Evidence of meeting #94 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was bank.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Brian Kingston  Vice-President, Policy, International and Fiscal Issues, Business Council of Canada
Henry Wegiel  Vice-Chair, Trade and Public Policy Committee, Canadian Steel Producers Association
Mike Darch  President, Consider Canada City Alliance
Leo Hindery Jr.  Managing Partner, InterMedia Partners
Charlotte Bell  President and Chief Executive Officer, Tourism Industry Association of Canada
Hendrik Brakel  Senior Director, Economic, Financial and Tax Policy, Canadian Chamber of Commerce
Bilan Arte  Chairperson, Canadian Federation of Students
Elizabeth Aquin  Senior Vice-President, Petroleum Services Association of Canada
David Shepheard  Director, Vancouver Film Commission, Vancouver Economic Commission
Angella MacEwen  Senior Economist, Canadian Labour Congress

4:20 p.m.

Liberal

The Chair Liberal Wayne Easter

Thank you both.

Mr. Albas.

4:20 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Thank you, Mr. Chair.

Thank you, witnesses, for the work you do in your different organizations and for enlightening us on your thoughts on Bill C-44.

I come from the Okanagan. The interior of British Columbia has a lot of opportunity to offer in tourism, so I'm going to start with Ms. Bell.

I find she has written down, conveniently, that there are 742 tourism operators in my area as well as just under 8,500 people who work in the industry. I appreciate your raising that today.

You have raised some legitimate concerns about our competitiveness. I was at the industry committee this morning. The minister responsible for small business and tourism, Minister Chagger, was there, and the question was brought to her about competitiveness. She said that one thing they needed to do was look at other jurisdictions and make evidence-based decisions. Do other jurisdictions that have a value-added tax or a goods and services tax have a similar provision for offering a rebate when you're trying to bring in business from out of the country?

4:20 p.m.

President and Chief Executive Officer, Tourism Industry Association of Canada

Charlotte Bell

Yes, my understanding is that many countries have these types of rebates. One of the reasons we're not as competitive is that we have no such rebate.

4:20 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

I imagine that this has already been tagged on. People expect that if they sign a new agreement today they will be collecting the GST on that and there will be no rebates. Is that correct?

4:20 p.m.

President and Chief Executive Officer, Tourism Industry Association of Canada

Charlotte Bell

I guess there are a couple of things. There are contracts signed after the budget is announced. According to the way it's been described in the budget documents, as long as payment has been made in full before January 2018, it would still apply. After that date, it wouldn't. The confusion for us lies in how the business works and how deals are signed. There is a primary deal and there are secondary contracts that flow from it.

4:20 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

I saw this in British Columbia after the referendum on the harmonized sales tax.

I remember attending many different meetings with the home builders' associations, where so many small-business owners were asking questions of each other because they were getting different answers from government of what qualifies and what doesn't. As you know, there are large tourism operators that can afford to have the people to do the research, and there are also very small operations that may not have the same capacity.

I certainly appreciate you raising some of this. Are you finding from your own members that there are concerns and confusion as to what qualifies and what doesn't?

4:20 p.m.

President and Chief Executive Officer, Tourism Industry Association of Canada

Charlotte Bell

Yes, I had a lot of questions, and I raised the issue.

We were at Rendez-vous Canada last week. That is the biggest travel trade show in Canada—1,800 delegates—and we had hundreds of buyers from across the world. I heard it from buyers and I heard about it from my members, so a number of sellers based here in Canada, and it is a concern. We're trying to understand.

Everyone understands that rules change, things can change, but we need some certainty moving forward to figure out how this applies. If it's going to change, can we at least mitigate the impact during the implementation phase or the interim period? We're not clear. We've asked the CRA for a ruling or an interpretation on that.

4:20 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Oh, so there has not been a lot of clarity presented to you as far as transitional rules, so that people can know with confidence when they're booking, etc., what applies and what doesn't apply.

4:20 p.m.

President and Chief Executive Officer, Tourism Industry Association of Canada

Charlotte Bell

That's right.

We don't have certainty on that front.

4:20 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Okay.

It's really unfortunate that the rollout wouldn't be as seamless as it maybe perhaps could be.

Again, going back to competitiveness, are you saying this is going to harm your competitiveness? I know many people who are very conscious of the price of gas. It's gone down. People are driving across the border from the United States, etc. Just when they're starting to get some business, now they're going to have a situation where they can't compete with some other operators from other jurisdictions.

Are you saying do not proceed with this, or can you say again what you want from government?

4:25 p.m.

President and Chief Executive Officer, Tourism Industry Association of Canada

Charlotte Bell

We would have hoped that the government wouldn't proceed with this. That was our first choice. However, if the government will proceed with it, then we're asking at least to mitigate the impact during the interim period. Make sure it's delayed enough so that it respects the contracts that are already in play so that we have some certainty.

The biggest problem is that there are contracts that have been signed, and secondary contracts, and they go all the way through to 2018. This is problematic.

4:25 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Thanks.

I'd like to go to the steel producers.

I certainly appreciate that your members produce a lot of great products. I was very proud to support a government that made Canadian steel a big part of our national shipbuilding contracts. I believe there is a national interest in being able to maintain our steel capacity. That being said, though, there are the economics, so you always have to balance between what the consumer can pay. I was very proud that the government said they would support the steel industry by making sure that those ships were built with Canadian steel.

From British Columbia again, we had the experience with steel rebar. We had Chinese, I think Turkish, and possibly Korean rebar coming in, and it was challenged. Many provinces and many different groups participated in the process. Unfortunately, at the end of the day, the trade remedy resulted in less Canadian steel being used and more American. That was just how the whole process works.

Given that there are so many different remedies here, can you say we are not going to find ourselves with this new rejigged process with similar kinds of results?

4:25 p.m.

Vice-Chair, Trade and Public Policy Committee, Canadian Steel Producers Association

Henry Wegiel

We're very aware of the rebar situation. I think you're referring to the public interest inquiry that was put forward by the Government of British Columbia and the construction association there.

We would say that the purpose of trade remedies is to remove the distortions caused by unfair trade in the Canadian market. At the end of the day, the way that the CITT finally ruled on that public interest inquiry was that the trade remedy brings back true market competition. When one says that the price is lower with dumped steel, that is not an argument to be made, that that is the right thing to do. Otherwise, we wouldn't be living in a lawful society here in Canada.

When they made the decision to not reduce the duties on imports from the Asian countries into B.C., it was predicated on that fundamental lawful belief of what competitive markets should be in Canada. My understanding is contrary to yours of what happened with steel in Canada. After those duties were in place, there was actually more steel that came from Canadian steel producers into B.C. than prior to the duties.

4:25 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

My understanding is that Ontario still does not sell major product into B.C., and that's where at least I understand the angst of the original action was. I worry that when we put these processes in place, with the best of intentions, it ultimately ends up being where none of us is satisfied with the results.

4:25 p.m.

Liberal

The Chair Liberal Wayne Easter

Okay. That will end that discussion.

Mr. Dusseault.

4:25 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

Thank you, Mr. Chair.

I'd like to thank the witnesses for being with us today. Since my questions will be for everyone, I would ask that you kindly keep your answers short.

The government raised the threshold that triggers a review of foreign investment in Canadian companies. I pointed out to the members of the government that the purchase of headquarters in Canada was a concern for many people and that the increased threshold could result in more headquarters being bought without the slightest bit of government scrutiny. I asked them whether they were worried about that. They said no and declared that investment in Canada was always a good thing. In their view, interest by foreign investors in Canada is positive, not a problem.

Do you agree that foreign investment is always a good thing?

Does the matter of headquarters in Canada concern you?

4:30 p.m.

Vice-President, Policy, International and Fiscal Issues, Business Council of Canada

Brian Kingston

We believe that foreign investment is generally good except in very unique circumstances. A lot of foreign investment can lead to headquarters being established in Canada. ISED tracks all foreign investments. They still even track investments below the threshold. We welcome foreign investment and we think by raising the threshold, you're just reducing another barrier to foreigners coming in and potentially putting their headquarters here.

But obviously there's much more to that decision than just the threshold. It's access to talent. What's the tax rate? What are the various supply chain linkages that will make those decisions? We are hopeful that this, combined with the Canada investment hub, will help attract more headquarters into Canada, because that is an area where Canada has generally lagged.

4:30 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

Thank you.

Countries are increasingly adopting buy domestic policies—buy American only, in the case of the U.S.

Could that impede Canada's ability to sell steel to those countries?

Does Bill C-44 address the problem in any way?

Can you tell us whether the problem is bigger today and how you think it could be resolved?

4:30 p.m.

Vice-Chair, Trade and Public Policy Committee, Canadian Steel Producers Association

Henry Wegiel

Thank you very much for the question. I apologize, I can't answer in French due to my limited French abilities.

The purpose of Bill C-44 is to address unfair trade. Steel or other goods that come in are dumped and subsidized and distort the market and injure Canadian industry. From a procurement perspective and what you're referring to as the Buy American provisions in the United States, that is a completely different issue, which Bill C-44 doesn't address. If we discuss that a bit, Canada does have procurement provisions; and if we're going to be spending the billions of dollars that we indicate we are, moving forward into the future here in Canada, then we should be looking at potential Canadian preferences. This is particularly given the nexus now of what we're talking about from a trade standpoint and from an environmental standpoint, which is now becoming more critical for Canada.

To give you an example, Canadian steel used in Canada has one-third of the carbon footprint that steel from offshore does. When we put forward a procurement policy here in Canada, we should be looking at that and saying if both of those are important to us, the environment is important to us, then we should be looking at what products we are actually using in our procurement policies, and from where, to reduce that overall carbon footprint. In a nutshell, if you buy Canadian steel, you get a discount of two-thirds on the carbon footprint, and that is something that is being elevated now after COP21, and everything else in Paris, the impact of carbon on the environment and on Canada's procurement policies. We're very hopeful in working with the government on those sorts of measures that would help the economy and help the environment.

4:30 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

Thank you.

You said the Invest in Canada hub would benefit Canada's municipalities, or open up an opportunity for them, and, I assume, others, by allowing them to deal directly with the organization. Could you elaborate on the upside of that?

According to what we've heard, the hub would, in essence, be the point of contact for foreign investors interested in Canada, serving as a single window they could turn to for information on the investment environment in Canada, regulatory and otherwise. It would advise investors on how they could do business in Canada.

Can you confirm that Canadians and municipalities will also have access to the hub, in order to ask questions, and that it will serve as the liaison between a foreign investor and a Canadian municipality or province?

4:35 p.m.

President, Consider Canada City Alliance

Mike Darch

Certainly.

In Canada we have three levels of government: the federal government, the provinces, and the individual cities. Individual investors will end up ultimately in a city somewhere. Often, they are originally identified by our trade commissioners, etc., overseas. We already have regular, twice yearly meetings between our municipalities and the federal government on how we can make that interaction between the federal government and our municipalities easier and better so, if we've identified a particular client and they have immigration questions, they can be resolved.

In the past each federal department has tended to view this separately, and you've had to set up relationships with each individual department. It is hoped that, when the hub comes into place, we will have one place where we can go to get that interaction with the federal government.

We fully expect that the organization will be listening to and responding to the individual municipalities. For the hub to be successful, it's going to have to place that investment into a municipality somewhere across Canada. The municipalities themselves have the in-depth knowledge, such as Blair has of the Ottawa ecosystem, of where that investment is going to be best placed and how they can best explain that.

I think that all the interaction we've had so far has been very positive.

4:35 p.m.

Liberal

The Chair Liberal Wayne Easter

Thank you both.

We're over time.

Mr. Fergus.

4:35 p.m.

Liberal

Greg Fergus Liberal Hull—Aylmer, QC

Thank you very much.

I want to start by apologizing to the witnesses here today because I don't have questions for all of you. I have specific questions for two, maybe three, of you.

It's concerning the infrastructure bank.

I'm very interested, Mr. Kingston and Mr. Hindery, in particular, if you could tell me why you feel that the infrastructure bank, as I gathered from your comments, is a welcome tool to have in Canada.

How is it an improvement over public-private partnerships?

4:35 p.m.

Liberal

The Chair Liberal Wayne Easter

Mr. Kingston, do you want to start?

4:35 p.m.

Vice-President, Policy, International and Fiscal Issues, Business Council of Canada

Brian Kingston

Sure.

We think the P3 model in Canada has actually been very successful. The infrastructure bank could still use the P3 model. I don't see the infrastructure bank as necessarily an improvement over the P3 model. Our hope is that it will address projects that wouldn't go ahead—