Finance Committee on Oct. 6th, 2016

[Raj Grewal, Liberal, Brampton East, ON]

Forty per cent of the market is exported to China, so that's a major percentage. What would the economic impact be of something like China being shut down to us, or trade tariffs being applied? Let's say that this deal didn't happen. Is there any analysis on how much that would cost Canadian farmers?

[Brian Innes]

It would have been extremely difficult when we have 40% of our seed.... There isn't another place that would take that much in a short amount of time. Our industry, collectively, contributes about $19 billion to the economy every year. Certainly, there are other places you can sell some canola, but for that amount of canola in a short amount of time, it's very difficult to replace that demand, so getting a solution was helpful

[The Chair, Liberal, Wayne Easter]

We'll have to leave it there, Raj. You're well over.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

We have Mr. Aboultaif for seven minutes.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you all very much for your presentations this morning.

I'm going to ask my questions on agriculture. I do believe that one of the saviours of our economy, moving forward, is agriculture. Everybody needs food. I think we do it right, and we have a history of performing on that at different levels. I hear that we need a competitive climate. I hear from Mr. Leitch that a balanced budget is very important. I hear that we need to increase skills and the immigration skills program. It goes on and on. It all sounds good.

I also hear that on canola, our competition—for example, Australia on the Asian side—plays a factor in the strategy in order to be competitive and to continue to move forward in providing our economy with the resources and revenue that we need.

Yesterday we saw a carbon tax. We've seen an expansion of CPP, and an increase in EI, which is a payroll tax. How are all of these going to play a part in this industry maintaining competitiveness? Aren't these roadblocks to it doing so?

I'll ask this question to Mr. Leitch, Mr. Mazier, and Mr. Innes.

[Dan Mazier]

You said carbon tax, payroll tax, and CPP?

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Yes.

[Dan Mazier]

I guess I'll take on the carbon tax one first. It is of great concern, when you consider how much energy it takes and how much agriculture is based on carbon inputs. We rely on fuel, diesel fuel. Nitrogen fertilizer comes from methane gas; that's its main source.

There are technologies out there, and that's why I talked a lot about accessing this technology. Somehow we have to get off this carbon reliance. The technology is there, but to get access to it at the farm level is going to take a lot of money, or some incentives to make sure that it gets down to the farm at the very end of the day.

In Manitoba, an announcement came out in the news a couple of days ago. Manitoba has the luxury of sitting back and learning from other provinces like B.C., Alberta, Ontario, and Quebec. In Manitoba, we're actually in a very unique position and probably a pretty good position, because we have a choice.

Our provincial government is engaging agriculture, engaging KAP to see what is going to be included in this conversation, as far as agriculture goes, and what's going to be excluded.

I think one of the major concerns is that we're not at the table and not being talked to about how this is going to impact us. Our members are very concerned about what this might mean to their bottom line, because we do rely on a lot of carbon to grow our crops.

There's the whole conversation around the actual balance, and whether growing certain crops emits more carbon. No one can talk about that better than producers themselves. We need to be at the table. We need to be addressing that.

How do we move forward? As long as we're talking about it with governments, I think we'll come to a solution. It may not be palatable. Some people are going to be very mad and concerned about it, but I think it's the reality. I think farmers have to deal with the reality every growing season. So that's what we're going to do. We're going to work with governments to try to figure out the best system for all of this.

We have to make sure, though, that we remain competitive in this whole system that we're talking about. Just because Canada is standing there saying, “We're going to be the best Boy Scout in all the world”, meanwhile, China could be importing goods that are high-carbon emitters. We have to look at that, too. That's why trade is so important.

[Brian Innes]

I'd just like to make a brief comment to follow up.

Certainly Dan's comments about being competitive internationally are very critical to canola and to exporting 90% of what we produce. One comment I would make, which Dan alluded to, is that agriculture has actually reduced its greenhouse gas emissions significantly over time.

If you look at Canola, for example, over the 20-year period from 1986 to 2006, it reduced the amount of greenhouse gas emissions per ton of canola by 65%. Every year farmers have proven that they're really able to be better stewards of the land by adopting innovation. We are certainly positive that we can adapt in the future as well.

[Don Leitch]

I have a couple of points, just to build on what my colleagues have said. In agriculture, when we are exporting internationally, we are price-takers. We don't set the price. We know the international price rises and fluctuates, so when input costs rise, we know who gets stuck in the middle—the producers these gentlemen represent. That's just the reality. Let's not forget that. Mr. Easter certainly knows the trials and tribulations of the agricultural sector.

The point was made that we have to be competitive, and a huge, massive neighbour to the south of us is not moving all that fast on carbon pricing. Depending on what happens, we could very easily find that we are very offside with that. There is the threat of the Chinese bringing carbon-heavy imports into the country, so unless we somehow figure out a system to put a carbon tax on imports as they come across, we are putting our own Canadian companies at a disadvantage.

We already have a lot of companies—and I'll speak from the Manitoba Business Council's perspective—that are very significant employers here. There are thousands of employers in Manitoba in the manufacturing sector and the value-added sector that export internationally, and significantly to the U.S. They already have plants in the U.S., for a couple of reasons.

One is the Buy American program, depending on what you are selling. If American federal money is going into a public institution—whether it's transit, a university, or whatever—and you are selling manufactured goods, whether it's a bus or lighting equipment, you have to have American content, so they've had to put plants in there. Many of those plants are already more competitive and more efficient, when you measure all the input costs, which oftentimes include the taxes, fees, and charges we put on them.

That is why we say that we have to be on par with that. If we get too far out of whack, what will happen is that those companies will continue to supply the American market out of American plants, but if something gives, it will be the employees here. At the end of the day, the company will continue, but the jobs here will disappear. That's the challenge of finding the right balance. Conversation and discussion are important and absolutely critical.

[The Chair, Liberal, Wayne Easter]

Ziad, we are over, but I know you have a second quick question.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

On internal trade, does Manitoba do enough with the other provinces in terms of agriculture trade or trade with other industries?

[Don Leitch]

I'll speak to the internal trade agreement.

The provincial premiers have not kept pace with their own commitments for establishing and renewing the internal trade agreement across the country. The biggest impediment, from our perspective, on the internal trade agreement is all the.... We don't have tariffs, but we have all of these procurement rules: if you're not a resident here, if you're not a resident there. We may lose a little from some contracts, but we are going to gain significantly as a province and as a country. I think the provincial premiers, collectively, have to pick up the pace and up the game to meet the objectives they set.

We should have had the new, completed, ratified internal trade agreement in place in April of this year, and they are still probably a year or 18 months away from that. That's the challenge.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you.

[Don Leitch]

The federal government should continue to put pressure on premiers to deliver, because it is in your interests nationally as well.

[The Chair, Liberal, Wayne Easter]

Thank you, Don.

Ms. Ashton, you have seven minutes.

[Niki Ashton, NDP, Churchill—Keewatinook Aski, MB]

Thank you.

Thank you to all of our witnesses today.

I want to say a particular thank you to Ms. Constant, Ms. Hladun, and Ms. Eschuk for their presentations. Here, you may be only three individuals, but you are speaking on behalf of thousands of people who live north of Winnipeg, people who are going through very difficult times.

I want to address my questions first to PSAC and UCTE, and then to Ms. Constant from OCN.

First, Ms. Hladun and Ms. Eschuk, you shared a very emotionally charged presentation, and I'm sure the people of Churchill would be so proud of the voice you've given them today. Obviously, Winnipeg is very far for many people to come, so you've really spoken to their anxiety, frustration, and hopes right now, particularly on the focus of federal leadership.

I wonder if you could share some thoughts in terms of, first, how important Churchill and the port are to northern Manitoba beyond the community of Churchill, but also to Canada, and second, how much experience you've had in working to establish public ownership, particularly the example of a port authority, and how much of a realistic alternative this is, not just for Churchill but for Canada.

[Teresa Eschuk]

I'll start by saying that the Port of Churchill is the only deepwater port in the Arctic. It's very strategically placed. Considering all the activity that is now going on in the north, it is very important for security reasons. We have the Coast Guard up there all the time and it's becoming more and more visible. Basically we feel that there should be a Coast Guard base in the Port of Churchill.

Also, DND at one time, as another speaker mentioned, was up there. When you're talking about the sovereignty of the north, the Port of Churchill is critical to that.

As I said earlier in my talk, people are having to go to other towns, and that one little rail line that OmniTRAX is using to hold us hostage is critical. They've cut freight down to once a week. Their shelves are empty of food. That is not acceptable in Canada. It does have an impact. That train also supplies other northern communities with their food, as Marianne mentioned, with snowmobiles, and with things for all aspects of living. That is so important. That is the critical part.

Other witnesses talked about grain and canola. Where are they going to ship that? The port is critical to shipping that. Their shipments go all over Europe to take that commodity there.

I will now turn it over to my sister.

[Marianne Hladun]

I have just a couple of things. The rail line does go through several northern communities. It goes to Churchill, but from that point, supplies get on barges and go to all northern communities along the bay in Nunavut. There are communities south of Churchill and north of Churchill that rely on having a rail line that is maintained. I will tell you that everyone in the community will say that OmniTRAX has not invested any money in infrastructure. The windows are broken out. I don't think it's seen a lick of paint since they took over in the 1990s. There have been no improvements, no technology put into it. They could easily add capacity by adding storage facilities so that as soon as the bay is open and cargo ships can get in, the grain is already on site. They could be unloading railcars before the ice in the the bay is open.

You asked about establishing a port authority. It may not be something those of us in the Prairies are familiar with. It's a model similar to airport authorities. The federal government took airports from Transport Canada and made them into airport authorities. They are run by a board of the community. It's an appointed board. They have access to federal infrastructure money. They are accountable to Canadians through their reporting process.

We have not been able to get any information out of OmniTRAX. If they won't disclose it, we can't get the information. They say they've upgraded the rail line. We don't see it. They say they've upgraded the port. We don't see it, but, as Canadians, we have no access to that information. Making it into a port authority similar to an airport authority model would mean that people in those communities would be able to have a say as to how that's going to operate in the best way for their interests in the communities in the north.

[Niki Ashton, NDP, Churchill—Keewatinook Aski, MB]

Thank you for that.

Ms. Constant, thank you for the very clear information you gave on behalf of OCN. I also acknowledge that many first nations share similar challenges as well.

One of the concerns I have heard from leaders is the lack of federal action to address the post-secondary student support, particularly sponsorship for post-secondary education for first nations peoples. I wonder if you could speak to how much of a barrier that is and what you think should be done by the federal government when it comes to post-secondary education for first nations.

[Carolynn Constant]

Our first nations post-secondary students need a lot of support, and not just for tuition and the training allowance. That's not enough to sustain them in the cities.

I have three university graduates, and I do not have beautiful furniture or a new car because we had to support them, which is good, because I have three teachers now and two with master's degrees.

You need to loosen up on the criteria, like the social program. It's possible that many of them may have been former social assistance recipients. That social assistance can be transferred even if they leave the community. There is no limit on the length of the support from the social program, and there is no limit on the numbers of people to be supported using social dollars, combined with training dollars, and combined with post-secondary dollars. The policies in place right now are too restrictive for post-secondary education, especially when they slam the door on all post-secondary, meaning the 10-month courses or the under two-year courses. There is no use for that fund anymore through the social program.

The other thing is that it's an investment. Once a first nation can invest in its people, then those people will become self-sufficient. They come back to the community, they raise the bar for everybody else, and they come back and give back.

Right now there aren't enough people being supported and being funded, and our youth population is so great. Even with a first nation like OCN, the social problems are so great, and our youth can't see a future for themselves with the environment they're in right now.

[The Chair, Liberal, Wayne Easter]

Thank you.

We'll have to end that round there.

Mr. MacKinnon, you have five minutes.

[Steven MacKinnon, Liberal, Gatineau, QC]

Thank you, Mr. Chair.

Thank you, all, for being here.

It's wonderful to be in Winnipeg and in Manitoba. I'm struck with how useful and relevant it is for parliamentarians to get across the country to learn more about the kinds of stories that you, Ms. Constant, tell us about communities, and in some cases remote communities. There is also the situation in Churchill, which is of ongoing concern.

I'm going to reprise some questions that I asked in the first round, because to be honest, Mr. Chairman, I think that as we go across the country we can now detect a real theme of a tremendous mismatch between jobs that are available in Canada and people who are looking for jobs. We hear stories from all over the country of under-employed and under-educated indigenous Canadians, immigrant populations, and people with credentials but no professional certification. Then we hear from the employer community or the business community about skills that are required in order to innovate, and to prosper, and to expand. We hear this in the agricultural communities, and certainly in my province of Quebec. The temporary foreign worker debate continues to rage.

Frankly, it's been a couple of decades since the federal government devolved labour market monies to the provinces, and I'm beginning to wonder whether this entire philosophy needs to be reviewed. We met with the bank economists last week, and it's pretty clear that we have a ceiling on our growth as a country because of demographics. We have an aging workforce.

To hear that within our population there are people who struggle to get the right training, or the relevant training, is a source of immense frustration to us on this side, as it is to people throughout the House of Commons.

I'm going to direct my question to Mr. Dandewich and Mr. Leitch, but anyone else who would care to comment would be most welcome.

How do we get at this conundrum? This seems to me to be an emerging crisis in the country and one that we need to address and address urgently.

[Greg Dandewich]

Yes, it is a conundrum. There's no question about that. As an economic development agency, as I previously indicated, we're meeting with companies on a regular basis. Of course, Don's group are members of the most senior companies that are part of the Manitoba business council.

What we hear is that everything revolves around talent. Everything revolves around skill. The issue is that when you start to reach a saturation point with respect to where the available skilled labour lies, companies look critically at what their future investments will be in the market. When that happens, they start to look at other operations that they have in the United States or other countries.

What we're trying to do as an organization is understand where the gaps exist. I'll identify one particular industry sector, and that's the ICT sector. It is across the nation. It is a massive challenge. How does the temporary foreign worker program potentially act as a bridge in order to be able to provide some of the skill sets that are required for that particular industry sector? Our job is to aggregate the expertise with post-secondaries, with industry, and with research institutes to try and figure out how you establish an appropriate pipeline, so that when we are working with existing companies there's a recognition that there's a pipeline of skills that can come through the system. The challenge is that the volume of labour that's in the marketplace does not necessarily match what's required by the companies in the market.

I'll go back to the information piece. What's critical is to really understand where those gaps exist. You can have anecdotal information, and you can have evidence-based information.