Finance Committee on May 21st, 2021

[The Chair, Liberal, Wayne Easter]

I call the meeting to order.

Welcome to meeting number 49 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 the hybrid format pursuant to the House order of January 25, and the proceedings will be made available via the House of Commons website. So that people are aware, the webcast will always show the person speaking, rather than the entirety of the committee.

We will start with BIOTECanada.

Just before we do that, just as a heads-up to committee members, we were having some difficulty in getting extended hours on May 27 to deal with clause-by-clause. That's now been accomplished, so we will be able to meet into the evening of Thursday, May 27 when we're in clause-by-clause to, hopefully, finish Bill C-30 that evening. We'll go from there.

I see that Mr. Barrett is on there. Does he want to do a sound check, Mr. Clerk, before we go to BIOTECanada?

[The Clerk of the Committee, Mr. Alexandre Roger]

Yes, certainly.

Mr. Barrett, if you could go ahead and test your mike, we'll check with the interpreters in the room on how you sound.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Thanks very much, Chair and Clerk.

I'm pleased to be joining the finance committee today. I appreciate the work of our interpreters and technicians. Thanks very much.

[The Clerk]

Thank you.

[The Chair, Liberal, Wayne Easter]

With that, we'll start with our witnesses, going first to Andrew Casey, president and CEO, BIOTECanada.

Welcome, Andrew. The floor is yours.

[Andrew Casey, President and Chief Executive Officer, BIOTECanada]

Thank you, Mr. Chair, and thank you very much to the committee for this important and very timely opportunity for BIOTECanada.

By way of introduction, BIOTECanada is the national association that represents Canada's biotech industry. We have some 240 members across the country in every single province, with significant clusters or hubs in every province. As I'm sure the minister from P.E.I., and you, Mr. Chair, will attest, there's a thriving one in P.E.I., but there's also one in every single province across the country.

Our members are in the biotech space. The companies develop biotechnology innovations that have industrial, agricultural, environmental and health and life sciences applications. We include the large multinational pharmaceutical companies, those that are making the vaccines for the current COVID crisis, but also most of our members are the very early-stage companies that are developing innovations for future health care crises or challenges and also, of course, for a planet that is becoming overpopulated and that needs solutions for population growth.

I'm just going to think back to where we were a year and a half or so ago, before the onset of the pandemic. At that time, everybody looked to this industry for some solutions. They looked for therapeutics. They looked for vaccines. At the time, it looked as though vaccines would be, at the best, three or four years out, but shortly thereafter we had a couple of very viable vaccine candidates being tested and looked at in the form of Moderna and Pfizer. In December vaccines started to go into arms, and since then a couple of other vaccines have come through, namely, AstraZeneca and Johnson and Johnson, with more on the horizon, including those from Canada's Medicago and, hopefully, IMV.

There have been some phenomenal developments in a very short period of time. I think it's a true testament to science and to the industry but also, globally speaking, to the regulators. I think a huge amount of credit goes to the Canadian regulators as well. Here we are now in a position where vaccines are going into arms. We're doing quite well in Canada, with vaccination rates going up nicely. I encourage everybody to keep getting vaccinated.

We have an opportunity to really turn our attention to what lies ahead. There are two key imperatives, I think, for the government and for society more broadly.

One is to prepare for the possibility of a future pandemic or pandemic-like challenge. The other is the economic rebuild. As we've seen throughout the pandemic, the biotech industry has continued to thrive. Investment has flowed to the sector, and the companies have continued to move their innovations and discoveries along to a place where they're getting more investment. That's all been very encouraging.

When we think about meeting the two objectives of preparing and rebuilding, this sector can actually meet on both of those objectives. We have a fantastic foundation upon which to build. Our association represents 240 companies, but there are probably three times that number across the country, so we have a great ecosystem in this country upon which to build. As the health and biosciences economic strategy table noted, there are some fantastic companies, innovations and scientists, but we do have some gaps that need to be filled.

I think the important thing to notice in this budget is the obvious recognition of the importance of the sector and the need to fill those gaps, particularly by improving access to investment capital, refinancing key funding programs and building biomanufacturing capacity as we think about future viruses.

The $2-billion plus commitments that stretch across a number of different parts of the biotech ecosystem are extremely important investments, from our perspective, and are very welcome. They fill some of those gaps, including one billion dollars' worth of commitments to the strategic innovation fund. There's now a dedicated life sciences fund in addition to a venture capital fund, as well as important investments in adMare BioInnovations, VIDO-InterVac in Saskatoon, Genome Canada and the Stem Cell Network. These are really critical investments across the country into key areas that are going to help build our capacity to respond to a future crisis, but also recognize the economic importance this sector can provide.

These also build on some of the important investments that have been made throughout the pandemic. We have seen a number of key investments into companies like AbCellera, VBI Vaccines, Medicago and IMV. I think all of this combined sends some really important signals and puts Canada in a pretty good position to take advantage of the fact that around the world biotechnology is seen as a key place to invest. By some estimates, somewhere in the area of $60 billion is being invested in the biotechnology sector.

Canada has to stay as competitive as possible and take advantage of that. We have a fantastic ecosystem, great companies and phenomenally talented researchers and scientists. We're doing world-leading research and we have lots of opportunities. The budget recognizes this. I think the challenge now is for all of it to come together, tie into the investments that are being made globally and really put Canada on the world stage. We welcome the budget and certainly the investments that are made.

I will leave it at that. I look forward to questions from the committee.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Casey.

Ms. MacNaughton, we'll go to you, and then we'll close with Minister Fox.

Go ahead, Ms. MacNaughton.

[Kathy MacNaughton, Accounting Clerk, As an Individual]

Hello, Chair and members of Parliament. Thank you very much for giving me this opportunity to talk to you about something that's very dear to my heart—EI sickness benefits.

My name is Kathy MacNaughton. My common-law husband, David Fraser, was diagnosed with esophageal cancer on December 3, 2014, his 50th birthday. Although we were devastated by this news, we were optimistic that we were going to beat this.

We went and applied for EI sickness benefits. Then we had consultations with our doctors in Halifax. We came up with a plan. The plan was that he would go through 25 rounds of radiation and two bouts of intense chemotherapy. Through a bottle attached to a PICC line, the medication would go through his body 24-7 for five days each time. After his treatment, he would have an operation where his diseased esophagus would be taken out and reattached to his stomach. Then he would recover.

David started his treatment on January 3, 2015. I continued to stay home, because he had a brother in Halifax who could look after him. I continued to work. David finished his treatment in the middle of February. He came home, and we were waiting for the surgeon to call to give him an appointment for the surgery. Two days later the surgeon called with more devastating news. David's cancer had spread to his liver and his aorta. He was deemed terminal. However, we could still continue treatment in New Glasgow, which would give him up to three years to live.

We went for treatment. I continued to work, because financially we needed me to. I changed my hours. I went from four o'clock in the morning until 12 o'clock in the afternoon so that I could be home with him to give him the medication and needles that he needed.

In the middle of March, his EI sickness benefits ran out. He said, “What are we going to do? How are we going to survive?”

I said, “Don't worry about it. You still have 30 weeks of regular EI. We'll go down and we'll talk to them. They have to help us.”

We went down to talk to them. There was nothing they could do. He wasn't allowed to draw that 30 weeks because he wasn't able to work. We were devastated. We got back in the car and I said, “David, I promise you that I will change this, because this is so wrong. You have 30 weeks of unemployment that you paid into and you're not allowed to draw it.”

He started his chemotherapy. We called disability pension, and we were offered $852 a month to help us financially. This was not enough, but there was nothing else we could do.

During the time when he was doing his chemotherapy, my sister Kelly wanted a laminate floor installed. David told me one day when I came home from work, “I'm going to install that floor for her.” I said, “David, you can't. You're not strong enough.” He said, “I have to. I have to help you financially so we can get through this.” I said, “Okay. We'll do it.” I went up with him. I carried the boards over to him and he cut them. He shimmied across that floor and he laid that laminate flooring. It broke my heart. He said it set him back physically a lot, but mentally it really helped, because he finally was able to contribute and help me pay the bills.

David passed away on August 4, 2015, eight months after his battle with esophagus cancer—one and a half months after he laid that floor.

I started David's Cause in September of 2015. I started off with Tim Houston, our local MLA. We had a change of government and he introduced me to Sean Fraser. Sean and I ran with this. We had to get my story out there because it was so wrong that people were worrying about financial situations when they were dying.

I worked with Canadian Cancer Society and finally, after seven years, my story was heard and my promise to David has been fulfilled. With the 2021-22 budget, EI sickness benefits will change from 15 weeks to 26 weeks. This is huge. This will help over 169,000 Canadians a year who are fighting a serious illness or injury.

My take-away to the panel today is this: Please don't view this as a political issue. View this as a humane and personal issue so that those 169,000 Canadians will not have to go through the financial worries that David went through while fighting for his life.

Thank you for your time.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Kathy. You have our sympathies on your loss and certainly our congratulations on your taking up the challenge and taking on the fight and moving the political system, which, as we very well know, is very hard to move.

We'll turn now to the Honourable Minister Jamie Fox from the Department of Fisheries and Communities. Just to give you a location for Minister Fox, if you ever drive across Confederation Bridge, you can near wave at him as you come off that bridge. That's the area he lives in.

The floor is yours, Jamie. Go ahead.

[Jamie Fox, Minister, Department of Fisheries and Communities, Government of Prince Edward Island]

Thanks very much, Wayne, and good afternoon to the committee. It is a pleasure to be here today.

It's quite a story that you expressed here, Kathy, and my thoughts are with you and your family.

I'd like to thank everybody today for this opportunity to speak to the finance committee in regard to an issue that's very important to us and the marine sectors of Atlantic Canada.

The seafood sector in Atlantic Canada in 2020 had exports of more than $4.5 billion and is responsible for supporting tens of thousands of jobs across mainly rural coastal communities. The Department of Fisheries and Oceans, DFO, has the very challenging task of managing over 1,000 harbours across this country, and I want to recognize the work they do, especially in eastern Canada, which accounts for 80% of Canada's fishing harbours. We all understand the importance of addressing this essential infrastructure.

I have had conversations directly with my fellow Atlantic ministers as of this morning to bring them up to speed. We are all in agreement—the provinces of Newfoundland and Labrador, Nova Scotia, New Brunswick and Prince Edward Island—that a new approach, a more strategic long-term approach to effectively deal with essential infrastructure needs to be put in place. We are all in agreement that the timing is right to support the federal government's approach to post-pandemic efforts to build back better and the blue economy.

I have met with the P.E.I. Fishermen's Association and the Prince Edward Island Aquaculture Alliance. They raised the urgent need their members are facing every day regarding the many harbours across Prince Edward Island and their need for repairs, which is the same story facing Newfoundland and Labrador, Nova Scotia and New Brunswick.

While we are very pleased to see the additional investments proposed in the 2021-22 federal budget of $300 million over the next two years, we feel that this is a short-term approach and is not conducive for sound and strategic long-term investment planning and infrastructure.

An evaluation of the small craft harbours program in 2013 specifically stated, “Having to rely on substantial funding beyond the program’s base budget indicates that the program lacks sufficient funding for [lifetime and] lifecycle management.”

It was also documented in a 2019 report of the Standing Committee on Fisheries and Oceans that “the annual funding required to keep all core fishing harbours in good working condition is estimated at over $150 million annually, but the average A-base annual budget remains at approximately $75-85 million, excluding salaries and overhead”. This was according to the assistant deputy minister for fisheries and harbour management at DFO.

For the past two years, I have been proposing that there needs to be a strategic five-year investment plan in addition to the existing budget of $1 billion.

I, along with my colleagues, have heard from industry loud and clear. Users of these facilities are appreciative of the repairs and investments that are being made each year, but they have consistently identified that there is more work that needs to be done that budget allocations won't allow. Much of the marine infrastructure under the responsibility of DFO is decades old. The need for repairs and new investments is beyond the current budget allocations.

Climate change is also bringing more frequent and severe weather events to eastern Canada, which are further impacting our aging infrastructure. I point out that in some cases, with the storm surges that we're seeing, some of our wharves are actually even with the top of the water or the water is covering the top of the wharf. Frankly, much of the existing infrastructure was not originally designed to deal with the current impacts of the more severe storms associated with climate change.

What is needed is a long-term approach that will support strategic planning and engagement with all groups to identify what supports they need in the area of current and future essential infrastructure to continue growing our marine sectors. For example, the average marine economy GDP increased by 25% in eastern Canada and by 45% in P.E.I. from 2014 to 2018.

It is also widely known that over time the needs of our commercial fishers have evolved. The vessels and gear are larger and the value of investments made by fishers have increased to the point where they are not comfortable docking a vessel valued at hundreds of thousands of dollars to a condemned wharf.

Our aquaculture sector has also grown substantially, and these businesses require access from ice-out to ice-in. In some years, they have allowed the boats to stay in year-round.

They can also face challenges and issues of access and space limitations, not to mention access to safe navigation. We do not need to look further than Malpeque harbour, which the chair is very familiar with, for an example that has been well studied for over two decades, and to see how, despite everyone's best efforts, more needs to be done. We can see how climate change is affecting that one harbour.

As we see light at the end of this pandemic, our marine sectors are positioned well to contribute their part in having our economies succeed. Canada has a well-renowned reputation for producing some of the highest-quality seafood protein; however, we cannot grow our exports if we do not have the strategic investments into the essential marine infrastructure that supports our seafood production.

Increased long-term investments into marine infrastructure will support the seafood sectors, which are in alignment with the federal government's discussions around the blue economy strategy. They will position Canada to build on its international reputation of being a net exporter of quality food products. This will also support the marine sectors, which are in alignment with the federal government's commitment to build back better as we move to the recovery phase of this pandemic. We will support job creation and investment in the marine construction and repair sector. We will mitigate and strategically plan for the impacts of climate change, which are resulting in more severe and frequent weather events. We will also ensure more effective, efficient and productive long-term planning and procurement and, last and ultimately, support small rural coastal communities and the small businesses that rise around these communities.

While the proposed increase in the budget of 2021 of $300 million over the next two years is recognized as a good start, I would like to put forward to the federal government that it has an opportunity with the Department of Fisheries and Oceans and the Canadian Coast Guard to demonstrate its support for the Canadian marine sectors by developing a strategic long-term marine infrastructure investment plan, such as our supporting marine infrastructure plan, which was provided to DFO with the endorsement of all the Atlantic ministers of fisheries and aquaculture.

I would like to thank the House of Commons Standing Committee on Finance for this opportunity to speak today. This is a very important issue to Prince Edward Island and Atlantic Canada.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you very much for your remarks, Minister Fox, and thanks to all the witnesses.

In the lineup for the first round of questions for six minutes each will be Mr. Fast, Ms. Koutrakis, Mr. Ste-Marie and Mr. Julian.

Ed, you're on.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you to all of our witnesses.

I want to begin by also expressing my condolences to Ms. MacNaughton for the loss of her husband.

I want to assure you, Kathy, that I believe there is unanimous support here around the table for these EI sickness benefits and the extension of those. In fact, some of us had asked for EI sickness benefits to be extended even longer and had expressed that in the House, so I think you're going to find that this budget and what it contains on that issue will have full support. Although some of us may not be able to support the budget in its entirety because of other reasons, on that one issue I want to assure you that I believe we're all on the same page.

I want to go to Minister Fox for a moment.

You've made it very clear that you're looking for a long-term strategic approach to marine infrastructure so that it can help drive economic growth in your region of the country. By the way, that's not so much different from my neck of the woods. On the west coast, we have our own challenges with respect to our fisheries sector and declining salmon stocks. We're all scrambling in trying to address these very immediate emergent issues that need to be addressed.

You talked about this long-term infrastructure plan. I'd like to know what that would look like, because I believe you've signalled that a plan had been presented to the government some time ago but hasn't been acted on, certainly not in its entirety. Do you want to expand on that a bit more?

[Jamie Fox]

Yes. Thank you, Ed.

A couple of years ago, after travelling the province when I first got into this portfolio, I started to hear from the industry directly and to see, for example, the condition of our wharves and harbours across Prince Edward Island. Then we started monthly meetings with the regional ministers. They were having the exact same problem. Our department came up with a supporting marine infrastructure plan and I brought that forward to the other ministers. They supported it, and then we put it into Minister Jordan's office.

Basically, though, if you look at the country, you see that we've had major infrastructure plans when it comes to our water and sewers, our highways, our marine, rail and all that major type of infrastructure, but there has never been an infrastructure plan specifically targeting our marine industry as it applies to our fishery and our aquaculture. That's specifically what we have put forward to the federal government.

[Ed Fast, Conservative, Abbotsford, BC]

Okay.

Do you have any idea of the total infrastructure deficit when it comes to small craft harbours in your neck of the woods?

[Jamie Fox]

DFO is doing the best they can. The problem is that you have A-base and B-base funding. The A-base funding has never actually increased. Year after year, DFO is consistently allocated the same amount of funds, which they try to spread across the repairs. If I do some rough math and we look at the $300 million over two years based across the whole country, which has to be spread out, that infrastructure to us would be a $12 million to $15 million per year increase of budget on our small craft harbours.

Now let's bring in Malpeque harbour, where we're chewing up around $1.5 million, if not a little bit more, in the dredging of that harbour alone. That's not looking at the other harbours as well, with the shifting sand. We live basically on sandstone rock. The money is not there. How do we keep this infrastructure in place? You can compare it with other provinces, where you see the infrastructure has been put in place and how old it actually is.

[Ed Fast, Conservative, Abbotsford, BC]

My question was really directed toward all of the small craft harbours in Atlantic Canada and the value of the infrastructure deficit and the work that has to be done to bring them up to a current state of repair. Have you ever done an evaluation of what that might look like? That obviously will drive the size of the program you're looking for.

[Jamie Fox]

Yes. When we first looked at the program and developed it, and looked at what we were hearing from the other provinces, we were thinking $750 million over five years. That would be distributed across the maritime region and should bring us up to a level of good repair for the future. Now with the pandemic and the price of infrastructure going forward, we're raising that to somewhere around $1 billion.

[Ed Fast, Conservative, Abbotsford, BC]

That's very helpful.

Talk to me about Malpeque harbour, which would be of great interest to Mr. Easter, and specifically about the deficit you see in that harbour and perhaps the cost of what it would take to address those concerns.

[Jamie Fox]

Malpeque harbour is centrally located up in Wayne's area. I'm very familiar with it. It sees basically 44 fishing boats or fishing fleets of lobster going out every day during the season. Probably there are 10 to 15 other aquaculture industry users there.

The problem in Malpeque harbour is shifting sand. In order for DFO to consistently keep that channel and harbour open and deal with the shifting sand, they have to dredge it twice and sometimes three times a year—spring, summer and then fall—to ensure safe passage. As Wayne can attest, they're actually falling behind on that, because you're dealing with sand.

We must make sure that the infrastructure is brought up to date with what climate change is doing. What's affecting Malpeque is climate change.

[Ed Fast, Conservative, Abbotsford, BC]

Ms. MacNaughton, perhaps I could go to you for a moment. You've made a very compelling case that EI sickness benefits need to be expanded to address the reality of the challenges faced by people who are really sick. Your husband's case is a perfect example of that.

Would the 26 weeks that the budget proposes fully address the concerns faced by you and your husband in trying to make it through that very difficult time?

[Kathy MacNaughton]

No. We need more than 26 weeks. David would still have been alive for two months after if this change had been in there to help us. Twenty-six weeks is a massive improvement, but I think it should be more. I'm hoping that we go one step at a time and that eventually everybody will realize that these sick Canadians need that money.

[Ed Fast, Conservative, Abbotsford, BC]

Yes. As long as—

[The Chair, Liberal, Wayne Easter]

We have to end it there.

[Ed Fast, Conservative, Abbotsford, BC]

Can I make one last comment?

[The Chair, Liberal, Wayne Easter]

Go ahead.