Finance Committee on Feb. 6th, 2020

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

Supply management works well. Production is determined by demand. Price is then determined by production cost, with revenue added in at a standard rate.

When concessions weaken supply management—you put the losses at 18%—what does that do to dairy farmers, in real terms?

[Pierre Lampron]

As you mentioned, the dairy sector was sacrificed. That means a loss of income. The cost of production and profit margin are also factors. While it’s possible to lose market share and still operate efficiently, efficiency is also a matter of volume.

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

Your colleague talked about investments earlier, saying that the investment program put in place had not worked well.

You’re asking for direct transfers, but my understanding is that the money is going to be used for other investment programs. As more and more access is granted to the market, the investments seem to be less and less clear.

[Pierre Lampron]

We are calling on the government to put the money in the hands of producers. They know how to manage their investments. Not all farmers are at the same place in terms of benefiting from transfers versus investments. They aren’t all at the investment stage. That’s what was so frustrating about the first program.

We are recommending that the payments be made directly to farmers, and they will invest the money when the time is right. They’ll have to pay taxes, so the money will be back in government coffers in no time.

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

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Mr. Julian.

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

I’d like to thank the witnesses.

My first questions are for Mr. Lampron and Mr. Weins. You talked about the expanded market access under the recent trade deals and the negative impact on supply management. I have two questions for you. The first has to do with the reciprocity of standards between Canada and the U.S. As we know, Canada has higher standards than the U.S. American dairy products contain all sorts of additives that are prohibited in Canada.

Does the reciprocity of standards concern you?

Mr. Weins, you talked about the surcharge on exports. It will be important to explore how the surcharge on exports can be avoided within the context of an administrative agreement, and if I understand correctly, even in relation to countries other than the U.S. and Mexico.

Do you think that’s possible?

[Pierre Lampron]

I’ll start with your first question.

There is no denying that the reciprocity of standards is a concern for producers, and that’s true not just for dairy farmers, but also for our fellow farmers in other sectors. We have high standards in Canada. The proAction initiative ensures oversight of animal welfare, the environment, traceability and biosecurity. All of our farmers have to meet requirements in those areas. They are verified standards.

We can try to determine what’s coming in from the U.S., but the fact remains, the Americans don’t have the same standards we do.

It’s a serious concern. You brought up a good point, so thank you.

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

Thank you.

Mr. Weins, did you have anything to add?

[David Wiens]

I would like to respond to your second question, on how that might work, how we might be able to change the agreement that is already in place and that we expect will be agreed to.

We would hope that there would be some way our government could negotiate something with their government, in an administrative way, to recognize the difficulty of having this ban on worldwide exports of Canadian dairy protein products.

I'm not sure what that might look like. I think people closer to that could maybe give us a better description. Even if it were a side letter, whatever.... I'm not sure exactly what it would look like.

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

You're underscoring the importance of that. I don't want to cut you off.

I'm just going to go to Ms. Ballantyne. I was going to ask you about the cherry blossoms just west of Harrison Mills as it's minus 10° in Ottawa, but I think I'll go right to child care. You talked about $1 billion more per year over 10 years, but also about negotiating enhanced child care agreements with the provinces, setting up a secretariat, putting in place a child care program that really is national in scope.

I guess I would ask you two questions. First off, we're probably talking about an additional close to $2-billion investment per year, I would expect, in order to really do this right. Is that not true? Second, how important is this for middle-class prosperity when you have families paying up to $2,000 a month per child care space? How essential is this to take that burden off? How does that contribute to Canadian prosperity when you make that investment? How does that contribute to accessing the labour force and providing more economic growth?

[Morna Ballantyne]

It's even more than what you're suggesting, Mr. Julian. What we're asking for is an additional $1 billion each year. In 2020 we're asking for $1 billion in the budget. In the year following we're asking for $2 billion. In the year following that, $3 billion, and so forth. That is consistent with the commitments your party made in the last election. It's set out in our plan, the affordable child care for all plan. That is the kind of money that would be required to build it, over a 10-year period—because it can't be done right away—and as the money increases each year, to be in a position to provide a licensed, high-quality, affordable space for every parent who wants it. We certainly don't think it should be mandatory, but we think that those parents who need access to child care, high-quality child care, should get it when they need it. That means a huge expansion of the system in every province, including in Quebec.

The money is also needed so that those spaces are high quality and affordable. What we're proposing is, actually, the creation of tens of thousands of spaces. That will, in turn, create a lot of jobs in the sector. If they're high-quality child care spaces, then they will be good jobs.

Why is this so crucial to middle-class prosperity? It's because, quite frankly, without access to high-quality child care, parents can't work as productively and as effectively and in as great numbers in the paid workforce. That's particularly true for women.

Middle-class prosperity, whether we like it or not, depends on two incomes. That means that parents, where there are two parents in a family, both need to be able to have the supports of child care to enter and stay in the labour force.

As you say, it contributes to middle-class prosperity, because right now, families are paying, on average, 26% of their household income on child care for the early years.

Thanks.

[The Chair, Liberal, Wayne Easter]

I'm going to have to cut you there, I'm afraid.

Mr. Cumming and then Ms. Dzerowicz.

[James Cumming, Conservative, Edmonton Centre, AB]

Thank you, all of you, for coming today. I very much appreciate your taking the time.

Mr. Kiss, I want to talk a little bit about some of the things you talked about. It couldn't have been easy to have to lay off 600 people. It strikes me that you're really not asking for a break. You're not asking for a tax break. Really, you're asking to be able to do what you do well and to continue to expand your business, which, obviously, will help with.... We hear a lot about people needing more money and more money from the tax coffers of the federal government.

If it were given the opportunity to grow, what would the potential for your business be? What's the potential for that kind of tax revenue, not just for the coffers but for things that you buy outside of the provinces of Alberta or Saskatchewan?

[Peter Kiss]

I had my finance team go back and pull up how much money we had contributed to the governments of Canada. It was $147 million, and that is payroll, but not GST, over 10 years. That was an astounding number. We're not a large business. By definition, we'd be medium-sized. In the oil sands, we would be a small player.

We have a staff of 850 employees, and if times were better I could see us doubling that size without much effort. It would be a lot of effort, but we could get there quite easily. All of those people buy vehicles made in Canada, food made in Canada and houses made in Canada. There's a massive trickle-down. They're flying across the country to get home to their families. We employ people all across the country, from Newfoundland to British Columbia and the territories.

Also, as I mentioned, we have eight indigenous partnerships and a couple more that I'm working on. The indigenous communities that we work in have been neglected and oppressed for generations. Now, with the focus and the spending of resource companies ensuring that they're gaining meaningful employment, we're seeing prosperity in places that have never seen it before. We're talking about developing-world poverty in our own country, and now these people have jobs. That's what it means.

There's a massive trickle-down across this country.

[James Cumming, Conservative, Edmonton Centre, AB]

We're hearing a lot about Teck Frontier. How important is that project to Alberta and to the resource industry in Alberta?

[Peter Kiss]

There is a lack of offtake capacity in western Canada. There are no pipelines to get our oil out. Any new projects that were slated have been shelved for two reasons. First, there's no place to put the oil. Second, a curtailment was imposed by the Alberta government to raise the price of oil, somewhat artificially, so that we weren't selling $60 oil to the United States for $12. There are no new projects happening.

Teck Frontier is a light at the end of the tunnel. I believe, and don't quote me on this, it's 7,000 construction jobs. I don't know what the permanent jobs would be, but it would be a massive boon to the Alberta economy. The steel and pipe and all kinds of material would come from across Canada. It's very important.

[The Chair, Liberal, Wayne Easter]

Thank you.

We'll turn to Ms. Dzerowicz.

I want to come back to some questions on Teck Frontier later, myself.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair. Thanks to everyone for your great presentations. I only have four minutes and I'd like to get to four of you, so please keep your comments short.

I'll start with the Canadian Cancer Society. Thanks for your excellent and thoughtful recommendations. In terms of employment insurance sickness benefits and extending the benefit to 26 weeks, considering it takes much longer to recover from breast cancer and colon cancer, I thought it was very generous to have suggested just 26 weeks. Have you costed it out, what the cost would be moving from 15 to 26 weeks?

[Kelly Masotti]

We say at least 26 weeks, because that is the data that we have access to, to indicate the length of time for treatment for somebody who has breast cancer or colon cancer. The Parliamentary Budget Officer completed a report, and we recommend that the committee look at this report. He has costed it out to 50 weeks, and I'm happy to share that afterwards.

[Julie Dzerowicz, Liberal, Davenport, ON]

Please do. Thank you so much. A number of other groups have recommended that, and I think it's high time we follow that.

My second question is for the Canadian Federation of Agriculture. Grain drying and the heating and cooling of livestock should be exempted from carbon pricing. Why haven't we done that?

[Scott Ross]

It's a very good question.

In many respects, there's a sense that agriculture was given some limited exemptions in terms of on-farm fuel use and greenhouse heating, for example. It's a complicated industry and many Canadians don't understand the ins and outs of what is required to get food to market. We would hope that it would be largely an oversight, particularly given the kinds of weather conditions that we are now experiencing and the extreme weather events. Our hope would very much be that this an oversight that could be addressed in the short term, given that grain drying is a reality in Canada, particularly when we see winters like we just had. As we have seen over the past number of years, adverse and extreme weather events are increasing in regularity due to climate change. We need to be prepared and ensure that farmers have the tools in place to manage that.

[Julie Dzerowicz, Liberal, Davenport, ON]

Are farmers largely seen as small business owners?

[Scott Ross]

I can't speak to public perception but, yes, they are largely, under any categorization you can come up with, small and medium-sized enterprises.

[Julie Dzerowicz, Liberal, Davenport, ON]

Part of the reason I'm asking is because I believe that additional 10% was set aside. I think that was meant to provide some additional funding to small business owners. I think that was also supposed to cover some of these additional costs.

Are you saying this did not occur?