Finance Committee on Nov. 16th, 2023

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

In your opinion, is the intent working in the opposite direction of what the impact of it is?

[Anthony Norejko]

We do see that. Right now there are decisions being taken in the market, everything from acquiring and retaining older aircraft, which is both a safety and environmental opportunity, to using foreign operators to accomplish what would otherwise be flown in Canada in an attempt to avoid the luxury tax.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Would removing the luxury tax help to start to bring back some of the customers and retain those jobs?

[Anthony Norejko]

Absolutely. In the end, it keeps Canadians employed. It keeps us moving, both individuals coast to coast to coast and businesses across the country and the globe.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Hallan.

Now we'll go to MP Baker, please.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thanks very much, Mr. Chair.

Thank you all for your testimony. I'll echo what Gabriel across the aisle said. There's a diversity and a richness of knowledge here that we're all benefiting from. I thank you all for that.

I want to start with Mr. McGowan.

I don't know that I have a question. It's more to build on the conversation that you were having with some of my colleagues around the CPP. I mentioned earlier in the introductions we did that I was a member of the provincial parliament in Ontario. That was when Kathleen Wynne was premier of Ontario. She was advocating very forcefully, as some of you may recall, for an expansion of the CPP premiums so that the benefits people received would be greater at the time.

One of the things—and this is public—that we looked at was the possibility of separating out or creating a separate Ontario pension plan. I think Kathleen went partway down the path and was exploring that. I'm just sharing that from my perspective, and this kind of goes back to what Ms. Yedlin was saying as well. I think that, for a whole bunch of reasons that both of you have spoken to today, the view was that it was much better for Ontarians, never mind for the rest of Canadians, if Ontario continued to stay within the CPP, both because of the certainty that it provided but also because of the benefit it provided.

You talked about the returns and the pension income. From a financial perspective, from a return for the pensioner perspective and from a certainty perspective, there wasn't a scenario that we saw where separating Ontario out or having a separate additional pension plan for Ontario to supplement the CPP was a scenario that would be beneficial to the economy, to workers or to businesses.

I just wanted to offer that as part of the discussion that you were having. It's not really question. It's more just to tack that on.

[Gil McGowan]

Can I respond?

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Sure.

[Gil McGowan]

I think there's an important distinction that needs to be made between what was proposed by the Wynne government in Ontario and what's being proposed by the Smith government here in Alberta. The big distinction is that what was being proposed in Ontario and, frankly, what was being considered at roughly the same time in both B.C. and Alberta, was a supplementary plan that would be publicly run by the province but would sit on top of the CPP. It was a supplementary plan. I want to make it clear that we in the Alberta labour movement actively participated in support of the idea of creating a supplementary plan under our previous provincial government. I think it was the Stelmach government.

CPP is not enough, frankly. To be fair, it was never designed to be the entirety of your retirement security. They talk about the three-legged stool in pension policy. They talk about public plans like CPP, personal savings and workplace pensions. The problem that we have, especially here in Alberta, is that, unlike in the 1960s, when CPP was started, a large number of people had access to workplace pensions. Here in Alberta, that's no longer the case. In Alberta, 75% of working Albertans have no workplace pension of any sort, whether it's defined benefits, defined contributions or even RRSPs. That's one leg of the three-legged stool that is gone for most workers in this province. That makes the first leg, CPP, even more important. We don't support our provincial government using it as a bargaining chip for politics. That's not what it's for. It's for retirement security.

If we were talking about a supplementary plan on top of CPP, that's an entirely different conversation. It's one that we would enthusiastically support. Especially for those workers who don't have workplace pensions, we should have that conversation.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Would you prefer a supplementary plan that augments people's pensions or an augmentation to the CPP?

[Gil McGowan]

Honestly, it would be better if it were an augmentation to the CPP, and the labour movement actively participated in the expansion of the CPP that is currently being implemented. I was involved in those conversations, and I would like to have seen more, because it's still not enough to provide retirement income—

[Yvan Baker, Liberal, Etobicoke Centre, ON]

I have to cut you off. I apologize. I have a minute left here.

That's my point. Yes, we could augment this. In Ontario, we were looking at that. If that were our last resort, we probably would have done it. The point was that we saw it would be better if the CPP were enhanced rather than separating it off, for financial and risk-related reasons.

Mr. Chair, I think I have 45 seconds left, is that right?

[The Chair, Liberal, Peter Fonseca]

Yes.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Ms. Lachance, I would like you to tell us briefly about the importance of the role your organization plays. In my riding, Etobicoke-Centre, there is a strong, dynamic, but small francophone community. Why is it important to support French and the francophone community, not just in Alberta, but everywhere in Canada?

[Nathalie Lachance]

It is crucial and it adds value to Canada. When we look at the pillars of this country, we talk about the anglophone community, first nations communities, Métis communities, and Inuit communities. We also have to talk about francophones and the crucial role we have played in the past and we can continue to play in the future.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Baker.

Now I will go to MP Ste-Marie.

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

I agree entirely.

Mr. Norejko, the purpose of the luxury tax, which affects aviation, was to distribute wealth better by asking the wealthy to make an extra effort. What you are telling us, and what has been shown, is that ultimately, that tax is jeopardizing an extremely important industry, one in which Canada is the third leading global centre. That is distressing.

You referred to the study by the Department of Finance that said there was nothing to worry about, this was not so risky and it should not really affect the industry. You are saying something entirely different about the tax in effect, however. If the tax on aircraft is maintained, what will the consequences be in the medium term?

[Anthony Norejko]

Thank you for the question.

It's an important area. Quebec leads in terms of our business aviation operations and manufacturing. It's a province that employs the most number of Canadians and has over 13,600 employees.

The luxury tax, itself, whether empowering business to move across the country and across the globe or even just reaching our environmental objectives, is forcing people to find alternatives. These alternatives are not favourable either to the Canadian economy—this is to say, the employees who are manufacturing these aircraft—or to the environment. When we talk about, let's say, the recent commissioner's report, 2030, the ability for us to get anywhere near close to that is not going to happen.

Broadly speaking, these decisions, the way luxury tax.... This committee had identified that aircraft should be separate and studied. Because that work has not been undertaken, these gaps, these challenges, remain. We are seeing, in industry today, decisions being undertaken either to find older aircraft or to not purchase them at all.

I think it absolutely is making an impact.

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

Thank you.

Canada is the third leading global centre for aeronautics, but it has no policy or industrial strategy for this sector. It is on its own. Why should Canada adopt a policy like this?

[Anthony Norejko]

Thank you for the question.

This is an important area. This is what I mentioned with the six pillars of the strategy, about the role of government. What role does government play in terms of the regulations and incentives that are applicable to our industry—broadly and not just business aviation? On our airports, we've talked about major centres and, even on this panel today, connection for rural communities and how important that is across the country.

We must talk about the role of airlines, our air operators—in this case, business aviation operators, helicopter operators, tourism—all of these and how they fit together. Also, there's air navigation and the role of Nav Canada. Lastly, there is manufacturing and maintenance. With all of these components together in today's global economy, Canada has the opportunity to lead in so many ways.

We have all of the foundational resources here, but without a focused strategic review of those six pillars, Canada risks falling behind. Absent from that, there's even, again, this opportunity for sustainable aviation fuel and how Canada could lead.

Those six elements plus the opportunity on the environment are exactly why Canada should undertake a concentrated study about its industry and its impact to Canadians.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie.

MP Blaikie, go ahead, please.

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

Thank you, Mr. Chair.

Mr. McGowan, in your opening remarks you mentioned that the Biden administration is looking at setting up a youth climate corps.

Can you describe for the committee what that looks like and how you think it might be adapted to the Canadian context? I don't know if you have this level of detail with you today, but what do you think it might cost and Canadians might get in terms of value for money out of a program like that?

[Gil McGowan]

Establishing a youth climate corps in Canada makes sense in every province, but it might be particularly useful in a province like Alberta, given what we've just gone through over the past couple of years, especially last spring and this summer.

We experienced an unprecedented number of wildfires and the province spent more than $1 billion fighting those wildfires. We just heard from Mr. McLauchlin from the Rural Municipalities of Alberta that we're dealing with unprecedented droughts in many parts of the province, so there's a desperate need for investment in resiliency and climate mitigation.

I look south of the border at what the Biden administration is proposing, and they're basically suggesting creating an army of young people by paying them and training them to do a lot of this resiliency work.

There was a poll that was put out yesterday that showed public support for these ideas, including very significant support in Alberta and especially among young people. I think our young workers are keen to get out there helping to fight fires to make our communities more resilient by supporting infrastructure. I think this would be very supportive of the federal government's climate work but also its industrial policy work.

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

I know there are some economists like Jim Stanford, for example, who we've heard from at this committee, who are reticent to use the words “labour shortage”. His contention is that it's at 5% unemployment, but there are a lot of people who have given up looking for work. There are a lot of Canadians fit for work but are having a hard time finding the right job or accessing the right training to be able to take the jobs that employers want them to fill.

Do you think that a youth climate corps is an opportunity to incorporate some basic skills training for folks who are otherwise having a hard time accessing employment and who could then go on to supply private sector employers who are looking for particular kinds of skills that they're not finding in the current labour market?

[Gil McGowan]

Yes, for sure. There's absolutely no doubt from our perspective that we are already experiencing a shortage in the skilled trades, in particular. That problem is set to get worse rather than better, because a lot of our tradespeople, at least here in Alberta, are in their late forties and fifties and many of them are contemplating retirement. There's going to be a huge turnover in the next five or 10 years, and we should be doing everything we can to get people into the pipeline.

I think a youth climate corps could actually help in that regard, especially if the focus is on building infrastructure to build resilience. There are a lot of young people who are excited about being part of the solution. If you could take that excitement to put them into employment that would put them on a path where we could kill two birds with one stone. It would help with climate resilience, but it would also get a lot of young people on the pipeline towards skilled trades.

Thank you very much.