Finance Committee on Oct. 18th, 2016

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

Thanks to all of you for being here.

I'm Dan Albas. I'm from the interior of British Columbia, and my riding is Central Okanagan—Similkameen—Nicola. I am a Conservative. Raj and I exchange ties just to keep everything in balance.

[Voices]

Oh, oh!

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

My name is Pierre-Luc Dusseault. I am the member of Parliament for Sherbrooke, in Quebec, and more precisely in the Eastern Townships, one of the best regions in Quebec.

[The Chair, Liberal, Wayne Easter]

Thanks to all you.

I understand that Minister Roach and his deputy will be here a little later, so we'll start without them.

We will begin with the Canadian Camping and RV Council, with Mr. Devenish and Wayne Hambly.

Mr. Devenish.

[Shane Devenish, Executive Director, Canadian Camping and RV Council]

I'd like to start by thanking the chairman and the members of the committee for the invitation to speak to you today.

My name is Shane Devenish, and I'm the executive director of the Canadian Camping and RV Council, a federal non-profit association representing 2,347 private campgrounds across Canada.

With me today is Wayne Hambly, president of the P.E.I. Home and RV Centre.

Campgrounds offer an opportunity for families to spend time together, to create lifelong memories, and to discover Canada's natural landscape. Camping creates a sense of community that is unique to this form of travel accommodation, and it is also an industry that plays an important role in the health of Canada's tourism sector. It also makes a significant contribution to the economy.

Campgrounds stimulate economic activity and create jobs for Canadians in urban areas and rural communities coast to coast. The Canadian Camping and RV Council contributes $4.7 billion to the economy, employs 60,400 people full time, and pays almost $1 billion in federal and provincial taxes. There are 5.8 million Canadians who camp annually, with travel-related expenditures totalling $2 billion and another $850 million spent on non-travel-related camping expenditures.

The camping and tourism industry provides a growing source of income for rural and remote populations, not only through RVing and camping, but through the local businesses the incoming visitors support and utilize around campgrounds.

The small business tax reduction reduces corporate tax that Canadian-controlled private corporations would otherwise have to pay on the first $500,000 of their income derived from an active business. An active business does not include a specified investment business, which is, one, a business with the principal purpose of deriving income from property—for example, interest, dividends, rents, and royalties—and two, a business that does not employ more than five full-time employees.

For the past several years, campground corporations have been able to qualify for the small business tax reduction of around 15%. However, CRA's interpretation changed earlier this year, without notification to either campgrounds across Canada or their accountants, and they reassessed a number of campgrounds at the large corporate tax rate of approximately 45%. CRA and National Revenue representatives are stating that their interpretation of campgrounds that employ less than five full-time employees as a specified investment business is a question of fact, as written in the current Income Tax Act, and they're acting accordingly. This now has campgrounds grouped unfairly in the same category as apartment buildings and mobile home parks, not to mention large Canadian corporations.

CCRVC estimates that nearly 75% of its private campgrounds do not employ five full-time employees, meaning that up to 1,760 campgrounds are impacted. Most campgrounds are required to close during the winter months in order to comply with local zoning bylaws. Because it is a seasonal business, the majority of campground employees are part-time. It is not financially feasible or necessary to employ them year-round. Simply, on average, campgrounds are small family-run businesses with limited staff working endless hours, and they are financially incapable of sustaining their business if they're paying a triple increase in their taxes.

With required environment and infrastructure expenditures, new campgrounds entering the Canadian market are virtually non-existent. For Canada to remain an attractive destination for domestic and international travellers, current private campgrounds must remain vibrant, and we need help from this government to remain financially stable.

CCRVC endorses the following potential solutions.

The definition of income in a corporation for the year from an active business should be modified so that it includes income that is derived in whole or in part from property where at least 500 hours of time is spent by employees of the corporation or by contractors retained by the corporation in the income-earning process—this would allow for the inclusion of seasonal worker hours when determining if the business is “active” or not—and/or establish tourism exception guidelines similar to ones that currently exist for hotels, motels, and inns, or any other similar premises, to aid in the determination of whether a business is an active business and therefore eligible for the small business tax deduction.

For the 2017 budget, CCRVC respectfully asks the finance committee to endorse a modification to amend the Income Tax Act that clearly distinguishes campgrounds as “active” businesses, which would provide private campgrounds eligibility for the small business tax deduction, ensuring that the campground industry remains strong and financially viable.

If that is unsuccessful, rural areas across our country will be impacted with numerous campground closings, leading to decreased tourism numbers, negative economic growth, job losses, and lost tax revenue in the regions that we need to support the most.

With that, I conclude. I'm very happy to answer any questions that the committee may have afterwards.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Shane.

Turning to the Cooper Institute, we have Ms. Baker and Ms. Wheatley.

[Ann Wheatley, Coordinator, Cooper Institute]

Thanks for inviting us to speak to you today.

Cooper Institute is a community-based social justice collective. We've been active since 1984 in communities across P.E.I. in working on social, economic, and environmental issues that are vital to Island residents.

In our presentation today, we're going to touch on several issues of particular importance to us: justice for migrant workers, addressing poverty, and sustainable communities.

It was with great enthusiasm that we read in the mandate letter to the Minister of Families, Children and Social Development the request to work with other departments to develop a strategy to address poverty. This is first and foremost a matter of fundamental human rights. It's also a budgetary concern. Acknowledged as a leading social determinant of health, poverty is costing Canadians billions of dollars annually.

Cooper Institute supports the concept of a basic income guarantee—BIG—and encourages the federal government to collaborate with provinces and territories, and especially with the community sector, to develop a model for implementing such a program. This is a long-term goal; we still need to invest in programs and services that support low-income Canadians, including affordable housing, universally accessible child care, and public transit. The BIG and other poverty reduction strategies must be seen as investments and could be paid for with revisions to the tax system. We support other groups in asking for tax fairness, including an increased corporate income tax and an end to corporate offshore tax dodging.

In Prince Edward Island, our rural communities and economies have been built and sustained by seasonal workers in fishing, farming, and tourism. Employment insurance is essential. It's paid for by workers and employers. It's essential to workers and businesses and the sectors in which they are employed. It's essential to the health and the economic well-being of their communities. The federal government must honour its commitment to reverse the 2012 changes to EI, reinstating the five extra weeks in all regions of the country. We have a high unemployment rate here, and our workers have been affected by the oil industry changes. We're asking for the working-on-claim provision to be fixed to make sure that workers are fairly compensated when they take work while on EI and for a re-evaluation of the regional divisions, which were particularly unfair in P.E.I.

Federal measures should support communities to develop their own policies and plans to meet the needs of people who live there. Cooper Institute is concerned about the impact of trade agreements, such as the CETA and the TPP. Under NAFTA, investor-state dispute settlement provisions have led to Canada being sued on numerous occasions and being forced to pay millions of dollars in compensation to foreign corporations. These costs are borne by all Canadians. The CETA and the TPP contain the same ISDS provisions that grant excessive power to corporations and impede government's ability to develop policies and programs that benefit communities and the environment.

Just a few months ago, we worked with MPs Sean Casey and Wayne Easter to organize consultations on climate change. In total, a hundred people attended and shared their ideas about what should be included in a climate change strategy for Canada. Not surprisingly, a common theme was the need to make a transition to a green economy. Specifically, people said they wanted no new infrastructure to support a carbon-based economy; no new investment in fossil fuel extraction or transport; investment in local renewable energy infrastructure and local food production and distribution; all government decisions to pass a climate test; avoidance of trade deals that will worsen climate change; and, a phasing out of fossil fuel subsidies.

[Josie Baker, Coordinator, Cooper Institute]

For the past six years, Cooper Institute has also been working on issues of migrant workers in Prince Edward Island. We are engaged in this issue on a national level as well, through work with the Canadian Council for Refugees, the National Farmers Union, and the Coalition for Migrant Worker Rights Canada.

Migrant workers contribute enormously to Canada's industries, particularly those related to food production as it occurs in rural and isolated areas. Over the past 50 years, industrial agricultural operations have grown to depend on this flexible workforce to operate in a context of dwindling rural populations. Canada's temporary foreign worker programs have been variously lauded and demonized with the changing tides of industry demands and media scandals. Further changes are expected following the recent release of the HUMA committee's report.

The policies of Canada's temporary foreign worker programs create systemic vulnerability for workers. One of the core constraints on workers is that their temporary work permits, which are tied to only one employer, effectively restrict their human rights. The deepening difficulty and expense of hiring foreign workers has the effect of driving employers towards the often unregulated international recruitment industry, which is known to traffic and extort workers.

Migrant workers pay into EI and CPP programs but are usually disqualified from claiming benefits from these programs. They pay Canadian taxes, but many of them are denied access to Canadian health care, and all of them are denied access to federally funded services offered to other kinds of immigrants. Canada's food system is now largely dependent on workers who have little or no access to rights and, in many cases, workers are routinely repatriated in the case of injury or illness. Some of them have been working and paying taxes in Canada for eight months each year for over a decade, but they are still denied basic rights and are not eligible to settle in Canada.

Migrant workers in Canada are propping up our economy. They are living and working in our rural communities, communities that are starved for new residents, young families, children in the local schools, volunteers for local fire departments, and workers in the local plants. These people and their families are needed and wanted, but they are ineligible for current immigration programs that prioritize affluent immigrants. The federal government should take immediate steps to make all migrant workers eligible for permanent residency status. This step would ensure that these workers' rights are respected, as befits Canadian workers, and would ensure that an industry does not profit from violating human rights.

It is worth questioning the economic ideology that promotes migration. Industry has demanded a flexible workforce, and this flexibility has been facilitated by federal policy through both the temporary foreign worker program and the changes to employment insurance. But whether we're talking about domestic or foreign workers, a flexible workforce is created out of desperate people willing to go anywhere and do almost anything for a paycheque. Flexible workers are, by definition, disposable. Desperate and disposable workers are more profitable for industry, and industry has the luxury of externalizing the real social and economic costs borne by Canadian and international societies when families are fractured and the social fabric is torn.

Migration is not a tool for development. Migration is more often a tactic of survival when other livable choices have been taken away. I urge this committee to reconsider the kinds of economic growth that are valued and what the true cost of those is.

In the maritime provinces, we can see very clearly the economic forces at play behind forced migration, and we've also seen what disposability looks like when the jobs dry up. We urge the finance committee to end the race to the bottom for workers, to grant status to transnational migrant workers, and to bring an end to forced economic migration within Canada.

[The Chair, Liberal, Wayne Easter]

Thank you, Josie.

Before we turn to Mr. Pearson, I neglected to mention earlier that sometimes it's distracting for witnesses when people are on their iPads. People may be paying attention to some of the briefs that may be on our iPads or the ones that were sent in prior to August 5. We are trying to be a paperless committee, most of us, except me. That's too new a technology for me.

As well, there will be an open-mike session following this meeting, in which we will give anybody who wants to make a statement for two minutes the opportunity to make that statement and get their message on the record.

Now, from CONTAX, we have Michael Pearson. The floor is yours.

[Michael Pearson, President, CONTAX Inc.]

Thank you, Mr. Chair. I will be checking all your personal profiles later to make sure that you weren't updating your status during our presentation.

[Voices]

Oh, oh!

[Michael Pearson]

First of all, I would like to commend you on the choice of location for this meeting. I've been in a lot of stuffy meetings rooms, and this is just a wonderful place to be for a meeting such as this. Whoever is responsible for this made a great choice. Thank you.

My name is Michael Pearson. I'm the president and founder of a software and technology services company called CONTAX. As you may have guessed, I am not from Canada. I wasn't born here. I came to Canada as a young man by myself. I had about enough money to buy a suit and get a job. I got some experience, saved some money, and started my company. That was quite a few years ago. Since then, my company has grown to have over 150 employees in four countries, with nine office locations, including right here in Charlottetown, P.E.I.

I've learned a lot about running a business, from the ground up. Many things I've learned the hard way, and I've had to become an expert in taxation and foreign currency hedging and things that I would never would have dreamed would be important qualities when I first started my business. I'm very appreciative of the opportunities I've had in coming to Canada; I don't take that for granted.

We have a wonderful system here. Many things are great about living in Canada, but it's also a great place to start and grow a business. There are many tax policies and other great things that encourage people to start businesses and grow and prosper here, and I do appreciate that, but obviously things can always be better. That's the reason why I wanted to come and present to you this morning and make my recommendations for changes that I think would make a significant difference to allowing small and mid-sized companies in Canada to grow and prosper.

My first recommendation is around the small business deduction, the SBD, which I'm sure you've been discussing or have been hearing about many times during these hearings. The SBD allows for a lower tax rate on the first $500,000 of taxable income for a Canadian-controlled private corporation, a CCPC. You're probably already aware of that. I'm sure there have been some requests to lower the taxation rate for the SBD. It's currently at 11%, and I know there's been discussion around its future.

My recommendation is slightly different. I don't necessarily agree that lowering the tax rate would have a significant economic advantage or impact, but increasing the threshold would. My recommendation is to increase the threshold from the current $500,000 to $750,000, and then index that threshold to inflation so that it doesn't erode over time. Most other thresholds, obviously, already have been indexed. The SBD, for some reason, hasn't been indexed. I'm not sure if anyone here knows the answer to this, but I believe the SBD threshold has been at $500,000 for roughly a decade.

Why is this important? As a business owner and a principal of the company, the amount of money I take out of the company is not determined by me. It's determined by you, by the taxation laws. My accountant and my finance department tell me how to minimize tax, obviously by taking advantage of the tax structure. By increasing the threshold, I'll be encouraged to leave more cash in the company, and cash in the company is a good thing. It encourages me and all other CCPCs to invest in innovation, technology, and growth, and to create jobs. Once I take that money out of the company, it's not there to do that. Increasing the threshold encourages me and my company and all other CCPCs to leave the money in the business, where it can be put to good use to create growth and jobs.

My second recommendation is around providing incentives and rewards for companies that are creating jobs. There was a program in 2011 called the “HCSB”, the hiring credit for small business. Essentially, any business paying EI premiums, employee premiums, up to $15,000 a year, could qualify for a $1,000-a-year tax credit. That program existed until 2013.

In 2015 a very similar program was put into place. It was called the small business job credit—SBJC—and it expires in 2016. Again, it's a similar program. It's based on the delta, the year-over-year increase in EI premiums, so an employer who is creating jobs and therefore paying more in EI premiums will get a tax credit, but only certain employers, only those employing up to about a dozen people. After that, you cross the threshold and there is no incentive. It's almost like a disincentive.

Once you cross that threshold, there is no tax break, so my second recommendation, and my final one, is to introduce a job credit program that provides a tax credit, but different from the previous programs. They had a good concept, but I don't believe they were well executed. Remove the threshold. There should be no threshold. Any company, any CCPC, that is creating jobs and therefore paying higher EI premiums should get a tax credit as an incentive, as a reward. That money would go back into the company, and for companies that are growing, innovating, investing, and creating jobs, what are they going to do with more money? They're probably going to continue to grow and create more jobs. Perhaps there needs to be a cap on the tax credit at some point, whether it be $10,000 or whatever number is deemed to be appropriate. That's my second recommendation.

Lastly, I would like to mention that my company has benefited from support from the Province of P.E.I. and from the federal government through jobs programs. We are very grateful for that support, particularly to the Honourable—and absent—Mr. Roach for his support here in P.E.I. also. I would encourage you to ask me any questions you may have about those programs, because we have taken advantage of them, and they have paid off very well.

[The Chair, Liberal, Wayne Easter]

He just came through the door as you thanked him.

Welcome, Minister and Deputy Minister.

Thank you, Mr. Pearson. Does that conclude your presentation? Thank you very much.

We'll turn to the St. John's Status of Women Council.

Ms. Wright, I want to apologize for the committee not getting to St. John's. We got to every other province, but we didn't get to Newfoundland or to the territories, because at the finance committee we couldn't get enough money from the budget liaison committee. We run into tight times too.

Ms. Wright.

[Jenny Wright, Executive Director, St. John's Status of Women Council]

Good morning, members of the committee. I'm grateful for the opportunity to address you this morning.

As the executive director of the St. John's Status of Women Council, my perspective on our economy and the budget is deeply rooted in the desire to attain economic equality for women in Canada.

Women may be a slim majority of the population, but we are the majority, and therefore our economic security has a substantial impact on the economy. I'm here to urge you to apply robust gender assessment tools, to mitigate the harm economic policies inevitably have on women, and to close the growing gender gap and raise women out of poverty.

As long as we continue to utilize traditional economic analysis, we will continue to recklessly ignore the fact that the status of women has a direct impact on our economy and mechanisms will not be put in place to close the inequalities and mitigate the damage to women. For example, pay equity legislation would dramatically decrease women's reliance on services and substantially increase women's contribution to the economy.

Treating women as a subset of the population is dangerous for women and the economy. We are 52% of the population, and our experiences cross all social determinants. We are seniors, youth, business owners, heads of families, workers, indigenous, sex workers, trans, middle class, sick, immigrants, and disabled.

We hold the majority of low-paying and precarious employment and take on the bulk of unpaid labour and child care, while dealing with a monumental and growing wage gap, now sitting at 72%. We cannot seek a fairer, more just economy without recognizing and addressing the fact that the majority of our poor are women.

Add to this our role as mothers and we are the largest users of services, often multiple services simultaneously. A lower socio-economic status has meant that women are always harmed by cuts in general, and austerity budgets can and do decisively destroy the services we most heavily rely on: health care, education, income support, and, because of the abysmal rates of violence we still experience here in Canada, domestic violence supports and services.

The World Health Organization and others have been calling on all governments to use gender assessment tools when generating budgets and economic policies that lessen this burden on women. A framework of tax and welfare policies can tackle this disproportionate burden. Pay equity, tax relief, and gender assessment tools can play a significant role in elevating the status of Canadian women.

Amidst concerns about the slow rate of growth in our economy, the International Monetary Fund has drawn attention to the need to close the gender gap between men's and women's employment in Canada. Research published by the World Bank suggests that closing the gender gap would be equivalent to 10% of Canada's GDP.

It's long past time for a national child care program. Clear research demonstrates that child care helps stimulate the economy through mothers' paid work, alleviates poverty, and moves women out of precarious work. A national program would create jobs, leave parents free to work or to upgrade their skills, and provide additional support for single parents.

Aside from raising families out of poverty and stimulating the economy, research has shown that early childhood education and care provides an environment where our children thrive regardless of their social and economic status. The numbers do bear out that the costs of subsidized child care are more than worth their cost in terms of returns to our economy. Many sound organizations have created viable frameworks for providing child care through social infrastructure, and it is well past time that we revisit these frameworks.

It is also time to return to a federal minimum wage, a living wage. A strong minimum wage is an immediate and highly effective economic policy to alleviate poverty for women. Women currently hold 59% of all minimum-wage jobs in Canada. A federal minimum wage would immediately benefit many Canadian workers and serve as a standard-bearer for provinces to follow.

Not only must we apply a gender lens to the economy, but we must not forget our human rights obligations. Canada has signed numerous conventions protecting and advancing the rights of women, including CEDAW, where article 3 states that the convention gives positive affirmation to the principle of equality:

States Parties shall take in all fields, in particular in the political, social, economic and cultural fields, all appropriate measures, including legislation, to ensure the full development and advancement of women, for the purpose of guaranteeing them the exercise and enjoyment of human rights and fundamental freedoms on a basis of equality with men.

A robust gender and human rights lens that strives to raise women out of poverty and closes the gender gap must be a prerequisite for Canada in meeting this responsibility.

In closing, I want to impress upon you that the correlation between women's economic security and their personal security is definitive. We must understand—and redress—that the lack of child care, housing, pay equity, access to women's health care, reproductive rights, education, and a fair justice system is not only the cause of violence against women, but is often the very barrier that prevents them from leaving. Women are not born vulnerable. We are made vulnerable by legislation and policies. We all want a vibrant, fair, and just Canada. We cannot reach this goal, however, if we continue to leave half the population behind.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Wright.

Turning to the Province of Prince Edward Island, we have Minister Roach and Deputy Minister Arsenault. Welcome. Thank you for coming.

[Allen F. Roach, Minister of Finance, Province of Prince Edward Island]

Good morning, Mr. Chair, and welcome to you and your committee members. Let me take the opportunity to welcome you to P.E.I. on behalf of the Province of P.E.I. and all the constituents and residents of Prince Edward Island.

We look forward to having the opportunity to present to you this morning. What we're going to do is pass out a few summaries of our economic performance. It's not my intention to review those with you this morning, but once you look at them, you're free to ask questions.

I know you have a difficult job to do. It is an important one, and I recognize that. I will be doing the very same outreach come January and February this year, when we'll be looking at our own budget here in the province.

Time is short, so I will get to the point. I have three areas that I would like to address.

The first one is infrastructure. We are pleased with the new programs, particularly with water and sewer. We're happy to see the fifty-fifty cost-sharing, but anything that large for a province of this size has a few wrinkles for us. Fiscal capacity is a limiting factor here.

There is a demand locally for projects that don't qualify under the rules of the federal program. It strains our ability to use these funds. We feel that there is a need for broader rules for qualifying for these projects, rules that possibly could be tailored. We believe they should be tailored to small jurisdictions such as ours, and I'm sure you recognize that. We also believe that the process is a bit cumbersome. We know there has to be accountability; however, it is always better to look at local versus national projects.

The second item that I want to speak of is health care. It's a constant financial pressure. We're a small jurisdiction, yet we're expected to provide the health care that's seen in other jurisdictions. Certainly, there's a lot of pressure on this government and on our budget to continue to move forward with that. Your move to drop the health transfers from 6% to 3% in 2017-18 will hurt us. The CHT covers approximately 25% of health costs at present, and the 3% decline will drop this percentage significantly over time.

As in other provinces, new services are required for mental health, home care, drugs, and innovation. Our population is aging, and costs are going to rise above 5%, as an older population requires more health care services.

Certainly, speaking anecdotally, I notice that even in my own district the number of people who have moved for retirement purposes to Prince Edward Island is increasing at an incredible rate. To give you a quick example in my own district, probably half a dozen families of teachers that have retired from the province of Ontario have come here for retirement purposes. Certainly, as they age, those needs will increase, and that's just a small portion. We're starting to see this as a trend. Home care demands are increasing. They have increased already. Pharmacare, or pharmacy, has increased.

I note that the premiers have instructed health ministers and finance ministers to report back to them this fall on a new health funding arrangement. I was on a conference call yesterday with the health ministers in Toronto to review phase one. We need to see action now, because our 2017-18 budgets are just around the corner.

The final item I would like to talk about is the carbon tax. Prince Edward Island is a low carbon emitter. Charts will show that we have lowered our emission rates significantly. Approximately 25% of our emissions come from agriculture and fisheries, 40% from transportation, and 25% from structures, buildings. Not a lot of mitigation is available to these sectors without massive investments in new technologies.

We're in the process now of developing a new energy strategy. It's due to be released later this fall. It will involve making electricity usage more practical as a way to mitigate our carbon footprint. We have no single large users or emitters of carbon. We'd like you to consider policy alternatives to encourage building and transportation conversion to allow a low carbon economy.

One of the things I'd like to point out, certainly, is that the Province of Prince Edward Island has been concerned about carbon emissions for a number of years. For anybody who follows what has taken place here, you will know that the Province of Prince Edward Island has made significant investments in wind energy over the years. Those investments certainly have been made in the past, to the point where we now generate 35% of the electricity ourselves, here on Prince Edward Island. When you look at a small jurisdiction, that's a significant number, and as a province that has been looking toward green and getting away from carbon for a long time, it's one that we hope doesn't get lost.

With that, I want to thank you very much for giving us the time here today and for listening to us. We'll certainly take any questions you may have.

[The Chair, Liberal, Wayne Easter]

Thank you, Finance Minister Roach.

Turning to the last presentation, we have the Canadian Union of Public Employees, with Lori MacKay.

Go ahead, Lori.

[Lori MacKay, Chair, PEI Coalition For Fair EI]

Thank you, Wayne.

It's a pleasure to present to you again. Welcome to P.E.I. My name is Lori MacKay.

I'm also the chair of the PEI Coalition for a Fair EI, so employment insurance is the topic I want to talk about again.

As I've commented before, the last federal budget has taken a few small steps toward reversing the negative impacts of the devastating 2012 changes to the EI system, but fell well short of the election promises of this government. We are hopeful that the next budget will finally reverse all the changes that were so devastating to this region and many others across the country.

For the PEI Coalition for a Fair EI, the number one priority is to see the additional EI zones reversed. As I explained to this committee in May, P.E.I. was always one economic zone for a reason. The Island is too small, and there is not one major industry that's in one particular area of the province. Fishing, farming, and tourism are spread throughout the Island. Federal jobs are located in both cities. The two largest private sector employers in Prince Edward Island are in the rural zones. It is imperative that our Island be reverted to one zone, because it is the fairest approach to EI benefits for Prince Edward Island.

As the chair and I explained through examples the last time, co-workers are working side by side and living close to one another, but have substantially different EI benefits. The number one ask for the budget from the coalition is to revert the EI to one zone.

There are other key priorities that we'd like you to address.

Restore the additional five-week benefit extension for high unemployment areas. There are a lot of continuous high unemployment areas in P.E.I. Many of them around the country have a lot of precarious but important work that still needs to be done, and workers need the knowledge that they can get from one season to another, or they're going to make different choices, and that is going to create labour shortages in many important industries in P.E.I.

Restore the “best 14 weeks” pilot project and make it permanent. This is the best way to calculate benefits for workers who have sporadic work patterns. Again, for areas of the country with seasonal work, sporadic work patterns are the norm..

Eliminate the classes of workers. This 2012 change perpetuated an unfair assumption about workers in the seasonal industries across the country.

Re-establish the local EI processing centres and the three-party juror system so that unemployed workers get the services they deserve.

Reverse the decision to allow cabinet to make adjustments to EI without the approval of Parliament and implement a wall of protection so that EI funds are for EI purposes only and not used to balance the federal budget.

Probably one of the most important areas you need to consider as a committee is the planned reduction of EI premiums. Yes, the economic sustainability of our country relies on a healthy EI system. It is necessary for our capitalist economy to continue doing that. The money that has been accumulated in the fund recently was on the backs of the seasonal/precarious workers in this country. Instead of recognizing the challenges, with an ineffective job strategy the government of the day targeted seasonal workers.

Our ask: reverse all changes implemented in 2012, stop premium reductions, and create a job strategy that works for all regions in the country so that we reduce our need for the EI system. But to be clear, we will need an EI system in a capitalist economy.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Lori.

Turning to questions, we'll go with six-minute rounds.

Mr. MacKinnon.

[Steven MacKinnon, Liberal, Gatineau, QC]

Merci, monsieur le président.

Thanks to all of you for your excellent presentations today, and thank you, Minister, for your warm welcome to Prince Edward Island.

We'll start with you, Minister, if I may. My home province is Quebec, as it is for Mr. Dusseault. The point of view of our health minister is that the federal government should simply write—pick a number—cheques above and beyond the 3% escalator that is currently planned and not ask any questions. If I understand his position correctly, it would mean that the money may or may not get allocated to health care, or if it is allocated to health care, it may or may not get allocated to a national priority that is identified by the health ministers. Could you state the position of the Province of Prince Edward Island on this?

[Allen F. Roach]

First of all, we'd welcome questions around any increase. Certainly, our biggest challenge here is the fact that we do have an aging population in this province. We have a lot of people who take the opportunity to retire here from other provinces, because of our housing and because it's simply a great place to retire to and to live.

I've been Minister of Finance now for roughly 18 months. During that time, we've had two budgets. As the Minister of Finance, , and I certainly recognize that my biggest challenge is health care. Whatever happens, health care is at the forefront, and as you know well from your position, that's not just in Prince Edward Island. It's right across the country. I don't necessarily concur with a blank cheque. I have no problem accepting a cheque and telling you exactly where it's going.

[Steven MacKinnon, Liberal, Gatineau, QC]

Thank you. That's a very constructive approach.

On taxing carbon pollution, the understanding that we have as parliamentarians—and I'm sure it's yours—is that provinces will either implement a cap-and-trade or taxation solution, and revenues derived from such a scheme would be reinvested as the provinces see fit.

You've identified a couple of areas where that money could be profitably invested. That was in terms of retrofitting buildings, if I understand correctly, or other measures. Have you begun that conversation within government? That would be one question. Another, more generally, would be, do you view a move away from taxing things like income into taxing carbon as an appropriate tax shift for the future?

[Allen F. Roach]

To your first question, we certainly have engaged in that conversation, and I'd like to add that it's a very active conversation around the table.

With respect to your second question, I think that with respect to a carbon tax there will be a lot of pressure on ensuring that those taxes that are collected go back into the economy to support initiatives that will lower carbon. Just in general conversation, we haven't made any firm decisions, but I think we'd certainly be looking at lower-income issues, starting off with homes that require it, to help them along the way. At least at this point, we certainly do not view it as a tax grab.

[Steven MacKinnon, Liberal, Gatineau, QC]

So it would be a—

[The Chair, Liberal, Wayne Easter]

I need to interrupt for a moment.

If anybody else has a response to any of these questions, just raise your hands, and we'll acknowledge you as well.

Go ahead, Steve.