Finance Committee on Feb. 16th, 2016

[Annie Bérubé]

With regard to your question that green energy costs money, traditional fossil fuel energy costs money, but the taxpayers and the public foot the bill. I'm an economist by training, and we talk about market externalities. We pay for our carbon emissions through the impacts of climate change in the communities—the flooding, the extreme weather that's only going to get worse for the next generation, the impact on air quality, and the adverse health effects— so our current energy system is extremely expensive. It's not just the consumer who's paying the bill; it's the taxpayers and the public overall. We need to recoup those externalities.

I would echo the previous comment that renewable energy technologies are currently becoming market competitive. Solar panels have gone down in price. Canada is about to miss the boat, if we don't make this transition right now. It's an economic imperative. It's the Royal Bank telling us that. It's Bloomberg Finance telling us that. It's no longer Greenpeace or the David Suzuki Foundation. China is the single largest investor in clean energy technology right now, and Canadian companies need to grab our rightful share of that global clean energy market if we don't want to miss this economic opportunity.

[The Chair, Liberal, Wayne Easter]

Mr. Maloney, it had better be a very tight question.

[James Maloney, Liberal, Etobicoke—Lakeshore, ON]

Okay, I'll have to pick from one of many, then.

Again, I don't want to pick on the two of you, but you were talking about the construction industry and you were talking about private landowners. What incentives would you suggest are appropriate to get construction companies and landowners to buy into what we need to do here?

[Thomas Mueller]

I think it depends on the sector of the construction industry.

For example, developers that build market-based housing—we see a lot of construction in major cities such as Toronto, Vancouver, and so on—need third-party financing to pay for the costs of energy improvements in their buildings. They build and they sell and they have very little interest in investing in something when they really don't have a payback in that sense. The payback or the benefit goes to the tenant.

In that sector the investment would really be providing the opportunity to finance the energy improvements in that building by a third party. It could be a utility or it could simply just be an investor. There is a business case in how these energy systems and these designs are paying back over time.

On the commercial side, I think it's not so much an incentive in terms of money, because the commercial sector is already quite involved and is already showing some leadership in making improvements to both new and existing buildings. That sector is really showing quite a bit of leadership, mainly driven by institutional investors and pension funds in Canada.

If you go down from a class A building to a class B or C building, these are the ones that actually need to be incentivized, and again it's financing in terms of loans to make the improvements to the buildings, or a tax exemption, because if you invest in your building you have a better building, but at the end of the day you pay more taxes because you have a better building. Therefore, you pay for the improvements and then you pay for the tax.

The federal government and the provinces are in a position to use some of the existing mechanisms to provide incentives to the sector to invest in energy efficiency and low-carbon buildings, and then also to create a favourable business model for a building that's less capitalized to derive some benefit from that.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Mueller.

Mr. Liepert.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Mr. McLellan, I just wanted to explore something with you that you touched on very briefly.

There's probably no province in the country that relies on our transportation infrastructure more than Saskatchewan. We have heard a lot from the government about spending money on infrastructure. We've also heard a lot of requests, and I'm sure we're going to hear a lot more about spending money before these hearings are concluded.

You touched briefly on the fact that from a Saskatchewan standpoint, pipeline capacity would take away the need to use rail. I'm assuming that because so much oil is being shipped today by rail, pipeline capacity will have an impact on your other commodities that are important to Saskatchewan, such as potash and grain, and I suppose to a lesser degree maybe the cattle industry.

Could you just outline a little bit, without spending very much money—at least government money—how changing what has become a transportation inequity would affect your province?

[Steve McLellan]

It would mean great things.

We're a province that's absolutely reliant on exports. We export more per capita than British Columbia and Alberta.

We have to make our entire modal system, our transportation system, more fluid. We would not eliminate the need to put oil on rail by having the pipelines, but pipelines would reduce the impact dramatically, and I would encourage, as I've indicated, the quick approval of the Energy East project, for example.

The other reality that I think we need to ask this government to look at is the Canada Transportation Act review that is under way, initiated by the previous government. Many of our organizations in Saskatchewan, including our provincial government, have put in submissions. There are some legislative changes that need to be done to enhance that system as well.

I think there also needs to be some consideration given to the port communities and the access to those areas. Living next to a railway line that's increasingly busy is not much fun, I'm sure, and I think that as a federal government, you need to focus on what can be done there, as the provincial government does in British Columbia.

The reality is that in 2013 Saskatchewan had its most successful year. We won a Grey Cup and we had a bumper crop. Subsequent to that, the only thing that people talked about in the winter of 2014 was the Roughriders win.

I don't use that as an excuse to make reference to it again, but I do make the point that we had a crisis in our agricultural sector. Our federal and provincial governments sort of poked the rail lines, but we took a more tangible action and hired the Conference Board of Canada to do a study to analyze what could be done. We have that available to you all, and we encourage you to have a look at it.

[The Chair, Liberal, Wayne Easter]

Ms. Raitt is next.

[Lisa Raitt, Conservative, Milton, ON]

Thank you.

I'm sorry, Madam Bérubé, but I missed some of the presentation for the Green Budget Coalition. I've gone through the document. It's very well laid out indeed.

Do you have the number for the total ask?

[Annie Bérubé]

No. We did not do that this year on purpose. We wanted to present options for the new government to deliver the mandate letter, so we did not tally the total funding ask.

[Lisa Raitt, Conservative, Milton, ON]

I did, and it's $3 billion in 2016, and it's $22 billion over five years.

I would assume you put this forward in a piecemeal...not “piecemeal”, but in more of a pick-and-play fashion, where they can see the parts. That make sense.

[Annie Bérubé]

Yes.

[Lisa Raitt, Conservative, Milton, ON]

You're a group of 16 organizations. Do you come together in advocacy only for this piece, or do you work together on other matters as well?

[Annie Bérubé]

Our coalition is strictly for making a submission to the federal budget. I should say, however, that we work all year long. We have a series of consultations in the fall with senior government officials, where we show our preliminary recommendations. We want to make sure they're in line with departmental needs. It's a year-long effort to come to these recommendations.

[Lisa Raitt, Conservative, Milton, ON]

I guess, as the manager, you would know the total revenue you have as a line item to pull this together. How much do you spend in putting this document together over the year?

[Annie Bérubé]

We spend about $100,000 a year. It's a very small budget.

[Lisa Raitt, Conservative, Milton, ON]

Okay.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you, Ms. Raitt.

Before I turn to Mr. Sorbara, I have a question for Mr. Laycraft.

In your presentation, you talked about value-added processing. Coming from the agriculture sector, I'm told that because some of the international slaughterhouse companies can't get labour to run slaughter lines 24 hours a day, they're actually electing to ship cattle to facilities in the U.S.

Do you know if that is happening? If it is, what is the impact on the economy, and what's the solution? I mean, we need the jobs, the stimulus, and the value-added in Canada. What's the solution there?

[Dennis Laycraft]

We're about 1000 employees short in our large plants. Two companies that I'm talking about in the beef industry process about 85%, but if you go to Prince Edward Island, they're concerned there as well with island beef and maintaining the workforce there.

What happens is that we'll send some live cattle south as a result of that, but more often than not, it's product that you might further process into consumer-ready product. Rather than doing that, we're just exporting it as a bone-in product, because it takes less labour to export it either like that or as what's called a subprimal, a large cut, that you haven't made into products in consumer-sized portions. We'll export that rather than do the value-adding here. That happens on a regular basis.

This past fall, one of the companies said they had a choice: they could do the consumer portioning work at the plant or they could reduce the number of animals they were processing, because they'd have to take off one line. They don't have enough employees for both lines. That's a real problem that we're seeing today.

[The Chair, Liberal, Wayne Easter]

Thank you.

Before I forget, Mr. McLellan, if you give the report on the railway tie-up, etc., to the clerk, she can distribute it to the committee.

Mr. Sorbara.

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

Thank you, Mr. Chair.

Actually, Mr. Laycraft, to go from what the chair said, my understanding is that the labour market shortage impact in your industry is also impacting industries in eastern Canada, whether it's processing fish or picking potatoes, which are some of the seasonal industries. If you had to put this on a scale of one to 10, where are we in terms of this being a problem, and where do we see ourselves on this issue a year or two from now?

[Dennis Laycraft]

On the first comment, yes, we're hearing this from every plant we're talking to in Canada. We're hearing from other sectors, such as the pork and seafood industries, that it remains a challenge. In the longer term, they would prefer to get to the point where they can start double-shifting again. You can really get a lot of efficiencies when you do that.

With the current economy, it's probably dropped down to an eight in importance, but that's still pretty important. A year ago, we probably would have had it up at the nine level in terms of being one of the major constraints. For me to give a nine to something—that's about as high a level as you can give it.

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

This question is for the gentlemen from the indigenous communities.

I had the pleasure of growing up in northern British Columbia with a very large aboriginal population, some of whom were my best friends in the community I grew up in. I'd like you to say two or three things about how we can get indigenous youth across Canada to be involved in the trades and skills. In my humble opinion, they are a vastly untapped, fantastic resource that we need to have participate in our economy. I would love to hear your thoughts on that.

[Clément Chartier]

Thank you for the question.

We are currently involved in the ASETS program, which is a training and employment program. It's been very successful in our Métis communities. We believe that it's the right step, but it needs to be increased and expanded.

Also, in terms of the Métis, we don't have access to post-secondary education services from the federal government, but as I mentioned, there was a promise in the campaign of $25 million. Actually, it's not for that; it's for economic development, which is also going to be helpful in this connection. There is also a promise to enhance the scholarships and bursary programs that we currently have through the ASETS program with universities and colleges in western Canada. That would be another step forward.

I believe that an enhancement of economic development, the bursaries program, and the ASETS program would significantly increase our opportunities in that sector. Ensuring that industry doesn't just pay lip service to the Métis when it comes to the duty to consult and accommodate would also be important for the Métis, because they don't view us as rights holders, and the federal government doesn't really step forward and ensure that we are engaged to the degree that we should be. There's a combination of these things, but it's something we look forward to working out with the new government.

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

The cost of solar power has declined drastically in recent years. Where are we on the technology side in being able to store renewable energy? Has the cost of solar power declined to a level where potentially subsidies aren't needed anymore?