Finance Committee on Nov. 7th, 2017

[The Chair, Liberal, Wayne Easter]

I call the meeting to order. Pursuant to Standing Order 108(2), the committee is studying the subject matter of Bill C-63, a second act to implement certain provisions of the budget tabled in Parliament on March 22, 2017, and other measures.

I thank all the witnesses for coming today. Some of you were invited by all sides of the committee. I hope you can hold your remarks to about five minutes. We have an hour and a half and five panellists, but we can go a little over that.

We'll start with Ms. Roussel from the Canadian Nurses Association.

Welcome.

[Josette Roussel, Senior Nurse Advisor, Policy, Advocacy and Strategy, Canadian Nurses Association]

Thank you, Mr. Chair and members of the committee, for the invitation to be here with you this afternoon.

I'm a registered nurse representing the Canadian Nurses Association, CNA, the national professional voice representing more than 139,000 registered nurses and nurse practitioners. Across Canada, there are close to 5,000 nurse practitioners who provide care to over three million people in Canada.

I am pleased to be here today to speak about the specific measures related to nurse practitioners, or NPs, in Bill C-63, budget implementation act number two. We are pleased to be here to discuss this important bill ahead of nurse practitioner week, which starts on November 12 and ends on November 18.

On May 17 of this year, CNA appeared before this committee to inform members about the important role played by NPs in our health care system. Our official testimony before the committee on Bill C-44, budget implementation act number one, noted that NPs conduct physical assessment, order and interpret tests, write admission and discharge orders, and prescribe medications.

As an update, I am pleased to say that NPs enthusiastically joined our October 24 webinar entitled “Updates of Form T2201 Federal Disability Tax Credit Certificate: New Authority for Nurse Practitioners”. NPs have certified the DTC since March 22, 2017, budget day, the day the changes took effect. The proposed amendments in Bill C-63 will provide Canada's NPs with the capacity to treat patients to the full extent of their qualifications. As this committee is aware, these qualifications include the ability to complete documentation about their patients' medical conditions.

CNA has gone through the proposed amendments in Bill C-63. We are pleased to let the members of this committee know that the amendments complete the remaining clauses where NPs needed to be added to fully modernize the legislation. As a result of these changes, NPs will be identified in the Income Tax Act and the income tax regulations as eligible to provide certifications or reports related to other tax measures wherever certification or reports are currently provided by medical doctors.

We are pleased to see that these changes will lead to amendments to the medical expense tax credit, the child care expense deduction, the definition of qualifying student, the registered disability savings plan, and the registered pension plan regulations. We therefore encourage members of the committee to accept the proposed changes. These changes will enhance access for patients whose primary care is delivered by an NP in rural/remote and urban communities across Canada.

As we move forward, CNA anticipates that similar changes will be made to the Canada pension plan disability benefit. CNA has met with both ministerial and departmental officials at ESDC about changes that will authorize NPs to complete the disability-related medical reports for patients. These changes will not only enhance access to care but also lower health care costs.

Finally, I would like to take this opportunity to encourage members of the committee to support the recommendations that were outlined in CNA's 2018 pre-budget submission. The recommendations outlined in our brief aim to strengthen public health education of health care providers, including nurses. Our key recommendations to the federal government include investing $125 million over the next five years in public education in advance of the passage of Bill C-45, including a one-time investment of $1.5 million to increase the level of cannabis education for nurses. We also recommend an investment of $45 million over the next five years to scale up provincial and territorial acute care and community-based antimicrobial stewardship programs, including a one-time investment of $1.5 million to increase AMS competence and capacity among nurses through a nursing profession-led knowledge, education, and mobilization program.

In closing, I encourage members of this committee to support Bill C-63. We are pleased that the bill builds on the important changes that were found in Bill C-44.

Thank you. I look forward to your questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Josette.

Ms. Hanson, with Diabetes Canada, welcome.

[Kimberley Hanson, Director, Federal Affairs, Government Relations and Public Policy, Diabetes Canada]

Thank you very much.

Thank you for the opportunity to speak to you on Bill C-63 today.

Diabetes Canada is very pleased to see Bill C-63 grant nurse practitioners the ability to certify applications for the disability tax credit. For many patients, they are their closest and most expert health care providers.

The matters referenced in Bill C-63 affect Canadians living with type 1 diabetes the most. Type 1 is a debilitating, chronic, progressive autoimmune disorder that threatens its sufferers with death on a daily basis. Its sufferers lack the ability to produce insulin, which is essential to metabolizing carbohydrates, which are in turn essential to sustaining life. While we don't know exactly what causes it, we know there is nothing anyone can do to prevent it. Type 1 is a painful, invasive, relentless disease from which none of those who live with it ever get a reprieve. It puts us all at high risk of serious complications like blindness, kidney failure, amputation, and heart disease, and it shortens our life spans by as much as 10 years.

Managing type 1 diabetes has been likened in complexity to flying an airplane. A study in 2009 found that there are 600 steps required to manage it each and every day, and even if its sufferers perform each of those tasks perfectly, their blood sugar doesn't always respond in kind. The same dose of insulin for the same set of circumstances on two different days often results in completely different responses, each of which frequently debilitates the patient. Its variability means it requires constant vigilance, each and every day.

Some people with diabetes don't like to refer to it as a disability, preferring to focus on achieving their dreams despite this challenging condition. That is an appropriate coping mechanism for some, but by any objective measure, it is a disability for which there is no cure.

Even with our publicly funded health care system, living with type 1 costs its sufferers up to $15,000 per year for supplies essential to delivering insulin and monitoring blood sugar. Insulin is life-sustaining therapy.

Given those costs and how imperative these drugs and supplies are for us, the DTC and RDSP offer welcome financial support and security. Although the DTC is only worth on average $1,500 per year, that's $1,500 that a person with diabetes can use towards their medical supplies and health. There's a strong chance that a person with type 1 will face periods of disability during their working life, and perhaps even have it cut short by the complications of the disease. An RDSP can therefore also provide a great deal of peace of mind for those with type 1 and their families.

Recently, that peace of mind has been denied to most Canadians with type 1. Whereas a year ago more than 80% of applicants with type 1 were being granted the DTC and RDSP, since May 2017 that number has plummeted to less than 20%. As the committee well knows, the Income Tax Act hasn't changed, nor have the eligibility criteria. What has changed is the interpretation by CRA agents.

Notwithstanding the difficulty of managing type 1 diabetes and the certification of hundreds of expert doctors and nurses, since May 2017 agents within the CRA have been overruling these certifications and stating that adults independently administering insulin therapy don't spend the required 14 hours a week treating their illness and therefore are ineligible. This change has been made without consultation or notice.

Diabetes Canada has received hundreds of complaints from people with type 1 diabetes who have recently been denied the DTC. Some were applying for the first time, but many had previously received the DTC and were reapplying. Some have been told they'll have to close their RDSPs in consequence of no longer qualifying. Every one of them had a certification from expert doctors and nurses that they meet the eligibility criteria. Not one has been cured.

That's why Diabetes Canada is urgently asking for the following: one, that the CRA revert to its pre-May practices, accept clinicians' certifications, and grant people with type 1 diabetes access to the DTC; two, that the CRA engage in open and transparent consultations with Diabetes Canada, JDRF, and diabetes experts to create eligibility criteria and a certification process that reflect the reality of this disease; and three, that the government consider granting eligibility for the DTC to all Canadians living with type 1 diabetes on the basis that it is incurable and that subjective application of criteria is both unfair and unethical.

That's why we respectfully request that the committee rectify inequities in the application of the Income Tax Act where it concerns the access of people with type 1 diabetes to the DTC and RDSP. Please help alleviate some of the burden these hundreds of thousands of Canadians carry.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you, Kimberley.

From Gay Lea Foods Co-operative Ltd., we have Mr. Dolson.

The floor is yours.

[Steve Dolson, Chair of the Board, Gay Lea Foods Cooperative Ltd.]

Thank you very much for the opportunity to speak to Bill C-63 and, more specifically, the provisions to amend the Income Tax Act in relation to agricultural and fisheries co-operatives. As the legislation indicates, the changes are to ensure that qualifying farmers and fishers selling to agricultural and fisheries co-operatives are eligible for the small business deduction.

Briefly, Gay Lea Foods is the largest dairy co-operative in Ontario. We have recently expanded our membership to eligible dairy farmers within Manitoba, and we are the first North American dairy co-operative to include both licensed dairy cow and dairy goat members. At our nine facilities across Ontario, our employees produce a wide range of dairy products, from the consumer favourite, Spreadables Butter, to North America's first smooth cottage cheese, and more recently, Nothing But Cheese, an innovative snack product made with 100% cheese. We also recently added a cheese-making facility in Alberta to our growing business.

With members on more than 1,300 dairy farms and more than 4,000 members overall, Gay Lea Foods is as renowned for its co-operative-inspired values as it is for being a preferred supplier of award-winning dairy products and high-quality dairy components.

Back in the spring, we became aware that certain changes in the 2016 federal budget would have an unintentional but significant impact on co-operative member-owners. A number of co-operatives, financial and agriculture groups, and experts communicated to Finance Canada about this interpretation and the potential impact on members of co-operatives. We were pleased to receive the proposed changes that Finance Canada published in May of this year, and we acknowledge the efficient time frame in which they provided clarification on this technical matter.

We support the proposed changes in Bill C-63, and are satisfied that they will ensure that recently enacted amendments to the Income Tax Act do not inappropriately deny access to the small business deduction for a farmer selling farm products to an agricultural co-operative.

Co-operatives play an understated but vital role in enhancing Canada's economic and social prosperity, and they support our local communities.

I am tremendously proud that many of the values that define co-operatives are the same ones we celebrate as Canadians. As a proudly Canadian co-operative, Gay Lea Foods invests in our employees and members with training and leadership opportunities. We support the local communities where our employees and members live, work, and raise their families, by donating product, sponsoring local activities, and providing stable, long-term, skilled employment. I am humbled that we are able to do all these activities while growing a 100% Canadian-owned co-operative.

We are empowered by our member-owners who see great value in supporting an innovative, dynamic, and profitable co-operative. With that in mind, as government develops policies and programs to grow the Canadian economy, we encourage you to consider the broader spinoffs and benefits for Canadians that come from supporting Canadian co-operatives like Gay Lea Foods.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Dolson.

We'll turn now to Mr. Thompson, vice-president of corporate affairs for Molson Coors Brewing Company. Welcome.

[Gavin Thompson, Vice-President, Corporate Affairs, Molson Coors Brewing Company]

Thank you, Chair, and honourable members.

Thanks very much for allowing me to speak with you today about a very important aspect of Bill C-63, beer concentrate taxation.

As industries grow, it's imperative that they innovate and find better ways to do business. The beer industry is no exception. Innovation has always been core to Molson Coors' success and culture. From the invention of the aluminum can in 1959, right though to the introduction of the first light beers to the market, our pioneering spirit continues to drive us forward.

Our latest innovation is a new draft process that will reduce beer's impact on the environment, ease day-to-day operations for retailers, and make beer available in more places without sacrificing our valued consumers. By allowing the distribution of beer concentrate in place of the standardized keg, Molson Coors is building on an already solid reputation of being a responsible corporate steward. This latest innovation will allow for a reduction in the overall carbon footprint of the beer industry on the production, storage, and consumption sides of our industry. Additionally, we believe that businesses will realize positive economic impacts, as well as injury reduction in their workplaces. I'm not sure if anybody has lifted a keg, but it's a bit of a workout.

The capital costs of beer concentrate for customers are significantly less than the capital expense of having a keg room, maintaining its temperature, and ensuring regular cleaning, all of which can be costly in themselves. In addition, the reduced carbon footprint of having fewer trucks on the road to deliver the kegs, the reduction in electricity consumption, and the reduced material usage on the production side, makes this innovation a cause for excitement.

Molson Coors has been working with our research and development team to ensure a safe and high-quality end product that is strictly regulated and monitored for quality in every step of our process. As such, we have created and invested in a multi-million dollar innovation hub for this industry based right here in Ontario, and we will be looking to expand the reach of the project as soon as possible.

We are in the early stages right now of testing this new system in Toronto with a limited group of customer accounts, with plans to expand the pilot later in this year and into 2018. We look forward to sharing more details in the coming months as we continue to prove out this concept. I can say to the panel that the early reviews of the pilot are very positive, from both our licensees and the consumers. We're confident that this innovation will revolutionize the industry and begin a new path in beer production and distribution.

Molson Coors is very pleased with the direction the government is headed, and we look forward to the passing of this bill and important regulations.

Thank you very much for your time, and I will be pleased to answer any questions the committee may have.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Thompson.

I'm wondering if that would be better with P.E.I. water rather than the Toronto stuff.

[Gavin Thompson]

And cheese.

[The Chair, Liberal, Wayne Easter]

And cheese, indeed.

We'll turn now to Ms. Lennox, co-founder and chief executive officer of Startup Canada.

Go ahead.

[Victoria Lennox, Co-Founder and Chief Executive Officer, Startup Canada]

Thank you so much. Thank you to the honourable members for inviting Startup Canada and Canada's entrepreneurs to the table today.

Startup Canada is the national rallying brand, community, and voice for Canada's 2.3 million entrepreneurs. Since I launched it as a social entrepreneur, along with my co-founder, in 2012, Startup Canada has grown to represent more than 200,000 entrepreneurs across Canada and across 50 grassroots start-up communities that volunteer-led and entrepreneur-run from coast to coast to coast.

We represent the diversity of Canada's entrepreneurial community. It's so cool that I'm here beside Molson Coors, a great Canadian success story. Many of my members wish they could be so successful one day. We represent women, indigenous persons, mompreneurs, and hackers in their basements. We represent farmers. We represent every Canadian entrepreneur.

We work in the best interests of every entrepreneur to foster an inclusive economy and a growing middle class through entrepreneurship. Through digital programs and flagship events, Startup Canada is the network promoting, inspiring, connecting, and giving a voice to Canada's entrepreneurs, supporting their start, operation, and scaling up of their businesses to build a better Canada.

Our entrepreneurs are among our economy's most important natural resources for the future. Canada is home to 2.3 million entrepreneurs and 1.1 million small businesses, accounting for 78% of private sector job creation in Canada, 30% of exports, and 27% percent of GDP. More than 8.2 million Canadians work for small businesses in Canada.

From my comments, I want you to really understand that the world is competing for this natural resource and the rest of the world is vying for this talent. They're vying for the investments and their share of international markets. What we need to do is to really build a Canada in which our entrepreneurs can flourish, and to keep them here in Canada. We believe that being fair and competitive are not mutually exclusive.

From the recent tax consultations on changing the taxation of entrepreneurs, we have never felt more concern among our community than now, and certainly every member of Parliament who has met with their small business community has felt this. There has never been such an outcry before as when we started to look at our tax system and talk about fairness and our entrepreneurs. That was an opportunity for a conversation, which our entrepreneurs had with members of Parliament across the government.

As we're building tax policy and looking at Bill C-63 in all respects, we need to ensure that we do not inhibit entrepreneurial ambition in our country but that we are our entrepreneurs and demonstrating that Canada is behind our dairy farmers, our Molson Coors', and every entrepreneur. We need to recognize and acknowledge the risk that entrepreneurs take on personally, financially, and professionally when they start a company. We need to increase incentives for Canadians to participate in our entrepreneurial economy, as angel investors and through crowdfunding platforms to unleash entrepreneurial capital. We need to ensure that there are no unintended consequences in supporting the succession or transfer of businesses across generations, or any other unintended consequences, as we look to modernize and create a fairer Canada.

Rather than looking to see where we can tax more, our goal ought to be to grow our entrepreneurial tax base and unleash the entrepreneurial potential of every Canadian.

We have seen the difference that has resulted when entrepreneurs and government work together. Through consultations, we saw the Government of Canada begin to step back and recognize that there were unintended consequences for entrepreneurs in some of the proposed tax reforms. We also saw a recognition of the value of entrepreneurs with the reduction of the corporate tax rate. When we work together, we can create a better Canada for entrepreneurs, as we've shown in the last few months. We're really excited about the possibilities for the future.

In closing, we believe that the government, as it relates to entrepreneurs, can provide the best possible environment and culture for entrepreneurship. In Canada, this is our opportunity today.

There are six things that we can do and that we ask the finance committee to consider as you're looking forward to building our economy.

We need to continue to reduce red tape for every entrepreneur. There is more red tape in this binder here. We need to relentlessly reduce red tape.

We need to make it easy for entrepreneurs to understand and access government services and support. Here in this binder, once again, we're talking about changes to the labour tax code. We're talking about changes to the GST and HST. We need to educate our entrepreneurs on the impact these changes will have on their businesses. We need to ensure that we're making it easy for entrepreneurs to understand what's happening and to plan for the future.

We also need to ensure that we have the best possible tax environment to provide incentives for entrepreneurial growth. As I mentioned, this is through unleashing innovative capital solutions to seed our economy of the future. We need to ensure that every analysis of Bill C-63 takes into account the impact on Canada's entrepreneurs and their ability to create jobs and invest in each other. Whether it be amendments to the Income Tax Act related to legislation that closes loopholes around capital gains exemptions or ensuring that our farmers and fishers are eligible for the small business deduction, we really need to ensure that our tax environment is conducive to entrepreneurial growth.

Moreover, we need to continue to improve domestic and international market access and access to international capital. How will the Asian Infrastructure Investment Bank help us to expand trade links with China and investment between Chinese investors and businesses and our entrepreneurs? How are we looking at this investment in regional consolidation and regional collaboration as an investment in our small businesses? How are we ensuring that qualifying farmers and fishers are eligible for the small business tax deduction?

In addition to opening up new markets and capital, we really recommend that the Government of Canada work with entrepreneur support organizations like Startup Canada and other industry partners to continue the dialogue and conversation. It's only by working together that we can identify that there are implications for entrepreneurs from many of the aspects of Bill C-63. It's our opportunity as a nation to shine as an entrepreneurial nation.

Thank you so much for the opportunity to bring entrepreneurs to the table. We look forward to taking your questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Lennox.

Thank you all for your presentations.

To your point about the Asian Infrastructure Investment Bank, the committee had a very extensive discussion with officials about that investment bank yesterday, with a lot of good questions and I think a lot of good answers. If you go to yesterday's minutes, you'll learn a lot about where that investment bank is going.

We'll start questions with seven-minute rounds.

Mr. Sorbara.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Mr. Chair.

Good afternoon, everyone, and welcome.

To the Canadian Nurses Association, can you outline some of the benefits for the health care system of nurse practitioners now being able to write the certificates, if I can put it in general terms? Can you also outline some of the benefits for patients?

[Josette Roussel]

It is absolutely beneficial to Canadian patients and the health care system, and also to their teams. A significant amount of time used to be wasted in finding practitioners who would complete the form. Having more practitioners who can complete the forms makes it an accessible process for patients. Right now we know that over 100 forms per week have already been completed by nurse practitioners since March.

It has had a fairly significant impact on access to this service for Canadians.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

This is obviously coast to coast to coast. It benefits all Canadians.

[Josette Roussel]

All Canadians, yes.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you.

Since we're talking about beer this afternoon, I'll ask about the innovation in beer. Will this make the keg obsolete? Will we not see that anymore?

[Gavin Thompson]

I would say not in the near term, but it is definitely an option that could transform the industry. A lot of this will pertain to adoption within our industry, and that's the longer-term goal of this objective.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

You alluded to a reduction in the carbon footprint. On a relative basis, could you give us some more details and dig a little deeper on the reduction in the carbon footprint?

[Gavin Thompson]

Absolutely. I mentioned the trucks off the road and that the payload would be a lot lighter when carrying these. They're literally like a box. So you can imagine that those will be taken off the road.

There's also a lot to do with the packaging. Right now the cleaning and creation of kegs in an aluminum format is very costly. It also uses a lot of water to create them and to clean them. This packaging is 100% recyclable and will go right back into the system.

Too, from an electricity standpoint, the liquid will be cooled at the point of distribution. You won't have to worry about keeping it cool in a large room. So refrigeration costs and electricity costs will be reduced as well.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

I used to cover your company on the bond desk and was glad when you guys put security on your Canadian dollar bonds. We were all very happy about that, and you changed your corporate structure.

Regarding the innovation hub that Molson Coors has started in Ontario, can you fill us in on how many people you expect to be working there and the amount that has been invested? It sounds like a great news story for Ontario.

[Gavin Thompson]

Yes. It's a physical facility right near our brewery in Toronto. It currently employs the project team, which I would estimate is approximately 10 people. That's been the core team working for the past year or so on the project. The total investment to date is just shy of $5 million.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you.

I'll go to Diabetes Canada.

We've heard some numbers. We've heard this 80% rejection rate. Do we have a source for this data?

[Kimberley Hanson]

We have multiple sources for this data. We have personally been contacted by several hundred people with diabetes complaining that they've recently been disallowed. We've also received a number of complaints from a number of diabetes clinics across the country that they're seeing multiple rejections, unlike in the past. We've heard from a number of social forums of people with type 1 diabetes that there has been a strong pattern in this regard. We've also heard from the Association of Canadian Disability Benefit Professionals, an association of companies that provide assistance to people who choose to have it, applying for the DTC and RDSP.

Based on the number of people who have contacted Diabetes Canada directly in the past couple of months, we can see that in the past six months there have been 715 disallowances and only five or six approvals, not all of which are for adults. I have seen the copies of these disallowances. By contrast, in the same period in the previous six months, there were more than 1,000 approvals and only five or six disapprovals. I don't have a complete dataset. We asked the CRA for this information. I understand they don't keep records in the way we ideally would want, for them to be able to answer questions on people with diabetes specifically. We haven't received a response to our question even in general terms. I don't have statistics from the CRA, but I have a great many sources who are experts in this community, all of whom are pointing to a ratio of far more than a 80% rejection rate.