Finance Committee on Nov. 15th, 2023

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

That's a great answer.

They also said that “Canada's relative prosperity is in steep decline”, with our GDP per capita “falling well below the average for the advanced economies” in the OECD, and that “there is an increasing likelihood of an outright decline in living standards.”

Do you share that concern?

[Bramwell Strain]

I think, again, if we go to that concern, we need to grow our economy. We need to keep up with other countries. Between inflation and COVID, etc., we have seen a decline in productivity, and we have seen a decline in our economy, yes.

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

We have anemic economic growth and a government that has doubled what the national debt was from 1867 to 2015, from $600 billion to $1.2 trillion, calling these expenditures investments, but with no return on that investment.

From my perspective, I can only characterize the conduct of this government's carriage of the economy as economic malpractice. Would you agree with that assessment?

[Bramwell Strain]

I'm not sure if that was a question or a statement, to be honest.

I think there are lots of factors that have led to that spending. I would have to go into such detail that I would go well over all of our time here to get into that, but I do think you have to subtract somewhat the cost of COVID.

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

Since I am a Winnipegger, I look forward to perhaps circling back to you on that conversation.

There's just one thing. I realize this is more of a business panel, but something interesting has happened with the carbon tax.

As you may be aware, because Liberal MPs in Atlantic Canada lobbied the federal government for a carve-out on home heating oil—they gave that—their minister, Minister Hutchings, actually said that if western Canadians wanted the same treatment.... I've never met anyone in Manitoba who heats their house with home heating oil. If they exist, I don't know of them. Everyone uses natural gas here or maybe electricity. Minister Hutchings actually said that western Canadians need to elect more Liberals if they want that treatment.

Do you think that Manitobans are being treated unfairly by this government by not getting a carve-out on the carbon tax for natural gas for heating their homes?

[Bramwell Strain]

I think if you go back to something we said about the necessity.... When you have to use carbon for necessity, that needs to be addressed, whether that's heating oil, which has not been used in this part of the country for years—I remember we used it when I was a kid—whether that's natural gas, or whether that is those who use electricity to heat their homes. If heating is the issue, then it should be universal.

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

I have 30 seconds.

Mr. Davidson, I would just like your view on the carve-out of the carbon tax for home heating in Manitoba. Given the fact that the government has been telling us for eight years that Canadians get back more than they pay, we know that's not true for business people—you've made that point—but it's obviously not true for people who heat their homes either.

[Chuck Davidson]

We've requested two adjustments to what has been said.

We have requested to the Prime Minister that there does need to be a fairness in regard to the carve-out, that it should be across the board and looking at all heating.

Again, we have reiterated our comments as well that there does need to be a system in place for Manitoba businesses to be able to also benefit from the rebates from the carbon tax.

Those are two adjustments that we think need to be made.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Morantz.

We're going to our final questioner for this first panel, and that's going to be MP Dzerowicz.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

Thanks again for your patience and for your excellent answers.

Sometimes when we're talking, we select key articles and you don't get the full picture of everything that's happening. There is a lot of work that we need to do around our growth moving forward, and I think that's recognized. I think it's also important just to put on the record that we are one of only 11 countries in the world that have a AAA rating by international credit agencies. We've brought back all the workers, and more, after the pandemic.

We've just come through one of the most trying times in economic history, or in the history of the world, with the pandemic, and now we have two wars going on in the world and lots of impact in terms of inflation. I think it's important to mention that as we're talking about some of the things that are happening that are impacting the economy here in Canada.

I want to ask you, Mr. Davidson, very quickly, what is stopping small businesses from accessing the rebate that we're giving them?

[Chuck Davidson]

There is no process for that in Manitoba.

[Julie Dzerowicz, Liberal, Davenport, ON]

There's no process for it. I just wanted to make sure.

I want to turn my attention to Harvest Manitoba and Make Poverty History Manitoba.

I separate the housing crisis from the affordability crisis, although they're very much interlinked.

I've met with all of the non-profits in my riding that want to build housing. They have capital, they have property, they have money, but they're having issues at all three levels.

I wonder whether you would agree that it would be helpful, on a regional basis, to have the three levels of government come together, look at all the tools that you have and the funds that are on the table, and say, let's work together. What our federal government has committed towards the national housing policy is $82 billion. There's a lot of money in a lot of pots, but maybe not all of the pots are as effective.

I'll give you another example. We tried to build rapid housing in my riding, but rapid housing means nothing if you don't have the supportive element, which is provincially led.

Would you agree that something like that is urgently needed, where you're bringing all three levels together right away to see what all the tools are on the table and what the little things are that might be stopping faster housing and the supportive element that needs to be addressed?

Maybe I could start with Harvest Manitoba, and then we'll go to Mr. Brandon.

[Vince Barletta]

Certainly, I think all of us who are from Winnipeg, from Manitoba, have seen that whenever we've made great strides on issues like housing and other urban development issues in the past, it's always been all three levels of government working together that has made the difference. We've seen that again and again over the decades.

I would certainly agree that having that coordinated approach, putting all resources on the table among all three levels of government, gives us our best chance to achieve those results.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

Mr. Brandon, would you like to add to that?

[Josh Brandon]

Yes, I'd agree that working together is absolutely essential.

When we think about the gains that were made in the 1970s and 1980s in Manitoba, at that time there was a tri-level governmental coming together. In fact, from people I talked to who were involved back in the day, I know they even housed the housing department of the three levels of government in the same office so they could talk to one another directly. That kind of communication and co-operation is essential.

Right now I think we do have a commitment from all three levels of government here in Manitoba—the municipal, provincial and federal—that they do want to work on housing and homelessness. We have to seize that moment quickly.

It's great to hear that you're putting $82 billion towards this, but we need to see the rollout of that quickly, and it needs to be directed particularly to the households that need it most, those in deep poverty and in deep housing need.

[Julie Dzerowicz, Liberal, Davenport, ON]

Maybe the last question I'll have to both of you is this. Starting from when we were first elected in 2015, a lot of what we've done has been to reduce the income inequality gap and to really strengthen the middle class, with the introduction of the Canada child benefit, the national child care program, the increase of the OAS and the triple increase in the Canada workers benefit. These are all elements and they're all geared to inflation.

Part of it is.... You almost think, how is it that such a crisis has led to so many people going to the food banks? Yes, it's the housing crisis and yes, it's inflation, so it's rising faster than the supports we're able to give them. Is there anything else that you think we need that you don't think we're quite understanding at the national level?

I would also suggest, by the way, that we need all three levels to come just on this together, as well, because we can give more money at the federal level, but if they take it away at the provincial level, then you're left with less than what you had before.

Can you address any of those comments? We'll start with Harvest Manitoba.

[Vince Barletta]

Thank you very much.

As I mentioned in my initial remarks, there continue to be groups of Canadians who have been left behind.

Mr. Blaikie spoke about the issue of the disability benefit, as we have. Again, Parliament has moved on that legislation. Now the program needs to be funded in a way that is adequate, to raise those with disabilities above the market basket measure for poverty in this country. It needs to be accessible to those who need it and not subject to clawback. That's an area where, again, many Canadians continue to fall through the cracks.

On issues of immigration, we continue to see individuals who come to this country and are not able to easily connect with the labour market, education and training. That's driving many of them to food banks. In the case of Winnipeg, at times in this past year, over half of all our new food bank clients fell into that category.

The third is particularly geared to our organization. In this province, first nations, Métis and Inuit—particularly on reserve and in remote communities, but also our urban indigenous population—continue to have health outcomes and food security outcomes that are far behind those of the general population.

Although steps have been taken to improve the lives of many, there are some really key demographics in Manitoba that continue to fall behind, and stay behind, where they need to be to meet their food security needs.

[Josh Brandon]

[Inaudible—Editor] we need to make sure those benefits are not clawed back.

Also, when we look at housing, in particular, we've seen such a jump in asset prices. It's priced people out of the market. There have been unjust gains for too many households. There's an opportunity there to distribute those opportunities better.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Dzerowicz.

Thank you to our witnesses. We're delighted to be here in Winnipeg to have your excellent expert testimony for our pre-budget consultations. From my perspective, and I'm sure everybody's, we have felt the collegiality and the collaboration from all of you. We have people from business, social services and culture, etc. Everybody is really coming together. Maybe it's the weather here; I don't know. It's a bit cold during the winter, but it brings everybody together.

Thank you for your many recommendations for our study. We appreciate it. Have a great afternoon.

We're going to suspend now for five minutes, so we can transition over to our second panel.

Thank you.

[The Chair, Liberal, Peter Fonseca]

We're back.

For everybody's understanding, we do have a hard stop right at noon because we have to get to the airport to catch a flight.

We had a great first panel of witnesses. I know this one is going to be just as excellent.

With us for this second panel, we have Emily Bond, programs director with the Canadian Animal Health Institute. From Colleges and Institutes Canada, we have Alain Roy, vice-president of international partnerships. From Keystone Agricultural Producers, we have Jill Verwey, president of the board of directors, as well as Colin Hornby, manager of communications and stakeholder relations. From the Manitoba Home Builders' Association, we have Lanny McInnes, president and chief executive officer. Finally, from the Canadian Federation of Nurses Unions, we have Darlene Jackson, president.

Each of the witnesses will have an opportunity to provide an opening statement with remarks and testimony for our committee here.

We are starting with Emily Bond, from the Canadian Animal Health Institute, please, for five minutes.

[Dr. Emily Bond, Programs Director, Canadian Animal Health Institute]

Good morning, Mr. Chair.

Thank you for the opportunity to appear before the committee. Thank you to committee members for all of your work on the pre-budget consultations.

I'm Dr. Emily Bond. I'm programs director at the Canadian Animal Health Institute, CAHI. It's a national organization representing developers, manufacturers and distributers of animal pharmaceuticals, biologics, feed additives, veterinary health products and animal pesticides. Our members make up the sales of approximately 95% of the animal health product market in Canada.

Over the last five years, Canada has seen a 40% decrease in the availability of licensed veterinary medicines in Canada due to Canada's regulatory environment and increasing regulatory fees. For 2023, an additional consumer price index increase resulted in an annual rise of regulatory costs for veterinary medicine of up to 20%. This increase will inevitably trickle down the supply chain to livestock and poultry producers, and then to Canadian consumers, who are already faced with drastic increases in the price of food. Veterinarians and producers must resort to alternative strategies, such as using compounded products, off-label drug use, own-use importation and online purchases of products that are not available in Canada but are available in other countries. These strategies come with significant risk.

We have three key recommendations for the committee today.

First, the government should amend the fees related to the veterinary drug services policy to an amount that would make Canada proportionally competitive to key trading partners. The Canadian market is already of a considerably smaller market size, which hinders return on investment for drug developers and deters companies from making the initial investments required to bring products into Canada. On April 1, 2020, the regulations came into effect, introducing up to a 500% fee increase for regulatory reviews of veterinary drugs. These higher fees surpass those of similar markets like Australia and the EU, making it very challenging for Canadian veterinary drug companies to compete globally.

Second, the government should amend the Food and Drugs Act to allow foreign decisions by trusted regulatory authorities in other jurisdictions for manufacturing quality and clinical efficacy reviews related to the authorization of veterinary drugs. The regulatory process can be streamlined and made more cost-effective, making it easier for companies to access the Canadian market based on approvals and reviews already completed and approved in the EU and the United States.

Third, the government should amend its policy and abolish drug establishment licence fees for low-risk active pharmaceutical ingredients. In 2017, regulatory changes were introduced that increased good-manufacturing process requirements for active pharmaceutical ingredients to improve oversight. These changes inadvertently put the availability of many veterinary drugs at risk in Canada, without significantly improving safety or quality. These changes came with new regulatory fees and increased costs for drug components. A growing number of API sources can no longer meet the new Canadian requirements, particularly many of the low-risk active pharmaceutical ingredients, which are considered food ingredients in other markets.

Adopting these recommendations is crucial to addressing the declining access to veterinary products in Canada. Animal health products play a vital role in the well-being of animal health, but also human health and the health of our planet.

Thank you very much. I'll be pleased to take any questions.

[The Chair, Liberal, Peter Fonseca]

Thank you, Dr. Bond. There will be opportunities during question time for more answers from you.

We are going now to Monsieur Roy from Colleges and Institutes Canada.

[Alain Roy, Vice-President, International Partnerships, Colleges and Institutes Canada]

Thank you.

Good morning.

I want to first acknowledge that I am speaking from Treaty 1 territory, the national homeland of the Red River Métis and the ancestral lands of the Anishinabe, Cree, Oji-Cree, Dene and Dakota peoples.

I'm pleased to be here on behalf of Colleges and Institutes Canada, an association of more than 140 publicly supported institutions, including colleges, institutes and polytechnics.

That obviously includes the CEGEPs in the province of Quebec.

Our members are located within 50 kilometres of 90% of Canadians and 86% of indigenous people, making us the largest post-secondary network.

The committee has received our comprehensive pre-budget submission, which proposes practical recommendations to propel Canada forward. The submission addresses broad challenges such as housing, labour shortages, indigenous reconciliation and securing Canada's place in the world.

I'm pleased to highlight three of those recommendations today.

I'd like to start with the most pressing issue, which is the student housing crisis in Canada.

Like many Canadians, students are struggling to find safe and affordable housing. In fact, according to a report by the Office of the Federal Housing Advocate, at least one million students are in unaffordable, overcrowded or poorly maintained housing.

This is not only affecting access to education; it is also putting additional pressure on the rental housing market, where students are competing with other Canadians for affordable housing.

To address this crisis, CICan recommends a direct investment in student housing. This lack of housing is exacerbated by the barriers that colleges and institutes face in initiating construction projects. These are primarily attributed to a long-term issue affecting the sector: the state of Canada's post-secondary education funding. In the last decade, provincial funding for higher education has stagnated. With inflation, new training demands and a greater need for student services, institutions find themselves increasingly stretched, with fewer dollars available to deliver their mandates. Colleges and institutes are now heavily reliant on student fees, both domestic and international, to continue their operations.

This reduction in funding erodes the quality of the education students receive. Meanwhile, Canada is facing skills and labour shortages. It is therefore vital that colleges and institutes continue to receive the support needed to do what they do best, which is training highly skilled workers equipped to meet the needs of Canada's evolving economy.

To achieve this, CICan recommends that the federal government commit to an increase of the Canada social transfer as part of the renegotiation process with the provinces in 2024. We're asking that this increase be accompanied by data agreements to ensure the money meant for the sector goes to providing Canadians with the high-quality education that prepares them to excel.

My last point about ensuring access to high-quality education in a changing world brings me to our call to renew and expand the global skills opportunity program. This program provides equity-deserving Canadians from all backgrounds with the opportunity to gain the global skills and confidence needed to compete in an international economy. It also fosters their belief that they can achieve anything at home, right within their communities.

To date, more than 6,000 students have studied or worked in more than 100 countries. These stays are funded by the global skills experience program. Funding for this program is set to end in 2025. However, Canada must continue to invest in international skills.

That is why we recommend that the government make this program permanent and increase its funding envelope.

The impact of the program can be felt or seen right here in Manitoba. Leon Mann from Lake Manitoba First Nation went to Finland as part of his automotive technician diploma program at Red River College Polytechnic. I met him a number of weeks ago. He credits his international experience with building his confidence, communication skills and technical knowledge. It has inspired him to one day start his own automotive business in his home community. This program is truly transformative for people like Leon, who would not otherwise have such opportunities.

It's also crucial for Canada, as these skills opportunities help develop a generation of Canadians who are more globally fluent and connected. This enhances Canada's capacity to strengthen global ties—especially in emerging economies—and drive trade diversification and export opportunities.

Colleges and institutes are key partners in addressing the broad challenges that Canada faces, ranging from a housing crisis to labour and skills shortages and the need to compete in an evolving global economy, but to fulfill this vital role, we need your support.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Roy.

Now we will hear from Keystone Agricultural Producers.

[Jill Verwey, President, Board of Directors, Keystone Agricultural Producers]

Good morning.

Mr. Chair and honourable committee members, thank you for having me here today to present on behalf of Manitoba farmers for the 2024 federal pre-budget consultations.

My name is Jill Verwey. I am president of Keystone Agricultural Producers. I operate a multi-generational mixed farming operation with my husband and children in Portage la Prairie, where we primarily grow 8,000 acres of grain. We own a commercial beef operation and a dairy operation.

I'm joined here today by our manager of communications and stakeholder relations, Colin Hornby.

Keystone Agricultural Producers is Manitoba's general farm policy organization, providing a unified voice on the issues that affect agriculture. We are also members of the Canadian Federation of Agriculture, a lead national advocacy organization for our sector that presented to your committee last month and provided you with several recommendations.

As a member of CFA, we endorse their recommendations; however, we would like to underline a few that are particularly important to our members here in Manitoba. These recommendations highlight areas where the federal government can make a positive impact for farmers, agriculture and the Canadian economy through the budgetary process.

First is to extend the on-farm exemption for qualifying farm fuel to marketable natural gas and propane. This would implement the changes outlined in Bill C-234, which we fully endorse. Farmers should not be excessively taxed on an essential part of their business when economically viable alternatives do not exist. In particular, this pertains to activities like drying grain to ensure farm food safety, and heating and cooling of livestock buildings to maintain animal welfare and best practices.

Number two is to exempt farms from filing the underused housing tax or UHT return, which requires private corporations and partnerships, including farming operations, that own residential properties to file a UHT return, adding unnecessary financial burden even if we do not have to pay the tax. This requirement has caused financial and administrative burden to many farmers, as they have to pay a professional to prepare and file this UHT return even when they know that they are exempt from the tax. Although there is an exemption process available for farmers, the application process itself is costly, adding to the already increasing expense of the farming operation in our input costs, energy costs and regulatory requirements.