Finance Committee on Nov. 2nd, 2016

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

Thank you, Minister. As others, I'll try to keep my questions as short as possible.

Does it matter to you personally that there's no plan to balance the budget? To make it simpler, I'll maybe throw out a multiple choice: yes, no, sort of, not really.

[Bill Morneau, Liberal, Toronto Centre, ON]

It's important for me to say again that it's not only for this committee but for Canadians, that it's important to me personally. It's important to our government that we're fiscally responsible. We know—

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

Oh....

[Bill Morneau, Liberal, Toronto Centre, ON]

—that the way to be fiscally responsible includes making investments in our economy, and that's what we're doing. We're going to do it in a way that allows us to keep our very strong balance sheet over time. That's the commitment we've made to Canadians, and we will follow through on it.

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

So you're okay with a $30-billion deficit being sold as “fiscally responsible”?

[Bill Morneau, Liberal, Toronto Centre, ON]

I'd like to bring all of us back to the decision that Canadians made a year ago. On offer was the option of balancing the budget from the two parties represented to my right, or making confident investments in the future.

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

Let me remind you that the choice was a balanced budget or a very small $10-billion deficit, not a $32-billion deficit, Mr. Minister. If we're going to talk facts, let's stick to facts.

[The Chair, Liberal, Wayne Easter]

Mr. Liepert, the minister has the floor.

Go ahead, Minister.

[Bill Morneau, Liberal, Toronto Centre, ON]

We came into office with the mandate to make investments. We also recognize that we've been in a low-growth era. We also recognize the global challenges; the amount of growth in the United States is less than we had expected, presenting significant challenges internationally, but we recognize that we continue to have opportunities to make a real difference for Canadians, and that's what we intend on doing.

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

Okay. I want to get back to your earlier answer to my colleague. In essence, you said it was more important to create jobs than it was to balance the budget. That's fine if that's your view, yet the PBO says not one net new job has been created. How do you align those two statements?

[Bill Morneau, Liberal, Toronto Centre, ON]

I'm pleased that I had the opportunity yesterday to provide Canadians with an update on our economic situation. Really what that did yesterday was allow Canadians to see the rolling-out of our plans. In budget 2016, as you'll remember, we made a significant effort to improve the lives of middle-class Canadians. Those efforts are just starting to fold into the economy.

The Canada child benefit, which is having a big impact on Canadian families, came into the economy on July 20. The infrastructure funding, the $14 billion we committed to in the March budget.... Of course, to do it responsibly you have to actually get to agreements, as we did with universities during the course of the summer and as we did with provinces and territories during the course of the summer. Those agreements have now been signed, and what we're going to see is projects that are getting going.

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

No, I—

[Bill Morneau, Liberal, Toronto Centre, ON]

We expect that the growth in jobs that we projected in budget 2016 will come about, and that's what we're working to do for Canadians.

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

I appreciate the fact that you've acknowledged that not one net new job has been created.

However, I want to get to one other issue, and that is around infrastructure. Some 800-some projects have been approved, yet according to the most recent Bloomberg study, there has been only one project that has broken ground, and that's in my province of Alberta in Whitecourt.

Are there other projects that you're aware of, or is it correct that only one project has actually broken ground out of the infrastructure funding that was announced in the budget?

[Bill Morneau, Liberal, Toronto Centre, ON]

As you can imagine, we're working hard to make sure that we get, in a responsible way, the funding that we've provided in budget 2016 in the same way that we'll move forward with the announcements we talked about yesterday. Our job is to figure out how we can have the biggest positive impact on our economy, how we can help Canadians in the best possible way by creating good jobs, and that means being bold in terms of the investments we want to make and being responsible about how we deliver them.

That's what we're doing. We're working to ensure that every project that we embark upon is done in a responsible way for the biggest possible impact.

[The Chair, Liberal, Wayne Easter]

Thank you both.

We'll have Mr. Grewal, and then, Mr. Caron, you'll have a couple of minutes, and then we'll go back to five minutes for Mr. Ouellette.

Mr. Grewal, the floor is yours.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you, Mr. Chair, and thank you, Minister, for being here with us today.

Let's shift gears a little bit. Let's talk about the foreign direct investment branch you're about to set up.

From a previous career as a corporate lawyer, I noted that law firms made a lot of money publishing books on how to do business in Canada. If you talk to a lot of people down south and you talk to a lot of people in Europe, they have great things to say about our country, but they have a few complaints about doing business in our country. That's what restricts foreign direct investment. Could you comment on the existing barriers to foreign direct investment in Canada and how this new agency will help alleviate some of those?

[Bill Morneau, Liberal, Toronto Centre, ON]

Thank you.

The invest in Canada hub is really intended to ensure that we let the world know that we want their investment if it's investment that will help us to create jobs in our country, if it's investment that will advance our goal of growing our economy. We know that as we do that, we need to deal with the challenges that investors face as well as present the opportunities that they have when they make investments in Canada.

We think that we can do better at presenting those opportunities, and that's what we're going to go about doing. You will have seen in The Economist this week, if you took a look at it, an article that's talking about the Canadian advantage and why investment in Canada makes sense because we have such a strong, educated workforce and the capacity to build off our great diversity.

We can see the advantages, and some of the challenges are also clear. We're going to deal with those. One of the things we did in our approach is we said that we're going to raise the amount of the threshold for investigation into whether a company can invest here from its current level up to a billion dollars. We're doing that in advance of what was previously understood. This provides a facility for people to make investments in Canada.

As I mentioned earlier, we've heard about the real need to be able to move talent here. If a business wants to start up in another country and wants to create 100 jobs in that country, it might need someone from their head office to go there in order to bring their culture and their technology and their know-how into that new place, so we're enabling them to do that in a way that will enable their investments and allow them to create jobs here.

These are really important decisions that can pave the way for expertise transfer into Canada, for better jobs for Canadians, and for a more vibrant economy in the long run.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you, Minister.

Along that line, immigration policy now is going to go hand in hand with economic policy. Your advisory council that you set up recommended an increase to 450,000 per year in immigrants. I agree with the advisory council. I know things don't happen overnight, and these are long-term policy changes. We see a disconnect when we travel the country from coast to coast between the jobs that people are looking for and the jobs that are available. There's a skills disconnect there, and that's why we still have a decent unemployment rate.

Can you speak to how an increase the immigration numbers may negatively or positively affect employment in the country?

[Bill Morneau, Liberal, Toronto Centre, ON]

Sure. I've been working with my advisory council on growth to think about how we ensure Canadians have the skills required to deal with the jobs of the future. We don't even know at this stage what many of them are going to be, so we need to create a constantly changing approach to skills. That is something we are looking at.

We also need to ensure that Canadians have access to information they require in order to choose the right courses to study and get into the right place for future opportunity. We are looking at those two areas as critically important in terms of some of the next things we are going to be talking to Canadians about.

With respect to immigration, we see our ability to bring people into our country as part of our long-term strength. It does create long-term growth. It also creates, as you mentioned, the short-term reality that we need to do very well for those people we invite to our country. That's something we are working on.

What you heard from my advisory council is an ambitious idea of growing the number of immigrants to this country. That ambition is important, and it's an ambition our government shares. We also know that we need to get right what we are doing now. The announcement on November 1 of 300,000 immigrants is really us saying that we want to do a fantastic job for the people we bring here so that we can position ourselves for continued growth down the road.

[The Chair, Liberal, Wayne Easter]

Thank you both.

Mr. Caron, I think you have time for one.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you very much, Mr. Chair.

I have a quick question.

It is said that, in the coffers of this Canada Infrastructure Bank that is about to be created, there will be $1 of public money for, hopefully, $4 of private funds. I think it is clear that people in the private sector, whether pension funds, private equity funds, or anything else, are not going to invest simply out of the goodness of their hearts. They will want a return on their investments.

How can public infrastructure ensure this return for private investors, other than by implementing user fees and tolls, or by increasing existing fees?

[Bill Morneau, Liberal, Toronto Centre, ON]

I would like to begin by explaining that our decision to create an infrastructure bank stems from an observation that it is possible to find people, institutional investors or pension funds that want to invest in infrastructure globally. As you said, it is important for them.

We also understand that it is important for us to identify more activities, infrastructure and possibilities for projects that can generate change. That is our goal. Together, we can find projects that will be meaningful for investors and also for Canadians. In this way, we will be able to roll out more projects more quickly and thereby generate change thanks to other investments.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

It was much longer than my question.

[The Chair, Liberal, Wayne Easter]

Mr. Ouellette, go ahead.