Finance Committee on Oct. 21st, 2016

[Raj Grewal, Liberal, Brampton East, ON]

Thank you.

[The Chair, Liberal, Wayne Easter]

Raj, sorry, we're going to run into a timeline against the next panel.

I have just one quick question for Mr. Kendall.

You requested $1 million per year for the next five years for Earth Rangers. What are the current funding levels?

[Peter Kendall]

We're currently at $1 million per year.

[The Chair, Liberal, Wayne Easter]

All right.

With that, thank you very much to all the panellists. I'm sorry we had to crunch eight into a panel, but it's a necessity with so many people wanting to appear. Thank you all for your presentations and answering questions.

We'll suspend for 10 minutes while we change panels.

[The Chair, Liberal, Wayne Easter]

We'll reconvene. I think most of the panellists are here.

As I think panellists know, this is the finance committee, and we're doing pre-budget consultations for the 2017 budget.

Let me ask members to introduce themselves quickly so that panellists know where you're from.

Raj.

[Raj Grewal, Liberal, Brampton East, ON]

Mr. Chair, my name is Raj Grewal. I'm the member of Parliament from Brampton East, just 10 minutes north of here, although it will take you an hour today.

[Steven MacKinnon, Liberal, Gatineau, QC]

I'm from a little further afield. I'm Steve MacKinnon, from Gatineau, Quebec.

[The Chair, Liberal, Wayne Easter]

I'm Wayne Easter, from Malpeque, Prince Edward Island. I'm a Liberal.

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

I'm Dan Albas. I'm from the interior of British Columbia, Central Okanagan—Similkameen—Nicola. I'm a Conservative member, and I'm really looking forward to your presentations today.

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

Good morning. My name is Pierre-Luc Dusseault. I'm the member of Parliament for Sherbrooke, which is in the Eastern Townships in Quebec, and I'm very pleased to be in Toronto. I'm part of the NDP caucus in Ottawa.

[The Chair, Liberal, Wayne Easter]

Thank you very much, folks.

Starting with the Canadian Urban Research and Innovation Consortium—a long name—we will hear Ms. Petrunic.

The floor is yours. If we can keep it to five minutes, that would be great.

[Josipa Gordana Petrunic, Executive Director and Chief Executive Officer, Canadian Urban Transit Research and Innovation Consortium]

Thank you very much, Mr. Chair, and thanks to all of the members here.

It is a long name. It's a bit of a misnomer, though, because we do research and innovation projects in automotive, heavy-duty bus, rail, and transit applications.

To take you through the high-level feedback in terms of what we'd like to add to this process, first off this is an innovation consortium, as the name implies. What that means is that a couple of years ago several manufacturers got together and said, we have an innovation problem in this country vis-a-vis automotive, rail, and transit applications; we need de-risk funding for high-risk, high-cost innovation projects. It thus speaks directly to the objectives of the innovation agenda underMinister Navdeep Bains.

The kinds of projects our organization funds range between $1 million and $5 million for lower-level, early-stage innovation projects between industry and academia, but at our highest level our largest project is $45 million. It's the pan-Ontario electric bus demonstration and integration trial, and it relates directly, Mr. Grewal, to your riding, since Brampton Transit is the lead agency there, with Hydro One Brampton.

The areas we work in are zero-emissions propulsion technologies. That means battery electric, hydrogen fuel cell, and renewable natural gas for propulsion. The second area is lightweight materials. That's—

[The Chair, Liberal, Wayne Easter]

Could you slow down a little?

[Josipa Gordana Petrunic]

Using lightweight materials means removing steel to replace it with polymers, bio-fibres, or anything that's going to lighten the weight of the vehicle in order to reduce emissions.

The third area is connected and automated vehicles, whether they be an application to a railcar, a bus, or an automobile. That includes the sensors, signals, and controls.

The fourth area is cybersecurity. Anytime the vehicle plugs into the grid, or anytime the vehicle is communicating to infrastructure, there's a cybersecurity concern.

The fifth area is big data, and using big data essentially to optimize routes, fleet, logistics, and so on.

We work in these areas, and we've come across several problems at the federal level. Problems that I would like to highlight here today because you're in the midst of discussing an innovation agenda.

CUTRIC has been at it for two years, and across the country we have found four clusters of innovation where over 50 projects have arisen in these five pillar areas in the last two years.

Those clusters are the greater Toronto and Hamilton area, the greater Vancouver area, the greater Montreal area, and the greater Winnipeg area. Recently, the greater Edmonton area has cropped up with several projects in our pipeline as well. It's clear that there are clusters of innovation capacity in zero-emissions, connected, lightweight, and digitally enabled vehicle systems.

The challenge is that, right now, there is no federal funding solution. There is nowhere you can go in the federal government to simply streamline or efficiently fund these high-risk, high-cost innovation projects.

I'll give you an example. Of the 50 projects we have in our pipeline right now, the Ontario government has come to the table and funded us at $10 million this year to start off projects, but the federal match is non-existent for several of these projects. I can go to NSERC. I can go to SSHRC. I can go to ASIP. I can go to PTIF or PTIF phase 2. I can go SDTC.

The APC, the automotive partnership Canada is now dead. I could have gone to that up to 2015. There's IRAP. There's Mitacs, and there's the new NRCan energy innovation program funding.

The problem is that, of the 50-some projects we have, a couple of them could be funded by NSERC, a couple by SSHRC, a couple by ASIP. Several projects cannot be funded by any of these portals. All of these portals have different deadlines, timelines, and rules of engagement. It means that it's extremely complex, challenging, and sometimes impossible for a small to mid-size enterprise, a medium-sized supplier, or a large-scale original equipment manufacturer to do a high-cost, high-risk innovation project.

For example, if I want to design a new electric motor or electric powertrain integrated into a battery vehicle powertrain system, it is extremely difficult in Canada to find the right kind of funding to de-risk those high-cost projects. The nature of innovation funding that CUTRIC works on is fundamentally collaborative. That means it's not for all companies. It's not for all kinds of innovation. It's going to be for those kinds of innovation projects where companies cannot do it internally.

Let's say I'm an auto company, or I'm a rail manufacturer like Bombardier, or I'm a bus manufacturer like Nova Bus. There are several technologies in zero-emissions vehicles, lightweight vehicles, or digitally connected vehicles that I cannot do on my own internally. It's too high a cost. I don't have the personnel. I don't have the equipment. I don't have the laboratories. By nature, I need to collaborate, either with universities or other suppliers. Those kinds of collaborative projects, especially if they are cross-provincial, cannot be funded right now at the federal level.

I know it's not apropos these days to say that the former government did good things, but there was a great program called the automotive partnership Canada fund. That program actually launched and probably funded every single company we have in this country that currently works in electric mobility hydrogen fuel cells, advanced automotive, or transit and transportation technologies.

That program died. There has been nothing to replace it. The result is that we've been working with Industry Canada, now ISED, Transport Canada, NRCan, and Infrastructure Canada for two years to figure out how to find a funding solution. I recognize that the minister is working on an innovation agenda. We recognize that right now we have dozens and dozens of projects ready to launch. I don't like to use the phrase “shovel-ready” but we have these projects ready to launch, and yet no federal funding partner.

That is the challenge that I would like to highlight to you today. I will conclude simply with the following statement.

Government does well several things, such as early-stage research. What it has not been able to do well at the federal level, at least in the last 10 years, is collaborative industry-led cross-provincial innovation in high-risk technologies.

The one instance in the recent federal budget of money for innovation of this type went to the Federation of Canadian Municipalities, but I can tell you that the challenge we face together is, when you take innovation dollars and put them in the hands of municipalities, the rules of engagement are zero risk. Municipalities represented by the Federation of Canadian Municipalities cannot accept risk. By definition, all of these projects are high-risk. If we want jobs in Canada to conclude in zero-emission vehicles, lightweight vehicle systems, digitally connected and automated vehicle systems, or data-driven optimization solutions, then we need to create a federal funding solution that helps to de-risk these projects, support industry-led innovation, and ultimately do so in a way that is immediate, because the issue is urgent.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

What was the name of the program that you said was cancelled? I didn't quite catch it. We do have your brief on iPads, but I couldn't find it.

[Josipa Gordana Petrunic]

It won't be in that short brief. The automotive partnership Canada grant was originally funded by NSERC and SSHRC, along with the National Research Council. It was a very good program. Was it perfect? No. There are lessons to be learned, but it was a good program for that time, and it certainly should have been built upon.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

Next is Ms. Ng, with the Good Jobs for All Coalition.

Welcome.

[Dr. Winnie Ng, Co-chair, EI Working Group, Good Jobs for All Coalition]

Thank you.

I am the co-chair of the EI working group, and I also teach at Ryerson University as a full-time Unifor Sam Gindin Chair in Social Justice and Democracy.

Good Jobs for All is a Toronto-based coalition comprising over 30 community, youth, environment, faith, and labour organizations. We came together in 2008, during the global financial crisis, with the key objectives to affirm the values of a truly just society, healthy communities, sustainable economy, strong public services, and decent work for all.

I want to speak to the EI issues, as well as to three good jobs measures.

Welcome to Toronto, where only one in every five unemployed workers in July 2016 was receiving EI benefits. Welcome to Toronto, where the youth unemployment rate is higher than the national average, and where the unemployment rate among indigenous youth is 25%, and among black youth close to 30%. That's according to the study of the Toronto CivicAction alliance. Only 49% of people with disabilities have jobs, when they are only different and not less.

In a study released this past Monday on the health impact of precarious employment on racialized immigrant and refugee women, we found that 75% of racialized refugee and immigrant women are in some sort of precarious employment: part-time, casual on-call, or temp agency work.

Welcome to Toronto, where three-quarters of city families cannot afford licensed day care. That's in a study released by U of T this week as well.

I want to go into the recommendations. On EI benefits improvement, I commend the government for removing the eligibility criterion of 910 hours for new claimants. That's a relief, but our coalition continues to urge the government to lower the hours requirement to 360.

We need substantive and meaningful change to the EI system, not just tinkering with the damage that has been done by the previous government. For the upcoming 2017 budget, we ask the government to expedite the review that was promised in the EI election platform and address the rampant problems in service delivery and in the appeals mechanism, experienced especially by marginalized and vulnerable workers within the city. The election platform was aptly called “Employment Insurance That Strengthens Our Economy and Works for Canadians”. We want to see that coming through as soon as possible.

Moving into the good jobs measures, it's important that we talk about the visions of investing in good jobs for all. Part of underscoring “for all” is saying that when there are good jobs and there is a good, green economy, it shouldn't be only for a few, but we should make sure that all vulnerable, equity-seeking groups have access to employment as well.

Our first recommendation is investing in people for a just transition. Studies have shown, repeatedly, that education pays off. With the Prime Minister's commitment to transition our economy from reliance on fossil fuels to clean, renewable energy, we would like to see the government use the EI training funds to provide workplace training and upgrade workers who are currently working. That could be done quite efficiently through some of the labour training agreements.

Then there is training for those laid-off workers who have been replaced by technology. For example, in an earlier presentation, you heard about the driver-less automobiles. These are going to be replacing a lot of truck drivers. In Fort McMurray, for example, they would replace over 700 truck drivers who hold stable union jobs.

Part of that is using EI money for the transition, to help workers upgrade and deliver their skills, getting them out ahead of the emerging labour market transformations due to climate change, technology, and the low-carbon economy.

The other piece is investing in social and public infrastructure. We need a national—

[The Chair, Liberal, Wayne Easter]

I'm going to have to get you to wrap up in a minute or less, if you can.

[Dr. Winnie Ng]

We need a national child care program that is affordable and universal. It's anticipated that there will be growth of 23% in child population in the next 15 years. We need a program that would assist working parents, whose labour fuels the local economy and helps fight poverty.

Last but not least, we need to focus on the community benefits agreement as a model in securing jobs for those who are vulnerable, high-risk youth in the communities. The Toronto Community Benefits Network, one of our members, is now in negotiations with Metrolinx for framework agreements to bring local jobs and economic development that relates to land use regulations. These are specific targets to make sure that local members of the community can also reap the benefits of the development and can access that employment.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you, Ms. Ng.

Mr. Miller, from the Canadian Cancer Society.

[Gabriel Miller, Vice President, Public Issues, Policy, Cancer Information, Canadian Cancer Society]

Thank you, Mr. Chair, for the opportunity to be here.

Most of the time, I will speak English. However, if you put questions to me in French, I will do my best to answer in that language.

It's my privilege to be here on behalf of the Cancer Society, which is the country's largest national health charity. We have 140,000 volunteers across the country and millions of supporters.

Today I want to summarize the three recommendations in our brief. Most importantly, I want to suggest to you very strongly that there are practical, affordable steps the federal government can take in this budget not only to improve health care but also to get better value for our health care dollars. Good health care and good health are the foundations of everything we value, including our economy. We face no greater health challenge than cancer, our leading cause of death. Building a more productive health care system, one that achieves more value for the money we put into it, will not only relieve suffering and pain; it will save lives, it will save money, and it will benefit every household and business in this country.

Achieving better value for the money we invest will ease the burden on taxpayers in a country where we invest more than $150 billion each year through government in health care, making it by far the largest piece of provincial budgets. Achieving better outcomes in prevention and treatment will reduce the costs of sickness and disability. It will help more Canadians remain active participants in the labour force for longer periods of time. In our submission, we highlight three areas where the federal government can take practical, affordable action. Let me say a couple of words about each.

Concerning tobacco control, despite the progress we've made over the last 30 years, tobacco remains the single largest preventable cause of cancer in Canada. Tobacco use remains responsible for 30,000 deaths a year in this country. Somehow, however, we've allowed federal investments in tobacco control to erode. Today we invest 1¢ of every dollar the federal government collects in tobacco taxes in programs to help people stop smoking. It's time we renew our federal tobacco strategy—it expires next year—and renew it with funding appropriate to what was envisioned when the strategy was first introduced in the early 2000s, an annual investment in excess of $100 million a year.

Second, I want to say a word about health research. While federal health care transfers have increased at 6% a year for more than a decade, federal investments in health research have become stagnant. They have essentially flatlined since 2008. This is madness. Surely as our health challenges grow, and our investments grow with them, we want a smarter, more evidence-based suite of policies to draw on. It's essential that, at the very least, our investments in health research keep pace with our investments in health care.

Finally, I'll say a word about the new national health accord. We strongly support the priority areas the federal government has outlined, especially home care and drug affordability.

In conclusion, I really want to draw your attention to the most important opportunity that the government has this year and a recommendation that I think this committee could make that would have a real impact. We recommend that the government dedicate as much as possible of the $3 billion it has committed to home care to improving palliative care across the country in homes and communities. This investment targeted at palliative care has the power to transform that type of care in this country. Spread too wide, that investment will have its impact diluted. By focusing on palliative care, we can come very close to closing the gap for people, especially at the end of life in the last 30 days. Here in Ontario it's estimated that care in the last 30 days of life is 10 times more expensive to provide in an acute-care hospital than it is to provide at home, and at least two or three times more expensive than it would be in a hospice or a community setting. This is an enormously powerful opportunity to make life better for families, to relieve unnecessary pain and suffering, and to transform one of the most broken parts of our health care system.

I think there are practical, affordable steps we can take together. The Cancer Society is anxious to work with you to realize them.

I want to thank you very much for the opportunity today.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Miller.

I might say, as well, all members have the briefs that were submitted prior to August 5 on their iPads.

For the Canadian Coalition for Green Finance, we have Ms. Becker. Welcome. The floor is yours.

[Lorraine Becker, Executive Director, Canadian Coalition for Green Finance]

Thank you very much, Mr. Chair. I'm Lorraine Becker, the co-founder and executive director for the Canadian Coalition for Green Finance.

Meeting the Paris agreement and economic growth are not mutually exclusive. Canada's transition to a low-carbon economy will require unprecedented investment in our energy, building, and transportation systems. Building low-carbon and climate-resilient infrastructure is how we will both address the climate crisis and ignite the economy.

A green investment bank for Canada is a bold idea for both our economy and for our performance on climate change. A type of national development bank, the OECD defines a green investment bank as “a publicly capitalized entity established specifically to facilitate private investment into domestic low carbon, climate resilient...infrastructure and other green sectors such as water and waste management.”

The model is already being leveraged by more than 13 other governments worldwide to deploy mature low-carbon technologies that result in emission reductions, amplify the impacts of public funds by leveraging them with private investment, and create mature liquid markets for low-carbon investments.

There is no shortage of capital to invest in low-carbon infrastructure. However, low-carbon product developers cannot access that capital because of problems of risk and scale. Green investment banks were designed to solve this mismatch. They de-risk low-carbon investments through mechanisms such as co-investing, insurance, loan loss guarantees, and debt subordination. Green investment banks overcome the problem of scale by aggregating transactions via mechanisms such as warehousing and securitization.

Green investment banks do not invest in early-stage technology but rather deploy mature technologies such as energy efficiency, renewable energy, and public transportation. However, they do play a particular role in the innovation bucket brigade by exerting a pull on the innovation system towards a commercialization of mature technologies.

Green banks typically crowd in three to four dollars of private capital for every public dollar invested. They act on commercial or near-commercial terms, thus avoiding the potential market distortions typically associated with grants and subsidies. Rather than subsidizing low-carbon projects, green banks create markets that stand on their own.

Finally, green banks are profitable and create returns on the public funds used for capitalization and for their private sector partners.

We recommend that the Department of Finance set up a new public financial institution, a crown corporation, based on the green investment bank model, in 2017. It should operate with a high degree of independence, together with a high degree of accountability. The high level of independence would reduce the potential for moral hazard or undue political influence, and ensure that the organization will have the commercial nimbleness it will require to remain efficient and relevant.

Deploying the funding allocated for the low-carbon economy fund, $2 billion, to capitalize a green investment bank for Canada over four years would be an efficient and fiscally responsible method of supporting the provinces and territories as they undertake incremental greenhouse gas emission reductions.

The possibility of redirecting some funds from grants and subsidies to green investment bank capitalization should be explored, as should the idea of capitalizing a green bank through a bond issuance. Through the leverage that a green bank can create, a $2-billion capitalization over four years, for example, would be leveraged up to $10 billion invested in our clean growth economy.

The window for achieving meaningful action on climate change is narrowing so fast that we should capitalize a green investment bank in the 2017 budget. We don't have to wait. We can put people to work right now with technologies that are proven but just need to be implemented at a commercial and investable scale.

We need jobs, emission reductions, and protection from the effects of climate change, and a green bank is a tool, one that will create assets, not deficits, that will help us accomplish all three. Let's invest for our future by investing in a green investment bank in budget 2017. Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Becker.

We turn now to Financial Executives International Canada, Michael Conway, president and CEO.