Finance Committee on May 20th, 2021

[Sean Fraser, Liberal, Central Nova, NS]

Thanks very much, Mr. Chair.

My first question is for Ms. Tiessen. Thank you very much for being here. I'm happy to benefit from your expertise.

The budget includes some fairly significant investments toward either job placement or skills training. Without getting into the specific investments that I'm referring to, I'm more interested in how we can properly target some of those programs that are focused on job placement and skills training to ensure that we're not missing the mark.

If you're designing a program, where do you deploy these resources to make sure that we're not just putting people into a random job because it might be available, but we're actually setting people up for a career that will exist over the next 20, 30 or 40 years?

[Kaylie Tiessen]

I wish I had talked to our training design experts this morning, before this question.

Here's what I will say, and I can put you in touch with our training folks to get a more detailed explanation. We're seeing that there's a major transition happening in our economy. There are people who will not be returning to their jobs after the pandemic. There are people who will be transitioning to the green economy. There are people who are going to be transitioning because of new technology.

There are multiple directions that people could choose from in their career, and we need to make sure that people have a choice in what they're training for next. It can't be only an employer-driven process. It also must be people making the best choices for themselves in terms of the life they want to create.

Also, when we're thinking about people transitioning, training is one important piece of the puzzle, whether they're training for a job in the corporation they work for now or a job somewhere else if they transition out. There are lots of other things that we need to be considering when transitions happen, including mental health issues and other pieces. That all needs to be considered. Again, I can put you in touch with our training folks directly to have a deeper conversation.

[Sean Fraser, Liberal, Central Nova, NS]

Certainly I'd benefit from any feedback they have.

My second question is for Mr. Balsillie. I very much appreciate your advice and perspective, by the way. I wish we had more time together, frankly.

I'll jump right in. One of the areas where I know there is quite a bit of work that's been going on for a few years, which I've been involved with in my role in the finance portfolio, is around the framework on open banking. I just see immense opportunities in Canada's fintech space to actually create jobs, to create wealth by providing solutions in the open banking or consumer-directed finance sphere. Right now my sense is that Canadians are a little bit afraid any time you talk about their data, perhaps not realizing that their data is already out there being used.

I'm curious if you have advice on how we can move forward to take advantage of what I see as opportunities for several potential billion-dollar valuation companies that are Canadian-grown, and how we can keep that talent and the wealth that it creates within our own borders.

[Jim Balsillie]

Thank you for the question.

I would say a couple of things. First of all, there has been no tangible progress on the open banking protocols and standards, so they're languishing. It's going to take a regulator like the Competition Bureau in there, coupled with finance, to push it, because incumbents don't want it; consumers want it. They're scraping screens right now, which isn't the best way to do it. It's frustrating domestic innovators.

The other thing the Council of Canadian Innovators was very vocal on is that all these other countries in the world used their fintech companies for loans during the COVID relief program. Canada was again an outlier in expressly excluding our fintechs in part of the COVID distribution packages of loans and so on, and it all went to the big incumbents. We candidly talk about one thing but do the opposite.

[Sean Fraser, Liberal, Central Nova, NS]

On a similar vein to the question I put to Ms. Tiessen on how we set ourselves up for success, there are a couple of envelopes included in the budget around the strategic innovation fund, including about $5 billion for the net-zero accelerator fund.

You're speaking to a group of parliamentarians here. In your mind, what would you have us do when this meeting ends, if we're going to help inform the next step to make sure that the money that's being budgeted for is actually deployed in the most effective way?

[Jim Balsillie]

We have a problem in that we view firms as homogeneous while they're strikingly heterogeneous in the evolution of the last 20 years, and we view jobs as relatively homogeneous when in fact they have entirely different characteristics for the benefit of the individuals and the country. My number one recommendation is that we do not have the capacity to analyze and create programs and implement and monitor programs to get the outcomes we're looking for in the quality of jobs, the quality of firms, the quality of productivity and the quality of security, which is in this 91% of the economy called intangibles. We talk the game, but we have to understand that Canada adopted an orthodoxy of extreme neo-liberalism 30 years ago.

The economist who wrote for the Macdonald commission, said that if you're going to liberalize labour, capital and markets, that's fine, but you have to pair it with an industrial innovation strategy or we'll go to a low-productivity, low-growth equilibrium. That was Richard Harris. He was the economist for it, and they ignored.... It was a two-book treatise and they only took one of the books. The first thing we have to do is to have capacity, or we're just going to keep, which is the definition of insanity, doing the same thing over and over again and expecting a different outcome.

[The Chair, Liberal, Wayne Easter]

We're going to have to end it there. I'm sorry. That was an interesting discussion.

We'll go to a couple of minutes each for Mr. Ste-Marie and Mr. Julian, followed by a regular round for Mr. Kelly and Ms. Dzerowicz, and then we'll have time for one question each from Mr. Falk and Mr. Fragiskatos.

Mr. Ste-Marie.

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

Thank you, Mr. Chair. It was indeed a very interesting discussion.

My question is for Ms. Tiessen and Ms. MacEwen. It concerns what is known as contract-flipping, which are aimed at subcontractors at airports.

The mechanism works on by tendering. The new company that submits the lowest bid and wins the tender hires the same skilled workers already in place in the position they held, but offers them lower wages and less favourable working conditions.

I'd like to know if any of your members are in this situation.

In Bill C-30, the government intervenes by saying that the new subcontractor will not be able to lower wages, but does not protect all collective agreements.

I'd like to hear your comments about this. Ms. Tiessen could start, then Ms. MacEwen could respond.

[Kaylie Tiessen]

We are supportive of the change that is being made, recognizing there needs to be extensive consultation in the regulatory process to make sure the list of job categories that it includes doesn't leave anyone out. We have members who do all sorts of jobs at the airport who experience contract flipping. They could work in the same place for 10 to 15 years and make the same wage after their contract and their employer has flipped multiple times.

We know the change that's being made is not enough and we need to extend full successor rights in the union negotiation process to make sure that those collective agreements remain in place so that they have access to all the benefits they have negotiated. Otherwise, we just see this continued fracturing of workplaces and workers end up paying the brunt of what happens.

I'll leave the rest to Angella.

[Angella MacEwen]

Thank you, Kaylie.

Yes, CUPE represents workers who deal with this as well. CUPE represents a bunch of food services workers, and it's a problem in provincial jurisdictions as well, so we're really happy to see the federal government start to provide leadership on this sector.

We would like to see them go further and talk about full successor rights because it's a huge problem. It's mostly racialized communities. It's mostly low-wage workers. It's mostly people who have faced multiple types of labour market discrimination, so this would actually be a really big step to providing more fairness in the workplace, helping to create good jobs and making sure employers aren't making their profits off the backs of workers.

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

Thank you both.

[The Chair, Liberal, Wayne Easter]

We will go now to Mr. Julian, followed by Mr. Kelly.

Peter.

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

Thanks, Mr. Chair.

I'd like to come back to you, Ms. Tiessen. I also want to underscore the important work that Unifor members are doing right across the country, often as frontline workers and showing incredible courage and dedication. We thank your members for helping us, helping Canadians, get through this pandemic.

We've been talking about successor rights. We've seen companies take supports from the federal government and lay off their workers. We're seeing this in the hotel industry here in British Columbia as well. We don't have in place anti-scab legislation. How important is it for the federal government, when it provides supports to businesses, to actually ensure that collective agreements are respected and that we have in place a good, effective labour law that protects workers?

[Kaylie Tiessen]

It's incredibly important. We know that one of the really important tools in an economy to raise working conditions for people is unionization. Any laws that undercut that mean we're seeing this sort of race to the bottom instead of a virtuous cycle where we're building job quality over time.

When it comes to anti-scab legislation, we have seen that the absence of that legislation drags on workplace spats and actually causes a lot more conflict in a workplace. It means that our members and members who are affected by this, workers across the country, don't have the same amount of power that they otherwise would. The whole point in setting up a process where people can unionize and actually fight back against their employer is to make sure there's an equalization of power. Something like the allowance of scabs means that equalization is diminished.

In terms of the other pieces, when we're seeing that corporations are getting support and using scabs as an example, that's something that's just totally unacceptable and actually flies in the face of what the government is trying to do by creating and keeping the jobs that are in the industry right now, or in any industry right now, to make sure that people are employed and that we're getting through this crisis.

[The Chair, Liberal, Wayne Easter]

There's never enough time, but we'll have to go to Mr. Kelly, followed by Ms. Dzerowicz for five-minute rounds.

Pat.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

I thought Mr. Fast might have started, but that's all right. I'll go ahead, and I might let him take over part of this round.

[The Chair, Liberal, Wayne Easter]

Okay.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

I'll start with Mr. Balsillie.

You mentioned the supercluster approach of the government, and you talked also more than once about helicoptering money. Can you comment on this approach of seemingly distributing money? Maybe it goes even beyond this into some of the grants that we've seen that have the appearance of giving free money to profitable companies. We've seen it with Loblaws or Mastercard or others.

Can you comment on this approach and how this fails to address the issues that you've raised about productivity and capacity building?

[Jim Balsillie]

Absolutely. Thank you for the question.

You have to understand that 91% of the value of the S&P 500 is in intangibles, up from 16% 40 years ago. The change in the economy is unprecedented in its degree and rapidity. Thus, it's your marketplace frameworks that determine whether you capture the economic and non-economic benefits of those investments. I have a chart of spillovers in the document I provided to you. They're dramatically different in the intangibles, where, when you can bring in a foreign firm or give them money, all you're doing is making them richer and more capable of exfiltrating assets and talent and wealth and security from Canada.

Whether it's a vaccine manufacturer that is foreign-owned, whether it's Mastercard, as you mentioned, whether it's Google for a smart city or whether it's partnering with Huawei at our universities with taxpayer funding, we will not get the sovereignty and wealth affects of that. It goes to capacity. If somebody understood what they were doing, if they were trained, if they had the expertise, if they had the analytical frameworks, we would do it radically differently.

Because we've had an extreme neo-liberalism orthodoxy, you don't have to do anything. You just go hands off. We went hands off when the rest of the world was double hands on. I'm not against investment, but I'm against spending money with no expertise in terms of making a dollar into 10 dollars. Then, when it turns into 10 cents, people say—

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Thank you. I'd really like Mr. Fast to get another question in. Thank you for that answer.

[The Chair, Liberal, Wayne Easter]

Ed.

[Ed Fast, Conservative, Abbotsford, BC]

Thanks, Jim, for that answer.

I'd like to ask you a little bit about Canada's trade policy, more specifically, the most recent agreement that Canada signed, the new NAFTA, which is known as CUSMA or USMCA. The U.S. is by far our largest and most impactful trading partner. You've had a good chance to review this agreement. There are three questions, all follow-ups.

First, do you believe it adequately addresses the challenges of an intangibles economy, the challenges of a digital and data-driven economy? Second, do you believe that the budget in any way mitigates those challenges? Third, would a revitalized economic council, as you've recommended, play a significant role in informing future trade policy?

[Jim Balsillie]

Our trade policy is firmly rooted in the 1970s. Michelle Rempel asked the question of our trade leaders at committee: Have you done an analysis of the intangible effects? They said no, yet there are no tariffs to get rid of and 99% of the effect of these deals is on intangibles.

We have, then, no offensive strategy. We have no analytical strategy, and we don't have the expertise. We've been on this 15-year pub crawl of just signing things, when in fact these are instruments for regulatory remote control.

No, it sets us back profoundly. Our degrees of policy latitude to build a future are limited. We need capacity to negotiate these trade agreements for the contemporary realities, which the economic council should do. We should have budgets for doing it, and we should have strategic investments in a very contended world.

[The Chair, Liberal, Wayne Easter]

I'm sorry. We'll have to move on again.

We'll go to Ms. Dzerowicz and then to you, Mr. Falk.

Ms. Dzerowicz.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you, Mr. Chair.

I want to thank all the presenters for all your excellent presentations. I wish we had all day, but I only have time to ask questions of one of our guests. My questions are going to be to Mr. Balsillie.

I want to say that I agree with a lot of what you have said, so I want to thank you for being here today.

When budget 2021 came out, the Council of Canadian Innovators put out a statement to say that there were a number of measures included that the council was actually very happy with, such as the strategic innovation fund, the net-zero accelerator, the dollars around re-skilling, the investment in child care, the moving forward with a digital service tax in clean-tech investments and some of our IP investments.

Do you stand by that statement?