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.
Liberal
Kim Rudd Liberal Northumberland—Peterborough South, ON
My apologies for calling you out, Brendan. I know you were at the meeting. We worked very closely together.
Vice-President, Economic and Northern Affairs, Mining Association of Canada
Yes, we were on the panel together, Kim.
We used to be in a NIMBY space and then that moved to BANANA: build absolutely nothing anywhere near anything. MAC underscores again, unequivocally, we are agnostic about fuel type. We do not discriminate on the products extracted from this country. We think we need to have all solutions on the table. We have a world-class nuclear industry, from extraction in Saskatchewan through to refinement in Ontario, through to generation of power in a number of different jurisdictions.
The advent of small modular nuclear reactors presents a tremendous opportunity for current off-grid circumstances to have lower-cost clean power. The benefits from that are many because it is virtually emission-free. It is lower cost. You can bring that to parts of the country that, if we wait at current timelines, will probably not see a connection to a piece of energy infrastructure in my lifetime.
The potential is huge. It has to be managed appropriately. We support a strong role for the Government of Canada in that. I understand that, at this time, prototypes of this technology are slated to be pilot tested at Chalk River facilities. MAC will remain involved in that.
We've also strongly encouraged the government to make sure there is a significant indigenous engagement as part of that pilot project, and through the entire application of this endeavour, wherever it may lead.
Liberal
Kim Rudd Liberal Northumberland—Peterborough South, ON
Thank you. That was excellent.
Quickly, Francis. I know I'm probably out of time.
Chief Operating Officer, Canadian Electricity Association
With respect to electrification, our interest of course is broader than simply a discussion of electrification of mining or, as I spoke earlier, about electric vehicles. If we're going to begin to take steps towards meeting some of our climate change commitments, we're going to have to decarbonize significantly and electrify the economy.
If you look at studies that have been done by Trottier Energy Futures, the Conference Board of Canada, and many others that try to quantify what that future would look like if we're going to move towards some of the climate targets we have, we're looking at a very significant increase in the need for electricity for transportation, certainly, and for industrial processes, for HVAC. As a result of that, every technology is going to have to be on the table.
We're very enthusiastic about what's taking place, certainly in the SMR space, but as we look even further to the future we're interested to see what's going to happen in the hydrogen space and how that will be part of our future. If you cast your mind more than 10 years into the future and try to figure out what it will look like if we're going to begin to make significant progress in reducing our GHG emissions, it is a future that is essentially going to be electric.
Liberal
The Chair Liberal Wayne Easter
Ms. Rudd, you're very substantially out of time.
We'll turn to Mr. Poilievre and then back to Mr. Fragiskatos.
Conservative
Pierre Poilievre Conservative Carleton, ON
Mr. Marshall or Mr. Bradley, what major nuclear projects are under way right now to power that electrification? Can either of you answer that?
Vice-President, Economic and Northern Affairs, Mining Association of Canada
On the power generation side, I defer to Francis. I think refurbishment is going on at Bruce right now.
Conservative
Pierre Poilievre Conservative Carleton, ON
Is there any new supply from nuclear at this point in Canada?
Chief Operating Officer, Canadian Electricity Association
Not at the moment, and of course that takes a fair amount of time to develop. Certainly things are being talked about, but the discussion is changing in the nuclear space. It is a discussion that isn't quite so much about the large systems in the future. It is about SMRs. It's about smaller increments that will be coming online.
Conservative
Pierre Poilievre Conservative Carleton, ON
Are there any planned investments in those in Canada right now?
Chief Operating Officer, Canadian Electricity Association
There is certainly research, and dollars that are going into research in both Canada and the U.S that we're following very closely, in the micro and the SMR space.
Chief Operating Officer, Canadian Electricity Association
In terms of commitments for projects, we're at the research and development stage; we're not yet at the rolling-out stage.
Vice-President, Economic and Northern Affairs, Mining Association of Canada
I'm only aware of one SMR globally that is currently deployed. It's in northern Russia. It's on a barge floating on the water. It has a cable that moves to an industrial facility.
Other than that, this is very much a cutting-edge, directional technological movement at this time.
Conservative
Pierre Poilievre Conservative Carleton, ON
Excellent. That's very promising.
I know there was talk of using nuclear in the Peace River valley to power the oil sands processes many years ago, about 10 or 12 years ago, and for various reasons they didn't proceed with it. Here in Ontario, we've more or less replaced coal with increased nuclear, and a little bit of extra increase in natural gas and hydroelectric.
I think you're right that nuclear is definitely part of the solution to getting us off greenhouse gas-emitting sources of electricity, or at least reducing those emissions.
Mr. Moody, you mentioned that money is leaving the country.
What is the best way for us to quantify that exit? Can you give us an example of the questions we should ask of officials in order to isolate the effect of money leaving the country?
Director, Canadian Tax Advisory, Moodys Gartner Tax Law
Well, on the first pillar that I mentioned, individuals leaving Canada, you would be looking at deemed dispositions as they leave Canada. I've tried to get that information from the CRA, and the information that has come back has been rather lacking, you could say.
Whatever information you'll get out of that pillar will not display the planning that goes on behind the scenes. It's very difficult in my view, and believe me, I've thought very hard about how to get my hands on that information.
The job of a guy like me, or firms like ours, Meyers Norris Penny, or whatever else, is to minimize the amount of taxation when you leave Canada. You don't see that. You don't see the benefits of that planning.
On pillar number two, which is simply investment in the United States, for example, I actually don't know. I really don't know how you'd come up with that information. But I can tell you anecdotally that in my office, it's a very significant number.
Conservative
Pierre Poilievre Conservative Carleton, ON
Right.
By 2017, Canadian investment in the U.S. was up by two-thirds, and American investment in Canada was down by half.
Ms. Rudd celebrates the fact that we're starting to recover to 2015 levels. However, we're still down in terms of foreign direct investment since this government took office. There's no doubt that the obstacles the government has put in the way of development, and the taxes it has imposed on our entrepreneurs, are largely responsible for that decline.
Mr. Moody, would you agree that there is a causal relationship between the increased tax and regulation and the departure of investment in Canada?
Director, Canadian Tax Advisory, Moodys Gartner Tax Law
Without a doubt.
If any of you have studied basic economics, which I presume lots of you have, I think the Laffer curve is very real. When you look at the amount of personal tax that ultimately is imposed, there's a tipping point as to when that behavioural change....
In terms of the use of the phrase by Ms. Rudd about levelling off investment in the oil sands, as a proud Albertan, I'll take issue with that statement “levelling off”. How about a significant decline, which has resulted in significant job losses—over 100,000 jobs lost? That's not a levelling off of investment in the oil sands. That is a direct impact of regulation and policy implementation that loses jobs.
So, yes. The overall answer to your question is yes.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
Thank you, Mr. Chair.
Well, we can go the way of trickle-down economics, or we can go the way of investing in people.
The managing director of the International Monetary Fund, as you know, is Christine Lagarde. Speaking favourably a few years ago, and this continues with the IMF's assessment of Canada, she said, “When you open a big construction site, you have people working, you have income being paid, you have income being consumed, so you enter into that virtuous cycle which can be net positive.”
My question is for the FCM. Thank you very much for being here and for the work that you do.
We are seeing delays by the provincial government of Ontario in rolling out infrastructure investments. We want to partner. We want to work with municipalities. Indeed, we want to work with the Ford government to fund infrastructure for Canadians. But, as I say, we see delay after delay in the assessment of projects that have come in from municipalities, and ultimately decisions on those applications.
How critical is it for the Ontario government, for all provincial governments—I'm from Ontario, so I'll focus on the Ontario government—to make these decisions and keep the ball rolling?
Executive Director, Policy and Public Affairs, Federation of Canadian Municipalities
Thank you for your question. I think that's a scenario being faced not just in Ontario but other provinces as well, where intake processes haven't opened up for even the current federal infrastructure programs.
It means nothing is happening. It means there is a stall, and that's very frustrating obviously for cities and communities across the country that are trying to make these investments in communities, and in Canadians in their communities. It's critically important that these programs and intake processes be opened, and that we move forward in a timely way so that the work can move forward, and that we don't miss construction seasons moving forward.
I'll use the opportunity of your question to again underline the merits of an approach like the gas tax fund: the difference between an allocation-based model and an application-based model, which is fraught with challenges that usually result in delays and get caught up in this kind of a dynamic. Again, there's a strong push from FCM and our members to continue to invest and double down on direct allocation models, because it's as direct as it gets, and we're able to move that and turn it around pretty quickly.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
That is very much appreciated. I wish we had longer to get into more nuances. As I say, I truly appreciate the work that FCM does.
Mr. Bradley, I've seen comments that you made shortly after budget 2019 speaking favourably about the $145-million investment towards cybersecurity and ensuring that critical infrastructure is secure. I know the committee on public safety and national security called for that for some time, and other voices. I'm glad to see that obviously go forward.
What else can we do on that front?
Chief Operating Officer, Canadian Electricity Association
We've seen, I think, two years in a row of good news on the cybersecurity front, frankly, after a fairly long time of industry players and critical infrastructure players asking for significant action. We began seeing significant action with the budget the year before that established the Canadian Centre for Cyber Security. We're encouraged again this year that there was specific mention of additional funds.
I'm afraid to say I'll be coming back each year and talking about the concerns that we have with respect to cybersecurity and the need to continue to invest in this. The kinds of people that we're up against are increasingly well funded as well. The cyber-threats that we're facing are increasing in their complexity. In addition to that, not to get too technical on things, but when people talk about the Internet of things, the IoT, or as I like to call it the Internet of threats, what we're talking about is the increase of devices that are connected. We're talking about, at the same time, a massive increase of potential vectors for attack. That is only going to increase in the future.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
I have a point of clarification, Mr. Chair.
Mr. Moody, you paint a scenario whereby the Canadian government is somehow involved in propping up Canadian media organizations, and there's a threat to our democracy as a result. At least that's my understanding of your testimony.
I would just point to the fact—and these are facts—that countries can decide how to support their media. In Europe, countries offer corporate tax exemptions. They offer grants for start-up ventures in journalism. They offer grants for journalism research and training. In France, which you spoke of favourably, journalists in that country are in fact given a reduction on their personal income taxes. In the United States, there are reduced postal rates for media organizations. There are also state sales tax exemptions as well.
Canada has decided to go in a particular direction, but we're certainly not unique in this regard. I think that the record should reflect that, Mr. Chair.