Finance Committee on Feb. 19th, 2016

[The Chair, Liberal, Wayne Easter]

If we could, please, we will come to order. This is our eighth meeting pursuant to Standing Order 108(2), the pre-budget consultations for the budget for 2016.

I'd like to thank those witnesses who are here today. I know that some of you are operating on quite short notice, and we would certainly like to thank you for coming here to put forward your views in this pre-budget consultation.

We will try fairly strenuously to limit the presentations to five minutes so that we can have a fair bit of time for questioning.

To start, as individuals, we have with us Robert Boadway, who is a professor in the department of economics at Queen's University, and Carey Bonnell, head of the school of fisheries at the Fisheries and Marine Institute of Memorial University.

Go ahead, please.

[Dr. Robin Boadway, Emeritus Professor, Department of Economics, Queen's University, As an Individual]

Thank you for inviting me, Mr. Chair and members of the committee.

What I'd like to do is make a number of comments on three general areas having to do with tax policy.

The first area is the growing inequality of income and wealth and what measures should complement the announced increase in the top income tax rate and the reduction in the middle tax rate.

To offset the benefit of the middle bracket tax cut for higher income groups, I think it would be wise to increase the taxes in the brackets for numbers three and four, so that—

[The Chair, Liberal, Wayne Easter]

Could I interrupt for a minute. The way it's listed, our list has you together, but there are really two separate presentations, so you will have five minutes and then Carey will have five minutes later.

Go ahead.

[Dr. Robin Boadway]

Thank you.

The first suggestion would be to offset the benefits that the middle tax rate cut affords the higher income groups by increasing the tax rates in the third and fourth brackets.

Next, to help those at the bottom of income distribution and to facilitate a transition to a basic income guarantee, make all non-refundable tax credits refundable. Enhance them, especially the disability tax credit, and claw them back like the GST credit, the child tax credit, and the guaranteed income supplement.

Finally, broaden the tax base to complement the increase in the top tax rate by reducing or eliminating the 50% exemption for capital gains by considering an upper limit on capital gains exemptions for housing. Also, reduce the use of the small business deduction to shelter income by denying its use by professionals and by restricting the hiring of family members

The second area is innovation and business taxes.

I would retain the small business deduction but reinstate a cumulative upper limit to prevent the disincentive for small businesses to grow. I would allow a carry-forward of losses with interest. I would consider encouraging innovation by flow-through share financing of R and D investments so that deductions are forwarded to the owner—the equity holder—and studying the use of patent or intellectual property boxes to encourage the exploitation of innovations in Canada

In the longer term, I would consider major reforms to the corporate tax, such as those that have been proposed in the U.K. and the U.S. and in many tax reform commissions around the world, and in particular, what's called the allowance for corporate equity system that's been introduced in some countries in Europe.

Third, I have some remarks on federal-provincial fiscal arrangements.

To protect both vertical and horizontal balance in the federation and to enhance the integrity of federal-provincial fiscal relations, I would restore formula-based equalization by removing the GDP growth limit. I would escalate the Canada social transfer and the Canada health transfer by the average rate of growth of provincial expenditures on social programs. Also, I would enhance federal and provincial co-operation by seeking federal government membership in the Council of the Federation.

Those are my remarks.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Boadway.

We'll turn to Mr. Bonnell, who is the head of the school of fisheries at the Fisheries and Marine Institute of Memorial University.

Go ahead. The floor is yours.

[Carey Bonnell, Head, School of Fisheries, Fisheries and Marine Institute of Memorial University, As an Individual]

Good afternoon, Mr. Chair, and committee members.

The views that I am going to be expressing today are my own views, grounded in my capacity as industry co-chair of the Canadian seafood value chain roundtable, SVCRT. The roundtable provides leadership to the Canadian seafood industry by providing a forum for value chain participants to identify significant industry impediments, collaborate on solutions and innovation, and influence decision-makers. Its vision is of a prosperous and competitive Canadian seafood industry that is a world leader and a preferred supplier of high value seafood, domestically and internationally.

The Canadian fish and seafood industry is an important producer of high-quality food and a significant contributor to Canada's economy, especially in rural, coastal, and aboriginal communities. Thousands of Canadian families, businesses, employees and their communities depend on this industry to provide for their well-being. In total, more than 80,000 Canadians were employed in the harvesting, production, and seafood processing sector in 2014.

The seafood industry in Canada is very much export oriented with approximately 75% of its production exported to foreign markets annually, making it the highest export-oriented sector of the food manufacturing industry in Canada. In 2014 the industry exported $4.9 billion of high-quality seafood, ranking as the world's eighth largest seafood exporter. Approximately 64% of exports were destined for the United States, followed by China and the European Union at 10% and 9% respectively.

In reviewing the Government of Canada's mandate letters, I am very pleased to see the government's commitment to ocean science and to the protection of our fisheries for future generations, as well as to an economically successful, responsible, and environmentally sustainable aquaculture industry. I'm also encouraged to see that the government will be giving priority to job creation, innovation, food safety, and the support of exports. Overall, the Canadian seafood industry is very proud of the contribution that it's making to the Canadian economy and to global food security. However, the sector is not without its challenges, and there are certainly steps the Government of Canada can take to help expand the global competitiveness of the sector and leverage its economic potential.

Related to this, I would like to outline two key areas for priority investment in this sector, namely around market readiness and social licence.

On the topic of market readiness, the seafood industry in Canada is extremely excited about the expansion of the Government of Canada's efforts around global trade agreements such as CETA, TPP, and Canada-Korea FTA, just to name a few. Our industry is export oriented, and these agreements provide Canadian seafood producers with improved market access opportunities through the reduction and elimination of prohibitive tariff barriers, ideally resulting in increased industry competitiveness. However, significant market readiness barriers exist in the Canadian seafood industry that impact its ability to fully leverage the potential of these trade agreements as well as other global market opportunities. Examples include the need for improved market intelligence to support the market development needs of the industry, the need for investment in innovation and automation in the sector, and a strategy to address the labour retention challenges in the industry given current demographic profiles.

Regarding social licence, there's a need for continued engagement and investment on the subject of science requirements for eco-certification in particular. Issues around traceability and eco-certification are now considered requirements for global market access. They represent a non-tariff trade barrier if Canadian producers cannot meet robust international eco-certification standards such as those of the Marine Stewardship Council and best aquaculture practices for the wild and aquaculture sectors, respectively. Key public investment in fisheries and ocean science, including sustainable aquaculture development, are critical to ensure the industry continues to meet and exceed best practices.

A major challenge for the seafood sector related to addressing its market readiness challenge is the fact that it is largely a sector without a home within the Government of Canada. Let me explain further.

Fisheries and Oceans Canada's mandate is very much focused on its regulatory responsibilities and does not include enabling programs to support the innovation, competitiveness, and overall market development needs of the industry.

By comparison, Agriculture and Agri-Food Canada has a growing forward 2 program that is focused on the innovation, competitiveness, and overall market development needs of the agrifood sector. The program envelope includes about $3 billion in investment by federal, provincial, and territorial governments over a five-year period and Agriculture Canada specifically administers $1 billion in agri-innovation, agri-competitiveness, and agri-marketing support. Seafood sector support under this initiative is limited to the agri-marketing program with a funding envelope of approximately $2.5 million per year.

While the support is highly valued, it falls well short of meeting the broader needs of the sector, given present challenges. Ultimately, seafood is a significant contributor to Canadian food production and should have equitable access to public programming to help improve its overall competitiveness. We're currently living in a period of unprecedented global change that will significantly impact seafood production in the years ahead. For example, the Food and Agriculture Organization of the United Nations currently estimates an additional 40 million tonnes of aquatic food will be required by 2030 just to maintain current per capita consumption. It also estimates that the average price of traded seafood products is expected to grow by 30% by 2022 based on factors such as increasing health awareness, rapidly expanding middle-class societies, and growing disposable income.

In conclusion, the Canadian seafood industry is very well positioned to address these grand challenges by providing high-quality, safe, and healthy sources of protein to the global community. Key strategic areas of investment by the Government of Canada present a tremendous opportunity for Canadian seafood producers to take advantage of globally expanding markets for sustainably and responsibly sourced seafood.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Bonnell.

We'll turn to the Partners for Mental Health, Mr. Manion.

I might remind people, don't go too fast when reading your document. We are doing translation, and they can only translate so fast.

[Dr. Ian Manion, Chair, Child and Youth Advisory Committee, Partners for Mental Health]

Thank you very much, Mr. Chair and committee members, for the opportunity to address this critical issue for Canadians. Michael Kirby, who is the driving force behind this effort, sends his best wishes and his thanks for hearing this issue.

You probably already know the statistics. We talk about suicide among young Canadians. It's the second leading cause of mortality among 15 to 24-year-olds. It accounts for more deaths than all cancers combined—probably three times more than all cancers combined—during this age period. If we're talking about our first nations communities, there are at least four times as many deaths by suicide in many of our first nations and inuit communities across the country.

The cost of one death by suicide in this age group is projected to be $1.5 million over a lifetime in lost productivity. That does not count the incredible cost to families, to communities, to schools, which are dealing with this issue on an ongoing basis, usually for years after an event. The cost of human suffering is actually measurable.

In terms of the number of young people who experience this problem, 8% of young people tell us they have actually tried to kill themselves. About 25% tell us they've had serious recurring thoughts of killing themselves. This is not a very isolated event; it is an event that occurs again and again, day in and day out.

This week I received a call from a community in Ontario where they've had two deaths in the last two weeks. Two more young people hospitalized with severe attempts will add major costs to our health care system for probably years to come.

It's really a symptom of a sector that is not meeting the needs of our children. You have a mental health sector that is probably dysfunctional in many respects. If we're going to be doing something transformational around preventing suicide, probably the biggest impact is to begin with children and youth.

We have an opportunity to make some significant change with you. We are proposing a $100-million national youth suicide prevention fund to take what we already know from evidence, apply it in Canadian contexts, and measure it as applied in 25 communities across Canada to demonstrate how we can have evidenced-informed decision-making for real change in preventing death by suicide, particularly among our young people.

That's a very bold request. The reality is that Canadians are tired of reading in the newspaper every day about one more young person whose life has been lost to suicide. They don't want talk; they want action. Young people deserve something bold, and they need to know that we are thinking about them and their lives at this time.

The proposal itself is built on what we know from evidence particularly in Europe, where they've had a whole community approach to youth suicide prevention, with significant impact. Partners have brought together experts from across Canada in youth suicide prevention to take this evidence, apply it in context, but also add elements that can enhance what we've seen happen in Europe.

The rates of decreased suicide and suicide behaviour in Europe have been estimated at approximately 24%. We have more than 500 young people dying by suicide every year. If we can eliminate 24%, that's 120 lives that have been changed, 120 families who live a different course, 120 schools that don't have to suffer for years and years to come because of the loss of experience.

Among the key components of this plan, one is building capacity in primary care, both in terms of identification but also pathways to care. Another is media and public awareness: what does everyone need to know in terms of identification of those at risk and getting the right level of help at the right time. Another is community training so that teachers, family doctors, community members, peers know what to look for, but also know how to bridge young people to the appropriate service at the right time. Another is targeted supports for those young people who are at risk because of their mental health status, homeless status, or their living arrangement. We know that in rural Canada, for example, the rates of suicide are higher. We can discuss at length why that might be.

Finally, a key component added in the Canadian model is meaningful youth engagement. There's ample evidence to suggest that meaningfully engaged youth are healthier physically and emotionally, engage in less risk-taking behaviour, and are less likely to think about and act on their suicidal thoughts.

We know the timing is right, now, because philanthropy has told us that they are prepared to participate in this. We've had several national organizations that have looked at this proposal and think it is the way to go because it is respectful of the reality of individual communities.

We know that provincial governments.... Michael Kirby has spoken to every provincial government, many of which are poised now to participate in this. The model is one that includes leveraging, whereby the fund would be matched by provincial funds, philanthropy, and business. Many of those partnerships have already been established. Letters of support have come from across Canada.

In closing, I want to say that I've been a psychologist for 30 years working in mental health. I get mad when one more young person dies by suicide, because we should have been able to identify that they were suffering in silence. We should have been able to do something for them before they chose to take their life as the only solution to their problems.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Manion. It's an extremely important issue.

Next is Mr. Meslin, with the Council of Canadian Academies.

[Prof. Eric Meslin, President & CEO, Council of Canadian Academies]

Thank you very much, Mr. Chair, and members of the committee, for the invitation.

The Council of Canadian Academies and our member academies—the Royal Society of Canada, the Canadian Academy of Engineering, and the Canadian Academy of Health Sciences—are part of Canada's science advice community. For our part, the CCA has been helping governments understand scientifically complex issues and their policy implications for more than 10 years. We provide highly credible and authoritative answers to questions asked by the federal government and other groups. We bring together the best minds from Canada and around the world, using expert panels to evaluate what is known and what is not known. These panels are multidisciplinary and multi-sectoral and can be convened on virtually any topic.

You have a copy of my testimony already, so I'll just remind you of a couple of brief points.

First, over the past decade it has been noted that science advice has been underutilized in government decision-making in Canada. We fully support the renewed commitment by the Government of Canada to put evidence squarely at the centre of decision-making and we welcome, for example, the decision to establish a chief science officer. Continued support for this type of leadership and for similar opportunities can only serve to enhance the entire science advice community, improving the integration of evidence into decision-making and strengthening public policy.

The government's policy priorities cross-cut multiple departments. Arguably, every one of them would benefit from evidence, evidence about the science, evidence about best practices, and lessons from other countries. Indeed, you've already heard from witnesses this week, and about two minutes ago, from my colleague about a number of complex issues of central importance to Canada's future: innovation, mental health, green infrastructure. We believe, Mr. Chair, that additional investment in science advice would aid in developing policy on each one of these issues and many others.

Second, as to our place in this system, the Government of Canada established the CCA in 2005 with a commitment of $30 million over 10 years. This commitment was renewed in 2015 for a further five years at the same funding level. With this modest investment, however, the CCA has completed 29 separate assessments for federal agencies on a diverse range of topics of importance to Canadians, from STEM employment to policing. We've also leveraged outside funding to undertake studies on issues such as climate change technology and marine shipping.

As we mentioned in our submitted testimony, our studies have influenced the development of a number of policies and programs by the government and others. With innovation very much on everyone's mind, we believe that innovation in science advice is every bit as important as innovation in other aspects of our economy. A good example is the way we incorporated traditional knowledge into a report on aboriginal food security in the north.

We also recognize that using evidence to inform policy must, after all, fit into the larger political reality. Some policy questions should be responded to quickly because they are motivated by the urgency of current events. The topic of the Zika virus comes to mind. Others benefit from deeper assessments that require longer-term consideration. Both of these are needed, and we do both of them at the CCA.

That said, three factors limit our ability to be as responsive as we would like to be and as we believe the government should expect of us.

First, requests for our work are submitted through a lengthy review and approval process, which affects our ability to take up studies quickly.

Second, while we are taking steps now to be more innovative in our own work, for example, by developing a more robust suite of services, our current funding envelope may constrain such robust plans.

Finally, we are now entering the second year of the current five-year funding plan, which inhibits our capacity to plan and to undertake future work, something that anyone working in science or in policy can appreciate.

Taken together, these factors may disincline potential sponsors from submitting requests at the very moment they are most needed. The government would, we think, signal its strong commitment to using science in policy-making by making further investment in the CCA to enable more studies, from more sponsors, on more topics, using more innovative approaches.

I should close with a quote from the mandate letter to the Minister of Science, with which I'm sure you're all familiar and with which we wholeheartedly agree: “We are a government that believes in science—and a government that believes that good scientific knowledge should inform decision-making.”

Thank you very much, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Meslin.

I'll turn now to Ms. Robinson from Polytechnics Canada. The floor is yours.

[Nobina Robinson, Chief Executive Officer, Polytechnics Canada]

Thank you very much, Mr. Chairman and members of this committee, for including us in your important week of pre-budget hearings.

Polytechnics Canada represents leading research-intensive, publicly funded polytechnics and colleges. All our members grant bachelor's degrees and offer industry-aligned post-secondary credentials, including trades training.

A polytechnic education builds a resilient and resourceful workforce. Canada needs more of this kind of applied education. Our education and training and our R and D and commercialization services help employers and companies to grow. The work our members do provides a cornerstone for building and supporting Canada's middle class.

As you seek ideas for economic growth, polytechnic education is one of the solutions Canada needs more of, whether it be tackling youth unemployment, supporting workers who form the bedrock of the middle class, or building the technical talent required for green infrastructure. Canada needs talent and innovation ecosystems where all players contribute their unique strengths.

For too long Canada's productivity has been held back by our fragmented, siloed, and incomplete approaches to talent and innovation. To bridge excellence to access, discovery to commercialization, and smart workers to smart jobs, we need an inclusive approach. Despite progress made in recent years, federal supports for an inclusive national talent strategy remain imbalanced and inadequate.

Let's remember that people innovate and companies commercialize. Innovation without talent is like science without ideas.

Our universities and academic scientists play a crucial role, but they can't get their inventions to market without attention being paid to the rest of the ecosystem—the R and D technicians and industry partners who bring innovations to the marketplace, especially in our small and mid-size businesses. The value of discovery research is not realized until people also perform the collaborative near-to-market work such as prototyping, beta testing, and market validation at which polytechnics excel, with their industry partners.

Unmuzzling science will not spur innovation. We need to unleash the innovative talent of polytechnic graduates and support the practical needs of Canada's entrepreneurs outside academe.

Our written submission presents a suite of 10 targeted investments that would both strengthen our ecosystem for the long term and help kick-start our economic turnaround in the short term. There are three broad categories of proposals: one, balancing supports for innovation; two, delivering Canada's infrastructure priorities with apprenticeship action; and three, building a modern labour force through better data.

Let me give you highlights. With respect to innovation, we call for increased funding for NSERC's college and community innovation program by $15 million annually. Currently the program is oversubscribed, having to limit competitions for funding while also spending funds intended for future competitions now. Yet this $53-million program makes up only a paltry 5% of NSERC's annual billion-dollar budget. In the private sector when something is in demand because it works, you supply more of it.

No policy rationale exists for excluding the college sector from equitable support for staff and infrastructure costs that support our legitimate research activities. This is an imbalance that can easily be fixed by increasing the research support fund by $25 million, and in doing so, signal fair treatment for all post-secondary research, not just university research.

To ensure Canada has the skilled workers needed to build and maintain our infrastructure over the next decade, polytechnics offer a variety of world-leading programs in construction management and the building trades; however, many of these programs have long waiting lists, while employers are reporting shortages of these very skilled workers. Therefore, we recommend a high-demand training capacity fund.

Finally, Canada needs reliable labour market information that leads to informed career choices. If employers and learners had access to accurate information about the publicly funded professional print and technical training programs we offer, and about the earning power of our polytechnic graduates, we would be better able to guide young Canadians toward programs with solid employment prospects. Possible financial incentives for more co-op opportunities need to be evidence-based. Better LMI leads to better prospects for our unemployed, our older workers, newcomers and indigenous learners, and even temporary foreign workers. Federal leadership in investment for evidence-based labour market data is vital now.

I hope you will take time to consider our recommendations. Growing the Canadian economy requires harnessing the many solutions offered by a polytechnic education.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Robinson.

We'll turn to the Retail Council of Canada, Karl Littler, who is vice-president of public affairs.

[Karl Littler, Vice-President, Public Affairs, Retail Council of Canada]

Thank you, Mr. Chair and members, for allowing me to contribute to your pre-budget deliberations and to speak to some of the issues that matter to our industry.

For members who haven't heard from us before, RCC is a not-for-profit industry association. Founded in 1963, we represent over 45,000 storefronts and include within our membership department, grocery, specialty, and independent stores, and online merchants. RCC's members sell over 70% of all consumer goods sold in Canada, and we employ the majority of the 2.2 million Canadians who work in retail. That makes us the largest employer group in the largest employment sector in Canada, and one of the very few with a presence in just about every community nationwide.

Paradoxically, because retail is so ubiquitous, it sometimes goes unnoticed by policy-makers. The exceptions that tend to break into headline news tend to be when there are merger proposals, like the recent one between Lowe's and Rona, or shutdowns like Target last year.

I can reassure you that our industry is pretty healthy. We grew by 3.9% in 2014, or about 2% above inflation. While we don't have final numbers for 2015, they will likely come in north of 3%, despite a relatively disappointing December, and 2014 also saw an increase of 21,000 jobs in our retail sector. So to paraphrase Mark Twain, reports of our death are greatly exaggerated.

That is not to say, however, that retail does not face significant challenges. The exchange rate in particular is a big one for us. While the falling Canadian dollar may help curtail cross-border shopping in the near term, it does create a long-term upward pressure on prices. We've seen this first in grocery items, and we'll see the effects on other goods over the course of the year. Some of you may have seen the comments of our chairman, Michael Medline, to this effect in today's Globe and Mail.

Retailers continually strive to keep prices affordable for consumers. While I'd like to pretend that's altruism, it's largely because it's a necessity in a highly competitive environment, and of course, there are public policy issues that have effects on these prices. I'd like to touch on two of these areas, namely tariffs and payments, although in our written brief, we do speak to de minimis, CPP enhancement, EI changes, and payments.

A couple of years ago, the other place—I think that's what I'm supposed to call it—released a study on Canadian pricing. One of its areas of focus was the impact of the Canadian customs tariff, a 98 chapter, 7,000 line item schedule of customs duties. As we understand, the original purpose of tariffs was as tools of industrial policy designed to support domestic manufacturers. Of course, they also serve as revenue generators for the government. While tariffs may once have helped Canadian manufacturers compete with imports, they're now seriously out of alignment with our manufacturing base. There are multiple examples of duties of 17% and 18% in areas where there's not even a single Canadian manufacturer. Once that industrial policy angle is lost, a tariff simply becomes another form of tax targeted at particular goods, like the bicycle tax or the affordable footwear tax, if you will.

Because duties have been removed from most manufacturing inputs, this hidden tax now bites Canadian consumers almost exclusively to the tune of $4.5 billion a year, or about 2% of the value of all consumer goods sold at retail. In numerous cases—footwear is a case in point—these hidden taxes are often double or triple the 5% GST rate on the same items. Most are not luxuries, and in many cases they're necessities.

RCC understands that the government lacks the fiscal capacity to provide immediate tariff relief across the board. What we suggest instead is to begin the process of reductions, especially where there's a duty differential between Canada and the U.S., where the duty in the U.S. is lower. That's a situation that can help to exacerbate cross-border shopping.

Our other recommendation, and one that's obviously very topical for members, is to continue to pursue bilateral and multilateral free trade agreements like CETA and the TPP, and to press for accelerated tax relief under those and future agreements.

The second issue that RCC would like to see addressed is credit card interchange fees. They are the charges that merchants pay to banks every time a credit card is used for payments. These rates are non-negotiable for merchants and are set by the credit card duopoly on the banks' behalf. That's $4 billion in interchange costs which get passed on to all Canadian consumers in the form of higher prices. Worldwide, the EU, Australia, New Zealand, and Israel, among scores of other countries, have moved to cap interchange rates, and their governments have all kinds of political stripes. They've said that enough is enough. Why should a Canadian consumer see the impact of interchange rate fees that are triple those in Australia and five times those in the U.K.?

Burdened as they are by over $4 billion in customs duties and $4 billion in credit card acceptance costs, Canadians are pleased to see the committee examining ways to spur economic activity and growth. We hope these retail sector-specific issues and the ones that we further speak to in our brief may provide some ideas in that regard.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Karl.

We'll turn now to our first round of questions.

Mr. Grewal, you have seven minutes.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you, Mr. Chair.

Thank you to the panellists for coming here today and providing testimony. We really appreciate it.

First, Carey, you spoke about labour retention and labour shortage in your industry. This has been a theme in the testimony throughout this week, and to a large extent when we go back to our ridings as well. From your perspective, what can the federal government do to ensure that it solves the problem specifically with the temporary foreign workers program?

[Carey Bonnell]

I think there are several perspectives you could look at. There are several tools in the tool kit to deal with the labour challenges in the country right now, particularly with respect to seafood. It is a real challenge. The average age of a worker in the fish harvesting and seafood processing sector, particularly the seafood processing sector, is probably approaching 60 years in Canada right now. In my province alone it's a significant issue. If you look at the Maritimes in the lobster sector, it's a massive issue.

The tools include certainly investment in technology, automation, and innovation. I've had an opportunity to visit facilities in Iceland and Norway. They've advanced very rapidly around technology and innovation. I made some points earlier in my statement about the need for supports for the seafood sector in that area, because it is lagging, in part due to the lack of support.

On the issue of temporary foreign workers, there's no doubt that it is a tool in the tool kit. Certainly the changes that were made to that program a couple of years ago have had a significant impact on the seafood industry in Canada. There's little doubt about that. Certainly the lobster sector in particular has been really feeling the pain. There has just not been an available supply of labour. They would look at it and say, “There are other programs within the Government of Canada that support the primary agricultural industry. Why are there not programs to support us? Why have the changes been made? Why can't we correct this?”

We're seeing it in other jurisdictions. I visited Iceland three months ago. Their workforce was largely made up of migrant workers. Now, in many cases, they are now citizens. They had a path to citizenship. Some have been there quite a few years. If you look at the demographic in these countries, most of them are foreign workers who are now residents, in that case.

We are one of the last jurisdictions to go down this road. The reality is that things like support for temporary foreign workers are tools in the tool kit. Whether it's a long-term solution or a medium-term solution, you could debate, but the reality is if we are going to promote trade agreements, as we've been talking about here today, it's all great to remove tariffs and barriers, but if you don't have the labour to produce the product to sell to the global community, then we have a major issue on our hands.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you very much for that.

Ian, thank you so much for your testimony.

I think the one thing we can all agree on across party lines is that this is a serious issue that needs to be addressed. What are some of the root causes leading our young Canadians to go down this path? Through my own research, I've heard that youth unemployment is double the national average. In my area of the country, it's almost 15% or 16% in the region of Peel. We're struggling across the provincial and municipal levels, and the federal level, to address youth unemployment and homelessness and to try to stop young Canadians from going down this path.

[Dr. Ian Manion]

We've talked a lot about evidence. I think one of the major root causes we look at through evidence is the underlying link to mental health and mental illness. We can see from psychological autopsies after the fact that for a large proportion of young people who die by suicide, there was either diagnosed or undiagnosed mental illness. So part of the solution has to be addressing our mental health care system, particularly for children and youth.

From the young people I talk to, there's a lost generation right now that is incredibly disengaged. They don't find education giving them a vocational path that makes sense. They're sold a bill of goods that going to university will solve all their problems. They don't go to colleges that might provide them with the skills necessary to make a meaningful contribution. They're stuck in this holding pattern with no real, good skills to cope with that.

When we look at young people in a holistic way, and at how we can engage them in meaningful ways in terms of their lives and their communities, that can really make a dent. It has impacts on education, on vocational and family life, and on everything you could possibly describe. Looking at it on an individual level, in terms of the possibility of illness being present and treating it, but also engaging in different ways and supporting life paths that make more sense, I think those would have the biggest yield.

[Raj Grewal, Liberal, Brampton East, ON]

Thank you very much.

Ms. Robinson, thank you so much for your testimony. As a recent grad myself who is still paying his student loans off, I have a lot of sympathy with young Canadians and the importance of post-secondary education.

In terms of the new economy, we have this shortage of trades and apprenticeships. You mentioned that the infrastructure program that our government's about to present should have a requirement on apprenticeship. In your opinion, is there a specific ratio there, or what's your perspective on how we can roll that out to actually solve the problem on the shortage of apprenticeships today?

[Nobina Robinson]

Thank you so much for such a pertinent question. I'll just jump to the heart of it because you've heard me preaching already. I'm so glad that you are a recent graduate who actually understands that the future of work means diverse solutions. Ratios are not within the purview of the federal government.

What you can do, though, is one, require all your new social infrastructure, public infrastructure projects to give points to bidders who are committed to registered apprentices. Two, when you look at what's being built, if you want what is being built to last for a decade or more, why can't we build roads for the next 30 to 40 years?

Let's go to the talent that is produced from colleges and polytechnics that are doing world-leading training in building envelope systems, for example, or green construction, or net zero homes.

Let's give points for the same workers who are highly trained. Basically, you'll get a double win. You build your infrastructure, but you build the talent that will build the next set of infrastructure as well. I would like to see your projects give that criteria.

[Raj Grewal, Liberal, Brampton East, ON]

I was aware that it's a provincial jurisdiction, but I really appreciate your answer.

My last question, Mr. Chair, is for Mr. Littler.

Thank you so much for your testimony. I have a quick question regarding credit card merchant fees. You mentioned the U.K. and another country. How do they compare to the U.S.?

[Karl Littler]

There were really only two countries that have rates that are comparable to Canada, and the U.S. has a comparable rate. I guess you could view it that the parent companies of both MasterCard and Visa are located there and it is tough negotiating packages.

There have been some reductions on the debit side which was a runaway cost by comparison to Canada, but the answer is that it's comparable on the U.S. side. Multiple other jurisdictions, like India, China, Israel, and Switzerland, have moved on this though, so I'm not sure that in this case we would look to the U.S. as a sort of an inspirational beacon on it.

[The Chair, Liberal, Wayne Easter]

Ms. Raitt, for seven minutes.

[Lisa Raitt, Conservative, Milton, ON]

Mr. Chair, I'm going to start by going back to some testimony we heard previously. I mentioned to you at the time, not on the record, that I was worried that one of our witnesses, when they were presenting, had a prop behind them. It came to my attention through Twitter last night that it's been tweeted out by the Globe and Mail reporter Bill Curry as well.

I have grave concerns and I bring it to your attention as the chair, and to the attention of the clerk of the committee as well, that I do think it's inappropriate to have political signs posted behind you when you provide information to a committee. It clearly does not happen here. There's nobody standing with a “Stop Harper” sign behind any of them. It may be implicit in what they're saying, and that's okay, but there is no physical sign. We object to that happening. We didn't do anything at the time because it was very difficult to see and ascertain exactly what was on it, but clearly from what we're seeing on Twitter, what we're seeing from people telling us, we can conclusively say that it was a “Stop Harper” sign, and it had to do with political campaign issues. We think it was inappropriate. I hope that you take some action to ensure that this doesn't happen going forward.