Evidence of meeting #7 for Finance in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was interest.
A video is available from Parliament.
Allan Lanthier Retired Partner of Ernst and Young and Former Chair of Canadian Tax Foundation, As an Individual
Thank you, Mr. Chair.
I have prepared a written submission that sets out my recommendations for budget 2020, but I did it this week and finished it last evening. I emailed it to the clerk. I don't know if it's been distributed, but it's available to committee members.
Liberal
The Chair Liberal Wayne Easter
It has been received, but it was only in one language, I believe. It will be translated and it will get to all members before we get to the final recommendations.
Retired Partner of Ernst and Young and Former Chair of Canadian Tax Foundation, As an Individual
Yes, it was only in English. I'm sorry about that.
Retired Partner of Ernst and Young and Former Chair of Canadian Tax Foundation, As an Individual
In any event, I thought I would take my first few minutes to highlight some of the points that are made in the written submission.
In the submission, first of all, I recommend—and some of this won't be new to this committee. I know you've been meeting all week, and some of this may go over ground that you've been through before—that an independent committee be established to conduct a comprehensive review of the Canadian tax regime. I will come back to that in a second.
Then I comment on three separate issues: intergenerational transfers of shares, taxation of stock option benefits, and a proposal to limit deductible interest expense for large corporations. I'm not sure if MNP might have commented; I just came in at the end of their presentation. They or others may have touched on that.
First, I recommend that a comprehensive review of our tax regime be carried out by an independent and non-partisan committee. It has been over 50 years, as the members of the committee know, since the Carter commission issued its report in 1966. A detailed study is long overdue.
There are two reasons why we need a detailed study now. First, a lot of the rules in the Income Tax Act simply make no sense. My submission contains a few examples simply as illustration. I'll just highlight three of those. For example, individuals who receive dividends are entitled to credits for corporate taxes, even if the corporation has not paid any taxes. That doesn't make any sense.
Another example is that family members may be exempt from the TOSI rules, the income-sprinkling rules, provided the private corporation does not carry on a service business. The Canada Revenue Agency, the CRA, says that more than 75% of small businesses are service businesses and carry on service activities, so what we have is an exception for small business that almost no small businesses can access.
Third, our international tax rules allow multinationals to set up foreign subsidiaries in low-tax or zero-tax jurisdictions, even if the business activities continue to be carried on by Canadian resident employees of the Canadian parent company.
The tax legislation is just full of stuff, and it's time to revisit it.
The second reason we need a comprehensive review, in my view, is to look at the entire tax regime and try to figure out the tax mix and tax rates that are most likely to promote job creation and economic growth in the long term.
It doesn't necessarily mean a reduction in revenue base as a percentage of GDP, and I comment on that in my submission, but it does mean trying to get the rates in the mix correct. One really needs a committee that includes fiscal economists to do that.
The submission then comments on three specific issues.
First, our tax rules, as I think you've heard, often force a small-business owner to sell the business to an unrelated third party rather than to family members, something called the “84.1 trap”, referring to section 84.1 of the Income Tax Act. The Department of Finance has known about this for years. The Province of Quebec has introduced legislation, although it's pretty complex and poorly written legislation. It's time for the Department of Finance to fix those rules.
Second, on stock option benefits, draft legislation was issued—a notice of a ways and means motion was tabled in June—to put an annual limit of $200,000 on how much an individual can receive in stock option benefits and receive preferential tax rates. The rules got stalled. The government has said that it will tell us in budget 2020 how it intends to proceed. The draft rules are much too complex, and they provide tax results that are much too favourable for senior executives.
I've set out three recommendations in my submission to set how I think the rules should be fixed.
Finally, as part of its election platform, the Liberal Party proposed to limit the amount that a large corporation can deduct as interest expense to 30% of EBITDA, earnings before interest, etc. This is one of the OECD's base erosion initiatives, but this one should not be implemented by Canada. We already have two separate sets of rules that limit excessive debt leveraging—the United States does not, but we do—so it would be duplicative of restrictions that we already have in place, and the Department of Finance knows that.
In addition, these types of rules would be harmful to businesses that don't have robust earnings, such as start-ups and scale-ups, and they'd add another level of huge complexity to our tax legislation.
I welcome comments later on. Thank you, Mr. Chair.
Liberal
The Chair Liberal Wayne Easter
Thank you very much for speaking from your experience too.
With the Agri-food Innovation Council, we have Mr. Buy, CEO.
Welcome, Serge.
Serge Buy Chief Executive Officer, Agri-food Innovation Council
Thank you very much, Mr. Chair.
From potato farmers using technology to adapt to climate change to the rise of AI in food processing, research and innovation have brought the agri-food sector to new heights. I know that the chair has some familiarity with agricultural innovation, but agri-food research has also had a direct impact on many of the constituencies represented on this committee. For example, Mr. Fragiskatos's riding includes AAFC's London research and development centre. Mr. Cumming's riding includes the Alberta Prion Research Institute. The research laboratory in applied science in food is located in Laval, in Madam Koutrakis's riding. Still other regions, such as the Northwest Territories—Mr. McLeod's riding—are benefiting from advancements in modular greenhouse technology, allowing increased agricultural production.
The Agri-food Innovation Council has been an advocate for agri-food research and innovation since 1920. It is supported solely by Canadian organizations.
We are encouraged to see that one focus of this pre-budget consultation is the climate emergency. It enables us to make two key points. One, while the agricultural sector is often identified as one of the emitters of greenhouse gases, it should also be viewed as part of the solution. Indeed, the positive role played by agriculture in carbon sequestration is not recognized sufficiently. This should change. It is easy to blame farm production but challenging to recognize the positive actions that farmers are taking. Two, research is revolutionizing agriculture and food production. Increasingly, food produced in Canada utilizes fewer resources, emits less carbon and has greater nutritional value.
We also need to recognize that the return on investment for agri-food research remains very high. This information doesn't come from us. Rather, it comes from a presentation done by Dr. Bonti-Ankomah, an economist with Agriculture and Agri-Food Canada. Second, I would like to remind you of the report from the federal government's advisory council on economic growth, which recognizes agri-food as one of the key drivers for economic progress in Canada.
For this brief, we consulted our members from across the whole country.
Dr. Malcolm Campbell, vice-president of research at the University of Guelph, says that Canada will be the global leader in the agri-food economy when it taps into its vast and diverse agri-food assets—an incredible talent pool, world-class research, and globally impactful innovation and food production and processing that are the envy of many nations. He says that to Canada’s immense benefit, those assets do not live in one geographic region but are resident right across the country. In keeping with this, investments in the Canadian agri-food sector must embrace this powerful national diversity, leveraging capacity that exists from coast to coast to coast, catalyzing partnerships, creating greater vertical integration and amplifying innovation that resides nationwide.
There are a few issues to consider as you plan for the 2020 budget. Dr. Webb from the Global Institute for Food Security suggests that funding must be targeted to cross-sectional programs in which key agricultural innovation can be leveraged horizontally to integrate with other industry verticals, particularly health, manufacturing and the environment. Dr. Webb says that the finance committee should therefore focus on initiatives that support cross-sectional technological innovation to link value in the agricultural sector with value at the level of population health and well-being, industrial sustainability and environmental protection, particularly measures to mitigate and reverse the effects of climate change.
Short-term granting cycles do not work. The government should develop long-term investments in such areas as plant breeding. This recommendation comes from Dr. Tania Humphrey, vice-president of research and development at Vineland, a very successful research centre in Ontario.
We would recommend, as per Dr. Campbell's suggestion, that the universities be provided with the resources to realize strong agri-food research and innovation outcomes. We also believe that steps should be taken to make existing programming more flexible and to accommodate more than just traditional partnerships between industry and academia. Different partners, such as the private sector, early adopter producers, and industry consortia from within and outside the sector should be incentivized to work together. While we recognize fiscal restraints, we would like to emphasize, as the Saskatchewan Wheat Commission has stated, that tremendous opportunity for Canada comes with increased funding levels, given the return on investment from agri-food research and innovation.
With targeted and strategic support, the impact of agricultural innovations can be felt on a greater scale. These made-in-Canada technologies also have the added benefit of increasing international trade. A report by the Standing Senate Committee on Agriculture and Forestry referred to this as “untapped potential”, and advocated for changes to support the innovation, growth and competitiveness of the value-added sector. Increasing government support and incentivising all parts of the research continuum, from fundamental research to the adoption by end-users, will ensure that positive effects are felt sooner, and on a larger scale.
Recognizing that the federal government has a limited amount of funding to disburse, we believe a thorough review of the grants and contributions system, with an eye to maximizing the return on investment for the federal government, would make the system more efficient and facilitate the development of better products. We look forward to working with you on this and other initiatives.
Thank you.
Liberal
The Chair Liberal Wayne Easter
Thank you very much, Mr. Buy.
From the Canadian Cancer Society, we have Ms. Masotti and Ms. Sonea.
Kelly Masotti Director, Public Issues, Canadian Cancer Society
Thank you, Mr. Chair.
Good afternoon. Thank you for the opportunity to present to the committee today. My name is Kelly Masotti. I'm the director of public issues at the Canadian Cancer Society. With me today is Helena Sonea, senior manager of public issues.
Over the course of a lifetime, nearly one in two of us will hear the words, “You have cancer.” These words will change you, but at the Canadian Cancer Society, we believe they don't have to define you. The Canadian Cancer Society is the only national charity that supports Canadians with all cancers in communities across the country. We fund groundbreaking research, provide a support system for all those affected by cancer, and shape health policies to prevent cancer and support those living with the disease.
The Canadian Cancer Society makes the following recommendations to the government to implement in budget 2020. One, extend the employment insurance sickness benefit; two, invest in pediatric cancer research; and three, implement an annual cost-recovery fee on the tobacco industry.
Our first recommendation is to extend the employment insurance sickness benefit. When Canadians face cancer, their struggle is not just medical but also financial. In addition to a decrease in income, Canadians with cancer also face a rise in such expenses as medication, medical travel, parking and home care costs. The employment insurance sickness benefit currently provides 15 weeks of coverage, which is just not enough. It's not adequate to cover the length of treatment for people with cancer. A report by the BC Cancer Agency notes that the average length of treatment and recovery for people with breast cancer is between 26 and 36 weeks. For colon cancer it's 37 weeks. These are two of the most common types of cancer for Canadians.
It's time to alleviate this burden on people who are living with a disease as serious as cancer. It's time for the government to follow through on its commitment to extend the sickness benefit to at least 26 weeks.
Helena Sonea Senior Manager, Public Issues, Canadian Cancer Society
Our second recommendation is to ask that the government follow through on the Minister of Health's mandate commitment and make new investments in pediatric cancer research.
Two decades ago, about 71% of Canadian children diagnosed with cancer survived for at least five years after their diagnosis. Thanks to research, today, about 84% will survive five or more years. We must continue this trajectory through research that will lead to new and more effective treatments for childhood cancers and increases in the number of children who survive into adulthood.
The Canadian Cancer Society recommends that the government follow through on their mandate commitment and make new investments in pediatric cancer research and that this investment be directed to the largest charitable funder of cancer research in Canada, the Canadian Cancer Society. We fund over $40 million in cancer research each year, including $20 million in pediatric cancer research over the last five years.
Our final recommendation is that the federal government implement an annual cost-recovery fee on the tobacco industry to provide full reimbursement for the $66-million annual cost of the federal tobacco control strategy. Tobacco use is the leading preventable cause of disease and death in Canada, killing 45,000 Canadians annually including 30% of all those who die of cancer. While significant progress has been made, there are still five million Canadians who smoke. An enormous amount of work needs to be done to achieve the federal government's objective of under 5% of Canadians using tobacco by 2035.
We propose that companies pay a fee, based on market share, similar to the federal cannabis annual regulatory fee, so that the government can recover $112 million annually by 2021. The U.S. has had a tobacco fee in place since 2009, which accounts for U.S. $712 million recovered annually. If there can be a federal cost-recovery fee on the cannabis industry, we believe that a cost-recovery fee on the tobacco industry is also feasible. A cost-recovery fee would generate $66 million in incremental annual government revenue, which could be used for government priorities. In conjunction, we recommend an increase in the federal tobacco tax, which has proven to be the most effective strategy to reduce smoking among youth.
Further, the federal government should implement a tax on e-cigarette products to decrease youth vaping as many states and Canadian provinces have done or are planning to do. These taxes would represent a win for all, increasing government revenue and benefiting public health.
Together these actions will help stop cancers before they start, provide much needed support to people who have cancer and their families, and establish a practical foundation to better manage the long-term impact of cancer on our communities.
Thank you for your time today.
Liberal
The Chair Liberal Wayne Easter
Thank you very much.
We turn now to the Canadian Federation of Agriculture, with Mr. Ross.
I take it that President Robinson, my fellow islander, got stranded in PEI and that it isn't a beach day.
Scott Ross Assistant Executive Director, Canadian Federation of Agriculture
She does send her regrets.
She was waiting in the airport hoping to get here and certainly wanted to be here. Unfortunately, her flight was cancelled, so I'm here in her stead.
Assistant Executive Director, Canadian Federation of Agriculture
Thank you.
My name is Scott Ross. I'm assistant executive director at the Canadian Federation of Agriculture. For those who don't know, the CFA is Canada's largest general farm organization, representing 200,000 farm families across Canada from coast to coast. Through a unified voice at the national level, CFA works to ensure the continued development of a viable and vibrant agriculture industry in Canada.
While Canada's agri-food industry is a key economic sector in Canada, contributing $143 billion to Canada's GDP while employing 2.3 million Canadians, Canadian farms also provide a range of additional benefits to all Canadians—prosperity in communities across Canada, access to safe, affordable food, and environmental stewardship. Yet our industry still has significant growth potential as identified in budget 2017 and reinforced by the agri-food economic strategy table.
Our submission identifies a number of opportunities to further these benefits, which we would be happy to speak to. You should have that available to you, as it was submitted last August. However, I'll limit my comments today to two of the most impactful measures we would hope to see reflected in budget 2020.
Canadian agriculture is poised for growth, but a number of obstacles continue to constrain that potential. Although Canada has a suite of business risk management programs designed to help farmers manage risks beyond their control, these programs are failing Canadian farmers. Whether it's trade disruptions in key markets, extreme weather events or the rising costs of inputs, Canadian farmers are facing significant financial pressures.
Canadian farmers are also facing an uneven playing field in international markets due to the actions of our competitors. In 2019 nearly 40% of total farm income in the United States will have come from government supports, with EU farmers receiving nearly the same level of annual support. Meanwhile, Canadian farmers saw their realized net income decline by 45% in 2018, with government support in that year amounting to only 3.6% of Canadian farm income. As a result, Canadian farmers are at a competitive disadvantage in world markets, facing unprecedented risks and challenging financial conditions without risk management programs that meet their needs.
AgriStability, a core pillar of our suite of BRM programs, is the only tool available to all farmers that addresses both production and price risk. It had its support cut in 2013 reducing its efficacy to farmers and leaving two-thirds of farmers now opting out of this program, and, as a result, exposed to immense risk. Without urgent action, farmers across Canada face great uncertainty and financial pressures as they approach a new cropping season.
For this reason, CFA is requesting that budget 2020 commit to risk management enhancements that would ensure farmers have access to meaningful tools to manage those risks beyond their control, in particular restoring AgriStability coverage to its pre-2013 levels.
Speaking to the financial challenges affecting farmers, carbon pricing is also imposing considerable unavoidable costs on Canadian farmers. Recent analysis by the Agricultural Producers Association of Saskatchewan found that Saskatchewan farmers can expect to lose 8% of their total net income in 2020 due to carbon pricing. Once that price increases to $50 per tonne in 2022, that will rise to 12% of total net income. Farmers are unable to pass these costs along or avoid these expenses as these costs reflect unavoidable farm expenses like grain drying and heating of farm buildings.
While certain non-farm fuel uses are already exempt, this does not include fuels used for heating and cooling livestock or for grain drying, which are critical to managing the impacts of the weather extremes caused by climate change. These impacts were evident during last year's harvest, which saw grain drying fuel costs skyrocket. Initial data from Keystone Agricultural Producers of Manitoba suggests that a typical farmer growing 500 acres of corn spent approximately $14,145 on fuel for grain drying, while carbon pricing added $1,722 to that bill. To mitigate these negative affects, CFA recommends that the Canadian government fully exempt fuel used for the purpose of heating and cooling livestock and for grain drying. It's further recommended that farmers be reimbursed for carbon tax paid on grain drying during the 2019 harvest. This will provide farmers some relief as they compete with farmers in other countries who don't face a carbon tax and provide a bridge to transition to the high-efficiency energy retrofits offered by the climate action incentive fund.
With that, I'd like to thank you for your time and I look forward to any questions you might have.
Liberal
The Chair Liberal Wayne Easter
Thank you very much, Scott.
We turn now to our video conference from Harrison Mills, British Columbia, with Ms. Ballantyne, executive director of Child Care Now.
The floor is yours. Welcome.
We can all see you here, Ms. Ballantyne, but we don't have sound here. We'll see what the trouble is and come back to you Ms. Ballantyne.
We'll go to the Dairy Farmers of Canada, with Mr. Lampron, president, and David Wiens, vice-president.
Welcome, guys.
Pierre Lampron President, Dairy Farmers of Canada
Thank you, Mr. Chair.
My name is Pierre Lampron, and I'm the president of the Dairy Farmers of Canada. I'm joined by David Wiens, vice-president of the board of directors and president of the Dairy Farmers of Manitoba. On behalf of all Canadian dairy farmers, we appreciate the opportunity to present our pre-budget submission for 2020.
The Dairy Farmers of Canada estimates that the market access granted under the WTO agreements; the Canada-European Union Comprehensive Economic and Trade Agreement, or CETA; the Comprehensive and Progressive Trans-Pacific Partnership Agreement, or CPTPP; and the Canada-United States-Mexico Agreement, or CUSMA, represent a loss equivalent to 18% of the country's dairy production. The annual loss of revenues for farmers could amount to $450 million.
The concessions will have a dramatic impact on on-farm investments by dairy farmers and may lead to job losses, with ripple effects in communities across the country. The impact isn't just limited to dairy farmers. It will also have an effect on farm workers and many other associated industries. All rural Canada will pay the price for these repeated concessions.
The Prime Minister repeatedly committed to full and fair compensation to the dairy sector for the cumulative impacts of international agreements. On August 16, 2019, his government announced a $2 billion compensation envelope to mitigate the impact of CETA and CPTPP. It should be noted that this compensation doesn't cover losses caused by CUSMA. Of the $2 billion announced, $250 million was previously allocated under the dairy farm investment program, and the remaining $1.75 billion will be distributed over an eight-year period. Payments began in fall 2019 with a one-year direct payment program, for a total of $345 million. The remaining $1.4 billion compensation envelope is expected to be distributed, as promised, over a seven-year period, starting in 2020.
Canadian dairy farmers are all affected by recent trade agreements and are in the best position to know their needs. We're asking to receive the remainder of the compensation in the form of direct payments. This method of payment is consistent with the recommendations of the working group established after the signature of CUSMA and with the government's commitment to listen to farmers when determining the terms of payment.
The government must understand that the concession amounted to taking a wheel off a tractor. For the tractor to work, the wheel must be replaced. This means compensation through direct payments. Then, if we want the tractor to move forward, we need to put fuel in it. This involves implementing government programs to develop the industry. The tractor may have wheels, but if it doesn't have fuel, it won't move forward.
The Canadian government has stated repeatedly that it wants a dynamic and strong dairy sector that generates growth, creates jobs and promotes investment. If it wants this to happen, it must provide compensation to restore confidence in the sector. It will provide the stability that dairy farmers need to move forward. As a result, dairy farmers recommend the following.
First, they recommend that the Canadian government continue to give dairy farmers, in the form of direct payments, the remaining seven years of compensation to mitigate the impacts of CETA and CPTPP, and that the total amount be included in the main estimates for 2020.
Second, they recommend that the Canadian government fulfill its commitment to provide full and fair compensation to dairy farmers to mitigate the impacts of CUSMA, in keeping with the recommendations made by the producers' working group established by the government following the announcement of the trade agreement.
David Wiens Vice-President, Dairy Farmers of Canada
The outcome of CUSMA negotiations goes far beyond the dairy market access concessions that were made. CUSMA imposes export charges on skimmed milk powder, milk protein concentrates and infant formula beyond a specified amount.
This effectively equates to a worldwide cap on the export of Canadian dairy products and sets a dangerous precedent that could affect other sectors in future trade deals. Therefore DFC recommends that the Canadian government conclude an administrative agreement with the American government to ensure that the export charges contained in CUSMA, which are triggered after a threshold on certain dairy products has been reached—and again that's on the milk protein concentrates, skim milk powder and infant formulas—apply only to exports to the signatories of this agreement. In other words, they would apply to only the United States and Mexico and would not apply worldwide.
Last, we would like to see the other sectors under supply management, as well as the dairy processors, compensated to mitigate the impact of the recent trade agreements.
In conclusion, Canadian dairy farmers remain committed to supporting research and the development and adoption of new on-farm practices and technology. In the absence of government action on these recommendations, our ability to make the investments required to drive these important initiatives could be impeded by the concessions granted in recent trade agreements.
I'd like to thank you for your time and welcome any questions that you would have.
Liberal
The Chair Liberal Wayne Easter
Thank you, David and Pierre.
Now we'll go to Morgan Construction and Environmental Ltd., with Mr. Kiss, president and CEO, from Palm Springs, California.
I don't expect you have snow there.
Peter Kiss President and Chief Executive Officer, Morgan Construction and Environmental Ltd.
No sir, but you can feel good that I was up in Fort McMurray last night and it was really different.
Liberal
The Chair Liberal Wayne Easter
It is very different.
Go ahead. The floor is yours. We can see and hear you.
February 6th, 2020 / 5:45 p.m.
President and Chief Executive Officer, Morgan Construction and Environmental Ltd.
Good afternoon. I wish to thank the finance committee for inviting me to these pre-budget consultations. My name is Peter Kiss and I'm the owner of Morgan Construction, a heavy civil earth-moving and environmental company operating throughout western Canada with a focus on the Alberta oil sands.
We currently employ 850 men and women from across Canada and have eight indigenous partnerships to provide real value and capacity-building to the groups we partner with. We are the definition of middle class. In 2014 and 2015 when the price of oil crashed, we laid off over 600 people. We have changed our business and innovated, but we have not really recovered. This is not a novel, one-off story; it repeats itself across the Prairies. The perception is that no one cares about Alberta and the west, and as it goes, perception becomes reality.
It was of special interest, especially to me, when I had my finance team pull these numbers together, to find out that over the last 10 years what I thought was a small business is a medium-sized business. The business and our staff have paid, including payroll remittances, taxes and fees to federal and provincial entities, $147 million. This is all while we've had our business evaporate. Again, this is paid by the middle class.
It should be noted that while we have paid our way, the company has not made significant money itself. It could be argued that we are hanging on by a thread. I am not alone. Western Canada is desperate. When I drive around rural Alberta to our work sites, the hotels and restaurants are vacant and there are “for lease” signs everywhere. Parking lots of oil service businesses are empty. The sentiment in western Canada is one of desperation and hopelessness. There is a feeling that we have been economically blockaded. We have no friends in the Dominion. It is economic Armageddon in the west.
Before questions, I'd like to provide the following suggestions for the upcoming budget and legislative session. We need investment in western Canada and we need offtake capacity and infrastructure for our resources.
First, we need to create a corporate and personal tax regime that is better than that in the United States, so investment will flow back into Canada. We have missed an economic boom and we need to catch up. As I sit down here in the United States, with unemployment at all-time record lows, there are help wanted signs everywhere and we have missed out.
Second, we cannot have different rules for our resources that have to compete on the world stage. One example of this is that oil produced in Canada has a charge for CO2 emissions, but oil produced in the Middle East does not. This makes us uncompetitive.
Third, we need to amend Bill C-69 to give investors confidence and we need to get money flowing back into western Canada. The economic engine of Canada is our resources and we cannot get them to market. This legislation, left unchecked, will only hinder activity and growth across Canada.
Fourth, I would like to pose the following question, which baffles much of the west with regard to Bill C-48 and energy east. Why is it okay to run tankers on the east coast but not on the west? Why can we not export our resources and get a global price? Do you feel that other countries have better environmental laws and human rights than we do? Believe me, as I was standing in Fort McMurray yesterday, on our job site, no one cares more about the environment than my front-line workers, my clients and me. Why are we importing oil from outside North America and not using our own resources? Does it make the middle class better off if we transfer their hard-earned money to various regimes with less stringent environmental standards and weaker human rights?
Finally, my last point is about Teck Frontier. It must be approved without conditions. If it is not, or the conditions imposed are so onerous that the proponent declines to proceed, there will be a rebellion in the west, plain and simple. For my business alone, I estimate that this project would mean 200 jobs.
In conclusion, I wish to thank the finance committee for inviting me to present during these pre-budget consultations. Please remember that we are desperate, but we don't want or need handouts. The west is resilient and hard-working and we need the economic blockade to end. We need to go to work. Thank you.
Liberal
The Chair Liberal Wayne Easter
Thank you, Mr. Kiss. Thank you for stating it as you see it. We appreciate it.
We now turn back to Harrison Mills, and hopefully this time we have Ms. Ballantyne of the Child Care Advocacy Association of Canada.
Morna Ballantyne Executive Director, Child Care Now, Child Care Advocacy Association of Canada
Thanks very much, Mr. Chair, to you and the committee for the invitation to speak this afternoon on behalf of Canada's Child Care Advocacy Association.
Our organization serves as a national voice for a large, diverse and growing group of individuals and organizations who want high-quality, affordable, inclusive early learning and child care for all families and all children in Canada.
Last year, we drafted the affordable child care for all plan, which has been endorsed by a Canada-wide coalition of more than 100 groups representing parents, early childhood educators, advocates of children’s rights, anti-poverty groups, women’s organizations, and many others.
Three of the four national parties in the 2019 federal election made explicit commitments consistent with our plan. The majority of Canadian voters supported these parties. Now, we urge the House of Commons finance committee to recommend that child care be made a priority in the next budget.
An ambitious, evidence-based federal child care policy supported by proper levels of federal funding can advance reconciliation by supporting the implementation and expansion of indigenous early learning and child care; grow the economy by making it possible for parents with young children, especially mothers, to join the workforce or return to it after parental leave; help address the climate emergency through investments in local, green child care facilities and through the creation of green jobs in the early childhood education field; and redress inequality by ensuring that all children, women and families have equal access to high-quality, inclusive child care.
We were gratified that the Liberal government re-engaged in child care following the 2015 election. We welcomed the multi-year funding commitment for early learning and child care in the 2017 federal budget, and the negotiation of a multilateral agreement with the provinces and territories on early learning and child care.
However, the federal government must and can do more. First, we want the Government of Canada to increase its spending on child care by an additional $1 billion each year over 10 years to meet international benchmark standards. We recognize and applaud the Liberal promise to fund the creation of 250,000 new child care spaces for school-aged children. But we also need to see additional funds for the creation of more affordable infant, toddler and preschool child care in order to address the desperate shortage of supply.
Second, we want the federal government to negotiate new bilateral funding agreements with the provinces and territories, agreements that will simultaneously raise the quality of child care by lifting up the wages, working conditions and education of the child care workforce; increase access by substantially increasing the supply of high-quality, inclusive, flexible licensed child care for all age groups, using a publicly planned and managed approach; and make child care affordable for parents by providing direct operating funding to services.
Third, we want to see legislation that enshrines Canada’s commitment to child care with an entitlement for all children. The legislation should set out the principles, conditions and accountability mechanisms for federal transfer payments to the provinces and territories similar to the Canada Health Act.
Fourth, we ask the federal government to deliver on its election promise to establish and fund a federal child care secretariat to lead and coordinate the federal government’s child care work.
Fifth, we ask that the federal government continue to fund and support the implementation of the indigenous early learning and child care framework to ensure that all indigenous children have access to spiritually enriching, culturally relevant, high-quality child care.
Thank you very much.
Liberal
The Chair Liberal Wayne Easter
Thank you very much, Ms. Ballantyne.
I hate to go to four-minute rounds. Maybe we can do roughly four-minute rounds, possibly five minutes. I'd like to get eight people in. I guess nobody is getting out on flights tonight anyway.
We can start with Mr. Lawrence. We'll hold people to slightly less than five minutes.
Go ahead.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Thank you.
If it's okay, Chair, I want to discuss the impact of the carbon tax on agriculture. I would invite Scott, Pierre or David to respond to my question.
Some recent studies coming out of the Manitoba and Saskatchewan agricultural societies, as it were, have commented on the fact that there is a 12% increase in input costs—a $15,000 average cost. I'm wondering if your organizations have done any studies or could shed some light as to the impact on farmers and the sector of the carbon tax.