Finance Committee on Oct. 2nd, 2018

[Jim Irving]

Look, I'll tell you this is about political will. I know there's politics in all of this, but to give him credit, the Prime Minister bought the pipeline, and he's going to make the pipeline happen out west.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

So far that's not happening.

[Jim Irving]

I have faith that it's going to happen, but regardless, this leadership.... It's tough, it's messy, and not to be partisan about it, but we've got to come together. All politicians have to come together to help this get fixed, because if we have haranguing on this, it's not good for the country. You pointed out, sir, that we need to generate the income, because that's what looks after everybody in this country. We shouldn't be discounting our crude because we can't get to market, period.

[The Chair, Liberal, Wayne Easter]

According to Frank McKenna, the Alberta discount last year cost the country about $17 billion in terms of what the discounted oil price was in Canada's results.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

That would pay for a lot of hospitals.

[The Chair, Liberal, Wayne Easter]

Mr. Julian is next, for seven minutes.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you very much, Mr. Chair.

My thanks to all the witnesses. I will start with Mr. Cyr and Mr. Brun.

Gentlemen, you have raised a really important issue about mental illness. I think no family in Canada, including mine, is spared. Mental health issues may become worse when people have no access to services in their own language. For minorities—there are communities of newcomers where I live—this access is fundamental.

I suspect some people are starting to raise concerns. New Brunswick had an election. We are now seeing that a small parliamentary group seems somewhat uncertain. This group, which is against francophones and minority language rights, could have a lot of weight in the government's future activities in New Brunswick.

If your recommendations, which are very valid and important, are not taken into account, do you think that the federal government should ensure that those services are provided to linguistic minorities, including in New Brunswick, when, at the provincial level, they are eliminated or cut because of politics?

[Albert Cyr]

In my opinion, it is very important to ensure that the mental health needs of the entire population are met. We have an aging population, and all Canadians must be able to contribute to the economy. Good mental health and access to services in one's language are among those needs.

In 2015, the provincial forum clearly emphasized the importance of safety and cultural jurisdiction for all first nations, immigrants and linguistic minorities. They are part of the community. The forum produced a report with 25 recommendations that various departments are currently using as a roadmap to meet the mental health needs of the public. The community must be part of it, including the majority, the minority and immigrants.

[Ronald Brun, Acting Member, Executive Office, Coalition santé mentale et traitement des dépendances du Nouveau-Brunswick]

Let me give you an example that reflects our situation.

I'll speak in English because I work in an English environment right now with first nations.

Just to give you an example, the gaps we're facing in terms of mental health servicing and access are so impactful and tremendous that we don't even recognize them at times. I've been working in a first nations community for 25 years, and in the process of those 25 years I've witnessed 60 suicides in that community, three of them in the last four months. That doesn't make sense at all.

We tell people the rate of suicides in first nations is seven times greater than the national and provincial average. Why don't people understand the impact that's going to have on these communities? If we're going to talk about productivity and competitiveness—and I'm willing to play with that jargon as well—we have a demographic population in Canada to some degree that we could be utilizing to our economic advantage.

However, if we do not concentrate any effort or any resources in trying to build up those communities and those vulnerable populations. They're not just the first nations: immigrants and a lot of other people are at risk. We need to care about those people and we need to build that capacity in order to meet that need.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you. I only have seven minutes, but I appreciate your reply on that.

Ms. Black, I have a very brief question. The Red Seal apprenticeship for crafts is a very intriguing idea. Is that something that your organization has approached the Red Seal folks on?

[Maegen Black]

We've just begun to reach out to them, to start to look at what building blocks we actually need to put together to bring this forward. There is a system in place for us to put forward a proposal, and we're working with our educational partners to try to see where those pockets are happening.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you very much.

I'll come back to Mr. Mullin and Mr. Irving. Both of you have raised very interesting points, Mr. Mullin around the review of the tax system and Mr. Irving around the Competition Bureau.

I come out of social enterprise. As I mentioned, I'm a member of the Burnaby Board of Trade and the New Westminster Chamber of Commerce. I think that when we're talking about a review of the tax system, we have to go beyond simple tax rates and actually look at tax shelters and overseas tax havens and whether or not those are actually serving Canadian interests. I believe in a partnership of public and private investment.

I'm going to ask you in a moment, Mr. Mullin, to comment on that review of the tax system, which also includes overseas tax havens and tax shelters.

I have a question for you Mr. Irving, on competitiveness and the idea that Canadian businesses benefit from our universal medicare system. The normal rule of thumb is $3,000 per employee per year, as compared to our American competitors who have a patchwork and incredibly inefficient medical system. Many people advocate for us to move to a pharmacare system because that would reduce costs to Canadian businesses as well. It would make them more competitive by eliminating anywhere from $4.5 billion to $6 billion that Canadian businesses currently pay for drug plans. Could the competitiveness bureau also look at those elements of competitiveness that exists in the Canadian economy?

Those are my questions to both of you.

[Dean Mullin]

Thank you. I've been pretty much exclusively in income tax since 1999. I think nothing should be off the table or out of bounds. The Income Tax Act is probably three or four inches thick, and some of it is not written in either official language. You have to be very careful when you're reading it. I don't think anything should be off the table in reviewing it. Tax rates, deductions, CCA classes, capital gains, capital gains strips, you name it—everything should be looked at. The last time there was a comprehensive review was in 1972.

[Jim Irving]

I think we should look at everything. This is about being competitive. Whether you make a kind of pulp, french fries, or oil and gas, what are the pluses and minuses? If health care is an advantage to Canadian businesses...I mean, you're paying the tax and it's funded, so it's not for free, but that's fine.

We should look at both parts of the equation. This is not about a one-sided equation. This is about getting the investment in Canada. If you're going to produce a ton of pulp, a barrel of oil, or something else, how does that compare with Africa, China, or some other part of the world? We have the resources, so can we create added value in this country? If that goes all the way around the circle to health care costs, as you ask, then sure.

What do we have that's giving us an advantage? What do we have that's giving us a disadvantage? Where do we fit in that global cost curve? If we're in the top quartile of competitiveness, there's going to be money to fund the programs for people, and so on, and we'll get the investment. If we're not, we're in trouble.

[The Chair, Liberal, Wayne Easter]

Mr. Sorbara, you have the last of the seven-minute rounds. Go ahead.

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

Thank you, Mr. Chair.

Welcome, everyone. It's great to be here today.

Since we are in New Brunswick, I'll put my focus on New Brunswick, with two themes.

To the CCSA, you made a recommendation on direct funding for broadband to some of the locally based companies already in the field, companies that serve rural areas. How much would that investment or that recommendation help the wonderful residents of New Brunswick?

[Jay Thomson]

It's an interesting question, because we actually don't have any members in New Brunswick.

The organization started 25 years ago with Fundy Cable, based here in Saint John, but Rogers now owns most of the cable companies in New Brunswick.

I would say that Eastlink is a very big partner of ours in providing services throughout the Maritimes, including in New Brunswick. Certainly it would help in that respect.

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

Wouldn't you say that broadband, much like the telephone, is now becoming essential for Canadians? You don't need to have a phone at home, but you need to have Internet.

[Jay Thomson]

I totally agree with that. It is an essential service for education, for social interaction, for access to health services and for entertainment.

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

I think that as we continue to look at innovation and as we continue to evolve as a society, there are going to be discussions on the critical nature of broadband for all Canadians, both rural and urban, as well as what that looks like in the future and how the government's role in investments with the private sector continues on. Many places in Europe now have squares you can go to where there's actually free Wi-Fi for their citizens to utilize because Wi-Fi or Internet has become so essential. Wouldn't you agree with that?

[Jay Thomson]

I would certainly agree with that.

To your colleague's earlier question about a national strategy versus a locally focused strategy, that's where a national strategy would be very important. We believe that if government at the high level sets the goals and the money's allocated appropriately, those objectives will be met.

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

Thank you.

I want to move on to Mr. Irving. Thank you for being here this morning. The gentleman from Saint John Board of Trade can chime in afterwards as well.

On the regulatory front, I often look at it as an economist and as someone who worked on Bay Street and Wall Street. I look at it as regulatory uncertainty. Mr. Irving, you pointed to it as regulatory layering. I think that was one of your comments. I'm concerned, always, about regulatory layering. Yesterday's agreement on the new trade accord with the United States, the USMCA—it kind of reminds me of a song, for some reason—I think puts to rest a lot of regulatory uncertainty on the trade side, which is great. Regulatory layering is concerning.

On the productivity side, one thing I think we need to focus on is ensuring we close the gap between productivity per hour per U.S. worker, or however you want to define it, versus Canada. I'd like to ask for your top three recommendations for how we can continue to close that productivity gap, because that does affect our standard of living. Like you, I like to be constructive and not critical when I'm meeting with folks.

[Jim Irving]

You can make a long list of things, I think, depending on the sector. This, I think, starts with understanding where you are. You know what they say; if you know where you are, you're never lost. We need to know where we are vis-à-vis everybody else out there in the world that we're competing with, and that should influence how the regulation gets its framework or what those inputs are.

In the province of New Brunswick, we have natural gas, but we're going to bring our natural gas down from Alberta. We're sitting on lots of natural gas here in this province, but no, we're not going to frack it, and we'll live on the transfer payments from Ottawa that he referred to.

If we have the right price of natural gas, we need to understand what that does for our energy costs in manufacturing. If we have the permits for....

We're in the offshore oil and gas business, for example, with ships off Newfoundland. We deal with Exxon. Exxon moves all around the world. They're going to spend $50 million to $100 million to drill exploration wells. It's a 60-day job in the Gulf of Mexico. To get a permit, it's 100 days approximately. If you go to Newfoundland, it's 500 days and counting.

What does it take to be competitive, and why? If we have unique circumstances because of some local conditions, that's fine, but if it's just bureaucracy or lack of knowledge or disjointed organizations having their own competing agendas, that just creates a lot of anxiety.

We have to deal with the aboriginal question in this country. We have to look after the indigenous community. We have to be supportive of them. We also can't stop things from moving ahead. We just can't let that happen.

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

You mentioned the capital cost allowance in your remarks. How important is that?

[Jim Irving]

I think it's very important. We're a local company. We plant trees. We're not going to cut that tree for 35 years. I don't think there's a longer-term investment than that. We're private and we're patient, but these big public companies are moving around the world. Their various plants are just pin dots on a wall map.