Evidence of meeting #109 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was prices.
A recording is available from Parliament.
11 a.m.
Liberal
The Chair Liberal Peter Fonseca
I call the meeting to order.
We have a vote that is imminent, and the bells will start ringing.
As members know, it's their prerogative to allow for unanimous consent so we would continue the meeting and then be able to vote with our apps. Is everybody okay with that?
11 a.m.
Some hon. members
Agreed.
11 a.m.
Liberal
The Chair Liberal Peter Fonseca
That will ensure that our witnesses are not held up and delayed with their time, and we will get our two hours of committee.
Welcome to meeting 109 of the House of Commons Standing Committee on Finance. Pursuant to Standing Order 83.1 and the motion adopted by the committee on Thursday, June 8, 2023, the committee is meeting to discuss the pre-budget consultations in advance of the 2024 budget.
Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room and remotely using the Zoom application. I would like to make a few comments for the benefit of the witnesses and members.
Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your microphone, and please mute yourself when you are not speaking. There is interpretation. For those on Zoom, you have the choice at the bottom of your screen of the floor, English or French. For those in the room, you can use the earpiece and select the desired channel.
Although this room is equipped with a powerful audio system, feedback events can occur. These can be extremely harmful to the interpreters and can cause serious injuries. The most common cause of sound feedback is an earpiece worn too close to a microphone. We therefore ask all participants to exercise a high degree of caution when handling the earpieces, especially when your microphone or your neighbour's microphone is turned on. In order to prevent incidents and safeguard the hearing health of the interpreters, I invite participants to ensure that they speak into the microphone into which their headset is plugged and to avoid manipulating the earbuds by placing them on the table away from the microphone when they are not in use.
I remind everyone that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as well as we can. We appreciate your patience and understanding in this regard.
In accordance with the committee's routine motion concerning connection tests for witnesses, I have been informed that everybody has been tested and everything is good. The tests have been done and everything is working.
Members—before I welcome the witnesses—I will say that we had an excellent tour, by all accounts, of Atlantic Canada. We had the opportunity to be on the ground in P.E.I, New Brunswick, Nova Scotia and Newfoundland and Labrador, to hear from stakeholders and witnesses and to get a lot of great testimony for our study.
Now we're back here in Ottawa and we're delighted to have the witnesses we have before us today. From HEC Montréal, we have Pierre-Olivier Pineau, who is a professor and chair in energy sector management and is appearing as an individual. From the agri-food analytics lab at Dalhousie University, we have the director and professor Sylvain Charlebois. From the Alliance of Canadian Cinema, Television and Radio Artists, we have the national president, Eleanor Noble, and the national executive director, Marie Kelly. We have, from the C.D. Howe Institute, the associate vice-president of public affairs, Benjamin Dachis. Joining us via video conference, we have, from the Centre for Future Work, the economist and director Jim Stanford. From Confédération des syndicats nationaux, we have adviser, research and status of women, François Bélanger; and the treasurer, Yvan Duceppe.
Welcome, everybody. We are going to start with Pierre-Olivier Pineau for five minutes.
11:05 a.m.
Pierre-Olivier Pineau Professor, Chair in Energy Sector Management, HEC Montréal, As an Individual
Thank you very much for the invitation. It's a pleasure to speak about the few things I'll be mentioning.
Basically, I'll be arguing that we do spend a lot to pollute in Canada, and that's a problem. The good news is that we can reduce this pollution by making Canadians save money, actually get richer and have a better standard of living.
I'll be providing four examples of this huge spending that takes us in the wrong direction, both from an economic perspective and from an environmental perspective.
The first example is the evolution of the fleet of cars across Canada.
In 2022, Canadians spent $81 billion to buy approximately 1.5 million new vehicles. That's almost back to normal, because in 2019 Canadians spent about the same amount. What's extremely concerning is that they've been spending $56,000 on average for trucks, while a car would cost only $46,000.
Basically, Canadians are increasingly buying more expensive trucks when they have access to cheaper cars. Also, these trucks actually will use more fuel than cars. For example, a mid-sized car like the Toyota Camry uses 6.3 litres per 100 kilometres, while an average new SUV will—
11:05 a.m.
Liberal
The Chair Liberal Peter Fonseca
Monsieur Pineau, I'm going to apologize for interrupting, but the bells are ringing. We see the lights here in the room.
Members, again, do we have unanimous consent to continue?
11:05 a.m.
Some hon. members
Agreed.
11:05 a.m.
Professor, Chair in Energy Sector Management, HEC Montréal, As an Individual
Okay.
I was just saying that trucks like SUVs—small trucks like SUVs—cost more and use more gasoline than mid-sized cars, for example. Canadians are buying increasing numbers of vehicles. Twenty years ago in 2000, there were fewer cars per 1,000 inhabitants in Canada compared to now. We're keeping the fleet growing faster than the population, which basically adds to congestion and to pollution. Basically, we are spending to create congestion and polluting more.
That's in personal transportation. In freight transportation, there are similar concerning trends.
In the last 20 years, freight truck transportation increased faster than trains, for example. All the statistics show that trains use less energy per tonne-kilometre and have less emissions per tonne-kilometre in moving one tonne over one kilometre, which is the standard unit in freight transportation—a tonne-kilometre. It basically costs more with trucks than with trains.
We've been developing the freight transportation modes with truck transportation, which is actually costing more for the Canadian economy and polluting more, in addition to creating more congestion on highways, instead of investing in railways that would actually free up space on the highways, cost less and pollute less. That's my second example.
My third example relates to housing.
In housing, building houses requires energy—resources—and once you have these buildings, you need to heat them and air-condition them. The trend all across Canada is that we have a bigger average square footage per house over time and fewer people in these houses.
The irony is that Canadians are spending more for more buildings at a time when there is a crisis in terms of housing, but there are fewer people in the average house. That's again an example of where we grow these houses, and we of course increase the energy consumption of these houses for fewer people. The average household size is actually decreasing over time. Again, that's an area where we spend a lot while polluting more.
The last example I'll share with you is that of food. With food, we tend to like animal-based protein food, when plant-based food is actually costing less and polluting less. If you have one kilogram of beef, for example, it will cost more and pollute more than one kilogram of plant-based protein. There are different habits that need to be changed, but the truth is that we are paying more for polluting more, just because we have the ability to do so because we're a rich country.
In conclusion, I would just say that I love wealth and I love being rich, but this level of wealth should not be an excuse for polluting more. We should be designing policies, such as more ecofiscality, to encourage Canadians to spend less on items that pollute and spend more on items that don't pollute. There are a lot of services that could actually raise our standard of living and could basically reduce the energy intensity of our economy while freeing up some resources to invest in more productivity and more wealth for Canadians.
I'll stop here. If you have questions, I'm able to answer them.
11:10 a.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Professor Pineau.
Now we will go to another professor, to Professor Charlebois.
Please proceed.
11:10 a.m.
Dr. Sylvain Charlebois Director, Agri-Food Analytics Lab and Professor, Dalhousie University, Agri-Food Analytics Lab
Mr. Chair and committee members, today I aim to address three key issues before the committee: carbon pricing, sales taxes on food and the prospect of implementing a Canadian SNAP program.
Let's talk about the carbon tax first. The question of whether the carbon tax serves as a convenient scapegoat for high food prices is not the right question to ask. Instead, this is what we should inquire: Is the carbon tax negatively impacting the competitiveness of our food industry? Carbon pricing undeniably holds significant weight in Canada. Nevertheless, it is imperative that we rigorously evaluate its effects on the affordability of food for Canadians and the long-term competitiveness of our industries. Unfortunately, comprehensive analyses in this regard have been lacking, and much of what we have encountered appears to be influenced by biased narratives. The efforts of our team of 10 researchers at Dalhousie University have shed light on the scarcity of research in this area.
The Bank of Canada's estimated 0.15% inflation figure applies solely to the direct impact of the carbon tax on three products included in the CPI—gasoline, heating oil and natural gas. This estimate does not encompass second-round or pass-through effects. As a research team, we believe it is challenging to quantify how the carbon tax affects food retail prices due to the multitude of factors influencing prices, starting with consumer behaviour. Our primary focus at Dalhousie has been on industrial and wholesale prices, where we have identified noteworthy disparities between Canada and the United States.
While the elimination of the carbon tax is not advisable, a temporary pause on any carbon pricing policies affecting our food supply chain should be considered until we gain a clearer understanding of their impact. We are diligently continuing our work and anticipate releasing reports soon.
With regard to CRA rules, regrettably, many Canadians are unaware that over 4,600 items in grocery stores are subject to taxation, or they incorrectly assume that taxes apply exclusively to unhealthy products. This misconception needs clarification. We estimate that grocers levy taxes ranging from $300 million to $700 million on items that in our opinion should not be taxed. Prepackaged, healthy salads with a premium price tag, Canadian-made natural bars and an increasing number of “shrinkflated” products, among other examples, are all subject to taxation.
Ottawa can provide immediate relief to Canadians by eliminating all sales tax on groceries. Taxing essential food items is regressive and raises ethical questions, particularly during a time when food affordability poses challenges for many. It is high time for a meaningful dialogue about which food items should be subject to taxes in grocery stores.
The final area is a national nutrition coupon program. As the government in Ottawa explores avenues to assist food-insecure Canadians, it may be an opportune moment to consider launching a national nutrition coupon program fund specifically designed to support children and families who generally cannot afford healthy food. This program could resemble the Canadian adaptation of the supplemental nutrition assistance program, or SNAP, commonly known as the food stamp program in the United States, but it would be inspired by farmers' markets across the country and supported by farmers' markets across the country. Those programs actually exist in Canada—in Nova Scotia, Montreal and B.C. We just need to nationalize it.
Such a program could be meticulously targeted to provide essential grocery store assistance to those in dire need. Through this initiative we could empower Canadians to purchase healthy, locally sourced food products and support farmers, thereby supporting our agri-food sector and ensuring access to a nutritious diet for us all.
Thank you, Mr. Chair.
11:15 a.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Professor Charlebois.
Now we will turn to the Alliance of Canadian Cinema, Television and Radio Artists with Ms. Noble and Ms. Kelly.
Ms. Noble, you will start.
11:15 a.m.
Eleanor Noble National President, Alliance of Canadian Cinema, Television and Radio Artists
Thank you for the opportunity to speak on behalf of 28,000 members of ACTRA, the Alliance of Canadian Cinema, Television and Radio Artists.
For 80 years, ACTRA has been representing professional performers across Canada who bring Canadian stories to life. We play a vital role in a nearly $14-billion industry that generates a quarter of a million jobs a year, but we have a major problem in Canada. We do not have enough Canadian production in this country because it's not financially supported.
When U.S. studio production comes to a halt here as a result of SAG-AFTRA and the WGA going on strike, we unnecessarily suffer the consequences. We need to be more than just a service industry to the U.S. We need ongoing Canadian production created by Canadians, so that we may continue to create a viable, sustainable and remarkable Canadian film and television industry here, one that is not solely dependent on foreign investment for success but rather provides real incentive for Canadian creatives to stay.
In addition, ACTRA has been shamefully locked out of commercial work for the last 541 days by union-busting advertising agencies that represent some of the wealthiest brands in Canada—Rogers, Wendy's and Canadian Tire, to name a few. These corporate giants boast record profits while refusing to pay minimum rates to ACTRA performers who helped build those brands, and with the introduction of commercial advertising on paid streaming services such Netflix and Disney+, the fight for ACTRA to protect our jurisdiction is at a critical juncture.
Even Canada Post, a Crown corporation, is producing non-union commercials, and my complaint to Minister Jean-Yves Duclos has gone unanswered. We have demanded that the federal procurement policy be revised to forbid the use of scab labour, directly or indirectly, and we have the full support of the Canadian Labour Congress. In June, the federal government selects its next agency of record. Please ensure it is an agency that, like its current one, is not using replacement workers. In our written submission, we've proposed simple solutions to address these issues.
I would now like to hand things over to ACTRA's lead negotiator and national executive director, Marie Kelly.
11:15 a.m.
Marie Kelly National Executive Director, Alliance of Canadian Cinema, Television and Radio Artists
Thank you, Eleanor.
We commend the government for agreeing to review how artists can access employment insurance, based on the heritage committee recommendations to strengthen the Status of the Artist Act. We believe that EI must be available to self-employed performers and that the first $15,000 of a performer's income should be tax free. We also ask that artists be allowed to use four-year income averaging due to the fluctuation of an artist's income.
We agree wholeheartedly with the heritage committee that we need to strengthen the Status of the Artist Act. This act is already Canadian policy, but without effective regulation, the policy becomes meaningless. Basic minimum rights developed over 80 years with the industry and ACTRA should be standard when funding is accessed. Telefilm and the Canadian Media Fund should be given direction that funding should be conditional on application of the basic minimum. We note that the heritage committee agrees with us.
There are two other urgent issues threatening the livelihood of performers.
As performers and creative artists, an ACTRA member's face, voice and performance is their product. They earn a living based on the licensed use of their personal brand. We're urging the government—and we know this is already before the industry committee—to protect these invaluable assets from misuse through artificial intelligence. As a union, ACTRA champions the concept of the three Cs—consent, control and compensation—which must support legislation to protect performers and govern AI. ACTRA members' likenesses have already been exploited in deepfakes, some pornographic in nature, with absolutely zero consent.
New legislation must include protections for performers to prevent the unauthorized replacement of human performances by AI technology. AI must evolve in a way that respects human inspiration, creativity and ingenuity. In this new world of AI, it's more urgent than ever to resolve the inequities of the Copyright Act as well. Today, audiovisual performers—that's actors—need the same protections that are afforded to musicians under this legislation.
Thank you. We welcome your questions.
11:20 a.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you.
Now we'll go to the the C.D. Howe Institute.
Mr. Dachis, please.
11:20 a.m.
Benjamin Dachis Associate Vice-President, Public Affairs, C.D. Howe Institute
Good morning. Thanks for having me here.
In my role at the C.D. Howe Institute, Canada's leading economic policy think tank, I get to take back advice from parliamentarians on what we should focus on. I'll try to be very brief here to allow all the members to dig into our submission and to let us know what issues are most on their minds for us to work on.
I'll start with our motivating urgent problem behind all the work at the C.D. Howe Institute and our submission, which is that Canada's business investment record has been shockingly weak. A lack of investment means that Canadian workers just don't have the tools or equipment that they need to be as productive as possible. Equipping our workers will mean higher real earnings and higher living standards per person. When those are not growing, that puts many things at risk, including government revenue.
For every dollar of investment per worker in the OECD, a worker in Canada is getting only about 73¢. For every dollar of new capital that a U.S. worker gets, a Canadian gets only about 53¢. This is a problem that's been getting progressively worse since 2015. We need a confidence-inspiring fiscal framework that leads to broad-based reductions in marginal tax rates on work, savings and investment.
What would specific action look like? You'll see a number of suggestions in our submission, but I'll summarize here and would be happy to discuss this further in questions.
First, with regard to fiscal policy, Ottawa should be limiting the growth of federal employee numbers and payroll expenses by freezing federal department operating budgets for wages and salaries at their 2023 levels for five years. It should also be avoiding unnecessary and unproductive expenses. For example, the government should not be pursuing a national single-payer pharmacare program. It should be working with the provinces to achieve universal coverage but allowing people to continue to have private insurance. Ottawa should also transition federal employees' pension plans to shared-risk, shared-governance plans in which taxpayers bear less risk.
The government should be prioritizing funding for infrastructure projects under direct federal control, such as investments in capacity and added security for marine, rail and air transportation and for military assets. That means less direct federal spending when private investors or other levels of government are better suited to tackling local needs. If the government does decide to increase spending, it should fund new spending with a higher GST rate rather than with growth-inhibiting hikes in personal and corporate income taxes or with ad hoc taxes that send a signal that any potential sector might be subject to sudden taxes. That's not how we get investment.
A robust fiscal framework is going to allow us to pursue a number of ideas outlined in our submission that I'm going to try to highlight here.
For taxes in general, we need to limit inflation's stealth tax by indexing amounts that are otherwise not updated with inflation. On personal taxes, for example, we should be implementing a benefit shield, focusing on the Canada child benefit and the Canada workers benefit. This benefit shield would partly compensate workers for the loss of certain income-tested tax credits, but only for the first year after they take on more work, so it's a fairly fiscally prudent measure.
We should also allow workers to average their income over many years—and we've heard this come up before—so that any single large-earnings year is not going to lead to a disproportionate loss of benefits or higher taxes. We should also be revisiting the tax deduction granted for child care expenses, replacing it with a refundable tax credit for child care expenses.
Now let's move on to the corporate income tax. We should be implementing a temporary general investment tax credit applicable to all investments in depreciable assets, including intangibles, at a rate of 5%, in effect from now until 2025. We should be reducing the corporate income tax from 15% to 13%, starting in 2025 after the temporary investment tax credit has ended. We should also be establishing an IP-box tax mechanism whereby income from patents and other intellectual property generated by activity in Canada and used in Canada faces a lower corporate income tax.
One last idea, before I turn it over to questions, is that we should tie the small business deduction to a firm's age. For example, at five-year intervals, the threshold level of capital assets that qualifies for the small business deduction would rise, and the level of the deduction would fall. That would be regardless of firm size until they reach the standard corporate income tax.
Thank you for inviting me again. I look forward to your questions.
11:25 a.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Mr. Dachis.
We have two more witnesses to hear from, members. We're going to hear from one, and then we're going to have to suspend to be able to vote. After the vote, we will come back to hear from the Confédération des syndicats nationaux.
However, right now we're going to the Centre for Future Work and Mr. Jim Stanford, please.
11:25 a.m.
Dr. Jim Stanford Economist and Director, Centre for Future Work
Thank you very much, Mr. Chair, for the invitation to appear.
I will focus my opening remarks on four specific points.
The first point is that much public commentary in the lead-up to this budget has focused on the size of the federal deficit and whether it is too big. I'd like to provide some important perspectives on this question.
Canada's deficit is very small by global standards. The latest “Fiscal Monitor” report from the IMF, released last week, shows that Canada's general government operating balance is the second-smallest of any G20 country at just 0.7% of GDP—behind only Saudi Arabia—and it's smaller than any other G7 country.
OECD data suggests that Canada's general government deficit is very small. By its estimate, it's just 0.4% this year as a share of GDP. That's the seventh-smallest of any of the OECD's 38 member countries and one-ninth the size of the average OECD deficit.
The contrast between Canada and the United States on this matter is very instructive. The U.S. federal deficit is almost 10 times larger, relative to GDP, than Canada's. It's around 7% of GDP, adjusted for the cancellation of the Biden government's student loan proposal, yet the U.S. economy grew 2.1% in the second quarter while ours shrank. U.S. inflation has been comparable to Canada's and is, in fact, now slightly lower. The combination of expansionary fiscal support in the U.S. with monetary restraint is showing that the economy can be supported more strongly while inflation comes down.
The large deficits incurred during the worst stages of the pandemic—and for good reason—have been almost entirely eliminated. Canada's strong recovery from the pandemic, combined with the impact of nominal GDP growth on government revenues, has made budget repair faster and stronger than expected, and this will continue. The government is likely to outperform its official projections for revenue and other budget benchmarks in coming years.
In short, while Canada faces many significant challenges at present, the deficit is not one of them. Concern with the deficit is overshadowed by more pressing priorities, such as supporting Canadians through the cost of living crisis, the housing crisis, climate disasters and more.
The second point is that claims the federal deficit has been a significant cause of Canada's recent inflation are not credible.
This argument assumes that inflation resulted from excess aggregate demand in the domestic economy. This assumption is not valid for explaining inflation after the COVID pandemic, which was driven by a combination of supply-side shocks, shortages of key commodities, consumer desperation after the lockdowns and then an energy price shock. All of that was made worse by unusually high profit margins collected by Canadian businesses. Canadian corporate profits reached an all-time record share of Canadian GDP in 2022, even as our inflation surged.
Internationally, there is no correlation between the size of a country's deficit and its rate of inflation. Some countries with larger deficits than Canada's, such as Japan, have had slower inflation. Some countries with smaller deficits have had faster inflation. Generally, inflation has been a global phenomenon resulting from those shocks after the pandemic that I mentioned and bears no relationship to a country's deficit.
In the macroeconomic context, it is the size of a government's deficit in national accounts terms, not public accounts, that matters if you are concerned with aggregate demand. Public accounts measures include all kinds of non-cash accounting measures, which do not affect real spending power in the economy. In national accounts terms, the federal budget is already effectively balanced. In the latest quarter, there was a deficit of just 0.3% of GDP. A deficit of that size can have no meaningful impact on economy-wide price trends, and what you do in this budget will have no impact on Canadian inflation going forward.
The third point is that, notwithstanding the lack of connection between the deficit and inflation, there are things that fiscal policy can do to help bring inflation down, as well as alleviate its consequences for the hardest-hit Canadians.
We should not assume that inflation is just the Bank of Canada's job; fiscal policy has a role to play as well. The federal government can reduce cost pressures that emanate from the actions of private companies. Priorities in this regard would be an ambitious expansion of affordable and non-market housing, since the housing sector is a dominant cause of our inflation today, and a national pharmacare program to bring down the price of drugs for Canadians.
Continuing and expanding targeted fiscal supports for hard-hit Canadians, such as the GST credit and the Canada housing benefit, would help, as would incremental taxes on the profits of companies that have contributed to Canadian inflation through historically high profit margins. We've done that already for banks and insurance companies. We've also imposed a 2% tax on share buybacks, which is helpful but too small and should be continued and expanded.
Other industries that have contributed so much to Canadian inflation and enjoyed unusually high profits should also be targeted, including the oil and gas sector and supermarkets. Once we agree that the deficit has had no impact on post-COVID inflation, then the government can fulfill its responsibility to assist in reducing inflation and its effects through new programs like those.
The last point—I'm out of time—is that I would like to reinforce the importance of the made-in-Canada supports for clean-energy investments including in electric vehicles and battery plants in Canada. Those have had a tremendous impact on addressing investment and attracting new projects to Canada, helping to address the point that Ben made earlier about the need for more investment.
Thank you for your attention.
11:30 a.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Mr. Stanford.
I'll say, just before we suspend, members, that we will come back and hear from our final witness and then we'll get into questions.
At this time, we're suspended until after the vote.
Thanks.
11:40 a.m.
Liberal
The Chair Liberal Peter Fonseca
I call the meeting back to order. With unanimous consent, we're good to get started again—thanks to modern technology.
Now we are going to hear from the Confédération des syndicats nationaux. I believe Monsieur Duceppe will be providing remarks.
Go ahead, please.
11:40 a.m.
Yvan Duceppe Treasurer, Confédération des syndicats nationaux
Good morning.
The vote was serious, from what I saw, so I'll be able to get started.
The Confédération des syndicats nationaux, or CSN, is a central labour body that brings together 1,600 unions, representing over 330,000 workers in Quebec and Canada. We represent people from all sectors, from the private sector to the public sector.
Our brief has several points. First, we indirectly address the issue of inflation by talking about the Bank of Canada, since it is through the Bank of Canada that inflation can be influenced in Canada. It has raised its key interest rate significantly. We think there should be a pause on that, because it takes time to have an effect on inflation, and because it causes a lot of anxiety for all those people we know who have to renew their mortgage. We have to recognize that.
However, we believe that the Government of Canada must act on other fronts to counter inflation and help citizens, particularly with regard to social housing. There's a major crisis in Canada and in Quebec too. We need to encourage the construction of non-market housing, such as co‑operative housing, in collaboration with other governments. It's not always easy, but we have to work on it. More targeted assistance should also be provided to lower-income citizens who are being hit hard by rising food costs.
As far as the EI system is concerned, we noticed during the pandemic that the current system is inadequate and has many shortcomings. A promise was made in this regard, and we think it must be kept to prevent many of our fellow citizens from finding themselves in what is known as the black hole of employment insurance, meaning a period without income. Yes, the pandemic is over, but there have been forest fires, and I can tell you that there are forestry workers in different parts of the country where there is no more wood to harvest, or there are workers in maritime regions where shrimp processing has taken less time, who are victims of the EI black hole, and that too is cause for anxiety.
Second, we think pharmacare should be public and universal, because it's a good way to control the cost of drugs. This would help control inflation and promote better access to medication for people.
As for the labour shortage, there is immigration, but many of the permits given to foreign workers are temporary. What's more, they should be given the right to change employers. Right now, they're a bit like prisoners—pardon the expression—of the employer to which they're tied. I can tell you that people from the UN have said that it's even worse than that. There have been abuses, and I think that allowing temporary foreign workers to change locations would prevent some of these abuses.
We could also take advantage of the energy crisis to develop a green economy. We are there. The first thing to do, in our opinion, is to facilitate an energy transition. This is a matter of urgency. I don't need to remind you of all the effects this crisis has had across Canada for some time now. We had an unbelievable summer. So we really have to put an end to the financial support of the oil and gas industry as soon as possible. In my opinion, and until proven otherwise, this industry is very profitable and does not need the support of the government or its Crown corporations.
There are tax credits. There have been some in recent budgets. That's good, but targeted subsidies would be even better and would enable the government to exercise leadership by targeting specific industries and promoting specific sectors.
We heard earlier from other speakers about batteries and electric cars. That's great. Now, we would also like to see public transit promoted.
Finally, with respect to taxation, we believe that the tax base should be improved by establishing a public registry of the ultimate beneficial owners. Such a registry would allow us to know who really has to pay tax and would allow multinationals to pay their taxes at an effective, not theoretical, rate of 25%. Of course, this is true for large multinational digital companies.
I will add one last word, by the way. While there's a tug‑of‑war going on, the media should be supported, rather than deprived of revenue. That would be important.
Thank you very much. We look forward to your questions.
11:50 a.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Mr. Duceppe.
We will now move to members' questions for the witnesses. We were suspended for about 15 minutes, so it looks like we'll be ending today at about 1:15 p.m. That's just so that everybody keeps an eye on the time.
In this round, each party will have up to six minutes to ask questions.
We will start with MP Hallan for six minutes.
11:50 a.m.
Conservative
Jasraj Singh Hallan Conservative Calgary Forest Lawn, AB
Thank you, Mr. Chair.
Thank you to the witnesses for being here.
After eight years of this Liberal-NDP government, we're seeing in this country one in five Canadians skipping meals. We're seeing food bank usage at record levels that we've never seen before, because of high taxes, and they're only growing. People can't afford to eat, heat and house themselves today.
Mr. Charlebois, in a National Post article, you're quoted as saying that the carbon tax has made expenses go up and that there is a “compounding effect” with this tax into the supply chain. Could you give your opinion on or break down, if you can, what parts of the supply chain the carbon tax hits the most?
11:50 a.m.
Director, Agri-Food Analytics Lab and Professor, Dalhousie University, Agri-Food Analytics Lab
Thank you for the question.
What we've noticed over the last few months is that a lot of attention is given to the CPI. I think it's really the wrong focus. We need to focus on the IPPI, the industrial product price index. If you look at pricing over the last, say, three or four years, the IPPI has outpaced the CPI in food. It means that pressures are real across the supply chain, particularly in processing, transportation and logistics.
I think that's where we need to focus, which is why I think it's important to pause—not to eliminate but to pause—the carbon tax in order to better appreciate what is happening with the food industry. I talk to companies and even restaurants, and they're feeling the pressure. It's never been measured. Measuring the effects of the carbon tax on retail is impossible because of all of us. Consumers impact prices every single day. It cannot be measured.
11:50 a.m.
Conservative
Jasraj Singh Hallan Conservative Calgary Forest Lawn, AB
In your opinion, we shouldn't just be looking at the fact that....
Yes, the Bank of Canada did say that the carbon tax is inflationary, and it's about 0.1%, but it does go beyond that, in your opinion. Is that correct?
October 19th, 2023 / 11:50 a.m.
Director, Agri-Food Analytics Lab and Professor, Dalhousie University, Agri-Food Analytics Lab
Absolutely. I did contact the Bank of Canada to ask for the arithmetic behind the 0.15%. As I mentioned earlier, it looks at only three components of the CPI. It doesn't evaluate the compounding effect of the carbon tax across the supply chain. That needs to be measured.