Finance Committee on Oct. 26th, 2023

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you. That's very helpful. If they move the excise sticker to a digital one, it makes no difference, it can save a lot of money and we can move on.

Mr. Asselin, the government has had a varying number of fiscal anchors over eight years. A tweet from the Minister of Finance yesterday seems to indicate that the new fiscal anchor is that we have the lowest debt in the G7 and we have the lowest debt-to-GDP in the G7. In your mind, does that count as a fiscal anchor? If not, I think you recommended one. Maybe you can explain why.

We have 30 seconds. I'll stay on time for the chair.

[Robert Asselin]

Thank you, Mr. Chair.

Yes, I think the debt anchor that the government has right now is not one that we're going to be able to meet, frankly. The debt-to-GDP ratio is going to go up this year and probably next year. Unfortunately for the government, it doesn't look like the fiscal anchor will be respected.

We think debt servicing costs of 10% of revenues is reasonable. We think that will prevent all the bad things that I explained earlier.

[The Chair, Liberal, Peter Fonseca]

Thank you, and thank you, MP Chambers.

Now we will go to MP Dzerowicz for five minutes, please.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

Thanks to all the witnesses. I have 10 minutes of questions for each one of you, so I don't have all the time I would like to have.

Mr. Smitherman, thank you for being here. You have a long history in politics. You have done an enormous service to Ontario and to our country, so thank you so much. Thanks for taking on this enormous role. You've been very clear in terms of your recommendations around the adjustments to the excise tax, the elimination of the health tax fee, and the regulated format for things like edibles, etc. Thank you for being clear. Bem-vindo to your board director. It's nice to have him here as well. I don't have any questions for you. I just wanted to say that your recommendations were clear.

Mr. Asselin, you are not a stranger to this committee. You have been here fairly frequently. We're always pleased to have you. Your messages have also been very clear on keeping spending to 2%, a comprehensive program review, a new fiscal anchor, the IAA clarity, and certainty and predictability. The thing that I'm slightly disappointed on—I'm going to shift over to Mr. Vronces, but I'm hoping to come back to you if I have time—is that I would love to have heard more suggestions from you on growing the economy.

As you know, I have spoken many times to Mr. Hyder about interprovincial trade barriers. This is a huge thing. If you think it's a huge thing, then you're never going to be able to tackle it, but there are ways to break it down and there are things that we can do. Having suggestions that are productive from the Canadian business council would actually be helpful to us.

The productivity levels in business investment—this is not a new thing. It didn't just happen overnight. It didn't happen over the last four years. Productivity is something we've been dealing with for 30 years. We have issues around the Competition Act. We know this. We know that we have productivity issues. We know that we have business investment issues. We know that our businesses are not investing in machinery. They're not investing in training. It is a problem.

It would be really helpful if you could actually come to us and say, “Here is how you can get businesses on track. Here is how you can provide some incentives to get more businesses to provide those types of investments.” That would be helpful to us. If we don't have time today, I'd be grateful if you could actually make that submission to our—

[Robert Asselin]

We need to get it solved.

Thank you, Mr. Chairman.

With great respect to the member, I think I've written at least four or five papers on industrial policy, innovation and productivity. We have a lot of solutions for these problems.

[Julie Dzerowicz, Liberal, Davenport, ON]

That's great, Mr. Asselin, but it would have been great if you'd mentioned that today: Here's what you need to do in terms of restraining your growth; here's where you need to focus on; and if I had to give you one or two or three recommendations for federal budget 2024, this is where we'd like them to go.

[Robert Asselin]

I did mention permitting. I did mention implementing tax credits that the government announced last budget.

[Julie Dzerowicz, Liberal, Davenport, ON]

Yes. Actually, that's the other thing I wanted to mention. We did put quite bit of money into our clean energy federal tool kit. We'd love to hear feedback from you that, for instance, it's great on these levels, but here are the things you need to be adjusting. I say with all genuineness that we want to get it right. It is fundamental that we get that right. So if you could provide that, that would be great.

I'm hoping to come back to you, Mr. Asselin, but right now I'm going to Mr. Vronces.

Look, I'm a big supporter of open banking. I have been a big supporter and am on record for that. There was testimony from Mr. Sabia, the former deputy minister, at a Senate committee in May 2023, earlier this year. He indicated very clearly that the federal government is actually seized with this. We are trying to make sure we're moving as fast as possible. He said that right now there's a complexity around how we can provide the stability that the system needs while moving and shifting into open banking in a world that is highly unpredictable right now.

I just want to let the record show that this is something that we have indicated is a priority for our government, and imminently we hope to be able to put that forward.

My question for you, in my remaining minute, is that I know with Fintechs there are a number of different ways to pay, such as 4Pay, Pay Send, Stripe and Square. How do the Fintechs members help build credit for the financially underserved in Canada? What role do you see your membership playing in the future? Could you respond to that, please?

[Alex Vronces]

One of the best examples I can think of that has gotten plenty of attention anywhere that it's been talked about is Borrowell's Rent Advantage program. They have a product that allows Canadians who might not have a lengthy credit history or new Canadians who don't have a credit history that's recognized by financial institutions to use rent payments to build their credit score. My understanding is that they were the first company in Canada to do that. That kind of product is built on the back of what open banking would enable.

Unfortunately, the problem now is that the only way that banks give to Canadians to share their financial information is unreliable and risky. Connections are often coming down, resulting in disruptions to the service. It gets in the way of Canadians trying to meet their financial objectives.

I also agree that any time you try to change financial sector policy there are going to be complexities and risks that need to be managed, but the status quo is also fraught with risks, and those risks need to be managed.

My understanding is that the department and our open banking lead are ready to go. They have been ready to go for months. They have been consulted on this for a long time. They've been consulting on this for over five years. What we need now is attention from the Minister of Finance to actually make a decision and give Canadians a way to access a wider range of financial services without compromising their financial security and their privacy.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much for that.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Thank you, MP Dzerowicz.

Now we'll go to MP Ste-Marie, please, for two and a half minutes.

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

Thank you, Chair.

My question is for the Oxfam-Québec representatives.

We are obviously all very concerned by the growing wealth disparity. But the fight against the use of tax havens is the battle that must be waged.

What other measures, or complementary measures, can make the tax system fairer?

[Diana Sarosi]

As I mentioned in my comments, a wealth tax is definitely one fiscal leveller that a government can use. It's very clear to everyone these days, just that exorbitant level of inequality in wealth; people on the streets talk about it now because it's so extreme.

In polling that was recently conducted, 89% of Canadians were in favour of a wealth tax. A wealth tax of 2% over $5 million, 3% over $50 million and 5% over $1 billion of wealth could raise $30 billion in revenues in the first year. Again, this is one of the measures that could help in making sure there are no services cut in terms of inflation and the debt issue.

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

Thank you very much.

Thank you, Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste‑Marie.

Now we're going to MP Blaikie, please.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

I certainly appreciate the extra time.

[Voices]

Oh, oh!

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Professor Purdon, obviously the carbon tax continues to go up. So do oil and gas company profits. Earlier, I know, you were able to translate what increases in the carbon tax meant at the pump for Canadians. Have you yourself or anyone you're aware of done work to try to translate the increase in profits for oil and gas companies into a cost at the pump for Canadians, and how would that compare to the carbon price increase?

[Mark Purdon]

That's an interesting question. I haven't looked at that, and I don't know anyone who has, but I think it could be done. Maybe it's something that we could look at. I work regularly with economists at UQAM and others across Canada. I'm not an economist by training, but I try to speak the language.

Yes, that could be something that could be increasing.... I don't want to speculate here, but I think that as colleagues at Oxfam were also mentioning, there are still substantial subsidies to the oil and gas sector that make it so that there's not really a level playing field. We could probably get.... There are probably pretty clear numbers on that in Canada although reducing the costs is going in another direction for consumers and producers, but it's definitely a worthwhile issue to consider.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

It seems to me that the increase in profits that oil and gas companies have experienced far exceeds what revenue is being generated by the carbon tax. I think it would be interesting to do that comparison as an apples-to-apples exercise, because if you're a Canadian and you're looking at your household budget and trying to figure out how to put food on the table, it doesn't really matter whether an increase comes in the form of a tax or whether it's an increase in order to pay higher dividends to oil and gas shareholders. At the end of the day, it puts the same amount of pressure on your budget.

It certainly seems like oil and gas companies have been getting a pretty good ride through the pandemic period. I think that even from 2019 to 2021 there are some examples of profit increases of up to 1,000%, which sounds far more dramatic to me than the increase in the carbon tax.

I thank you for that. Certainly, if you do find some of those numbers, if you could forward them on to the committee here, we would be very appreciative of that information.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

MP Morantz, go ahead for five minutes.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you, Chair.

Mr. Asselin, after eight long years of this Liberal government, despite historically high deficits, this Liberal government has left Canada with the lowest GDP per capita since the Great Depression. Ms. Dzerowicz says she's disappointed and has asked that you explain all of the things you've written about over the years that her government should have done over that time—

[Julie Dzerowicz, Liberal, Davenport, ON]

On a point of order, Mr. Chair, let the record show that I did not say that.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

—to make the economy grow, so here is your chance.

[Julie Dzerowicz, Liberal, Davenport, ON]

On a point of order, I did not say that.