Finance Committee on Nov. 17th, 2023

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Stachova.

Now we will hear from TransLink.

[Steve Vanagas, Vice-President, Customer Communications and Public Affairs, TransLink]

Thank you, Chair.

Thanks for inviting TransLink to speak with the committee today to discuss a topic that impacts all of us here in metro Vancouver, which is the pressing need to invest in transit and transportation infrastructure in our rapidly growing cities.

TransLink is the regional transportation authority for metro Vancouver. We move more than 400,000 people every single day in our transit system. Like other large cities in Canada, the metro Vancouver region is facing increasing affordability challenges. Today, I want to make a case for why investing in transit now is fundamental to addressing this affordability crisis, as well as why it is fundamental to advancing the economy.

While governments at all levels are working hard to add more housing supply, it's vitally important that we also invest in the transit infrastructure that's needed to move people from their homes to major city centres, job centres and campuses. In fact, while the Province of B.C. recently introduced legislation requiring transit-oriented development around all transit stations, as of today, we have no capacity to provide additional transit service to those locations.

There is a plan to invest in the metro Vancouver region's transit infrastructure called “Access for Everyone”. It's a $21-billion plan in capital investments over the next 10 years. In particular, we are focused on kick-starting this plan with a down payment that the Government of Canada, along with its partners in the Province of B.C. and local municipal governments, can make, beginning in 2024.

We have an urgent need to get going on these investments because of the lead times it takes to get buses ordered and built, to hire and train the bus operators and the maintenance crews, and to prepare the facilities we need to be ready to put the service on the roads and on the tracks.

Today, our transit system has recovered from the pandemic and has now reached prepandemic levels of growth. Overall, ridership has reached close to 90% of prepandemic ridership. On weekends, it's over 100%. TransLink's pandemic ridership recovery has surpassed all major transit systems in Canada and the United States. SkyTrain has emerged as the fourth-busiest rapid rail system across Canada and the United States. While we're the 17th-largest metropolitan area in North America, TransLink's bus ridership is now the third-highest of all transit systems in Canada and the U.S.

Ridership growth is something we should all be celebrating, but it comes with a flip side, which is our capacity to handle all of this demand for transit. In particular, we are seeing overcrowded buses in Surrey, Langley and Delta. These are the most affordable of our suburbs, which are the homes of many newcomers to our region and many new jobs. On route 323, for example, which operates between Surrey's Newton neighbourhood and the Surrey Central SkyTrain station, we have over 15,000 taps every day to get on the bus. That's 6,000 more per day than in 2019. There is now overcrowding on nearly one out of every three buses for transit users on this particular route.

Each week, one-third of the population of our region uses transit to move around the region. To put it into perspective, there are 60% to 70% more overcrowded buses system-wide than there were at the same time last year. It's now worse on all days of the week than it was in 2019, and we expect demand for transit to keep growing, as we saw last year, with over 77,000 new residents coming into our region. Many, if not most, newcomers will use transit when they get here.

Overcrowding is bad today and it will get worse over the next several years. Without transit investments aligned with projected growth, it's expected that overcrowding in our busiest areas—Vancouver and Surrey, for example—will get five and six times worse, respectively, over the next five years. That's why we need an urgent commitment to invest now.

We must be proactive in making sure that our transit infrastructure stays on pace with the growing demand. The longer we wait, the more expensive these projects become. The longer we wait, the more our system ages without the proper maintenance and upgrades required to maintain a state of good repair. The longer we wait, the harder it is for newcomers and everyone else to move around the region to their work and school.

To move as quickly as we can, we are focusing on improving bus service. The “Access for Everyone” plan calls for 250 new buses every year over the next decade. It builds the critical support infrastructure, like bus depots, that is the linchpin for increased service and without which we cannot expand and electrify our service to meet emissions goals. The plan also invests in 65 kilometres of new bus-based rapid transit connecting communities like North Vancouver, Burnaby, Maple Ridge, Langley, Surrey and White Rock.

Federal funding support for these projects, which we announced yesterday, will be critical to get them done. We are asking federal and provincial governments to partner with us now to urgently advance the first phase of transportation priorities with the “Access for Everyone” plan.

Moreover, we need to fundamentally reimagine how we pay for transit throughout the sustainable funding model. That's why we are actively working with the Province of B.C. to develop lasting solutions to fund transit in metro Vancouver.

We also need to look at more secure and stable ways to fund transit across the country. By investing in transit and transportation today, we can create a region that is more affordable, more efficient and more sustainable.

Thank you, Chair, for the opportunity to speak today.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Vanagas.

Now we'll hear from the Vancouver Airport Authority.

[Trevor Boudreau, Director, Government Relations, Vancouver Airport Authority]

Thank you, Chair.

Thank you for this opportunity to appear before the committee.

YVR exists to serve our community and the economy that supports it. As Canada's gateway to the Indo-Pacific, we are also a critical economic engine. By connecting people with places and cargo with markets, we open Canada to the world and the world to Canada. We also, though, have a responsibility to lead and help develop a globally connected country that is resilient, thriving and sustainable.

Our operations and our long-term strategy reflect the values of Canadians—innovation, climate action and indigenous reconciliation. We are investing in the 26,000 people who come to work on Sea Island every day, in our processes and in our technology to advance and sustain YVR's competitiveness as a global economic hub. In turn, those investments are enhancing our contribution to Canada's economy and the prosperity of Canadians.

I'd like to bring your attention to two important recommendations we have for budget 2024. First, invest in government modernization initiatives and services that will improve the passenger experience through Canadian airports. Second, join us in investing to accelerate the adoption of clean aviation fuel and decarbonize air travel.

On our first recommendation, there is an opportunity for the Government of Canada to invest in enhancing the passenger journey while maintaining the security of our air transportation sector. Every effort must be made to ensure that Canadians can move through our airports and move through processes in a modern and efficient manner. I think the committee members understand that very deeply.

While there have been notable steps across government agencies and within government accountabilities, more needs to be done. First, government should expand the current verified traveller program to be a true domestic trusted traveller program. This program would be similar to what the U.S. has in the TSA PreCheck program. It would allow travellers to become verified without the added cost of being part of the NEXUS program.

This will enable a more risk-based approach to passenger screening. It will reduce processing times. It will improve the operational efficiency, which is good for the frontline worker, and deliver a streamlined experience. That extension of the verified travel program should be supported with appropriate funding in the early days and guided by clear public policy direction. Importantly, though, this type of program will be self-funding over the long term with membership fees.

There is also a need for Canada to catch up with foreign jurisdictions that are investing in digitization, most notably the U.S. To maintain Canadian airports' competitiveness vis-à-vis these U.S. airports, we believe Canada must accelerate the adoption of digital technologies. It's critical that Transport Canada, Immigration, CBSA and CATSA accelerate their efforts. Specifically, we are asking for the federal government to expedite the implementation of an end-to-end digital traveller journey for all people who wish to utilize digital processes.

Our second recommendation is to accelerate clean aviation fuel in British Columbia. YVR is a leader in clean transportation. Hopefully, committee members know that we have made the commitment to be Canada's first net-zero airport by 2030. We accelerated that commitment by 20 years two years ago. We've invested $135 million in that journey. We are well on our way to achieving that by 2030, and hopefully before.

We do that while knowing that 95% of greenhouse gas emissions from air travel come from the tailpipe of an aircraft. We are super-sizing our influence, to the best of our ability, in helping to reduce that through our work in championing sustainable aviation fuel, or SAF, in Canada. Right now the demand for SAF is high, but the availability of SAF is very low.

There is an opportunity for the federal government to do more to accelerate that domestic supply. Canada is uniquely positioned with our abundance of renewable feedstocks. Right here in the Lower Mainland, there is a company called West Coast Reduction: 95% of their raw product is purchased by foreign SAF producers. It's shipped overseas to Singapore, refined into sustainable aviation fuel and then sold back to North America at a premium. We don't think that's correct. That's not right. Canada is missing out on valuable economic opportunities.

Canadian-made SAF will be essential to decarbonizing Canada's air sector. The Canadian Council for Sustainable Aviation Fuels, of which YVR is a proud founding member, has presented a realistic and clear road map to how Canada can build that feedstock-to-fuels SAF supply chain.

The road map relies on three key objectives. First, maximize SAF now from commercial-ready pathways. Second, establish commercial research and development pathways for new Canadian feedstocks. Finally, invest in innovation to support emerging homegrown technologies.

We believe that the Government of Canada should create the necessary financial and public policy supports to follow the C-SAF road map as presented. Now is the time for government to join our industry and invest in decarbonization efforts.

Thank you very much on behalf of the 26,000 people who work at YVR.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Boudreau.

Now we will hear from the Abbotsford Chamber of Commerce, please.

[Alex Mitchell]

Good morning, Honourable Chair, vice-chairs and members of this committee.

It's my privilege today to represent the Abbotsford Chamber of Commerce and deliver this message on behalf of our nearly 700 members from across Abbotsford's diverse business community.

In our community, we're grateful to live and work on the traditional territory of the Halq'emeylem-speaking people, the Sto:lo people, and today I am pleased to be a guest on the traditional territory of the Musqueam, Squamish and Tsleil-Waututh people.

Our members include businesses of all sizes, from home-based operators to large-scale manufacturers. They are facing many of the same challenges, which are directly impacted by the loss of economic competitiveness in Canada and the rising cost of doing business, making it increasingly difficult not only to grow but to, in some cases, continue to operate.

Today, government has its foot on the pedal of inflation, and we see the knock-on effects at the community level with the rising commercial rents and lease rates, alongside higher interest rates that result in reduced profitability, felt most acutely by the small and medium-sized business owners who are struggling with affordability on their own to maintain their operations.

Ottawa has an opportunity to make a substantial impact to relieve the strains on small businesses while improving the baseline of Canada's economy. Some of these measures could include removing internal barriers to trade, simplifying the tax code and reducing the barriers that prevent the private sector from capitalizing on the strategic economic advantages that we have in this country and in the community of Abbotsford.

Today, the Abbotsford Chamber of Commerce is recommending five key areas for action in budget 2024.

First, lower the cost of doing business, specifically for small and medium-sized enterprises. The cost of running a business in Canada continues to climb, making it very difficult for businesses to succeed and to grow.

We call on the government to avoid imposing additional taxes on businesses. For example, the upcoming increase of EI premiums in 2024 will be felt by every single employer in the country. This, paired with the numerous other costs being added by other levels of government—such as increased property taxes in most municipalities, carbon taxes that affect British Columbia's business owners differently and interest-rate increases—means that businesses are being squeezed from nearly every direction.

Economic headwinds are still present, and businesses haven't fully recovered from the impacts of the pandemic. One key issue remains: the upcoming CEBA loan repayment deadline. In our view, now is not the time to recall the loans for struggling businesses, and we strongly urge the government to give business owners more time by extending the repayment deadline. What we've advocated for is the end of 2025.

Our second item is around building resilient and trade-enabling infrastructure. Reliable connections with our trading partners across the province, country and globe are required for businesses in British Columbia to reach their potential. That, in our community, includes flood mitigation infrastructure for the Fraser Valley, home to some of Canada's most productive agricultural land, which was impacted by the devastating floods only two years ago, and also the expansion of regional trade corridors, like Highway 1 through Abbotsford. Ensuring that we have resilient infrastructure in place to meet the demands of today and the future is critical to the long-term success of businesses.

The third is around fostering healthy communities. The health of our community is a direct function of the health of the businesses that operate within it. If businesses are prospering, the local economy will too. Today, we see how policies—for example, bail reform for repeat offenders alongside an extremely challenging opioid crisis—have impacted the job creators of our communities. For many small businesses in the community of Abbotsford, this has become what some have described as a virtual crime tax, where businesses increasingly need to account for regular property damage and vandalism clean-up, which further adds to their costs of doing business.

The fourth is around addressing labour challenges. One of the most critical issues that we face as a province and in our community is ensuring that we have the people we need with the training required to meet our needs today and into the future. We also need to ensure that communities are equipped with the necessary funding from the government for infrastructure that will support the growth in population, as well as the services to ensure the success of newcomers within their chosen communities.

The last is around incenting innovation. Empowering companies to do more with the same resources, or even less, is one way to help businesses grow and succeed. We want to foster the success of new industries such as agriculture technology, which has a natural home in Abbotsford, Canada's agriculture capital. In fact, Abbotsford's farmers are driving the future of food security for the nation, and the government can play a key role in investing in the ecosystem that supports that innovation.

I hope this helps to provide some additional insight into the challenges facing small businesses and medium-sized enterprises today.

Thank you so much.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Mitchell.

Thank you to all of our witnesses on our second panel.

Now we're going to get into an opportunity for members to ask you questions.

Each party in our first round of questions will have up to six minutes to ask their questions. I'll ask them to introduce themselves and say where they're from or what community they represent.

I'm from Mississauga East—Cooksville, very close to Pearson airport in.... I was going to say “Toronto”, but it actually is in Mississauga. Toronto international airport is in Mississauga, just so everybody is well aware of that. The Vancouver Airport Authority would know that.

I did live in Kitsilano—I mentioned this to the first panel—for a year. It was a magnificent year.

We are going to start now with MP Morantz, please, for six minutes.

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

Thank you, Mr. Chair.

Thank you, all of you, for your opening statements. It has been really important that we do this. Normally, the finance committee meets in Ottawa, but we've been travelling across the country and hearing from stakeholders all over Canada. It's been very helpful in informing us as to how to proceed.

By the way, I'm Marty Morantz, member of Parliament for Charleswood—St. James—Assiniboia—Headingley, in Winnipeg.

Ms. Mitchell, I wanted to ask you a number of things, but let's start with the CEBA loan. One of the things that I thought was curious about the way the government handled the CEBA loan was that they extended the deadline for repayment to the end of December 2024, but said that, if you don't repay it before January 18, you lose the forgivable portion of the loan. Did that cause any confusion among your members?

[Alex Mitchell]

Thanks for the question.

I think there's confusion, certainly, but first and foremost, the view from many of our members is that the adjustment simply isn't enough and that business owners really do need more time. Those that are specifically vulnerable need more time to be able to repay those loans.

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

In any event, if they don't repay it before January 18, they lose the forgivable portion, which is another penalty being layered onto businesses in addition to all of the others you mentioned. Would you agree?

[Alex Mitchell]

Absolutely, we do, and at the end of the day, this funding was meant to support the businesses who were the most at risk, to help them to weather the economic headwinds of the pandemic and work towards resilience, so absolutely we believe that we need more time for those businesses.

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

Thank you.

With respect to the carbon tax, we've been hearing Liberals say for eight years now that people get back more than they pay, but we know now that's simply not true. It has never been true for small business people. Small businesses don't get the climate action incentive back from the carbon tax.

Another interesting development has happened with respect to the carbon tax just a couple of weeks ago. The government announced a carve-out or a pause on the carbon tax as it pertains to home heating in Atlantic Canada for home heating oil.

Now, they claim this is a national program, because if you can find the one person in Manitoba who heats their home with home heating oil, they get the break, but the reality is that Winnipeg is one of the coldest cities on the planet in the winter. Most people use natural gas to heat their homes. We're not getting the break. One of their ministers actually said that, if western Canadians want a break from the carbon tax on home heating, they should have elected more Liberals, if you can believe it.

In any event, do you agree that it's unfair that the rest of Canada isn't getting the same break that Atlantic Canadians are getting?

[Alex Mitchell]

Thank you for the question.

In our view when it comes to the carbon tax, our stance is that it should be a revenue-neutral policy mechanism, and fairness is key. One of the things we continue to point to with the carbon tax is that it's another cost that's being added on to the regular cost of doing business for business owners, and all of that is a challenge.

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

Okay.

Perhaps I'll ask you a question more related to business, then, when it comes to the carbon tax. Are you familiar with Bill C-234?

[Alex Mitchell]

I'm not entirely familiar, no.

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

Okay.

Bill C-234 is a bill that was presented by one of our members. It's an opposition member's private member's bill that would call for an exemption from the carbon tax for things like grain drying in agricultural operations. That bill is currently being held up in the Senate. If you're not completely familiar with it, I won't ask your opinion on it, but I'd urge you to do some research on it. It would be an interesting policy for your members to get behind.

There are a couple of other things.

Canada is in a situation where we have a serious problem with per capita GDP. For example, in 2021 the OECD projected that our economy would perform worse this decade than all other member countries, with per capita GDP growing at only 0.7 of 1% annually, though at least that would be an improvement over the last five years.

We have a situation where this government has been in office now for eight years. We have anemic economic growth. They've doubled our national debt from $600 billion to $1.2 trillion. Interest rates have skyrocketed. Doesn't this put businesses in a terrible position in terms of how they're going to navigate their way into the future?

[Alex Mitchell]

Thank you.

What we hear the most from our members is that doing business in today's environment is increasingly challenging. Those additional costs present numerous barriers to growth. It's become quite tenuous for many business owners, especially small and medium-sized enterprises. We absolutely do want to see a dynamic, bold economic vision for Canada that trickles down to the communities and the small business owners operating within them.

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

I think you mentioned in your statement that the “paycheque taxes”, as we call them, are particularly onerous for your members. Could you talk about the difficulties in terms of all these added costs being piled on, and about now losing the forgivable portion of the CEBA? How are businesses going to weather the storm when interest rates are so high? Commercial rents, as you pointed out, have skyrocketed. The government keeps layering on cost after cost after cost.

[Alex Mitchell]

It's become extremely challenging for those small businesses that are looking to operate and grow and retain their employees. That's where we've chosen to speak to incentivizing innovation and having, again, that bold economic vision for the country and for communities. Really, it's about trying to invest in a future of agricultural innovation in Canada's agricultural capital. There's a lot of opportunity there for that.

Again, yes, it's increasingly challenging for business owners. It's the multitude of additional taxes being added on and added on here that continues to impact competitiveness.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Thank you, MP Morantz.

I will now go to MP Dzerowicz, please.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you, Mr. Chair.

Thank you so much to everyone for being here today.

My name is Julie Dzerowicz. I'm the member of Parliament for Davenport. It's a downtown Toronto west riding. I've been on the finance committee for four years. It's our first time travelling in about four years. It's really nice to be here in person.

Ms. Stachova, I actually visited MOSAIC last year. I do quite a bit of work on immigration, refugees and asylum seekers, so I have a very good sense of what MOSAIC does. Thank you for all you do.

I'm interested in a new model around providing settlement support. We've heard that a number of times. Given the changing nature of the expectations of our settlement agencies, that sounds like the right request to make. Is there a model anywhere in other parts of the world, or is there anything that you might want us to look at, in addition to the very specific recommendations you've made?

[Olga Stachova]

I would just note that where we are doing well as a country is that we do have an incredibly robust system on settlement supports, with organizations across the country. There is an incredible network. We are the envy of the world. I have the opportunity to go and speak at international conferences. What Canada does is always held on a pedestal. We are always approached: “Tell us how Canada does things.” There's a lot that we already do well. The fact that, as opposed to other countries, it is the charitable sector and not the profit sector that delivers the services is a really good model, where it's the government delivering the supports.

There are pockets of interesting programs, especially around getting newcomers into skills-commensurate jobs. Australia has some interesting programs. There are pockets around the world that we look at. We do go to conferences. We learn what other countries are doing. We share what we do. We try to bring those practices here and include them in our proposals.

[Julie Dzerowicz, Liberal, Davenport, ON]

We hear a lot as we go across the country. So many jobs still need to be filled. A lot of skills need to be filled. I often think, even for our asylum seekers who are coming in, that we'll get the hotel association to say.... Literally, if they just provide even a desk at the airport, they would be willing to give jobs to anybody who's coming in and put them right across the country. If you have specific suggestions about how we can actually do that, and team up better and maybe faster in some cases, I'd be very open to them. I would suggest that you get them in very quickly to our committee, because I don't think we have time to talk through that today.

I'll give you a few seconds to respond, and then I want to go to Mr. Vanagas.

[Olga Stachova]

I'd be happy to respond.

We need to recognize the role that employers are going to play. We can spend a lot of money on credentials recognition and training, but in the end, that piece of paper or recognition doesn't actually lead to a job. It's working with employers, changing the culture within employers, motivating them to create those opportunities and recognizing that employers do have a role in providing on-the-job training.

We've done it. There are concepts that we've done with young people. We have students taking co-ops and internships, and companies have bought into the concept. In their HR planning every year, companies set aside spots for internships and co-ops. Why don't we do that with newcomers? It takes time, but it's possible.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

Mr. Vanagas, thank you so much for your presentation.

I'm from downtown Toronto, and I will tell you on transit that if we don't have that our city cannot function. I'm very proud of our federal government for providing historic funding in transit over the last eight years. Much more needs to get done.

I guess there are a couple of things I wanted to ask you.

One, has provincial funding for transit also correspondingly gone up over the last...whether it's five years or 10 years? Can you respond to that?

The other thing is that I was looking at international data. What I was trying to do was to find whether national governments of other countries actually fund transit systems from an operation perspective. I did put out a message to the Library of Parliament. They were only able to find some examples in the United States, but limited examples. If you have any for us, I'd be very open to hearing about that, if you could respond.