Finance Committee on Feb. 27th, 2020

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

I thank my colleague for attempting to make his point of order. I've sat on committee with him for many years, and we've had a very good working relationship. I respect him as a parliamentarian. Our voters have voted us here.

I disagree with the intent of his motion because he relates it as corporate welfare; it is most definitely not. It is investing in Canada. It is creating a set of policies to help grow our economy. I'm a big proponent of the agricultural sector. I'm an economist by training and have come here to ensure one thing, that we have a strong economy for me, my family, our kids and all the children across Canada.

The policies we've put in place are aimed at creating jobs. When I think of the situation with Mastercard specifically, if I can speak to that, that is a situation where I fundamentally disagree with the notion that this is corporate welfare. I fundamentally disagree that utilizing resources on behalf of the federal government to create long-term jobs that produce tax revenues at the federal, provincial and municipal level is a bad thing and defined as corporate welfare.

I do believe in creating an environment where companies undertake those types of investments and decide to locate in Canada. That's why I've alluded to immigration and investment policies and certain regulatory environments. We need to do that.

On the motion put forward here by the member from the Ottawa area in studying corporate welfare, he hasn't defined what corporate welfare means. He hasn't defined why he would want to study it, other than to say it's bad. I fundamentally disagree with that. I wouldn't be supporting this kind of motion because it doesn't add anything of value. It's an open-ended motion.

I go back to the Alberta situation with the investments that have taken place in the area south of Edmonton and in the industrial heartland. When those companies come to the table and sit down with our provincial counterparts and the federal government, they say they want to invest in Canada. Do they say this is corporate welfare? No. They are investing in Canada and Canadians.

Why? Because they know Canada is a great place to invest. We know we have those natural resources, whether they are by-products like ethylene or propylene, or further down the stream like polypropylene and other products in the chemistry stream that we can contribute and are in other products including plastics. Canadians need to know that we as a government are looking at investments all over this country to help grow our economy.

The member opposite has defined it as corporate welfare. I fundamentally disagree, so I would be voting against a motion of this nature because it really produces nothing. I look to my colleague from one of the ridings in Burnaby, Mr. Julian, where my—

[Peter Julian, NDP, New Westminster—Burnaby, BC]

I have a point of order.

I am certainly enjoying the member's speech, but it is the riding of New Westminster—Burnaby. I just wanted to make that very clear. I love both communities equally.

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

Thank you, Mr. Julian.

New Westminster—Burnaby is a beautiful part of the Lower Mainland, which I have visited. I went to Simon Fraser University and lived in Vancouver. I worked at Metrotown, at the old head office of Future Shop before it was taken over by Best Buy. I know that area quite well. There is a famous local pub in New Westminster called Kits' Pub. I don't know if it's still open, but I frequented it quite a bit when I went to university. It was a great place. It was a lot of fun.

[Pierre Poilievre, Conservative, Carleton, ON]

They're still talking about you.

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

Pierre, if they are talking about me.... Oh my God, I'm 48, actually, in a day, so if they are talking about me 25 years—

[Pierre Poilievre, Conservative, Carleton, ON]

Happy birthday.

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

Thank you very much. It's tomorrow.

If they are still talking about me some 25 years later, that is kind of scary; nonetheless, I must have left a good impression, I hope.

With regard to the direction of this committee, we all know that committees are the masters of their own domain. Obviously, we have a minority Parliament, so there'll need to be co-operation among all parties to produce good reports that we can look back at and be proud of.

When I look at this motion, compared to what we did in the prior Parliament, this motion doesn't pass that litmus test. I hate using the phrase “litmus test” on anything.

When we talk about investing in Canada, investing in Canadians and investing in global companies and Canadian companies, we need to think about what that means. It means creating a better future for our citizens. It means creating a better future for my kids, frankly.

When I look at all the firms in Vaughan.... I've done announcements in the city of Vaughan. There are 13,000 businesses. I don't think one of those owners would think that receiving funds, whether they're from the SR and ED program, which is a $3-billion tax expenditure a year....

Mr. McLean referenced the word “expenditure”. I would note that today the finance department released the 2020 federal expenditure book. It's a great book. I recommend that everyone read it. It goes through every tax expenditure that's provided to Canadians from coast to coast to coast, both individual and business. It references government investments. Those are government investments in Canadian companies.

They may call it “corporate welfare”, but there is $3 billion in the SR and ED program that goes to companies from coast to coast to coast so that we can strengthen R and D levels in Canada. You may consider it corporate welfare, but I don't. The basic personal amount is an expenditure. It may be applied to individuals and not businesses, but it is still very important.

[Larry Maguire, Conservative, Brandon—Souris, MB]

I have a point of order.

I appreciate that my colleague is running out of oxygen over there. He needs a little water to recharge the well.

[The Chair, Liberal, Wayne Easter]

What's the point of order?

[Larry Maguire, Conservative, Brandon—Souris, MB]

The points he is making are really good things to put into a study on corporate welfare. He could debate there whether they're expenditures or whatever else he thinks corporate welfare may be.

Mr. Chair, about three quarters of an hour ago, you said something about it being time to have a vote on this motion. I'm wondering if we could call for one.

[The Chair, Liberal, Wayne Easter]

The procedures are that you can't call for a vote.

The floor is Mr. Sorbara's.

After Mr. Sorbara, I will be going to Mr. Ste-Marie, Mr. Cumming, Mr. Fraser, Mr. Fragiskatos and Mr. McLean. We have a substantial list.

Mr. Sorbara.

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

Thank you, sir.

I wanted to pull up a document on the federal tax expenditures, so you're going to have to give me a second. It's a shame that when Mr. Poilievre came in with this motion he didn't say he wanted to undertake a study of federal tax expenditures. He didn't say, how do we want to put a motion forward on how we want to improve the competitiveness of the Canadian economy, grow the economy, grow and strengthen that middle class? Because that's what we're here for; that's why we got elected.

When I look at this motion and think of corporate welfare, I say, no, I don't think so. I think about the number of investments that the Minister for Innovation, my honourable colleague from, I think, the riding for Mississauga—Malton has made over the last number of years by setting up the five clusters.

I think about the east coast and the cluster for aquaculture. I think about those investments. They may be looked at by the opposite side as investments for corporate welfare. I look at them as investments for the future.

Or, I think about Quebec, the Montreal area and the investments for artificial intelligence. Canada is becoming a leader in artificial intelligence. Again, Mr. Poilievre may say that those investments are corporate welfare. I would fundamentally disagree. I think the investments we've made for artificial intelligence, whether it's in the Waterloo area, whether it's in Montreal, are investments that create long-term jobs. They attract the best and the brightest.

We need to ensure that we continue along that path and not use a term.... When we think about corporate welfare, and why someone may look at it in that sense.... I think we always have to be judicious, conscientious and diligent in any form of programs that we undertake.

At the same time we need to undertake those investments where we know we are competing against other jurisdictions. We've seen in the last few months a number of automakers make announcements south of the border, in terms of investments in electric vehicles, in the auto parts sector, which we're going to benefit from. Those advancements largely occurred because state governments in the United States helped out their stakeholders. They assisted them. They know that. We have to do the same thing.

In Canada, we've been successful in attracting a lot of investment and we need to continue doing that. We need to continue to tell the world that we are open for business. Unfortunately, the members opposite will continue to deride that and call it corporate welfare. I would say that's significantly different.

I think about the SR and ED program, Mr. Poilievre. I did a tour to a number of the tax offices as the Parliamentary Secretary to the Minister of National Revenue. I met with the SR and ED team. Remember those individuals in the Toronto West office, which is actually commonly known as Mississauga but termed Toronto West. I spoke to them and saw how they look at investments in Canadian companies and how they analyze those and allow early-stage companies to undertake investments, allow other companies to continue to do R and D year after year, and allow that tax credit to take place, which gives them some funds back so they continue to invest. Under Mr. Poilievre's motion, that would be considered corporate welfare. I would actually consider that good, sound innovation policy.

We always have to re-examine the SR and ED program from year to year. I agree that we need to re-examine whether it's working and its implications. To paint any government's investments as corporate welfare, I think would be highly troubling. We need to continue to make those investments that are smart, sound, based on good analysis and evidence, and that lead to good job growth in Canadian companies. Those are smart things to do.

Before I was privileged to be elected for the second time here in Ottawa, I worked in the private sector among many of my colleagues here. I worked for JPMorgan Chase in New York City. I worked very long hours for a number of years. One thing I learned at JPMorgan Chase was that companies around the world will want to invest in places where there's certainty in their investments, a good rule of law, decent competitive taxation rates, a strong labour force and where government is a partner. When you think about that and you do a check, check, check, that's where Canada is today.

We are a country that continues to partner with global companies and domestic companies to help them grow.

When I see this type of motion, “That the committee undertake a study on corporate welfare”, well, what does that mean? It's an open-ended motion. The motion derides people who are making decisions all over this country to raise incomes and to create good, middle-class jobs. I find it sort of cynical.

One of the privileges I had, when I decided to return to Canada for various reasons, was to be offered a choice. I could work at a small rating agency here in Canada called Dominion Bond Rating Service. It was founded by an entrepreneurial Ukrainian family from Winnipeg, the Schroeder family, who grew the business and later sold it for hundreds of millions of dollars to Warburg Pincus out of New York City. It still exists downtown. I was offered the opportunity to come back to Canada and stay here. At the same time, I was offered a really lucrative job to move back and work for Sanford C. Bernstein in New York City as a research analyst—or UBS, actually, in Connecticut—but I decided to stay in this country and work here.

[The Chair, Liberal, Wayne Easter]

And this does have something to do with the motion...?

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

Yes, it does.

[The Chair, Liberal, Wayne Easter]

Okay. I just wouldn't want you to get too far astray from the motion, or you'd be out of order.

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

No, I will not stray.

With that, this firm scaled up. It scaled up because of the employees it attracted and the partnerships it formed. That's important to know. When we look at companies around Canada, that's where they're partnering. We look at Invest in Canada, and we know that the government is there, partnering with it, putting in place government policies that will allow us to continue to grow our economy, especially in a period of time when there's a lot of volatility. We've seen a Q4 growth rate in Germany of 0%. We've seen the implications on the supply chains from the coronavirus. We've seen things taking place that we know will be harmful to economic growth globally. At the same time, we know that the Canadian government is partnering with and investing in companies in Canada from coast to coast to coast. You name the province, we are there. You name the area, we are there. We know that we have a role to play, especially with the situation.

Now, if possible, Chair, I would like to propose an amendment to the motion.

[The Chair, Liberal, Wayne Easter]

All right. Let's hear your amendment.

It took a long time to get there.

[Sean Fraser, Liberal, Central Nova, NS]

Every point made sense along the way.

[The Chair, Liberal, Wayne Easter]

It did. It was a good speech.

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

My amendment is as follows:

That the committee undertake a study on corporate subsidies for businesses.

[The Chair, Liberal, Wayne Easter]

Yes, Mr. Poilievre.

[Pierre Poilievre, Conservative, Carleton, ON]

If I may, if you say “corporate subsidies”, then you don't need to say “for businesses”.

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

Yes. You can remove “for businesses”.

[The Chair, Liberal, Wayne Easter]

Here is the original motion:

That the committee undertake a study on corporate welfare.

What you're proposing is this:

That the committee undertake a study on corporate subsidies.

Is that it?

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

Yes.