Evidence of meeting #172 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.
A recording is available from Parliament.
11:50 a.m.
President, Quebec Association for the Taxation of Financial Transactions and Citizen's Action
I could point to a clause in the new agreement that runs counter to what you say. I'd like to discuss it with you.
I can tell you that this is of concern to a lot of the people we deal with in various milieus. We are in fact discussing this topic. We aren't sure we have the protection you refer to. We found something very concrete in the United States-Mexico-Canada Agreement, that shows that what you say is far from certain.
11:50 a.m.
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
We will discuss that. Thank you.
I have five minutes left.
Mr. Toye and Mr. Gibson, thank you for having come to meet us.
I have three questions on your recommendations. Your second recommendation is to “adopt a framework legislation to embed a commitment to social innovation and social finance across the federal government”. I expect that you're trying to fill a gap that means that groups like the CEDs do not necessarily fund social economy enterprises.
Am I right?
11:50 a.m.
Executive Director, Canadian Community Economic Development Network
Yes, building on the model of the Quebec framework legislation of 2013, it really ensures there's a whole-of-government approach, because social economy, social innovation and social finance touch a wide range of departments and agencies. Yes, that helps to ground it.
11:50 a.m.
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
Your 11th recommendation is that we:
Study the feasibility of a portable account financed by contributions from workers, employers and the federal government, for Canadians to draw upon to pay for lifetime learning and job retraining.
Do you have a figure? Could you propose an amount?
11:50 a.m.
Executive Director, Canadian Community Economic Development Network
I don't have a number. I have to say, these recommendations come from our members across the country, and that's one I'm a bit less familiar with. I think it really reflects the era we're in, where there's a lot more mobility and a lot more dynamism, and we need more flexibility both with the types of enterprises that people are creating and the types of jobs that are going to be available. I'll look into an amount and follow up with you.
11:50 a.m.
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
Your first recommendation is that the federal government invest $375 million.
Would that amount be staggered over several years, or are you asking for all of it immediately?
11:55 a.m.
Executive Director, Canadian Community Economic Development Network
I think that's an excellent starting point. In coming up with those numbers, we looked at what has been invested in other countries—they're putting significant sums into it—and what has been invested in the past, when governments supported the social economy federally in Canada. There was $132 million 15 years ago, which was a good start. We're well beyond that now.
What has been invested in innovation by the current government? Mr. Sorbara mentioned superclusters. There has been strong support for traditional sectors of innovation and less for social innovation and social finance.
I think the money is significant. It makes a huge difference, but I think what's really rooted at the bottom of this strategy is a different way of doing things. It's tapping into the existing programs that Madame Cicciarelli mentioned, as well as existing assets across the country. These relatively small investments would leverage much larger sums of existing programs and existing assets across the country.
11:55 a.m.
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
I have one last question. It's uncommon to receive a dozen recommendations from a single organization.
Are there two or three that you would prioritize?
11:55 a.m.
Executive Director, Canadian Community Economic Development Network
I would say that the first one is number one. That's the overall strategy. In fact, one of the points we made in a letter to Minister Duclos and Minister Hajdu yesterday was about an integrated approach. In fact, all of the elements and recommendations in this booklet are mutually reinforcing and require a comprehensive approach, so if we move ahead with this significant advancement in the overall strategy, a lot of the others will be included in that.
11:55 a.m.
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
Thank you.
Mr. Frappier and Ms. Cicciarelli, I'd like to put a question to you about your recommendations, which are very similar to those of the Canadian Community Economic Development Network.
Once again, I am quite familiar with the work of the Chantier de l'économie sociale, in my region particularly. It's quite prominent. I know that several of your members are now in Bilbao, Spain, for the World Forum on Social Economy.
Which of your recommendations are priorities? Which two or three recommendations would you highlight?
11:55 a.m.
Communications Director, Chantier de l'économie sociale
The very first concerns programs. An analysis needs to be done to ensure that the tax and regulatory environment is fair for social economy enterprises.
The second is the implementation of the Social Innovation and Social Finance Strategy, and the need to respect what has already been done, with a view to complementarity. We really do not wish to redo or reinvent anything.
The third, in order of importance and not going by the order in the brief, is to create framework legislation on social innovation or social finance.
We must create a sufficient pool of data to understand the administration of programs correctly when they are created for social economy enterprises.
One of the difficulties is that we are often told, at CED or elsewhere, that businesses are eligible for these programs. However, when we look at the fine print, we realize that the public servant administering the program does not understand the nuances of the businesses. We then realize that the tax status or the activities of the business mean that they are not always eligible, even if this is not spelled out in program documents.
Public servants must be trained, and a group created, to ensure that throughout all of government, everyone understands what social economy and community organizations are, as well as the whole movement around them.
11:55 a.m.
Aurora—Oak Ridges—Richmond Hill, CPC
Thank you very much.
I'd like to direct my question to Ms. Chan. My colleague Mr. Sorbara asked a bit about recommendation three. I apologize, but I'm still not clear. What specifically is the government looking to propose in this new regulation? What specifically will impede or cause difficulties for pharmaceutical competitiveness?
11:55 a.m.
Vice-President, Policy and External Affairs, Merck Canada Inc.
Thank you, Ms. Alleslev. I'll try to respond to this efficiently.
The government is trying to propose new criteria or new factors in terms of setting price. If we think about the role of the federal government, it is a price regulator. Its mandate is to ensure that prices in Canada are not excessive compared to a basket of comparator countries. What they are proposing is additional regulatory burden: processes, criteria and pathways that are not seen anywhere else in the world, frankly. That's one piece.
The second piece is in terms of that basket of comparator countries. We believe that our prices in Canada for pharmaceuticals are in fact fair. We're highly regulated. We compare against countries of like economic status, and we undergo many other steps in the process. We have to demonstrate, through a health technology assessment system, that our pharmaceuticals are cost-effective and that they deliver value. We then work very closely with the provincial governments to negotiate the price of the pharmaceuticals. There are significant cost savings there.
It's a highly regulated environment. It's a system that enables our public payers to achieve significant savings through the pan-Canadian pharmaceutical alliance. It's a system that is working. What the government is now proposing is untested and unprecedented measures that would have a detrimental impact on our industry. We are looking at up to 40% impact on our revenues overall, and there is no industry that can sustain that.
What we are asking for is an opportunity to sit down with the government, stop the letters going back and forth, and work on some concrete, implementable solutions that can be implemented in a timely way. Let's work toward building up Canada's innovation and skills strategy and keep the research and investments coming into Canada. It's really about looking at a balanced policy approach to bring health and innovation together, to ensure that Canadians continue to have access to innovative new medicines and that we continue to stimulate and drive the innovative health research ecosystem in Canada.
Noon
Aurora—Oak Ridges—Richmond Hill, CPC
I want to make sure that I understand completely. The government thinks there's a problem that needs to be solved, and yet, from your perspective, perhaps it's a “Don't fix something that ain't broken.” Is that a fair statement? There's a gap between whether or not there's a problem that needs to be solved.
Noon
Vice-President, Policy and External Affairs, Merck Canada Inc.
Yes, that's a very fair statement. I think a lot of it is about defining the issue that needs to be resolved and then working together to solve the how.
Noon
Aurora—Oak Ridges—Richmond Hill, CPC
All right.
We are on our way to getting a new NAFTA agreement with the United States, which is now USMCA, and there are some concerns, some articles around pharmaceuticals. Have you had an opportunity to get a feel for what that looks like and how that new regulation or trade element is going to impact you in Canada, and Canadians, from a drug perspective?
Noon
Vice-President, Policy and External Affairs, Merck Canada Inc.
The data protection provisions in the USMCA are looking at an extension of the protection for biologic medicine, a specific class of medicines, for an additional two years. It's all fairly new to all of us. We are currently in the process of going through the text and trying to get an understanding of it. We know that intellectual property is the foundation of our ecosystem being able to innovate, but we also know that data protection has a very long time frame, so we're looking eight to 10 years out.
We will continue to work with the provincial governments and all public payers, federal and provincial, to negotiate fair prices for our pharmaceuticals through the mechanism that exists today of the pan-Canadian pharmaceutical alliance. We will ensure that the medicines and the prices of our pharmaceuticals remain fair through the process that exists.
Noon
London North Centre, Lib.
Thank you very much, Chair.
Thanks, everyone. Thank you to all the witnesses for appearing today and for their presentations.
I'm particularly interested in the social innovation side. I'm from London, Ontario. In London, and indeed in the southwestern region, we have had this burgeoning sector of social enterprises that have really played an important role in meeting the social challenges facing our society, from drug use to poverty to homelessness. I think it's a really great model that needs further encouragement in Canada, and I thank you very much for your presentations.
I want to delve into something quite specific. I didn't have a chance this morning, because I ran out of time, to ask a question of one of the presenters who'd put in their brief a concern about the future of media. We have heard, really for the past few years, about local media particularly. Newspapers in small communities have been the foundation, in many ways, keeping people together.
I grew up just outside of London, in a small town called Exeter, where the Times-Advocate is still going. It managed to find a way to survive. Really, that was a rallying point for the community. That's where people read about how many goals their kids had scored on the weekend. That's where people read about prices when it came to livestock. That's where people learned about what was going on.
My take on this is that I don't know that it makes sense for government to continue to look at proposals from organizations and messages that continue to come in, saying that government has a responsibility to fund local newspapers. What about the not-for-profit model? I think that it has the potential to save these media outlets in small communities, whether it's newspapers, magazines or other small efforts, periodicals in small communities.
What about the social innovation and social finance model as a way of addressing the challenges faced by local media in communities?
I'll go to Mr. Toye first, and then Ms. Cicciarelli.
12:05 p.m.
Executive Director, Canadian Community Economic Development Network
I totally agree. I think that's the point of social innovation and social finance. It's driven by local people. If there is local ownership and local investment, then the right environment—the right legal structure and the right regulatory structure—can enable local people to take action.
For example, one of our members is the Alliance des radios communautaires du Canada, and those are some key local radio stations. I think Madam Cicciarelli will talk more about the work they're doing with those local content providers to allow them in an ecosystem to be more competitive and to support each other.
We had the example earlier this year of La Presse changing ownership to a model that allows it to serve its public function, its essential public good function, in a way that's more compatible, perhaps, with long-term sustainability.
So I entirely agree. I think the new structures can enable more sustainability in the media sector.
12:05 p.m.
London North Centre, Lib.
Well, the media sector is evolving so dramatically that I really have a problem with those folks who say that government has a responsibility to offer tax credits or funding, which would really be a slippery slope. When would the funding come to a halt? It would be perpetual. I don't think that's a sustainable model.
I think if citizens come together and support the sector on their own, there's something to be said for that. I think they're living up to their responsibility as citizens. I think it could serve to be sustainable, because there you have citizens who are pursuing their passion. It's all the more likely that local newspapers could be saved that way.
Ms. Cicciarelli, what's your view?
12:05 p.m.
Partnerships Officer, Chantier de l'économie sociale
I completely agree that having it controlled by collective ownership is a great way to do this. These types of enterprises come from local needs, and people know what their needs are. They come together to find a solution. As much as government should not have control, it does need to be part of the ecosystem and contribute in that way.
For example, both provincial and federal governments should be contributing by buying at least a portion of the advertisements in the media. They never get to their actual targets, but they approach them, so that's a way of financing. An issue that we have, especially in radio, is that when they want to diversify their content, they are limited by the fact that they are non-profits.
To recognize that certain types of enterprises are limited in this way, to change the way things work so that these enterprises can have access and diversify their funds, and to make sure they are not continually brought in front of an obstacle—these approaches would be a great way to facilitate people coming together and finding solutions for their radios and their newspapers. Such measures would show government leadership in giving responsibility to citizens while remaining a valuable player in the ecosystem.
12:10 p.m.
Liberal
The Chair Liberal Wayne Easter
I want to come back to the point that Mr. Julian raised earlier in a question to Ms. Drouin. On the pipeline, there are all different sides to the story, and I think Mr. Julian said that the expense would be $4.5 billion for a used pipeline and $10 billion in order to do the development, somewhere around those figures.
The other side of the coin is that there is what's called an “Alberta discount”, in terms of a discount we take in oil prices because we're captive to the U.S. market. Frank McKenna says that the cost to the country of that discount is $17 billion. Yesterday, when we were at Irving Oil, we heard the figure to be much higher, but I can give you yesterday's figure. In yesterday's oil prices, the discount for every single barrel of oil we sent to the United States yesterday was $39.47. That adds up to a heck of a lot of money.
I will take my side, but I'm telling you there are two sides to this story. If we didn't have that Alberta discount, and we had that $17 billion per year in our economy, it would do a lot. All I'm saying, Peter, is that there are two sides to the story. You're entitled to your opinion, and others are entitled to theirs.
We'll go with three single questions: one from the Liberals, one from the Conservatives, and one from the NDP.
Greg, go ahead.
12:10 p.m.
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
I only have one question, which is addressed to Mr. Lesage.
I thank you for your opinion on the matter of beneficial owners. This is a very timely issue for our committee. As our chair said, we are examining the issue of money laundering, which we want to curtail.
We wonder whether the national registry of beneficial owners should be public or private. In some countries like the United Kingdom, it is made public. Others, such as the United States, provide it upon reference.
Do you have a preference?