Finance Committee on May 20th, 2021

[Jim Balsillie]

I stand by the direction. I'll say that the frameworks are incredibly incomplete. Those are nuanced comments; you have to put it in it.

They say they're going to do IP, but there are no details on it. I know there was a dollar amount put and a statement, but there is no expertise and no plan for how these are going to be done yet. It is highly recommended that the SIF be done with IP and data frameworks that are oriented to creating intangible stock assets for Canadian companies, and there was criticism that over half the SIF money went to non-Canadian companies.

Again, I'm not against investment, but I am against investments that create negative returns for Canada. Having the expertise in the civil service to know the difference and do the analysis and ensure the implementation is the difference between positive returns and negative returns.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you for that. I heard your comment very clearly in response to Mr. Fast's question, in which you said that we were missing some foundational pieces. I also heard you say very clearly that we're actually missing some capacity within the civil service.

My next question to you is this. Is there a way for us to actually build that capacity fairly quickly? Would you have recommendations on how we could go about doing it?

[Jim Balsillie]

Absolutely, and I'd be very happy to supply a paper to your committee on how it might be done. Australia went through setting up a commission. They put in a lot of governance things, which I've studied. I've looked at the parts of the civil service that could elegantly create something like this, with its expertise and its independence and transparency. Yes, I'd be more than happy, if you're interested, to prepare a paper and supply it to you on how this could be done.

I see no reason why it couldn't be up and running by the end of the year with de minimis funds.

[Julie Dzerowicz, Liberal, Davenport, ON]

I'd be very grateful if you could submit that to the committee.

The next question I want to talk to you about is IP strategy. We do pre-budget consultations at the finance committee, and as part of the recommendations we made to government we recommended a national IP strategy and a national data strategy.

We have some investments in our budget around promoting Canadian IP strategy. There's $90 million for some IP support for start-ups, and there's also some support for the National Research Council—a sort of industrial assistance program.

Are those positive investments, or do we need to do far more than what we have done?

[Jim Balsillie]

I know the details around ElevateIP. It was a number put with a sentence and there's no understanding of how they're going to implement it or what the details are going to be behind it. It's one of those things where you can spend a dollar and get 10 cents out of it, and if you don't have expertise in creating and implementing the program, you're going to have the debacle you had with the superclusters.

It's not that investments are a bad idea, but again you'll find that all roads will go back.... If we build a hospital and surgery rooms but don't have surgeons, then we don't have capacity—but I'm all for hospitals.

Again, I like the concept of the investments. I'm deeply concerned about the absence of capacity to design and implement and monitor them.

[Julie Dzerowicz, Liberal, Davenport, ON]

My last question, Mr. Balsillie, has to do with your key recommendation to us, which is rebuilding an economic council that will do some sort of analysis of our economy moving forward. Can you speak a little bit more to it? Is it rebuilding an existing council? Is it a new council? Could you be a little bit more specifically about your key recommendation?

[Jim Balsillie]

Sure, and the Broadbent Institute has an excellent paper on the history of the Economic Council. We shut ours down in 1989, so we went pure hands-off neo-liberalism when others were upgrading their instruments or doubling down on this.

It could be something that is there to measure and manage the intangibles economy. It would be attuned to our contemporary realities, but the concept is policy expertise like we used to have. We stripped it away because we didn't need input because it was all hands off.

You would model it after probably what Australia's doing, take some lessons from other countries, look for a nice insertion point for where to put it in the government and cry a bit of a sad cry over why we shut it down for 30 years.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much.

[The Chair, Liberal, Wayne Easter]

Okay, we are going to end it there.

We'll go to two minutes for Mr. Falk, then the same for Mr. Fragiskatos, and we'll have to wrap it up with that.

Mr. Falk.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair.

Thank you to all our witnesses for coming to committee today. It's been very interesting testimony.

Mr. Wilton, I would like to direct my question to you. You talked a lot about the costs in the aviation industry of getting one's pilot's licence. It's very significant. It's at least $10,000 to get your private pilot's licence. You talked about the cost of aircraft, especially for aviation schools. I too am a private pilot. I have a 40-year-old airplane that's worth about $100,000, and I hardly think it's a luxury.

You've also made mention of our airline industry and our whole aerospace industry, and how that's going to be negatively impacted. There are jobs in the sector that are going to be lost, whether in maintenance or sales. Can you talk a little more about how ill-conceived this idea of a luxury tax on a $100,000 airplane is?

[Michael Wilton]

Yes, sir. I think the biggest revelation we found was this tax on the purchase of an aircraft. We already pay tax to our maintenance engineers. We pay fuel tax. We pay landing fees. We pay fees to the pseudo-government agency, Nav Canada, which controls and operates our very safe airspace up here.

We already contribute a lot of tax, you know, for this hobby, for the non-ultra rich. We find that this kind of random tax was thrown at us in this budget as a luxury item. Your aircraft is $100,000. My aircraft is $135,000. I have a friend who's a very wealthy individual and has done very well for himself and drives around in a $450,000 car. Do I think he should be taxed higher than me? Absolutely. His repair bill on the car last year was about six hundred bucks. My repair bill on the airplane last year was $7,000, which I paid tax on.

I think the loss of jobs and the loss of tax revenue is going to actually be seriously detrimental versus the benefit of this random tax on $100,000-plus airplanes.

[Ted Falk, Conservative, Provencher, MB]

I really believe the threshold is wrong.

[The Chair, Liberal, Wayne Easter]

I'm sorry, Ted.

[Ted Falk, Conservative, Provencher, MB]

Okay. Thanks, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

It's over to Mr. Fragiskatos for the last question.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you, Chair. My question will go to Ms. Tiessen.

I'm asking you in your capacity as an economist, Ms. Tiessen. I looked at what you wrote. It was on social media in March of last year. You said at that time that the federal government response to the COVID-19 crisis should come in three waves. Number one was public health precautions and immediate worker supports, so the emergency supports introduced by the federal government obviously fit that. Number two was to double down on social infrastructure plans once the acute phase is over. I don't think we'll have time, but a policy like early learning and child care at the national level, which has been proposed in this budget, I think fits in that, and I do see you nodding.

It's number three that interests me. You called for a massive investment in clean-tech infrastructure and jobs in the long term. As you may know, in this budget there's a sum of $17.6 billion that's been proposed for investment in clean tech so that Canada can meet its climate change targets and goals.

I want you to expand, if you could, on the economic impact that could have. I think all too often we think about our moral obligation, as we should, on matters of climate change, but the huge—

[The Chair, Liberal, Wayne Easter]

I'm sorry, Peter. Your going to have to give Tiessen time to answer.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Sure. Thank you.

[The Chair, Liberal, Wayne Easter]

Ms. Tiessen.

[Kaylie Tiessen]

That is another big question.

Number one, I don't think we should separate our moral obligation from our economic obligation. Our moral obligation to people comes first. The economy is supposed to serve people, so that's number one.

Then, when it comes to this transition that we now see government has started to commit to, we need to make sure that there are transition supports in place for people. I spoke to this a little bit with the training question earlier. If we are going to see people transition, we need to make sure that they are supported through the process.

That means a stronger EI program, and when they choose to do training in a particular area, that they have the income support. We need to make sure that the training is affordable, so that means it's provided, to a large extent, by governments and employers. We need to make sure that they have the other supports in place to get to school, for example, like making sure there is child care, and those pieces form part of that process.

[The Chair, Liberal, Wayne Easter]

I hate to end the very good discussion that we've hit on in this panel, but as the committee knows, we have another two panels starting in 28 minutes, and people likely want to grab a bite to eat.

Mr. Balsillie, if you can send that paper to the clerk, that will be great. We'll get it distributed.

For committee members, we did learn a little bit in this panel. When we have pre-budget consultations, we'll be able to fly with Ted. He has the aircraft, and that will be dandy.

With that, we will adjourn the meeting. Thank you, again, to all the witnesses for answering our questions.

The meeting is adjourned.