Finance Committee on April 24th, 2020

[The Chair, Liberal, Wayne Easter]

Mr. Lee, we have to end it there.

We'll go to Mr. Fragiskatos and then we'll go to one question each from Gabriel, Peter, Michael Cooper and Annie Koutrakis.

Peter Fragiskatos, you're on.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you, Mr. Chair, and the witnesses.

Professor Milligan, you are not an expert on municipalities, but I still want to ask you about the recent ask the Federation of Canadian Municipalities has put forward to the federal government. They're asking, as you might know, for at least $10 billion in support from Ottawa. You teach students. Students at the post-secondary level live in cities. Do you have any advice or thoughts on how the federal government should deal with a request like this?

[Prof. Kevin Milligan]

Again, when we think about transit authorities specifically and local government issues, the virus is creating some debt here and the question is whether that debt should sit on transit authorities and local governments, on provincial books or on federal books. That's how we should think about this.

My point of view on this is that the provinces are closest to the issues of their local transit systems. There are differences across provinces in how they are funded and how they're structured. I think it should be up to the provinces to figure out which institutions in their provinces should be funded and how they need to get funding, but I also think the federal government can have some role to play in providing some of those dollars.

So the decisions ought to be more decentralized. I don't think it's great for the federal government in Ottawa to be deciding which transit authority needs what kind of funding, but I think the federal balance sheet is capable of taking a heavy part of the load here. That could happen through funds given to provinces, which then get allocated to local circumstances.

[Peter Fragiskatos, Liberal, London North Centre, ON]

So to confirm, you believe there should be a very significant provincial role, taking into account that municipalities are creatures of the provinces?

[Prof. Kevin Milligan]

That's my view. Again, the reason is that different provinces have very different arrangements with local authorities. It's really hard, from the point of view of Ottawa, to design a program that fits all sizes across the country.

I do think the federal government has the capability of carrying a heavy part of the debt load that's been generated by this crisis, but the actual decisions on whether to fund one transit authority or another, I think, really ought to be done in provincial capitals.

[Peter Fragiskatos, Liberal, London North Centre, ON]

What do you make of this argument, then, Professor? I know we've been talking, again, about students, and other issues have been raised here. Perhaps I could be accused of straying from the main topic, but again, cities and the experience of cities is so important to the lived reality of everyday Canadians. I would be remiss if I didn't take the opportunity to keep asking you about this. What do you make of the argument that provinces are beginning to raise when they say, for example, that they don't have the funds to assist municipalities? They don't have that capability, and all or the vast majority of the financial support should be shouldered by the federal government. What do you make of an argument like that?

[Prof. Kevin Milligan]

I think they have a case that their books are strained. When we think about the frame of the long-run sustainability of fiscal policy, it is the case that over the next 20 years the provinces will have a big health care burden that they face. That's not true as much for the federal government, so I do think there is a case to be made that provincial governments, looking forward, have a more difficult ability to carry more debt going forward.

That said, I do think there is an opportunity, when we get through more of this crisis, and things, hopefully, calm down a bit in terms of the speed of the crisis, to sit down and make some of these really important long-run decisions about the shape of the fiscal transfers in our federation. I do think we need to have a full rethink of those. What we do in the emergency is one thing, but we need to also set a long-run trajectory that makes sense both for federal and provincial governments.

[Peter Fragiskatos, Liberal, London North Centre, ON]

I have a very short question.

[Chair]

[Inaudible--Editor]

[Peter Fragiskatos, Liberal, London North Centre, ON]

Okay, Mr. Chair, I'll stick with Professor Milligan.

Professor Milligan, you've talked about how a universal basic income actually is not universal in the sense that it does not assist those particular individuals who have a certain social need that leads them to rely on government more than others. I believe, in a recent podcast with David Herle, you made the case of someone who might be physically disabled, who needs government more than someone who is able-bodied, yet a universal basic income goes out equally. It's distributed equally but it has very unequal outcomes, if you like.

Could you follow up on that idea?

[Prof. Kevin Milligan]

Sure. It does depend on how we structure such a benefit, but often when the basic income proposals are made, the idea is that we replace existing benefits. The thing about existing benefits is that they are very often based on need. If you are disabled and you need a wheelchair, and you're on social assistance, you can get a wheelchair.

Under some basic income models, where we would replace all existing benefits with one cheque, you'd be stuck trying to buy a wheelchair with a cheque. I don't think that's the good thing to do. I think we need to have benefits that depend on your need and your particular circumstance rather than a one-size-fits-all solution.

[The Chair, Liberal, Wayne Easter]

Okay. We'll have to end it there.

Before I go to the single questions, I just have a question for the two witnesses who haven't had questions yet.

To either Mr. Davidson or Ms. Therrien, we have to look at ways of coming out of this crisis. Certainly infrastructure is one of them, as you mentioned. Can you give us an example of what that infrastructure would be, what the spinoff would be, and how fast it could happen?

To Ms. Laing, on the gymnasts, what solution do you see to the rent problem you have? Will the Canadian emergency commercial rent assistance that was announced be helpful, or is there still a crack to fill?

I'll turn to Mr. Davidson or Ms. Therrien.

[Paul Davidson]

Thank you, Mr. Chair.

Universities are on the front lines of the current effort. We're going to be there during the period of stabilization, and we want to be there for the recovery. As you know, universities have a reputation for being able to deliver high-quality infrastructure quickly and well. We did it during Mr. Harper's government. We did it in Mr. Trudeau's first term.

The kind of infrastructure that really needs attention can include deferred maintenance. Throughout Atlantic Canada, there are large amounts of deferred maintenance that need to be addressed. It can include digital infrastructure, to make sure that we are robust in terms of robust cybersecurity and being able to deliver online experience. It can include green infrastructure, to make sure that our campuses live up to the expectations of young people today, who expect to live and work in green environments. It can also include accessible infrastructure that lives up to the last Parliament's legislation on the accessibility act, making sure that universities are inclusive places.

That's an important part of the recovery phase, and we stand ready. We have provided to officials $3.8 billion-worth of shovel-ready projects. There is an additional $3.2 billion-worth of projects that are nearly ready, so there's a capacity of about $7 billion distributed right across the country, including in communities large and small. This is where I go back to universities as being anchor employers in communities, with local supply chains and where the benefits of these kinds of investments create quality jobs and better learning environments for our students.

[The Chair, Liberal, Wayne Easter]

Thank you.

Ms. Laing, do you have a response, please?

[Agnes Laing]

It has been very interesting to hear about the many crises that face our country. I realize that sport is probably very much last on the agenda, but as I was listening to all of you, I was reminded that 80% of our employees are students. In the end, children are going to be gravely affected by their lack of physical activity over the next year, and what the government has done for us is great for a couple of months, but it will not sustain facilities like ours.

Nobody will be able to stay open and be ready, because it is not going to be sustainable if they have a $250,000 debt without any revenue. There is also the fact that we are one of those organizations that cannot, as you have all said, slowly re-engage back into the economy. We are unable to do anything because we are in close contact, and although our children may not be as sick, they tend to be carriers, and those who are working with them are certainly middle-aged and older like me.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Laing.

Gabriel Ste-Marie, one quick question, please, and then it's on to Mr. Julian.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. LeBel, in your presentation, you raised the issue of student-researchers.

Can you give us an example to illustrate their challenges and needs? Can you give us some potential solutions?

[Philippe LeBel]

I'm a PhD student in microbiology and I work directly on farms. If this crisis had occurred during the practical phase of my project, I would have had to wait a year, maybe even two, before I could start the same study again, because it requires a complete experimental setup.

So it's very important that the research funding agencies also include this in their response to the crisis and that they are able to provide additional funding so that some students can graduate. Otherwise, it is like throwing away millions of dollars due to the crisis.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

It's Mr. Julian, and then on to Mr. Cooper.

Peter.

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

Thank you very much, Mr. Chair.

My question is for Mr. Céré. A lot of unemployed people go into debt. In fact, Canadian families carry the most debt in the industrialized world.

During the crisis, is it important that the federal government fulfill its responsibilities by requiring the big Canadian banks, which are making huge profits, to reduce their interest rates and stop penalizing people? For example, the credit unions have brought their interest rates down to zero.

Should the federal government use these tools to ensure that the unemployed are not in too much debt after the crisis?

[The Chair, Liberal, Wayne Easter]

Go ahead.

[Pierre Céré]

Of course, workers build society. Everything we see around us was made by workers. The current crisis is brutal and the unemployment rate is brutal. We have to make sure that people do not come out of this crisis more in debt or in worse conditions than before.

The Canada emergency response benefit was introduced as replacement income, and that's great. We were able to fill the gap for seasonal workers, people who lost their employment insurance benefits, those who lost income and students. That's great too.

However, other issues need to be addressed, such as credit cards, usurious interest rates and many other factors. We have to look into multiple concerns. We must ensure that people and society can come out of the crisis stronger. We need to prepare ourselves and our social security system for potential crises.

This is a historic moment, and there have been other moments like this in our society's history. We must learn from it, go further and come out stronger.

[The Chair, Liberal, Wayne Easter]

Thank you both.

We'll go to Michael Cooper, with a quick question, then to Annie Koutrakis.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

I'll direct my question to Professor Lee.

Professor, I completely agree with your comment that this is unsustainable. We're only five weeks into this lockdown and billions and billions of dollars have been spent. It's tough to imagine another month or two months.

You cited a few jurisdictions, including Germany and Denmark, in your presentation. Perhaps you could elaborate a bit about what they are doing.

You also spoke about a vaccine. I've heard some people say that unless we have a vaccine, we need to continue with essentially an effective lockdown. In the case of SARS, it's been 17 years and there is no vaccine.

One of the concerns I have as we try to find an off-ramp to this, all the while being guided by public health officials, is that the goal posts are shifting from the objective of this effective shutdown, which is to flatten the curve and ensure that our hospital system isn't overwhelmed. I wonder if you share that concern.