Finance Committee on Feb. 16th, 2016

[Thomas Pedersen]

If we were asked today to help organize that, we would get on the phone tomorrow, and I would suggest that within three months we would have that body. We know where the expertise and the experts are. We know that they're really willing to jump in and help. They haven't been asked on a national scale. I would pick up the phone tomorrow and call Sustainable Prosperity and Ecofiscal Commission, and my former colleagues at PICS, and so on and so forth across the nation, and propose that we get together in six weeks to hammer out the governance structure for this new body. In the meantime we invite the federal Government of Canada to provide the key issues for which it seeks politically independent advice, and we get cracking right away.

The smart minds out there are chomping at the bit to help, but they haven't been asked and they don't have the resources to undertake the scale of activity that we need to put in place. We don't have the luxury of sitting and waiting anymore. We have to get going. We had to get going 30 years ago. We have a lot of legacy to catch up on and we cannot just sit back and relax on this.

[The Chair, Liberal, Wayne Easter]

I'll have to cut you off there, Mr. Pedersen.

Mr. McColeman.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Thank you, Chair, and I want to thank the panellists as well.

My questions really are directed to my colleague Ms. Raitt regarding trying to get an understanding of the combined debt levels of provinces and the national level—there's only one taxpayer in the country. I recently read that RBC said that the provinces in this next year will run nearly $20 billion in deficits.

If the federal government decides, whatever the number is, there's a lot of speculation out there.... The National Bank last week said $90 billion over four years. Maybe that's a number that you could hang your hat on, but let me try to understand what you're saying.

Is there not a tipping point? I understand that growth creates value and equity in, let's say, the house of government or the house of the country, because I often think in my mind in very simplistic terms that the debt we have is the country's mortgage. As long as the house is valued more, I guess you could always go into debt against what the house is worth. But are you saying that can go on indefinitely and there's never a tipping point?

[David Macdonald]

In the sense that we could continue to run deficits indefinitely, yes, that is so. We have a Canadian economy that's worth $2 trillion. Even if it's not growing at 5%, which would be ideal, let's say that it grows at 3%, which is likely what we'll see next year, in nominal terms. That's more rapid than the $25 billion or $28 billion we're adding to debt. This means it becomes more affordable over time.

[Phil McColeman, Conservative, Brantford—Brant, ON]

I'm thinking that when you combine the two, as my colleague said, they are in the 78% to 80% range, and—

[David Macdonald]

Well, the combined federal and provincial debt-to-GDP ratio is 60% in Canada right now, but it's half federal, half provincial.

[Phil McColeman, Conservative, Brantford—Brant, ON]

What you're suggesting is that we'll never have to make a payment against the debt in this country.

[David Macdonald]

We'll certainly have to pay against the debt. We pay all the time. The federal government is constantly paying and rolling bonds over year to year.

Is your question, will we ever pay the debt back to zero?

[Phil McColeman, Conservative, Brantford—Brant, ON]

No, it's not. It's about making headway on the debt that we have. We are not making headway; we're seemingly building on the overall provincial and national debt on an ongoing basis, and I'm just saying....

I'm not an economist. I'm a pretty simple thinker, in the sense that I was taught to save money and pay down debt. But you're suggesting that's not the route the country should follow.

[David Macdonald]

There are two approaches. You can pay down the absolute level of the debt, and you do that by running surpluses. You would collect more in taxes than you're providing in services. You can certainly do that. The problem is that you would take a hit to GDP in the process.

The other approach is that you can work on the GDP part of the debt-to-GDP ratio, have a deficit, but drive it into better growth, such that you're using high multiplier activities—infrastructure, social programs, those sorts of things—and you continue to stay ahead of it.

In contrast to a household, which has a lifespan, such that at the end of everyone's hopefully long life here their debt is resolved in some way, the federal government and Canada, hopefully, do not have a lifespan; they continue indefinitely.

One other thing to understand is that it has really been the household sector that has taken on the debt over the last decade. The household sector and the federal government used to have the same debt-to-GDP ratio in the 1990s, both at about 40%. The federal government's has decreased to about 30% now; the household sector's is at 96% of GDP. The household sector has been spending about $70 billion in deficit every year and they have been doing this for a decade.

I think one of the challenges is how to reset that balance so that all the debt that's being incurred on Canadian balance sheets isn't exclusively happening at the household level, which is more or less what has happened since the crisis in 2009.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Let me move on to Mr. Everson.

There are comments from many of the panellists we've heard that corporations are holding on to their money—not investing it, but taking, I suppose, a “wait and see” attitude.

How do we get them to make investments? What things would you envision in a budget that the federal government brought forward to see some of that money go into the economy to loosen it up? What are some of the measures you would recommend?

[Warren Everson]

I don't want to indulge in nostrums, but I'm afraid they are applicable. Canada produces much more than Canada can use, so export trade is extremely significant. We're starting to see good numbers in the export businesses in eastern Canada, but we are not able to get our natural resources to market in many cases. That's an extremely significant problem.

One thing that's interesting right now is that the government is sitting on the starting line for some monstrous private investments. We've talked about public infrastructure, and I have mentioned our support, but in this year we could see $80 billion of private sector investment in telecom, which as you know is hanging fire, and in LNG and two major pipelines—and in fact, in a whole series of other pipelines as well. The crown has Via Rail asking for permission to install a dedicated rail line in the east, which would be cheap like borscht but would be tremendously significant in terms of reducing congestion and providing an alternative to the highway grid we have right now.

There is a whole series of things hanging fire, and they all require something. They all require something different, unfortunately.

[The Vice-Chair, Conservative, Ron Liepert]

I'll have to stop you. Thank you.

Ms. Dzerowicz.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you very much, Mr. Vice-Chair.

First I want to say a huge thank you to all of our presenters today. It was super-informative and very moving. Thank you so much.

My first question is for Mr. Everson.

In my riding of Davenport, I have a number of workers in the construction field—carpenters, painters, the whole field. Many of them are here on a temporary sort of work visa. I find your comments about the number of businesses worried about their ability to source workers so that they're holding back on spending a bit worrisome. We also know, and my colleague has pointed this out, that we have workers across the country; we have a sufficient number of unemployed people, whether it's in Saskatchewan, Alberta, or Newfoundland; and we have a number of workers in our aboriginal communities who would love to find wonderful, paying jobs.

You also talked a little bit about the temporary foreign worker program. I will tell you that if I talk to the workers who are on temporary work visas in my riding, they will say they would love a path to citizenship. They would love to be here as full-time Canadians and would love a path to that.

My question to you is in two parts. One, what recommendations would you have for the federal government in immigration policy as well as mobility policy across the country, moving people from where we have workers with probably some good skills to where there are jobs?

[Warren Everson]

That is an interesting question. Thank you very much.

The temporary foreign workers file is obviously a very hot one. There are at least five different categories of temporary foreign workers, and they're not all the same. A couple of years ago, when there was enormous public concern about it, I think most people were focused on the low-skilled workers who were doing jobs that most Canadians would be able to do.

That speaks to your mobility problem. It's fine to say that there's a job waiting in Tofino, B.C., but somebody in Nova Scotia can't get there, and if the job is working in retail or a restaurant it's not going to pay the mobility cost. So we agree that there's a significant challenge there.

However, in the crackdown on the temporary foreign workers we also cracked down on extremely skilled people who are the key to some sort of development from which hundreds and hundreds of Canadians are going to benefit. We really did ourselves in, and we have to reverse that.

I always like the example of a European hockey goalie who comes over and plays for Vancouver. That's a temporary foreign worker, and if that person does a really good job, not only does the team go to the playoffs but so do the car parks, the concessions, the restaurants. Everyone benefits because one foreign worker, an extremely highly skilled individual, was sourced and brought in to do that job.

You can extrapolate that through the whole economy. In some of the projects we've talked to, people have done extremely extensive studies of the Canadian workforce. They have said they do not know for sure that they're going to have enough of some particular kinds of skills.

[Julie Dzerowicz, Liberal, Davenport, ON]

What changes would you propose?

[Warren Everson]

In that particular case, you need to give them a safety valve. You have to say that when you've sourced in your province and have sourced nationally and you have done it damn quickly and you can't get the people you need, we will allow you to bring in a specialist.

I agree that the temporary foreign worker project was getting out of control with respect to the number of people coming in on low-skilled jobs, and I think both the previous government and this one are attacking that problem with issues of worker knowledge—that you are able to find where the jobs are—and as you pointed to, with support for mobility to get people to go and to take them on.

I will say, though, that in the Chamber of Commerce—we have 200,000 businesses—the single most frequent issue raised with us by our membership is a lack of skilled workers. There is a good deal of fury among employers, who say, “I don't want to be told that I could find the people if I worked harder; I've done job fairs, I've posted advertising; I cannot find these people, and I can't do my business.”

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you. My next question is to Mr. Pedersen.

While I have many construction workers, I also have many environmental workers in my community, and they're very passionate. Beyond the recommendation around a forum modelled on the Pacific Institute for Climate Solutions—we all know that there are already four different systems in Canada to reduce GHG emissions and that Minister McKenna is working tirelessly right now with all of the premiers and territorial leaders to try to find a national plan so that we can achieve the commitments we made in Paris. My question to you is: what would be your concrete or additional recommendations to help us to achieve that national climate plan?

[Thomas Pedersen]

Thank you. That's an excellent question. There are so many pieces to it and so many responses I could give.

I think the first and most prominent step we need to take as a nation is to put an appropriate price on carbon emissions. We did this in British Columbia in 2008 as you may know. We brought in the world's first broad spectrum, legislated carbon tax that was revenue neutral. That has been internationally praised as a “template for the world“ in the words of one famous environmental economist at University College London.

What we did in British Columbia was to say we'll start with a tax that's low, but it's on almost all forms of carbon combustion. It's low, but it has an upward scheduled ramp that will continue in this case for five full years, rising each year incrementally. Every penny of tax revenue is recycled immediately back into the economy through personal income tax reductions, corporate income tax reductions, and critical support for rural and northern people who need to heat their homes and that sort of thing.

We put supports in place for the less advantaged in our society, and we lowered our overall tax rate. It's been tremendously successful. We lowered our per capita fossil fuel consumption in British Columbia between 2008 and 2013 by 19% relative to the rest of Canada, and we all suffered from the same post-2008 recession. If we take the recession out of it, we lowered our per capita consumption substantially.

More importantly—

[The Chair, Liberal, Wayne Easter]

Mr. Pedersen, wrap up if you could in 20 seconds.

[Thomas Pedersen]

Okay, wrap up.

More importantly, our economy grew faster than the Canadian average during that time.

[The Chair, Liberal, Wayne Easter]

I'll have to thank all the witnesses very much for their time. As I said earlier, on short notice, a lot of information was provided here. We will suspend for five minutes and go to the next panel of witnesses.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

We'll come to order, if we could.

We'll start with the video conference, with the Canadian Doctors for Medicare.

Dr. Dutt, go ahead. The floor is yours.

[Dr. Monika Dutt, Chair, Canadian Doctors for Medicare]

Hi. Thank you, everyone, for including me in what is, I'm sure, a long day for all of you.

Canadian Doctors for Medicare was created in 2006. We are physicians who are firmly committed to evidence-informed health care policy reform and to our single payer medicare system.

Our recent advocacy for action has focused on three specific areas: upholding the Canada Health Act, developing and implementing a new Canada health accord, and improving access to prescription drugs through a national pharmacare program. Each of these reforms begins with strong federal leadership.

First is upholding the Canada Health Act. As part of its commitment to the CHA, the federal government must recognize new forms of privatization that have emerged since the Canada Health Act was passed in 1984. Clear examples of violations of the CHA exist across the country. They include, but are not limited to, the following. On November 10, 2015, Quebec lawmakers approved Bill 20, new health care legislation that allows physicians to charge patients who seek services that are already insured under public medicare, with no clearly established limits on the charge.

We've seen the strains that this type of extra billing can cause to a health care system. For example in B.C. in 2012, the B.C. government audited the Cambie Surgery Centre, and found that in roughly a 30-day period the CSC had overbilled patients $491,654 and submitted overlapping claims of about $70,000, which means they charged both the patient as well as the provincial health care system.

People who advocate for-profit health care often argue that it will take a pressure off the public system. In fact, we've seen the opposite. It drains health care professionals from the public system, as they go into the private system. They charge people for health care, which means that people who can pay for that health care can access it, and the rest of Canadians aren't able to. Often more procedures and tests are done, because that's often more profitable. Lastly, they don't tend to operate in places that are unprofitable. That might include remote and rural communities, aboriginal communities, marginalized urban populations, and those needing complex chronic care. For these reasons we continue to support single payer medicare.

Secondly, we need a strong federal health accord in 2016. The 2003-04 health accords were landmark developments in Canada, but in the decade that followed there were mixed results. For example, there were some successes in reducing wait times for certain procedures, but they weren't seen across the country. There was virtually no progress on a national pharmaceutical strategy. A renewed focus on achieving their unmet objectives, building on their successes, and rising to new challenges is needed. Specifically, Canadian Doctors for Medicare, or CDM, would like the government to initiate the timely development of a new health accord to adjust the accord for considerations for age, geographic distribution of population, and economic disparity, and to reflect Canada's commitment to equitable access to medically necessary health care.

Lastly, a national pharmacare strategy, which is something I feel incredibly strongly about and really hope this federal government will take on, is also an unfulfilled commitment from the 2004 accord. Right now in Canada we pay more for our prescription medications than any other country in the Organisation for Economic Co-operation and Development, except for the United States, and we pay 30% more than the OECD average. This means that my patients, you, and your family—one in five families in Canada—aren't able to take their prescription medications due to cost. Also, if you don't have insurance, that rises to one in four families. When that happens, that means people's quality of life decreases and there's also an additional burden on the health care system because they require more hospitalizations and more medical care.

Now the federal government has committed to bulk buying with the provinces and territories through the pan-Canadian pharmaceutical alliance, which is wonderful, but the $260 million this will save per year is nothing compared to the $5 billion a year that a comprehensive universal drug coverage program would.

In conclusion, a federal budget is a reflection of our government's values and priorities. With that in mind, we ask the federal government to do the following: enforce the Canada Health Act and close any loopholes that may allow for-profit clinics to violate its intent; demonstrate leadership and vision by reopening the health accord negotiations with provinces and territories; and lastly, support the provinces and territorial health ministers as they work to develop and implement a national pharmacare strategy.

Thank you very much for this opportunity to present on behalf of Canadian Doctors for Medicare to the Standing Committee on Finance.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Doctor.

I believe you're in Sydney, Nova Scotia. Is that correct?