground flat where the trail might be because our trails aren't based on four feet of riprap, two feet of crushed rock, and then pavement. Most of our trails are out in the country through the bush, through the forest, through the trees. Across the rivers, we put a bridge in. We use the snow like a road-building material. These groomers like you see on the ski hill are exactly what we have.

The current price of the PBs, or the Pisten Bully, or the Prinoth units that pull and drag behind them to groom trails, with the new tier four, they're $70,000 each. We have 1,200 of them out in the snow across Canada and we're looking at refurbishing our fleet. The average age of the units now is getting over 10 years. Part of the investment we see is going back into the groomers.

This very specific ask is to work with us over a longer term to raise our snowmobile trails to a new level. The concept is to raise them by going to bulk buying, and replace the ones in right parts of Canada.

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

Thank you.

To the others, I appreciate your presentations. I'm sorry I won't have time to ask you all questions.

My last question then is, if I have a minute....

[The Chair, Liberal, Wayne Easter]

You do. You have 30 seconds.

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

Mr. Parker, for the Toronto Region Board of Trade, you talked about airports and capacity, and the need to build up the capacity at our regional airports. I agree with you there.

There are two things happening. First, the Minister of Transport has conducted a study on aviation for the GTA and the greater golden horseshoe, so I look forward to getting those updated numbers, because you quoted capacity at Pearson by 2030. That's based on a very old GTAA study that had some issues because it was prior to the 2008 economic crash. I think the questions around data will be helpful.

In regard to what I'm understanding for some of the issues around, for example, Pearson being a super hub is not the capacity in the airport but the transportation to move people in and out. In fact, Pearson is essentially the same size as Atlanta. Atlanta can do almost double the passenger capacity or the flights.

Is the focus really about that capacity to move people to and from the airport? You spoke about it a lot. Is that one of the biggest challenges?

[Dr. Jeff Parker]

Yes, Ms. O'Connell, I would suggest the movement of people and goods is the first and foremost issue. We have the UP Express, which has given us some new connections, but we still have a major bottleneck in this area. One thing the board is studying right now is the movement of goods. We have a four-part series that's been coming out over the fall because we acknowledge that Pearson, as much as it's a passenger hub, is also a very important goods movement hub. We need to make sure the infrastructure is in place to get the goods to and from the airport, and that's an area where we think the federal government can show some additional leadership.

[The Chair, Liberal, Wayne Easter]

Thank you, all.

Mr. Kmiec.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Thank you, Mr. Chair.

I'm going to focus most of my comments on the Canadian Beverage Association, but I'll start with the Canadian Vehicle Manufacturers' Association.

You asked that charging stations not become taxable benefits. Is it a taxable benefit right now if an employer provides charging stations to its employees?

[Mark Nantais]

Yes. Maybe I can try to give a little clarity. If you are an employer and you provide recharging stations and you provide potentially cost-free charging, that is a taxable benefit. A good part of the value equation to those people considering the purchase of electric vehicles is being able to get to and from work, and while you're at work to be able to recharge your vehicle. That's a real plus, and it's a major consideration for them. If you are being taxed for that as a taxable benefit, it tends to be a deterrent in terms of your decision to purchase a new vehicle.

Part of the EV strategy that I mentioned, which we're trying to develop on a pan-Canadian framework basis, is looking for ways to remove impediments. We would see the taxability of that benefit as an impediment, at least in the early stages of the market development.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Most people who own EV vehicles right now are very high-income earners, because the vehicles are much more expensive. We would be indirectly subsidizing individuals with high incomes.

Just to think about it, the marginal effect on tax rate would be miniscule, as it doesn't consume all that much electricity.

I'll move on to the beverage association—

[Mark Nantais]

I can address that, if I may.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Yes, go ahead.

[Mark Nantais]

Right now, clearly, some of the vehicles out there are for the high-income group, but with all the models that are coming forward.... In 2011 there were about seven models available. There are now well over 30 models, and those models are becoming available to those income brackets, families, that can afford them, families that see this as a regular family car. To suggest that only those people who are high-income earners would benefit from this.... That is a very quickly evolving scenario where ordinary individuals, our families out there, are going to benefit—

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Families who can afford those vehicles, or families who have an older vehicle they don't want to switch out yet, are paying excise tax, and paying GST or HST here in Ontario. That's not a taxable benefit, but they are paying taxes on it. That's just an idea.

To the beverage association, you referred to Mexico. We heard, from the other side, referring to Mexico, how they've reached some of their targets in terms of health improvements. They didn't mention job losses, though. I find it striking. You said there were 11,000 job losses in Mexico after the soda tax, I'm going to call it, was introduced?

[Jim Goetz]

Yes, absolutely. There's a study out of the University of Mexico, which I'd be happy to provide for the committee, that showed there had been between 10,000 and 11,000 job losses up and down the value chain.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Do you have any data or information on what the similar impact would be in Canada if such a tax was introduced, using preferably the same methodology as the University of Mexico?

[Jim Goetz]

We don't have the data on how exactly that would affect the Canadian industry, but all we have to do is look around the globe where these kinds of taxes have been introduced and we see that there's been a similar pattern. Philadelphia recently introduced a tax in the city of Philadelphia, and there have been 200 union job losses there. When Denmark introduced a similar style of tax regime, which was more focused on fat, they had that tax in place for only 18 months because there had been 1,200 job losses in the food and beverage sector.

There is a pattern evolving here in that where these taxes are introduced, there are job losses.

I would point to the fact that the Government of Canada was very quick to act when a tariff was put on softwood lumber, averaging about 20%, because of concern for job losses and investment losses, etc., and rightly so, for products going to the United States. Yet at the same time, people are talking about putting a 20% tax on our industry here in Canada, and there is not this discussion about what that would do to our investment here in Canada. On one hand we're addressing, rightly so again, a punitive tax, and on the other hand, discussing putting a punitive tax on our industry. You have to expect there are going to be job losses.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

In your presentation you also mentioned advertising. You made reference to Bill S-228, as have other witnesses before the committee who brought forward their views on it. You mentioned that your industry is regulated, and you have standards that you abide by.

Do people who are members of your association target children for advertising? How do you treat children aged zero to 12, and then 13 to 18?

[Jim Goetz]

As far as our industry's track record, I would again refer you to the recent compliance audited report that was issued two weeks ago, I believe, which showed that the beverage industry is meeting its targets when it comes to not advertising to children 12 and under.

In relation to the bill that's been introduced in the Senate and is now making its way to the House of Commons, first of all, our members have done business in the province of Quebec since their legislation was introduced sometime in the eighties, and we're compliant. What the mandate letter to the minister stated was to introduce legislation that is similar to what is in Quebec as far as advertising and marketing to children. We support that. We're not opposed to the legislation.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

I'm going to interrupt you, because I don't know how much time I have.

This was something that I think Mr. Fergus brought up. We were asking questions of the Canadian Convenience Stores Association.

What is the difference between the proposed S-228 and Quebec's advertising law?

[Jim Goetz]

Very quickly, Quebec's law outlaws essentially all marketing to children. What the bill that's coming over to the House of Commons does is that it differs in three very significant ways. First, it's only targeted at certain food and beverage products, so it's not all marketing to children but different.

Second, the age is very different: 13 versus 17. Our concern, again, is not with the legislation. Well, we do have concerns with the legislation, but that age is then leading into adult advertising. For example, that means you probably would not be able to show an advertisement for orange juice on Hockey Night in Canada, but you would be able to show a beer ad.

The third component is how extensive it will limit sponsorship events that are really targeted at adults. Because that age is 17, you will have a lot of events that are now sponsored by food and beverage companies that will simply no longer be able to occur in Canada.

[The Chair, Liberal, Wayne Easter]

We'll have to end it there.

Mr. Boulerice.

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

Thanks, Mr. Chairman.

I wanted to take 30 seconds to say to citizens and the people who came to the mike to talk about the importance of science and fundamental science that we support the NATO recommendation and we completely agree with your points.

I will now continue my speech in French.

Ms. Dagg, I will try to address my questions to three speakers. You are the first one. Please keep the answers short.

Where is Airbnb's head office?

[Alexandra Dagg]

Our company's headquarters is in San Francisco, but we do have an office in Toronto.

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

So you have an office in Toronto.