Finance Committee on Nov. 20th, 2023

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

Oh, oh! All right. It's Ian Lee.

Moving on from there, I've talked a bit about—and the other side's eyes will start glazing over when I mention it—the carbon tax in this. We're talking about competition. The Fraser Institute has done reports on the carbon tax. Many other reputable...such as C.D. Howe have done studies on the impact of the carbon tax.

My belief is that how it hurts competition is twofold.

One is the fact that, of course, it has another cost. Countries like the United States, India and the People's Republic of China do not have a carbon tax, so it makes us less competitive.

It also hurts us as we compete to eliminate emissions and become more green. What's happening is that our green companies are moving over to places like India and West Virginia, where they're powered by coal. Instead of clean natural gas, our manufacturers are putting.... We're moving them aside, so we're actually greenwashing, creating more emissions and losing out on that.

I'd like to get your thoughts, in general, with respect to the carbon tax and competition.

[Dr. Ian Lee]

Okay. I'll be very quick.

I talk about this in my classes. I don't think anyone should deny the Pigou tax. Professor Pigou created the idea of putting a tax on something. Make it more expensive, and we consume less of it. That's a Pigou tax—a carbon tax, a cigarette tax or an alcohol tax. They work.

The problem is, in this instance, we're in a unique market. We think we're huge in Canada, and we are, geographically, but we're very small. We're smaller than the state of California. There are fewer people in Canada than in California, and they do not have a carbon tax. They are our largest competitor. Pierre Trudeau said they are our best friend, whether we like that or not.

[Some hon. members]

Oh, oh!

[Dr. Ian Lee]

There are 330 million...and they are the largest, most productive and most dynamic economy in the world. China is actually declining as a percentage of U.S. GDP. Europe is declining. People don't realize that. The United States keeps getting bigger, larger and more competitive, and we have to take that into effect. For GDP and income per person, the gap between us and the States is widening. We have to pay our government services, universities, health care and so forth with the revenues that come in. However, our GDP per person is not increasing, so our standard of living is declining relative to that of the United States. That's going to precipitate a brain drain to the States.

There are all kinds of things we should take into effect when looking at our relationship vis-à-vis the United States.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Lawrence.

MP Thompson.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you.

Thank you, again, to the witnesses for staying with us. It's been a long evening. I'm sure it's been, for you, probably, a long day as well.

I will start with you, Mrs. Houle.

You referenced—thank you for this—housing as a human right. I absolutely agree with you. I would go so far as to say it's also very clearly part of the determinants of health. I think the link in the accelerator fund to transit and to understanding how we live in a broader community is very important. We are realizing that housing is a link to well-being, connectivity and all those things that enable people to be well in the place they live. Obviously, it's complex. There are many players who need to be at the table, and there are many solutions.

You also referenced, as part of that link, rent stabilization across the country. Would you speak about that for a moment and about what role the federal government can play, if any, in terms of creating a lead?

There are provinces, provincial links, and I also want, in my little preamble, to talk about the link to the municipalities in the accelerator fund, because it's closer to the ground and very strongly in the lead in terms of bringing three layers of government to the table.

[Marie-Josée Houle]

Absolutely. I'll start with rent stabilization. These mechanisms could be brought in by the federal government through their bilateral agreements with provinces, because the provinces certainly have the jurisdiction over vacancy control and rent control, but it can be imported as part of the agreement. It has been done in Canadian history, not too long ago, where it was a temporary measure until the housing market was stabilized, so this can be done again.

It is absolutely primordial that the federal government and the provinces really come to some agreement, because the pointing of fingers and saying, “This is terrible, but it's them,” has to stop.

This is one mechanism, and this is where we always say that the federal government needs to take leadership around the question of housing. It is a national issue. People's circumstances cannot the change the minute they cross over an invisible line, and this is exactly the case whether it's a municipal line, a provincial line or a territorial line, or, if you're indigenous, over your community line.

People migrate in this country, so we need something that people can expect—that they're treated equally and that their human right to housing is realized equally, regardless of where they live.

That is one. That's why we need federal leadership on this.

I'm sorry, what was the other question, Mr. Chair, if I could ask the honourable Ms. Thompson to repeat it?

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you.

It was on the link to engaging municipalities in a very specific way, because obviously I can certainly speak to the challenges sometimes with zoning. We need to do something substantial in a short period of time. We need all players at the table, so if we could have your thoughts there....

[Marie-Josée Houle]

Again, these are amazing opportunities. I think we are sitting on a once-in-a-lifetime opportunity, and I see the window closing very quickly. This is very concerning to me.

With the housing accelerator fund, this is an attempt for the federal government to have a direct relationship with municipalities that are willing, with the exception, unfortunately, of municipalities in Quebec, but, again, to really build in these conditions, because it is a substantial amount of taxpayers' money.

I come back to the fact that this is taxpayers' money. It is precious. It needs to have real results, and the results need to be affordability and perpetuity. How do you build that in? Here's our chance.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you. I agree.

Mr. Ross, if I could, I would like to finish with a quick question for you. I meet with the local branch of the federation of co-operatives in Newfoundland and Labrador in my riding. Unfortunately, there are not a lot of them, but they're very enthusiastic, and I'm always very pleased to support them in any way I can. How do we get the message across the country that co-operatives are a wonderful way to ensure affordable rents? It's, to some degree, stabilized rent for people. How do we get the message out to really clear up the misconceptions about what a co-operative is?

[Timothy Ross]

I think the best way to get the message out about new co-op homes is to build new co-op homes. That's why we really look forward to, and anticipate, the launch of the co-op housing development program as soon as possible.

We have, as a sector, worked to co-design that program with the federal government. We aim to create as many co-op homes as possible and to create an ongoing sector finance capacity, because government funding and financing comes and goes. It's very important that we leverage this opportunity to maintain a continuing finance capacity as a sector.

The answer is to get building, and then more people can benefit from co-op housing.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you.

I think I'm out of time. I'll just say that I want to see more in my riding.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Thompson.

Now, we will go to MP Ste-Marie, please.

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

Thank you, Mr. Chair.

I quite agree with your comments, Mr. Ross.

Ms. Levac, do you have anything to add concerning the Competition Act?

[Sara Eve Levac]

In addition to our recommendations regarding the powers of the Competition Bureau, another of our recommendations would be to repeal the efficiencies defence for anti-competitive agreements as well, not just for mergers.

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

Can you explain that a little more, please?

[Sara Eve Levac]

Right.

At the international level, to my knowledge, that defence does not apply to anti-competitive agreements. If that defence is being repealed for mergers, we do not understand why it should be preserved for anti-competitive agreements, since that kind of agreement can have negative effects on competition.

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

Right, thank you.

Mr. Castiblanco, on the point of the importance of better collaboration among the various levels of government, I imagine that the answer is not found in Pierre Poilievre's bill, under which the transfers to municipalities would be cut if there is not enough construction. However, Ms. Freeland seems to have adopted that perspective in her economic statement.

In your opinion, what does better cooperation among the different levels of government look like?

[Carlos Castiblanco]

The current agreement between Ottawa and Quebec does not involve municipalities directly, but it does allow for the rights of each province to be respected. In the case of an interdepartmental agreement, better cooperation also allows the expectations of a provincial government to be conveyed to the federal government and allows for the federal and provincial expectations to be communicated to the municipalities. That suits everyone and means that the needs of all levels can be analyzed, instead of jumping from the federal level directly to the municipalities.

Even though excellent results were achieved in Ontario, a number of agreements were signed with certain cities under the same program. We agree that it also works for the agreement we have between Quebec and Ottawa.

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

Thank you.

Bill C-56 proposes to remove the GST for the construction of rental housing. Would it have been useful for the government to consult the provinces so they could better align their tax policies in this regard?

[Carlos Castiblanco]

For the moment, what the government has done is rather to encourage the provinces to take similar measures of their own. The economic statement established that some provinces were going to do that and were going to eliminate their own taxes on new buildings.

That is a good approach. However, the federal government also cannot force the provinces to take measures of this kind. It can only suggest that they follow the measures it has already taken.

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

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie.

Now we'll go to MP Blaikie.

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

Thank you very much, Mr. Chair.

Mr. Boswell, obviously in Bill C-56 there are some important new powers that the bureau will be getting, and presumably there are some commensurate expectations as well. I'm wondering, does your office need some time after royal assent in order to prepare for managing those new powers, or are these powers that, in your opinion, your office will be able to implement immediately?

[Matthew Boswell]

One of the amendments will come into effect only the year after, which is good. We can engage, as we do, in transparent communication with the market about making changes so that they're in compliance with that amendment when it comes into effect.

The repeal of the efficiencies exception defence will not require us to do a heck of a lot, because it will in fact take a lot of work—complicated, expensive work—off our plate that we've been engaged in since 1986. That will be very positive.

On market studies, as I say, we already do them. We're excited about the idea of having the ability to compel information in connection with a formal market study power. That won't add a tremendous amount to our workload either.

As I said in the opening statement, when there are amendments to the law.... With the 2022 amendments to the law, we engaged in a process of publishing guidance for the business community about how we were going to approach the different amendments, and we will do that on a regular basis with any amendments to the act.