Finance Committee on Nov. 2nd, 2023

[The Chair, Liberal, Peter Fonseca]

I call this meeting to order.

Welcome to meeting number 113 of the 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'd 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 mike. Please mute yourself when you are not speaking.

Interpretation is available. For those on Zoom, at the bottom of your screen you have the choice of English, French or floor audio. 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 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 their microphone or their neighbour's microphone is turned on.

In order to prevent incidents and safeguard the hearing health of the interpreters, I invite participants to ensure they speak into the microphone into which their headset is plugged and avoid manipulating the earbuds by placing them on the table away from the microphone when they are not in use. Please also keep any papers, hands, etc., away from the microphone.

As a reminder, 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 best 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'm informing the committee that one witness is still being tested as we speak. The rest have completed the required connection tests in advance of the meeting.

Members, before we go to witnesses, I want to provide you with an update. The Deputy Prime Minister and Minister of Finance has reached out to the clerk. She will be available to appear before the committee, along with officials, on the housing study for one hour on December 7, with officials remaining for an additional hour afterwards.

I would now like to welcome our witnesses.

We have, from the Canadian Centre for Policy Alternatives, Mr. Hadrian Mertins-Kirkwood, senior researcher. Welcome.

From the Canadian Chamber of Commerce, we have Mr. Alex Gray. Welcome back to our committee. He's the senior director of fiscal and financial services policy.

From the Tourism Industry Association of Canada and no stranger to this committee, we have Ms. Beth Potter, president and chief executive officer.

From the Université du Québec, we have Céline Poncelin de Raucourt, vice-president, teaching and research. Along with Céline, we have Maxime Colleret, government affairs officer.

We have Wealthsimple Investments joining us. Jessica Oliver is head of government and regulatory relations.

We also have Oceans North. This is the witness who is now being tested just to make sure everything is working in terms of audio, video and the interpreters. Amy Nugent is the associate director of marine climate action.

In terms of opening remarks, Oceans North will come in at the end, so they have enough time to get tested and be prepared to go.

On that, we are going to open up with the witnesses and their opening statements of five minutes.

We'll have Hadrian Mertins-Kirkwood from the Canadian Centre for Policy Alternatives, please.

[Hadrian Mertins-Kirkwood, Senior Researcher, Canadian Centre for Policy Alternatives]

Thank you for the introduction, and thanks to the committee for the invitation.

Every year, the Canadian Centre for Policy Alternatives produces an alternative federal budget, which we do in collaboration with dozens of organizations and experts across the country. Our 2024 edition was released in August, and I'm excited to be able to share some of our recommendations with you.

In particular, I'm going to focus my remarks on my own areas of expertise, which are climate policy and green industrial policy, but I'm happy to address questions about the federal budget more broadly.

For context, green industrial policy is something our biggest allies and competitors are already engaged in. The U.S., the EU, China and others are putting the weight of government behind a cleaner economy, and that means that the playing field in growth industries is not level. If we want to compete in a global economy that is moving away from fossil fuels, we need government to play a larger role in the market.

To be clear, this transition is not optional. The Canada Energy Regulator forecasts an 83% decline in oil sands production in its global net-zero scenario. The International Energy Agency recently forecast a 76% decline in global oil demand under a similar scenario, so we need to start planning now for what our post-oil economy will look like in the coming decades, whether we like it or not.

The federal government has started to experiment with green industrial policy. Budget 2023, as you know, included investment tax credits worth tens of billions of dollars, but this approach of trying to incentivize the private sector to do the heavy lifting of transitioning Canada to a greener economy has limits.

First, there's no guarantee that the market will buy in. That was made very clear by the Canada Infrastructure Bank's inability, under its original mandate, to attract private capital. For projects of vital national importance—for example, things like tripling the capacity of our national electricity grid, which underpins basically everything else we do on climate—we can't afford to wait and hope that the private sector steps up.

Second, if the credits turn out to be too generous, they will effectively pad the profits of private investors without leading to any actual increase in green investment, and that's just a waste of money that could be better spent on public goods.

Third and perhaps most importantly, this market-led approach to green investment will not resolve the regional dimensions of transition. Much of the public money that's been allocated to clean industry is going to flow into corporate headquarters in Toronto and Calgary and not into the often rural communities that really need investment and economic diversification.

Those are the problems. What are the alternatives?

In the alternative federal budget, we call first of all for a comprehensive national green industrial strategy. This government has published a lot of strategies for critical minerals, emissions reductions and so on, but they don't all share a single, coherent vision for the economy. We cannot be a climate leader that meets its emission goals while also being an exporter of oil and gas, either practically or morally. We need a whole-of-economy strategy that starts from the end point, which is an economy free of fossil fuels by 2050, and works backwards to what that means for policy today in every sector.

When it comes to spending, we call for direct public funding—not financing and not corporate incentives—in a number of key sectors, including $5 billion per year to decarbonize and expand the electricity grid, as I mentioned, and $15 billion per year for energy efficiency retrofits of homes and buildings. The federal government is already spending in these and other strategic areas, and that's good. The issue is that we simply need more capital, given the urgency of the climate crisis.

We call for new public interest mandates for both the Canada Infrastructure Bank and the Canada growth fund. Instead of trying to de-risk private investment, these institutions should be offering funding and low-cost loans to governments and to communities, especially those most affected by the transition to net zero. In other words, we'd like these institutions to function more like public banks that can support community-led, public-interest initiatives.

We also call for $1 billion per year for more aggressive workforce development policies. It's no secret that we're already facing large skills shortages in key sectors in the clean economy, and that problem is only going to get worse in the coming years. Training and retraining workers for these jobs will not only enable us to build the green economy we want but also help to ease the transition away from fossil fuels for affected workers in an equitable way.

These are just a handful of recommendations from our alternative federal budget. As I mentioned, the full document includes hundreds of recommendations across 26 chapters in every area of federal policy, so I strongly encourage you to take a look. We've provided copies in English and French to the clerk.

Thank you again for your time, and I look forward to your questions.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Mertins-Kirkwood.

Now we're going to hear from the Canadian Chamber of Commerce and Mr. Gray, please.

[Alex Gray, Senior Director, Fiscal and Financial Services Policy, Canadian Chamber of Commerce]

It is my privilege to represent the Canadian Chamber of Commerce and deliver a simple but alarming message. Canada's economic competitiveness is slipping. Ultimately, it is economic growth that underpins our standard of living and our ability to provide the services Canadians require. Absent a vibrant economy, future generations will not enjoy the same quality of life and the same quality of opportunity that we around this table have.

To remedy this, Ottawa must turn its focus to nurturing growth driven by the private sector. As we have outlined in our official submission, Ottawa can enact immediate change to improve the fundamentals of our economy. Measures like simplifying the tax code, undertaking regulatory reform and removing internal barriers to trade need not be expensive but will generate abundant growth and investment. Reducing the barriers that prevent the private sector from capitalizing on our strategic economic advantages must be at the forefront of government policy.

It is a common refrain in this committee and among the economic commentariat that poor productivity is Canada's most pressing economic issue. Indeed, the matter is urgent. Canadian productivity is no longer stagnant but declining. Correcting this trend requires encouraging both private sector innovation and capital investment. Regrettably, we have historically been at pains to promote ourselves as an attractive destination for capital, and this has stymied our standard of living.

To deliver the shot in the arm our economy badly needs, we must avoid pitfalls such as new business taxes that repel investment. Canada should strive for a tax environment that encourages rather than deters investment. A streamlined and efficient tax system, based on best practices from around the world, is not only a priority but a necessity. Indeed, our creaky tax system is a hindrance to investment, hence our repeated call for simplifying the tax code.

We also call on the government to avoid imposing new taxes on the business sector, as it currently intends to do in the case of the digital services tax, or DST. As it stands, Ottawa intends to enact a retroactively imposed DST on certain online platforms' revenues. This is despite Canada's participation in international negotiations in which nearly 140 countries, including our largest trading partner, have agreed to delay imposing such taxes.

Our objections are numerous, but I'll outline just a few for you today.

First, we strongly object to the principle of retroactivity that robs businesses of the certainty they need to make productive investments in innovation and growth. Second, we oppose any measure that will increase the costs for businesses and consumers at a time of such economic precarity. Finally, we must sound the alarm that successive administrations in Washington have stated that enacting a DST would provoke damaging trade retaliation, potentially against key sectors of the Canadian economy. For the benefit of all Canadians, we urge the government to immediately stand still on its plan to enact the DST and allow the OECD process to complete.

Another tax quandary that Ottawa could quickly rectify at minimal cost is the scientific research and experimental development tax incentives program. As they stand, Canada's tax rules provide Canadian-controlled private corporations with access to its incentives that are not available to publicly listed companies, thereby creating an artificial barrier to growth.

The mention of publicly listed companies typically conjures images of large multinationals, yet, in Canada, two-thirds of TSX-listed companies are SMEs. This is a unique feature of our capital markets relative to the rest of the world and should be accounted for in crafting policies that encourage innovation. In Canada, preventing these publicly listed SMEs from accessing incentives that encourage more spending on research and development is weighing down our economic potential.

Budget 2024 presents an opportunity for decisive action. We urge Ottawa to adopt pro-growth policies that will invigorate Canada's economy. As ever, we stand ready to facilitate collaboration between policy-makers and the business community to make this happen.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Gray.

Now we go to the Tourism Industry Association of Canada and Ms. Potter, please.

[Beth Potter, President and Chief Executive Officer, Tourism Industry Association of Canada]

Thank you very much, Mr. Chair.

Good morning.

Thank you for inviting me to appear before the committee today.

I am speaking to you today from the unceded and ancestral territory of the Musqueam, Squamish and Tsleil-Waututh nations, which has been stewarded by them since time immemorial.

Tourism is an important contributor to Canada's economy. Before the pandemic, there was $105 billion in total spending, contributing 2% of annual GDP and two million jobs. Unfortunately, our sector has faced a prolonged recovery from the impacts of the pandemic.

Canada's borders reopened only one year ago, and international visitors have been slow to return. As of the end of August, we were still three million visitors below where we were at this point in 2019. Other key performance indicators are all still below prepandemic levels. Many businesses still face persistent hurdles, including low revenue, mounting debt and struggles to attract an optimal workforce.

The new federal tourism growth strategy sets out ambitious objectives to hit by 2030, including increasing our contribution to GDP by 40% and bolstering our international ranking. To reach these targets, industry and government will need to continue to work together. It will also require greater investment. TIAC has identified key recommendations to help with these targets.

Our first priority is the mounting debt burden faced by many tourism businesses. Loans made available served as a vital lifeline during the height of the COVID pandemic, but operators still face tremendous financial strain, and debt repayments have become daunting. TIAC appreciates the recent revisions to CEBA, but entrepreneurs still require near-term support to alleviate the debt burden, so we recommend the adoption of new measures to help tourism SMEs remain solvent.

Second is the need to rebuild the tourism workforce. A significant labour shortage remains during a critical time of regrowth for the sector. As such, we recommend extending the economic mobility pathways pilot program to those employed in a wide spectrum of tourism occupations, the creation of a dedicated tourism stream with a permanent residency track under Canada's temporary foreign worker program, and funding a workforce strategy for indigenous tourism.

Next is to invest in tourism assets. There remains a pressing need for investment in tourism assets throughout Canada, including airports, ports, accommodations, conference centres and attractions. We recommend that the government adopt a comprehensive approach to expanding Canada's tourism assets, including a tourism infrastructure fund to support major capital projects, a tax credit program to incentivize investment in the creation and upgrading of assets, and an investment incentive to provide airports with the capital to expand and update infrastructure. Such investment will ultimately lead to dividends for the government through increased tax revenue. It would also spur increased private investment, including direct foreign investment.

These investments need not necessarily come from new funding sources; existing programs like the investing in Canada infrastructure program could be fine-tuned with resources earmarked specifically for tourism.

Another key priority is expediting access for visitors to Canada. Application backlogs for visitor visas remain a deterrent for many international travellers. The government could bolster IRCC's special events program to ensure business event travellers do not face visa processing delays. For the cruise ship industry to prosper, we also need to ensure there is CBSA port coverage in all small communities.

Environmental sustainability is also an important policy pillar for TIAC. Government investment is needed for such things as the production of sustainable aviation fuel in Canada. We note that if this was done, Canada could become the global leader in the production of sustainable aviation fuel.

Finally, TIAC is calling on the government to ensure housing affordability in tourism hubs. We recommend the government create a working group to address concerns, assess needs and consider how tourism can contribute to affordable housing objectives.

In closing, I trust that the full submission we've provided will be helpful to you as you consider priorities for the federal budget in 2024.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Potter.

We will hear from the Université du Québec. I believe the time is going to be shared by Céline and Maxime. Is that correct?

Okay, you may begin.

[Maxime Colleret, Government Affairs Officer, Université du Québec]

Mr. Chair and members of the Standing Committee on Finance, we would like to thank you for the opportunity to participate in the pre-budget consultations in advance of the 2024 budget.

Founded in 1968, further to a bill that was unanimously passed by the National Assembly of Quebec, Université du Québec, or UQ, provides francophones across Quebec with access to higher education through its network of 10 institutions and presence in some 40 municipalities.

To date, more than 800,000 students have earned degrees at one of UQ's 10 institutions.

Today, nearly one in three students in Quebec is enrolled at a UQ institution, representing approximately 100,000 students every year. That makes UQ the largest French-language university in the Americas. More students attend UQ than even the University of Toronto.

At UQ, we consider scientific research and university studies pillars of our society. That is why it is important to step up efforts to award graduate scholarships, fund research and support Canada's French-speaking scientific community.

I will now turn things over to my colleague Ms. Poncelin de Raucourt to share our budget recommendations with you.

[Céline Poncelin de Raucourt, Vice-President, Teaching and Research, Université du Québec]

Thank you, Mr. Colleret.

I'll start with an issue that concerns every scientific community in Canada. For the past two decades, the value of graduate scholarships in Canada has essentially stayed the same, despite a 30% increase in the consumer price index. What that means on a practical level is that we are forcing our best and brightest, the researchers of tomorrow, to live below the poverty line. That is why we are asking the government for a 50% increase in the annual value of Canada's graduate scholarships and an annual adjustment based on inflation.

Barely 3% of graduate students receive scholarships and fellowships from one of the granting councils. This financial support is, however, known to play an instrumental role in the paths students follow and the success they achieve, not to mention that the brain drain is a real risk. We are already seeing it. We believe the number of graduate student scholarships available through the three councils should be doubled.

Nevertheless, it's important to point out that the current quota system is negatively impacting equitable access to scholarships and regions' ability to build scientific capacity. Currently, the number of scholarships each university gets is based on the value of the research grant funding it receives. This fosters a system of accumulating benefit. A total of 73% of graduate student scholarships go to just 15% of Canadian universities, which tend to be those in very large urban centres. To prevent the concentration of scholarships in the hands of a few universities, the quota system should ensure that every institution, regardless of where in the country it is, receives a minimum number of scholarships in the three research areas.

Furthermore, it's clear that the increasingly large share of research funding set aside for medicine and large-scale competitions, such as the Canada first research excellence fund, tends to favour large universities with medical schools.

However, leveraging the expertise of the entire scientific community is imperative. Why? I'll give you an example. The researchers in our cross-sectoral health research group report that it is impossible to reduce inequities in health care access without tailoring prevention initiatives and the delivery of health care and social services to people's lived realities and living environments. As someone mentioned earlier, it's important to think about rural and remote areas. That means researchers shouldn't all be living and working in large urban centres. Research can't be carried out exclusively in large teaching hospitals. It also has to be carried out in the hundreds of other places where people access care and services on a daily basis.

To harness and build the research capacity that exists in every part of the country and better meet the needs of Canada's population, we have three recommendations.

First, we recommend that the granting councils' total base budgets be increased by at least 10% annually for five years. As the Advisory Panel on the Federal Research Support System highlighted in its report—commonly known as the Bouchard report—research funding over the past 20 years simply hasn't kept pace with the pressures on the research system.

Second, we recommend that this investment go hand in hand with measures to ensure greater funding equity across different disciplines. At the Canadian Institutes of Health Research, or CIHR, which funds health research, some 60% of funding is allocated to biomedical and clinical research. As a result, a significant proportion of non-medical health expertise is overlooked. This also contributes to the concentration of funding. Some 91% of the funding that flows from CIHR goes to just 15 universities in Canada.

Lastly, we recommend that federal departments be given the budgets they need to support research that addresses the country's priorities, in co‑operation with universities.

To conclude, I will say a few words about the place of French in science. As you of course know, English dominates the science realm. Canada must take a stand to ensure the vitality of the French-speaking research community, which is over 35,000 strong across the country. We provided a few examples in our submission.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Poncelin de Raucourt.

Thank you, Maxime, as well.

Now, we're going to hear from Wealthsimple Investments and Ms. Jessica Oliver.

[Jessica Oliver, Head, Government and Regulatory Relations, Wealthsimple Investment Inc.]

Thank you, Chair. Thank you to the committee for having me.

My name is Jessica Oliver. I'm head of government relations at Wealthsimple, a financial services company headquartered in Toronto and serving more than three million Canadians. One in five Canadians 18 to 40 years of age are Wealthsimple clients.

We believe Canadians deserve better and simpler financial services. Our products range from investing and trading to free or “pay what you want” tax filing and, more recently, a no-fee chequing account, which offers 4% interest on cash balances, accrued daily, with no strings attached.

A remote-first company, I'm one of about 1,000 employees spread across nine provinces from coast to coast to coast. We're reaching clients in new ways and in underserved segments. Wealthsimple's low-fee group retirement savings plan serves small and medium-sized businesses, 96% of which did not offer any workplace retirement savings before working with us. Since launching our first home savings account in August, we've opened an average of 1,000 FHSAs each day.

Innovation will get you only so far, though, when the infrastructure underpinning financial transactions in Canada is out of date. Access to it is so unequal as to prevent true competition. It's a problem for companies like ours, but it's a much bigger problem for Canadians, who pay some of the world's highest banking fees for outdated and inadequate service.

Last week you heard from Fintechs Canada on open banking, and we fully support their comments on its benefits.

Our submission focuses on a second enabling project, the real-time rail, or RTR. Canada is [Technical difficulty—Editor] country without a true RTR. More than 70 countries worldwide are reaping the benefits of real-time payments. The Centre for Economics and Business Research estimates that by 2026, the world's five largest RTR markets will generate an additional $150 billion in GDP as a result of real-time payments.

Our recommendations call for the implementation of Canada's RTR as soon as possible, and for three features critical to its success. The first is the 24/7/365 settlement, which is an end to the Monday to Friday nine-to-five restrictions.

The second is fair and transparent pricing, where all qualified participants pay the same rate per transaction, regardless of size.

The third is leadership to ensure provincial and municipal governments are prepared to use the RTR and realize savings from day one, including savings identified by Public Services and Procurement Canada on the opportunity to phase out physical cheques, particularly related to distributing emergency relief funds.

Though certain payments in Canada might feel instant, settlement delays behind the scenes make it impossible for Canadians, businesses and governments to manage their finances efficiently.

Consider a student beginning their studies at the Université du Québec. Their first tuition installment is due on the same day as payday. Every Canadian university's website states clearly that payments received after the deadline may be subject to late payment fees. Students have to anticipate a delay of two to five working days before the payment is received.

This common, ubiquitous warning to plan for two to five days for settlement is a solid indication that questions and concerns around settlement timing and the corresponding fees have been raised a few times.

When a student initiates a payment to a university, it disappears from their account immediately, into the ether, until it settles at some unknown point. The student could risk a late-payment fee or may have to access a payday loan to bridge the gap. There are countless examples affecting small businesses, particularly those with just-in-time supply chains, households, non-profits, governments and government agencies.

Last week, RBC's financial well-being survey found that 48% of Canadians and 63% of millennials said that stressing about money is impacting their mental health. These are real problems affecting real Canadians that the RTR would meaningfully address.

The federal government has supported the development of the RTR since 2015 and given Payments Canada a mandate to build an RTR that promotes fair and open access, enables competition and innovation, fosters fair and transparent pricing, implements appropriate risk controls and considers end-user interests. These are the right policy objectives and must not be compromised. On this, the government has our full support.

I have one final clarification. The stability of Canada's banking system is, appropriately, a great source of pride. However, the absence of modern payment infrastructure that is treated as a public utility and economic enabler, akin to a highway or broadband Internet, has nothing to do with the liquidity or integrity of our banks.

To the best of my knowledge, the RTR has support across all party lines. My hope today is to find advocates across all party lines as well.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Oliver, for your opening statement.

Ms. Oliver, we found it was a little choppy. Sometimes it's the Internet and sometimes it's the device. One thing you can do is ensure no movement and also speak slowly and clearly. That will help everybody out. Thank you for that.

I also want to let members know that we have Amy Nugent from Oceans North. I think she may be on the screen, or you'll see her on the screen.

Unfortunately, we are having technical difficulties with her headset. Ms. Nugent has submitted her opening statement and her brief to this committee. If members have questions, they can pose the questions. She'll be able to hear them and then she'll get back to our committee with answers to those.

We apologize to Ms. Nugent and to members that we will not be able to hear from her directly here.

On that, we are going to move to the members' questions. In this first round, each party has up to six minutes to ask our witnesses questions.

We are starting with MP Morantz for the first six minutes.

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

Thank you, Mr. Chair.

I'd like to thank our witnesses for their opening statements. They were all very interesting.

Mr. Gray, I wanted to touch base on your statement. You said that Canada's “competitiveness is slipping”. In your submission, it says that “our international competitors continue to outpace us”. I have to say that I agree with you completely.

For example, Robert Asselin was here last week, sounding the alarm bell around the fact that interest rates are outpacing economic growth and that government spending, particularly on social programs that people rely on very much, is not sustainable.

Stats Canada just this week indicated that Canada is slipping into a technical recession. We had the governor of the Bank of Canada at this committee just a couple of days ago. He cautioned the government that its spending is not very helpful.

Interestingly, the BDC just issued a report saying that there are 100,000 fewer entrepreneurs in this country than there were 20 years ago. That is basically a 12% reduction in entrepreneurs.

The OECD published a chart recently on the “fear of failure”. It says, “As it turns out, Canadians now lead all G7 countries in citing 'fear of failure' as a roadblock to being an entrepreneur, according to the OECD, having moved up from fifth spot five years ago.”

That's higher than Britain, Japan, Italy, France, the U.S. and Germany.

I was reminded when I read this about the writer Paul Wells, who said something recently that I thought was quite apt. He said that in Canada, “if you run a successful business, you are made to feel you have done something wrong.”

I have to say, Mr. Gray, that in the context of everything that's going on, I could only characterize this government's management of the economy as nothing short of economic malpractice.

Would you agree?

[Alex Gray]

I think this government should very strongly consider that over the past eight years, we have said extremely similar things in our submissions, which is about the need for pro-growth economic policy and pro-growth taxation policy.

On the tax point, I believe it was promised in the 2015 platform that tax reform would happen. It has not happened since then. Indeed, it has not happened since the Toronto Maple Leafs last won the Stanley Cup.

It's open for anyone in government to take that upon themselves. We would welcome it. As I mentioned in the statement, it is fundamental to our economic competitiveness. It's partly fundamental to the problem of entrepreneurship, as you said.

I see that failure of entrepreneurship as a microcosm of what we hear from our larger members. They don't see where they can invest responsibly to yield productive returns. For a lot of Canadian entrepreneurs, they just don't see how they can make a go of it.

It is a pressing concern among our membership, for all sizes. We hope some of our recommendations will be duly accounted for in the upcoming budget.

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

You have some constructive suggestions in your report, which I appreciate. For example, you talk about something that we've talked about a great deal, which is credentials for new Canadians; for example, fast-tracking credentials for new Canadians to make sure they're contributing to the economy.

One of the things I really liked about your report—and something I've been harping on about for quite a while—is that this government never seems to want to miss an opportunity to charge people more for a beer. You correctly point out that although they did pause it last year, they made no indication that they're going to do it again next year. Also, the accelerator tax has been a thorn in the side of that industry for years now. Then there's the issue of interprovincial trade. Could you give your give position on those three?

[Alex Gray]

Sure. I'll start with the alcohol tax, because that's very simple. The fact that it's an automatic escalator tax means that it eludes parliamentary review. If we want to raise taxes on a thing, it should go to debate. I think that's pretty simple and clear.

As for credential recognition, many of our members, particularly on the smaller side of the spectrum, consistently highlight a lack of skilled talent as a barrier to growth. There are many foreign credentials that are nearly equivalent to the Canadian counterparts, many of them, for example, in health care and in skilled trades, which I think are not only badly needed right now in the Canadian economy, frankly....

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

I have just a quick one for Ms. Oliver. Real-time rail is paused again. Every other G7 country seems to have a version of it.

How much is this costing Canadians, in your view?

[Jessica Oliver]

I don't have a number to share. In our submission, we referenced the impact on cash flow for businesses. I believe that in 2019 a report by Deloitte in the U.K. found that 63% of businesses hold back capital to mitigate challenges with cash flow, when really, if they were able to count on real-time payments, they could deploy that capital in other ways. Therefore, I think the cost is significant, and I think it spans across individuals, families, small businesses, large businesses, governments at all levels and government agencies.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Morantz.

We now go to MP Weiler, please.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you, Mr. Chair.

I want to thank all the witnesses for being here today and for all the great diversity of views that are being brought forward.

I want to start my questions with Ms. Potter, who is in a very familiar place for me, in the ancestral unceded territories of the Musqueam, Squamish and Tsleil-Waututh peoples.

The average hotel rate right now in Vancouver is $346 a night. That is not the top, but the average. In your pre-budget submission and in your opening statement, you recommended that a tax credit program be put forward to help invest in tourism-related infrastructure. I was hoping you could explain to the committee why the Tourism Industry Association of Canada sees that as necessary and the type of benefits that you foresee in that type of a mechanism being brought forward.

[Beth Potter]

Thank you very much. It's always great to see you, MP Weiler.

I will say that when we are building hotels, as an example, the long-term gain is far down the road. We have an example right now in Calgary, where we have a new convention centre that has been built, but we don't have any hotel rooms to go with it. The risk associated with building those hotel rooms off the beaten track and tied to a convention centre, which is much needed, is due to the unknown factor of how often that building and those hotel rooms are going to be used. We will need help to incentivize private investment to come in to build those hotels and give us the required rooms in order for us to continue to attract international business events that will then add to the economic prosperity of Calgary.

Just as an example, I can tell you that in other cities we are looking at private development investments in things like the event centre and entertainment district, in the billions. The estimated cost for the Calgary event centre and entertainment district is $1.2 billion. Being able to leverage that with a tax incentive to be able to attract the right investor to come in and build those hotels, which, as I said, would contribute to the economic vitality of Calgary and help us make sure the right capital is brought in and put in place.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you.

You made a number of other suggestions related to rebuilding the workforce and developing a workforce strategy. I was hoping, first, you'd just give a sense of the number of unfilled jobs right now that you see in the tourism industry.

[Beth Potter]

We have about 300,000 unfilled jobs at this point in time across our industry and across all types of positions. Just to give you a sense of where that has come from, first of all, prior to the pandemic we were already in a challenging situation when it came to labour. The pandemic heightened that. We immediately lost 1,000,000 jobs right off the hop. We've been building that back, but we are an industry that had been in a growth position for the 10 years prior to the pandemic, and we look to get back to that in order for us to reach the growth targets outlined in the federal strategy.

We are going to need not only to fill the jobs we have, but to add another 85,000 jobs between now and 2030. These are jobs that are year-round. They're full-time and highly skilled. One of the top jobs we need to fill is for cooks and chefs in order for us to continue to deliver on the culinary experience that visitors to our country have come to expect.

Working with IRCC, we've seen a number of changes to policy over the last few months, for which we are incredibly grateful, but really a long-term strategy is something that is required, specifically for the indigenous tourism sector. We have a challenge there. My colleagues at the Indigenous Tourism Association of Canada tell me that they are going to be in an even more precarious situation as far as labour is concerned.

We need a strategy in place to ensure that we are attracting the right folks to our industry and that we are giving them the tools they need in order to grow within the industry, but also to develop and deliver on the brand promise that Canada has put forth as a destination of choice.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Absolutely. I know that's one area that's identified in the new tourism growth strategy, where we can see some of the greatest potential for the growth of the sector in Canada.

With my remaining time.... You mentioned a recommendation to look at extending the repayment period of the CEBA and HASCAP loans. Given that a large number of businesses in the tourism sector are seasonal, what risk do you see over the next year in terms of challenges for those businesses in having to repay those loans before they have the seasonal business come in?

[The Chair, Liberal, Peter Fonseca]

Make it a short answer, Ms. Potter, please.