Finance Committee on Oct. 19th, 2016

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

We've had so many groups come, and everyone is competing for the same dollar, so why should it be your project? What kind of relevance do you have to non-sea-ice areas of Canada?

[Glenn Blackwood]

There are remotely operated vehicles that I mentioned, and the maritime studies and naval architecture programs for shipbuilding are unique. It's one of a kind in Canada. Again, most of our graduates come from B.C. and work in B.C.

The Holyrood facility for us is access to the ocean to position Canada in that Arctic type of environment, and also to work with small and medium-sized companies. Most of the companies I mentioned are the big companies providing the infrastructure, but most of the users of the facility to date have been the Kraken Sonars, the eSonars, the small and medium-sized companies that don't have their own research and development capabilities, so—

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

I appreciate that and I appreciate that time is limited..

Mr. MacDonald, I do appreciate the discussion that you brought to the table, but, again, oftentimes when I work with first nation communities, I find every community is drastically different. They have different needs and visions, and new chiefs and councils are elected with different ideas. Rather than the federal government making the decision to reprofile many of these funds, which I totally agree with, if there's a better way to do things in the long term, we should look at that first, if we can, as an order of business.

For the communities asking for the subsidy, wouldn't it make sense to empower them by saying that we will give them either a subsidy or stability if they decide to make a partnership, and then we can come to the table, rather than for the federal government to make that decision on where those communities need to go? Instead they would meet with people, with other companies as well, and find out where they want to go, and then apply to have those same subsidies applied to a project like your own.

[Ron MacDonald]

Thank you very much for the question. That's very much our business model.

I spend most of my time in small aircraft going to a lot of remote communities, and not all the communities have the same capacity to develop these projects. We try to find the ones that have the capacity, and then we do the projects, make sure they can be replicated, and continue to build capacity in the community. These are long-term projects. I agree 100%.

The difficulty right now is that the access to apply for those subsidies does not exist. You need to be able to provide stability over a long time. Given the nature of the federal treasury and the consolidated revenue account, it's going to take a little bit of work to make this a reality.

I'm not saying that every community is ready; some communities will never be ready. Many communities, though, are very ready to move forward but lack the equity to get the projects done. The private sector, and we're not the only ones, is prepared to invest where the business case can be made.

Keep in mind that when a utility like Nalcor—I'm sitting down with a bunch of Newfoundlanders and I'm really pleased that I am—does a capital investment, they do it over a 40- or 45-year economic model. If you're looking at renewables to replace diesel, we're only talking 20-year models. It still means there have to be some funds there for equity participation by the indigenous community.

We're not a charity. We're not going to go in and do a project because it makes us feel good. We go into projects that actually make a difference, that actually give a return for investors. We know that in many of these cases we can get 8%, 10%, 12%, even as high as 15% returns over the long term, but the community needs access to equity. Our proposition is that if you're going to spend the money and burn it up the chimney, give it to the community if they come forward with a viable business plan and a partner from the private sector—so I agree.

[The Chair, Liberal, Wayne Easter]

I'll just cut it there.

Mr. Dusseault is next.

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

Thank you, Mr. Chair. My first question will be to Madame Shortall.

You talked about a national child care strategy. You have also underlined the challenge of workforce shortages and other labour issues. Can you provide this committee with the reason that the two can go together? Tell us why the finance committee should recommend to the government that investing in child care could be one of the solutions to the workforce shortage in Canada. Do you have the numbers to prove that each dollar invested in child care would in fact have a return for the government? What is needed to convince the finance committee to invest in that?

[Mary Shortall]

The $500 million allocated in the last budget towards a child care program was a first step in what really needs to be a broader federal policy framework for working with the provinces and territories and indigenous peoples. We have lots of research over many years of child care advocacy that shows how expensive child care has become. Newfoundland and Labrador, for example, has the second-highest child care costs in the country, Ontario being the highest. This causes women either to stay home or work part time at precarious work. It keeps children out of regulated child care.

It's very important that there be a national child care and national monies invested. The studies, which come mostly from Quebec's child care program, show that an investment of $15 a day actually provides a return on investment, putting $1 or $2 back into the economy, so it can pay for itself in fiscal terms.

In social terms, it also raises families out of poverty. Allowing women to go back to work allows them to make more money, which they reinvest in the economy, because workers spend more money locally in the economy.

Research also shows us that early childhood education allows children to thrive regardless of their economic or social status, because there is a standard of child care there. By working with the provinces and having sustained operational funding, as well as sustained funding for setting up a policy framework, we can make something of high quality that's universally accessible. By building a system that's public or not-for-profit, we can create an equality across the country that doesn't exist right now. It will help raise families out of poverty.

Again, for many families, child care is incredibly expensive. It doesn't help our economy if people tend to stay home or if people can't afford to pay child care.

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

Thank you. I think the case is made, and I hope this committee will hear that, and the government will hear it too.

Mr. MacDonald, I want to thank you for your presentation. You said the government is subsidizing burning diesel in some communities. I haven't heard you speak about the fact that the government recently signed the Paris Agreement and has a target for greenhouse gas emission reduction. Do you think it should be important to make the case that if you want to get to those targets, it would be an option to reduce greenhouse gas emissions, so instead of subsidizing burning diesel in the communities, we should invest in renewable energy?

[Ron MacDonald]

Thank you for your question.

Absolutely. When I gave my earlier presentation, I talked about a number of policy objectives by governments provincially and federally. COP21 is certainly one. As somebody who is now spending a lot of time in the High Arctic, I can tell you that when you speak to people who have lived there on the land all their lives, global warming is real. Its impact in the north is greater than anywhere in the south. There's no question about that. Where they used to have three months of winter roads, they now have seven or eight weeks to get the material in to get their stuff for the winter.

You're absolutely right. I just did some numbers. We think there's probably about 500 megawatts of diesel being burned in these communities. That's the generation capacity. Each megawatt of diesel generates 2,500 tonnes per year of greenhouse gases. If I look at this, it tells me in total what we think the megawatts out there are: it's 25,500,000 tonnes of greenhouse gases that are going into a very pristine, fragile environment in our northern communities. It has way more impact there than it does down here in Halifax, or in Ottawa. I can absolutely tell you that.

The other imperative to try to move away from this is on the environmental front. I will say there's a federal/provincial task force on diesel reduction that's been working for over a year, and there are a number of interprovincial committees, but the time for action is right now. The indigenous communities in Canada are no longer content to have utilities and governments tell them what's going to be okay on their land, including extractive industries or whatever. They now say they have control of it, and we must agree.

In every community I go into, not one wants diesel. I go into Quebec. I go into the Makivik region up in Nunavik. There are 14 diesel-dependent communities on that land base. Every one of them wants to move, but it is a complex move. Dollars are important. That's why the federal government needs to be a coordinator here. The federal government has a constitutional responsibility to Canada's indigenous people.

I think for far too long they've found it too complicated to deal with the provincial or territorial government, the federal government, or a utility. The federal government needs to lead on this. For no other reason than for climate change, they definitely need to lead.

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

Thank you. I have one more.

My question will be for universities. I have a great university in my riding, Sherbrooke University, and it is doing well with the projects that have been developed in the university and in their commercialization afterward.

Would you advocate funding projects and technology more often, to develop fisheries or ocean technology in a university, so that those students who have those ideas and projects can commercialize them and grow a business with them?

[Dr. Robert Greenwood]

Maybe I could speak to that first, and Glenn can jump in if he likes.

The real emphasis at Memorial on public engagement emphasizes that idea in terms of research, teaching, and learning. We have a conventional view in Canada. It's still important that the findings in the lab by the researchers—students or faculty—need to be brought into commercialization. There's an outdated view that it's some kind of linear, systematic, rational process. All the research now is very clear that we live in an ecosystem where there's constant interaction and feedback loops among industry, government, NGOs, and researchers, so building the bridges.... This, again, is what the Jenkins panel emphasized.

Other universities are coming to Memorial to learn about the Marine Institute, to learn about C-CORE. I also run a centre of regional policy and development, the Harris Centre. They're bridges. They're part of the university.

Glenn, Charles, and I are not tenured faculty members who have to publish or perish. We have Ph.D.s. We do a bit of research. We do some of that. Our job, though, when we get up in the morning, is to make those connections. It's connecting from the inside out and the outside in. There was just a Conference Board report released two days ago that highlights the Harris Centre and the network in Canada, where we need more of this knowledge mobilization and brokering role.

For Glenn and Charles, their institutes, centres, or campuses don't get enough funding to operate unless they leverage that very directly applied work. Mr. Albas mentioned that there are only so many dollars to spend, and he's bang on.

The goal is to grow the economy so that we have more dollars. When we have anchor institutions like universities that are the basis of clusters with a focus on bridging, that is when we're going to drive the economy from the resource sector, but with the value added that builds on it. Sherbrooke, I know, is intent on that. At Memorial, because we're the only university in the province and we are a province with significant needs and expectations, necessity is the mother of invention. We're a leader in the world in many ways on this.

I don't know if Glenn wants to add to that quickly.

[Glenn Blackwood]

I think one of the things that we say about Canada—I'm a governor of the Royal Canadian Geographical Society, which does make me an expert on Canada—is that we have the largest coastline in the world. We have the three oceans. What we're doing is complementing what's happening in the University of Victoria. We're partnering with Ocean Networks Canada. We've had strong partnerships in Quebec in Rimouski, and in other universities through the ArcticNet. I sit on the board of Meopar, based at Dalhousie. We just had the announcement of the CFREF, which positions Canada first on the ocean side. It's a partnership between Memorial and Dalhousie, so I spend a lot of time going back and forth to Halifax.

[Dr. Robert Greenwood]

And UPEI.

[Glenn Blackwood]

And UPEI.

When I look at Newfoundland and Labrador, or the east coast of Canada, or Canada in general, I see that we have settled here from the coast and then moved inland. I think awhile ago we forgot about the oceans a little bit. I'm hoping that the oceans come back to the forefront.

In Newfoundland and Labrador, our wealth comes from the sea. When we're a have-not province, it comes from the sea. When we're a have province, it comes from the sea. It just comes in different forms. It was fish for nearly 500 years. It's been oil and gas for the past 20 years, fortunately. We're now taking advantage of expertise in these areas to almost a Norwegian model. If you're good at what you do, you can do it around the world.

Water covers 70% or 72% of the planet. By default, 72% of the resources on the planet are probably under water, so we've been working in that area quite intensively.

[The Chair, Liberal, Wayne Easter]

We'll have to cut it there, Glenn.

Just before we go to you, Francesco, I have a question for Pallium.

On this panel, we are on the theme of economic growth. Are you suggesting that the system you're proposing creates some cost efficiencies? In order to do that, beyond the health care side, do you see some cost efficiencies in the system, and what's the economy to do that?

[Dr. José Pereira]

Absolutely, we see cost efficiencies. We see improvements in quality of care, at the same time saving costs.

We're all well aware of the news in the past few days of the skyrocketing costs in health care systems, and we need to reduce those costs and we need to slow down those high costs. For example, we could educate a nephrologist or a kidney nurse and show that there are other options. For someone who is dying of a very advanced disease or a lot of other diseases, there is not much point in starting up dialysis when it's going to be a futile treatment. By doing those sorts of interventions, we can save significant costs. I can give you example after example across the system of where resources are being used inappropriately.

I'll give an example. In Ontario the cost of caring for someone in an acute care hospital is about $1,100 a day. In a hospice it's about $440 to $450 a day. At home it's about $150 to $200 a day.

We know from studies that approximately 42% of patients with cancer—and we're not even speaking about the non-cancer, because we have some early evidence that the numbers are much higher—in the last two weeks of life visit an emergency department and are admitted into acute care hospitals when it could be avoided.

[The Chair, Liberal, Wayne Easter]

Thank you.

Go ahead, Mr. Sorbara.

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

Thank you, Mr. Chair.

Welcome, everyone, again.

I'll start at Pallium Canada, because it's timely that you're here this morning. I'm one of the three MPs who represent the city of Vaughan in York Region. In my riding we are going to be building a Hospice Vaughan and we had a gala on Saturday night that attracted about 1,100 people. I sat with a gentleman by the name of Dr. Maida, whom you may or may not know. He is a palliative care doctor.

We've had some really great announcements. Land has been set aside by the conservation authority. The Province of Ontario has stepped in and offered to provide 50% of the operating requirement, so that's about $1 million a year, but the kink is that you still have to raise that other 50%, which is another $1 million, and that's not a number to just sneeze at.

We're fully on board, and I am myself trying to support it. I do recognize the cost savings, and this is for a 10-bed or a 10-unit hospice centre and research excellence facility.

Unfortunately, this morning my system is not working, so I haven't been able to look at your brief—I'll have to deal with this IT in a bit—so I have to ask, what is your direct ask? That's because the question I am asked, as a federal MP, is, “Francesco, how and where can you help the Hospice Vaughan, because it saves money for hospitals and saves money for the health care system?” What would be the ask? It is very granular, and it is funded at the provincial level in my case.

Where would you see the role for the federal government in this situation? Could you answer briefly, please?

[Dr. Kathryn Downer, National Director, Pallium Canada]

Thank you very much for that question and for your work in Vaughan in promoting the hospice.

That was my work prior to Pallium Canada. It's a significant engagement with the community to enable that to occur. Having that kind of support in the work that will be undertaken is also part of broader cost savings.

From a Pallium perspective, our work is to develop and to support dissemination of broad-based interprofessional education and to build community capacity in order to provide appropriate care so that the very early goals of care, advanced care planning, embracing of families, and appropriate diagnosis of illness…so that appropriate settings of care can be applied to individuals and their families.

From a federal perspective, the work that we've been able to engage in to this point is to disseminate and build a standardized, consistent framework of education and training across multiple sectors of care and interprofessionally so that everyone is on the same page with the same understanding of providing care. Our work is very much looking to scale this model up from the impact that we've had to this point.

The one example I will give is with the training of paramedics across Nova Scotia, P.E.I., and now in Alberta, and making that change of practice from a dispatch or transfer to a hospital setting to provide much more cost-effective care in the home, and then again have those families supported so that they have a place to call when they have a crisis. As well, if that paramedic organization is affiliated with a long-term care setting that has had the same training, first, those calls will be much fewer, and if they do occur, they're coming from the same place of understanding.

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

Thank you.

For time's sake, I'd like to move on to another topic, and then we can follow up off-line.

Andrea, I've read the C.D. Howe brief that was put together regarding the de minimis threshold. It's obviously a very compelling story, with it currently at $20, and they go through three scenarios of $80, $100, and $200.

Similar to what Dan was saying, I've received a number of emails from local retailers. I'd like to maybe assuage their concerns in terms of doing this, because the merits on an economic efficiency basis just on the government side are obviously quite compelling. Obviously the world has changed in terms of technology and in terms of the Internet, but more importantly, if you're a rural resident versus an urban resident and living closer to the border, your access is different.

Perhaps you could speak to something that we can look at in addition to it being raised from $20 to $80—which I don't think is an unreasonable ask—that would smooth some of the concerns from the retailer side, whether it is subsequent tariff reductions or things such as that, so that we create a win-win situation for everybody instead of possibly a win and small loss situation.

[Andrea Stairs]

Thank you for the question.

From eBay's perspective, we very much want to see Canadian retail thrive. From a strategic business perspective, our focus is very much on developing our domestic marketplace, with Canadian sellers selling to Canadian buyers.

I do think, though, there's a suite of solutions that can accompany an increase in the de minimis threshold, and I think you hit the nail on the head with tariff reductions.

Even the Retail Council's own pre-budget submission raises the idea of pairing an increase in the de minimis threshold with a reduction or a rationalization of tariffs in order to maintain a level playing field for retailers so that we maintain the situation but are not protecting retailers on the backs of Canadian consumers. We're doing it in a much more direct and thoughtful way. We can also have a de minimis threshold above which there is more consistent enforcement, so that everybody knows the rules of the game and you're not subject to it being enforced one day at $80 and another day at $100. That pairing of solutions might make a lot of sense.

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

As a comment around the assessment rate, I can imagine that when the holiday season comes, when Christmastime comes, the assessment rate will change because of the volume of packages coming into the country and being shipped. They may look at $20 or $25 today, but during holiday time they potentially can't look at $25 because of the volume. That would just slow down supply chains across the board.

[Andrea Stairs]

Absolutely. I think the unpredictability is one of the areas that is particularly pernicious to small businesses that are trying to deal with the border, because they don't know exactly when it's going to be enforced.

You're precisely right. We understand that the effective de minimis moves with volume, and actually moves depending on where the volume is coming through. For something coming through Vancouver, the effective threshold might be much higher, because the volume of goods coming in from Asia is much higher there than the volume coming through Toronto.

As regards the Christmas season, if you want to be less likely to be assessed for duties and taxes, buy something at Christmas. The volume goes up, and the ability of the CBSA to stay within budget and assess packages means that their effective threshold goes up.

[The Chair, Liberal, Wayne Easter]

Thank you both.

Mr. Aboultaif is next.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you, Mr. Chair; and thanks to the panellists.

Andrea, I'm going to stay on this topic for the first couple of minutes.

For eBay in Canada, it's a $1-billion industry per year. If you're increasing the threshold from $20 to $80, you're looking at an increase in revenue within operations or in activities. Is that correct?