Finance Committee on Feb. 18th, 2016

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

It's a $2.6-billion commitment from—

[Prof. Christopher Ragan]

This is a good question, and I have to claim ignorance.

I know the Canadian government has committed to it. I think it's currently a $100-billion fund, largely from the developed countries to the developing countries, but I do not know the details of how those resources will be spent. I think this is one small part of a very large and very complex international negotiation.

My emphasis here is about the Canadian government and the provincial governments developing a coherent pan-Canadian policy to cost-effectively reduce emissions. I think that's where we need to make sure we take the time and get the details right.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

My next question is for Mr. Louie.

I read on page 14 of your brief that you're talking about the realigning of PPP Canada. I seem to have difficulty understanding the P3 model that you have presented here. Could you elaborate on it and explain it to us further? As I've said, I'm in favour of a P3 program in which there is more private equity or private investment involved, especially when it comes to the initial capital for it, rather than a reliance on our governments, from municipal to federal to provincial, to spend the money on such an expensive expansion as would result from what you are proposing.

Would you like to explain that?

[Raymond Louie]

I'd be happy to, through you, Mr. Chairman.

First, let me say that I've had the opportunity to vote on two P3 projects. One I voted in favour of and one I did not. That is to highlight not that I am open-minded, but rather that not all P3 projects are created equal.

What we're saying at the Federation of Canadian Municipalities is that we need the flexibility to determine at a local level whether or not it makes sense for a P3 project to proceed, not have it be forced through a P3 screening process. We need the flexibility in order to make that local determination.

The point should be made that a P3 funding model is just that: it's a funding model that is a loan that needs to be repaid, and there is a cost premium for a theoretical risk transfer. It doesn't necessarily always play out on the city side, or in fact, the citizen side or the resident side. What we're asking for at the Federation of Canadian Municipalities is more of a model whereby we're receiving funding, a grant, because it's not a question of inability to access capital which is what we're coming up against. Local governments have a AAA credit rating. British Columbia, joint and several liable, can borrow at the best rates possible. The City of Vancouver has a AA+ rating. This is not an issue for most municipalities.

What we're asking for is that rather than delaying projects that are meaningful, that are shovel-ready, shovel-worthy.... They are being delayed as a result of having gone through or needing to go through a P3 screening process. We're saying the risk transference and analysis may bear some value. But it depends on each particular project.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Here is a quick question for Mr. Smillie.

Do we have a shortage, do we have a surplus, or are we balanced with skilled workers in Canada? How balanced is the distribution of skilled workers across Canada? Could you elaborate on that, please?

[Christopher Smillie]

We can't change demographics. What we know is that in the next 15 years there's going to be a tsunami of retirements in construction and in the skilled trades. We cannot change the mode age of my membership, which is 52; that's the most frequent age. What we have to do is get the training file completely right for young people to replace the skills that are going to be walking away from job sites.

We have ups and downs in our economy, in the various regional economies in Canada. At any given time, anywhere in the country we might have a small surplus or a small shortage. But essentially, even among industrial employers in Alberta today, if you talk to the big producers, they're having shutdowns in a sequential way to maintain their $4-billion or $5-billion facilities. There's still a scramble to find people. It's about demographics and it's about the investment in the training system and it's about getting that file right.

[The Chair, Liberal, Wayne Easter]

Thank you. That is very important information.

Just coming out of that discussion, Mr. Parliamentary Secretary, I guess we don't know if there's a $2.5-billion commitment from Canada to a $100-billion international fund to combat climate change in the development world, which comes out of the complicated negotiations in Paris. Could you check on that? I think it'll be likely a question for the minister on Tuesday when he comes. In any event, it would be good if you could check on that.

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

Yes.

[The Chair, Liberal, Wayne Easter]

Go ahead, Mr. Aboultaif.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

The number is $2.6 billion. That's what the Prime Minister has committed to that program.

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

That is over three years.

[The Chair, Liberal, Wayne Easter]

It's over three years. Okay, then we'll get the facts on it, if we can.

Turning to Mr. Sorbara, you have five minutes, sir.

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

Thank you, Mr. Chair.

Most of my comments will be for Mr. Smillie.

Mr. Smillie, I'm from the riding of Vaughan—Woodbridge. I'm proud to have the Carpenters' District Council of Ontario there. I've been to the training facility many times. My father is a retired carpenter and sheet metal worker. An individual called it an oasis. I think I do too. In York Region we're having a little oasis right now because there is a lot of construction activity. There's a lot of infrastructure building taking place. There's a lot of home building taking place. So there is a shortage of carpenters and framers. It would be great to see some of those unfortunately laid-off workers in Alberta come over. There's work. I think we need to do that. I applaud the effort on the mobility measure. I think it's well needed.

As to the demographics, though, we are going to be seeing a big wall of retirements happen in a couple of years.

[Christopher Smillie]

Yes.

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

This has to be a joint effort among business and unions and government and non-profits, because I think we really need to change the mindset of young workers. When you speak to people today, and their parents, how many parents encourage their kids to become welders? My father-in-law's 70 years old and he's still welding in his own business, because there's such a demand still and there are not enough welders coming up.

Are there any measures that your organization is looking at in terms of the apprenticeships, getting more folks going that way?

[Christopher Smillie]

One of the things we've had success with on major projects is the builder or the owner of the asset saying to contractors that, in order to build on a particular site or in order to participate in building the site, they must hire and (a) have a training plan within their RFP documents, and (b) they commit to train when they're working on the project. Shell Canada, for instance, has a number of projects in Alberta which have been successful in attracting first nations workers and women in the skilled trades because Shell requires it of their contractors. They say that in order to do business with them, contractors must do (a), (b), (c), and (d).

If we're going to spend $60 billion on infrastructure to rebuild this country, it might not be a bad thing to take a look at requiring these same sorts of things on federal infrastructure projects, or even shared-funded projects among the feds, the provinces, and municipal governments. Why wouldn't we use these projects to increase participation in apprenticeships and encourage companies to train young people?

At the end of the day, everything we do all day every day is brought to you by the people in the building trades. It's sort of the invisible workforce out there. If you like driving to work, or you like flying on an airplane, or you like taking a train, or you like the heating systems in this building, they're brought to you by people that have these skills and training.

Skilled trades, to me, are the entranceway to entrepreneurship. Being an apprentice welder today means running your own business in 10 years. These are the kinds of things we need to promote.

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

I think what's happened in Ontario specifically is due to the provincial government's ramp-up in infrastructure spending, because there was such a large infrastructure deficit that was left over from prior administrations. Now we're going to step up on the federal side. There is a large need for skilled trades, and we're seeing that, and I think we need to plan accordingly, not just for now, but also for a decade from now, when a lot of individuals will be getting ready to retire. These are very well-paying jobs.

[Christopher Smillie]

I should have been an electrician.

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

They offer great futures and great benefits for their workers.

Mr. Louie, just quickly on FCM, $1 investment in infrastructure is $1.64 benefit to the economy. We obviously ran on a platform for $125 billion of spending over 10 years. I think it's great that we can look to refurbishment of existing stock and assets initially, and also new projects to go ahead. I think that's the best way to proceed. That's my view on the issue. My other colleagues have addressed the other issues with regard to FCM, so I'll leave it at that.

I'm finished, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Thank you.

I'll turn to Ms. Raitt, for five minutes.

[Lisa Raitt, Conservative, Milton, ON]

Mr. Smillie, I'll start with you, please.

As you were speaking, ironically enough, an article came out indicating that it is projected by a report that 84% of oil sands construction jobs are going to disappear in the next four years. At what point does this become a crisis, in your eyes, and in need of serious government intervention?

[Christopher Smillie]

North of 55% of the building trades membership goes to work every day on some sort of energy project, be that oil and gas, pipelines, or nuclear facilities. The energy portfolio, which includes oil sands, is an important part. There's no question that cancelled projects in Alberta will have an impact on the job prospects of our membership.

I will say there is enough work associated with maintaining existing facilities, the upgraders and the extraction facilities, to ensure there isn't a complete decimation in the industry. In fact, the maintenance hours, because of economic conditions over the last five years, have surpassed new construction hours as it is. It's a fair point.

With changes in Canada's economy, we'll have to pivot.

[Lisa Raitt, Conservative, Milton, ON]

All right.

You know I'm from Cape Breton.

[Christopher Smillie]

I didn't know.

[Lisa Raitt, Conservative, Milton, ON]

Everyone should know because I tell them every day. There are two things I'll tell you: I'm from Cape Breton and I have two sons, both things I'm proud of.

I read something today by an economist based in Cape Breton. He's done an analysis of mobility issues, which you were talking about earlier. He said, “Mining the Alberta oil sands is as important to the Cape Breton economy now as mining coal was in the 1980s.” It's an incredible, important safety valve that we had in Cape Breton for so many years to ensure there was some kind of help.

I fully support whatever ideas you bring to the table on labour mobility, because it's what has kept the island going for the last 10 years. I look forward to seeing what else...I'm echoing what Ron said about the same thing. I'm curious to see what you come up with.

I commend you on continuing on that work.