Evidence of meeting #3 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was infrastructure.
A video is available from Parliament.
Liberal
The Chair Liberal Wayne Easter
If you could hold that to a minute, it would be great. Then he won't miss asking his final question.
President and Chief Executive Officer, Canadian Electricity Association
That's a challenge, but I will try my best.
On the long-term transformational, I'm not talking about our entities looking to the public purse to pay for the $350 billion over 20 years. We've been achieving that roughly the last number of years, $15 billion a year. What we're talking about is when you go to the regulator, let's say in Ontario, and you look at doing a pilot project, or green technologies, or wiring remote communities, they will say no, because their remit is to keep prices down. Yet those are very aspirational goals that are found in the federal government's agenda and increasingly in the provincial governments'.
For us, we'd like to form a partnership, with the federal and provincial governments, to address those very sizable gaps, and find a way to finance those long-term transformational infrastructure projects. We believe there's also a second phase to this infrastructure coming to a theatre near us, which really is parallelled with nation building.
Secondly, when it comes to nuclear energy, I believe in nuclear energy. You mentioned that in Ontario it's more than 60%; an impeccable safety record. We know that the challenge for the nuclear energy community is that sometimes the public opinion is very skittish, and nothing moves quicker than scared public opinion. When we had the earthquake in Japan, we saw that Germany, the leading locomotive in the European Union, shifted away from nuclear completely and went to coal. We have to find a way to build that confidence with Canadians, based on the record and not on the perception of fear. It's not easy.
Do we have the skills? I think a challenge in our industry, like many industries, is that in the next few years we will be seeing a high number of skilled workers in our sector retiring. We have to find a way to replace those individuals. We should replace them with made-at-home labour, and if need be, ask new Canadians to join us in the building. I think we will and do currently have the labour; I'm worried projecting 15, 20, or 25 years.
In the electricity sector, we measure change in decades. We have to embrace that future by doing some work today. That's one concern I have. Are we moving quickly enough to be where we need to be in 20 or 25 years?
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
I'd just like to say [Inaudible--Editor] for their presentation. Thank you.
Liberal
The Chair Liberal Wayne Easter
We may get a chance later.
I do want to say one thing on Sergio's comment on Germany.
I just did an energy tour in Germany in December. Yes, they're out of nuclear by 2022, I think it is. They're going to phase down their coal as well, and they're targeting 40% renewable. I just forget the time frame, but a lot of that is wind and solar. They have one solar city.
It is interesting what's happening around the world.
Mr. Liepert.
Conservative
Ron Liepert Conservative Calgary Signal Hill, AB
Thank you, Mr. Chairman.
My question, my first one anyway, is to the fellow who just finished doing all the talking, so I guess we're going to hear from him again.
Mr. Marchi, I used to be a cabinet minister in Alberta, and I was fortunate to be an energy minister. I used to facetiously say, even though I think I really meant it, that the one file that gave me nothing but a headache was electricity. It was because people didn't understand it. They wanted the lights to come on when they flicked the switch, and they didn't want to pay too much at the end of the month.
We've been talking a lot about budget deficits. We all know about the federal budget deficit, and earlier we were talking about the provincial government deficits.
What percentage of Canada's electricity market is made up of crown corporations? Do you know what the significant debt load of those crowns might be?
President and Chief Executive Officer, Canadian Electricity Association
Firstly, I hope you're enjoying federal life as you did provincially.
Secondly, I think you're absolutely right. One of electricity's challenges is being out of sight, out of mind, perhaps less sexy than the oil and gas fraternity over the last few years. It's difficult to get 15 minutes of fame, because in a country that's developed like Canada, people expect that when they flick that switch the lights will come on.
The other part is that, of course, we need to keep costs low. My concern is that if we only look at replacing our end of life-cycle infrastructure by one determinant called “get me the cheapest system available”, we will be passing down to our kids a system that is guaranteed to be less reliable than the one we inherited. We say low prices, but let's marry that with the indispensable value we attach to electricity, which means that we also want to pay for that reliability and quality.
On the specific numbers of the debt load, I will have to get back to this committee, Mr. Chairman. I don't have them at my—
Conservative
Ron Liepert Conservative Calgary Signal Hill, AB
But it's fair to say that there's a significant debt load within the crowns. That would be fair to say.
President and Chief Executive Officer, Canadian Electricity Association
I think it would be fair, but I'd hate to speculate without having those specifics in front of me. In terms of balance—
Conservative
Ron Liepert Conservative Calgary Signal Hill, AB
I want to ask at least one question to Mr. Upshall and Mr. Wilson, and I'll preface it the same way, in that I also had the good fortune of being the Minister of Health in Alberta for a couple of years. One of the frustrating parts of being the health minister—and let me say that the entire file generally gave me a headache—was that mental health was somehow the neglected child of our health care system.
Any time in health care that we tried to do something, we always seemed to bite off a way bigger chunk than was capable of being accomplished. I look at your proposal and I think that it's exactly what needs to happen, but are we trying to do too much again with one initiative? Would it make sense to have a more focused....? I'm not saying that one is more important than the other, but clearly we have a lot of issues today with PTSD. Would it make sense to maybe focus on that if you received the money from the federal government and made that work and then expand it, rather than trying to cover the waterfront on the mental health file?
Chair, Mental Health Commission of Canada
Let me start on that.
First of all, the Mental Health Commission is covering a range of things. We have a range of programs. We look at suicide prevention, the PTSD, as fleshing out that suite of programs. We think there is a real urgency to deal with the suicide prevention issue because of the very high levels of suicide in our indigenous communities. I think that is both a key driver from a mental health standpoint, but it's a real concern, if I can use the word, in a political sense. People understand the extent of it. It's five or six times the national average in these indigenous communities. There's a real desire on the part of people who are following this to address this particular issue.
We are starting by identifying 13 communities that are more prone to having suicides. There is a real focus on this, but we feel that as we roll this out in those 13 communities, there's an opportunity then to scale it up to cover the whole country.
Liberal
The Chair Liberal Wayne Easter
I just want to let you know that we're quite a bit over. I would say that we're starting to rapidly run out of time.
We have three people on our list. We'll go with three minutes each: Ms. Dzerowicz, and then Mr. McColeman, and then Mr. Grewal.
On this suicide prevention issue, I just want to make one point that people should think about because, as MPs, you're going to get calls at some point in time. With the number of platforms available to get hold of MPs now, I had a veteran with PTSD tweet me 33 times in 25 minutes, each one a little more suicidal. I didn't even know the guy. He wasn't even in my riding, as it worked out, but what do you do when you look at your BlackBerry two hours later? I convinced him to call me, which he did, but I spent an hour and 20 minutes on the phone with him, and I'm not trained for that.
I just make that point to say how serious this can be for people who are sitting around this room, as MPs, because I guarantee you, some day you're going to get a call from someone and we're not trained for that kind of work. That's how serious the issue is.
Ms. Dzerowicz, first, and then we'll go to Mr. McColeman.
Liberal
Julie Dzerowicz Liberal Davenport, ON
Thank you, Mr. Chair.
My first question is actually for Ms. Dutt.
First, thanks to everyone for their presentations. They were absolutely outstanding.
Health care is something we as Canadians are super proud of. I know that I, for one, am going to do everything I can to protect our health care system and to make sure it evolves to continue to meet our needs in the 21st century.
I also know that on a per capita basis Canadians pay more for their health care system than those in most countries that I admire—the Nordic countries, the Netherlands, Germany. I think that with this in mind I wouldn't mind getting some recommendations.
My opinion is that I don't think the pot needs to get bigger; I think we have the pot we need. With that in mind, what would be your specific recommendations in terms of what the federal government should be doing to continue to rejuvenate our health care system?
Chair, Canadian Doctors for Medicare
Just as a comment around the size of the pot, there has been a lot of analysis showing a whole lot of talk around health care using more and more of the budget. Often in reality what's happening is that the overall pot is getting smaller when taxes are reduced, and things like that, so that health care ends up looking like it's taking up more in the budget, but we've actually been fairly stable as a percentage of GDP, especially in recent years.
In terms of specific recommendations—and it's going back to what I focused on in my presentation—we need to look at innovations that will be both good for health and will also save us money, because money is always a factor. Pharmacare is one of those things that would unquestionably save money in the public sector as well as the private sector, and improve health. It's those types of initiatives that I think are some of the main things we can be looking at.
Maybe just to make a connection with some of the Nordic countries and others you mentioned, often those are countries that have very strong social programs. I know that wasn't the focus of my presentation but the health care system doesn't exist in a vacuum, so when you have other countries that have really strong social programs it does take some of the burden off the health care system. I think that's really important to keep in mind, too. When we're talking about health it needs to be connected with the strong education system and the social infrastructure that's also being discussed at this meeting, in addition to the other types of infrastructure.
Those are some of my quick points. The one around pharmacare is one specific initiative, and then also the social programs that help support a health care system.
Conservative
Phil McColeman Conservative Brantford—Brant, ON
Thank you, Chair.
Thank you to our witnesses.
I'm going to go to Michael. You haven't really been able to chime in here through most of the discussion. Thank you for the shout-out, by the way, for our human resources, skills and development and status of persons with disability work.
On social finance, most people probably don't understand the concept of it, and the fact that you can mobilize an immense amount of capital to do community projects on the ground. There are lots of people around the world who are interested in it.
Can you do it justice in the next two minutes to describe exactly what it is you would propose in a budget from a federal government in terms of the framework to support social finance?
Executive Director, Canadian Community Economic Development Network
Thank you for that question. Probably the short answer is, no, I can't do it in just two minutes but I'll do my best.
Impact investing—social finance—is the combination of people investing for social returns and not purely financial ones. It's a market that has been growing internationally as well as here in Canada. A couple of Canadians in fact did a study last year for the Rockefeller Foundation measuring the scope. It's an asset class that is really growing.
In Canada specifically, some of the recommendations being made by key leaders such as the MaRS Centre for Impact Investing, Vancity Credit Union, and the Chantier de l'économie sociale suggest building on the G7 task force on social finance as well as a thought leader group convened by the MaRS Centre for Impact Investing, saying that a first loss capital fund of $250 million dedicated to social investment, which I mentioned, could catalyze a 3:1 matching from private sector investments and could then really have an impact on social infrastructure in the country.
The second angle on it is capacity building. There is an emerging practice. As you say, most people don't understand what it means, but it's how we can classify, how we measure, how we regulate these new asset investment opportunities. There's some work that needs to be done, and the civil society actors on the ground doing that work could be advanced in terms of building that capacity.
Liberal
Liberal
Raj Grewal Liberal Brampton East, ON
Thank you, Mr. Chair, and thank you to all of the witnesses for your great testimony today.
We've heard a lot on this committee about infrastructure spending and how it stimulates growth and about budgets and running deficits to ensure that you can invest in infrastructure.
My question is to Mr. Ferreira.
The ideological differences on infrastructure spending and running deficits to spend on infrastructure will be debated for years to come, but you mentioned something really interesting about corporations holding a lot of cash. That's no secret to anybody. To encourage them to spend some of their money to stimulate the economy, you spoke about depreciation policy in Canada versus the U.S. In the U.S. it was six years, while in Canada it was 13 years. I found that really interesting, that an adoption of an aggressive depreciation valuation in Canada will help stimulate the economy.
Do you have any metrics to say how, or can you expand on that idea to say how it would stimulate the economy?
Vice-President, Government Relations and Public Affairs, Canadian Construction Association
First off, I need to correct one thing, because my members would kill me otherwise. We never use the term “spending”; we always refer to it as “infrastructure investments”.
Vice-President, Government Relations and Public Affairs, Canadian Construction Association
What we looked at was specifically construction equipment and the differences between the two countries. The depreciation rate in the United States is far more aggressive. Now, the Department of Finance will tell you that this is because corporate taxes in the United States are higher. I'm not advocating that we touch our corporate taxes—I think our members are quite happy with where they are—but one of the things that aggressive depreciation allows you to do is to invest in equipment more quickly.
That's something that frankly we don't see here. Our depreciation rates are tied to the useful service life of the asset rather than to the productive life of the asset. The productive life of most construction equipment is about four to six years, only because these engines are constantly running. Once they've reached that limit, you sometimes will find other uses for them—you don't necessarily retire them altogether—but our perspective is that we should be frankly encouraging companies to invest in the newest equipment, particularly tier 4 engines, which are a dramatic improvement over the tier 3s when it comes to pollution control equipment.
Right now, given the change in our currency, we have a lot of equipment sitting in dealers' showrooms that just isn't going to be moving anytime soon. Aggressive depreciation I think would encourage businesses to begin investing. Those are investments that stay within the company, so those are investments in Canada.