Thank you, Mr. Chair and committee members.
My apologies; this is the time I was assigned.
I am pleased to be with you on behalf of Canada's chemistry and plastics manufacturers. Combined, they represent nearly an $80 billion-a-year industry in Canada. It's the third-largest manufacturing sector. Most importantly, it serves all of your other important economic sectors, be they mining, forestry, automotive, aerospace, agriculture and agri-food, to name just a few.
With respect to Bill C-30, the budget implementation act, we offer three comments for you.
First, our chemistry and plastics sectors have been resilient, and for the most part—albeit it's been a little uneven—companies had already recovered or nearly recovered to pre-COVID levels by the end of 2020. Due to a wide variety of factors that have had the winds at the back of this industry in Canada this year, the sector is showing significant growth through the start of 2021.
Nevertheless, there are many other sectors and that are struggling. We've just heard from Mr. Kelly and others about these sectors and households. Canadian families and businesses have not had the opportunity yet to recover or participate in this recovery, and this budget will play a very important role in providing a supporting floor as the recovery takes hold in these more challenged sectors of the economy.
Second, I think there was a strong message in the budget that the challenge of a circular, net-carbon-zero economy is truly daunting to comprehend. In many areas, this budget does propose substantial early investments, which will send strong signals on the direction businesses and society must go in the coming years and decades.
Third, I do have to point out that those signals alone are not sufficient. Mr. Gill has already talked about this, but achieving a circular and a net-zero economy is going to require a complete recapitalization of the Canadian economy. Government expenditures alone will never be able to get the job done. Though I don't have an exact number for you, if you look at our chemistry sector alone, it will be well in excess of $100 billion, probably over $200 billion, to recapitalize the current industry we have to allow it to transform for a circular and net-zero economy. Only the private sector has the ability to allocate resources at any scale approaching that.
From our perspective, that's where the budget fell short and where we believe more attention is urgently needed. Make no mistake, global supply chains will recapitalize; they will be transformed completely for a net-zero and circular economy. The only question is whether Canada’s industrial and economic sectors will be able to participate or will just continue to be a flyover destination for the much-needed global investment.
As for the experience in our sector, I've talked to you folks about this a number of times. As a case in point, south of the border we've seen $300 billion in new investment in the last seven years. By historical measures, we should have seen $30 billion of that in Canada; we've seen just $7 billion. Yes, COVID has certainly delayed some investment activity south of the border and globally, but some of those trends I talked about are pointing to the sector already looking tight.
I think you can expect to see some global announcements of new investments, including in the United States, in the weeks and months to come. At this point, however, I would have to say that another round of investments is probably not on Canada's radar. We don't believe the budget offered anything to improve the chances of attracting that investment in the near future.
Prior to the next budget, we urge the committee to make further recommendations to underline those you've placed before to focus on improving Canada's investment climate. One of them already discussed is the 100% accelerated capital cost allowance that was introduced in the fall economic statement. Previously, you'll recall that it was a temporary measure. The clock is already running. Companies that had to go on hold for two years because of COVID now can't take advantage of the full allowance that you put in place for them. We'd encourage you to, at a minimum, extend that out to 2030, a full capital-cost cycle. If that's not sufficient, we'd certainly encourage you to make that permanent, like it is south of the border.
Second, please, we have to recycle these carbon revenues back into industrial sectors. We can't take hundreds of millions, if not billions, of dollars out of the productive economy, send it elsewhere and then expect the same sectors of the industrial economy to somehow magically come up with these hundreds of billions of dollars to invest in recapitalization. It's not going to happen. We have to find a way to get the revenues back to allow for that investment.
Third, and you've heard me say this before, as much as the federal government and provinces have collaborated to the benefit of all Canadians throughout this COVID pandemic, we need equal, shared and collaborative attention to building a sustainable investment climate that will attract global capital and retain Canadian capital in this country so that we have a chance to succeed in this transition to a circular and net-zero economy.
I thank you once again for this opportunity to be with you today.
Thank you, Mr. Chair.