Finance Committee on Feb. 18th, 2016

[The Chair, Liberal, Wayne Easter]

Thank you.

Mr. Champagne.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Thank you, Mr. Chair.

I'll do something different. I'll start with Ms. Ballantyne.

I must say, the minister and I went across the country to listen to a number of groups, and child care was something we heard a lot about, and how we can bring under-represented classes in our communities into the workforce, obviously women with young children. We looked at the Quebec model and how to foster bringing more women with young children into the workforce.

I must say I am quite aware of this issue because I've heard about it in many consultations. I just want to note that your issue is very much something we've heard about.

And I'd like to say the same to Mr. Brault. We've been very proud to host members of the arts, entertainment and cultural world in each of our communities. I think it's important to highlight that you contribute, not just to the creativity, but also to the economic vitality of our communities.

We've heard from many people from all across the country during our consultations.

I will just address my last question, because time is pressing, to Mr. Bain.

What are the best practices in leveraging private capital in PPP projects, and not just in Canada? I've been involved in my previous life in Asia and other places. Share with the committee what best practices are in leveraging private capital in trying to invest in PPP. As you know, we've been looking at different funds that could participate and leverage what we need to do in Canada.

I think Canada is a great place to invest, and I know a number of players around the world, not just in Canada. Let's think big about who would like to come to Canada and invest. Tell me some of the best practices you've seen around the world.

[Mark Bain]

Best practices in the leading jurisdictions, which I say have been the U.K., Australia, and continental Europe, seemed to coalesce around finding the appropriate role for private capital so that there is an appropriately structured transaction that gives a long-term predictable cash flow adjusted for risk, making sure that private capital doesn't just get a free ride but actually takes appropriate risk, and for the incremental cost of private capital ensuring that they bear risk so that the overall cost to the private sector of the net present value of the transaction is superior to government doing things alone.

It is making sure there is aware, interested, invested skin in the game. In terms of figuring out how that works, in Canada our transactions tend to be highly levered so they're minimal risk after the construction period, so 90% debt and 10% equity. In other jurisdictions we find private capital absorbing volume risk, on toll roads for example. That has not been a feature of the Canadian market.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Chair—

[The Chair, Liberal, Wayne Easter]

Thank you. We're out of time. Sorry, François.

With that, we'll have to end this session and bring forward our next witnesses.

I want to thank you all for providing information fairly forthrightly to the committee.

We'll suspend for about three minutes, and then reconvene.

[The Chair, Liberal, Wayne Easter]

Could we come to order again, please.

We'll start our second round of discussions this afternoon on pre-budget consultations for budget 2016.

I will limit the points being made fairly strictly to five minutes.

Our first witness will be Canada's Building Trades Unions.

Mr. Smillie, welcome.

[Christopher Smillie, Senior Advisor, Government Relations and Public Affairs, Canada's Building Trades Unions]

Thank you for having me.

Good evening, members of the committee. You've been at this a while, so congratulations.

Canada's Building Trades Unions represents a half a million members across Canada. Together with our colleagues in the building trades in the United States there are close to three million members in North America. We represent people who go to work every day to build roads, the rails, energy infrastructure, commercial and office buildings, and the homes where people live in Canada.

We are the largest private trainer in Canada. We invest more than a quarter billion dollars every year in training, in apprenticeship programs, in classroom training programs, and most importantly in on-the-job training.

We know jobs. We're paid by our members to find them jobs every week. If the Building Trades doesn't find them a job, we haven't done ours.

Almost all skilled trades workers will at some point in their career travel long distances for work. More than half travel on a regular basis to where the work is.

Jobs are primarily the purview of the private sector, but there is a distinct and valuable role for the federal government. I submit today that the federal government can and should support mobility measures in the Canadian labour market with simple, cost-effective steps that would assist people who could not or would not otherwise go to where the work is by moving skilled trades workers from areas of high unemployment to where employers need them and when they need them, and with relatively minor adjustments to the tax code, or a restructure of the employment insurance benefit system. These would both be inexpensive compared to other government spending on the table today.

A mobility assistance measure would ease unemployment in some hard-hit regions by getting qualified, hard-working Canadians to labour markets where their talents are required by employers.

Even short-term jobs, especially in construction, help the economy and help the country. A mobility measure could encourage people to transition from employment insurance and start working again. A mobility system would help link Canada's numerous regional economies as a bridge from one community to another, even if that community is thousands of kilometres away.

All construction work is temporary. All construction work is transitory. Skilled tradespeople are dispatched wherever the work may be. The lucky ones get travel assistance from either the construction employer or a large asset owner, like Syncrude Canada.

The existing permanent relocation tax credit in the Income Tax Act doesn't make sense for a permanently temporary workforce, or apply to workers our country needs to move the most.

These workers are not interested in, nor should be expected to be, moving their families. We shouldn't want them to uproot and move their homes for a temporary six-week job or even a six-month job.

Canada needs a change incentive policy for in demand occupations when relocating for temporary work. For many years workers have been flocking to Alberta. Now many unemployed Albertans will be seeking work elsewhere in Canada.

Voices across industry are united on this file. The Canadian Construction Association, the Progressive Contractors Association of Canada, and a host of other employer groups join us in this call.

Getting a job is a non-partisan issue. The Government of Canada introducing a mobility assistance policy for in demand or unemployed workers is not a partisan act.

The government helping people temporarily to relocate for work is not a partisan exercise. The government's expense getting them there today means tax revenues tomorrow from the worker, from the capital asset they're building, and from the company doing the work.

The pilot we suggest in our submission starts small with $4 million in forgone tax revenue if changes are made to the ITA. It returns $12 million in income tax paid by individuals alone. Pick a few occupations most in need and choose a few major projects to determine eligibility for a pilot.

Federal budgets are about wise spending choices, and this modest pilot certainly falls into the frugal category when you look at the breadth and depth of some of the spending being proposed today.

Changes in the EI system would be revenue neutral to the government. Giving someone the benefit they were eligible for up front, rather than over time, for travel purposes is free to the Government of Canada. Contributions to EI were made by employers and employees.

This measure could also help Canadians get the training they need in a different regional economy by using the job grant. The job grant is dependent on an employer willing to hire you.

Markets with hot employment markets will require more people to be trained.

There's a natural link here. The Canada job grant, despite the noise over the last couple of years, is the single most important change to the training system in Canada in the last two decades.

So what next? I'm concluding, it's up to you, the finance committee and the Minister of Finance, to help a critical industry and help in demand workers.

In previous reports, HUMA, FINA, they've all recommended that we take a look at mobility measures for skilled trades workers. It doesn't seem that there's a better time to take action than today.

What matters to us is having an available workforce wherever needed for Canada's economy. What matters to us is being able to build those infrastructure projects we're talking about today. We want to have labour market stability and certainty in the marketplace for the bidders of all large projects.

Incidentally, in the United States, Canada's skilled trades workers are inherently less likely than American workers to travel temporarily for work. Funnily enough, the IRS allows deductions for travel to obtain temporary work.

Here's an opportunity to make Canada's workforce more productive and reduce taxes for Canadians everywhere.

I remain available to take your questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Smillie.

Next is Mr. Ragan, with Canada's Ecofiscal Commission.

[Prof. Christopher Ragan, Chair, Canada's Ecofiscal Commission]

Thank you very much.

My name is Chris Ragan. I'm a professor of economics at McGill, but I'm here today as the chair of the Ecofiscal Commission, which is a five- or six-year project designed to help Canadian governments across the country think about how we can improve environmental and economic outcomes at the same time.

I come before you with an unusual budget ask. I will ask for no spending and I will ask for no baubles added to or taken from the tax system. My basic ask is to encourage the Government of Canada to slow down in its thinking about climate policy and to make sure to get the details right.

I'll make four quick points in my five minutes. The first will be the briefest.

The first point is simply on the importance of reducing greenhouse gas emissions. There are many costs associated with greenhouse gas emissions that Canadians feel across the country, whether it is the decline in the economic value of the western forests from the pine beetle, or the decline in the economic value of the mollusc industry in Atlantic Canada, or many things in between. While it is true that Canada represents only about 1.6% of global emissions and this is certainly a global problem, I think Canadians probably would like to be 1.6% of the solution.

The second point is the importance of achieving emissions reductions in the most cost-effective way possible. This is really a central point. After all, on the Ecofiscal Commission, we are first and foremost economists, so we are looking not just at the need to improve the environment but at the need to maintain a prosperous economy as well.

When talking about reducing greenhouse gas emissions in the most cost-effective way, carbon pricing comes to mind. Our report from back in April 2015 showed, with a great deal of modelling province by province in this country, that there is a substantial economic benefit from using carbon pricing rather than using regulatory approaches for reducing greenhouse gas emissions. It's very important that the government take seriously the impact of carbon pricing on the competitiveness of firms and its overall impact on GDP growth, but those things need not be obstacles to a well-designed policy.

My third point is the importance of respecting provincial jurisdictions. First, the environment is a shared jurisdiction between the federal government and provincial governments, but resources and energy are, for the most part, exclusive provincial jurisdictions. I think it's very important, to avoid federal-provincial tensions in this country, that the federal government respect provincial action and provincial jurisdiction.

The second part of that is that when any government starts pricing carbon emissions, there will invariably be revenue generated, and there is a serious political and an economic complication associated with any revenues that are generated within a province and taken back to the centre, which I'll call Ottawa, even though the geographic centre is much closer to Kenora.

I think that if the federal government gets into the game of pricing carbon, you have to think very carefully about how to guarantee that those revenues remain in the provinces from which they are generated.

The fourth point I would make is the importance of getting the details right. I've mentioned a couple of details, but there are many others. There is the fact that Quebec currently has a cap and trade system that is linked to California's and that Ontario will soon be joining it. The presence of California in the cap and trade system between Ontario and Quebec imposes a very interesting constraint on Canadian policy: the idea that the federal government may, as was reported today in the The Globe and Mail, explore the idea of putting on a minimum price, but then thinking about how that minimum price interacts with the existing provincial prices. There are many details.

This is a big file. It's a big issue. I think it is very important that the federal government participate in a very collegial way with the provinces to develop this policy, but I encourage nobody to rush. This is not an argument to delay; this is an argument to get the details right.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

I'll turn to the Canadian Taxpayers Federation.

Mr. Wudrick.

[Aaron Wudrick, Federal Director, Canadian Taxpayers Federation]

Good evening, ladies and gentlemen.

Thank you for the opportunity to appear before the committee this evening.

My name is Aaron Wudrick and I am the federal director of the Canadian Taxpayers Federation, or CTF. For those who aren't familiar with our organization, the CTF is a federally incorporated, not-for-profit citizen's group supported by more than 429,000 people across the country.

The CTF is committed to three key principles: lower taxes, less waste and accountable government.

I have some good news for the committee. Much like Professor Ragan, unlike the vast majority of witnesses you will hear from, I am not going to ask you to spend any money. On the contrary, I'm going to suggest that the best way forward is instead for the government to show restraint.

Our pre-budget brief, an expanded version of which is also available on our federation's website, makes 10 recommendations. On some of those, such as balancing the budget and paying down the public debt, it is fair to say that we do not see eye to eye with the government. We will, of course, continue to advocate regularly on those issues in the public sphere.

Given the time constraints today, I want instead to focus on a few recommendations which I think may have a chance for a broader agreement or at least a better opportunity for productive dialogue.

First is a little discussed issue of the political party donation tax credit. We can all agree that donations to political parties are an act of civic engagement and should be encouraged, but is it really fair that a donation of $200 to the Liberal Party or Conservative Party should give the donor a $150 tax credit, whereas that same $200 donation to the Canadian Cancer Society or Red Cross only results in a $30 tax credit? Is it really fair for political parties to have such a big advantage over the many worthy charitable causes also competing for voluntary donations? We do not think so, which is why we recommend that the political party donation tax credit be reduced to match the same level that charities receive in order to create a more level playing field.

Second, we recommend that the government resist the temptation to implement any of these so-called sugar or fat taxes. The good intentions of those advocating for such taxes is not in question, but the effectiveness of these taxes in meeting their policy objective of improving public health is on much shakier ground. We strongly encourage the government to take a long hard look at some of the unintended and detrimental consequences of such taxes based on the empirical evidence in other jurisdictions before attempting any similar measures here in Canada.

Third, we recommend implementing a truth in budgeting law. Simply put, knowing the cost of promises is an essential part of making informed decisions about their desirability. This is already accepted as a given when it comes to political party platforms during an election, which are always professionally costed. It is time to extend this principle further to include any new proposed legislation in Parliament. Governing is in large part about making choices between competing alternatives and we cannot gloss over the fact that these choices have costs attached to them.

Fourth, we recommend there be a core review of government spending to identify at least the least efficient or wasteful 5% of all program expenditures. The empirical fact is that since 2006, federal program spending has ballooned by 23%, or nearly $50 billion, which far outstrips inflation and population growth. Canadians expect that this money is being spent efficiently and effectively on the programs and services they need and want, and if not, it should be reallocated to areas of higher priority or returned to them in the form of tax relief.

Finally, we recommend controlling public sector pay and spending. There is a natural tension between the interests of public sector unions and the interests of Canadian taxpayers at large. The former group wants to get the best deal for its members. The latter group is the one paying for it and needs confidence they are getting value for their money.

Public sector workers deserve fair treatment, but fair doesn't mean the government should always be overly generous. It is important that the government be as hard-nosed an advocate for taxpayers at the bargaining table as union leaders are for their own membership.

In closing, our basic message to the government is quite straightforward. Please tread carefully. It is natural to be ambitious to help Canadians facing difficult times, but you cannot fix every problem or grant every request for spending. Temper your faith in the power of government to do good with a sober understanding of the limits of that power.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you.

Turning to the Canadian Credit Union Association, we have Ms. Durdin.

[Martha Durdin, President and Chief Executive Officer, Canadian Credit Union Association]

Thank you.

Good evening, Mr. Chair and distinguished members of the committee. Thank you for the opportunity to share with you the perspective of credit unions so that it may receive consideration in the committee's report.

Before I begin, some of you may not yet be familiar with the recent change in the credit union system. Last month the Canadian Credit Union Association, which I represent, replaced Credit Union Central of Canada as the new national voice for credit unions and caisses populaires outside Quebec. The transformation has been part of a collaborative process over a number of years to build a national association and a national voice for the 316 credit unions in Canada.

More than 5.6 million Canadians, or one in five outside Quebec, trust a local credit union for their day-to-day banking activities. Collectively, credit unions employ more than 27,000 Canadians and are the only financial institution in more than 380 communities. They are important pillars of the economy, managing over $186 billion in assets, 7% of the mortgage lending in the market outside Quebec, 11% of the small business market, and 11% of lending to the agricultural centre, and that's higher in some of the western provinces. What's more, our members continue to rank the highest in surveys about service to small businesses.

With the right policy frameworks, credit unions can partner with the public and private sectors to provide investment that will create sustainable growth and economic opportunity. I'll go through individually our three recommendations for the budget to help build those frameworks.

First, implement or enhance the federal loan guarantee programs to support credit union lending. Credit unions believe the federal loan loss guarantees can be a cost-effective approach to provide lending to underserved individuals and priority sectors of the economy. We believe this because we're proud to have demonstrated the success in guarantee-based programs.

The foreign credential recognition pilot program is one example where 36% of new Canadians encounter financial barriers to getting their foreign credentials recognized, yet through this program the federal government, community organizations, and credit unions are helping foreign-trained individuals cover the cost of the credentialling process. As of March 2015, five credit unions have made more than 333 loans, backed by the government, to skilled, new Canadians to help them pursue training to work in their professions when they are in Canada. As a result of this pilot program, 110 loan recipients completed their certification training and are working in their field or in a related field. We recommend the federal government expand this program and make it permanent in budget 2016.

Similarly, because of our local roots, credit unions have experienced supporting social and community infrastructure projects and have a solid relationship with municipalities and community agencies. We recommend the government's proposed infrastructure bank include loan guarantees to allow credit unions to help deliver vital social infrastructure projects.

Secondly, the 2014 budget set out transitional measures to support credit unions that wanted to migrate from a provincially regulated regime to a federal one.

These measures included proposals for extended deposit insurance guarantees, transitional funding support, and extended insurance retailing powers to assist credit unions interested in doing so to move from the provincial sphere to the national sphere.

We recommend that the federal government clarify in the budget the parameters around this proposed transitional measure for federal credit unions. Clarity will further define the legislative framework established in 2012 and promote the government's objective of enhancing domestic competition in the banking and financial services sector.

Finally, implement a new tax measure to help credit unions build capital. Like chartered banks, credit unions are required to hold large amounts of capital, but unlike chartered banks, credit unions rely primarily on retained earnings to meet these requirements. To help credit unions grow their retained earnings and ensure competitive balance in the tax system, we recommend that the federal government implement a new capital growth tax credit for credit unions. This tax measure would help credit unions lend to middle-class Canadians and create local jobs in rural and urban areas, while meeting increased regulatory capital requirements. Our estimate on this measure would result in $34 million in forgone tax revenue, but that would generate an additional $418 million in lending to small business, farmers, and families.

Parliament put in place a similar measure more than 40 years ago. It was good government policy and helped to support credit union capital growth, mirroring the positive impact the capital gains tax deduction has on building bank capital, while respecting that financial co-operatives build capital differently. This measure is set to expire in 2017, and should be replaced by our proposal.

To conclude, Mr. Chair, the Canadian Credit Union Association thanks the committee for the opportunity to participate in the consultation. We look forward to your questions.

[The Chair, Liberal, Wayne Easter]

Thank you.

Turning to Ms. Lanthier, with the Fédération des communautés francophones et acadienne du Canada.

[Sylviane Lanthier, Chair, Fédération des communautés francophones et acadienne du Canada]

Good evening.

Mr. Chair and members of the committee, my name is Sylviane Lanthier and I am the president of the Fédération des communautés francophones et acadienne du Canada, or FCFA. I'd like to thank you for the opportunity to appear before you this evening.

In 9 provinces and 3 territories, 2.6 million citizens have chosen to live in French. The dynamic and diverse francophone communities in every region of the country are the reason Canada can boast of genuine linguistic duality. They embody one of our fundamental Canadian values.

The FCFA is appearing before the committee today as the main voice of those communities and the people who belong to them, people who are determined to live their lives in French. Specifically, the FCFA is here on behalf of 42 organizations and institutions across the country committed to the development of our communities, and among them are 12 provincial and territorial francophone associations.

As the leader of this extensive joint action network, the FCFA is the federal government's primary partner when it comes to discussing official languages issues and support for minority francophone communities. At the helm of this network, the FCFA serves as the voice of hundreds of francophone local groups, cultural and community centres, health networks and settlement service organizations.

The reason for the long introduction is to give you a clear sense of the distinct manner in which we have equipped ourselves with services and places that allow us to lead our lives in French. These services and places exist only because community groups and institutions joined forces to build a network to overcome the isolation of minority communities in the interest of everyone's well-being.

The first piece of good news that we would like to share with you is that, never before, have there been so many people in the country wanting to lead their lives in French and that demand for French-language activities is ever-growing. The second piece of good news is that the extensive network of organizations and institutions I told you about is constantly on the lookout for innovative solutions to better serve French-speaking citizens.

Community building is part of our DNA: as members of minority language communities, we took our future into our own hands and built, on our own, the infrastructure we needed to live our lives in French.

The added value of our community and cultural centres, schools, settlement service groups, employment assistance organizations, community media and local francophone agencies is now undeniable. But today, these institutions have hit a ceiling in terms of what they can do with the resources they have. Many of them receive funding from the Department of Canadian Heritage through the official languages support program, but that funding has neither increased nor even been indexed for the past 11 years. Given how much the cost of living has gone up, that is equivalent to a 30% to 35% decline in the resources available to these organizations. As a result, in some places, such as the Northwest Territories, organizations have had to close their doors owing to a lack of funding, often despite being the only group providing French-language service to their community.

Other more specialized organizations are facing different, but equally concerning, circumstances. Despite the fact that the 2013-18 roadmap for Canada's official languages set out funding for targeted development initiatives, some of the roadmap money has yet to be released, today, in 2016.

Strengthening community capacity is crucial if communities are to continue championing and promoting French, as they are currently doing. We have to be able to modernize and upgrade our infrastructure in order to handle the growing demand for services, our media has to be able to shift to digital platforms, and our organizations and institutions have to be able to meet emerging needs in areas such as francophone immigration.

We know that the committee is hearing from a myriad of groups, all of whom have multiple priorities and high expectations. Since the 2016 budget will be this new government's first, the FCFA, for its part, would like, above all, for the government to send a clear message signalling its intention to take action, through the budget, in support of those who build and contribute to French life all over the country.

We therefore recommend that the federal budget include a statement of the government's intention to, at the very least, index the funding it invests in organizations and institutions throughout francophone and Acadian communities, beginning in the 2017-18 fiscal year.

We also recommend that, in the 2016-17 fiscal year, the Government of Canada release the roadmap funding that has yet to be made available and that the government commit to working with organizations and institutions in francophone and Acadian communities as key partners in identifying the requirements and solutions to strengthen community capacity and infrastructure.

On the eve of the year when we will celebrate the 150th anniversary of Confederation, the government has an opportunity to take decisive, even historic, action to strengthen Canada's linguistic duality. And all it has to do is support those who create places where people can live their lives in French all over the country.

Thank you.

[The Chair, Liberal, Wayne Easter]

Merci, Madame.

We'll turn now to Mr. Louie, the president of the Federation of Canadian Municipalities. The floor is yours.

[Raymond Louie, President, Federation of Canadian Municipalities]

Thank you, Chairman Easter.

Members of the committee, thank you for this opportunity to present to you today.

My name is Raymond Louie. I'm the president of the Federation of Canadian Municipalities. I'm the acting mayor for the City of Vancouver. I've been elected like you for five terms—not all of you for five terms. I understand the work before you, having served six years as chair of the finance committee in the City of Vancouver.

I'm pleased to have this opportunity to discuss what is potentially a transformative federal budget for Canada, and I'll give you a few thoughts of what FCM is thinking.

What stands before us as elected officials is an opportunity to redefine how Canada works. It's an opportunity to work together to ensure that Canada's world-class cities are more livable, that they are competitive, and that our rural and northern communities also thrive.

As president of the FCM, I can tell you that Canada's local governments are ready to rise to the moment.

Mayors and municipal leaders have long understood that solutions to the country's biggest national challenges can be found right here in our neighbourhoods where people live and call home. That's why we welcome this government's $60-billion pledge for transit, social, and green infrastructure. We know these kinds of smart investments pay dividends for our economy and our communities.

Transit maintenance and new construction increase productivity, while reducing the smog and gridlock that plague our cities.

Social infrastructure, like affordable housing, is the cornerstone to ensuring livable neighbourhoods and a better quality of life for Canadians.

Green infrastructure investments, like home energy retrofits, create jobs, grow the economy, and help tackle climate change.

The FCM's 2016 budget submission is a blueprint for you to turn this bold vision into meaningful action. You'll see that we've distributed it to all of you. Hopefully you'll have a chance to review it during my speech and later on, as well. It lays out a comprehensive path to create jobs, spark sustainable growth, and provide a better quality of life for all Canadians.

Our budget submission focuses on priorities that matter most to Canadians in their daily lives. Not only that, it directs the distinct local realities of Canada's diverse communities and the realities that mean the difference between a well-intentioned policy and an effective policy. To do that the FCM and the municipal sector call on the federal government to streamline and improve the transparency of existing application-based infrastructure programs.

There is no shortage of worthy green infrastructure, social infrastructure, and transit projects ready to transform our communities. What we need is the right partner and the right environment. That means increasing the federal contribution to infrastructure projects and expanding and dedicating investments in Canada's rural communities. It means ensuring municipalities have the flexibility to make local, evidence-based decisions they are best positioned to make. It means ensuring both short-term repair and renewal investments that can create jobs immediately and long-term strategic investments that lay the foundation for Canada's future.

These are just some of the policy options put forward by the FCM's nearly 2,000 members and the 32 million Canadians that the FCM represents. Our budget submission touches on everything from building reliable public transit and affordable housing to creating more vibrant communities and a more sustainable future. Municipal leaders envision a thriving Canada of sustainable and livable communities with good jobs, exceptional transit, housing choices, and innovative responses to climate change.

Most importantly, Canadians envision it, too. It's what they voted for last fall.

To get there, municipalities need the tools and flexibility to do what we do best: find solutions and deliver results. All orders of government have to work together in full partnership.

Together let's rise to the moment. Let's show Canadians their leaders are transforming bold ideas into real jobs, growth, and more livable communities for all.

Thank you, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Louie, and thank you all for your presentations.

We will go to the first round of questions for seven minutes each.

Ms. O'Connell.

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

Thank you so much, Mr. Chair.

My first question is for Mr. Louie. It's probably no surprise; I was on council for 10 years in my region, so this is what the witness has been looking for.

One of the biggest reasons that I ran, in fact, was a frustration not necessarily with the funding but with how funding flows to municipalities. During my pre-budget consultations, I met with chairman Roger Anderson who I know is on the executive, so I'm sure you know him well. One of the biggest issues is how funding flows. Over the last couple of days we've heard from witnesses who talked about shovel-worthy projects. My frustration has been that I know from municipalities that we could have these more visionary projects ready, but it's the cost to get them ready for tender that usually makes them ineligible for the former funding model.

Could you speak to that? Does FCM have a position in terms of their preferred flow of this infrastructure money? What is it that municipalities would prefer to ensure that we can actually have shovel-ready projects that are the more visionary ones, such as transit and climate change-type infrastructure, ready to go?

[Raymond Louie]

Thank you for the question.

Clearly, the FCM and our members agree with the government's position that it needs to be not only shovel-ready but shovel-worthy. Smart investments are the underpinning of our submission to the government today. We think investments today will save money tomorrow, because infrastructure that is in need of repair costs much more, potentially $10 to $1, if we wait too long.

The delivery model has been a challenge for us for a number of years. We've made the submission to a previous government as well that an allocation-based model similar to the gas tax is the preferred model for local government and that application-based models, where it's a lottery and we don't have the surety that we will receive a steady stream of funding in order to properly plan for infrastructure, makes program efficiency impossible. Without the clarity of receiving that money, we cannot go through our three-, five-, ten-year infrastructure planning processes at the local government level. As an order of government it is important for us to have that surety, not only just to receive it from the federal government but also to lever the provincial and territorial governments as well, ensuring that we have a complete picture and a collaboration among all the orders of government and private sector in order to have those projects delivered in a timely fashion when they're needed, not based on a program that might become available at any point in time. It's a cattle call, essentially, for everyone rushing to try to attract that federal funding and in turn perhaps not having the best timing of that project being brought forward.

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

Thank you so much. You summarized it really well, and it certainly helps me when I'm advocating, given that background.

My next question is in regard to some of the social infrastructure, housing, that we heard about in the panel before. I don't know how it is for you in your municipality, but I think Ontario is the only province that does not fund social housing.

Does FCM have a position? Again, it's about the flow of funding, because if the federal government provides funding for social housing, Ontario will get less in the sense that, yes, we're all one taxpayer, but we'd be getting less in the sense that we don't have anything from the provincial government. It's the regional municipality, which is my background.

Has FCM looked at how each province will have some differences and how we then make up for it so everyone gets their relatively fair share? Just like in Vancouver, in Toronto and the GTA ,the housing need is enormous. How do we ensure that we can get as much with the same money being distributed?

[Raymond Louie]

What I can say is that our membership has been clear, and it is one of our top priorities. There are three priorities at the FCM: housing, transit, and green infrastructure.

Housing affordability is a challenge for all of our local government members, every single one. What we've put forward as part of our submission is that we are asking out of the, I think, $1.9-billion allocation over the first two years, for $1.3 billion of it being put towards state of good repair for existing infrastructure while providing some flexibility for new projects to come forward to build new housing units as well, maintaining the CMHC funding that is currently in place, and ensuring that these streams of funding aren't lost to other services when we know that our population is aging and that the need will grow over time.

These are two major pieces that we're asking for. The underpinning of that is that we need to have the flexibility to apply it with a local lens. The experience in Ontario is different from certainly in Vancouver, where we have the poorest postal code in Canada, and we have thousands of units that are necessary. Local governments, in my instance in Vancouver, are willing to make $250-million worth of lands available and submit that as part of the package to the federal government and our provincial government, hoping to lever some solution to this very, very challenging problem.

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

Thank you very much.

I have one other question for you, but could you keep the response short, if you have a response, because I do want to ask one other question to another panellist.

[The Chair, Liberal, Wayne Easter]

You only have time for about one, Jennifer.

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

Okay. Then I'll connect with you offline on that question.

I want to ask Mr. Smillie about the building trades. In Ontario, again, and I'm not sure if it's a problem elsewhere, we have issues with respect to some of our trades facilities. They have amazing training, but the problem is that once the members are trained, they don't have apprenticeship spots. Is this a nationwide problem? Is it in specific areas? How do we address it? In addition to that, how do we also encourage more women and first nations into the building trades sector?