Evidence of meeting #2 for Finance in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was billion.
A video is available from Parliament.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
The agreement states that steel auto parts must not only come from North America, but must also be melted down in North America. Do you think that this makes a difference? It seems that the aluminum could come from Chinese dumping, since these parts don't need to be melted down in North America.
Do you think that this factor is significant?
President, Canadian Steel Producers Association
Actually, we feel that CUSMA very much strengthens the North American content requirements both in the rules of origin and in the subsequent down-the-road additional criteria in seven years time, specific to auto. From our perspective, this really does strengthen the competitiveness of the North American steel industry and moves it forward for us in a significant way. I stand here today telling you that we're very committed to this deal. We need to get it done.
Liberal
NDP
Peter Julian NDP New Westminster—Burnaby, BC
This is awesome testimony. Thank you very much for being here.
We could ask a lot of questions, but I'll start with you, Dr. Bechard. You were very eloquent about the impacts of not having a universal pharmacare in place. I will just give one brief example. A family in my riding of New Westminster—Burnaby is paying a $1,000 a month for heart medication. They are now having to choose whether they can continue in their home or if they have to put all of family resources to the heart medication.
You mentioned that national standards and a funding agreement are the two steps. As you probably know, the NDP is bringing forward a private member's bill that would deal with the issue of national standards. What remains, then, are the funding agreements that the federal government needs to negotiate with the provinces.
I guess my question is this. How important is it that this be in this year's budget, that the federal government, in this budget, make sure that the funding foundation is present, so we can move ahead with pharmacare now and not wait another decade for putting in place a valuable program?
Executive Board Member, Canadian Doctors for Medicare
Perfect. Thank you very much for the question.
I think no one will be surprised when I say it's critically important that we get movement in this year's budget. As some folks might already be aware, in the 2019 budget there was some funding for a Canadian drug agency. That has already been provided, to start an organization that can work toward this very evidence-based formulary of the most needed and effective medications so that we can get started.
There's also been some funding set forward for a national strategy for rare diseases. Some of us might be familiar with the fact that the more rare diseases often have very specialized and very expensive medication. It was determined in the Hoskins report that this likely needs to have its own strategy.
We have these moving pieces in place already. It's seems as though we've already put together some funding and a lot of effort toward getting the foundation ready. If we don't continue to proceed with this momentum, we really have not made the most of that funding that's already been invested. I think the momentum is already there. We know that Canadians overwhelmingly support the idea of national pharmacare. I think at this point it's not a matter of if, but when.
In the meantime Canadians, in both the private and public sector, are paying way more for our medications than we need to. So it's critical to act quickly.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
Thank you very much. I'll move on to Mr. Sanger.
You spoke very eloquently about the impacts of the stock options deduction; the lack of any sort of taxation regime for the web giants; and the fact as well that we require a lot of funding to catch up and fight the climate emergency. The PBO produced a report, which we discussed at our last finance committee meeting back in June 2 prior to the election, that conservatively estimated losses of $25 billion a year for the overall tax system because of the impacts of overseas tax havens.
How important is it to really move forward in this budget with a fair tax system to address all of these inequalities, so we can make the investments that so many families are looking for in affordable housing, pharmacare and dental care—all these other areas where Canadians have had to pay such a price because of our unfair tax system?
Executive Director, Canadians for Tax Fairness
I think it's quite surprising to a lot of people how much revenue is lost in these different areas to tax havens and loopholes. The other aspect of this is that it's important for businesses to be on a level playing field in this area as well. Right now, it is the larger corporations, in particular, that can avoid taxes through international tax dodging and, to a certain extent, domestically as well.
It was interesting to see the CRA's report on the tax gap. It was different from the PBO one, but there was even more of a tax gap for larger corporations. It was significantly larger. It's absolutely essential to take steps as soon as possible. That, as I've mentioned, can be very important to help fund different areas. It could help fund pharmacare. It could help fund investments in a green economy as well.
Liberal
The Chair Liberal Wayne Easter
We are turning now to Mr. McLean and then Mr. Fragiskatos, with four minutes apiece.
Conservative
Greg McLean Conservative Calgary Centre, AB
My first question goes to Ms. Cobden.
I'm a former steel worker and very pleased to see that you've decreased CO2 emissions by 31% over 30 years. Let's call it 1% per year. I understand that in order to make a big jump ahead, we're going to have to get some innovative technologies to make that happen. One percent per year is a good base if we can continue along that way. Obviously, some industries will do better, but it's nice to see steel on that track.
You did talk a lot about the CO2 tax and how much you're in favour of transitioning the industry to this new CO2 paradigm, and yet you want all the tax to go back to the industry so that it can innovate. You want the CO2 tax applied against imports, including from trading partners that are covered under certain trade agreements at this point in time. It seems like the cost of this CO2 system is going to be more expensive and more difficult, more onerous to administer, than not having a CO2 tax at all on your industry.
Would it be fair for me to say that you're actually not in favour of this, given the fact that it takes so much gerrymandering to make it work in the long run?
President, Canadian Steel Producers Association
Just to clarify my comments, we are going to see large emitters pay about $200 million per year into the industrial component of the program. There's been some discussion already on revenue recycling, that it should go to the province from which it came and all of that. That's fine. Our view is that it should be recycled back to the industries that can make the biggest change with the money in order to see our overall carbon emissions as a country go down. This is the essence of our situation.
I think you're right that 1% per year has been really good, and that's what will continue. I don't know how much more of that we're going to be able to do for the next 30 years, but we're going to continue to do it, and we'll get more improvement incrementally.
What we are really talking about for the new investment is transformation. How do we create those really new technologies of the future that recast how steel is made, not just in our country but globally? This is a real opportunity. No one else is doing it. We don't think this is something that can be done overnight. We think that we need a systemic, year-by-year approach to find those solutions and really make those things work. I have some experience in innovation. I know that good projects come and go—
Conservative
Greg McLean Conservative Calgary Centre, AB
Let's go back to the question about the CO2 tax because you do seem to be working around it, as opposed to addressing it directly. We'll pay the tax, take it back, and apply a tax on everybody offshore coming in. Is it a difficult way to address a situation having to deal with a new tax on your industry?
February 3rd, 2020 / 7:50 p.m.
President, Canadian Steel Producers Association
We operate in the world of what we have. What we have is a system, a regulatory system, that we need to meet. Basically, we do not see our competitors having to meet that system. So we are very concerned about leakage—
President, Canadian Steel Producers Association
—and we think there could be solutions for leakage. We're not necessarily saying that we need to tax them on their way in. We need to look at ways, though, that support the domestic industry's carbon objectives without having those unintended consequences—
President, Canadian Steel Producers Association
—that you've identified in your question.
Conservative
Greg McLean Conservative Calgary Centre, AB
I hear you. I'd like to see what those are at some point in time.
My next question for you is something that I am curious about, Ms. Cobden. You talked about the inherent environmental benefits of Canadian steel.
Conservative
Greg McLean Conservative Calgary Centre, AB
The last time I checked, steel is really composed of two inputs: metallurgical coal and iron ore. I don't know how those change as Canadian metallurgical coal goes over to China and is mixed with iron ore to make steel. Is it the shipping you're talking about that the footprint is on?
President, Canadian Steel Producers Association
Yes. The facts we can talk about specifically are the transportation costs. Of course, to your earlier comment, our industry is also in a regulatory framework that has seen us improve our emission portfolio and our emission profile. But on a transportation level alone, we would have about a third of the emissions of imports coming in from China.
Liberal
The Chair Liberal Wayne Easter
We'll have a little time later if you have another supplementary question, Greg.
Conservative
Liberal
The Chair Liberal Wayne Easter
We'll get back to you later. You have an opening later.
Mr. Fragiskatos.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
Thank you to the witnesses.
Ms. Cobden, when the question was raised earlier about the measures that the steel sector has taken on the environment, you talked about signals from the market, but then you expanded the list to include “signals...from our bankers”, in your words. Could you expand on that?