Finance Committee on Oct. 27th, 2016

[Alex Ferguson]

Certainly. We have companies that operate in Canada that are global entities. We have U.S.-based companies. Certainly, we have a lot of Canadian-owned, Canadian-driven companies, as well. So we get those opinions, too.

[Steven MacKinnon, Liberal, Gatineau, QC]

Thank you, Mr. Ferguson. That's very helpful.

Mr. Atkinson, it's fitting that you speak about this today because we've heard about it in virtually every session: the issue of people without jobs and jobs without people. You have a specific prescription with respect to apprenticeships and making sure that we have a workforce in your vital sector for generations to come, so to speak. I just want to give you the opportunity to expand a bit on your EI suggestion so that we understand the interrelationship of that and labour mobility.

[Michael Atkinson]

There have been a number of studies done on the disincentives for mobility, particularly for the unemployed who are looking for work. These studies were done by groups like BuildForce Canada, for example. I know the building trades, as well, have done some research in this area. One of the biggest disincentives is the cost to go outside your own local area to look for work. We're trying to break down those disincentives to make it more accessible for individuals.

In the apprenticeship world, we really would like to see greater engagement by employers, but the vast majority of employers are small businesses. In fact, Statistics Canada says 60% of them have fewer than five employees. There have been a lot of studies done internationally that show that incentivizing the employer sometimes is a much more productive way to go. Hence, we'd like to see an expansion of the apprenticeship job creation tax credit.

[Steven MacKinnon, Liberal, Gatineau, QC]

Thank you very much.

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

I want to thank my colleague for allowing me some time.

My question is for the Canadian Credit Union Association. I'm looking at these measures that were introduced. We want to maintain the financial stability of our housing market; that is a paramount concern to all of us. With these measures, though, there's going to be, I think, at my level, an impact on mortgage and credit availability, on the competitive landscape, and potentially on pricing. That leads me to a question on the bigger picture. How does this impact the competitive landscape for credit unions today versus what may happen tomorrow with these proposed regulations?

[Martha Durdin]

It would certainly add costs to the mortgage market, which would, of course, get downloaded eventually to customers. I think the credit unions, being very small institutions, have less ability to absorb any of the costs and less ability to raise funds on the open markets. Therefore, they would be more impacted. If we are not able to securitize our mortgage loans, that means we would not be able to refinance existing mortgages, and that would impact Canadians.

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

The footprint of a lot of credit unions is obviously in rural regions and smaller towns.

[Martha Durdin]

There are actually about 380 communities in Canada where credit unions are the only bricks and mortar banks, and we are very active in rural communities across the country. So, of course, the impact would be higher in those communities, and those are the communities that I think these rules are not really aimed at in trying to redress any inequities.

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

Thank you.

[The Chair, Liberal, Wayne Easter]

Mr. Albas.

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

Thank you again to all of our witnesses for your testimonies and ideas on how we can grow the economy.

I'd like to start with the credit unions. One of the things that has been discussed here in Ottawa is the potential viability of a post office bank in certain rural areas. Obviously, if a Canada Post bank was established, that would put those rural credit unions at risk, as well, would it not?

[Martha Durdin]

Yes, it would.

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

Okay. I just want to put that out.

With regard to the FATCA provisions, those are imposed by the government. They are something that this committee will see. They're in the budget implementation act. You have given the suggestion that there is already another regime created for the American FATCA regulations that works well because it acknowledges that not all institutions—particularly the small ones—have a high risk.

You're suggesting that the government go with a 2%—

[Martha Durdin]

—threshold.

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

Why do you think the government is implementing this measure in such a top-heavy way? Summerland Credit Union, by the way, is one of the smaller credit unions in my riding and it has 10 people. How does that work?

[Martha Durdin]

Well, I wouldn't speculate on why it's being imposed from a regulatory perspective rather than a risk-based perspective. I think it's very logical to look at it in terms of applying a regulation based on risk, and if an average of three members in smaller credit unions have accounts abroad, then I think there isn't really much risk of tax evasion, and we can apply an approach that keeps that in mind.

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

There is a separate regime that covers basically the same concern that there is some tax evasion—

[Martha Durdin]

Yes. FATCA applies to the U.S. This new measure applies to OECD countries, so to a much larger number of countries.

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

We did hear in Quebec City that Desjardins had to do 300-plus submissions, while some of the other banks had to do only one just because of the very structure of credit unions and how different they are in their structure.

[Martha Durdin]

That's right.

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

I appreciate your sharing a lot of that with us today.

I'd like to go to the Canadian Steel Producers Association.

Mr. Galimberti, I appreciate your testimony today. We've had some discussions about steel rebar and some of the perverse results we end up with because of the system we have now. I'm not going to dig into that.

I did hear something from a representative of one of the national shipbuilding companies who said they'd like to see more involvement of Canadian steel in the production of these great new vessels. Unfortunately there is very little interest from steel companies in participating because of the large investments it would take to be able to provide that.

Have you heard of any of this before?

[Joseph Galimberti]

Those are highly technical projects. It depends on where that ship is being built and the level of plate that's required. I know that Essar Steel Algoma, for instance, in Sault Ste. Marie, was initially supplying plate for some of the shipbuilding in the Maritimes. I believe that one of our members in western Canada, EVRAZ, from Regina, is supplying plate to the western shipbuilding initiative.

It's sort of the—

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

The gentleman mentioned that some of the specialized parts are being taken up, but again, for the larger orders, right now it seems to be that it's mainly U.S. or even in some cases, Chinese steel.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

It's German.

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

Pardon me; I mean German steel.

To me, it's a concern if there is no interest, because one of the things we've heard at this committee is that when government says, “Here is 30 years of business”, why would you not want your membership being part of that?