Evidence of meeting #6 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was funding.
A video is available from Parliament.
4:10 p.m.
Liberal
4:10 p.m.
NDP
Marjolaine Boutin-Sweet NDP Hochelaga, QC
Thank you, Mr. Chair.
Ladies and gentlemen, thank you for being here with us today.
Since I am my party's housing critic, I am going to address my questions to Mr. Morrison. I will save a few minutes at the end for my colleague Pierre Nantel.
We have talked about building social housing. You said that there was a crying need for new social housing. The waiting lists are very long. In Toronto, 90,000 units are needed, and in Montreal, the figure is 25,000. You also talked about the end of agreements between the CMHC and housing associations.
In the riding of Hochelaga alone, the riding I represent, 57 housing projects are affected by the end of these agreements. As you know, this means the loss of rent subsidies. I am told that in Quebec, there will be an average rent increase of $250. This means that overnight, people will have to pay $250 more in rent.
If the funding of the agreements is not renewed, what will happen, in the short and long term, in these households that are usually the poorest?
4:15 p.m.
Executive Director, Canadian Housing and Renewal Association
Ms. Boutin-Sweet, thank you for your question and for your support of our sector. I will reply to you in English.
When operating agreements expire, and as I've said, that has already begun—we've already seen approximately 800 agreements expire just in the past year or so—providers are essentially scratching their heads and figuring what they do now. A lot of work has been undertaken by individual providers, hopefully trying to scale that up to look at some innovative solutions to diversify the operations of social housing units such that they can continue to operate subsidized housing for their tenants.
For example, we're seeing greater use of mixed income units, possibly commercial space. I should add that this ties back to the conversation that was just had regarding the private equity funds and the private market. Some proposals are now starting to be developed, including a proposal that will be going to the gouvernement du Québec to use, or to try to leverage private equity to essentially bring that into the social housing sphere, in other words, to use some of that private money for social infrastructure. Quebec is going to be recommending a proposal in that area.
Innovative solutions are occurring on a more local and grassroots level. More are being looked at as providers are looking into the future and realizing their expiries are coming up, but what we need, and this goes to our third recommendation, is essentially an ability and some capacity to scale up some of those innovative solutions. For example, one of the deliverables from the mandate letters was the concept of an infrastructure bank and could that potentially be another source to diversify the operation of social housing.
Several options are being implemented, being considered, being studied, but essentially we need to scale them up. We need to leverage them so they are not just grassroots initiatives. They can be copied. Their best practices can be shared across the country.
4:15 p.m.
NDP
Marjolaine Boutin-Sweet NDP Hochelaga, QC
Personally, I saw the loss of certain units when the Sudbury agreements ended. I remember that two units were completely lost a year or two ago because people could not continue to pay the bills. Is this the sort of thing you foresee happening?
4:15 p.m.
Executive Director, Canadian Housing and Renewal Association
We have to find new, innovative solutions.
The other option is they close, and when that happens we start seeing evictions. We see increases in homelessness. We see people who really have no other choice, and clearly, that's a last resort. That's the last thing we want to see, but it is happening. Clearly, for this government, for any government that understands the value of housing as an enabler for education, for job creation, etc., that's not a solution we want to see pursued.
4:15 p.m.
NDP
Marjolaine Boutin-Sweet NDP Hochelaga, QC
Thank you, Mr. Morrison.
I will now give the floor to my colleague.
4:15 p.m.
NDP
Pierre Nantel NDP Longueuil—Saint-Hubert, QC
I thank my colleague. I also thank all of the witnesses for their presence here with us today.
It is really fascinating, after an election, to see people from the community come and claim their due following the great election campaign and the fine election promises made by everyone. I thank all of you for being here and contributing to the debate.
Mr. Morrison, as Ms. Boutin-Sweet said, these are very important issues. Even in Longueuil, there was an event this morning attended by some members of my staff. An announcement was made that a Longueuil delegate will be in Geneva on February 24 and 25 for the famous convention where Canada is going to have to defend its position on social housing. That is very important.
I am here especially to speak to Mr. Brault, whom I would like to commend.
I want to congratulate you. If anyone has garnered the unanimous support of all parties, it is you, because of the quality of your management, your enthusiasm and your perseverance. Here is my question.
What will be the concrete impact of the additional funds—and this was, in fact, one of those fine promises—that will be allocated to you, we hope? You had already begun to revamp the structure and model of your organization. Concretely speaking, what will you add to your program?
4:15 p.m.
Director and Chief Executive Officer, Director's Office, Canada Council for the Arts
Like everyone, we are waiting. We will look at the budget carefully to see exactly what is there and what is not. The mandate letter says that the Minister of Canadian Heritage has the mandate to double the budget of the Canada Council for the Arts. We will see under what conditions that will be done.
I have always said that new investments will be made in keeping with our new funding model. So it is clear to us that we must not repeat what has been done in the past ad infinitum. We need new funding models that, for example, would make it possible to welcome the new generation. We need business models that are different from those created in the past. They must be much more collaborative and not really force young artists to constantly keep creating new non-profit structures and organizations. The way art is created, disseminated and presented today is different from how it was done 60 years ago.
Today, we are talking about a $47.7-billion economy. Some 130,000 artists are at the heart of that economy, about 100,000 of whom are directly affected by the Canada Council for the Arts. Those artists have a key role because they develop content. They are currently poorly paid. The digital developments have brought along many pay-related issues. We need much better adapted models in that area.
If new investments are made in the Canada Council for the Arts, we really want to have a positive impact for at least one generation by changing the way to support creators and being much closer to their needs and their ways to create.
4:20 p.m.
Liberal
The Chair Liberal Wayne Easter
We'll have to cut you off there, Pierre. Thank you.
Before I turn to Steven, Jeff, on these 800 agreements that have expired, are you talking co-op housing agreements? What specific agreements are you talking about?
4:20 p.m.
Executive Director, Canadian Housing and Renewal Association
Principally co-op housing, but there is somewhat of a mix. The vast majority of those 800 are co-ops, yes.
4:20 p.m.
Executive Director, Canadian Housing and Renewal Association
Most operating agreements would have been negotiated between CMHC and individual providers in the sixties, seventies, eighties, generally for a long-term commitment. The time is up for these agreements without a renewal of them. Between now and 2040, we're seeing that long-term date of expiration.
4:20 p.m.
Liberal
4:20 p.m.
Conservative
Phil McColeman Conservative Brantford—Brant, ON
I'd like to clarify that point because I worked on this file.
4:20 p.m.
Conservative
Phil McColeman Conservative Brantford—Brant, ON
The reason they're expiring is that the mortgages have been paid off.
February 18th, 2016 / 4:20 p.m.
Liberal
Steven MacKinnon Liberal Gatineau, QC
Thank you, Mr. Chair.
Mr. Nantel may like this because I want to continue in the same vein with a question for Mr. Brault. Like my colleagues around the table, I also want to congratulate you.
This is a meeting of the Standing Committee on Finance. Therefore, we are focusing on the economic contribution, opportunities for growth, and so on. I also want to take this opportunity to commend the Canada Council for the Arts not only for its economic contribution, but also for its cultural contribution.
In your presentation, you eloquently said that the two could go hand in hand. In this digital era, the two go hand in hand more often than not. You talked about the strategic transformation of your organization—which is also our organization because it belongs to all Canadians—and the possibilities for increased investments in the next budget. Can you briefly tell us about the tangible economic and cultural contribution that can have on the sector? Would you like to highlight other potential contributions?
4:20 p.m.
Director and Chief Executive Officer, Director's Office, Canada Council for the Arts
When it comes to economic and cultural contributions, you are absolutely right to say that the two are intrinsically linked.
In this digital era, many people think that things can be created and disseminated very quickly, and that success is easy. However, we see that true success on the Internet involves very solid and convincing quality of production.
We are convinced that the future hinges upon the refinement and excellence of creation, rather than upon the proliferation of supported artists or arts organizations. So it is very important to provide our organizations and artists with means.
Artists need more time. They need more time to create and to achieve truly accomplished levels of production that are internationally competitive. A number of our organizations have drastically reduced their artistic staff, as well as their level of production over the past few years. They are less competitive internationally. For us, it's important to invest in quality and to encourage the sector to adopt the digital world and to adapt to it. The arts sector is far behind in that regard.
Ten years ago, England adopted a strategy so that the arts sector would adopt the digital universe and adapt to it. In Canada, we have sort of missed that opportunity. I think it is very important to have that capacity. It will mean easier discovery and the adoption of new ways of interacting with the public, with Canadians, and changing the methods of international dissemination. So we have a lot of work to do. The opportunities are numerous.
The good news is that, with often insufficient means, Canada has managed to shine on the international stage in terms of arts and culture. We think that the potential is there for us to shine even brighter, and that will lead to more significant economic, social and human benefits.
Thank you.
4:25 p.m.
Liberal
Steven MacKinnon Liberal Gatineau, QC
Thank you, Mr. Brault.
I have a quick second question.
Let's talk about the economic impact an investment in the cultural sector has on young people. Is it reasonable to think that investments in culture can significantly help reduce unemployment among young Canadians or have a positive economic impact on them?
4:25 p.m.
Director and Chief Executive Officer, Director's Office, Canada Council for the Arts
I think so. When we invest in the arts sector, the money flows quickly. In fact, it's a sector where no savings are made and it is impossible to save money. People lack means, so they spend the money quickly. All economic models show that arts production is always done locally and takes place in the local economy. Material is consumed, jobs are created, and so on.
There is often a commitment to creating those jobs. Artists or young people who are involved the arts community are extremely committed and want to do that work. So I believe that an investment in the arts will create jobs directly for artists and, indirectly, for service providers.
I am also thinking of the cultural, book, film and other industries. Those industries will perform well as long as they have original content to present. I think that has significant economic impacts in terms of employment.
4:25 p.m.
Liberal
Steven MacKinnon Liberal Gatineau, QC
I would like to move on from cultural production to production in general and direct my questions to Mr. Lavoie.
We often hear that the track records of our Canadian companies—be they exporters, manufacturers or others—are pretty good and that those companies are fairly healthy. However, investments do not necessarily follow.
I would like you to clarify your organization's position on that. Is it true? Do you think that there has been an investment increase, be it in terms of capital, export capacity or innovation capacity? Are you seeing any improvements in that area? What are your views on the topic?
4:25 p.m.
Director, Business Tax and Innovation, Canadian Manufacturers and Exporters
There were ups and downs in terms of capital investment when the accelerated capital cost allowance measure was implemented by the previous government. Normally, in economics, when the rate of industrial capacity exceeds 80%, we expect to start seeing more significant investments, especially for modernizing plants and increasing their capacity. At this time, the industrial capacity is generally 84%, but there has not been as much investment as there should have been. I should point out that many of our manufacturing companies belong to U.S. firms. Many firms invest that money outside Canada.
Some aerospace companies, for example, have invested in new plants in the United States even though the rates of capacity in Canada have been below 60%. This means that, in many sectors, the environment in Canada does not seem to be very attractive for investments.
A second factor has been identified by the Institute for Competitiveness & Prosperity. That Ontario organization said that, for many foreign companies that receive funding in Canada, the money from global profits is in Canada because of taxation rates that have been lower than elsewhere. So that factor can also play a role.
4:25 p.m.
Liberal
4:30 p.m.
Conservative
Phil McColeman Conservative Brantford—Brant, ON
Chair, I'd like to start out my time by clarifying the record on an exchange I had this morning with Jeannie Baldwin from the Public Service Alliance of Canada. In that discussion I asked a question about sick leave days, public versus private.
I did a bit of research since that time we spoke. There's quite a bit of data out there, but probably the data that is the most reliable would be from the Treasury Board and the labour force survey data. That data show the public service takes off 12.4 days a year versus the private sector at 8.3 days. That's a spread of 4.1 days. The other one, which I think weighs in a little heavier, is the non-partisan research organization, the Macdonald-Laurier Institute, because they have no political allegiances. They said their analysis shows the public service took 10.5 days a year and the private sector 6.4. That's a similar spread.
I want to put that on the record, if you don't mind, Chair, because the answer to the question is that there is no difference between the two. These are two respected bodies that serve us here in Ottawa, and they both say there is a significant spread.
I just wanted to clarify that.