Finance Committee on Nov. 15th, 2023

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

Thank you.

Go ahead, Mr. Davidson.

[Chuck Davidson]

I would provide the same sort of commentary. We're not necessarily opposed to the carbon tax. We're opposed to the way it's being used.

The reality in Manitoba—and I think Mr. Strain touched on this as well—is that for businesses that are paying it, there's no incentive to reduce it as well, so that's where we'd prefer to see federal government dollars being used, to help these businesses and industries that are carbon emitters to reduce it without additional costs to them. That's where we would prefer to see how it can be utilized, whether it's programs or incentives, to put it back into the pockets of these businesses.

That's how we'd prefer to see it.

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

Terrific. It's focusing resources where they should belong. Where we're looking, there are elastic situations and inelastic situations. Rather than pounding on the burden of single moms already battling Liberal inflation, we are facing it with technology.

We heard from the Canadian Gas Association yesterday that simply by changing the fuel in the shipyards of British Columbia, we could do more and replace the entire emissions footprint in British Columbia from that.

Are these types of technological solutions the ones that your members would be in favour of?

[Chuck Davidson]

One of the biggest challenges that we've found over the course of the last number of years.... We've undertaken a process to help SMEs specifically understand what they can do in terms of climate change, but the challenge a lot of small businesses have is that they don't know where to get started. They recognize that they want to take some steps and they want to make changes, but how do they get started?

We've developed a number of programs, and we've built a climate change tool kit with some funding from the provincial government to help some of those small businesses take some of those small steps so that they can reduce their carbon footprint.

We all agree that we want to head in that direction, but there are measures that can be taken to do that. How can we assist businesses, rather than punish them as a result of that?

[The Chair, Liberal, Peter Fonseca]

Thank you.

Thank you, MP Lawrence.

Now we'll go to MP Baker for five minutes.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thanks very much, Mr. Chair.

Thanks very much to all our witnesses. It's wonderful to be here in Winnipeg, in Manitoba.

Again, I wish I could ask questions of all of you. I won't have that time, but I'll do my best to be selective and prioritize.

Before I start, we should be here to listen to folks, not to espouse our political views. That said, I need to quickly respond to what my colleague said, because I think there's some context that's important. I wouldn't want you folks to walk away with a misunderstanding of what the government is doing. It's just the underlying facts. That's all.

The assertion that the government is increasing the tax four times is simply not true. I'm happy to get data for any of you who are interested in that, but what was alleged is not true.

The second point is that what the Governor of the Bank of Canada told us just a couple of weeks ago, when he was before our committee in Ottawa—and this is on the record, so you can look it up if you're interested—was that the elimination of the carbon tax would have a one-time 0.6% decrease in inflation. It's one time. It's not annually. It's just once.

After that, the carbon tax is gone and all the benefits and impacts of the carbon tax are gone. For example, never mind the environmental impact of eliminating the carbon tax and making pollution free.... I think all the folks here agree that we need to...nobody said they're against the carbon tax. You've all said we have to.... Maybe there are ways to improve it, and I'm happy to hear them. I'm interested in hearing those things. However, you'd lose the environmental benefits of the price on pollution, and you'd also lose the rebate.

When I think of the price on pollution, I think of it as action on climate, but I also think of it as an affordability measure. I hear you about the redistribution to business—and I'm interested in hearing that feedback, so I'm not dismissing it—but the current model of the price on pollution and the carbon tax is an affordability measure that helps 80% of Canadians who have the lowest income in this country receive more than they pay in carbon tax. If you eliminate the carbon tax, as has been suggested by some, you also eliminate the rebate because you don't have the money to give back the rebate. What does that do for the folks who are struggling at food banks, the folks you were talking about, our indigenous communities or whatever the case may be?

I want to be “eyes wide open” on what we're talking about here to make sure that we have the facts straight, but also understand the implications of what's being suggested by some colleagues.

The other thing is that there's talk about other countries and the fact that they don't have a carbon tax. We made a commitment, along with many other countries, to meet net zero by 2050. That's the goal. That's what we're doing. We're trying to find the most effective way to get there, making sure that we're supporting a growing economy, a green economy and everything else, all while addressing all the concerns our business folks have raised.

If there's room for improvement, I'm interested in hearing it, but that's the target we're heading toward. I'm personally not that interested in comparing myself to other countries, unless they're going to hit that net-zero target. Frankly, some countries have a bigger carbon footprint than others, so some have to do more work than others to meet that net-zero target, but if we're going to save our planet for our children and grandchildren, we have to hit net zero. Otherwise, we're all in much bigger trouble than we should be.

With my remaining time, I'd like to ask a question of Monsieur Lamontagne.

Yesterday, in Toronto, we heard from a witness who spoke to us about the francophone community and the importance of protecting the French language. I get the impression that's what your organization is doing. That is at least one of your organization's objectives.

In my riding of Etobicoke Centre, which is mostly anglophone, there is a relatively small francophone community. Why is it important for my constituents and for people across Canada to support organizations like yours that protect the French language?

[Edouard Lamontagne]

Thank you for your question.

Outside Winnipeg, a number of communities were founded by francophone families. We have to maintain that culture and be able to promote that heritage in those small towns. To maintain our pride in our shared history, we have to be able to live in these communities. That's what we're trying to do through cultural events.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

We have people who represent businesses here in Manitoba. You mentioned that culture was also an economic driver.

Can you explain that and make the connection between the needs of businesses and your requests?

[Edouard Lamontagne]

Sure. I often have the opportunity to sit down with people who talk about economic development in those regions. Culture is the last thing people think of.

Mr. Ste-Marie raised the issue of immigration. People come to our communities to work, but we also encourage them to stay for cultural events. We don't think enough about culture as an economic driver, but it is indeed one. A cultural event cannot take place without the contribution of volunteers and the rental of a function room and, sometimes, a sound system. All of this is money spent that goes back to the communities and stimulates the region's economy.

We have to remember that these cultural events boost the economy.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Baker.

I will now go to MP Ste-Marie, please.

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

Thank you, Mr. Chair.

I completely agree with what Mr. Lamontagne just said. The economic impact of the cultural sector is always underestimated, even though it is an economic driver.

My next question is for Mr. Davidson.

Mr. Davidson, in your presentation, you talked about the Canada emergency business account. You're asking for the loan repayment deadline to be extended by two years. We have also heard a lot of recommendations from the Quebec chambers of commerce, which are asking for a one-year deferral instead.

According to data from the Canadian Federation of Independent Business, 19% of SMEs will be in serious trouble without this deferral. There was the pandemic, and then the rise in interest rates. A number of companies have continued to take on debt and are now threatened with bankruptcy.

A number of ministers seem to be very much in favour of this request, unlike the Minister of Finance and her senior officials. They say they want to shut down pandemic-related programs and that extensions will cost too much. However, if we compare the cost of 19% of SMEs going bankrupt to the cost of the requested extensions, it seems obvious that it would be better for the government to grant a one-year extension than to shut everything down.

What do you think? How would you convince the Minister of Finance to reverse her decision?

[Chuck Davidson]

This is a challenge. Chambers of commerce across Canada and various other organizations have all sounded the warning bell on this. We appreciate that the government was open to an extension, but that extension of potentially three weeks is not going to be sufficient for a lot of these businesses to go find investment or loans from banks. It's simply not an option for a number of businesses that we've talked to. The reality is that a number of these businesses that continue to have these extensive loans are in significant trouble.

Here's the challenge. The CEBA loans were greatly appreciated during the pandemic because it was a very difficult time for small businesses across Canada. There was a sense that once we got out of the pandemic, things would return to normal, but things didn't return to normal. It became a piling on. We dealt with inflationary pressures, workforce challenges and supply chain challenges.

Businesses in many industries are still not back to prepandemic levels. We're going to continue to urge the federal government and legislators for the extension of the program. It's not that businesses don't want to repay it; they just need more time. There are a number of reasons for that. That fear of potentially 19% of those businesses having to close their doors and lay off employees is going to have a much more negative impact than pushing off by a year when those payments have to go to the government.

We strongly encourage the government to rethink the position they're taking.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie.

We'll go to MP Blaikie, please.

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

Thank you.

Mr. Davidson, I just want to build on that.

New Democrats have been very forceful in our advocacy for a longer extension of the CEBA program. Even if we just look at the government books—and I think this was part of Mr. Ste-Marie's question—by forcing almost 20% of Canadian businesses on the CEBA program into bankruptcy, is the government likely to get more money back or less money back?

If we're talking about the finances of the federal government, it seems imprudent to push a whole bunch of businesses out of business so that they can never repay the loan, as opposed to granting an extension to allow them a little more time to pay that back. They would continue to have a successful business with all the economic benefits that this produces for their community, while at the same time ensuring that the federal government ultimately does get paid back.

[Chuck Davidson]

I would agree with you, Mr. Blaikie.

I think we've heard from the finance minister, as well as the small business minister. This issue was raised most recently at our Canadian Chamber of Commerce annual general meeting in Calgary. We recognize the government is looking to get its fiscal house in order in terms of reducing spending and we fully applaud that.

We think this is a measure in terms of pushing this off for a year, or it would have a more negative impact, specifically on businesses. Businesses not being able to pay taxes or have employees is a concern we have. For them to be directed to find additional funding or loans to otherwise pay that loan back, banks and others aren't willing to fund those at this point in time. What I'm hearing from many small businesses that are going to be significantly impacted is that that's not an option.

We would strongly encourage a rethink or continuing to look at how we can extend that payment schedule so it will better make sure these businesses will be able to survive, because they're still in a very tenuous situation, specifically small and medium-sized enterprises across Canada.

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

Thank you.

This is for Mr. Davidson and Mr. Strain.

On the need for trade infrastructure, can you give some Manitoba-specific examples of pending projects that you think would be significant for Manitoba's economic development and contribution to the national economy?

[Bramwell Strain]

I'd love to give you some very specific examples of that.

There are a couple of things. CentrePort was already brought up as one, obviously.

A lot of the past trade corridor money has gone to the end of the trade corridor, including into the ports and some rail infrastructure, etc. Highways are also very important. The port of Emerson desperately needs to be improved. Highway 75 needs to be flood-proofed so that trade stays open all the time. That's a lifeline for us.

We need “freeway-ization”, if I can use that term, of our highway system. For those who know our geography well, at Highway 1 and Highway 16, where the two major highways in western Canada part, there is a four-way stop. You would not get that in Toronto. You would not get that in Montreal. You would not get that anywhere in the U.S. That is costing us money and it's costing us carbon. It's costing us time and efficiency.

That's not to mention the Port of Churchill, where there's potential that should continue to be looked at. There is a lot of opportunity in the logistics area, but that infrastructure needs to be national in scope, not at the end of the port.

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

Fair enough. Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

Thanks for that list. If there's anything else that any of the witnesses would like to submit to our committee, please feel free to do that.

We are going to MP Morantz.

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

Mr. Strain, I want to talk to you about our economic growth. There was a very interesting editorial in the Globe just last week, which the editorial board wrote, and they said some pretty damning stuff about the Liberals' management of the economy. I'll start with a couple of the points they made and just ask you if you could quickly respond to those things.

One thing The Globe and Mail said was that “the Liberals have governed while Canada's...GDP per capita has flatlined, and their policy choices are making the problem [even] worse.” Would you agree with that assessment?

[Bramwell Strain]

I'm going to go back to something we said earlier about the need for a level playing field. If you set bars too high, it makes them unachievable. I'll give you just a very quick example.

If you open a trucking company in Ohio, you have to give zero days of holidays. If you open one here, you have to give two weeks. There's a disincentive. There needs to be competitiveness. That is essential.

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

They also highlighted the housing crisis. As you know, CMHC says we need to build 5.8 million homes by 2030. We had testimony last week at committee that this was going to cost $3.2 trillion. They highlighted the housing crisis as “the most prominent example” of failed Liberal policy choices. Would you agree with that?

[Bramwell Strain]

[Technical difficulty—Editor] more houses. There are some economic factors that are contributing to that—inflation and borrowing rates, obviously interest rates. That needs to be addressed immediately. Without that housing crisis being addressed, at all levels all along the housing continuum.... It needs to be addressed.

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

I'm short on time, so I just want to motor along. I appreciate your short answers.

They also said that our “prosperity problem” has been “accelerating since the Liberals took power in 2015.” Would you agree with that?

[Bramwell Strain]

Stats are stats. There's a short answer for you.