Finance Committee on Nov. 16th, 2023

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

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

That's the end of our first round of questions. We have enough time for a second round of questions. The timings will be a little different for the members asking the questions.

We are starting with MP Morantz.

Go ahead, please, for five minutes.

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

Thank you, Mr. Chair.

Mr. Schmidt, we heard Mr. Bewick say a few minutes ago that Canada is in the midst of an affordability crisis. I agree. I have in front of me a report put out by Agriculture Carbon Alliance. Are you familiar with it?

I'm just going to go through a couple of things as they pertain to Alberta.

They canvassed different sectors. The Alberta chicken farmers said they conducted an energy utilization survey among their farmers to quantify the impact of the carbon price. Depending on the size of the operation, the carbon price was estimated to cost an average of $41,000 annually to our chicken farmers. Also, in terms of Alberta, the Alberta Cattle Feeders' Association put a number of about $14,000 on it, which equates to 75¢ per tonne of grain that is produced. Then the Alberta poultry farmers said, “as for financial viability, we face the following. Every $10 per tonne of carbon tax costs us significantly more each month, and when the cost goes to the intended level of $170 per tonne, our cost will rise to an average of approximately $40,000 per month”.

These are incredibly high numbers. I know the government members have made the case over the last eight years that people get back more than they pay. That is obviously not the case if you are a poultry farmer, a cattle feeder or any of the other examples that I gave.

We have this bill in the Senate right now. It's Ben Lobb's bill. It was passed in the House. It was tied down by Liberal senators in the Senate. Are you of the mind that this bill should pass the Senate as quickly as possible?

[Greg Schmidt]

I am absolutely.

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

That's a very short answer to a very long question.

[Voices]

Oh, oh!

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

I thank you for it.

Do you have any context you care to add?

[Greg Schmidt]

Yes. You touched on a lot of different industries there. I think we're seeing the effects of not only the carbon tax but also multiple layers of taxation that are affecting us as an agriculture industry. We rely heavily on transporting our product to and from market, whether that's live animals or whatever it is, and on heating our barns. We're very high fuel users. The carbon tax has a big direct impact on us.

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

Poultry farmers say it will be $480,000 a year at $170 per tonne.

Does that make food more expensive?

[Greg Schmidt]

The problem with most of our industries at the bottom of the chain is that we are price-takers, so we really can't pass those costs on to consumers. However, yes, down the chain, I'm sure that affects the food price.

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

Instead of making food more expensive, it makes the producers less viable.

[Greg Schmidt]

Absolutely.

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

Okay.

I just want to circle back to this issue of a carve-out or pause on the carbon tax for home heating oil. I'm from Manitoba. I have never met a single person who heats their home with home heating oil. As much as the Liberals like to say that this is a national program, when they rolled that policy out, there wasn't a single cabinet minister from the west at that press conference. There were just Atlantic cabinet ministers. To say that this was not a policy, a carve-out, intended to deal with only Atlantic Canadians—because the Liberals were tanking in the polls there—I think is disingenuous.

Would you agree that it would be fair to have a carve-out for home heating across the board for all Canadians?

[Greg Schmidt]

I would absolutely. That's home heating, and I think more important to our industry is Bill C-234 at the Senate.

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

I'll have to ask you a few more questions, because I love when people say, “Absolutely”.

Mr. Bewick, just briefly, it seems as though Alberta always gets the short end of the stick when it comes to national unity. There are so many issues and you've eloquently covered them.

When it comes to energy—and oil and gas in particular—I remember the national energy program of the 1980s. I'm old enough to remember what federal government policy did to the Alberta economy back then. You referred to the oil and gas industry as the golden goose and said that it's going to affect Canadians' standard of living as we go forward.

Just quickly, how much do these policies around the carbon tax and other anti-energy policies cost the Alberta economy?

[Dr. Bill Bewick]

At the moment, it's just starting, so it's as much the spectre of where it ends up that is now curtailing investment and costing us opportunities already as....

When you say the carbon tax will go up to $170 in 2030, when you say you will have to slash production of the oil and gas sector by 2030 to meet an arbitrary standard and when you arbitrarily pick 2035 as a net-zero electricity grid date, it's just bad governance. It's the kind of thing that chases investors away.

If, instead, it was, “Let's work together. Here's our plan for how to fully invest in carbon capture and storage so that people can continue to grow their businesses, and here are ways we will support the policies to get that carbon stored underground so that production can continue”. If that was the tone and the attitude, that would attract investment. I think Mr. Bruce would agree with me. However, instead, we're getting these somewhat arbitrary deadlines and caps, and people who want to invest here don't know where it's going to end.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Thank you, MP Morantz.

We'll go to MP Dzerowicz, please.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

I want to thank all the presenters for excellent presentations and for the discussions today.

My colleague was very eloquent when he said it's okay to have a difference of opinion—and we indeed want to hear from you when there are things we can do much better—but no one should invent facts. In an earlier exchange, there was an indication that our carbon tax is weakening and failing, and it's all awful. I will say to you that we continue to be very committed to a price on pollution, which we call the carbon tax.

We were in Manitoba yesterday. I'll tell you that everyone who was there continued to support a carbon tax. It is the best and the cheapest way to tackle climate change, and if oil and gas prices are going up, it's because we have global inflation and there is massive instability from wars that is impacting the price of oil and gas in our country.

With that, I'm going to make a couple of comments and then I'll ask some questions.

Mr. Gallaway, I very much appreciated that my colleague Mr. Blaikie talked about the health care accord we talked about and we promised in 2015. I too agree that we need to bring that back, and I really appreciated your comments around having to make sure that there are far more strings attached. That came out in yesterday's testimony as well. I want to let you know that the increase we provided in our health care funding.... We made a major announcement of $198 billion for health care. The increase we gave the Canada health transfer was based on what the Canadian Medical Association had recommended, which was just under 5%. We did that, and I want to put it on the record.

I appreciate your comments. We're very much listening very closely to them.

I would like to turn my attention to Mr. Schmidt and Ms. Tranberg. Thank you so much for your wonderful testimony. I really appreciated some very specific recommendations that you had for us.

One of the things we've been talking about in the finance committee is interprovincial trade barriers. I wanted to know whether or not you think it is important for us to be tackling that for your industry. The recommendation that's come out from a number of other people who have come to present to us is that we should have a registry to show whether the interprovincial trade barriers are actually stopping trade—and affordable trade—between the different provinces.

I wanted to know whether that's something you would support.

[Janice Tranberg]

I'll take this one.

We don't have a position on interprovincial trade.

On meat specifically, there are impacts to international trade should we lower standards. Right now, processing plants are either federally inspected or provincially inspected. If we lower our standards to meet provincial inspections, that could potentially complicate international trade. There are opportunities lost by not being able to have interprovincial trade, but there are also concerns for our international trade, which is about 50% of beef in Canada.

It's not an easy yes-or-no answer. That's what I'm trying to say.

[Julie Dzerowicz, Liberal, Davenport, ON]

I appreciate that.

I also appreciated your comments around food security in Canada. There needs to be a lot more planning around that because, as we move to more global instability, you want to build a more resilient food system within Canada. I think the more supports we can provide to our food sector, including the sector you're a part of.... I think it is really important, so I appreciated that.

I'll move over to Mr. Breton on EVs, or electric vehicles. I appreciated your comments.

One of the things I've noted, as someone who wants to purchase an electric car, is that in B.C. and Quebec, they have the highest number of electric vehicles. A huge part of that is because it's the provinces that have jumped in and provided some incentives.

I hear your recommendations for the federal level. Would you also agree that at the provincial level there needs to be some strong incentives as well?

[Daniel Breton]

Yes, but I'll give you an example.

In New Brunswick, the EV incentives are higher than in B.C. The issue in New Brunswick is that, because there are no regulations, they can't get any. It's one thing—

[Julie Dzerowicz, Liberal, Davenport, ON]

Is it regulation, or is it provincial?

[Daniel Breton]

Right now, there are provincial regulations in B.C. and Quebec, so manufacturers have to provide more electric vehicles there. Because there's a higher rebate in New Brunswick, but no regulations, they can't get any—

[Julie Dzerowicz, Liberal, Davenport, ON]

There are no regulations.

[Daniel Breton]

There are no provincial regulations. That's why the federal regulations that should be announced any day now will make a big difference.

I'll give you a perfect example.

Twelve years ago, the federal government under Mr. Harper, and the Ontario government, provided $170 million for Toyota to assemble Toyota RAV4 EVs in Ontario. There was a big incentive back then. It was $8,500. Because there were no regulations, 100% of these vehicles, which had been assembled with taxpayers' money, were sent to the U.S.—all of them. You could not buy a Toyota RAV4 EV in Canada or in Ontario.

Then, yes, rebates do make a difference, but regulations sure do.