Finance Committee on Nov. 20th, 2023

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

I have a point of order, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

On a point of order, Mr Kurek.

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

Thanks.

My point of order is that the NDP member has been speaking now for 30 minutes. I thought he would find that—

[An hon. member]

That's not a point of order.

[The Chair, Liberal, Peter Fonseca]

That's not a point of order.

MP Blaikie, please.

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

I'm sorry, I was just trying to have equal time with Mr. Kurek. I didn't realize that would be objectionable to him. In fact, I think to meet the bar, I still have some ways to go, so I will continue.

[An hon. member]

About an hour and 20 minutes.

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

I made the point on India, which was that what we saw was a strategic silence by the Conservatives when Parliament was talking about an issue they didn't like. It wasn't in their political interest, so that's how they got out of that one.

We're seeing something similar happen on the Canada-Ukraine Free Trade Agreement. They decided that they wanted to vote against it. I talked earlier about Preston Manning encouraging closer collaboration between Danielle Smith and the federal Conservatives. What we're seeing in the United States with the Republican movement there—and Donald Trump particularly, who I think was bought and paid for by Russia—is that Republicans are raising doubts and criticisms of Ukraine in order to undermine that effort.

We know that a lot of strategy is shared between Canadian Conservatives and the Republican Party in the United States, and they're going to these conventions now as Republicans in the States and what are they hearing? It's that we should be more critical of Ukraine. What are the Conservatives doing? For maybe the first time ever, they're voting against an international free trade agreement. They want to make it about the carbon tax because that's what they like to talk about. Suddenly, they're not talking about the war in Ukraine anymore. They're talking about the carbon tax.

They're not talking about the fact that President Zelenskyy himself wanted Canada to implement this agreement and asked Canada to vote in favour of it. They're not talking about the fact that on the Day of Dignity and Freedom in Ukraine, they voted against the Canada-Ukraine Free Trade Agreement that President Zelenskyy had asked Canada to pass, because they want to talk about the carbon tax because that's more politically expedient for them. To try to make the Canada-Ukraine conflict about the carbon tax works better for them than explaining why, after hanging out with their Republican buddies in the United States, they came back and decided to vote against the Canada-Ukraine Free Trade Agreement.

I get why that's an uncomfortable conversation, but that's the conversation we should be having—not another conversation about the carbon tax, which we have often in this place and which is often used to distract from a number of topics. In fact, I've seen Conservative MPs from provinces that don't even have the federal carbon tax use that same strategy. In British Columbia there's no federal carbon tax, yet I've watched Conservative MP after Conservative MP get up to talk about how they're serving their constituents by talking about the federal carbon tax, as if the carbon tax in B.C. wouldn't apply the day after a federal carbon tax was eliminated.

We see pretty consistent strategies going on.

I made reference earlier and I'll do it again.... And I'm sorry Mr. Perkins isn't here because he was one of the MPs up in the chamber last night talking about the anti-scab legislation, an uncomfortable topic for Conservatives because they have been trying to portray themselves as being on the side of workers. We know that the right to strike is one of the most important rights when it comes to workers being able to stand up for themselves and bring home powerful paycheques. We know, because we have watched Conservatives vote against anti-scab legislation in the past and for right-to-work legislation in the past, that Conservatives are not on the side of workers.

They don't want to talk about it in the House. It's why they wouldn't talk about it in the House last night.

[The Chair, Liberal, Peter Fonseca]

I'm going to interject at this time.

We've talked about Ukraine. The Holodomor commemoration is happening at this time on the Hill.

Members, we will suspend.

[The meeting was suspended at 1:00 p.m., Thursday, November 23]

[The meeting resumed at 3:59 p.m., Monday, November 27]

[The Chair, Liberal, Peter Fonseca]

Welcome, everyone.

We are resuming meeting number 121 of the House of Commons Standing Committee on Finance. Pursuant to the order of reference of Thursday, November 23, 2023, the committee is commencing its study of Bill C-56, an act to amend the Excise Tax Act and the Competition Act.

As indicated in the memo that was sent out last week, I'd like to remind members that amendments to the bill must be submitted to the clerk of the committee by noon tomorrow, Tuesday, November 28. It is important for members to note that, pursuant to the order adopted by the House on Thursday, November 23, the noon deadline is firm. This means any amendments submitted to the clerk after the deadline and any amendments moved from the floor during the clause-by-clause consideration of the bill will not be considered by the committee. It is important that, when submitting amendments, members also send an XML version of the amendment file. This will ensure that the legislative clerks are able to quickly put together the package of amendments, which will be a benefit to all members of the committee.

Today's meeting is taking place in a hybrid format, pursuant to the Standing Order 15.1. Members are attending in person in the room and remotely using the Zoom application.

I'd like to make a few comments for the benefit of witnesses and members.

Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mic, and please mute yourself when you are not speaking.

There is interpretation. For those on Zoom, you have the choice at the bottom of your screen of floor, English or French. For those in the room, you can use the earpiece and select the desired channel.

Although this room is equipped with a powerful audio system, feedback events can occur. These can be extremely harmful to the interpreters and can cause serious injuries. The most common cause of sound feedback is an earpiece worn too close to the microphone. We therefore ask all participants to exercise a high degree of caution when handling the earpiece, especially when your microphone or your neighbour's microphone is turned on.

In order to prevent incidents and safeguard the hearing health of the interpreters, I invite participants to ensure that they speak into the microphone into which their headset is plugged and avoid manipulating the earbuds by placing them on the table away from the microphone when they are not in use.

As a reminder, all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as best we can. We appreciate your patience and understanding in this regard.

I'd now like to welcome our witnesses. With us today is the Deputy Prime Minister and Minister of Finance, the Honourable Chrystia Freeland. Welcome, Minister. I see that you're wearing your Ukraine pin colours. Thank you for commemorating the Holodomor this weekend with the community.

Joining you today, from the Department of Finance, is the assistant deputy minister of the tax policy branch, Miodrag Jovanovic.

The floor is yours, Minister, for opening remarks.

[Chrystia Freeland, Liberal, Deputy Prime Minister and Minister of Finance]

Thank you, Mr. Chair. I am wearing the Ukrainian colours because this weekend was the 90th anniversary of the Holodomor. There were many residents of your constituency there, and our colleague Yvan Baker was there as well on this solemn occasion. I thought it was definitely worth standing in solidarity with Ukraine today.

I am delighted to be here with you and the committee members to discuss Bill C‑56, the affordable housing and groceries act. This legislation is part of our government's economic plan to build an economy that is focused on the well-being of all Canadians, to create good jobs people can count on.

Our plan is working. In the first half of this year, Canada ranked third highest in the world for foreign direct investment and had more per capita investment than any other G7 country—better than the United States, the United Kingdom, Germany, Italy, France and Japan. Canada has the lowest deficit and the lowest debt‑to‑GDP ratio in the G7. The International Monetary Fund projects that Canada will see the strongest economic growth in the G7 next year.

All of that means that our economy is creating excellent jobs for Canadians right across the country. In fact, there are over a million more people working today than there were prepandemic. Building on that significant progress, our government is taking new concrete measures, under the affordable housing and groceries bill, to address two of the biggest challenges facing Canadians, access to housing and affordability.

I'd like to outline why it is so important that we work together to pass this legislation.

First, we are removing the GST on new purpose-built rental housing, which we all know will help build more homes faster across Canada. This is about making the math work for builders and giving them an incentive to build more homes that would otherwise not move forward due to construction costs. For example, in the case of a two-bedroom rental unit valued at $500,000, a builder will benefit from $25,000 in tax relief. That makes it more cost-effective for them to build. It's going to build more rental homes faster. We know Canadians need that.

Our plan is already delivering results. To give you one example, a Toronto-based developer said, after we announced this measure, that this developer will now build 5,000 new rental units across the country. These are units that were otherwise on hold. Provinces, including Ontario, Nova Scotia, Prince Edward Island and Newfoundland and Labrador, have followed our lead by eliminating provincial taxes on new rentals, and that is getting even more new rental housing built across Canada.

In the fall economic statement that I tabled last week, the federal government is also proposing to eliminate the GST on the construction of new co-op, purpose-built rental housing, something that members of this committee have been advocating for and that we've been having very good constructive conversations about.

Today, about a third of all Canadians rent their homes, and whether they are students, families, seniors or new Canadians, it's essential that we build more rental homes and build them faster. I really believe that is a goal that all members of this committee share, and by passing the affordable housing and groceries act, we can help to do just that.

Bill C-56 would also increase competition across our economy, particularly in the grocery sector. More competition means lower prices and more choice. By increasing competition and cracking down on unfair and anti-competitive practices, we're helping to stabilize prices for Canadians. That includes by amending the Competition Act to give more power to the Competition Bureau to help the bureau investigate and crack down on price-fixing.

We are also removing the efficiencies defence to end anti-competitive mergers that raise prices and limit choices for Canadians. We are empowering the Competition Bureau to put a stop to situations where large grocers prevent smaller competitors from establishing operations nearby.

Through our economic plan, our government will continue to do everything we can to build an economy that works for everyone, and that is exactly what this legislation will help to do.

Thank you. I'm happy to take your questions.

[The Chair, Liberal, Peter Fonseca]

Thank you, Minister Freeland. I'm sure members have many questions.

We are starting with our first round of questions. Each party will have up to six minutes to ask questions.

We are starting with MP Hallan, for six minutes.

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

Thanks, Chair.

Minister, what is your projected growth rate for your government spending next year?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

I'd like to start, Mr. Hallan, by talking about one of the things that we all know can make life more affordable for Canadians and—

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

Minister, respectfully, I only have six minutes. It was a quick answer on the question—

[The Chair, Liberal, Peter Fonseca]

MP Hallan—

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

I'll continue my questioning. Thank you, Chair.

The Governor of the Bank of Canada, who sat in that chair recently, said, “we expect government spending to grow at about 2.5%. What that means is, if all those spending plans are realized, government spending will be adding to demand more than supply is growing, and in an environment where we're trying to moderate spending and get inflation down, that's not helpful.”

I'll help you out, Minister. In your own fall economic statement on page 77, according to your numbers, it calculates to be about 5.5% growth. That's more than double what the governor said would be helpful. The governor also said that your fiscal policy and his monetary policy of trying to tackle inflation by raising interest rates are rowing in opposite directions.

Do you agree with him, or do you disagree with him?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Let me quote the governor from Wednesday, the day after I tabled my fall economic statement. He said the fall economic statement “is not adding new or additional inflationary pressures over the next couple of years, which is the critical period over which we will be looking to reduce inflation and get it back to the target”. He also said, and I'll quote the governor—

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

Respectfully, Minister, by adding $20 billion—

[Chrystia Freeland, Liberal, University—Rosedale, ON]

I'm sorry—

[The Chair, Liberal, Peter Fonseca]

MP Hallan, we've had this conversation before. I don't want you interjecting when the minister is answering or when any witness is—

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

It's a very simple question.

[The Chair, Liberal, Peter Fonseca]

It's okay if it's a simple question, MP Hallan. I want you to listen to the answer and then ask your next question. That's what I want you to do.

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

I have a point of order.

[The Chair, Liberal, Peter Fonseca]

What I'm asking for is decorum and respect here.

MP Lawrence.