Evidence of meeting #174 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was students.
A recording is available from Parliament.
2:30 p.m.
Aurora—Oak Ridges—Richmond Hill, CPC
Do we need additional, not federal regulation, but policing or execution implementation of regulations?
2:30 p.m.
President, Ontario Federation of Agriculture
CFIA could use a boost in budget for sure to help alleviate that.
2:30 p.m.
Aurora—Oak Ridges—Richmond Hill, CPC
All right.
On compensation versus the loss in revenue that you're forecasting, do you have a gut feeling? Could you make a comment on whether that's going to be adequate or not?
2:30 p.m.
President, Ontario Federation of Agriculture
I don't think it's ever going to be adequate to be compensated for losing market share and potentially having your business stymied. It has to be fair to all people including the taxpayers of this country. We're certainly cognizant of that. This loss we're going to be experiencing isn't just a one-time thing. It's going to be a long-term thing, because the access that's being granted is going to happen gradually over the next 10 years. The compensation needs to reflect that and be gradual over the next 10 years as well.
2:30 p.m.
Aurora—Oak Ridges—Richmond Hill, CPC
Perfect.
Thank you very much.
Mr. Hudak, would you have any insight into one of the contributing factors for the decline being the potential foreign investment and some of the concerns about the shadiness, perhaps, of foreign investment in the housing market? As we know, FINTRAC has provided over 2,000 documented incidents of actionable money laundering, largely around the real estate industry.
Would you say that is a contributing factor to houses not being affordable and therefore to the decline in the housing uptake rate?
2:30 p.m.
Chief Executive Officer, Ontario Real Estate Association
The direct answer on that is no. I think it's exaggerated. I think that the degree...which the media liked to cover, saying it was all foreign buyers who are driving things up, was greatly exaggerated in numbers. Since then the Province of Ontario study put it at around 3% or 4% of the market.
I do take your point though, that the federal government should focus on those who are avoiding taxes and not paying when they transfer ownership or sell ownership, who have residences outside of Canada. It's important. It levels the playing field with Canadians.
With regard to FINTRAC, my federal colleague Michael Bourque at CREA could probably give a better answer on that. My members would say—they would be mad at me if I didn't speak up— the paperwork burden on that is tremendous. It might be better if it were targeted at high-risk areas than on every transaction.
2:30 p.m.
Aurora—Oak Ridges—Richmond Hill, CPC
Perfect.
Do we have a mechanism for tracking vacancy rates? A lot of homes have been purchased, certainly in the Aurora area, that remain vacant. Of course the impact on the economy is significant, because houses are assets, and they generate revenue when there are kids who go to school, people who buy groceries, etc.
It also takes away from the supply. You mentioned needing to have more homes built. Do you have a feel for how many homes we have that are just being held vacant? Do we need a mechanism to address that and therefore give people the opportunity to purchase homes they can live in?
2:35 p.m.
Chief Executive Officer, Ontario Real Estate Association
I appreciate the enthusiasm for that, too, because I guess Aurora—Oak Ridges—Richmond Hill would have been the epicentre for rapidly increasing housing prices. Good for you for advocating for your constituents, whose sons and daughters have gone to school and gotten jobs but can't find places of their own. I get it.
The fair housing plan in Ontario, introduced by the previous provincial government, allowed the City of Toronto to apply a vacancy tax and assess vacancy rates. Other municipalities could get that by request and the province would have to grant it, so the tool exists.
It has not advanced in the city of Toronto, because it's complicated. We have snowbirds who go away for six months of the year. How do you know if a home is vacant? The implementation is not as easy as it may seem. You could certainly work with a hydro provider or a local utility—water, for example—to see if it's being used and the people are just away a bit.
Ultimately, though, I want to stress for all members of the committee that the supply issue is everywhere. We do not have enough homes being built, whether it's detached homes, condos, or the missing middle in between, which would be a solution in the cities close to Toronto and in the city of Toronto.
If we don't address the supply issue, it doesn't matter how much you tinker around with taxes to punish homeowners. We need to fix the supply issue fast.
2:35 p.m.
London North Centre, Lib.
Thank you, Mr. Chair. Thank you to the witnesses.
Mr. Nantais, I wanted to ask you about your thoughts on the USMCA. As you well know, under the terms of the revised NAFTA, cars will be traded tariff-free as long as 40% to 45% of the automobile is made by workers making a minimum of $16 an hour. It's tremendously important and offers a huge boost to the Canadian economy and the automotive sector in particular.
We as a committee are studying competitiveness. Competitiveness and economic prosperity for individuals and for communities go hand in hand. I wonder if you can tell us, in your opinion, what this means for current workers and for the prospects of car plants attracting future workers.
2:35 p.m.
President, Canadian Vehicle Manufacturers' Association
For assembly jobs, there's probably no impact, actually. However, probably within the supply chain there are companies that may have paid less than that. If they want to be contractors or suppliers to us, those companies will have to make some adjustments.
The biggest change will be in Mexico. Mexico, like every other jurisdiction or trade bloc that has automotive as a cornerstone, has a low-cost jurisdiction, so it will actually raise the cost somewhat in our supply chain.
Will that help with our competitiveness? Not when you look at some other jurisdictions, like under CPTPP, where Japan still has access to low-cost jurisdictions. That particular provision may or may not provide some benefit to us.
2:35 p.m.
London North Centre, Lib.
I have only five minutes, so I want to shift to the Hotel Association of Canada.
Mr. Lund, right at the end of your presentation you advocated for greater funds for tourism marketing purposes, which I sympathize with. However, there's only so much that can be spent in a budget. The Government of Canada has invested heavily, as you know, in attracting tourism to Canada, and we've had record numbers of tourists visiting the country. It's been a real success in recent years.
On your end, can you tell us what the Hotel Association's views are on things like a municipal accommodation tax? I'll tell you why I'm asking in a moment, but are you generally in favour of communities adopting this uniformly?
2:35 p.m.
Vice-Chair, Hotel Association of Canada
Each community makes its own decision on that. I'm not sure. I can defer to Alana from the Hotel Association to see if we actually have a national position on that, but it's really a local issue. It certainly serves a purpose. It allows a fund to be generated that can support more local regional initiatives. But when you're talking about the national issues and the growing accommodation sector because of the international tourism, that is what's really driving our success and that's where the growth is coming. That's where we need to spend our money to continue to see the growth.
As this grows, I think we're looking for an incremental increase to accommodate that.
2:40 p.m.
London North Centre, Lib.
I'm asking because I'm a member of Parliament, as I said at the outset, from London, Ontario. Recently, the tourism association of our city, Tourism London, under the leadership of John Winston, has put forward with the city council a provision now that's being introduced by hotels this month. A 4% levy is charged on hotel rooms. About $2 million to $4 million is expected to be generated on an annual basis. Half of that money will be used by Tourism London to promote visitors coming to London. The other half will be used by the city to improve city facilities that visitors use.
I think if we're going to talk about boosting tourism in communities, something like a municipal accommodation tax ought to be pursued. I know you're looking for money from the Government of Canada, but I would ask you to look at advocating for this and having a position on this as an association.
With all due respect, Toronto has this tax...Ottawa, Sault Ste. Marie...hotels in St. Catharines, Hamilton and Niagara Falls. It's a great way to market communities. The Government of Canada wants to assist, but all our ships have to be sailing in the right direction, in the same direction.
2:40 p.m.
Vice-Chair, Hotel Association of Canada
Thank you.
I would comment that these are our members, actually, that are supporting that. All brands have hotels in that market and they are actually part of that decision. We'd support that. I'm just not sure if there is a position from the Hotel Association of Canada.
2:40 p.m.
Liberal
The Chair Liberal Wayne Easter
I have another question on that, on the municipal accommodation tax. Do the Airbnb pay it?
2:40 p.m.
Vice-Chair, Hotel Association of Canada
No, they wouldn't pay. There is no mechanism to collect that fee. To my knowledge, I don't believe they pay into any initiatives in their communities.
2:40 p.m.
Director of Government Relations, Hotel Association of Canada
Maybe I can add because that's actually where I was going to link the municipal accommodation taxes to the short-term rental market.
Further to what you said, Jonathan, there are agreements that have been formed between some municipalities and Airbnb. For example, Ottawa is one of them, where they will be subject to collect and remit the municipal accommodation tax. That's only one step, though, and there are more steps that need to take place.
We're starting to see movement in that direction, but there is much more to be done. What we're looking for from the federal government is to apply the same tax at the national level as well.
2:40 p.m.
Liberal
The Chair Liberal Wayne Easter
I have a question for Mark Nantais. On the capital cost allowance and accelerated capital cost allowance, we've had quite a few requests along those lines, especially to remain competitive with the U.S. At what level are you talking about and on what kind of capital investment?
2:40 p.m.
President, Canadian Vehicle Manufacturers' Association
Yes, I didn't mention it in my verbal remarks, but we are part of the Canadian Manufacturing Coalition, which did recommend this. We support the recommendation that they put on the table, so it's being able to write off that cost in a single year. It would be tooling. It would be a number of things. This would be very important for our suppliers as well as for the actual manufacturers. That's the recommendation we support.
2:40 p.m.
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
I have a question for the representatives of the Hotel Association of Canada.
Thank you for your presentation. I completely agree with you that the rules of the game must be fair. In Quebec, it seems to me that Airbnb has reached an agreement with the Government of Quebec to bill its users for taxes, including the TVQ and the GST. Have other provinces done that too?
2:45 p.m.
Director of Government Relations, Hotel Association of Canada
Yes, you're correct. There is an agreement in place in Quebec to collect the provincial and municipal taxes. We see that in only one other province, which is British Columbia. These in fact are tax agreements. One of the challenges with these agreements is that there's quite possibly a lack of transparency and accountability with these.
As I said, we're starting to see movement in various provinces, but what's happening right now is almost like a patchwork of agreements when it comes to taxation across the country at the municipal level and at the provincial level. We have nothing yet at the federal level, and that's important as well.
2:45 p.m.
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
Let me make a slight correction. In Quebec, those who use Airbnb will be required to pay the federal tax as well.