Finance Committee on Nov. 14th, 2023

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you.

[The Chair, Liberal, Peter Fonseca]

We'll move to MP Dzerowicz for the next question.

[Julie Dzerowicz, Liberal, Davenport, ON]

You can stay in the seat, Mr. Courtice.

One thing I struggle with personally is that our federal government has genuinely really worked to reduce income inequality and to really adjust all of our supports on the lower end of the income scale. We've triple increased the Canada workers benefit. We've introduced the Canada child benefit. We've introduced national child care. We've increased OAS by 10%. I could go on with the list. We've actually done a significant amount of money to really support.

The only way I can see that all of.... So much of that has been eliminated through a massive increase in housing—and we are not controlling that—mental health supports and the lack of, and the ongoing inflation. Food costs are going up higher then...because all of these are indexed to inflation. They're all indexed to inflation, so you would ideologically believe that it should keep up.

Perhaps you could help us to maybe figure out whether it's really a bit of inflation or a bit of each of those. Maybe you can help us understand. Why is the struggle so much harder and our support programs not being as effective as they need to be?

[Scott Courtice]

It's a very complex question.

I'll lean back to what Lynne said, which is that these complex issues require a coordinated response across levels of government. As I said, the taxpayer is not getting a great level of investment because we're not having all of the levers of government working together in a coordinated way.

It's frustrating trying to make change. I'm sure it's frustrating for you making those investments and not seeing the changes. We all need to be working together in a more coordinated way.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Dzerowicz.

Now we will go to MP Ste-Marie, please.

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

Mrs. Paré, if annual contributions to the Canada music fund weren't increased as you're requesting, what consequences would that have for your industry?

[Eve Paré]

They would be disastrous to say the least.

Earlier I mentioned a $10 million increase that had been granted over a five-year period, which is now coming to an end. Then the Liberals promised $50 million that would include that $10 million.

We don't even know right now whether that additional $10 million will be carried over. If it weren't, that would shrink the francophone market by $4 million. It represents approximately 30% of the amounts received from the Canada music fund.

That would have a major impact that would inevitably lead to significant cuts and layoffs.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste-Marie.

MP Green, you'll be the final questioner for this excellent first panel.

[Matthew Green, NDP, Hamilton Centre, ON]

Thank you very much, Mr. Chair.

Former MP Cash, I picture you as a young punk artist coming to Hamilton and playing The Casbah or This Ain't Hollywood. I think about Sonic Unyon and Cadence Weapon, which you referenced. I think about folks such as the Arkells, Terra Lightfoot, Harrison Kennedy and LTtheMonk. All of them are incredible artists.

Can you talk a little bit about why investments in art and artists, particularly for the constituents in Hamilton Centre, are going to be vitally important for this upcoming budget?

[Andrew Cash]

Absolutely.

I think that for a city like Hamilton, and many others—London, as well—these investments have a spinoff effect for the community, not only economically but also culturally. You have a Terra Lightfoot, a Sonic Unyon or all manner of different types of artisans and entrepreneurs in Hamilton, who are building a new industrial sector in their city. I think that's really key.

I want to add that the Canada music fund was set at $25 million in 2005. Adjusted for inflation today, that would be $47 million. We're asking for $60 million.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you.

On behalf of the finance committee, all the members and everybody who helps make this committee happen, we thank you.

We had a diverse group of witnesses here today—artists and gas and mortgages and municipalities, etc. The passion was felt. Your expertise is welcome to help inform our study on pre-budget consultations in advance of the 2024 budget. Thank you so much. We really appreciate it.

On that, we are going to suspend as we transition to our second panel of witnesses.

We're going to take five minutes.

[The Chair, Liberal, Peter Fonseca]

We're back, everybody.

We are with the second panel for our pre-budget consultations. For those who weren't here earlier, I explained that we are crossing the country. We started in the Atlantic. We did every province. Yesterday, we were in Quebec City, Quebec. Today we're here in Toronto, the capital of Ontario, and we'll be making our way across the country all the way to Vancouver and back. That will conclude the testimony we will hear for this study.

Some of the witnesses we have as we cross the country.... The analysts will be capturing all of that information. We have many people who make this committee happen. Our clerk, of course, is Alexandre Roger, and we have our technicians and interpreters. Our technicians and interpreters want to make sure everybody has their devices. English is on channel 2 and French is on channel 1, for your information.

Now we are going to introduce our witnesses.

From the Canadian Bankers Association, we have Alex Ciappara, vice-president and head economist, financial stability and banking policy. From the Canadian Federation of Independent Business, we have Corinne Pohlmann, executive vice-president, advocacy. From Inclusion Canada, we have Jeff Ferguson, executive director, knowledge mobilization and transformation. From MaRS Discovery District, we have Krista Jones, chief delivery officer, ventures and ecosystems group. From the Toronto Region Board of Trade, we have Reid McKay, policy director. From the Université de l'Ontario français, we have Pierre Ouellette, president.

We will start with an opening statement from the Canadian Bankers Association for five minutes.

[Alex Ciappara, Vice President and Head Economist, Financial Stability and Banking Policy, Canadian Bankers Association]

Thank you very much.

Thank you for inviting the Canadian Bankers Association to appear this morning to participate in the committee's pre-budget consultations. As you said, my name is Alex Ciappara, and I am the head economist at the CBA.

The CBA works on behalf of more than 60 domestic and foreign banks operating in Canada and their employees. The CBA advocates for effective public policies that contribute to a strong banking system that benefits all Canadians. We promote financial literacy to help Canadians make informed financial decisions, and we work with banks and law enforcement to protect customers against financial crimes and to promote fraud awareness.

A healthy banking system is the cornerstone of helping customers and households manage their finances, of spurring growth for small businesses and of promoting Canada's economy internationally. Our submission, which the committee has received, offers the banking industry's views and recommendations in areas that are of interest to the committee to support vibrant communities and clean, sustainable economic growth.

Canada's banks have a long-standing track record of supporting the Canadian economy. In 2022 they contributed approximately $70 billion or 3.6% to Canada's economy, paid close to $18 billion in taxes and provided $26 billion in dividend income that went to Canadian seniors, families, pension plans, charities and endowments. They have invested approximately $115 billion in technology across Canada over the last decade.

Additionally, at the end of 2022, Canadian banks had lent in total close to $1.6 trillion in residential mortgages and authorized $1.7 trillion in business credit. In business credit, $278 billion was authorized to small businesses. Canadian small businesses are well served by the financial sector owing to robust competition. In fact, in 2021, according to Statistics Canada, 94% of debt financing requests for small businesses were approved, and since 2010 the debt approval rate has been consistently above 80%.

Our recommendations for the 2024 budget revolve around five key areas.

The first is productivity and tax reform. We support removing the financial institutions tax and the Canada recovery dividend to give investors in the banking industry confidence that Canada is committed to attracting new investment. We also suggest that the federal government undertake a comprehensive review of Canada's tax system with the objective of improving labour productivity, meeting the needs of Canada's evolving economy, ensuring that Canada can compete internationally and recommitting to tax neutrality. Bank-specific taxes hinder the industry's ability to positively impact Canada's productivity.

Our second recommendation focuses on the market conduct of unregulated and under-regulated financial service providers. We encourage the federal government to develop financial consumer protection standards for unregulated or under-regulated providers, such as e-commerce platforms and similar entities, for provincial adoption, and to work with the provinces to adopt these standards. To the greatest extent possible, the standards should emulate relevant FCAC regulations to which FRFIs must adhere.

Third, housing is top of mind for all Canadians right now. To correct supply-demand imbalances, which contribute to the affordability crisis, we suggest that the federal government pursue greater policy coordination through a forum for relevant stakeholders including federal, provincial and municipal officials responsible for housing, infrastructure and immigration as well as representatives of the construction industry and advocacy groups.

Fourth, financial crime and fraud continue to be a significant issue in Canada. We recommend that the federal government build, implement and maintain a comprehensive, single, pan-Canadian beneficial ownership registry, which would include information on both federally and provincially regulated corporations and other legal arrangements, including partnerships, trusts and associations.

We also need to ensure that legislation progresses to allow resources and activities to be targeted at areas of highest risk to facilitate collaboration and the lawful sharing of information between financial institutions and from FINTRAC and law enforcement to financial institutions. We also suggest allocating additional funding to organizations like the federal government's cyber centre to increase individual cybersecurity awareness and cross-industry collaboration.

Finally, on the transition to net zero, the CBA applauds the government for its commitment to achieve net-zero emissions by 2050. The financial sector is central to securing an orderly transition to a low-carbon economy. By financing the climate transition, banks are helping Canada meet its net-zero ambition while helping meet interim energy demands in a volatile global context. A national or harmonized process is needed for Canada to meet its climate goals and enhance productivity and economic growth.

Businesses, governments and individuals working together on the fundamental reshaping of our economy and society is critical in achieving these goals. Banks look forward to opportunities to support the generation of more clean energy, to grow our economy and to cut emissions in Canada.

Thank you for your time. I'm happy to answer any questions you may have.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ciappara.

We'll now go to the Canadian Federation of Independent Business.

[Corinne Pohlmann, Executive Vice-President, Advocacy, Canadian Federation of Independent Business]

Good morning. Thank you for the opportunity to be here.

The CFIB represents 97,000 small and medium-sized, independently-owned Canadian companies. They come from every region of Canada, and they are found in every sector of the economy.

CFIB data shows that many small businesses continue to face persistent challenges, including high levels of pandemic-related debt, insufficient domestic demand, high interest rates, inflation and increased labour costs. Many are struggling to keep their heads above water, let alone make headway in reducing the debt that they incurred during the pandemic.

Late last month, Stats Canada revealed that more businesses have closed as a result of the COVID-induced economic downturn than during the 2008 financial crisis. Another report from the Office of the Superintendent of Bankruptcy found that business bankruptcies in September were up more than 40% compared to the same month last year. Clearly, a significant number of small businesses have closed down, with many simply having no choice but to walk away from their businesses.

The CFIB's latest monthly business barometer, which tracks business confidence over the next year, has sunk to lows not seen since the early days of COVID, with just 47% of small business owners feeling like their business will be doing better a year from now. We normally want to see that index sitting somewhere between 65% and 70% when the economy is growing at its potential.

As small and medium-sized businesses represent more than half of Canada's GDP and employ over 80% of Canadians in the private sector, these business losses can have a significant impact on Canada's economy, and governments need to pay attention.

In a recent survey, we asked small businesses what they want the federal government to focus on to help them address their business priorities. The top issue cited by two-thirds is to reduce the overall tax burden to help them address rising costs. Second was more flexibility around the repayment of CEBA loans to help them address their debts. Third was reducing red tape to help them be more productive, followed by helping them deal with labour shortages.

The CFIB's budget recommendations will focus on ways that may help address these concerns, with the exception of CEBA, as we understand that any decisions around CEBA, the Canada emergency business account loan, will have to be made sooner than the budget. Just so you know, we continue to press for an extension of the CEBA repayment deadline to maintain the forgivable portion to the end of 2024 to give small businesses more time to recover.

Over the last year, not only have businesses' costs gone up, but so have government taxes. While EI was frozen during COVID, it was increased in 2023 and will again increase in 2024. Every year for the last few years, there were increases in CPP premiums, carbon taxes and alcohol excise taxes.

To help address and offset some of these costs, the CFIB recommends, among other ideas, first, lowering EI premiums for smaller employers, which are more sensitive to payroll tax increases than larger firms. One way to do this would be to replicate a program from 2015-16 called the small business job credit. It provided rebates to businesses with less than $50,000 in EI premiums that were equivalent to what they would have paid if they had only paid 1.2 times what an employee pays—normally, they pay 1.4 times.

Second, you can increase the small business deduction threshold to $700,000 from $500,000 and index it to inflation so that more small firms can access the small business tax rate.

Third, you can freeze the carbon tax and fix the unfairness that results in small businesses paying about 40% of the carbon tax while less than 10% is set aside for them. Only a small fraction of that amount has ever been returned to them. We would ask that the $2.5 billion that has already been earmarked for small businesses and collected from them be immediately returned to all small businesses, not just a select few, and that the formula be reconfigured to make it more fair for small businesses. If this cannot be done, then the current carbon tax should really be scrapped.

Next, the CFIB found that the most effective methods to address labour shortages are immigration and automation. Knowing this, the CFIB recommends, among other things, that we allow temporary immigrants already in Canada to work or work more.

Second, we recommend that you help small businesses invest in automation by extending the accelerated investment incentive for a few more years. We would also encourage the government to extend or make permanent the immediate expensing provision that allows Canadian control of private corporations to expense up to $1.5 million in the year the asset is put into use, which is set to expire at the end of this year. This would give small businesses more time to capitalize on this tax measure, help make them more productive and keep them competitive with their U.S. counterparts that have a similar tax measure that has already been made permanent.

Third, we need to enhance incentives to work for older workers, so that they stay in the workforce longer without losing their benefits. I'm happy to elaborate on that and how that could be done.

Finally, putting together a greater emphasis on reducing regulatory burden could help address productivity, lower costs and free up time so that entrepreneurs can focus on building their businesses. You could try to identify examples of red tape and then fix them one by one. However, new ones will always emerge. To really address this issue, you also need to implement a process that requires regulators to not just create but also actively manage regulations.

In our experience, we have found that governments that are successful in reducing the regulatory burden do three things well.

First, they make red tape reduction a political priority. Without leadership from the top, nothing will get done.

Second, they measure and report on the total number of rules that exist, because once they're measured, you can more effectively start to reduce that burden.

Third, you place constraints on regulators. While there is already a constraint on regulators at the federal level called the one-for-one rule, it needs to be updated to include not only those rules found in the regulations but also those in legislation, guidelines and policies.

Those are just some of the many recommendations that could help small businesses grow and be more productive during a difficult time, which not only helps them and their communities but also helps grow and extend Canada's economy overall.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Pohlmann.

We will now go to Inclusion Canada, please, for five minutes.

[Jeff Ferguson, Executive Director, Knowledge Mobilization and Transformation, Inclusion Canada]

Thank you very much for this important opportunity to speak with you today to provide input into the 2024 federal budget.

I'm pleased to join you today from the traditional territory of many nations, including the Mississaugas of the Credit, the Anishinabe, the Chippewa, the Haudenosaunee and the Wendat peoples.

I'm here to speak to a matter of utmost importance: the funding of the Canada disability benefit. The organization I represent, Inclusion Canada, was founded over 60 years ago. We are a national federation of 13 provincial and territorial member organizations, over 300 local associations and more than 40,000 members across the country, which supports people with intellectual disabilities and their families.

We argue that no person with a disability in our country should have to live in poverty. Inclusion Canada submitted to the committee its pre-budget recommendations in a brief that specifically focused on the Canada disability benefit.

For decades, provincial and territorial disability income assistance programs have kept people with disabilities in legislated poverty. More than 40% of people who live in poverty in Canada have a disability. Even worse, 75% of adults between the ages of 18 and 64 with an intellectual disability who live outside the family home live in poverty. In every jurisdiction throughout the country, people with disabilities who rely on social disability assistance programs are struggling to live in conditions of deep poverty.

With unanimous all-party support, we finally have the first-ever national disability benefit in Canada. The benefit is about bringing people with disabilities out of poverty. We must now work together to ensure that the Canada disability benefit is able to do what it is intended to do.

It can only serve to do this if the benefit is budgeted and adequately funded. To seriously reduce poverty among people with disabilities requires an ongoing and substantial commitment of federal expenditures. Time today does not permit me to go into details about each of our recommendations; however, our primary recommendation is that the finance minister and the Government of Canada make a budgetary provision that would ensure the immediate and adequate funding of the Canada disability benefit beginning in the 2024-25 fiscal year.

Lifting people out of poverty requires a substantial financial commitment. The government has made substantial investments to reduce poverty before. We have seen the old age security and the guaranteed income supplement programs for seniors, and the Canada child benefit, CCB, for families with children.

To be truly effective in supporting the financial security of adults with disabilities, the CDB, like the OAS, the GIS and the CCB, must be significant income supplementation. We recommend that the federal government provide a top-up to what individuals receive on provincial and territorial disability monthly assistance. This total combined amount would ensure that eligible persons with disabilities would receive a minimum amount of $2,400 monthly.

Based on the number of people on provincial and territorial social disability assistance, along with the proposed top-up amount, we estimate the total ask for the 2024 budget to be between $24 billion and $26 billion. The Canada disability benefit would require a significant investment from the federal government.

Inclusion Canada also recommends that a firm commitment must be made to ensure the benefit is delivered in 2024. We are recommending a three-year fiscal plan that would allocate a specific amount of funding, starting in fiscal 2024-25 and projected through to fiscal 2026-27, and that would be indexed to inflation. The timeline would provide a clear target for the implementation of the Canada disability benefit. It illustrates the government's and all parliamentarians' commitment to this initiative.

There is currently considerable anxiety in the disability community with the slow pace of implementing the design and regulations of the Canada disability benefit legislation. Since the bill's passing in June, there has been very little progress made, and the frustration is mounting.

As you prepare your pre-budget consultation report, I urge you to include a strong and unequivocal statement on the necessity of adequately funding the Canada disability benefit. The inclusion of such a statement would send a powerful message to all Canadians about the government's commitment to creating a more equitable and inclusive society. It also sends much-needed reassurance to the disability community, which eagerly awaits the realization of this important benefit.

Let's together seize this historic opportunity.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ferguson.

Now we'll go to MaRS Discovery District.

[Krista Jones, Chief Delivery Officer, Ventures and Ecosystems Group, MaRS Discovery District]

Good afternoon.

I apologize. What I sent is a lot longer than what I'm going to talk about. In my practice, I was over five minutes, so it might not be great for the translation.

Thank you very much for having me today. As the chair indicated, I'm Krista Jones, and I'm the chief delivery officer for MaRS Discovery District, which is North America's largest innovation hub.

MaRS specializes in the commercialization of intellectual property that is developed in our state-of-the-art universities, hospitals and research labs across Canada. We support thousands of Canadian entrepreneurs' start-ups that have the potential to become category-leading companies in technology, climate and the life sciences industries. These industries are critical to long-term Canadian prosperity.

I want to spend a minute on the type of work we do, explaining the much misunderstood term “commercialization”. Simply put, commercialization is the messy business of taking a product or service to market. Note that it's not the act of turning this technology or science into a patent or a product. That's innovation or development—the “D” in R and D.

Commercialization is the crucial and often ignored next step in converting great research into leading companies. The C.D. Howe Institute analysis of federal budgets since 2012 found that research and innovation are mentioned 30 times more often than commercialization.

Commercialization is finding investors to catalyze your business, hiring the right team, creating a growth-oriented business model, finding and understanding your customers and driving sales at scale. The commercialization engine that we have built at MaRS includes experienced founders and operators who have been in the trenches and have successfully scaled companies to become category leaders.

We have built a globally unique set of capabilities that provides start-ups with really practical and tangible supports that enable them to compete on a global scale. A recent independent study of the economic impact of MaRS-supported start-ups showed that over the past 12 years, they contributed $29.6 billion to the GDP, with an annualized revenue growth rate of 20.7%. Their contribution to the GDP is growing at more than 10 times Ontario's compound annual GDP growth rate.

This growth rate is what will build major knowledge-based economies, fuel Canada's future prosperity and build it around our existing strengths in creating globally leading IP.

I want to emphasize my appreciation for the support the government has provided by funding research and development. It it why Canada punches above its weight in research in many emerging tech sectors and why international companies establish their R and D centres of excellence here.

However, at MaRS, we believe that these investments alone will not create sufficient conditions to improve economic output. We need a commercialization ecosystem to translate the IP developed in our universities and in our start-ups into viable commercial assets. Current market conditions are threatening to erase the hard-won gains of the last five to seven years for Canada.

Another major issue is that Canadian businesses and our government are lagging behind their global peers in the adoption of critical digital infrastructure, especially our homegrown IP. Even though Canada is the leader globally in the research and development of AI, KPMG reports that only 35% of Canadian businesses surveyed are using AI in their operations, compared to 72% in the U.S.

When you consider that, according to Gartner, by 2030, every dollar of GDP created anywhere will be influenced by AI, Canada simply cannot afford to miss this valuable economic opportunity.

Unfortunately, this situation is not isolated to AI. Canadian firms in most innovation sectors often derive more revenue from the United States, even at the very early stages, due to a lack of domestic customers and adoption. For example, as little as 19% of the revenue earned by MaRS climate-tech ventures comes from domestic sources. They're getting the revenue and the climate change impact. This is why we need at least equal investment into the commercialization of IP and into growing domestic category leaders as is being invested into branch plants for foreign multinationals. Our future really depends on it.

Our key recommendations for investment in the 2024 federal budget are the following.

Increase and coordinate commercialization funding to enable regional organizations with a national platform to supercharge start-ups across the country, taking advantage of regional strengths. More funding is urgently needed to combat the heightened risk of IP migration resulting from the scale of the U.S. CHIPS Act, which is impacting way more than the semiconductor industry.

We think we need to create more independent wet-lab space to enable the commercialization phase of our life sciences innovation.

We need to increase deep tech and climate early-stage funding. Number one, we're hoping for a rapid resolution of the situation at SDTC in order to continue that money flowing. We also think we need to incentivize more catalytic, philanthropic and private investment directly into early-stage climate tech companies.

We believe we should create incentive programs for the responsible—and I emphasize “responsible”—adoption of Canadian AI technologies. A few examples are extending the pan-Canadian AI strategy to include commercially focused incentives, artificial intelligence being part of the step program and providing incentives to help Canadians start up some businesses.

My last point is to also increase government procurement of Canadian tech.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Jones.

There will be plenty of time during questions to expand on what you had to say.

Now we'll hear from the Toronto Region Board of Trade.

[Reid McKay, Director, Policy Innovation and Fiscal Policy, Toronto Region Board of Trade]

Good morning, honourable members of the finance committee.

Thank you for inviting me to speak. On behalf of our 11,500 members, the Toronto Region Board of Trade welcomes the opportunity to make a deputation today regarding the federal government's forthcoming budget.

Canada's waning economic competitiveness is of primary concern for the board and our members. Canada, once a beacon of prosperity, now faces a precipitous decline in productivity, with the nation now having suffered a declining GDP per capita for the fourth straight quarter. This is not a fleeting challenge but an urgent call for decisive action.

In addition to removing oft-cited barriers to internal trade and competition, we feel there are three immediate areas where the federal government should focus its efforts to bring Canada's weak productivity and investment growth back in line with leading OECD economies and reverse this concerning trend.

One is increasing support for manufacturing capital development projects that stand to markedly increase the region's productivity and bolster industrial development opportunity.

Two is lending greater support for the City of Toronto's capital projects and services, which facilitate economic development for the broader region and nation.

Three is ensuring taxes on technology and digital services remain aligned with international precedents and encouraging technology development, commercialization and adoption.

To begin, the American Infrastructure Investment and Jobs Act, the Inflation Reduction Act and the CHIPS Act have catalyzed a significant surge in U.S. manufacturing construction spending, particularly in high-value sectors such as computers, electronics and electrical manufacturing. Since 2022, these policies have quadrupled investments in these sectors, markedly enhancing America's competitive edge in manufacturing key components for the future global economy.

In contrast, Canada's manufacturing sector, which contributes approximately 10% to our national GDP, is at a pivotal juncture. To remain competitive, especially in advanced manufacturing, our businesses need support akin to their American counterparts. The exceptional return on labour presented by advanced manufacturing offers an excellent opportunity to invest in boosting our nation's productivity.

A prime example of this potential is the electric vehicle industry, notably Toyota's commitment to establish a battery factory in Canada. This venture is more than an investment in green technology. It's a strategic leap towards a sustainable future and a stronger technologically advanced industry. Federal support in this sector is essential. It will create new, highly productive and good-paying jobs, and it will position Canada as a leader in the global EV market—a market that promises cleaner air and reduced carbon emissions. Inclusion of Ontario's largest OEM automotive manufacturer in this vision will be critical to aligning our technological, environmental and economic objectives.

Turning to the City of Toronto's financial crisis, we are reminded of the vulnerabilities that our urban centres face. The truth is that Toronto's budget is broken and we need a new deal. We applaud the government for joining the new deal working group, but we want to emphasize that fixing Toronto's finances is not something the city can do alone. After more than a decade of surging population increases, Toronto finds itself choking on growth. As a result, federal goals related to public health, climate, mobility, housing and supply chain resiliency are increasingly out of reach. The financial challenges confronting Toronto are not isolated incidents but symptoms of broader systemic issues that threaten the economic health of not just Toronto but other major urban centres in Ontario.

The federal government's recognition and support of the city's investments in social support, transportation and economic development are crucial. Toronto is at the heart of an economically interconnected region. That's why investing in Toronto's infrastructure builds the financial network that sustains the economic vitality of regions extending well beyond the city limits. Enhancing community safety goes beyond traditional policing. It's about creating environments conducive to the well-being and productivity of every individual, thereby reinforcing the economic and social fabric of our society. These initiatives, though locally rooted, have far-reaching impacts that enhance the economic and social health of both the province and the nation.

In the realm of technology and digital services, the federal government must ensure its tax and regulatory policies are aligned with international precedents. This alignment is crucial. It fosters a predictable and stable environment for businesses, particularly those operating on a global scale. Companies thrive when they can anticipate regulatory landscapes, not just domestically but also in markets they serve internationally. Adhering to international standards helps in avoiding the complexities and potential conflicts that arise from a patchwork of unilateral regulations. This is particularly relevant in the digital domain, where services and products often transcend national borders. A harmonized approach reduces administrative burdens and compliance costs for businesses, encouraging them to invest more in technology development and commercialization.

As we consider the support for Toyota's EV battery factory, we deliberate on the means to avert Toronto's financial crisis and look to cultivate a national technology development ecosystem. It's essential that the principles of innovation, collaboration and sustainability guide decision-making.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. McKay.

Next, we'll go to the Université de l'Ontario français.

[Pierre Ouellette, President, Université de l'Ontario français]

Thank you very much, Mr. Chair.

Thanks to the members of the committee for agreeing to have me here this morning.

My name is Pierre Ouellette, and I am the president of the Université de l'Ontario français.

First I want to thank the Government of Canada for its innovative decision to provide 50% of the funding needed to start up our university, the first French-language university managed by francophones in central and southwestern Ontario.

I'd like to update you on what the federal government is getting in return for its investment in the Université de l'Ontario français, which was established in the midst of the pandemic.

Even though we are just starting our third year, our university already has 230 students.

This past September, we introduced a new teacher training program and have already enrolled twice as many students in it as we had anticipated. Next September, we will be adding a sixth program to our degree options, a specialized bachelor-level program in business administration, which will be offered in cooperation with the Collège La Cité. Shortly thereafter, we intend to add a mental health program, and, in the meantime, we are in the process of creating a specialized bachelor's degree in social work.

The new programs that the Université de l'Ontario français has created are in response to the pressing labour needs in the Canadian economy, more specifically in Ontario, and the shortage of French-language teachers across the country. Our programs can also accommodate the thousands of students currently enrolled in immersion programs in the greater Toronto area and the entire region, which will be a significant win for the development of the francophonie in Ontario and across Canada.

In research, the Université de l'Ontario français last week received confirmation that it will receive a UNESCO Chair in Migration and Francophonie in a Minority Context. Last week, it also established the Observatoire sur l'immigration francophone au Canada together with Toronto Metropolitan University and the Centre francophone du grand Toronto.

Francophones living in language minority communities across the country need to acquire, analyze and disseminate knowledge about francophone immigration in order to provide you political decision-makers, as well as researchers and practitioners, with data, analyses and tools designed to support and promote immigration.

Researchers must generate relevant knowledge based on everyday governance, like the movement that led to the founding of the Université de l'Ontario français in 2018. The future of the francophonie in Canada depends on the creation of this knowledge, which will guide the decisions that you will be making about immigration in the next few years.

As you can see, your investment, and that of Ontario, in the Université de l'Ontario français are already producing results, and we need to act quickly. Ontario's more than 600,000 francophones are by far the largest group of francophones outside Quebec. More than one third of that number, 36% to be more exact, live in central and southwestern Ontario. Continuing funding for the Université de l'Ontario français and its development will be critical in supporting the vitality of one of the largest francophone communities outside Quebec.

We are aware that French-speaking Ontario will grow in large part as a result of immigration. If francophone newcomers do not have access to a full range of services in their language, including high-quality university programs, they may be anglicized in short order, and that will weaken the francophone community.

The Université de l'Ontario français is building a tradition of university education in French in Toronto and the surrounding region, a long-term project that is essential to the development of our community. Continued financial support is a must.

The community needs the Université de l'Ontario français to support the development of the largest francophone community in Ontario. I believe that Canada also needs to continue supporting the development of a French-language university in the largest city in the land in order to support its identity as a bilingual country and the trademark image that is attached to it.

In the new Official Languages Act, Canada has committed to supporting francophones living in minority language communities so that they can acquire an education in their language throughout their entire lives.

We request that the government act on the recommendation made by the Association des collèges et universités de la francophonie canadienne that it permanently increase the funding it provides to the post-secondary sector in official language minority communities to $80 million a year.

In conclusion, I sincerely want to thank the federal government for the support it has provided to the Université de l'Ontario français. The results of that support are already making themselves felt, and we are rapidly pursuing the institution's development. To continue playing a leading role in one of the largest francophone communities outside Quebec, to welcome francophone newcomers more warmly and to continue creating and disseminating knowledge in French across the country, we hope that our university can continue to rely on the federal government's financial support.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Monsieur Ouellette.

We're about to get into questions.

For everybody's information, due to our transition time and some of the technical challenges that we had, we will be finishing this meeting today at about 12:20, just so everybody is aware of the timing.

In our first round, each of the parties will have up to six minutes to ask the witnesses questions. We are starting with MP Lawrence.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you, Mr. Chair.

Good morning, everyone. I'm going to start my questioning with Ms. Pohlmann.

First of all, can you repeat and reiterate the cost of the carbon tax for small business owners and your members?