Finance Committee on Feb. 6th, 2020

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Yes. Thank you.

[The Chair, Liberal, Wayne Easter]

If you could, please forward that to us as quickly as possible. We have to try to meet on recommendations the week after next, so we need it fairly quickly.

[Luke Chapman]

Okay.

[The Chair, Liberal, Wayne Easter]

We'll have Ms. Dzerowicz wrap it up.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much for your presentations.

I'm going to ask what I hope is perhaps not too odd a question. This is for you, Mr. Marshall.

We've been talking a lot about electric vehicles, electric buses and moving to a low-carbon economy. I think you mentioned something here about how rare earth elements are used within batteries and for our electric vehicles. Is this true?

[Brendan Marshall]

Yes.

[Julie Dzerowicz, Liberal, Davenport, ON]

Part of your recommendation is.... Do we have those minerals here in Canada, or are you saying that we're seeking some support so that we can explore whether or not we actually have this here in Canada?

[Brendan Marshall]

Sure. It's complicated. We do have a number of rare earth deposits. We have a permanent rare earth element mine in the Northwest Territories. We know how to extract those materials. The challenge with rare earth elements is that there is no market for those products. The reason for this is that China has coerced the market, so much so that out of concern for controlling supply they will force the price to plummet to prohibit financing for these projects to be able to move forward.

[Julie Dzerowicz, Liberal, Davenport, ON]

Okay.

[Brendan Marshall]

Any time there's an opportunity to diversify a supply source away from Chinese control, the Chinese very quickly act to extinguish that opportunity.

[Julie Dzerowicz, Liberal, Davenport, ON]

Right, because they have a monopoly now....

[Brendan Marshall]

That's correct.

[Julie Dzerowicz, Liberal, Davenport, ON]

Okay. Thank you for that. I wanted to make sure that I understood that section. It is something that's worrisome. Believe it or not, I was on vacation and met a French couple who were thinking about buying an electric vehicle and they talked about the monopoly on this.

[Brendan Marshall]

Yes.

[Julie Dzerowicz, Liberal, Davenport, ON]

It's crazy that this seems to be a concern around the world.

[Brendan Marshall]

Well, it is. I mean, at the end of the day, countries are re-evaluating the reliability of their existing supply chains for these materials, on the basis of concern that growing geopolitical tensions and trade conflicts could cause an abrupt interruption of these essential inputs into their national security as well as their economic functioning. They've created critical minerals lists. Canada signed a prime ministerial-presidential agreement on trying to streamline the production, manufacturing and development of the downstream market of these materials. The EU has done this. Japan has done this.

I don't think this is going to be a narrative that dissipates over time. I think that as concerns over geopolitical instability increase, we're going to see a greater level of attention from countries seeking to preserve their economies and looking at where they supply and where they source these materials. This is an opportunity for Canada.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much.

My next question is for Ms. Tassé-Goodman. I had a recently widowed woman call me and say that now that her husband has passed away, she no longer can afford her expenses. I find your recommendation for the OAS being extended for three months past the death of a partner a very good one.

Do you happen to have data on how much income drops when a male spouse dies versus when a female spouse dies? Do you have this type of data that you'd be able to provide the committee?

[Gisèle Tassé-Goodman]

It depends on the deceased person's contribution. That's how the calculation is made. The survivor's distress must be taken into consideration.

I want to make sure that I'm giving you an accurate answer. Are you referring to the three-month extension for the survivor or the bereavement pension?

[Julie Dzerowicz, Liberal, Davenport, ON]

I am referring to that. Because traditionally a lot of women have worked out of their homes to raise their children, when their spouses die, I suspect they tend to lose quite a bit more income than if a male spouse continues to live when the female partner dies.

I'm trying to ask if there is an inequity here. Not only do I support your recommendation, but I also feel it's very much needed, for a good chunk of our population. Particularly if the woman lives longer than her spouse, she's negatively impacted.

In any case, I wanted to say thank you for the recommendation. I think it's excellent.

I also wanted to confirm that you also recommended a $50-per-month increase to the GIS for everyone. Was that your first recommendation?

[Gisèle Tassé-Goodman]

We're asking for a $50 increase in the guaranteed income supplement for the people who receive it. These are the disadvantaged people in society, since they receive roughly $18,000 a year. As I said earlier, they face a number of costs. Some seniors go without medication because they don't have enough income. Moreover, there are the hearing aids and dentures that I mentioned earlier. We should also remember the support services that they may need.

All this means that an additional $50 per month would be appreciated by the most disadvantaged people receiving the guaranteed income supplement.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much.

[The Chair, Liberal, Wayne Easter]

I'd like to go back to you, Mr. Marshall, for a minute. We're just about out of time.

On these rare earth elements, I agree with what you said in terms of where China is at and the control it has over the system. In your presentation, you mentioned the joint action plan between the United States and Canada. Is that basically the bottom line proposal for how we can get out of this risk, I guess, of not being able to attain rare earth elements? Or is that enough? What do you see as the bottom line solution here to lessen the risk to us with the monopoly, basically, that China has on these metals?

[Brendan Marshall]

This is what we would perceive to be a good start.

There are really a couple of buckets that need to be addressed.

One is that there needs to be some RD and D to improve the processing, separating and refining of the finished products for rare earths. Companies have done that before; these processes exist. We think that's within reach.

The bigger question is how you break monopoly control over something. How do you generate a market somewhere where it doesn't actually exist? Not only that, but how do you generate that market where you have a predatory operator that has a vested interest in destabilizing that market?

I think those are the types of industrial policy questions that really need to be studied more carefully. Those are not the types of conventional tools in the tool box that governments in western, liberal, democratic, market-oriented societies reach to or readily have at their disposal. That's one of the reasons we included this interdepartmental joint industry working group that would come back, study the issue very carefully and then propose thought-out, researched, well-prepared, targeted recommendations to get to the question that you just asked: What are the specific solutions that we need? We acknowledge that we have some ideas right now about aspects of it, but some aspects of it need to be looked at more carefully.

[The Chair, Liberal, Wayne Easter]

Thank you for that.

Once again, thank you to all the witnesses for their presentations.

We will suspend for five or seven minutes before we go to the next panel.

[The Chair, Liberal, Wayne Easter]

I think we're all here.

Thank you, first, to the witnesses by video conference and those who are here for putting together presentations and coming on short notice for the pre-budget consultations 2020. I want to tell those who made submissions prior to the middle of August that the committee has decided to bring those forward and make part of the record and consideration for our recommendations when we get down to the final strokes on making recommendations, which we must put forward by February 28.

With that, we look forward to your presentations. We'll start with Mr. Lanthier as an individual. He is a retired partner of Ernst & Young, and former chair of the Canadian Tax Foundation.

Welcome, and the floor is yours.