Finance Committee on Feb. 19th, 2016

[Lisa Raitt, Conservative, Milton, ON]

Thanks, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Raitt.

Ms. O'Connell.

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

Thank you, Mr. Chair.

I'm probably going to sound like a broken record to my colleagues here, but this is for Mr. Lehman in terms of the application process of budgeting for municipalities and infrastructure. I did over 10 budgets, I think, when you combine municipal and then my regional ones.

You talked about the stable funding, but also, in having these parameters.... We've heard from some witnesses who say not to freely give cash to municipalities to spend however they like. Even under the gas tax program, there are strict parameters. You are audited by EMO and FCM—in Ontario, anyways, it's EMO—to ensure that you meet compliance.

One of the funding models that's missing, or one of the parameters that's missing, which we always found was an issue in Durham, is eligibility for getting projects shovel-ready. The costs to do the engineering for a road or a bridge or to do the environmental assessments are not eligible as a total project cost, but they can be sometimes millions of dollars for a visionary project.

Has the Large Urban Mayors' Caucus taken a position not on moving away from the application process but on expanding the eligibility so that the funds can actually go towards the total cost of the project and not just the shovels in the ground?

[Jeff Lehman]

Thank you very much for that question. It's very insightful.

Yes, we would like to see the design costs, the upfront costs, included.

There's a lot of focus on the word “shovel” because we all think about the construction aspect, but infrastructure, of course, has knock-on benefits. I mean, the goods that we use—the cement, the steel, and everything else—have to be manufactured. There are manufacturing jobs. There are the jobs that spin out of manufacturing jobs. There are also, as you say, the professional, scientific, and technical jobs that are created in engineering and so forth by the eligible architecture and the eligibility of design costs.

When you are investing in infrastructure, there are broad impacts across the economy. The change you suggest, which we do support, would absolutely broaden the economic impact in the infrastructure investment.

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

Thank you.

Following up on that, in regard to affordable housing, Ontario is in a different situation than other provinces are because it is solely municipal funding. I don't know what it is for Barrie, but just on the backlog in terms of investment in the current stock, let alone building new, how do we get around the fact of ensuring that all provinces are treated relatively equally given the fact that there are provincial differences in the amounts of funding?

For example, if the federal government gives funding for affordable housing and Ontario doesn't kick in and it's municipal, how do we get that balance in comparison, say, to other provinces that invest?

[Jeff Lehman]

It's a fair question. I don't have an answer for other provinces. My caucus is Ontario.

I would tell you that the equity can be, I believe, designed through the type of funding that the CMHC provided in the eighties and nineties. The approach that saw the assistance, the per-door approach, is straightforward. Again, if we're focused on results and on evidence-based spending and policy, then on that kind of approach, if you follow it all the way through, regardless of whether you're partnering with the province, a regional authority in Ontario or Alberta, or a municipality, the end result should be the same. I think that's the best answer I can give you.

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

Thank you.

Could you provide us with more details on the per-door approach and the CMHC study? I don't know if it's FCM or who might have it.

[Jeff Lehman]

Absolutely.

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

Thank you.

[The Chair, Liberal, Wayne Easter]

Just provide it to the clerk and she'll give it to the committee members.

Mr. Aboultaif.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you.

I do have a couple of comments to make on Monsieur Dussault's.... I definitely don't agree that poverty is caused by low minimum wages and is a call for an increase in low minimum wages, or the expansion of CPP. Relatively all that is going to end up on the lap of taxpayers or consumers, basically. That's going to cause additional poverty, and at some point some kind of inflation that is unfavourable by economic measures.

Ms. Zatylny, you're calling on the federal government to invest in ports. It's part of the infrastructure plan maybe to keep upgrading, updating, and to be on top of things when it comes to such important transportation and supply management. Have you considered private investment? Has it been attractive enough for private investment to come and invest in such a thing instead of using public money?

[Wendy Zatylny]

In fact, it's not an either-or. Private investment plays a very large part in any port development or port infrastructure projects. As I mentioned earlier, port-financing models for infrastructure projects really are a patchwork quilt. They're almost like P6s. Private-sector financing is an important part of that, as is, however, municipal, provincial, and federal.

[The Chair, Liberal, Wayne Easter]

Mr. Gupta, we haven't forgotten about you. You're still on our monitors here, so if there are questions for you, fire ahead, anyone.

Go ahead, Mr. Aboultaif.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Affordable housing investment calls on the federal government to invest. Again, I'm in favour of private investment in that under the P3s, so rather use the money of the private sector instead of using public money.

I'm not sure if there are any comments from Mr. Lehman on that.

[Jeff Lehman]

In terms of public-private investment, I'm actually a big supporter of that. You will find many supporters among the Large Urban Mayors' Caucus of Ontario. We had some concerns with mandatory P3 screens, but I believe that you're watching municipalities already implement a variety of P3 approaches, and they are relevant not just for the largest projects. This is something that I think is a misconception.

PPP Canada has done excellent work to try to encourage medium-sized cities across the country to be innovative with projects. Regina has built a bridge. We were able to build a bus maintenance facility by bundling it with an operating contract. That has worked very well, so I would actually encourage the use of those tools to continue, to be explored.

[The Chair, Liberal, Wayne Easter]

Okay.

We'll turn to Mr. Ouellette.

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

Thank you very much.

My question is actually for Alexandre Laurin.

I have a few questions about the inequality between households.

Might this have an impact on people's health? Can it make their health worse or better if there is a larger inequality in incomes?

[Alexandre Laurin]

There are indeed social costs if the inequality in incomes is too large.

I would like to comment briefly on that. Yes, income inequality is important, but we have to remember that Canada's government services—so health, education and so on—make up 35% to 40% of the GDP. There are many government services, and they constitute 35% to 40% of our gross domestic product. Most of these services are universal. So there are income inequalities, but the governments in Canada do a pretty good job of combatting that. They manage this not only through income supplement programs, but also through government services.

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

It's all very well to speak of a brain drain to the United States, but sometimes the quality of life is at stake. It is extremely important to consider society. It's more nuanced than simply talking about the economy. People don't think only about their wallet. They think about many other things, such as citizenship and quality of life.

[Alexandre Laurin]

You are absolutely right, and it is the most important nuance to make. Studies were done in the early 2000s on the brain drain. That was the most important reason why many talented people stayed in Canada. It was because they preferred Canada's social climate. It is an important reason and a distinction to be made.

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

My next question is for the president of the Association of Canadian Port Authorities.

Could you talk about the Port of Churchill? It's an arctic port. It is one of the ones that is quite far inland. Could you talk about some of the difficulties it's facing and perhaps some of the potential solutions?

[Wendy Zatylny]

First of all, I have to say that the Port of Churchill is a private port. It is not a port authority. They don't fall under our jurisdiction. However, I suspect they face a lot of the same kinds of challenges that many of the ports do around climate change and being able to find an operating season that allows them to be profitable. My understanding of the port right now is that they have a limited shipping season, simply because of their location and winter. They have, as I've said, similar challenges to the rest of Canada's ports.

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

You mentioned that you operate 18 or 15 ports.

[Wendy Zatylny]

Eighteen port authorities, yes.

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

Why are you no longer operating the Port of Churchill?