Finance Committee on Oct. 5th, 2018

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

I am Francesco Sorbara. I am the member of Parliament for Vaughan—Woodbridge. Welcome, everyone. I look forward to your presentations.

Thank you.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Good afternoon. My name is Greg Fergus.

I am the member for Hull—Aylmer, a riding across from Ottawa in the province of Quebec. I have been a member of the Standing Committee on Finance for two years, and I am pleased to be here with you.

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

My name is Peter Julian. I'm the member of Parliament for New Westminster—Burnaby, on the other side of the country, as well as the NDP vice-chair of the committee. I am very pleased to be here.

Thank you very much.

[Leona Alleslev]

I'm Leona Alleslev, the member of Parliament for Aurora—Oak Ridges—Richmond Hill.

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

My name is Pat Kelly. I'm a member of Parliament for Calgary Rocky Ridge. I am a member of the opposition Conservative caucus.

[The Chair, Liberal, Wayne Easter]

We will start with the Canadians for Fair Access to Medical Marijuana.

Mr. O'Hara.

[James O'Hara, President and Chief Executive Officer, Canadians for Fair Access to Medical Marijuana]

Thank you, Chairman, and members of the committee, for the invitation to speak with you today.

Let me get right to it. It's unlikely I'll need my full time today since these are fairly simple and straightforward points that I'll outline for you.

The main reason that this government has made statements over and over again for maintaining taxes on medical cannabis is that non-medical users wishing to purchase cannabis will flock to take advantage of the medical system and abuse the very system that is designed for medical patients.

While that's a very weak and unproven excuse to begin with, it wrongly punishes and conveniently takes advantage of the innocent, legitimate and economically challenged medical patients who are unable to defend themselves and who have turned to medical cannabis to manage their medical conditions and improve both their health and their lives.

However, as of October 17, when all Canadians can legally access cannabis, this so-called reason is no longer valid. It's that simple. I call on this government to end the practice of taking advantage of medical patients to fund the government's legalization needs and end the senseless, harmful and shameful tax on medical patients as of that date.

Let me elaborate and give you a profile of the typical medical cannabis patient. The greatest percentage of medical cannabis patients are among the most economically challenged of Canadians, struggling to maintain their health and simply trying to live. Many are on disability income today. Patients on disability cannot even claim the cost of medical cannabis on their tax return because they have disability and have not earned income.

It's also critically important to recognize that not only are they financially challenged to begin with, but they're also funding their own medicine since cannabis isn't typically covered by drug plans. This isn't unlike medical cannabis patient Sarah Colero, who sits in the visitors' gallery with us today. Sarah had two strokes as a child of only five years old and has suffered with seizures and migraines all her life. She was prescribed oxycodone and hydromorphone, and since switching to medical cannabis, she not only got off opioids, which frankly is a feat unto itself, she has eliminated her seizures completely and now lives independently. Her migraines are completely manageable.

Also, please understand that in the vast majority of cases, medical cannabis patients have already exhausted conventional and funded medical options, either because they simply don't work or they left the patient in such a state that they couldn't function properly. There's also a large segment of medical cannabis patients where cannabis allowed the patient to return to work, to live, to function, to earn a wage, and to help themselves and their families as best they can—just like Sarah has.

What's common among the patients? I'd submit that through medical cannabis, patients are actually costing the provinces, the federal government and insurance companies less money in drug, health care and workplace insurance costs since they are funding their own medicine while often contributing to the overall productivity of this country through their ability to return to work.

Is this who we should be taking advantage of?

These patients should not be financially punished or penalized for taking ownership of their health. They should be commended for taking responsibility of their own health, getting off opioids, and returning to a much better level of health. They should not in any way be viewed as individuals to be financially taken advantage of, as this government has done.

I ask you this important question today. Is this really who we've become as Canadians, taking advantage of the ill and economically challenged who are doing their very best to take care of themselves and their families? Is this really who we are as Canadians? I don't think so.

I suggest you honestly look at yourselves in the mirror and ask yourselves this very same question.

My vision of Canada is a much better one than this and I suggest we're way better than that. It's time to demonstrate who we truly are as Canadians and remove these taxes.

In closing, I submit to you today that this government's taxing of medical cannabis is utterly shameful, and the practice of taking advantage of medically challenged and responsible Canadians must stop.

Thank you, Mr. Chairman.

[The Chair, Liberal, Wayne Easter]

Thank you, James.

Turning then to the Canadian Vehicle Manufacturers' Association, we have Mark Nantais.

Welcome, Mark.

[Mark Nantais, President, Canadian Vehicle Manufacturers' Association]

Thank you very much, Mr. Chairman, and good afternoon, honourable members.

First and importantly, I'd like to take this opportunity to congratulate the government on successfully concluding the U.S.-Mexico-Canada agreement. It has been a tough and intense negotiation, and Minister Freeland and the Canadian team are to be commended on their outreach to industry in seeking guidance and arriving at a modernized agreement that provides more certainty and builds a strengthened platform for trade across the North American integrated industry.

Certainty and predictability are what industry needs to make new investment decisions along with meaningful, agile and effective support measures. To that end, coordinated federal and provincial policy frameworks must continue to be responsive and adjustable to new circumstances that best meet industry's competitiveness needs in a global market.

I have four things that I would recommend today. First is fair and balanced trade opportunities. The USMCA, as it's now known, is an agreement in principle that must now be translated into legal text for implementation, not to mention approvals in the three countries.

CVMA will continue to provide assistance to the government in this regard. Importantly the agreement removes the threat of U.S. section 232 auto parts tariffs through the enactment of a side letter to the agreement. What remains outstanding is the U.S. 232 tariffs on steel and aluminum. I have to believe that the goodwill built up between the Canadian and U.S. negotiating teams can be leveraged to address this matter in very short order.

More broadly speaking, we acknowledge the government's interest in trade diversification and are directly engaged in the government consultation respecting Mercosur, the Pacific Alliance and the ASEAN trade negotiations. While we support fair and balanced trade opportunities, we do not support diversification at the expense of our member companies, their workers or our domestic supply chain.

Respecting CPTPP, we remain very concerned that Canada has opened its domestic market to CPTPP party countries without adequately addressing current non-tariff barriers to trade. CPTPP has a dispute mechanism that addresses only future barriers. Any auto-related trade outcome that unilaterally reduces or eliminates remaining tariffs essentially provides savings worth hundreds of millions of dollars annually to automobile importers who do not produce here, do not use Canadian auto suppliers and do not generate Canadian manufacturing jobs. These are outcomes that we must avoid.

Second is ensuring that the auto sector is an identified class within the federal carbon pricing system and that the recycling of revenues underpins competitiveness of industry. The proposed federal carbon pricing system provides for the development of an output-based pricing system, the aim of which is to reduce greenhouse gas emissions and minimize competitiveness risks for emission-intensive, trade-exposed industrial facilities so as to avoid carbon leakage.

The auto industry is low energy intensity but its trade exposure at 95% plus makes it the most trade-exposed sector in Canada. Considering that Ontario is a high-cost operating jurisdiction, our manufacturing plants are prime candidates for carbon leakage to other competing jurisdictions having higher GHG-emitting energy inputs. Should this occur, the environment loses, our economy is negatively impacted, and we potentially risk losing thousands of high-value jobs. None of these outcomes is desirable.

As the federal government moves forward, it must sufficiently recognize the diversity of the Canadian manufacturing sectors and their facilities and the degree to which the imposition of carbon pricing system costs may undermine a company's competitiveness relative to competing jurisdictions in which they operate.

Program design and attendant requirements are the key to a successful achievement of GHG reduction with minimal economic impact while preventing carbon leakage. For industry, this means a revenue-neutral approach. The program must ensure that the revenue generated under the carbon pricing policy is appropriately recycled back to the company from which it came.

This can be achieved by ensuring that every dollar paid under the federal carbon pricing regime is recycled back to the originating company to be used for new investments in innovation, operating efficiency, and competitiveness. Otherwise, if revenues paid do not equal revenues restored, the difference is simply a tax. It's a tax that our competing plants and other jurisdictions do not have to pay. We are working closely with the government on the program design, and we greatly appreciate the ongoing collaborative approach.

Third, reform Canada's tax policy. Canada must restore its corporate tax advantage over the United States to attract investment and innovation and to spur growth. Canada has the top combined federal and provincial personal income tax among the OECD countries. We strongly recommend that Canada close the tax advantage gap with the U.S. and examine opportunities to make the tax system less complicated and burdensome in order to improve the ease of doing business in Canada.

I might add, there is a recent C.D. Howe Institute report that talks about income tax and what it actually can do to attract new skills and retain highly skilled workers. You might want to take a look at that now, Mr. Chairman.

Lastly, we need to strengthen the strategic investment fund. Canada’s innovation policy framework must be responsive and sensitive to the competitive needs of the industry to support a company's ability to actually bring new investments to Canada. Our industry's investment portfolio ranges from the research and development of technologies that enhance advanced production processes, to joint ventures and partnerships with Canadian-based companies having strong capacities in software development and artificial intelligence, to connected and autonomous vehicle development. All of these meet the objectives of the government's innovation agenda and the product and driving experience being demanded by our consumers.

The industry is evolving at a lightning speed, developing technologies in what will be the new shared economy. It only makes sense that we take a look at refocusing and strengthening how the SIF will be responsive to the future investment needs of auto manufacturing in Canada.

Mr. Chairman, that concludes my remarks. I'd certainly welcome any questions the members of the committee may have.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much. Mark.

Turning to the Cannabis Council of Canada, we have Mr. Lucas, vice-chair, and Mr. Rewak, executive director.

Welcome.

[Allan Rewak, Executive Director, Cannabis Council of Canada]

Good afternoon. I'd like to begin by thanking the committee for the opportunity to be here today. As was mentioned, my name is Allan Rewak and I am the executive director of the Cannabis Council of Canada, or C3.

We serve as the national trade association for producers of medicinal cannabis approved by Health Canada, under the ACMPR, and very soon, Bill C-45, the Cannabis Act.

With me today, as mentioned, is our association's vice-chair Philippe Lucas, who will take the lead on all questions related to medicinal cannabis and the needs of the patients we serve.

C3's diverse membership represents approximately 85% of the cultivation of legal cannabis in Canada under the current ACMPR and reflects the full diversity and scale of our nascent legal industry. Today, in consultation around the upcoming federal budget, I'd like to express two key complementary but also mutually reinforcing recommendations.

First, as we build this new industry together, we believe we must ensure that the tax environment for both medicinal and recreational cannabis is conducive to building up an industry that can effectively compete against an illicit market.

Secondly, as we do this, we must ensure that medicinal patients, who really gave birth to our sector, are not unfairly penalized for accessing the medicine that has improved their quality of life.

In regard to the first issue, as I'm sure this committee is aware, all adult-use cannabis sold in Canada will be subject to both provincial and federal sales tax. Additional provincial tax measures will occur in certain provinces and we also will have a federal excise tax. On top of this, we will have a cost-recovery fee to assist Health Canada in regulating and measuring our industry. Taken together, this cascade of taxes presents an immense cost burden on an industry that requires very significant, upfront capital outlays to begin, and which is competing against an existent illicit market that is remarkably well funded and quite adaptable.

If our shared goal is to truly replace this illicit market, we must ensure that the tax burden does not make legal cannabis uncompetitive vis-à-vis the illicit marketplace. If we are to successfully defeat the illicit market, we must be able to directly compete against them for market share, price, availability and product selection, which will altogether be the deciding factor for the success of this new policy regime.

Today we're here to share our concerns around the growing tax burden that will affect the viability of licensed producers and also the success of public and private retailers in all provinces. We believe that as we move towards October 17, we must also, as we look at this issue, not forget the needs of our medicinal patients who are facing an ever-increasing escalation in the price of their medicine. This is a direct result of the Cannabis Act.

As CFAMM has told you today, from a patient perspective, cost has always been cited as a primary obstacle in accessing medicinal cannabis, and the burden of sales tax compounds this through the application of an excise tax. Ironically, while critically and chronically ill Canadians can get opioids or benzoids tax free, patients using cannabis at the direction and support of a medical professional will face an additional 10% sin tax on their medicine on October 18.

We know Canadians don't support this. A national poll, commissioned by both CFAMM and the Canadian Medical Cannabis Council in February 2018, found that over 60% of Canadians support removing the tax on medicinal cannabis, suggesting it should be zero-rated, just like all other prescription drugs. In fact, to the best of our knowledge, Canada is the only jurisdiction in the world—and there are 30 countries that are legalizing or have legalized medicinal cannabis—that does not have a differential tax rate fully implemented for medicinal and adult consumer-use cannabis. Notably, in our discussions with members of all political parties in the House and in the Senate, we have yet to find anyone who actively believes in an aggressive fashion that taxation on medical cannabis makes sense and would oppose the removal of excise tax as we move forward in fully developing this regime.

While our country is about to take the momentous step of legalizing cannabis for adult consumers, we urge you not to forget those 300,000 Canadian patients who benefit from its use for medicinal purposes. We believe that, as all other prescription drugs, no GST and certainly no sin tax should be targeted towards sick or suffering Canadians.

In closing, I would like to thank the members of this committee for the opportunity to be here today to voice our concerns primarily on the part of patients. With my colleague Mr. Lucas, I'd be pleased to answer any questions you may have after the other deputants have provided their remarks.

On a personal note, before we begin that, happy Thanksgiving to all of you.

[The Chair, Liberal, Wayne Easter]

Thank you, Allan.

With the Hotel Association of Canada, we Mr. Lund, vice-chair, and Ms. Baker, director of government relations.

Welcome.

[Jonathan Lund, Vice-Chair, Hotel Association of Canada]

Thank you, Mr. Chair, and thank you, members of Parliament.

Good afternoon, and thank you for the opportunity to be here today.

My name is Jonathan Lund. I am the vice-chair of the Hotel Association of Canada. In my day job I am a regional vice-president with InterContinental Hotels Group, or IHG.

Joining me today is Alana Baker, director of government relations with the Hotel Association of Canada.

The Hotel Association of Canada is proud to represent more than 8,200 hotels, motels and resorts, which encompass the $20.8-billion Canadian hotel industry. Our country's hotel sector directly and indirectly employs over 306,000 people. Hotels are a significant contributor to the Canadian economy, generating revenues estimated at $9 billion for all three levels of government.

In response to the committee's requested questions, my remarks will centre around measures that would help Canadian business be more productive and competitive.

Our submission to this committee included nine recommendations that address three broad themes, and I'll speak to each of these.

Firstly, I will address short-term rentals. The growth of Airbnb to nearly 160 million guest arrivals in 2018 tells us that the platform companies for short-term rental accommodations are here to stay, yet the revolution in the short-term rental industry has given rise to unintended consequences.

Increasingly, Canadians are concerned about the impacts this has on their community. This week we released the results of a national study that found that more than 60% of Canadians are concerned, or somewhat concerned, about a neighbouring home being regularly rented on a platform like Airbnb. Only 1% believe that Airbnb has a positive impact on their neighbourhood quality of life.

What started as a true home sharing, where the owner is present during the guest stay, has expanded into growing commercial operations. Over the last two years the commercial side of Airbnb's business—those renting multi-unit entire homes—grew by 108%. Entire home rentals as a whole, including multi-listed hosts, generate 83% of Airbnb's revenues.

Clearly these hosts are running a business through Airbnb, yet the federal government doesn't require, nor does Airbnb provide, any tax information slips so that revenues can be tracked and taxes calculated. Online rental platforms operating in Canada do not currently collect or remit GST or HST. They pay no corporate income taxes on their Canadian activity, and they make it far too easy for those renting rooms on their platform to inadvertently do the same.

In 2016, guests of Canada's legitimate hotel properties contributed an estimated $2.2 billion in consumer taxes and fees based on room revenues alone. If the same rates were to be applied to Airbnb's revenue, the sector has the potential to contribute almost $100 million to the Canadian economy.

While many countries have modernized their tax policies in response to the unintended consequences of the 21st-century sharing economy, Canada's federal government has fallen behind.

Our recommendations will ensure tax fairness so that Canada's lodging sector can invest in a market with a level playing field. They allow for the collection of relevant taxes without undue burden on hosts, while ensuring appropriate information sharing with the government. If Canada is to embrace digital technologies, it must modernize its tax policies while ensuring that the sharing economy does not lead to growth in the underground economy.

Secondly, on labour shortages, hotels across Canada continue to face critical labour shortages, both year-round and during peak periods. This shortage will become more acute as the available pool of employees continues to steadily decline. Over the next 17 years, we anticipate a labour shortage of over 10,000 employees. The ability of Canada's hotel industry to promote economic growth and remain competitive will be threatened if this downward trend continues.

Hoteliers are committed to hiring Canadians first, and have gone to great lengths with recruitment efforts. However, we need to do more, particularly when attracting under-represented groups. We recommend that the government develop and implement industry-specific programs to connect Canadian youth and indigenous peoples with vacant jobs in the accommodation sector. We also encourage the government to recognize the seasonal aspect of our industry and develop a program focused on mobility or exchange with suitable foreign countries.

Finally, we were pleased to see funding for Destination Canada set at $95.5 million on an annual basis, as announced in budget 2017. However, for it to remain competitive and attract more visitors, base funding should be supplemented by incremental performance-based annual increases of 10%. This would put Canada at more competitive advantage and ensure that Destination Canada remains innovative and competitive in its approach to marketing performance.

In conclusion, the Government of Canada can encourage investment, growth and employment in the tourism and hospitality sectors while also sustaining the digital economy for short-term rental accommodations by modernizing its tax policies, supporting programs to address critical labour shortages, and providing continued support for tourism marketing funding.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Jonathan.

I'll now turn to the Ontario Federation of Agriculture.

Mr. Currie, welcome.

[Keith Currie, President, Ontario Federation of Agriculture]

Thank you, Mr. Chair and ladies and gentlemen of the committee. I am Keith Currie, president of the Ontario Federation of Agriculture.

The Ontario Federation of Agriculture represents the interests of 38,000 Ontario farm family businesses. I'd like to welcome everyone here during our Ontario Agriculture Week.

As part of the agri-food value chain, our farmers are a significant part of Ontario's largest industry, encompassing farm inputs, food and fibre production, food processing and distribution. The government's own 2017 report, “Unleashing the Growth Potential of Key Sectors”, which we have come to know as the Barton report, clearly indicated that the agri-food sector is capable of tremendous growth to create jobs and drive the Ontario and Canadian economies.

In our pre-budget submission filed in August of this year, we outlined how the federal government could ensure Canada's competitiveness through prudent investments in rural Canada. We referred to the agri-food sector as our “economic powerhouse”. We outlined important recommendations to unleash the growth potential of rural communities through infrastructure investment in natural gas expansion, broadband access and improved transportation infrastructure. We spoke of improving tax and trade competitiveness, and the critical need to address labour shortages in terms of skills and numbers of workers available. This seems to be a recurring theme.

The OFA urges the committee to carefully review and act on those recommendations. However, ladies and gentlemen, I am here today to speak of a fundamental shortcoming in the relationship between the federal government and our farm businesses. This shortcoming will severely dampen the economic potential of our farms and our rural economy. This shortcoming is the apparent refusal of the federal government to protect the real contribution and future potential of the agri-food sector in this country.

This has most recently been manifested in the new USMCA trade deal, in which our dairy, poultry and eggs sector was sacrificed for the sake of a deal. We readily acknowledge how important a new NAFTA is for all sectors that trade within North America, but make no mistake: The constant chipping away at agriculture production will seriously damage the ability of the farm and agri-food sector to thrive in Canada.

What's done is done, I suppose. Now we can only insist that the Government of Canada compensate those farm businesses that will suffer economic loss so that other sectors can survive. For those agri-food sectors relying on North American trade, the USMCA signals a certain level of security in knowing that markets will remain open with our two important trading partners. However, for livestock and grains, the quality of those markets has been severely shaken by the United States-led tariff war. The USMCA is critical, because the North American markets for grains and livestock are completely integrated across these three partners. For that reason, when the U.S. engages in tariff wars that depress its own market prices, Canadian farmers suffer equally.

The damage to farmers has been recognized as the need for a $12-billion level of support for American farmers. Even so, it is said to be not nearly enough to compensate for the damage done. Yet in Canada, our federal minister says that the current risk management programs are adequate to overcome this unprecedented and devastating market interruption.

Ladies and gentlemen, this is simply not the case. I am here today to tell you that Canadian farmers and our agri-food system can drive our economy to new heights while providing safe and affordable food to Canadians, but we cannot do this without our federal government stepping up to help us overcome serious market damage caused by political whim and bluster. If Canada cannot negotiate an end to this damaging tariff war—and we believe we cannot—then Canada needs to step up and match the support our competitors are receiving so that we can survive long enough to create jobs and grow the economy once markets return to normal.

We do thank the committee for their time and consideration.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Keith.

Next we have the Ontario Real Estate Association.

Mr. Hudak, welcome.

[Tim Hudak, Chief Executive Officer, Ontario Real Estate Association]

Thank you, Chair Easter, Vice-Chair Julian, and members of the standing committee.

My name is Tim Hudak, CEO for the Ontario realtors association. We represent 70,000 realtors in the province of Ontario. Importantly, for the committee's interest, they're women and men across our province who work hard every day to help people achieve the Canadian dream of home ownership. I think all of you, as successful, hard-working MPs, see what our members see in communities each and every day, that the pride of home ownership is one of the most deeply held Canadian values. It binds us as a country. It's a non-partisan issue. It unites every region represented at the table here today, and every generation and every group in this great country.

For decades, rising home ownership provided evidence that we were a growing, confident and prosperous country. We all come from families where, I hope, the next generation would always do better than the one that preceded it. We would have better lives than our parents did. We'd have a greater chance of owning a home—until, sadly, now. Believe it or not, in 2016, for the first time in Canada's history, the rate of home ownership actually declined. It went down to 67.8% across Canada, from 69% five years before.

That has never happened before. It has been a great Canadian story that every year that percentage would go up. There's every indication out there that it's not a one-time blip. Unless we do something differently, falling home ownership will become the new normal in Canada.

It will be no surprise to members around the table from London or Vaughan or Aurora that in Ontario, 81% of people agree that a home is harder to get for young people than it used to be. Millennials are far less likely to own a home at the age of 30 than their parents were. Think about that. This is not just a cyclical change. This isn't a blip. As a matter of fact, this isn't from the economy, because we're now almost a decade into economic recovery. We're in a period of long and low mortgage rates. We've never seen mortgage rates like the ones we've had over the last number of years. But despite the strong economy and low mortgage rates—think about it—home ownership is in decline.

A good question to ask ourselves is, when did we ever have that debate? When did you, as elected officials, ever decide that a good public policy would be to lower home ownership? The folks you represent across this great country were never engaged in that kind of debate, because you know what they'd say: They believe in that Canadian dream, and they want their kids to do better than they did.

Here's a suggestion for the upcoming budget. Set a bold goal that we can reverse this unprecedented decline, that we'll get home ownership back over 70% by 2021, and then aim beyond that, for 75%. Of course, bold action is required to get to this bold objective, but you have that action in your grasp.

The first thing I'd suggest is that we address policy measures that are making home ownership harder in Canada today. Tougher mortgage stress tests have had a dramatic negative effect on Ontario homebuyers. They reduce the purchasing power by 20¢ on every dollar. These stress tests, quite frankly, are just too blunt an instrument. There are many good options to explore when it comes to mortgage rules as well, such as preventing even further damage from the stress tests when interest rates rise, ensuring people can choose among lenders when they renew their mortgages, and the flexibility for things like 30-year amortization periods.

At the same time, policy measures that enable home ownership get eaten away by inflation, such as the $1-million cap on insured mortgages and the $25,000 limit on what we can dip into in our RRSP funds for first-time homebuyers. The problem is that over a generation, those things take hold. They erode purchasing power and move home ownership further away.

Second, you can make a big impact when it comes to increasing housing supply. In the greater Toronto and Hamilton areas, the number of homes built declined by 50% between 2002 and 2016. I commend Minister Morneau for setting up his task force on the provinces and the big cities to look at options. The federal government is the largest landowner in Canada, and having policy tools like infrastructure funds can motivate provinces and cities to bring more land into home supply and home ownership.

One of the quickest actions you can take is to help families actually own a home. Get taxes down...including the first-time homebuyers' credit at the national level. That can make a big difference.

I know by your actions in your ridings and in Parliament that you want to see this turn around. You want to see home ownership rise again. The next federal budget can set that bold objective: reverse the decline, aim for 70% by 2021, and then a bolder term of 75% beyond that.

I thank the members of the committee for their time.

[The Chair, Liberal, Wayne Easter]

Thanks very much, Tim.

We'll start with the seven-minute rounds.

Mr. Sorbara, go ahead.

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

Thank you, Chair.

Thank you, everyone.

I'm going to get right to this.

Mr. Hudak, welcome.

Affordability has been in the news. We know that, with regard to the housing market, there are three, sometimes four, levels of government that we need to deal with. Our government, and even our predecessor government, took a number of macroprudential measures to ensure that the quality of debt households were taking on to buy their first home was good, that the scores underlying FICO credit scores were good, and that we had a strong and stable housing market.

As you know, zoning is approved by the regions and the municipalities, and obviously they are creatures of the province, as we well know, notwithstanding anything—no pun intended. At the federal level, could you think of three measures that would have an impact on housing affordability and allowing middle-class Canadians to purchase their first home?

[Tim Hudak]

Thank you.

I want to commend Mr. Sorbara, as well. I know you started a housing caucus—

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

Yes.

[Tim Hudak]

—which I think is a tremendous step. No doubt, representing the Vaughn-King area, you hear about this all the time.

To answer the question, I think there are three categories here. The number one category was to try to move the pendulum back. There have been a significant number of measures taken at the national level. I get that the purpose is trying to ease up demand in the housing market and make sure that you have sustainable and responsible borrowing, but I'd argue that the pendulum has swung too far.

I'd say, look at easing up. The dynamic nature of the stress test has become too cruel and blunt an instrument, especially because the mortgage rates are increasing. I would look at restoring the 30-year amortization rate for insured borrowers, as well, which was taken away. People usually get that when they're starting out in their career. They're going to climb the ladder, and they're going to put money away. It's an achievable way to get home ownership.

The third area I think you should look at is the caps that you currently have on RRSP deductions. When it comes to the cap on housing, I know that a $1-million home sounds like a lot, but as you know, in York region, the city of Toronto and Vancouver, it's a middle-class entry-level home.

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

Yes, that is a middle-class home.

Thank you, Mr. Hudak.

I want to move on to the Hotel Association. Welcome. It's great to have you here. I just want to focus on one aspect of your report, and that's labour.

In York region, I hear all the time from manufacturing companies, from logistics companies, across the board that they are having difficulty finding labour for semi-skilled to skilled jobs. What's the need today? More importantly, going forward, what are we short?

[Jonathan Lund]

I think in our submission here we talked about 10,000 jobs. That would be the number I'd give you.

In regard to the shortage, you'd immediately think of seasonal work at high-volume tourist operations like Banff Springs and those kinds of places, but the reality is that there's a general shortage across the country and in all sectors of our business. This is a current issue. It's a current issue for sustaining the growth in tourism that we're seeing today, which as you know is having a tremendous year, with Chinese and Mexican tourism growing.

We need some help getting entry-level people into the hotels. If there are some ways to encourage more employment, certainly out of Canadians first, but also to attract other people from offshore—

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

I would argue that if we have a labour shortage, we have to deal with it. If we need to bring in temporary foreign workers, obviously having a path for them to become permanent residents is very important.

I'll stop you there and move on to CVMA.

Mark, it's great to see you. The Prime Minister is in Windsor today at the FCA factory, and we just had a revised NAFTA put in place. What are we calling it? YMCA is the term that comes to me all the time. But we have some insurance. Section 232 is basically gone. How important is it for investment certainty that we removed the NAFTA question?