Finance Committee on Oct. 3rd, 2016

[The Chair, Liberal, Wayne Easter]

Go ahead, Ernie.

Just a quick comment, if you have it.

[Ernie Daniels]

One of the other things that the regime, the act, is doing is...we're looking at trying to get first nations involvement in large resource projects across the country, so pipelines, whatever. That's currently being looked at right now, so there's a lot of work.

First nations are coming together, and they are looking at how to participate from an ownership point of view as well.

[The Chair, Liberal, Wayne Easter]

Mr. Albas.

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

Thank you.

I certainly appreciate everyone's attendance here today, and the presentations. I also want to once again welcome everyone to the Okanagan. It's wonderful to have the finance committee doing its pre-budget consultation here.

Mr. Chair, with your permission, I'm going to start with Mr. Prodan from the B.C. Wine Institute.

Mr. MacKinnon raised the prospects for interprovincial trade earlier, and you gave some specific answers. I also want to go to your comments with regard to the domestic industry and the opportunity there. There are many different opportunities. You raised innovation. You also raised the trade between provinces.

Paul Bosc Jr., at the finance committee, about four or five years ago, said that most wine-producing countries that become export-oriented first dominate their domestic market.

Would you agree with that sentiment?

[Miles Prodan]

Absolutely.

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

In order to do that, interprovincial trade is one aspect that we could do.

British Columbia opened up its borders, so to speak. I hate using that term, Mr. Chair. Really, in a country that's celebrating its 150th birthday next year, to me, the word “borders” is an arcane use.

British Columbia opened its borders, and since that time, Mr. Prodan—you would know this better than anyone—have sales for B.C. wine gone down, or have they gone up?

[Miles Prodan]

They have gone up, absolutely, and similarly sales of Ontario VQA wines in B.C. have increased as well.

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

Some might argue that the leakage, so to speak, where you now have B.C. opening its borders and producers from other provinces sending wine in, has not hurt the British Columbia market at all.

[Miles Prodan]

It has not.

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

We see demand going up for B.C. wine.

Do you think if other provinces took the approach of Manitoba or Nova Scotia or British Columbia that we would see an equal growth?

[Miles Prodan]

Absolutely.

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

At this committee a few months ago, the Governor of the Bank of Canada spoke of trade deals being a benefit for Canada, both internally as well as externally. One of the things he did say, though, is that it's just like anything: there are winners and losers.

Could you point out, on the increased sales of wine, who the winners would be?

[Miles Prodan]

It would be the Canadian producers, clearly.

It's the access to the market, and right now we're being blocked from that within Canada.

Listen, people really want to be able to enjoy Canadian product. We make a fantastic product, but it's not available. That is blocking us from it, so with that access, the rising tide will literally bring us all up.

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

You also pointed out there are a mass amount of taxes, whether we're talking about corporate income taxes, personal income taxes of employees, the HST/GST, depending on which province you're in.

Who would the losers be from an expanded more robust Canadian wine industry?

[Miles Prodan]

There's only so much consumption, but ultimately it would be the importers if we could take some of that market share away.

The overall pie continues to grow, and that was my early opening statement. We are one of the largest-growing wine-consuming countries in the world. The consumption is there, the demand is there, so literally we would all win. It's just a matter of giving the public, the consumer, what they would like.

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

In the interest of time, beyond interprovincial trade, unfortunately there was not an agreement in the Yukon when it came to a federal approach to the sale of wine, beer, and spirits in Canada. It's unfortunate that hasn't happened. There is a court case going through, but that's beyond today's meeting.

What are some of the things on this innovation proposal that you have?

Can you give us a tangible item of what might show, where federal investments in this kind of area would grow the economy through the wine industry?

[Miles Prodan]

The wine industry is incredibly capital-intensive. You have to understand the lag time between when the grapes are harvested to when they are matured in the barrel to the time they make it into the market. That's forgetting, starting from the very beginning, that there's a six-year or seven-year gap before all of that. There is a lot of capital involved.

What we're talking about with this grant proposal is specifically for infrastructure. Whether it's increased tankage, the building of a tourism enterprise like a restaurant, it's all about leveraging the product that the winery has today.

You have to understand, as well, that we're talking about really small, family-owned businesses. Of the 260 grape wineries here in B.C., we know that 80% of them are small producers. That's 20,000 cases or less. To be able to have access to the capital to expand their business is critically important. As I said, we know the return would be there multifold.

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

Stoneboat in Oliver, in Mr. Cannings' riding, is now competing with the Italians and the French with a different process for sparkling. Would those kinds of innovations be supported by your proposal?

[Miles Prodan]

That's an excellent example, because it requires a special tank that's not inexpensive. That product could be put up against any similar sparkling product from around the world. I would argue that it's of better quality.

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

That family has been growing grapes there for 30 years and has moved now into the wine-production side. The father is happy to see his family members come into it, his sons and his daughter-in-law. They have business degrees, horticulture degrees, so we're seeing a much differently structured environment. Do you think the wine industry would continue to support innovation projects like that?

[Miles Prodan]

Absolutely.

[The Chair, Liberal, Wayne Easter]

We'll stop there, Dan.

Mr. Cannings.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you, and my thanks to all of you for coming here today. It's been very interesting and I wish I could ask questions of all of you, but I bet I don't have enough time.

I'm going to start with the Low Carbon Partnership, Mr. Morrice and Mr. Gilmore. I'm happy to see you here. This is an issue I think that all Canadians want us to move forward with quickly. I think that's what a lot of the expectations out of last year's election were. In your presentation you touched on the opportunities to create good green jobs for the oil fields, oil sands workers, thousands of whom are now out of jobs because of the drop in oil prices. I wonder if you could expand on those opportunities to put them to work in good green jobs that would pay the same amount. Maybe you could bring up the geothermal aspect. I am interested to hear about that, too.

[Brent Gilmour, Executive Director, Quality Urban Energy Systems of Tomorrow, The Low Carbon Partnership]

Through our partnership collectively, and that's our strength, we are able to come together to respond to an example such as we see in Alberta. Let me just paint a picture for you.

A 1% energy-efficient reduction can deliver up to $14-million in savings. That can be disbursed within a community. It's a 1% important way to think about what we're talking about here today. It affects SMEs, wine producers, first nations—everyone we're talking about today.

How does this relate to oil workers? Well, we're thinking about the opportunities here. At the end of the day, investment of about a million dollars in energy efficiency can generate 15 to 79 jobs, on average, depending on where you are in Canada and what's going on. One way of thinking about this is that it's a substitution. It's an opportunity to expand growth and opportunities for workers who are looking for new areas of employment. It's something that Alberta has been a leader in through their own investments at the provincial level in their new strategies for clean-energy opportunities. This is how we see it dovetail.

As to geothermal, this is used often in drilling areas that are no longer in use. Actually, you have to think of it as energy storage. It's an opportunity to harness that energy and put it back into the electricity grid. It's repurposing an existing field, retooling people who are in the drilling sector, and thinking of them as being able to be employed.

You can't get there right away. That's what this whole partnership is about, and that's why why Natural Step is so critical to their roles. It's helping businesses like Suncor understand how to retool their existing assets, helping them understand where they can deploy them. They can't do that on their own. They need to have the provincial government engaged. In some cases, they need to have the utilities as well as the local government.

At the end of the day, it goes right down to that end-user. That's where things like CoLab come in. They're trying to pull all that together to create an opportunity for our interest in clean energy generation to become action on the ground. That's how we're pulling that together.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Just to clarify, you see a real opportunity to take workers who are out of work now, who had been working mainly in Alberta and Saskatchewan, and create jobs across the country that will not only give them good working opportunities, but also allow them to live closer to home. I have a lot of people in my riding—and I'm sure this is true in other ridings as well—who used to work in northern Alberta and were away from their families.