Finance Committee on Oct. 26th, 2016

[Dave Janzen]

Certainly. We would want to see if a carbon tax were implemented that it would be consistent across the country. As you heard, we have chicken production in all 10 provinces. Even though our footprint offers a very low impact of greenhouse gases, we are a significant user of natural gas, so in answer to your question, this would definitely increase our production costs, especially in the colder climates.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

I have a little time left. I'll let my colleague, Mr. Aboultaif, ask a question.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

I have a couple of quick questions.

Thank you all for your presentations.

For the Federation of Canadian Municipalities, you're proposing $12.6 million, which is a very significant amount, for affordable housing. As a municipality, you are your own authority, so how much are the municipalities doing within their own jurisdictions to put up more of these affordable homes?

[Sylvie Goneau]

Depending on where we are in Canada, because different municipalities are under different provincial jurisdictions, we are well positioned to know the needs in our municipalities as far as housing, social housing, and the occupancy rate. All of those are addressed in the submission we did on a national housing policy.

In some jurisdictions, municipalities do invest in complementarity with the federal government, with the provincial government, and also with local organizations on the ground that are required to invest in infrastructure to be able to house different people

in some vulnerable communities.

The services provided to the public in response to demands for housing, whether it is affordable housing, social housing or housing to address homelessness, are largely a municipal responsibility. Funding from the federal and provincial governments can make a great difference in people's lives and also for the municipalities that would be able to provide all their citizens with affordable, reasonable, safe and accessible housing.

You are aware that 1.5 million Canadians have to spend more than 30% of their income on housing. This is completely unacceptable. Without adequate funding from all levels of government, we will not be able to address and overcome the housing crisis in Canada. I feel that it is one of the essential services that we must provide to our people.

[The Chair, Liberal, Wayne Easter]

Thank you all.

We'll have to end it there. I thank everyone for their presentations and for trying to stick to a tight time frame.

The meeting is suspended for five minutes.

[The Chair, Liberal, Wayne Easter]

Could we come to order?

I think we have all our panellists. Welcome to the second panel. As you know, we're doing pre-budget consultations in advance of the 2017 budget. We're trying to emphasize the theme of economic growth.

In case you weren't here before, panel, we are under a very tight time frame. We have to depart no later than 5:45 for a vote in the House of Commons. I apologize for that in advance. We will hold everyone to a five-minute time frame. You may end up having to sum up pretty quickly.

We're starting with the Canadian Union of Public Employees and Mr. Sanger. Welcome.

[Toby Sanger, Senior Economist, Canadian Union of Public Employees]

Mr. Chair and honourable members, I know you've had many long weeks of hearings, and so on behalf of 640,000 CUPE members who work hard to deliver quality public services in communities all across Canada, I want to thank you for the opportunity to be here.

We submitted a brief in August and I'll summarize our main recommendations.

The average pay of our members is about $42,000 a year, and without quality public services, they could barely survive. Because of continued austerity, CUPE members' base wages will increase by an average of just 1.5% this year and next. Average base increases for all unionized workers have been below 2% every year since 2009. You heard on Monday from the Governor of the Bank of Canada about how expectations for economic growth have declined. Next week we'll hear something similar from the finance minister.

When household spending accounts for about two-thirds of our economy, but workers' wages continue to be repressed, should there be any wonder the economy isn't growing any stronger? We don't need more tax cuts or subsidies for corporations that already have over $700 billion in cash they aren't investing in the economy. We also don't need more trade deals that expand the powers of large, multinational corporations and undermine workers' wages and our sovereignty in different ways. We do need more and better quality jobs with decent wages and benefits in a diversified and sustainable economy, in other words, inclusive growth.

We also need improved public services and public infrastructure supported by fairer taxes and not further privatization. We need to increase workers' wages but we also need to increase the social wage that all Canadians receive through public education, health care, pensions, and other public services. One of our top priorities should be to establish and fund an affordable, quality, public early childhood education and care system with professional child care workers. This could pay for itself in fiscal and economic terms, promote equality, and generate hundreds of thousands of jobs. A new health accord should provide significant increases in funding strictly tied to improvements and expansion of public health care, including a national pharmacare program, expansion of publicly provided continuing care and primary health care, and additional support for mental health.

We support reducing and ultimately eliminating undergraduate and college tuition fees. One-half of the cost of this could be paid by eliminating federal education tax credits and loan-based financial assistance. We also need more support for literacy and essential skills.

The green economy network's proposal to invest billions more annually in public transportation, renewable energy, and energy efficiency could generate one million person-years of good green jobs over the next 10 years. Climate change plans should also include transition measures to ensure that vulnerable workers' industries and communities are assisted.

The federal government has shown leadership on a national minimum carbon price. This could provide enough revenue to pay for these additional investments and offset the hardship for those most affected. We support increased funding for public infrastructure in the government's priority areas, but more should be done to ensure that it achieves the greatest social, economic, and environmental return on investment, and creates decent jobs for all Canadians. Federally funded projects should meet a platform of social and ethical standards, including provision of decent wages, labour rights, pay-equity representative work forces, apprenticeships, and high standards of corporate responsibility including payment of taxes.

Public infrastructure should be publicly financed and operated. The P3 fund and PPP Canada should be eliminated, with funding redirected to public infrastructure projects.

We oppose the advisory council on economic growth's proposal for an infrastructure bank. These would mean much higher costs for private finance and cannibalize our public infrastructure for private profit. The public would ultimately pay these higher costs directly through higher user fees and indirectly through higher payments from and lower revenues to governments. Experts such as Matti Siemiatycki have proposed much better suggestions for a national infrastructure bank that would reduce costs and increase accountability and transparency.

Lastly, we need progressive tax reform. Priorities here include closing regressive tax loopholes, taxing income from capital at the same rate as income from labour, increasing corporate tax rates, cracking down on tax evasion and avoidance, and ensuring that large, multinational digital economy corporations such as Uber and Netflix and others pay their fair share of tax.

Thank you. I very much welcome your questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Sanger. For all present, we have your submissions on the mobile units.

Next, from the Canadian Climate Forum, is Ms. Laframboise.

[Deirdre Laframboise, Executive Director, Canadian Climate Forum]

Thank you, Mr. Chair and honourable members, for this opportunity.

Canadians are facing a climate urgency. Natural disasters are ever-increasing in frequency and intensity. Think of Hurricane William and Fort McMurray as recent examples. There are ever-increasing needs and costs to protect Canadians from these disasters. International commitments on climate are helping drive our low-carbon economy. It is an exciting time and a new way of doing business, but time is not on our side, and global warming waits for no one.

The Canadian Climate Forum is unique in Canada. We are the only national, independent, apolitical agency that addresses all climate issues across all sectors and jurisdictions. We've built upon our distinguished past as the foundation and today focus on the science-to-policy interface to drive best strategies and policies. Our network is deep. It's Canada's leading climate scientists and academics, as well as a wide range of others from sectors of industry, economy, health, sociology, NGOs, national centres of excellence, and so on.

Our approach is to break down silos, form strategic partnerships to enrich expertise and avoid wasteful duplication, and convene across sectors and issues. A recent example of how we operate is provided by our national and international symposium, which was just last week, entitled “Moving Towards Sustainable Energy”. Every sector of the climate spectrum was represented, and our world-class speakers included Minister Catherine McKenna, Minister Jim Carr, Elizabeth May, Chris Ragan, Dominic Barton, Paul Boothe, and Dr. Mark Jaccard.

We also had a blue ribbon panel of clean-tech CEOs, and this came as a request from Mr. Jim Balsillie. These clean-tech CEOs said very clearly to the room that policies are lacking for them to do their business in this country, to scale up, and to keep jobs here.

We've been listening carefully to bureaucrats for the last 10 months and personally have met with more than 70 since January. We hear the consistent message that they are under huge pressure and that they need help with developing climate policy for adaptation and mitigation. Mitigation is new to many, and integration, while it is embraced, is a cultural shift. It's taking time, and it's time that really there isn't much of.

Recently we completed a contract on emergency management with Public Safety Canada. We were asked to develop a national inventory and engagement strategy of stakeholders who are absent from the discussions under way for a national emergency management plan for disasters. Because of the forum's network and expertise we were able to produce a 43-page report in a matter of weeks, identify more than 200 stakeholders whose voices have not been heard to date, and design an engagement strategy that Public Safety can implement immediately, with a range of cost options.

We heard from senior bureaucrats that two other major areas that lack help and knowledge are in the north, particularly engagement on traditional knowledge issues, and first nations and major infrastructure challenges such as thawing permafrost, sea level rise, snow and ice loss, and disruption of traditional ways of life.

Lastly, another main theme that appeared across different ministries concerns data. There is a massive and major lack of standardized data and guidelines in this country, driving everything from flood mapping to snow load guidelines to projections for agriculture practices. How can Canada build back better or build new without the best evidence?

In the private sector—the second part of our request in our submission—there is in this country a major gap in the private sector's voice in public policy related to climate change. Every department we met with told us that they would value an opportunity to have regular dialogues with CEOs in this country. Nobody is doing it, and the forum would like to be the one. We have recommended a business round table for climate resiliency, similar to the National Round Table on the Environment and the Economy, which disappeared, but much broader and more integrated.

We also propose to house ARISE Canada, which is the UNISDR's disaster risk reduction international initiative.

ARISE Canada just launched in October in Toronto, but there is no secretariat. I want to make it clear that the funding we ask for is not to sustain the secretariat; it's to launch it and to get it going. We see that 12 to 24 months would be plenty of time to have private sector funding to have the round table continue. This is a win-win. We have Public Safety Canada and other ministries hosting the world regional platform for disaster risk reduction next March, so you could announce this as a government initiative, and it would be a voice for government to go to for industry input.

To close, there is an urgency for knowledge and climate advice. It's a whole-of-society approach that will involve every sector and multitudes of stakeholders, and the forum is here to serve this government.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much. We have those figures and those monies in the brief, I note.

From the Conference for Advanced Life Underwriting, we have Mr. Blatt.

[Warren Blatt, Chair, Government Relations, Conference for Advanced Life Underwriting]

Thank you, Mr. Chair and committee members, for the opportunity to be here today with you.

I'm Warren Blatt, and in addition to being an independent financial adviser, I'm a member of the CALU board of directors, as well as chair of its government relations committee.

CALU and our sister organization, Advocis, represent approximately 11,000 insurance and financial advisers, who in turn provide financial advice to millions of Canadians. CALU appreciates this opportunity to comment on behalf of our members and their clients on two recommendations contained in its 2017 pre-budget submission.

By way of background, it is readily apparent that the boomer generation has had and will continue to have a significant social and economic impact in Canada. Notably, the first boomers turned 65 years of age in 2011, and over the next 20 years this group will expand the number of Canadians over the age of 65 to 23% of the population.

As Canadians age and retire, two of their greatest concerns are receiving quality health care and cultivating their personal savings. It is therefore critically important that all levels of government focus on encouraging Canadians to save and invest to be more financially self-sufficient during their retirement years. By doing so, this will also reduce reliance on public programs and institutional support.

The current and previous governments have taken important actions in this area, including the reduction in the RRIF minimum, a factor that took effect in 2015, and the recently announced enhancement to the Canada Pension Plan. These modifications will help Canadians retain more of their savings, increase future retirement benefits, and protect them from the longevity risk.

With a significant portion of the Canadian population moving into their retirement years, advancing age will drive a corresponding need for increasing long-term care services. The C.D. Howe Institute recently released a report that estimated that the total cost of long-term care will more than double to $140 billion over the next 20 years. The C.D. Howe report concluded that the provinces will need to shift more of the cost of long-term care to those who can afford to pay. This will be an additional retirement financial burden that most Canadians are not currently planning or prepared for. CALU believes that long-term care insurance can play an important role in helping address this funding gap.

Long-term care insurance provides a cash allowance to individuals who are unable to manage the activities of daily living. Greater ownership of this type of insurance is critical in helping to manage private costs associated with long-term care services.

CALU, therefore, urges the federal government to continue to take a leadership position in preparing Canadians for what lies ahead. This could be achieved by educating Canadians about their financial obligations relating to long-term care services, by working with the provinces to develop a more unified approach to determine who qualifies for subsidized access, and by enacting tax rules that will encourage more Canadians to own individual long-term care insurance.

CALU's second recommendation relates to the impact of an aging population on business owners who have built successful family businesses. Small businesses play an extremely important role in the Canadian economy, making a significant contribution to the employment and economic activity of the country. However, it is estimated that close to 75% of current business owners will sell or exit their businesses in the next 10 years, and many may want to pass on their businesses to family members. Unfortunately, existing tax rules can penalize the owner of incorporated businesses who transfers shares to a corporation controlled by other family members. A similar transaction involving an arm's-length purchaser would not result in the application of these rules. As a result, a business owner may be forced to sell their business outside the family to preserve more after-tax proceeds to fund their retirement income.

CALU supports the call for other interested stakeholders to review and amend these rules to permit the transfer of incorporated small businesses to the next generation of family owners on a more tax-neutral basis. We believe this action will facilitate the successful transfer of family businesses, and in turn protect local jobs generated by these companies.

I thank you for your time and attention. Of course, I'm pleased to answer any questions you may have.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Blatt.

With the Green Budget Coalition, Mr. Van Iterson.

[Andrew Van Iterson, Manager, Green Budget Coalition]

Thank you, Mr. Chairman and honourable committee members. Thank you for inviting the Green Budget Coalition to speak to you today.

The Green Budget Coalition, or GBC, is unique in bringing together the expertise of 17 of Canada's leading environmental organizations, collectively representing over 600,000 Canadians and ranging from Ducks Unlimited to Greenpeace. Our mission is to present an analysis of the most pressing issues regarding environmental sustainability in Canada and to make a consolidated annual set of recommendations to the federal government regarding strategic fiscal and budgetary opportunities.

The GBC appreciated the funding in budget 2016 for many of its priorities, including the low-carbon economy fund, marine protected areas, green infrastructure, first nations communities, and tax benefits for electricity storage technologies. However, much more is still needed to put Canada on a solid path towards environmental sustainability and to play a responsible role in addressing climate change.

I would like to highlight the Green Budget Coalition's key recommendations for budget 2017. They include a suite of measures to achieve Canada's climate change mitigation and adaptation objectives, related nature conservation objectives, and freshwater programs.

In particular, the Green Budget Coalition recommends taking action to implement a well-designed, pan-Canadian carbon price starting at a price level that respects the social cost of carbon with appreciable annual increases for several years and with revenues directed towards compensating low-income and other vulnerable individuals and families, supporting emission reductions, clean economic growth, and adaptation to climate change, including natural solutions.

We welcome the Prime Minister's announcement regarding a carbon price as an important step forward. We have two key concerns, one being that it will be many years before the price level is significant enough to significantly reduce emissions, and the second being that we would have preferred an incremental $10 per tonne increase until 2030 with annual reviews every five years so that we not get stuck in inertia, which seems to be happening in British Columbia.

The GBC also recommends phasing out exploration and development subsidies to the fossil fuel industry, which effectively work against the effectiveness of a carbon price and have strong public support.

We recommend directing 30% of green infrastructure funding to natural infrastructure options such as wetlands and coastal strengthening, and 10% of annual funding from the pan-Canadian framework on clean growth and climate change to help Canada's ecosystems adapt to climate change.

We recommend taking strategic, nationwide, multi-year conservation action in three areas: expanding and better protecting our terrestrial protected area system, expanding measures to conserve unique and ecologically significant wildlife habitat and to ensure ecological connectivity, and fulfilling Canada's commitments to reach and exceed international marine protection targets and to ensure ocean health and sustainable fisheries.

In this area, we're also supportive of the guardians proposal from the indigenous leadership initiative. We also support renewing important freshwater programs that are sunsetting in March 2017, regarding Lake Simcoe and Georgian Bay and investing in the quality, comprehensiveness, and accessibility of freshwater monitoring data.

We've been engaged in a series of meetings over the past month with deputy ministers and finance officials regarding our preliminary recommendations for next year's budget. We will be issuing a final version in mid-November and would welcome the opportunity to meet with you then.

Our final document will include a number of complementary recommendations across issues of climate change mitigation and adaptation, energy, transit, nature conservation, radon mitigation, and measuring ecological goods and services.

We are also supportive of the Assembly of First Nations' proposals for reducing diesel use in indigenous communities and for clean energy funds.

Thank you very much for your time and attention, and I look forward to your questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

With the Macdonald-Laurier Institute, Mr. Cross, senior fellow.

Go ahead.

[Philip Cross, Senior Fellow, Macdonald-Laurier Institute]

Thank you.

I'd like to summarize a paper on macroeconomics that will be released shortly by the Macdonald-Laurier Institute.

Almost all economic analysts agreed on the necessity of adopting extraordinary monitoring and fiscal stimulus at the worst of the recession in 2008 and 2009. However, few at the time imagined such stimulus would be maintained and even augmented nine years after the onset of the crisis.

A growing number of analysts and organizations, including the Bank for International Settlements, are critical of maintaining such stimulative fiscal and monetary policies for such an extended period of time. These reservations centre on whether the negative impacts of stimulative policies on long-term potential growth exceed their short-term benefits, whether the short-term benefits even exist anymore, and whether the risks they cultivate in the global financial system threaten to aggravate the turmoil they were originally designed to redress.

Briefly, there are two types of macroeconomic policy: cyclical policies aimed at quickly bringing the economy out of recession or cooling off an over-heating economy; and structural policies, such as trade to boost long-term growth potential. These two types of policies, cyclical and structural, are often in opposition to each other. The dynamics of growth in the long run are different and often the opposite of the determinants of growth in the short run.

Containing inflation involves slower growth in the short term, which is tolerated because lower inflation boosts the long-term potential of the economy. Policies designed to stimulate the economy in the short term, such as budget deficits, dampen long-term potential growth. Policy-makers accept this trade-off because the harmful social and economic effects of a recession are worth minimizing, even at the cost of somewhat lower growth in the longer term.

Conversely, policies that boost long-term growth potential often dampen growth in the short term, such as moves to increase labour market efficiency or liberalized trade. In the words of Robert Shiller, “We must therefore consider the short run and the long run separately, and the policy responses to the two are very different.”

As William White, former deputy governor of the Bank of Canada and chief economist at the BIS, observed, the long run is not just a series of short runs. Because of the harm to long-term potential growths, counter-cyclical policies should only be implemented for short periods of time.

That policies designed to stimulate the economy are harmful for the long-term trend of growth is demonstrated by the way nobody advocates ultra-low interest rates, quantitative easing, or budget deficits throughout the business cycle. These policies are considered extraordinary medicine only to be administered when the economy is faltering and needs stimulus. They were not meant to address persistently slow growth, which is increasingly what they're being asked to do.

Chronically slow growth reflects structural forces, notably low productivity gains, that can only be addressed by structural reforms. Most macroeconomic stimulus policies inhibit productivity growth. At the worst, they encourage excessive debt growth that results in unstable financial conditions and a prolonged and severe slump in the economy.

The main argument of this brief is that the damage to long-term potential growth from nearly a decade of extraordinary measures has outweighed their usefulness for some time. They've failed to return growth to normal rates and have reduced the long-term potential growth rate of the economy. The constant stimulus applied to most advanced economies may even plunge the global economy back into recession by increasing the financial system's exposure to risk from either asset price bubbles or a destabilizing of international capital flows.

There are reasons to believe that beyond damaging long-term potential growth, monitoring and fiscal policies are exhausting their ability to stimulate growth in the short term. These diminishing returns partly reflect, after years of stimulus, that there's little spending left to shift from the future to the present. As the BIS observed, tomorrow eventually becomes today.

As well, both monetary and fiscal policy are reaching the absolute limits of stimulus, particularly as we approach zero interest rates in North America. There are clear implications of this line of analysis for the “new normal” thesis that the western world is mired in an era of slow growth due to weak demand and the aging of the population.

An alternative view, as laid out by the BIS, is that the protracted slump in growth reflects the dulling impact of monetary and fiscal policies adopted in response to the 2008 crisis and since amplified as the recovery has sputtered. As the years have passed, these economic chickens have come home to roost in the form of structurally lower potential growth. Worse, the possible formation of bubbles in several asset markets raises the possibility of another financial crisis for which policy-makers will have fewer tools than in 2008.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Cross.

We turn to the Chartered Professional Accountants of Canada.

Welcome, Mr. Gallant, an oft-time visitor to P.E.I., I know. Go ahead.

[Gregory Gallant, Board Member, Chartered Professional Accountants of Canada]

Thank you, Mr. Chair, and members of the committee.

I am Greg Gallant, and I am a member of the board of Chartered Professional Accountants of Canada, also known as CPA Canada, and I'm a partner with Grant Thornton in Toronto.

Let me start by stating the obvious. We are in a long period of slow growth in Canada and in most advanced economies. However low it may be, economic growth matters. The pursuit of policies and investments that will spur growth and support social development is the aim of this budget process. It is also CPA Canada's desire to play a role in helping the government achieve growth for the benefit of Canadians.

Before I share a few of our recommendations for budget 2017, let me tell you about our organization.

CPA Canada serves as the national and international voice for Canada's more than 200,000 chartered professional accountants who work at home and abroad. CPAs are in executive, finance, business, and accounting roles in the private and public sectors.

There can be no doubt that the tax system plays a critical role in Canada's economic growth and the prosperity of our citizens. Canada's tax system has become complex, unfair to some, and costly to comply with and administer. Major national organizations, including CPA Canada, as well as the economists, academics, and think tanks have all called for a comprehensive review of Canada's tax system.

Canada has not had a thorough review of its tax system for over 50 years, and consider how much has changed since 1966. It's time for change. That is why CPA Canada applauds this committee for passing a motion to undertake a comprehensive review of the Income Tax Act and the Canadian tax system, and prepare a report.

In our pre-budget submission, we outlined the principles and outcomes necessary to guide this tax review. Canada needs a 21st-century tax system, a simple, predictable, fair, efficient, and transparent tax system. We need low internationally competitive tax rates where everyone pays their fair share, so that all Canadians prosper.

We urge the committee to launch its study at the earliest opportunity, so that your recommendations can be considered for the next federal budget. We look forward to the opportunity to contribute to the committee's work on this review.

Time does not permit us to speak on all policy recommendations in our submission. They include maintaining the importance of strong fiscal management, making responsible investments in infrastructure that focus on long-term sustainable goals, integrating internationally trained professionals in the workforce quickly, strengthening financial literacy, and continually innovating and adapting, so that Canada maintains its enviable quality of life.

I will speak briefly on the last point concerning innovation and climate change adaption.

First, on innovation, we recommend the government implement a patent box, enhance the SR and ED tax credit program, and adopt standardized business reporting. The government's focus on innovation is most welcome for its potential to improve Canada's productivity. Too often the discussions of innovation involves largely around research and development. We think Canada must seriously look at how to boost demand for Canada's innovations, target high-potential firms, focus on human resources, and create a business landscape that encourages firms to invest and commercialize their innovations.

Secondly, regarding climate change, we are encouraged by the government's commitment to transition to a low-carbon economy through its pan-Canadian framework. CPAs are helping businesses to manage that transition and to adapt to climate-related impacts that are so costly to our economy and society. For these reasons, we recommend the government build on its leadership role and develop a national adaptation plan that engages all affected stakeholders, including the private sector.

CPA Canada appreciates this opportunity to provide the accounting profession's views and recommendations on public policy issues that contribute to inclusiveness and sustainable growth.

We welcome your comments and questions.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Gallant.

Turning to video conference presentations, first we have the Forest Products Association of Canada video conference from Vancouver. Mr. Nighbor, the floor is yours.

[Derek Nighbor, Chief Executive Officer, Forest Products Association of Canada]

Thank you, Mr. Chair, and thanks for the flexibility.

Although based in Ottawa I was touring the Port of Vancouver today, and I think if we need a reminder about how critical infrastructure is to the future growth of our economy, I'd encourage anybody who hasn't had the opportunity to tour the port. It really impressed me today on how important critical infrastructure is.

It's a challenging time in Canada's forest sector and it's got me to think about the challenges of the last decade in the sector. I'm reminded about how far we've come and how innovation is in our DNA. Our industry has faced many challenges in the past, but our focus on innovation in products, including market diversification, productivity, and evolving forest management practices, are at our core. We have a track record of innovation and continually adapt our operations and practices to meet the demands of changing global markets and consumer preferences.

Partnerships are at the heart of what we do. The forest products sector has been at the heart of the Canadian economy with 230,000 direct jobs and one million indirect jobs in communities, where increasingly, or I would say in a big way, our mills and our forest families are really the backbone of these local communities. Our sector is one of the largest employers of indigenous people in Canada and we're proud to say that we have 1,400 indigenous-owned forest businesses across the country. We're the third-largest manufacturing industry and we lead the greenest workforce in Canada.

Our industry also has the best environmental reputation in the world, achieved by embracing strong environmental standards and committing to continuous improvement. We were one of the first sectors to launch our climate change challenge and our commitment to deliver 13% of the government's overall target in terms of carbon mitigation, carbon reduction.

From the forest sector, in your presentation you'll see clearly mapped out a few of the things that we believe are important for the committee and Minister Morneau to consider.

Firstly, on investments in science networks, we innovate through collaboration, partnerships, and science networks with government, business, and academia. Long-term and stable investments in private-public partnerships such as FPInnovations, research and development projects, and business clusters will strengthen Canada's innovation capacity. We're recommending that the federal government renew FPInnovations' core funding of $100 million over four years.

FPAC also recommends that the federal government invest $100 million over four years for fundamental and applied science networks related to industry, in addition to $40 million over four years for business clusters. The innovation minister, Navdeep Bains, has said that the government is betting heavily on networks or innovation clusters as part of the innovation agenda, and we believe he is right to do so.

On commercialization and the adoption of clean technology, Canada's forest sector is a global leader in adopting new technology and in embracing clean technology. The government's support for commercialization of clean technologies is vital if our sector is to remain competitive. We are recommending that the government support commercialization of advanced wood products, bioproducts, and clean technology with $200 million over four years through the investments in forest industry transformation program.

I'd like to talk a bit more about that program in the Q and A, if I can, because it's been really successful in the past. That program is set to expire in 2018, but we believe it should be renewed because for every dollar that was invested in IFIT under the previous government, $2.60 was generated in return.

Further, we believe the government should support subsequent replication of technology across the forest products industry under the clean resources initiative, with a $250-million investment over four years to address our sector's unique needs.

Government support can accelerate technology and innovation replication and ensure that Canada's forest sector keeps pace with international competition in the widespread adoption of clean technology. That will also contribute to helping us tackle climate change.

Finally, I'd like to mention the importance of closing gaps in market access. The government could take action on a number of fronts to ensure that businesses in our industry are meeting expansion, innovation, and prosperity goals to better contribute to economic growth, for example, updating building codes and standards to incorporate consideration of the carbon footprint, renewing the expanding market opportunities program, and funding for Canada Wood.

FPAC members are diversifying into higher value niche areas like bioenergy, biochemicals, nanotechnology, and advanced construction materials. More than ever this kind of innovation is fundamental to improving our competitiveness in the global marketplace.

Mr. Chair, in conclusion, strategic investments in the forest sector in budget 2017 to support better investments in science networks and business clusters, commercialization and adoption of clean tech, and closing gaps in market access will contribute to Canada's economic growth and modernize how we innovate as a country.

I'm happy to answer any questions. Thanks again for your time today.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

We do have your brief on our mobiles.

With the Canadian Council of Refugees, we have Loly Rico.

Go ahead, the floor is yours.

[Loly Rico, President, Canadian Council for Refugees]

Thank you for the invitation.

We have 180 organizations in the Canadian Council for Refugees. Among them we have private sponsorship groups, settlement agencies, community groups, and lawyers who work with immigrants and refugees.

Thank you for this invitation because we want to bring the contribution of refugees into the budget, and how they can contribute more. I want to address refugee resettlement.

As you saw, this year Canada received a lot of Syrian refugees. When they resettle in Canada, they come with a debt, their transportation loans. They need to pay for their transportation to come to Canada. Because they cannot afford the expense, the Government of Canada gives them a loan that they need to pay back with interest. That will limit their contribution, because when they arrive they need to start paying that. As a recommendation, the Canadian Council for Refugees calls on the government to wait and absorb all the costs for transportation and expenses for refugees. From April of next year, the Government of Canada is absorbing their medical costs. We are looking to see if they can absorb the transportation loans.

Also, one of the things we have been doing, in terms of refugees making a contribution, is providing settlement services. It's a big investment. We are asking the Government of Canada if they can increase the resources for settlement services for refugees and immigrants, especially for refugees who come with high needs, and if it can provide different levels of support during the time they receive these settlement services.

Other services we are looking at are in relation to refugees when they are in Canada. We need to talk about some limitations. For example, one of the things that we are looking at is family reunification. We are looking into whether the government can commit more resources to family reunification and reunite families in six months, at a minimum. Family reunification is taking too long. Instead of concentrating on their contribution here in Canada, the refugees send some of the remittances to their families.

We are also looking into any refugee, and especially refugee claimants, having access to work permits. They do have access to work permits, but it takes too long, more than four months. In that case, the Canadian Council for Refugees is recommending this year that refugees, even refugee claimants, have immediate access to work permits when they arrive in Canada. That way they can start contributing in Canada.

As you know, we receive a lot of temporary foreign workers. We also have survivors of human trafficking, and we have also persons from other countries whom Canada cannot remove. One of the things we are looking into is whether the Government of Canada can amend their policies in favour of these categories. Having access to permanent residency will make a better contribution to Canadian society.

With that, I want to say thank you. If you have any questions, I'm willing to answer.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Rico.

For people's information, you are on a video conference from Toronto.

With that, we will turn to questions. Try to keep them pretty tight.

Ms. O'Connell, you're up.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you very much, Mr. Chair.

Thank you all for coming.

Unfortunately, I won't have time to ask all of you questions. I'm going to ask a more broad question for both groups, the Green Budget Coalition as well as Canadian Climate Forum. I just returned from a forum in London talking about economic policy and climate change and how to meet all our Paris agreement goals. I hear you in terms of the funds, and the things you'd like to see. One of the things we talked about extensively was the need for a specific policy that is going to be overreaching, that would create private investment in innovation.

I'll give you a quick example. In the U.S., their defence procurement policy has put out a contract asking for someone to design a gun that shoots around a corner, and if there's anyone who can design that, they'll buy a lot of them. That puts a lot of the risk and the innovation in the private sector, with the benefit of the technology with the government in that case, as well as any technology that comes from it that might not be intended.

Funds run out and funds are short term. What are economic policies that would change and move the process forward to have innovation in things that are going to help us meet these goals?

[The Chair, Liberal, Wayne Easter]

Who wants to start?

[Deirdre Laframboise]

It really would be more appropriate on the Green Budget Coalition side.