Finance Committee on May 5th, 2020

[Sean Fraser, Liberal, Central Nova, NS]

One thing you mentioned in addition to help kick-start the recovery was to have some sort of consumer spending initiative. One of the dangers that I see with an approach that might not be tailored too finely is when, say, you have no HST for a period of time, or something basic like that. You might essentially encourage people to go buy those imported products at a Walmart, for example, as opposed to visiting a local market and buying from a local artisan.

Are there safeguards or strategies that we could employ to encourage people to not only revisit their spending habits on the back end of this public health emergency, but target the spending on things that will have the greatest economic impact in Canadian communities?

[Mathew Wilson]

I've heard of different ideas coming out from some of our members around this and I haven't got my head completely wrapped around them. It's a great question.

As an example, let's take a look at those cars again for a second. I'm not advocating for this; I'm saying there is one example that's out there along those lines. The manufacture and sale of vehicles is a big-ticket item, hugely important for our economy overall. July 1 not only happens to be Canada Day but also the launch of the new USMCA among Canada, the United States and Mexico. There is not reason that you couldn't have cars that qualify, under the new USMCA, for some type of a special tax holiday or something like that. We've seen that before with different measures. Again, I'm not saying that is a necessity; I'm just saying it's one of the ideas being floated out there and it may be something to look at. I'm not sure what the impact of something like that would actually be, though, to be perfectly honest.

[Sean Fraser, Liberal, Central Nova, NS]

Sure.

I will direct my next question to our guest from the Winnipeg chamber.

You've described the government's efforts as hitting the mark nine times out of 10. I think the only reason for that is that we've been taking advice, as you've pointed out, from groups that have real experience in the economy or the communities, that can say, “Hey this is going to work,” or, “This needs to be tweaked.” Thank you for your input to date.

I've been doing some of my own consultations in my own community as a local member of Parliament, and doing some with some of my colleagues across Canada. I've found it remarkable to see how quickly we can identify where policy does need to be tweaked to make changes when we're having conversations of this nature, particularly when virtually everyone in Canada is focused on a common threat. I'm curious as to whether you can see lessons we can take from the consultation process—if I can call it that—as we formulate policy, to continue to have it be effective on a go-forward basis when we start to pivot towards the recovery.

How can we best engage with stakeholders to continue the success we've seen—to use your words—to hit the target nine times out of 10 during the next phase of this response?

[Loren Remillard]

I will say this to begin with. In my previous life I was a federal civil servant for 10 years. One of the lessons I would bring from that experience to what we're going through now is that too often MPs, be they from the government or the opposition, accept “no” from the civil service.

It's not a criticism, but I think this pandemic has really shown that when there's a sense of urgency, it's amazing how rapid and how innovative we can be as a government. When we don't accept “no” as an answer, we can get a lot of things done.

I'm particularly encouraged by something that the chamber had advocated for a while back—not necessarily implementing basic income or “Mincome” but taking a look at an experiment around that. I think we're living that experiment right now. There are a lot of lessons to be learned from that.

On a global scale, I would say that as a government, as elected officials, we need to be pushing the public service to embrace innovation. The opportunity is being made abundantly clear through COVID.

In terms of opportunities to continue to engage, I'm obviously a little biased, but I can't emphasize enough that the chamber network is the only business organization that represents all sizes and sectors of business from coast to coast to coast. I do want to give particular kudos to our national voice, Perrin Beatty, who has done an exceptional job in stewarding the network through this.

Continuing to engage those organizations that live and breathe within their communities, that are Main Street, Canada, and that know the mom-and-pop shops and those that are exporting internationally and are multinationals, through organizations like the chamber, really enables you to tap into not just one voice but the entirety of voices of the community.

This is my last comment. We're a vast country geographically, with multiple cultures and languages. Continue to look at digital transformation as an opportunity to engage meaningfully, not just in town halls where everyone calls in and you have five questions and get the check box consultation. Seize the opportunity to engage Canadians digitally.

[The Chair, Liberal, Wayne Easter]

We are going to have to end it there, Loren.

We are turning then to Mr. Ste-Marie, who will be followed by Mr. Julian, and then it's on to Mr. Cooper.

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

Thank you, Mr. Chair.

First, I want to acknowledge all of the witnesses and thank them for their presentations.

My questions are for Mr. Bolduc, from the FTQ.

In your five-minute speech you touched on a wide range of topics connected to the crisis, including the economy, emergency programs and the recovery. You spoke about cultural and media industries.

I'd like to hear more. Can you talk to us about what problems they are experiencing and what we can do to help them?

[Denis Bolduc]

Thank you for the question, Mr. Ste-Marie.

I think that the CERB needs to be extended for workers in these sectors, for as long as possible. We think that the health crisis will affect the cultural sector and the restaurant and hotel industries for a longer period of time, which I also mentioned. If we do nothing and these benefits stop in June, workers in the cultural and media sectors will have to rely on food banks in July because they will not have an income to pay for food and rent. We cannot abandon them. They'll need help.

It will be the same for the businesses in these sectors. Some businesses will likely not make it through, or if they do, they will have significantly cut their payroll as of July. Some will even close up shop. This is happening every week, especially with weekly newspapers in the regions across Canada. Every week we hear this kind of thing. It's unfortunate.

We also worried that we'll lose a lot of small performance halls in the cultural sector. We are hearing from some that they estimate we could lose up to 50% of existing performance halls. We cannot abandon them. They'll need support, which could be required longer than in other sectors.

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

In your speech you also said it was important not to lower taxes. We all know that these are some exceptional emergency economic measures. Forecasts so far are for a $250-billion deficit. That's comparable to what other G20 countries are doing, proportionally to their economies. Everyone will obviously need to do their part to pay back that debt when the time comes.

You said it was important not to lower taxes. I'd like to hear your position on the use of tax havens. Poland has said that, in this time of emergency, tax havens must no longer be used. Denmark has said that companies that want to access assistance measures cannot use tax havens, and France followed suit with a similar declaration made by its finance minister.

What's your position on the use of tax havens?

[Denis Bolduc]

When the Prime Minister first started getting questions on this topic, in light of what was going on in Poland, Denmark and France, as you mentioned, Mr. Trudeau seemed to be somewhat open. Unfortunately, he later retracted and took a step back.

We believe that if companies are getting assistance, that assistance should, of course, benefit the companies, but it should also benefit the workers. These companies must certainly not be using tricks or tax strategies to use tax havens in order to pay little or no tax.

It's hard to assess how many hundreds of millions of dollars—some even say billions of dollars a year—the Canadian tax system loses to attempts to maximize corporate tax strategies. Any assistance must benefit the companies, but it must also benefit the workers. We should take a lesson from what France, Denmark and Poland are doing.

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

We can't get the exact figures, but if you look at the five big banks in Toronto—

[The Chair, Liberal, Wayne Easter]

We have to end it there, Gabriel. We're just right on the time.

We will go to Mr. Julian and then on to Mr. Cooper.

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

Thank you to all of our witnesses for being here today. We certainly hope that your families and everyone in your neighbourhood is safe and healthy.

I'd like to address my questions, to start, to Mr. Neumann.

Thank you very much for being here, and a big shout-out to steelworkers across the country, who are often the front-line workers keeping us healthy, keeping us fed and making sure that our society is still functioning.

Mr. Neumann, you said something very eloquent, that we're all in this together, but we're not in it equally, and so I want to contrast two things and ask for your comments.

First, Jagmeet Singh and our caucus have been pushing for a universal benefit. The reality is that the CERB is already set up as a universal benefit, but many people are excluded. We had to fight hard to get three million people added, and yet there are millions who are still excluded from the CERB, even if they need it.

Despite those conditions and the government's refusal to put in a universal benefit.... As you mentioned, as far as corporate support is concerned, there are no conditions for the banking sector, no conditions regarding overseas tax havens. In fact, as you mentioned, many other countries have put in place conditions, such as not using public funds to for stock buybacks or for executive bonuses. Yet, the government refuses to put in any conditions in place there.

I'd like your comments in contrasting that universality for bigger business and yet for small or regular Canadians there's not the universal support available.

How harmful is it that we don't have those conditions in place for bigger businesses? Does it make any sense that we give them public funds that could be used for overseas tax havens or executive bonuses, stock buybacks or dividends?

[Ken Neumann]

Thank you very much, Peter, for that question and for your comments about the steelworkers.

As I said in my testimony, we represent workers from a very broad base. There should be no worker who should be left behind. The fact is that we're in a global pandemic. This is not just in Canada; it's around the world.

This is an opportunity for the Government of Canada to shine. These are our hard-earned tax dollars, and each and everyone of us contributes to the coffers.

The fact is that it's prudent for the government to make sure we don't have corporations that basically try to avoid their taxes with these tax havens and somehow be at the front of the line to get some of the government benefits. There are politicians elected—and all of you folks have been out there—to make it a better world for all of us. How dare would we now think that someone who has been trying to avoid paying their fair taxes should benefit from that? That's the first one.

On universality, there are many things you can talk about. You can talk about the health care system. You can talk about what has been exposed in this pandemic in regard to how we treat our elders. There are a variety of issues.

This is an opportunity for all politicians. I can see there is a lot of commonality in what's taking place. This is unprecedented for any of us in our lifetimes to witness what we are witnessing, and we're not out of it yet. This is why we need to have a government that's focused, along with the opposition parties that are pushing it in the right direction. As I said at the beginning, there should be no one left behind.

We have numerous examples of what I've relayed to you in my testimony in regard to people who have—

[The Clerk of the Committee, Mr. David Gagnon]

Mr. Neumann. I'm sorry—

[Ken Neumann]

—fallen through the cracks in this situation. In Alberta, we have a steel facility that's just at the cusp of this transition of COVID-19. It's called Alpha Steel. There's been a transition, with a new company coming in to buy.... The fact is that because it was being hived off, we're probably going to be seeing significant layoffs at Alpha Steel. Yet, they don't qualify for the 75% wage subsidy.

I think that we're moving in the right direction. However, with some of those elements I've talked about, this is an opportunity for all politicians to take leadership and talk about fairness in Canada. I can talk about manufacturing ad infinitum, and I've heard other witnesses talk about the PPE. It's an embarrassment to this country.

[The Clerk]

Mr. Neumann, Mr. Chair, I'm sorry to interrupt. The sound quality is not good for the interpreters at the moment, so they had to stop interpreting.

They were suggesting that you could try to be closer to your computer and maybe speak more slowly and a bit louder, and we can see if that works.

Sorry, Mr. Chair.

Sorry, Mr. Neumann.

[Ken Neumann]

Okay, sorry about that. I'll try to slow down. I get excited when I get talking about some of these things.

When it comes to personal protective equipment, we have first-hand knowledge. We have some front-line workers who work at airports, and who are expected—without going into names, some people have asked what happens if they have to screen someone coming through the scanner and the buzzer goes off. They weren't given face shields and were told that if someone coughs they should just turn their head. What kind of society are we talking about if we can't protect workers?

Each and every one of us gets up in the morning to go to work to fend for our families, each and every one of us who is here today, yet we don't have the ability to go to work and do a fair day's work to have pride in the work we do. The most important thing is that you have the ability to come home to your loved ones. I see it time and time again. The tragedy is, unfortunately—we just had April 28, Peter, which is the day of mourning, when we mourn for the dead and fight for the living.

In Canada, we still kill over a thousand people each year who do the same thing we do every day: getting up and trying to go to work and fend for ourselves. We have an opportunity to reset some of these inequalities or inefficiencies that have taken place in the health care system and the PPE, where we can't produce our own equipment to protect our front-line workers, protect our people.

We represent a lot of workers in the nursing homes. If you look at the baby boom burst, these are the folks, if you're fortunate enough to still have parents who are living, who are going to be in need of home care and these nursing homes. If you've witnessed what we've all witnessed over the last several weeks, it's not a pretty picture. It's not something I'd want to be saddled with, to say that I think it's time for my parents to go to a nursing home, considering what has transpired. We have a fiduciary responsibility, an obligation, to make sure we treat those people with dignity and respect. They have helped us build this great country.

Peter, here's an opportunity to reset and move forward, and to close those gaps, to stop those loopholes and to have a fairer society that's going to prosper for all.

[The Chair, Liberal, Wayne Easter]

Okay, we'll have to end that round there.

We'll now go to the five-minute round. We'll start with Mr. Cooper and on to Ms. Dzerowicz.

Mr. Cooper.

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

Thank you, Mr. Chair, and thank you to the witnesses.

I will address my questions to Mr. Brunnen of CAPP. You spoke of the unique and pressing challenges facing Canada's energy industry, and in particular for the immediate need for industry-specific liquidity measures. Thus far, we have seen very little for the oil and gas industry in terms of the federal response. We saw $1.7 billion for orphan oil wells, but really that's almost it.

In that regard, and I thought you said it but if you hadn't, I would just ask if you agree that, when it comes to the oil and gas industry, the federal COVID response has been insufficient?

[Ben Brunnen]

Yes, I agree with you that the federal response to support the oil and gas industry has not been sufficient from our side of things. We've seen the government announce its $1.7 billion, as you said, for orphaned and inactive wells. I think that's helpful. We've seen liquidity support for small and medium-sized companies, but we have not seen the government address the liquidity needs of the medium to large companies, and those are the companies that carry a significant portion of the investment, of the jobs in this country. We are hoping, and we are certainly advocating for the federal government to advance liquidity for these companies.

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

Thank you for that.

As we look beyond the immediate challenges facing the industry, which you've addressed by way of some of the measures you'd like to see, and we look toward an economic recovery over the longer term, there is some $20 billion worth of resource projects currently in the queue awaiting approval.

I know that in the past CAPP has expressed concerns about the approval process. Can you speak to the benefits of expediting approval for these projects? These are wealth-generating and job-creating projects and assets that will last for decades, especially in light of looking at the bigger picture, decades into the future, with the continued demand for oil and natural gas around the world.

[Ben Brunnen]

In our view, the recovery is likely going to be protracted. It's going to take some time to get ourselves back to a strong economic position as a country. Our view is that the government should look to the sectors that can help lead the recovery. We think the oil and gas industry is one of those sectors. We can certainly mobilize investment for projects to develop our high-quality environmentally managed resources.

Our recommendations ask the government, first, to create the right fiscal framework, notably with the immediate deductibility and the tax pools' recommendations that move forward projects that we consider shovel-ready. In addition to that, streamlined regulatory processes are certainly necessary to provide certainty and expeditiousness with respect to approving projects.

Those two elements are critical, and we think our industry can help lead the recovery not only in Alberta, Saskatchewan and British Columbia, but also nationally. As you heard, we have a substantial economic footprint and contribution across the country, and we'd be pleased to have the opportunity to draw on that investment to build those projects and jobs.

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

Right, and the immediate deductibility that you spoke of for the energy sector, with the benefit that it would have, is already in place for the manufacturing sector, is it not?

[Ben Brunnen]

It absolutely is in place for the manufacturing sector. The oil and gas industry did not receive the same full treatment at the time that was introduced, in 2018.

This is the single greatest lever that helps incent investment in long-cycle, major capital projects. Notably, Atlantic Canada and the oil sands are two of those types of projects—the SAGD facilities and in situ projects—that would really benefit from those parameters. We would also support LNG and pipelines, and other types of projects that would benefit from this provision.

[The Chair, Liberal, Wayne Easter]

Okay, thank you Michael and Ben.

Ms. Dzerowicz.