Finance Committee on Feb. 16th, 2016

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you, Mr. Chair. I certainly am happy and excited to be here, and I'll be excited when you cut me off.

I'm going to go right into the Canadian Electricity Association.

Thank you very much, all of you, for being here.

With regard to the Canadian Environmental Assessment Act review that was done in the last Parliament, the Canadian Electricity Association came out in support of a “one project, one review” approach. Having multiple processes complicated an already difficult field. You have to deal with provincial power, utility commissions, etc.

Are you as an organization still in favour of one project, one review?

[Sergio Marchi]

We are. In fact, we've also communicated that to a number of the federal actors. We recently had a meeting with the president of CEA. We also met with the minister of NRCan and the deputy minister of Fisheries and Oceans.

When an environmental assessment provides the approval, we, for example, want that approval to mean something. In other words, that badge of honour must be credible. It does us no favours if that approval is granted and then it's second-guessed by a number of different organizations. We believe in a strong, credible, environmental assessment process.

We live in a democratic country, which means that people should be able to have a voice. We think, though, that we should do this in a smart way, and we very much respect having one project assessment on which the federal and provincial governments collaborate. It seems that the reset button on federal-provincial co-operation has been pressed.

We also don't believe we should throw out the baby with the bathwater. In other words, I think there are areas this government has signalled that it wishes to tweak. That is its right, but we believe that there is a good foundation. At the end of the day, when approval is given, I hope we find the political will and courage to build in this country, because nation building should never be allowed to sleep.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

I wholeheartedly agree with you on that.

I'm going to move now to the Canadian Construction Association. I want to start with the suggestion about the infrastructure bank. For example, in my home province of British Columbia, municipalities use what's called the Municipal Finance Authority, which works very well. In fact, they get some of the lowest rates guaranteed. They're used to using that organization. I think it's been around for 30-plus years.

In your submission to the committee, you said you would like to confirm your support for the infrastructure bank, but you don't want to see these projects getting slowed down because of new processes. I'm of the opinion that the BDC and some of the other crown corporations that already exist could probably give out those monies and help with some of these stimulus projects much more quickly and with better governance than an infrastructure bank could.

Do you agree that adding a new governance or crown corporation to the mix may end up having more process costs than using existing ones would?

[Bill Ferreira]

I don't believe I took a position on the infrastructure bank. If you ask me for my opinion—and this is really my own opinion—we certainly see some benefits to the government taking on...because it can borrow more cheaply than even provinces can, in most cases. There might be some benefit, but I think this whole issue of the infrastructure bank needs to be studied more carefully.

I would agree with you. We don't want to see additional impediments to municipalities and provincial governments accessing federal funding.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

You did raise a point that there should be a central portal that's easy to access. I would consider the municipal financing authorities. Perhaps the government would be able to work through that, or even allow gas-tax monies to be mortgaged out over a period of time, so that the construction of larger projects could be paid through gas taxes.

I'd like to go back to talking about infrastructure in general. Do you believe there's a difference between shovel-ready and shovel-worthy? This means that the government, rather than going across the board with just any infrastructure spending, should be focusing on productive infrastructure or quality-of-life infrastructure, like sewers and water, and things that help our communities.

[Bill Ferreira]

With regard to the terms “shovel-ready” and “shovel-worthy”, from our perspective, all construction projects that municipalities put forward were worthy. There was never a question of whether something shovel-ready wasn't worthy. Even resurfacing roads, which a lot of people complained about, was work that needed to be done. As I said, there's a huge list of deferred maintenance out there that needs to be addressed.

I would agree with you that there are other priorities, and I think the way the government has structured these new funds will actually lift some of those water projects outside of the building Canada fund, which will free up additional money from that for highways, roads, and bridges, which I think are equally important.

We wouldn't take a specific position on the semantics of “ready” versus “worthy”.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

So as long as there's funding, it doesn't matter where it goes.

[Bill Ferreira]

I didn't say that. I said that I think what we need to do is ensure that the money is flowing.

As for priorities, municipalities set those priorities. They too are elected, and I think they have a pretty good grasp of what their needs are.

From our perspective, we don't take a position on whether something is shovel-worthy or shovel-ready. That shovel-ready work needed to be done, just like shovel-worthy projects need to be done. All municipalities have a huge list of projects that are sitting on the shelf that they can't fund every year. If more money is made available, that means more work will get done, and it is work that needs to be done.

[The Chair, Liberal, Wayne Easter]

Thank you, gentlemen.

Mr. Caron.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I want to thank all of our guests for their testimony. It has all been very insightful. This is our fifth group of witnesses today. It has been intense, but it enables us to come right to the point and focus on priorities more than long meetings do.

I will start with Ms. St-Onge.

Among the figures you have shared with us regarding CBC/Radio-Canada, I was especially impressed by the fact that Canadians' annual contribution to our public broadcaster is about $29 per person, while the average contribution is about $83 or $84 in OECD countries.

CBC/radio-Canada is not PBS and should not become PBS, either. Correct me if I'm wrong, but most European countries and other OECD members feel that the role of public television is not only to ensure programming and diversity of news, but also to ensure that there is something for everyone in the available broadcast programming, which includes private television and radio. This is actually not a business requirement, but truly a quality requirement.

Could you comment on that comparison and give us your opinion on what CBC/Radio-Canada should be, in light of what its counterparts are in the countries that invest more?

[Pascale St-Onge]

CBC/Radio-Canada should have a specific mission different from that of other private broadcasters when it comes to things like cultural content, but also local and regional content. For instance, BBC is one of the United Kingdom's cultural drivers.

We have noticed that, since the latest cuts, CBC/Radio-Canada has offloaded a number of aspects of its mandate and its mission. It's important to point out that the Canadian broadcaster's mission is different from that of other public broadcasters around the world, if only because of the linguistic reality and the size of the territory to be covered. It's unique in the world. However, we are among those with the least support through public funding. For CBC/Radio-Canada, that is clearly a major obstacle to providing local service in the regions.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Regarding news, we hear that many private broadcasters are closing regional stations. CBC/Radio-Canada's mandate is still to provide news, but the various cuts have forced it to reduce the provision of local news almost everywhere. I know that television news broadcasts have gone from one hour to 30 minutes a day across the country. Some newscasts have even disappeared completely.

The government has promised a $150-million investment. Will that investment help re-establish the level of local news necessary for the communities to be well informed and aware of what is happening in their area?

Do you think that will be enough for the transition to what is called new media to continue?

We have had a glimpse of what is happening in that area. CBC/Radio-Canada is trying to adapt to the various platforms that have been created and is trying to become part of that new environment.

[Pascale St-Onge]

The $150 million promised by the Liberal government during the last election campaign is actually in line with the latest cuts of $115 million, as well as the loss of the Local Programming Improvement Fund. That fund was used directly by CBC/Radio-Canada and helped the broadcaster produce regional newscasts.

The investment would only bring the Canadian public broadcaster back to the level it was at before the cuts—to an annual contribution of $33 or $34 per Canadian. We are still well below the OECD average. In a perfect world, it would definitely be preferable for the investment to be even larger. We talked about the difference between inflation and increases. There is a difference of $547 million annually. That's huge. Of course, $150 million is a good start.

You were talking about investments to be made in the area of technology. Given all these new broadcasting platforms, we believe that CBC/Radio-Canada must be present and be a leader in terms of new technologies. Meeting this challenge will require investments for the acquisition of not only equipment, but also qualified staff. The idea is to help Canada have a global impact in terms of innovation.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

The Minister of Heritage did not really confirm the $150-million amount. Questions were asked in the House, and she is now no longer mentioning that figure.

Why would it be important to pay out that $150 million now, instead of waiting two or three years, if ever the government was to propose that timeline?

[Pascale St-Onge]

The action plan that was established by CBC/Radio-Canada's current management is ongoing. The number of positions is expected to be reduced again by about 1,500. We cannot continue on this path. Investments absolutely have to be made this year in order to stop the haemorrhaging and enable CBC/Radio-Canada to keep existing and to continue its work.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you very much.

My next question is for Mr. Marchi.

I know that energy production and distribution are a provincial responsibility. However, an issue is discussed periodically that I think is often passed over during the meetings we have on budget matters across Canada.

What are the biggest obstacles to establishing a pan-Canadian east-west grid? All the provinces are doing a good job of establishing a north-south grid and exporting to the United States. Does the issue lie in a lack of collaboration among provinces? Can the federal government encourage the development of such a grid? Is it desirable to have an east-west electricity grid?

[Sergio Marchi]

Obviously, electricity, like other energy constituencies, is provincially wired, but also when it comes to electricity, the federal government has a significant role because there are some 34 departments or agencies of the federal government that are in the policy space of electricity. That's number one.

Number two, I think, on the reset button and the collaboration, this could be a window of opportunity on energy writ large when we look at the federal government potentially joining the provinces on developing and bringing over the goal line a Canadian energy strategy. When it comes to the east-west grid, obviously one of the issues is financial expenditure and cost. Obviously, a lot of things are natural north-south, and we've had to build infrastructure to keep this country together east-west, whether it's the CBC, the railways, the pipelines, or Canadian national highways.

In terms of east-west, I really think that there's real potential for regional east-west participation and collaboration. For example, the Minister of Energy in Ontario has put out a number of MOUs with his counterparts, not only in Quebec but also in Atlantic Canada. The Premier of British Columbia is obviously pushing an infrastructure project of her own in terms of bringing electricity into Alberta. Alberta is also concerned about its natural gas. You have to find a right fit, because you also don't want to do one thing right and go two steps back.

I think on a regional basis, as opposed to coast to coast to coast, because of the financial viability question, regionalism on east-west is very much possible. If the federal and provincial governments with the private sector can collaborate in a partnership, I think that's possible.

[The Chair, Liberal, Wayne Easter]

Thank you.

I'll have to cut you there.

Mr. Sorbara, I'm going to hold you to five minutes.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Mr. Chair.

I'll start off with the gentleman from the construction industry.

Thank you for mentioning a few things. Thank you for mentioning about productivity. If we want to improve our standard of living, or at least maintain it, we need to improve productivity and we need to undertake that.

Thank you for talking about the multiplier. I think people with regard to our infrastructure investments tend to forget that for every dollar of infrastructure you get a bang of about $1.50. That's something that's important, especially in today's environment of, say, a 1% annual growth rate, interest rates at record lows; call it flight to safety. Now is the time to proceed with a robust infrastructure pipeline and do it over a multi-year period.

The one thing you talked about that did strike a chord was EI. About two weeks ago, the C.D. Howe Institute put out a report that said 7% of unemployed Canadians in 2008 were deemed long-term unemployed. Today that number has doubled, call it 14%, 15%, so EI needs to play a role in this discussion in terms of avoiding an increase in the rate of long-term unemployed.

You mentioned something about EI deliverability. Could you succinctly comment on what you meant by that and how that would apply?

[Bill Ferreira]

What we have is some of our provincial associations being very much involved in training. That training is typically focused on those who are EI ineligible.

The STEP program, which is something that is delivered by the B.C. Construction Association, is kind of held up as a model. They used to receive government funding. As a result of some changes that were introduced a couple of years ago to the funding model, they've seen their funding drop by about 15%.

That organization managed to put 15,000 unemployed Canadians who were EI ineligible into the construction industry. I think well over 90% of them remained and are long-term construction employees. A lot of times they are immigrants who just don't have the language training.

Sorry, I suspect you wanted a shorter answer.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Yes, please.

[Bill Ferreira]

A lot of times it's immigrants who are new to the country, who don't have the language skills, and who need to upgrade those skills. A lot of times, it's safety training.

In our industry, it's not simple. You can't just take somebody off the street and suddenly put them in construction. There's an apprenticeship program. Those usually are four-year programs. In some areas where we can do it, we do.

We certainly think it's been a worthwhile program. Certainly the industry, the employers within the industry, appreciated the program.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

I appreciate your comments on the accelerated cost of capital for manufacturing and how we can expand that.

Turning to Mr. Marchi and the CEA, you spoke about long-term transformational projects. Under my criteria, I'd probably put the maritime link project as a long-term transformational project. That's the first thing.

Second, in terms of infrastructure reinvestment into our electricity grid, obviously, as Mr. Caron had mentioned earlier, it does fall under the purview of the provinces and the regulators, but we have AltaLink, which completed a multi-billion dollar investment. If you add up Hydro One and Toronto Hydro, every year they're probably putting about $2 billion in maintenance and capital investment.

There are a couple of parts to my question. First, do we have the right skilled tradespeople available to undertake all this investment that we're going to need? Second, and not directly tied to this, can you comment on the nuclear component in Canada's electricity grid?

[Sergio Marchi]

Sorry, what's the second component?

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Nuclear energy. In Ontario, about two-thirds of all electricity generated is from nuclear.

Third, perhaps you would comment on your criteria for long-term transformational projects.

Then I have a final question for the gentleman on the corner.