Evidence of meeting #209 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was mining.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Chris Roberts  National Director, Social and Economic Policy Department, Canadian Labour Congress
Darryl Marlowe  Lutsel K’e Dene First Nation
Amanjit Lidder  Senior Vice-President, Taxation Services, MNP LLP
Vivian Krause  Researcher and Writer, As an Individual
Jennifer Kim Drever  Regional Tax Leader, MNP LLP
Francis Bradley  Chief Operating Officer, Canadian Electricity Association
Carole Saab  Executive Director, Policy and Public Affairs, Federation of Canadian Municipalities
Brendan Marshall  Vice-President, Economic and Northern Affairs, Mining Association of Canada
Kim Moody  Director, Canadian Tax Advisory, Moodys Gartner Tax Law
Lisa McDonald  Executive Director, Prospectors and Developers Association of Canada
Lesley Williams  Director, Policy, Prospectors and Developers Association of Canada

12:25 p.m.

Regional Tax Leader, MNP LLP

Jennifer Kim Drever

Yes, out of the company altogether.

Once it's been moved out, from a policy perspective, the cash is out of the business. Now it might be in the individual's personal RSP or it might be somewhere else, and it's now hard to bring it back into the business, if need be.

For the tax on split income, we just went through probably one of the most complex tax seasons of our lives because of the tax rules on split income. Those are in place for the first time in 2018, and the number of clients now, and even our partners who are not tax specialists, who are concerned with how those are impacting their clients....

There is a lot of complexity around the reporting of whether it is tax on split income. There's still a lot of ambiguity. There is uncertainty for taxpayers, and uncertainty for every business owner, as to whether tax on split income will apply or not. It's changing how we implement matrimonial asset split-ups for divorces, because we have to get specifically four-square into the new rules to make sure we implement the divorce in a way that will not attract tax on split income post-divorce.

12:30 p.m.


The Chair Liberal Wayne Easter

Okay. We are—

12:30 p.m.


Pierre Poilievre Conservative Carleton, ON

Can I ask one final question, Chair?

12:30 p.m.


The Chair Liberal Wayne Easter

Yes, but just hold on before you do. We'll let you ask one more.

Chief, I know you have to go. I want to thank you for coming all this distance to appear before the committee.

You can ask a fairly short question, Mr. Poilievre, and then we're done.

12:30 p.m.


Pierre Poilievre Conservative Carleton, ON

Thank you, Chair.

When a divorce is finalized, and all that dirty, difficult paperwork is out of the way, can divorced couples split income? In other words, does the recipient of spousal support pay the tax on that income, or is it taxed in the hands of the original earner?

12:30 p.m.

Regional Tax Leader, MNP LLP

Jennifer Kim Drever

Are you looking at the spousal support or the matrimonial split?

12:30 p.m.


Pierre Poilievre Conservative Carleton, ON

I mean the spousal support.

12:30 p.m.

Regional Tax Leader, MNP LLP

Jennifer Kim Drever

The spousal support is taxed in the hands of the recipient.

12:30 p.m.


Pierre Poilievre Conservative Carleton, ON

That's kind of like income splitting.

12:30 p.m.


The Chair Liberal Wayne Easter

That's it.

You can answer that question if you want.

12:30 p.m.

Regional Tax Leader, MNP LLP

Jennifer Kim Drever

I would prefer not to answer that question.

12:30 p.m.


The Chair Liberal Wayne Easter

He can talk to you off-line and get some of those answers.

I want to thank all of you for your presentations and for answering the questions that committee members had today.

With that, we will suspend and bring up panel two.

Thank you very much.

12:35 p.m.


The Chair Liberal Wayne Easter

We will start with the Canadian Electricity Association, Francis Bradley, chief operating officer.

Go ahead, Mr. Bradley.

12:35 p.m.

Francis Bradley Chief Operating Officer, Canadian Electricity Association

Thank you, Mr. Chair.

My name is Francis Bradley, and I am the chief operating officer of the Canadian Electricity Association, or CEA.

CEA is the national voice of electricity. Our members include generation, transmission and distribution companies, as well as technology and service providers from across the country.

The sector employs 81,000 Canadians and contributes $30 billion to Canada's GDP. Over 80% of Canada's electricity generation is non-emitting, making it one of the cleanest in the world. In fact, the Canadian electricity sector has already reduced GHG emissions by 30% since 2005.

Electricity will play an essential role as Canada transitions to a low-carbon economy. The electricity sector is uniquely positioned to help advance Canada's clean energy future, and the measures in Bill C-97 help this.

The 2019 federal budget and 2018 fall economic statement included a number of significant measures for the electricity sector.

The budget's measures to encourage the purchase and use of electric vehicles will help electrify the transportation sector—a low-hanging fruit for significant GHG reductions. These come at a time when EVs are increasingly a consumer expectation, including for reasons beyond environmental benefits.

Consumer purchase incentives and business writeoffs will help to get more EVs on the road, and funding to install charging infrastructure in workplaces, apartments and public parking garages will make sure that everyone has a place to charge them.

The budget's investment in energy efficiency measures in buildings, which will be administered through the Federation of Canadian Municipalities, is a significant step forward. Our sector is always very happy when customers can find new ways to use less of our product and use it more efficiently. Doing so has real advantages for the users of the building, but it also reduces the need and the pressure for expansion of electricity grids. A kilowatt not used is cheaper than producing a new one.

Our industry was also pleased to see the budget include the creation of a new Canadian centre for energy information, a central repository for national energy data that will compile various sources into a single, easy-to-use website.

In total, almost $1.5 billion was included in new spending on these important initiatives.

Cybersecurity, though, is also receiving significant funding in the budget. There's an ever-increasing threat from cyber-attacks. We're seeing that in our sector, and this helps us keep pace.

Beyond the budget, the CEA is very pleased to see the government move forward with its first piece of regulatory modernization legislation, particularly given that it includes amendments to the Electricity and Gas Inspection Act that will facilitate the expansion of new technologies such as EV fast chargers and adaptive streetlights.

It's no secret that technology often moves much faster than legislation, and electricity meters are an example of this.

The CEA is eager to work with Innovation, Science and Economic Development Canada and Measurement Canada to prioritize some early areas of focus in order to enable technologies such as EV DC fast charging that are essential to Canada's clean energy future. This will help Canadians to make the clean energy choices they want to make.

In summation, Bill C-97 takes steps forward that allow Canadians to make choices that are more sustainable, take advantage of new technologies, and can help reduce costs and increase convenience. Central to all of these is Canada's safe, sustainable and reliable electricity system. We look forward to working with government to continue to leverage these advantages.

Thank you.

12:40 p.m.


The Chair Liberal Wayne Easter

Thank you very much, Mr. Bradley.

Turning to the Federation of Canadian Municipalities, we have Ms. Saab, executive director, and Mr. Boivin, managing director.

The floor is yours, Ms. Saab.

12:40 p.m.

Carole Saab Executive Director, Policy and Public Affairs, Federation of Canadian Municipalities

Thank you very much, Mr. Chair.

Thank you, all.

We are pleased to have this opportunity to explore budget 2019, especially the tools that it provides to municipal governments to help them build a better life for families and workers in Canada.

I'm Carole Saab. I'm the head of policy and public affairs for the Federation of Canadian Municipalities. I am joined today by my colleague, Chris Boivin, who is the managing director of FCM's green municipal fund.

FCM's 2,000 municipal members represent more than 90% of all Canadians. These are the governments that are closest to people's everyday needs and challenges. When the federal government works with them directly, municipalities deliver cost-effective solutions that work. That's why successive governments have taken steps that empower municipalities to do more for Canadians, steps like allocation-based public transit funding. That's already empowering cities to lead major system expansions.

Even so, budget 2019 stands out as a turning point. The budget takes our federal-municipal partnership and fundamentally elevates it to build better lives.

This budget strengthens our federal-municipal partnership because it's the surest way to improve the living conditions of our fellow Canadians.

For instance, there is this budget's unprecedented investment in rural broadband infrastructure. This implements the urgent, front-line advice of FCM and our rural members.

I'll note that Bill C-97 enacts legislation for the national housing strategy, a generational priority for our communities.

This budget also builds on the gas tax fund, or GTF, transfer. FCM worked with successive governments to launch the GTF, then make it permanent and ultimately index it with a 2% escalator. It's our most reliable infrastructure funding tool. Municipalities can turn every dollar into real outcomes, such as better roads, bridges and public transit; better water, waste and energy systems, and better places to live, work and raise our families.

In Ontario's Clearview township, GTF funds powered a new affordable transit service linking residents to grocery stores, parks, retirement homes, schools and clinics.

In Granisle, B.C., a new biomass boiler is reducing emissions and saving money by heating the village office, arena, elementary school, curling rink, fire hall, public works office and tourist information centre.

The City of Terrebonne, Quebec, is building a modern and safe pedestrian and cycling trail next to a busy street, thanks to predictable long-term gas tax funding.

The gas tax fund is proof that when you put tools directly in local hands, we build better lives for Canadians.

The GTF's one Achilles heel is its scale. Every year it leaves key projects unfunded. Budget 2019 recognizes this by doubling this year's GTF transfer to move more local projects forward. In short, this budget doubles down on working directly with municipalities to achieve national economic and quality-of-life objectives. There are no delays or roadblocks. This is direct fuel for projects that build better lives for Canadians.

This same principle, which underlies the objective of providing tools directly to Canadians, is at the heart of a second element of budget 2019. Over the past two decades, the Federation of Canadian Municipalities' Green Municipal Fund, or GMF, has funded 1,250 local sustainable development projects. These projects have eliminated 2.5 million tons of greenhouse gas emissions and have enabled the citizens of our country to enjoy a safer and more affordable life.

I should also point out that we have achieved these GMF results while preserving every dollar received from the federal government.

Budget 2019 substantially scales up FCM's mission to drive cost-saving energy efficiency across Canada through the green municipal fund, and it extends FCM programming that boosts local asset management capacity. Practically, this means greener community buildings that cost less to run, from social housing to libraries to local arenas. It also means making it more affordable for hard-working families to retrofit their own homes through smart local financing programs that will also reduce their energy bills. It means good jobs in communities across Canada. Once again, it means working directly with municipalities to get things done for Canadians.

Naturally, we want to see the budget implementation act move forward so that important work can move forward, but we want to see the principle that this budget implements continue to guide Canada's federal government moving forward. That's the principle of working together directly as orders of government to build better lives.

On behalf of our president, Vicki-May Hamm, and FCM's 2,000 members, I thank you very much for the opportunity and look forward to taking your questions.

12:45 p.m.


The Chair Liberal Wayne Easter

Thank you for your presentation.

Turning to the Mining Association of Canada, we have Mr. Marshall, vice-president, economic and northern affairs.


12:45 p.m.

Brendan Marshall Vice-President, Economic and Northern Affairs, Mining Association of Canada

I'm Brendan Marshall, vice-president, economic and northern affairs.

I used to work for an MP so I appreciate the work that you do. Sometimes this can be a misunderstood place, but rest assured, I think the work that you're doing is very important for our country.

Thank you for the opportunity to appear before the committee and participate in this important pre-budget consultation process.

The Mining Association of Canada, or MAC, is the national voice of Canada's mining and mineral processing industry, representing more than 40 members engaged in exploration, mining, smelting and semi-fabrication across a host of commodities.

In 2017, mining contributed $97 billion to Canada's GDP, employed 630,000 workers and accounted for 20%, or $97 billion, of Canada's overall export value. Proportionally, mining is the largest private sector employer of indigenous peoples. Canada leads global mining finance, with the majority of the world's public mining companies listed on the TSX.

Historically, the sector has helped build Canada, both literally and figuratively, as it holds an important space in our cultural fabric. Canadian mining is broadly recognized internationally for best practice, and our knowledge and expertise are widely sought.

In recent years, however, the sector has faced challenges in attracting investment. The value of total projects planned and under construction from 2018 to 2028 has reduced by 55% since 2014, from a total of $160 billion down to $72 billion. Only four new mining projects were submitted for federal environmental assessment review in 2018. They were all gold mines.

Over the last five years, Canada has lost more ground than it has gained in the commodities for which it is the top five global producer. In 2017, capital spending in the Canadian mining industry accounted for 4.4% of Canada's total. That's a value of $11.7 billion. That's down 0.5% year over year, and it's the fifth consecutive year that capital spending has fallen.

At a time when global mining investment is increasing, Canada is not keeping pace. While much work remains to be done, budget 2019, building off measures in the 2018 fall economic statement, proposes several measures to begin to address the challenges our sector is facing.

In Canada's north, mining is the largest private sector driver, directly employing 8% of the total territorial population. However, it is much more expensive to operate. It costs two to 2.5 times more to build the same precious or base metal mine in the north than in a centrally located region, and 70% of this cost differential derives from the infrastructure deficit.

The future of Canada's mining industry lies increasingly in remote and northern regions but will remain unrealized unless we close the infrastructure gap. Commitment to renew the allocation of the national trade corridors fund to arctic and northern regions by $400 million is good news and a direct response to a MAC recommendation.

Further, the creation of a universal broadband fund, capitalized at $1.7 billion and further leveraging more than $3 billion through the Canada Infrastructure Bank, is also welcome. Enabling universal high-speed Internet access in rural, remote and northern communities and industries helps to improve operational efficiencies at mine sites and reduce costs.

On the innovation front, the proposed immediate tax deductibility of certain zero-emission vehicles is a positive first step to further enabling electrification in the mining industry. Looking forward, MAC commits to working with Finance Canada and Environment and Climate Change Canada decision-makers to broaden the provision to include all vehicles deployed at mining operations, including above-ground and below-ground heavy equipment.

Further, $100 million to the strategic innovation fund in support of the activities of the Clean Resource Innovation Network, or CRIN, is welcome. This investment will support groundbreaking clean tech and emission-lowering solutions leading to cleaner energy production from source to end use.

On the investment competitiveness front, Canada's tax regime has fallen behind international competitors in recent years. Budgets 2012 and 2013 reduced or eliminated several direct and indirect mining-related tax credits. Most recently, the U.S. Tax Cuts and Jobs Act reforms significantly reduced Canada's mining tax competitiveness vis-à-vis the U.S.

The 2018 fall economic statement proposed several measures that will enhance the investment competitiveness of Canada's mining and metal manufacturing sectors. These included the accelerated investment incentive, which will enable miners to write off three times the eligible cost of newly acquired assets in the year the investment is made; extending the mineral exploration tax credit for a five-year term, bringing greater investment certainty for early-stage mineral exploration; and allowing businesses to immediately write off the full cost of clean energy equipment.

While MAC supports continued improvements to Canada's mining tax competitiveness, including bringing dividend withholding tax in line with our competitor jurisdictions, more than anything, the measures establish a positive platform to build from.

Thank you for the opportunity to speak. I look forward to answering any questions you may have.

12:50 p.m.


The Chair Liberal Wayne Easter

Thank you very much, Mr. Marshall.

Now we have Mr. Moody, director, Canadian tax advisory, with Moodys Gartner Tax Law.

The floor is yours, Mr. Moody.

12:50 p.m.

Kim Moody Director, Canadian Tax Advisory, Moodys Gartner Tax Law

Thank you, Mr. Chair.

Good afternoon, committee members. Thank you for the opportunity to appear before this committee. My name is Kim Moody. I'm a chartered professional accountant and director of Canadian tax advisory services at Moodys Gartner Tax Law in Calgary. I have a very long history of serving the Canadian tax profession, with a variety of leadership positions.

Bill C-97, as you know, is a 367-page bill that contains measures that are both tax and non-tax in subject matter. Accordingly, my brief comments will be restricted to my practice area, which is tax, and specifically to the tax content or lack thereof of Bill C-97 as it relates to the March 19 budget.

From a tax perspective, there was some content in the budget that was good, like the changes to the specified corporate income rules; amendments to the change of use rules in section 45 of the Income Tax Act; and positive changes to the registered disability savings plans, although much more work needs to be done in this area especially as it relates to the use of trust for people with disabilities.

However, I believe that the budget and Bill C-97 are noteworthy for two broad reasons: one, what the budget and Bill C-97 do not contain, and two, the journalism tax incentives. Accordingly, I'll restrict my comments to those.

What do the budget and Bill C-97 not contain? The first thing is targeted and broad measures to deal with competitive concerns. While some have argued vigorously that the accelerated tax depreciation numbers for M and P equipment and certain green equipment and accelerated first year depreciation claims introduced in the fall economic update have solved or gone a long way to competing with our U.S. friends who are benefiting from a massive package of tax reforms, I would argue strongly that is not the case.

I live and see it every day with Canadian private businesses scrambling to remain competitive. Many are expanding their businesses into the U.S. and bringing capital with them. After 11 months of the government saying it is not going to respond in a knee-jerk fashion to U.S. tax reform, the fall economic statement measures, which introduced accelerated depreciation measures, were disappointing.

As Jack Mintz and Philip Bazel wrote in the Canadian Tax Journal last month:

Overall, a much deeper corporate and personal tax reform was needed to deal with the many competitiveness issues raised by the US tax reform for Canada. Accelerated depreciation focused only on a narrow set of issues, and not necessarily the right ones.

I agree. Many were waiting for additional measures in the March 19 budget, only to be disappointed again. There was nothing. To be clear, the package of tax reform measures released by the U.S. is historical in its breadth and in its impact to U.S. businesses. By any measure, including my anecdotal experience with my firm's clients, it is significantly impacting in a negative way Canadian businesses' ability to remain competitive.

Corporate and personal tax rate reductions should have been at the top of the list of considerations for competitiveness responses.

The second highlight-reel omission from the budget and Bill C-97 was the fact that there was no announcement with respect to the government taking the large initiative to undergo comprehensive tax review and reform.

As you know and I'm sure you've heard many times, numerous credible bodies like CPA Canada, the Canadian Chamber of Commerce and others have been requesting for a long period of time a fresh and comprehensive look at how Canada raises necessary revenues to provide good government. I agree. The last time Canada had a comprehensive review of its tax systems was the Royal Commission on Taxation, which released its landmark six volume report with recommendations in 1966 after approximately four years of studies.

I'm sure some of you were not even born when that commission released its report. I certainly wasn't. Such recommendations were studied and debated for a lengthy period following its release, and it ultimately was the impetus for many of the foundational changes introduced in 1972 tax reform.

While limited form studies—and an embarrassing attempt at reform that arose from the July 18, 2017, private corporation tax proposals—have been completed since 1972, nothing comprehensive has been undertaken since the royal commission. Accordingly, since 1972, our Income Tax Act has become a patchwork quilt of changes. However, a patchwork quilt can quickly become busy and complex, and there is no doubt that our current income tax statute is just that: overly complex and busy. It's time for a fresh quilt.

To those who say to be careful what we wish for or, worse yet, Canada is not ready for comprehensive tax review or reform, I say this: Canadians are a lot smarter and well-intentioned than you are giving them credit for. The average Canadian simply wants a tax system that works for all. It's time that this important initiative be undertaken and it was extremely disappointing that the budget did not address this.

Number two is the journalism tax incentives. As you know—and I won't repeat the budget measures because you all know them—these measures are horrible and a threat to our country's free press, given the likelihood that some of our country's media will likely be incentivized to receive these tax goodies and perhaps cater to big so-called donors.

As respected journalist Andrew Coyne stated in his March 20, 2019, article in the Financial Post about these measures, “There are any number of objections to the government getting into the game of propping up failing news organizations: that taking money from the people we cover will place us in a permanent and inescapable conflict of interest”, and he goes on to criticize. I very much agree.

Can you not see how dangerous this is and how littered with problems these so-called incentives are, as are having a so-called independent panel to pick winners and losers and using an overly complex tax system to administer these indoctrination instruments? Our charitable sector already has significant tax issues, as we heard from the first panel this morning, and is long overdue for a thorough review and rethink. These incentives will add a new class of charity that will no doubt compound these problems.

While I acknowledge that our country's journalism industry is certainly struggling and that Canadians need to have unbiased and truthful news articles provided to them, perhaps a thorough review of what other countries around the world are doing to try to protect, support and preserve this crucial industry should be done before these poorly thought-out proposals are implemented. It seems to me that the crucial aspect that has harmed our country's journalism industry tremendously is the fact that Internet giants such as Google and Facebook have sucked away tremendous advertising dollars from our country's newspapers without producing original content.

Is it time to target these companies like France has? France has recently proposed a 3% tax on the French revenues of Internet giants. When the proposals were released, the French finance minister stated that the estimated tax will raise about 500 million euros, but that should increase quickly. He also said the tax will not affect companies that are directly selling their own products online. It will mostly affect companies that use consumers' data to sell online advertising.

The French finance minister stated, “This is about justice. These digital giants use our personal data, make huge profits out of these data...then transfer the money somewhere else without paying their fair amount of taxes.” It's hard to disagree that there is a problem with Internet giants using personal data to then deploy online advertising. Beyond the obvious privacy concerns, such methods greatly harm our Canadian journalists.

Will a tax like that introduced by France solve the problems facing our country's journalism industry? Likely not. A Wall Street Journal article from last weekend highlights how dire the situation of the newspaper industry is in the United States. It seems to me that the Canadian industry is in similar dire straits. Accordingly, a targeted response that deals with the root causes of the industry issues is a better response.

With respect to the current journalism tax incentives in Bill C-97, these so-called incentives should have no place in our democracy.

Thank you for your time. I'd be happy to answer any questions.

1 p.m.


The Chair Liberal Wayne Easter

Thank you very much, Mr. Moody.

Turning now to the Prospectors and Developers Association of Canada, we have Ms. McDonald, executive director, and Ms. Williams, director.


1 p.m.

Lisa McDonald Executive Director, Prospectors and Developers Association of Canada

Good afternoon Chair and committee members.

I'd like to start by acknowledging that we are on the lands of the Algonquin people.

I'm Lisa McDonald, executive director of the Prospectors and Developers Association of Canada, otherwise known to many of you as PDAC. I'm joined here today by my colleague Lesley Williams, director of policy and programs.

Thank you for the opportunity to offer comments on behalf of the mineral industry. PDAC is the national voice of Canada's mineral exploration and development sector, representing nearly 8,000 members. Our work centres on supporting a responsible and competitive mineral industry.

Canada's mineral exploration and mining industry generates significant economic and social benefits in remote communities, indigenous communities and cities, employing over 600,000 workers and contributing $96.5 billion annually to the GDP. It is the largest private sector industrial employer on a proportional basis of indigenous peoples in Canada, and a key partner of indigenous businesses.

I'd like to provide a brief overview of mineral exploration in Canada. Mineral exploration is a staged process of information gathering with the hopes of discovering an economically viable mineral deposit. Junior exploration companies do the bulk of this high-risk, high-reward, grassroots exploration work in Canada, which leads to new discoveries. They find the new mines of the future. These companies are a key feature of the mining ecosystem, accounting for upwards of 70% of all discoveries made in Canada. Essentially, without new discoveries through exploration, there will be no new mines.

Junior exploration companies are small businesses. They operate projects on limited budgets and timelines. Most do not generate revenue, and fund their activities by raising financing from investors, primarily by issuing shares.

The Canadian mineral industry faces strong global competition for investment dollars. Sourcing investment to fund exploration activities has become increasingly challenging. Financing is quite volatile and difficult to come by due to increasing competition, and it has been in general decline for a number of years.

A variety of factors affect the decisions made by investors about where to invest in projects, and by companies about where to explore and mine among competing jurisdictions.

As an industry that operates across the country, generating significant economic impact and social benefits, it is critical that the mineral sector has the means to responsibly capitalize on Canada's natural resources while also being able to compete globally.

In conjunction with many other policy measures, effective fiscal policies in support of a strong mineral exploration and mining sector will help to support Canada's mineral industry competitiveness. One of these fiscal tools is the mineral exploration tax credit, METC. The inclusion of a five-year renewal in budget 2019 was widely celebrated by the mineral sector. As you may know, this is the first multi-year renewal of the METC since its inception in 2000, and something that PDAC has long championed and advocated for.

Five-year METC renewal will provide longer term stability for exploration companies, including multi-year exploration program funding and planning. Exploration companies and investors need certainty that they can finance not only the current year of their exploration programs but also any subsequent exploration necessary to fully scope the mineral potential of a particular property. It will also provide a sense of stability for suppliers and service providers, as well as for the cities and northern and indigenous communities across Canada that depend on exploration and mining for growth, employment opportunities and local trade.

Flow-through shares and the METC have proven to be effective tools in raising financing over the past 18 years, including during difficult times. We can see the manifestation of the success of these fiscal tools through the many exploration projects financed by flow-though financing that later became mines: the Éléonore mine in Quebec, the New Afton gold mine in British Columbia, and the Meadowbank mine in Nunavut, to name a few.

Furthermore, the future of Canada's mineral industry lies increasingly in remote and northern regions. These regions experience economic and geographic circumstances that impact their ability to harness the vast potential for mineral development in many ways, particularly with respect to costs.

Measures included in budget 2019 that are targeted towards northern Canada are important. We welcome additional funding for northern economic development programming, and measures to enhance skills training and education, particularly for indigenous peoples.

Also of interest is the inclusion of commitments in budget 2019 to invest in various types of infrastructure, for example, the national trade corridors fund and hydroelectricity in the Northwest Territories. Due to a significant infrastructure deficit, it can cost up to six times more to explore and 2.2 times more to build new mines in remote regions. As a result, a disproportionately high percentage of known mineral deposits also remain undeveloped in Canada's territories, compared to non-remote regions.

Challenges related to the high costs of operating in remote and northern Canada must be addressed to support mineral investment and project advancement and to enhance economic development opportunities for northern and indigenous communities. It will take a long-term, well-funded, coordinated infrastructure plan to address the lack of transportation and energy infrastructure in the north. This would truly unlock the potential of the region and enhance economic activity.

We would be remiss if we did not note that while fiscal policies can help to boost mineral industry competitiveness, getting other legislative and policy mechanisms right, such as the proposed impact assessment act and the Canadian ombudsperson for responsible enterprise, is absolutely critical for the success of our sector. These policy decisions must work in conjunction in order to ensure that Canada does not lose out on development opportunities and associated benefits to more competitive mining jurisdictions.

Finally, I would like to thank this committee for including the recommendation of a multi-year extension of the METC in your report to the Minister of Finance. No doubt the consideration by this committee went a long way to securing this multi-year renewal.

Thank you for the opportunity to appear here today. We'd be pleased to answer questions.

1:05 p.m.


The Chair Liberal Wayne Easter

Thank you, Ms. McDonald.

Thanks to everyone for their presentations.

We'll go to five-minute rounds. That way, we should be able to get eight questions in.

We'll start with Mr. Sorbara.

1:05 p.m.


Francesco Sorbara Liberal Vaughan—Woodbridge, ON

Thank you, Mr. Chair.

I'd like to begin with the Federation of Canadian Municipalities. Welcome.

Obviously, we've put in budget 2019 and the BIA the one-time top-up of the gas tax fund, nearly $2.2 billion. For the City of Vaughan—I am one of the three MPs who have the privilege of representing that city—it's about $9.2 million.

Just how important is it that we maintain this strong relationship we've built with FCM and all the cities across Canada?

1:05 p.m.

Executive Director, Policy and Public Affairs, Federation of Canadian Municipalities

Carole Saab

Certainly, all our members across the country, cities and communities across the country, really welcome this current budget and celebrate the one-time doubling of the federal gas tax fund. More to the point, as we were talking about in our comments here today, it really is a signal of a strengthened relationship between the federal and municipal governments. Having all levels of government work together is a key focal point for our members moving forward, because it is the most effective way to get projects moving and deliver results for Canadians to improve their lives.

To your question, we would, of course, say that it is critically important that we continue to work together as orders of government to continue to advance the relationship.