Finance Committee on Feb. 4th, 2020

[The Chair, Liberal, Wayne Easter]

Thank you. It isn't the first time we've heard about a comprehensive tax review. We heard it a lot in the last Parliament. I believe we even made a recommendation on it.

Mr. McLeod, you are next.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Mr. Chair. I will be splitting my time with my colleague Annie Koutrakis.

I have a couple of quick observations that I want to flag. Then I have a question for the Canadian Association of Fire Chiefs.

First of all, I want to commend you for the work your organization is doing on the indigenous fire marshals. I think it's a good move. I think it's something that's much needed. In your document you state that you need support. Maybe you could provide to the committee what form that would take.

The second thing is that as fire chiefs, fire marshals are responsible for all hazards by default. This is an observation from the Northwest Territories, and I think it will happen with these fire marshals on the reserves. We don't have building inspectors. By default, the fire marshal's office is usually asked to take on that responsibility. It's a serious concern. I think that may be an area that you could look into a lot more.

The question I want to ask is regarding mental health. I think this is a real serious concern. It's something that we deal with with social workers in the north. We've already invested $30 million in a commitment over five years. Is that meeting the mark? Is that meeting what it's intended to meet?

If you could respond to that, then I'll turn it over to Annie.

[Daniel Perron]

Indeed, mental health is a serious problem not only for firefighters but also for all the first responders of this country, and it's even larger than that. We have had the chance to make some forward movement with the latest investment the government has made in the last couple of years. The problem with the situation right now is that most of that money has gone to research. Even though we acknowledge and we know that research is important and that it will be extremely useful in the years to come, on the ground and in the field we see what the problem is and we know that there are already a couple of solutions that could be applied, programs that do exist right now that are doing the work they're supposed to do.

We are firefighters. There's no time if one's in front of a house on fire to write a white paper. We're having problems with things that take a lot of time to come out and to translate into actions in the field.

Do you want to add something, Tina?

[Tina Saryeddine, Executive Director, Canadian Association of Fire Chiefs]

Thank you, Chief Perron.

Thank you for the question, Mr. McLeod. This is an ongoing case we've had with those you funded from the $30 million that came out from budget 2018. Something that I think all fields struggle with is the speed of translation when you try to get an evidence-informed process, as Chief Perron said, to the front line. That's why our brief is called “Between 7 minutes”—which is the fire response time—“and 17 years” which is the time the evidence tells us it takes for health research to reach the front line. You're doing a great job, because supplementing your long-term thinking are the short-term boots-on-the-ground types of responses. That's why Chief Perron said in his remarks “micro investments matter”.

Let me give you a great example, not because it's all we need to do—we have a long way to go—but to encourage the types of initiatives that you're taking. Recently Public Safety Canada shared with us that through the University of Regina, they would provide an additional $400,000 of funding to help spread the Road to Mental Readiness program. This type of programming is something that you use with DND and that we are taking to the Northwest Territories this year through a grant from the Motorola Solutions Foundation.

I don't want to take too much time answering the question, but to Chief Perron's point, we do have the struggle of finding evidence-based practices that can get implemented quickly. It takes creativity. The best thing the finance committee can do is to hold to account those who are leading the charge in terms of the research and ask what innovative methods they are using to take those research dollars to the front line and how they are engaging the front line. One of Chief Perron's colleagues has the opportunity to co-chair the public safety steering committee, which is working with the University of Regina. Another big area is suicide prevention.

We still have quite a bit of time, so thank you on that.

[The Chair, Liberal, Wayne Easter]

Ms. Koutrakis, you can have a quick question.

[Annie Koutrakis, Liberal, Vimy, QC]

It's just a quick question.

Thank you for being here today.

I am the member for the riding of Vimy, which includes the city of Laval, the Montreal area’s largest suburb. Under the federal gas tax fund, Quebec received more than $504 million in fiscal 2018-19.

Laval, like many municipalities across the country, faces vast infrastructure challenges as it urbanizes. What sort of challenges do municipalities face when deciding where to implement the GTF? What are some of the ways that we can streamline the process?

That's for Ms. Saab or Mr. Rubinstein.

[Carole Saab]

Thank you very much for highlighting in your question and example the kind of direct investment that's been made in Quebec through the gas tax fund transfer. It's one of the most direct and reliable tools that municipalities have. Our experience with the gas tax fund, and I think most recently illustrated by your government's one-time doubling of the transfer in the last federal budget, is how quickly municipalities are then able to turn that around into real-time projects. Every community has asset management plans and projects identified that are ready to go. Programs like the gas tax fund transfer that are direct, that are allocation based, and that provide the ability to plan really are the most streamlined version of delivering dollars to municipalities across the country. They enable them to get projects going, shovels in the ground, right away on a long list of projects that municipalities have at the ready.

[The Chair, Liberal, Wayne Easter]

We better leave it there.

We will go to Mr. Ste-Marie and then Mr. Julian.

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

I’d like to start by welcoming all of the witnesses and thanking them for being here today.

My first questions will be for the Canadian Association of Fire Chiefs representatives.

Your presentation was very clear, and your recommendations were duly noted.

My riding is home to a number of small rural municipalities, which rely on volunteer firefighters. With the current labour shortage, recruiting volunteer firefighters is a challenge. Would you say the federal government is doing enough to support fire departments in their efforts to recruit volunteer firefighters?

[Daniel Perron]

Thank you for your question.

As I mentioned in my presentation, 85% of the country is covered by volunteer or part-time firefighters. Not only do these firefighters cover a massive amount of territory, but the service they provide is also essential. Just imagine if all of them were paid full-time workers. That would require an enormous investment; it would cost a fortune.

You hit the nail on the head. One of our biggest challenges right now is retaining part-time and volunteer firefighters. Times have changed; the context is no longer the same. Nowadays, it’s hard to retain young firefighters, and that’s a problem facing not just municipalities in Quebec, but also those around the country.

Some municipalities have already set up initiatives to retain firefighters. Measures do exist, including the volunteer firefighter tax credit. However, it’s confusing because, as I just mentioned, there are two types of firefighters: part time and volunteer. Part-time firefighters receive some benefits for their service, but volunteer firefighters do it purely for the love of the job. True volunteers are harder and harder to come by. While they do have access to the volunteer firefighter tax credit, the applicable definition of a volunteer firefighter isn’t clear.

You asked me whether additional efforts could be made. More credits would certainly be welcome. Firefighters and people who live in the regions often have seasonal jobs, and that can be a headache for them. In Gaspé or on the west coast, for instance, people work as fishers, and when the season ends, they collect employment insurance, or EI, benefits. They are penalized, however, when they are called to respond to a fire: their EI benefits are cut depending on what they receive for their firefighting service.

This is something the federal government could work on to help us hold on to our part-time firefighters.

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

If I understand correctly, a good number of firefighters work on a volunteer or part-time basis, and the government should make clear the difference between the two to allow for better use of the tax credit. Many of them do seasonal work and rely on EI for part of the year, but when they respond to calls, they are penalized. That partly explains the challenge around retention. Basically, the EI rules need to be changed to support firefighter recruitment.

[Daniel Perron]

That’s exactly right.

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

Thank you very much.

My next question is for the Federation of Canadian Municipalities representatives. Your three points or requests were also quite clear. The municipalities in my riding are very appreciative of the federal gas tax fund. There is no doubt that your request to grow the gas tax fund aligns with their needs, as long as the criteria don’t become more stringent, of course.

I gather that, under the last federal budget, the government tasked your organization with distributing a portion of the infrastructure funding to Canadian municipalities. If I’m right, was that the case for municipalities in Quebec as well?

[Carole Saab]

Thank you for your question.

The government certainly did invest in FCM programming, particularly with a significant investment in the green municipal fund. That is for projects right across the country, and the green municipal fund does fund projects directly in Quebec as well. The investments that were made in the last federal budget will also be going towards projects that will happen in Quebec.

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

I’d like you to clarify something for me. Normally, all infrastructure funding goes through Quebec City, the seat of the National Assembly. In this case, however, you’re dealing with municipalities directly. Is that correct?

[Carole Saab]

That's correct. For the federal infrastructure programs, the money goes through the province to the municipalities for the green municipal fund. FCM is the intermediary, although in Quebec we have worked out an agreement with MAMH to ensure delivery.

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

I see. Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you. We'll have to end it there.

I'm going to come back to the EI question, Chief Perron. Are you saying that the firefighters who get paid a stipend for being firefighters, but who are out of their season and are drawing EI, get their employment insurance clawed back? Is that what you're saying?

[Daniel Perron]

That's what it is. In the dead season when there is no fishing or work in the woods, there are a few seasonal workers—more than a few. Out of 18,000, there are quite a few. Whenever it's the dead season for them and they're not working and they're getting unemployment insurance, if they answer a call, they get punished.

[The Chair, Liberal, Wayne Easter]

They get a portion clawed back.

[Daniel Perron]

Right. For me, it's a punishment.

[The Chair, Liberal, Wayne Easter]

I'll give you an example. I have a constituent who is also a councillor. She's a single mother. She got paid $300 for being a councillor. They happened to write the cheque when she was on EI, and her EI was cancelled for a little while just before Christmas while they did an investigation. Had she been paid while she was working, it would have been fine.

There's something wrong with this picture.

Mr. Julian.

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

I agree with you, Mr. Chair.

Thank you to the witnesses for being here today.

I'll start with Ms. Saab. In our area, in the Lower Mainland of British Columbia, we have TransLink, which is struggling to try to expand the transit system out to Langley and to the University of British Columbia. They've called not only for sustained funding—and the gas tax you've pointed to is certainly one example of that—but also for significant increases in funding.

In all the municipalities you represent, first off, how are we dealing with the infrastructure deficit? Is it growing? Does it not mean that this budget really should put in place substantial investments for infrastructure, including public transit?

Second, last night we heard very disturbing testimony from the Insurance Bureau of Canada. They now estimate there was over $5 billion last year in catastrophic climate change-related destruction, both insured and uninsured. What kind of impact does the growing size and scope of the climate emergency have on municipalities when, in the case of the insurance bureau, they are estimating that two-thirds of those damages are uninsured? To what extent does that mean municipalities are being strangled by the growing climate emergency and the lack of action?

[Carole Saab]

Thank you very much, Mr. Julian, for both those questions. I'll take them in order.

To your question on the necessity of significant investment in infrastructure on an ongoing basis, certainly the communities you're referencing in your part of the country are not alone in looking to really advance transit system expansions, in continuing to grow their public transit systems and in doing a lot of work to that end, using, where they can, the gas tax fund transfer dollars and also the public transit fund dollars. Our recommendation is, quite clearly, to continue to double-down on the direct investments to municipalities in the areas of infrastructure through a tool that gives that long-term predictability municipalities can plan against, like the gas tax transfer, but also to implement the commitment that we saw from the federal government in the last election around a permanent transit fund on an ongoing basis.

The current plan will sunset in 2027. There is a commitment to make the public transit fund permanent, which would give municipalities across the country the certainty they need. Part of what was so significant about this transit fund, which we would recommend continue on an ongoing basis, is that it was allocation-based. Systems across the country were aware of what their allocation was, what it was going to be for the foreseeable future, and were then able to plan long-term transit expansions, like what we're seeing happen out west, which is significant.

We believe that there is a necessity for continued and significant investment in infrastructure in the country, with a particular emphasis, from our perspective, on the necessity of its being predictable and as long term as possible, and allocation-based to provide that kind of certainty to communities.

To your second question, we agree with IBC. We watched its testimony with interest and have done some work together to try to continue to assess the impact of new weather extremes and climate change on communities across the country. Municipalities are on the front lines, both in terms of being the owners and operators of this kind of infrastructure for which there is a significant dollar bill attached to upgrades to be more resilient and to adapt to climate change, but also in terms of response. As we see more floods, as we see fires continue, it's the municipalities that are on the front lines dealing with these new kinds of weather extremes.

Our recommendation, specifically, is to continue to invest in the disaster mitigation and adaptation fund. It was heavily oversubscribed in the previous iteration. We know across the country that the demand far outstrips the dollars that are available. Our recommendation is to increase it by a further $2 billion over the next four years, because the risks are real and we are seeing them unfold in communities across the country. The necessity to upgrade infrastructure to be more resilient is critical.

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

Thank you very much.

I'm going to go on to Mr. Ball and Ms. McGuire.

Perhaps, Ms. Saab, you could reference what the calculation is on the infrastructure deficit at some point in your testimony today through the FCM. Over the last five or 10 years, are we going up or down, or is it remaining stable?

Mr. Ball, you've raised, very clearly, concerns around both the fact that the web giants are not paying any sort of contribution to the income tax system and the need to strengthen the anti-money laundering regime. The PBO published a report last June that we briefly talked about at the finance committee, showing $25 billion—and that was a conservative estimate—going through electronic funds transfers and other methods to overseas tax havens. That's basically an erosion of the money that we have in common to invest in supporting quality of life, infrastructure, and in fighting climate change and putting in place programs like dental care or pharmacare.

How important is it for us to tackle immediately what has become a profoundly unfair tax system and do that comprehensive review so that Canadians can have confidence that everybody is paying their fair share and that very wealthy and very profitable corporations are having to contribute and make investments to build our country?