Evidence of meeting #12 for Finance in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was finance.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Clerk of the Committee  Mr. David Gagnon

3:35 p.m.

Liberal

The Chair Liberal Wayne Easter

I call the meeting to order.

The meeting has been called for committee business, now that we have the pre-budget consultations out of the way, and I expect that report will be ready to be tabled tomorrow.

Just to remind folks, if they are here tomorrow and they want to say a couple of words on their supplementary or dissenting report, you can also do that in the House when it is tabled.

We've called the meeting for committee business, but I understand there's a willingness to go to the election of vice-chairs.

I'll call on the clerk to go through that process.

3:35 p.m.

The Clerk of the Committee Mr. David Gagnon

Pursuant to Standing Order 106(2), the first vice-chair must be a member of the official opposition.

I am now prepared to receive motions for the first vice-chair.

3:35 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

I'd like to propose Pierre Poilievre.

3:35 p.m.

The Clerk

It has been moved by Mr. Julian that Pierre Poilievre be elected as first vice-chair of the committee.

Are there any further motions?

Is it the pleasure of the committee to adopt the motion?

(Motion agreed to)

3:35 p.m.

Some hon. members

Hear, hear!

3:35 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

Thank you very much, everyone, and on this occasion of my inauguration as vice.....

February 27th, 2020 / 3:35 p.m.

Some hon. members

Oh, oh!

3:35 p.m.

Liberal

The Chair Liberal Wayne Easter

You're watching CNN or Fox News too much, Pierre.

Mr. Clerk, we'll move to second vice-chair.

3:35 p.m.

The Clerk

Pursuant to Standing Order 106(2), the second vice-chair must be a member of an opposition party other than the official opposition.

I am ready to receive motions for the second vice-chair.

Mr. Julian, you have the floor.

3:35 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

I would like to nominate someone who is also worthy of holding the vice-chair position, and that is Mr. Ste-Marie.

3:35 p.m.

The Clerk

Mr. Julian moves that Mr. Ste-Marie be elected second vice-chair of the committee.

Are there any further motions?

Seeing none, is it the pleasure of the committee to adopt the motion?

(Motion agreed to)

I declare the motion carried and Mr. Ste-Marie duly elected second vice-chair of the committee.

3:35 p.m.

Some hon. members

Hear, hear!

3:35 p.m.

Liberal

The Chair Liberal Wayne Easter

Congratulations, all.

Let the work begin.

We need to bat around some ideas for possible further studies. There's no legislation before us and no budget implementation act, so we can bat around some ideas.

Go ahead, Peter.

3:35 p.m.

Liberal

Peter Fragiskatos Liberal London North Centre, ON

Thank you, Mr. Chair.

The first idea on a study that I will put to the committee's attention is around the concept of sustainable finance.

The concept of sustainable finance, Mr. Chair, has galvanized a great deal of global attention, not it's just because of the work that Mark Carney is doing on the issue, although I think that's extremely important. We heard testimony from a number of witnesses in the pre-budget consultation on the link between economic growth and sustainability from an environmental perspective, that the two ought to go together.

I think a set of meetings, amounting to a study, could help shed real light on that issue and help us to come up with a set of recommendations that would benefit the government and hence the country.

With that said, this is the wording of the motion or the proposal that I put forward:

That the committee undertake a study on sustainable finance in Canada with a focus on: a) driving economic growth; b) opportunities to scale Canadian initiatives; and that the committee dedicate up to seven meetings to the hearing of witnesses in Ottawa.

3:40 p.m.

Liberal

The Chair Liberal Wayne Easter

Okay, it's up for discussion.

We'll go to Mr. Poilievre and then Mr. Julian and Mr. McLean.

3:40 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

Mr. Chair, I find the motion a bit vague. “Sustainable finance” can mean a lot of things to a lot of people.

To me, it means balanced budgets, for example. To my friends across the way, it probably means some trendy new idea that's circulating on the Internet. I think we run the risk of opening this motion and having it lead us in all directions and no direction. It reminds me of Stephen Leacock's description of the man who ran out of the bar, jumped on his horse and rode off in all directions. In order to avoid doing that, we need more focus to our motions and our studies, lest we ride off in all directions and end up getting nowhere.

I think there's another issue that needs examination, Mr. Chair, and that is the billions of dollars that governments are wasting on corporate subsidies, giving handouts to companies of all different shapes and sizes, and particularly to big companies. They end up getting them because they have the lobbyists and they have the political connections.

These companies then make a bunch of commitments. They don't fulfill the commitments, but they pocket the cash, to the benefit of the shareholders and the executives. Workers end up losing their jobs anyway, taxpayers don't get a refund for what they're paid, and taxes are then too high for everyone else. I think we need to start to examine what we're getting in exchange for all this money.

I asked the Library of Parliament how much Canada's federal government is spending on corporate welfare, handouts and schemes. It estimated that the number was somewhere around $7 billion a year. That doesn't include tax loopholes and other forms of tax preferences. It just includes cash benefits from the government to these enterprises, and we don't actually see any evidence presented for the benefits. A minister will get up and say, “This handout is going to create 1,600 jobs.” We never actually see any proof that these jobs are created.

Not only that, but we don't ever see any evidence of how many jobs are killed when the money is taken out of the economy in the first place to give it to the recipient company. Minister So-and-so shows up at a favoured company and says, “I'm here today to announce an initiative. We will grant money to this company and it's going to create 100 jobs.” They never actually answer the question of how many jobs they killed, right?

The money that you had to take out of the economy in the first place to give to the favoured recipient would have been used to hire people in other sectors. Think of all the small businesses that could hire people if that money had been left in their coffers, rather than taxed away by government and then given away to a well-lobbied-for corporate entity. As long as I've been here, I've never seen any committee study whether these handouts actually work, what damage they do and what results they produce.

I was on the doorstep of one of my constituents during the election. He said that he had designed an app that was intended to help people understand their carbon footprint. They can monitor their activities in their lives and determine how much greenhouse gases are being emitted into the atmosphere as a result. He said that the bad news is that his competitor, who was slower to invent the same application, got a grant from the government, so now he is being effectively put out of business with his own tax dollars. The guy who came up with the idea first is paying taxes so that a competitor can do the very same thing, but with other people's money.

We see these perverse incentives all the time. Most recently, we see the creation of this entity called the Infrastructure Bank. It's going to offer loan guarantees and “subordinated equity”. What does that mean?

It means that if a project is profitable, then the construction company will keep the cash, but if a project loses money, the taxpayer is on the hook. The private sector gets the profit; the taxpayers get the loss.

Supported equity is a very similar concept through which the government takes the first loss and the private sector takes the first gain. The result is that taxpayers can only lose and these well-connected corporate entities always win.

I'm in favour of the free market. I'm pro-business, but I'm pro-business in the free market, and the free market puts risk and reward, profit and loss together. The investor who wants to build a factory should be the one to profit from it, but if the factory loses money, that same investor should be the one to lose it. The investor should not be able to transfer those losses to taxpayers. That's what this massive corporate welfare bank, the infrastructure bank, is going to do. It's going to allow businesses to put their losses on the government balance sheet rather than on their own.

I think it's high time we did a serious examination of all of these government handouts to find out where they go and whether they create jobs or are simply a tool by which the wealthy and well-connected can enrich themselves at public expense.

That's what I think we should be studying, Mr. Chair.

3:45 p.m.

Liberal

The Chair Liberal Wayne Easter

You're opposing this motion in favour of something else.

3:45 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

I am.

3:45 p.m.

Liberal

The Chair Liberal Wayne Easter

Go ahead, Mr. Julian.

3:45 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

Thanks, Mr. Chair.

I would like to congratulate our new first and second vice-chairs.

I don't often agree with Mr. Poilievre, but I do here. I think that a sustainable finance motion is maybe something we can make more specific and develop over the next couple of months, but right away, I think the first issue to tackle would be the issue of corporate welfare.

I find in my riding that many people reacted to the Loblaws grant. That was $12 million that was given to a company that makes massive profits. When people in my riding who are struggling to pay for dental care, who don't have access to pharmacare and who are struggling to keep a roof over their head look at that, they're quite upset.

We should have a study over the next six or eight weeks that really tackles the issue of corporate welfare and these grants that are given and the track record. What does it mean in terms of jobs? Does it produce jobs? Where are the grants going, and are they going to very profitable corporations like Mastercard? These are all issues that I think people would want the finance committee in a minority Parliament to examine.

I agree with the proposal of Mr. Poilievre, and I think it'll be important to put that into place. I can think of witnesses already who would be willing to come before the committee. Fortunately, we have a week off, so we could submit witnesses as early as next week and then have hearings the following week as well as the weeks going into April after the second March break week. If we do it for six or eight meetings, I think we would have a very interesting report that would provide recommendations about the extent to which these grants—I would call them giveaways—have any sort of positive repercussion and the extent to which taxpayers' interests are being protected.

I guess I'm seconding Mr. Poilievre's proposal.

3:50 p.m.

Liberal

The Chair Liberal Wayne Easter

It isn't on the table yet.

We have a motion on the table, and that's to undertake a study on sustainable finance.

On my list I have first Mr. McLean, then Mr. Fraser, then Mr. Fragiskatos and then Mr. Ste-Marie.

Mr. McLean, you're up.

3:50 p.m.

Conservative

Greg McLean Conservative Calgary Centre, AB

Thank you, Mr. Easter. I'll speak to sustainable financing.

Sustainable financing means that you are going to put government money towards something that is already being financed in the marketplace right now. In Canada, the financial markets show no dearth of financing for sustainable projects at this point in time. There are several funds in the market with money in their hands waiting for the right projects. Having a new fund financed by the government—i.e., by the taxpayers of Canada—to put more money into those projects is completely worthless at this point in time.

I'll second what my colleague Mr. Poilievre said, which is that the Canada Infrastructure Bank exists, but it isn't necessary with billions of dollars sitting on the sidelines waiting for the proper investments and the right risk-return scenarios. There is very much money invested at a low rate of return for Canadians for actual projects that make sense across this country.

There's no definition on “sustainable finance”. It is the flavour of the day: How do we get more money out of government in order to do our pet projects?

I would speak strongly against this proposal from the finance industry perspective, but I would also speak strongly in favour of Mr. Poilievre's replacement motion to really look at what Canadians want to see here, which is where all this money is going. They see it going, and it's advertised where it's going—$50 million here, $40 million there—yet the government will come back at tax time and say they need to raise taxes. They need to find more ways to take money from small business owners and doctors and teachers and everybody else throughout this piece here, including capital gains exemption and what is called “tax equity”, although most people wouldn't call it tax equity.

That whole pulling in of money is what seems to be jading people the most. They see the government throw it out the door with abandon to all these corporations that merely have really good friends who are lobbyists.

I've spoken against the motion on the table and I've spoken for what I think is a great alternative motion.

Thank you, Mr. Chair.

3:50 p.m.

Liberal

The Chair Liberal Wayne Easter

Mr. Fraser is next, and then Peter.

3:50 p.m.

Liberal

Sean Fraser Liberal Central Nova, NS

Thank you very much, Mr. Chair.

For the benefit of those who are at the table who may not have been part of the pre-budget consultation exercise, I'll just note that we heard repeated recommendations that the government move to implement the recommendations of the expert panel on sustainable finance.

I acknowledge that the wording of the proposed motion fails to specifically mention that report. I assume it was the intention of my colleague to specifically study some of those recommendations. I know we were encouraged repeatedly to adopt each of the recommendations of that report before we jumped to the broad-based conclusion that it would provide a great opportunity for us to examine them in greater detail. I too understand which of them may make sense and create opportunities for economic growth as we transition to a low-carbon economy.

I would support the motion for that purpose, though I would remain open to other ideas.

The second point, Mr. Chair, is that from my experience in the previous Parliament—and I know there are folks around this table who have been here longer than I have—it seems that would be the kind of discussion that would ordinarily be kicked to the Subcommittee on Agenda and Procedure, which exists more or less for the purpose of having these conversations so that we don't need to have them in the full committee hearing. I seek your advice on what the ordinary practice should be here, and perhaps the recommendation of the clerk as to what the proper course of action would be with respect to the subcommittee.

3:50 p.m.

Liberal

The Chair Liberal Wayne Easter

I believe the clerk wants to speak as well.

We've done it both ways. Usually, we've dealt with motions of this nature in the full committee, and then the subcommittee gets together to prioritize the witnesses and that type of thing. We've done it both ways. We've talked at the subcommittee, and I think we had as many as eight proposals, or somewhere around there, on deck at one point in time in the previous committee, and we've had the subcommittee go with one. It's been done both ways.

We're at where we're at now, and we need to make a decision on what we want to start with in the first week back.

Go ahead, Mr. Fragiskatos.