Finance Committee on Feb. 19th, 2020

[James Cumming, Conservative, Edmonton Centre, AB]

Thank you, Mr. Chair.

Thank you, Minister, for being here.

From where I come from, Alberta, it's certainly not the rosy picture that you paint. We saw witness after witness talk about the unemployment rate, the dire straits that the resource sector is in, the unemployment. Bankruptcy is up. It's very concerning. What they did come clear with is that they're not looking for bailouts. They're looking to be able to get their product to market and to contribute to the Canadian economy.

My question is very specific. When will TMX be in service?

[Bill Morneau, Liberal, Toronto Centre, ON]

Again, I haven't been here with you, so it's good to get a question.

I don't hail from Alberta, but I've spent a lot of time there, both before I got into office and while being in office, and I fully appreciate that the challenges are very real. They're very real for individuals who are out of work, and they're real for businesses that are trying to figure out how they can get access to capital, how they can actually continue on their successful business strategies.

Nobody's been asking us, in Alberta, for a bailout or aid. What they're asking for is how they can be successful. I absolutely believe that getting access to international markets for our resources, getting a fair price for our resources is critically important. That is an enabler for the oil and gas sector.

In answer to your question, Trans Mountain Corporation came out just a couple of weeks ago and told us what their estimate of the timeline for that pipeline conclusion was, and that is in late 2022. That is the information we're working with right now. We're working hard to make sure that we enable that as best we can, although the company, as you know, is operated independently on a commercial basis.

[James Cumming, Conservative, Edmonton Centre, AB]

I want to come back to Teck. What is the cost to the Canadian economy if we do not approve this project? Specifically, what is the cost to the Alberta and Saskatchewan economies?

[The Chair, Liberal, Wayne Easter]

Just for clarification for those watching, you mean Teck Frontier.

[Bill Morneau, Liberal, Toronto Centre, ON]

As I mentioned earlier, we are in a position right now where this is coming to cabinet in the very near future. We will have to consider all of the reviews that it's gone through in order to get to a conclusion that makes sense for our country. That is the process we're going through right now, which is quite a rigorous one. We look forward to having more to say on that in the not too distant future.

[James Cumming, Conservative, Edmonton Centre, AB]

What message would you give to resource companies that are working in Alberta and outside investors who are expecting the approval of this project, which went through all the environmental reviews, if this project is not approved?

[Bill Morneau, Liberal, Toronto Centre, ON]

I appreciate the question, but it is truly a hypothetical question. As I've said, now is not the time for us to answer that question, because it is going through a review process. As we finalize that decision, there will be more to be said. I will look forward to being part of that and appropriately answering questions based on the conclusions we get.

[The Chair, Liberal, Wayne Easter]

You have time for a very quick one, James.

[James Cumming, Conservative, Edmonton Centre, AB]

I would disagree it's hypothetical. They went through a review process and it's been recommended. The resource companies in Alberta are expecting and looking forward to seeing this approval. They don't view it as a hypothetical.

[Bill Morneau, Liberal, Toronto Centre, ON]

I'm sorry if I said that incorrectly. I did not say that anything to do with the process that it has gone through is in any way anything other than really important work; we just haven't gotten to a conclusion yet. Since we haven't gotten to a conclusion, we're not yet ready to talk about an approach to communicating with any Canadians, because we are still doing that review. At the time we get to that conclusion, based on the rigorous analysis that's gone on, we would be happy to discuss this.

[The Chair, Liberal, Wayne Easter]

Thank you, both.

We'll move over to Mr. McLeod, and then back to Mr. Ste-Marie.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Mr. Chair.

Once again, thank you for coming and presenting to us.

In your presentation, you talked about the economy doing well. We talked about this issue before, but while the national indicators remain strong, there still are parts of Canada that are struggling, not growing as fast as we would like to see. In the Northwest Territories, our economy is growing at a slower pace. It's causing a lot of concern with my constituents. The diamond mines are starting to hit a point where they're going to be past their production peak pretty soon, and there's really no other industry to offset this decline.

Two pieces keep coming forward as ways to boost our economy. First is dealing with the land tenure and governance issue with our indigenous people of the Northwest Territories. If we want to move forward, we need to have the indigenous people as full partners at the decision-making table. It's been slow going. The discussions are not going as fast as we'd like.

I belong to the Dehcho First Nations. I was a young teenager when we started our negotiations, and 50 years later we're still trying to sort out the issues and come to an arrangement. It's a long time, and it's hard to understand why it would take 50 years to try to negotiate an agreement with a population of 2,000 people. For us, reconciliation with our indigenous people is tied to the growth of the economy. We have a land freeze with a good part of the Northwest Territories that will not be lifted until we sort out the land tenure and governance issues. I think we need to put a lot more attention on it. In the last government, we put a lot of attention on the national indigenous organizations. Maybe this time we need to switch that focus.

We hear from the Chamber of Mines and the Chamber of Commerce that we also need more investment in infrastructure. We need more roads, better airports, bigger airports. We've done pretty well with the last government, but the deficit is so huge that we need to continue to look at what we can do.

I want you to speak to the efforts the Government of Canada is taking to support regional economies, more specifically in the north, to foster both growth and diversification.

[Bill Morneau, Liberal, Toronto Centre, ON]

First of all, I think you're identifying a challenge that Mr. Cumming identified as well. As we've seen, economic success in our country over the last number of years has not been distributed evenly. That is, I suppose, inevitable in a country as large and varied as Canada, but it's one of the very real challenges for our government.

As we talked about, we're working hard to think about how we can improve the economy in Alberta and Saskatchewan, and Newfoundland and Labrador as well. I think we also need to think, as you've said, about how we can ensure that we're making impacts in the north, where I recognize that there are some places that are not doing well at all. It's an important reminder.

As for the 50 years that you're talking about, I guess I don't have a lot of insights into the 45 years before we got into power, but in our government, we've been working hard to come to new fiscal relations, where we can, with first nations groups. We've been working hard to think about our infrastructure challenges in parts of the country that are going through significant challenges. In some cases, those challenges are related to climate change—things like reducing permafrost, which causes big infrastructure deficits.

We've also been thinking about how we can advantage particular parts of the economy that have different situations in different parts of the country. I know that the mining exploration tax credit, for example, has a big impact in the north. We extended it for five years recently, as you know, to try to give more long-term assurance to that sector of the economy, which is obviously one of the biggest drivers for economic success in the north.

But that's not me saying that we've done everything that we can do. I do think we need to work together to think about the challenges you've brought to my attention on numerous occasions, and the different situations with indigenous peoples in the Northwest Territories versus in other parts of the north. I think that's appreciated, and we need to continue to work on it to make sure that we make improvement.

Fifty years plus 13, does that mean 63? Is that the math I'm doing right now?

[The Chair, Liberal, Wayne Easter]

Thank you, both. We'll have to cut you off there. I'm conscious of your time, Minister.

Mr. Ste-Marie, if you could, keep it to one quick question, and the same for Mr. Julian.

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

Okay.

Mr. Minister, in the United States and in Europe, the aerospace sector is heavily subsidized by the state. European countries and the United States have policies to support aeronautics, because it is a very lucrative sector. However, it takes time to design models and make them profitable. Canada has no national aeronautics policy. Do you plan to develop such a policy?

Let me remind you that the aerospace sector is crucial for the economy of Quebec. When our aviation company needed assistance, it had to turn to the Government of Quebec and that kept its lights on. When the economy in the west needed help, investments totalling almost $20 billion were announced. In Ontario, the automotive industry needed about $10 billion. We can also think about the national shipbuilding strategy that helps the Maritimes and British Columbia, or even the hydroelectric dam project in Newfoundland and Labrador.

Do you plan to develop a serious aeronautics policy?

[Bill Morneau, Liberal, Toronto Centre, ON]

Thank you for the question.

I know that the sector is very important for Quebec. We have done a number of things to assist the sector in Quebec. My colleague Navdeep Bains, Minister of Innovation, Science and Industry, is always looking at ways in which we can improve the situation for the sector, and continues to do so. Of course, we will continue to have discussions with you and your colleagues, but also with our colleagues in the Government of Quebec, to make sure that the sector is in a good situation today and in the future.

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

The industry is asking for a policy.

[The Chair, Liberal, Wayne Easter]

I'm sorry, Gabriel.

It's Mr. Julian, Mr. Cooper, and then Ms. O'Connell will wrap it up.

Mr. Julian.

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

I'm just going to come back to two questions you haven't answered yet, Mr. Morneau.

First, on the issue of Trans Mountain, we're at $17 billion and counting. What is the cap? What is the limit of public funds that the federal government is willing to put into the project? Is it $20 billion? Is it $25 billion, or is the sky the limit?

The other question that you didn't answer in the first round was on the issue of tax havens. Since the ministry of finance disputes the PBO's figures of $25 billion going to overseas tax havens, what are the internal figures that you have, in terms of the money that should be going to support programs and Canadians but is instead going to overseas tax havens? If the PBO's figures aren't right, what are the figures that you have?

[Bill Morneau, Liberal, Toronto Centre, ON]

On the first question, around Trans Mountain, we've said we want to make sure that this project deals with the very real challenge we faced politically—that is why we took it on—and that it continues to be of benefit to all Canadians.

The company told us of their expectation of the cost to develop. This is a commercially important project and one on which the Canadian approach will ensure that we make a profit. That's where we're at on that. We believe this is the right thing for us to do to deal with a political challenge, and we are continuing to move forward based on the positive economics of the project.

As you may know, we put out an annual review of tax expenditures; that's an OECD best practice that Canada follows. That report will be out soon, and in that report you will find voluminous information. I know, because I reviewed it just before I came here today. It's a long and arduous report to get through, Andrew, so thank you for that, and it will provide more information.

When is that going to be public? Do we know?

[Andrew Marsland]

With the main estimates.

[Bill Morneau, Liberal, Toronto Centre, ON]

So that will be out in the not to distant future.

[The Chair, Liberal, Wayne Easter]

Thank you all.

Mr. Cooper, the floor is yours, and the final one will be Ms. O'Connell.

Go ahead.

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

Thank you, Mr. Chair.

Thank you, Minister.

At a time when your government has been delivering massive deficits and debt, your government has also been delivering massive waste: $50 million for Mastercard, $12 million for Loblaws, $40 million for BlackBerry, a $600-million media bailout, and $256 million to build pipelines in Azerbaijan.

On what date will the $372-million bailout to Bombardier be paid? In 2017, Bombardier laid off 3,000 workers, while senior executives gave themselves a 50% pay hike.

[Bill Morneau, Liberal, Toronto Centre, ON]

First, I think we need to address the decisions that our government's been making around the stewardship of the economy. I hope that Canadians would look at our economic situation and realize that with the kinds of unemployment rates we have today, and with continuing growth in our economy, we've made decisions that are putting us in a strong position. We will continue to work to make sure that we are fiscally responsible, while maintaining a good situation.

The Bombardier company's decisions over the last couple of weeks in terms of the changes in their organization are ones they took independently to protect the company and the workers, we hope, in Quebec and across the country. We have been assured that any repayable contributions will be repayable under the new ownership. We certainly hope that success for that company, as well as for all companies, continues, and I will be watching carefully to see that.