Finance Committee on May 17th, 2021

[The Chair, Liberal, Wayne Easter]

I call the meeting to order.

Welcome to meeting number 44 of the House of Commons Standing Committee on Finance. Pursuant to Standing Order 108(2) and the committee's motion adopted on Tuesday, April 27, the committee is meeting to study the subject matter of Bill C-30, an act to implement certain provisions of the budget tabled in Parliament on April 19, 2021 and other measures.

Today's meeting is taking place in a hybrid format, pursuant to the House order of January 25. Therefore, members are attending in person in the room and remotely using the Zoom application. The proceedings will be made available via the House of Commons website. The webcast shows only the person speaking rather than the entirety of the committee. We ask that screenshots of the total committee or its witnesses not be taken.

With that, I will go the agenda. We're looking at 10 different departments in this panel. We have 23 witnesses all on video, although Mr. Xavier, I believe, is available via voice. We'll deal with part 4, divisions 10, 14, 17, 18, 19, 26, 27, 28, 31, 33 and 37.

Rather than me getting into the introduction of all the witnesses, I'd ask that when the spokesperson for each division comes forward, they introduce themselves, their department, their position and any other colleagues they may have with them.

I want to thank all the witnesses for coming.

We will start with division 10, which is the First Nations Fiscal Management Act.

Ms. Dwivedi, you may go ahead. Then we will go to questions, as we've done in the previous panels.

[Garima Dwivedi, Director General, Resolutions and Partnerships, Department of Crown-Indigenous Relations and Northern Affairs]

Thank you. I will start with a brief overview.

My name is Garima Dwivedi, and I'm from Crown-Indigenous Relations and Northern Affairs Canada. I'm the director general of indigenous institutions and governance modernization.

I'm joined today by my colleagues, Leane Walsh and Jeffrey Clark, and I'm joining you from the unceded traditional territory of the Algonquin Anishinabe people.

I'm pleased to be able to speak to you on the proposed amendment to the First Nations Fiscal Management Act, which, if enacted, would expand the types of revenues that first nations can use to support borrowing from the First Nations Finance Authority.

Since 2006, the First Nations Fiscal Management Act has enabled first nations that voluntarily opt in to exercise jurisdiction over fiscal matters such as financial management, property taxation and local revenue generation. The act also provides first nations with access to long-term financing at preferred rates through the issuance of bonds on capital markets, allowing them to leverage their own sources of revenue to access capital for infrastructure and for socio-economic development, through which over $1.3 billion has been raised.

The First Nations Fiscal Management Act is led by first nations with more than 300 first nations across Canada benefiting from the fiscal services offered by the regime's three first nations-led institutions: the First Nations Finance Authority, the First Nations Financial Management Board and the First Nations Tax Commission.

The amendment being proposed is one that the First Nations Fiscal Management Act institutions and their members have wanted for some time now. Currently, first nations cannot use the first nations goods and services tax, FNGST, or the first nations sales tax, FNST, as a revenue source for pooled borrowing through the First Nations Finance Authority, because section 67 of the Financial Administration Act prohibits the assignment of Crown debt. It had been considered that borrowing revenues from the first nations goods and services tax and the first nations sales tax would likely constitute an assignment of Crown debt. The proposed amendment would remove this impediment. The wording of this new provision, including the subsection stating that it's not binding on the Crown, is consistent with similar provisions in other federal legislation that make exceptions to section 67 of the Financial Administration Act.

If this amendment is enacted, the related regulations, financing secured by other revenues regulations, would also be amended.

The proposed change would remove the obstacle first nations have had and enable them to use, should they choose, the first nations goods and services tax or the first nations sales tax as a source of revenue to secure long-term financing through the First Nations Finance Authority.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Dwivedi.

Ms. Jansen, go ahead.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

Thank you. I just have a few questions.

How many nations have opted into the First Nations Fiscal Management Act?

[Garima Dwivedi]

Over 300 first nations have opted into the act, voluntarily.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

Are you saying that this will allow them to borrow money based on GST that they're collecting?

[Garima Dwivedi]

That's correct. They have GST that's collected on their behalf through the CRA and given back to them, as well as the first nations sales tax. They would be able to use those revenues from the GST or the sales tax to borrow money through the First Nations Finance Authority for pooled borrowing. It would be a source of revenue against which they could borrow for infrastructure and economic development purposes.

[The Chair, Liberal, Wayne Easter]

Thank you.

Next is Mr. McLeod.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Mr. Chair.

Thank you for the presentation.

I have a question on the First Nation Fiscal Management Act and the amendments, and who it applies to. I represent the Northwest Territories and we have a different system in the north, and that's pretty much the same in the Yukon and Nunavut. Do these amendments have any implications for the north, or I guess the question is, is the north part of it or not part of it?

[Garima Dwivedi]

These amendments are for first nations that have opted into the First Nations Fiscal Management Act. At the same time, we are working on regulations under section 141 of the First Nations Fiscal Management Act that will expand eligibility for other self-governing modern treaty first nations to have access to the act.

Through that mechanism, they, too, would be able to access pooled borrowing through the act and would have access to FNGST and FNST as a means for using that revenue for pooled borrowing.

[Michael McLeod, Liberal, Northwest Territories, NT]

Okay.

I have one more question. It's good to hear that the modern treaty holder self-governing nations are going to be included. I'm assuming it's going to be through the self-governing fiscal policy that is being negotiated, or the terms are being negotiated that will allow this.

I still am a little bit curious to see how it's going to work in the north on indigenous lands. The Government of Northwest Territories collects all GST and everything else, so it's a different ball game in the north.

I'm just wondering how that will apply.

[Garima Dwivedi]

We're working on regulations under the First Nations Fiscal Management Act section 141 to expand eligibility to self-governing and modern treaty first nations.

I'll turn it over to my colleague, Leane Walsh, to see if she'd like to add anything further.

[Leane Walsh, Director, Fiscal Policy and Investment Readiness, Department of Crown-Indigenous Relations and Northern Affairs]

Thanks for that, Garima.

There are first nations in NWT already participating in the act. Salt River First Nation, for instance, works quite well with the finance authority and has used those tools to help advance development in its community.

Also, there are 15 self-governing first nations that currently have agreements with the Department of Finance for the collection of FNGST. That is open to first nations, including self-governing first nations, to negotiate with the Department of Finance.

I don't know specifically the context of how it will work on the lands in settlement lands, but I believe that they would also be included.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you.

[The Chair, Liberal, Wayne Easter]

Ms. Dzerowicz, please go ahead.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

Thank you, Ms. Dwivedi, for your great presentation.

You have already mentioned that the amendment would enable funds to be used for infrastructure and economic development purposes.

Are you able to speak a little bit more about how this amendment would help with economic growth and creating jobs?

[Garima Dwivedi]

For example, if a first nation wanted to build, let's say, a gas station or some other economic development type of activity, it could build that using the revenues from FNGST or FNST, and it could get a loan to build that through the First Nations Finance Authority and through the capital markets at reduced rates.

That would generate economic activity.

[Julie Dzerowicz, Liberal, Davenport, ON]

That is very helpful. Thanks so much.

[The Chair, Liberal, Wayne Easter]

Okay, are there any other questions from members?

Hearing none, we'll move on to the next division.

Thank you both very much.

We'll turn to division 14, which is the Canada community-building fund.

Mr. Malara, please go ahead.

[Eric Malara, Director, Governance and Reporting, Office of Infrastructure of Canada]

Good day. Thank you so much.

My name is Eric Malara, and I am the director of the governance and reporting section of the Office of Infrastructure of Canada. I am accompanied by my colleague, Nathalie Lechasseur, director general of program integrations. Our presentation deals with section 14 of Part 4 of Bill C-30.

The federal gas tax fund is a permanent statutory index funding program. It currently transfers more than $2.2 billion a year to finance infrastructure in municipalities and First Nation communities.

A bill has been presented which is proposing a one-time transfer of $2.2 billion, which is double the amount that we had committed to give every year to Canadian municipalities. The bill also proposes to rename the federal gas tax fund, which would be henceforth known as the Canada community-building fund.

We would be pleased to answer any questions you may have.

[The Chair, Liberal, Wayne Easter]

We will go to questions, if there are any. I think people are reasonably familiar with this. It's changing the name of the gas tax fund, simply put, plus putting more money into it.

It's a great program for communities.

There may be questions before the end of the panel—you never know—as people think about it.

Thanks, Eric.

[Eric Malara]

Thank you very much.

[The Chair, Liberal, Wayne Easter]

We'll turn to division 17, which is the Telecommunications Act.

Mr. Arbour, please go ahead.

[Andre Arbour, Acting Director General, Telecommunications and Internet Policy Branch, Department of Industry]

Thank you, Mr. Chair.

My name is Andre Arbour. I'm the director general of telecommunications and Internet policy at Innovation, Science and Economic Development Canada. I'm joined by my colleague James Nicholson. I'm happy to speak about division 17, which involves amendments to the Telecommunications Act.

These amendments are about improving the coordination of broadband funding programs. The federal government has a number of programs that fund the expansion of broadband infrastructure in underserved areas. This includes, for instance, the universal broadband fund delivered by ISED. The CRTC, Canada's communications regulator, delivers a broadband fund as well, and that fund operates under the auspices of the Telecommunications Act.

The CRTC fund is a bit different from normal grants and contributions programs. It's funded by a levy on industry, so the CRTC imposes this levy and then directs those monies into a fund to support broadband infrastructure. The CRTC is also different overall in that it's an arm's-length tribunal that operates separately from typical line departments.

There are two key amendments today to facilitate the coordination of broadband funding. The first amendment involves appeals of CRTC decisions. CRTC telecommunications decisions have three avenues of appeal. An applicant can ask the CRTC to rehear a matter, it can file what's called a petition to the Governor in Council, or it can seek leave to appeal with the Federal Court of Appeal. These appeal avenues are intended for and better oriented to deal with broad regulatory issues.

The CRTC has a lot of regulatory business that is involved with regulating the telecommunications industry; however, when funding individual broadband projects, which could be a relatively small project, maybe a few million dollars in a particular area, that project would still be subject to the same potential avenues of appeal, even though it's a much narrower issue; therefore, there would be the risk that broadband funding would be tied up in appeal and that those projects wouldn't be able to roll out to help serve Canadians.

The second set of amendments involves information sharing and would better facilitate the sharing of confidential information between the CRTC and federal departments, as well as provincial and territorial entities involved in supporting broadband projects.

With that, I'll stop, and I'm happy to take your questions. Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Arbour.

Are there any questions here for Mr. Arbour?

You never know, we might come back to you, Mr. Arbour, before this session is over. Thank you very much for your presentation.

We'll turn to division 18, which is the Canada Small Business Financing Act.

Ms. McRae.