Mr. Grewal is next.
Evidence of meeting #2 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was federal.
A video is available from Parliament.
Evidence of meeting #2 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was federal.
A video is available from Parliament.
February 16th, 2016 / 12:10 p.m.
Liberal
Raj Grewal Liberal Brampton East, ON
Thank you to all the witnesses who came out to present today.
I want to mention, before I begin my questioning, that the finance minister has an obligation to all Canadians, not just the 9.1 million who voted for the opposition party. I'm very excited that the minister will be here on Tuesday to present in front of this committee.
My question is for Mr. Williamson. I know you've been a busy man today, so I'll keep it short.
It's a good time to invest. There are low interest rates in the country, and we have a declining debt-to-GDP ratio. As the parliamentary secretary mentioned, the IMF has basically said that Canada is in a great, unique position for investment. You mentioned in your testimony that infrastructure projects may not be all that they're assumed to be in terms of growth. The government has made a pledge that it's going to spend its money wisely. It should be on projects that stimulate growth in the short term and in the long term, and we should benefit from a long-term perspective.
In 2008, when the Obama administration came into power, the Americans focused on spending money. Over those eight years in power, we've seen a declining unemployment rate and growth rates at historical levels in the United States. In the same period in Canada, we haven't had that growth. In the last 10 years, we've had the worst growth rates since World War II.
Investment in infrastructure spending has always been seen as a way to stimulate the economy. Could we hear your views on that, and how the Atlantic provinces could benefit and should benefit from federal government spending on infrastructure?
12:10 p.m.
Vice President, Research, Atlantic Institute for Market Studies
Look, I want to be clear here. I don't want to leave you with the wrong impression. I certainly do not suggest that infrastructure spending can't be beneficial or is not beneficial for communities and for provinces—far from it. My point was that the platform commitments the Liberal Party made involved a plan over the mandate, but increasingly we're hearing that we should just get the money out the door quickly, because we need to spend it.
I actually think that would be the wrong approach. In fact, I think there have also been comparisons looking at how Canada spends its infrastructure money versus how the Obama administration did in its early years. I don't quite agree with you that their growth records are well ahead of ours in Canada. Until very recently, Canada had a lower unemployment rate than the United States did. You are correct that they are beginning to take off now, but that has actually happened at the back end of the administration's term. Canada, for a time, had a lower unemployment rate, something we haven't seen in generations in this country.
My point on this infrastructure spending is to take your time. Do it well. Do it over the next four years, as you committed to in the campaign. Work with the provinces. Work with municipalities. Don't let the public pressure you now, which you are going to experience, to get it all out in the first year and end up funding programs or projects that actually won't have the long-term economic benefit that we want to see them have.
12:15 p.m.
Liberal
Raj Grewal Liberal Brampton East, ON
Thank you.
My next question is for Mr. Poschmann.
You alluded to public transit not being that important in terms of infrastructure spending. You alluded to the UP Express experiment from Pearson into Toronto, and to how the financial model there doesn't work, because the price for ridership is $27 or something like that.
This weekend, Family Day weekend, it was free, and there was almost four times the ridership. The demand, from a public perspective, is there, as is the financial model. There was an op-ed piece in the National Post last week about how it was something designed by the private sector and that's why it didn't work out, but the demand to get people moving in the country is still there.
I'd like your comments on the importance of public transit and on how infrastructure spending can ensure that the economy benefits overall.
12:15 p.m.
President and Chief Executive Officer, Atlantic Provinces Economic Council
Thank you.
Mr. Chairman, I just spent a little over 17 years working in downtown Toronto, so I am a fan of things that improve urban congestion.
I think my point was that it doesn't help everybody everywhere. We really do have to prioritize where scarce dollars are spent. I used Union Pearson as an example of something that plainly has not delivered. Maybe one day it will. We can keep hoping, I guess, but don't hold your breath.
The other point about transportation is whether you are talking about moving goods, getting people to markets, or just improving congestion. Congestion is a thing to be addressed, and addressing it is a thing of value, but is it the most important one?
Looking at things from an Atlantic perspective, highways are actually not that bad. We do have a choke point, which is important to the New Brunswick and Nova Scotia economies, in particular, and that is the highways in eastern Quebec. Your infrastructure investment in eastern Quebec would be very helpful to people who are shipping goods to and from Nova Scotia, New Brunswick, and P.E.I.
You need to do the analysis.
12:15 p.m.
Liberal
12:15 p.m.
Conservative
Ron Liepert Conservative Calgary Signal Hill, AB
Thank you all for being here on short notice today. I think we gained a lot from all of your presentations.
I happen to be the only member of Parliament on this committee from west of Winnipeg, so when I say that the Energy East pipeline is very important to the three western provinces, I was heartened to hear both of the presenters from Atlantic Canada advocating for Energy East.
We know that the federal cabinet will decide whether to approve Energy East. Presumably that decision will be based on the comprehensive review by the National Energy Board. One other factor, I would hope, is that the federal cabinet will listen to the input from their caucus members, all of whom sit around this table today.
I would ask whether you, as representatives from your region, have been having these discussions with your members of Parliament from the regions of Atlantic Canada and expressing to them how important Energy East is.
After they have answered that question, I would like to ask each one of the presenters today to simply answer yes or no as to whether they support the Energy East pipeline.
12:15 p.m.
Conservative
Ron Liepert Conservative Calgary Signal Hill, AB
I would like an answer from the two members from Atlantic Canada first.
12:15 p.m.
Liberal
12:15 p.m.
Vice President, Research, Atlantic Institute for Market Studies
Very quickly, the energy east pipeline in New Brunswick has bipartisan support. The Liberals support it, and the Conservatives support it. It has bipartisan support. The NDP supports it as well. It has overwhelming support. The message, I think, is well known and well heard. By and large, it is uniform across the province.
That said, we're going to hear the position of the aboriginal community. Negotiations and discussions are ongoing there, as they are with communities through which the pipeline could traverse.
There is overwhelming support at home for the pipeline.
12:15 p.m.
President and Chief Executive Officer, Atlantic Provinces Economic Council
Yes, the support is bipartisan. It's federal and provincial, in my experience, and perhaps what is more important is that it is not only at the political level but in general at the committee level.
12:15 p.m.
Liberal
12:15 p.m.
Senior Vice-President and Chief Economist, Conference Board of Canada
We've actually done the analyses on both the Trans Mountain project and the Energy East project, and the numbers are clear. The economic benefits from both projects proceeding are massive.
One of the biggest benefits.... There's a construction period and an operation period, but the real benefit is getting a world price for the product. The western select discount is massive, and we have to find a way to capture the benefit of a world price.
Of course, the decision is political. We're non-partisan, so I'm not going to give you a vote.
12:20 p.m.
Chief of Staff, Assembly of First Nations
What I would say is we don't have a mandate to tell you yes or no, but what we would like to hear is that this government will absolutely listen to and engage the rights holders that are affected by the pipeline. That would be our answer.
12:20 p.m.
Senior Economist, Social and Economic Policy, Canadian Labour Congress
I also don't have a mandate to say yes or no, but our position is that oil should be moved in the safest way possible, that there should be environmental guidelines for moving it, and that those jobs are critical in Atlantic Canada.
12:20 p.m.
Conservative
Ron Liepert Conservative Calgary Signal Hill, AB
I would ask Mr. Hodgson as well not only about the benefits, but have you done an assessment on the amount of money the country is losing based on importing foreign oil into Atlantic Canada?
12:20 p.m.
Senior Vice-President and Chief Economist, Conference Board of Canada
The short answer is no. We focus on the analyses of the two pipeline projects, and the benefits are construction jobs, operation jobs, revenues for both levels of government—provincial and federal—and getting the world price for the product.