Evidence of meeting #133 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was carbon.
A recording is available from Parliament.
Liberal
The Chair Liberal Peter Fonseca
We're going to suspend. I'll confer with the clerk and get back to you.
Liberal
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
I will now apologize and not resign.
Liberal
The Chair Liberal Peter Fonseca
Minister, we are moving to MP Weiler.
MP Weiler, you will be our last questioner.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
On a point of order, Mr. Chair, I won't speak anymore, but could you give the minister 15 seconds to comment on that, please?
Liberal
The Chair Liberal Peter Fonseca
Minister, if you would like 15 seconds, go ahead. Then we'll be going to MP Weiler.
Liberal
Chrystia Freeland Liberal University—Rosedale, ON
I'll just say two things super quickly.
We all want jobs and growth. The way to get jobs and growth is to pass Bill C‑59. This includes essential ITCs.
I was in Calgary last Friday. Alberta industry leaders said to me, “Why the heck can't you get those measures passed into law?” It makes me quite sad to say it's because of Conservative MPs that we can't do it. Let's just get together on this. Let's pass these measures.
Liberal
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
Thank you, Mr. Chair.
I want to thank the minister for being here today to answer questions on Bill C-59.
I want to pick up on the last line of questioning, and thanks, Minister, for sharing the good news about the level of foreign direct investment we're seeing in Canada right now, particularly in the battery supply value chain. I know that Bloomberg has rated Canada the number one country in the world for that, but unfortunately we're not seeing that level of investment in all areas of our economy.
Much of the discussion recently has revolved around the impact of the price on pollution on the cost of things like fuel and gasoline, but we know that it's the global price of energy that has disproportionately impacted people. No rebate is coming with that when the global price goes up. It's the illegal and unprovoked invasion of Ukraine that has disrupted the energy market and is really driving that. That money is going into profit. I saw a recent report that the five biggest oil and gas companies made almost $38 billion in profit in 2022.
It's great to hear that companies in that sector are asking us to move ahead with the carbon capture and storage investment tax credit in this measure.
I am hoping that you can share with this committee what you're hearing from those companies. How quickly are they ready to move on making the critical investments that will drive jobs, create economic growth and help reduce emissions from Canada's largest and fastest source of GHG emissions?
Liberal
Chrystia Freeland Liberal University—Rosedale, ON
I am not going to speak for them, but I will say—because they've been very clear publicly about this—that if we want to get projects built that will reduce emissions and create great jobs at the same time, we need these tax credits passed into law. Really, there can be no excuse for delay. I think we need to act with alacrity.
I would urge all MPs, but maybe particularly Alberta MPs, to join our government in supporting these historic job-creating measures. They show that you can and you must have a climate plan and an economic plan at the same time. The reality is that the best economic plan is a climate plan, and the best climate plan is an economic plan. That is what these measures represent.
I'm also really glad, Patrick, that you mentioned the illegal Russian invasion of Ukraine as an economic issue. We spoke about it earlier as a gross violation of international law and of the sovereignty of human rights, but this war has also impoverished us all and driven up costs for every single family in Canada. That's why, towards the end of this testimony, this is a nice opportunity for me to highlight that, as the Prime Minister promised on February 24 in Kyiv, Canada is supporting the brave people of Ukraine in their fight against Putin. That's a fight for the international rule of law, but it's also a fight for getting the global economy back to normal. It's a fight for people's pocketbooks.
I was really glad that our country yesterday was able to send $2 billion of support to Ukraine. The Ukrainians got it yesterday, and their Prime Minister got in touch with me to say, “Thank you very much. This is making a big difference.”
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
Thank you for that.
I just want to pick up with one last question in the remaining time on the revenue-driving side.
In Bill C-59, we have legislation related to the digital services tax. I'm hoping that you might be able to explain how this fits into our OECD pillar one commitments to implement this multilaterally.
Liberal
Chrystia Freeland Liberal University—Rosedale, ON
Canada has been working assiduously with our international partners on the two OECD pillars. These are about fairness. These are about preventing a race to the bottom in global taxation.
On pillar one and on the DST, this legislation is important in moving forward with that. We always prefer a multilateral approach and a multilateral solution. I have been having some good, collaborative conversations about this with many international partners and specifically with Secretary Janet Yellen, the Secretary of the Treasury.
Maybe this gives me an opportunity to give a final shout-out to Chris Forbes, our deputy minister of finance, because he and team Finance at the officials level have also been having some good conversations with our international partners, very much including the U.S., on this issue.
Thanks, Chris.
Liberal
The Chair Liberal Peter Fonseca
Thank you, MP Weiler.
Thank you, Minister Freeland and Deputy Minister Forbes.
That is the hour we had set down for Bill C-59.
We are now moving to another study we have on main estimates, and you'll be here with us for the next half-hour. That will allow us to get through a new full round on this. Each party will have up to six minutes to ask questions.
We'll start with MP Hallan, please.
Conservative
Conservative
Adam Chambers Conservative Simcoe North, ON
Thank you very much, Mr. Chair.
Minister, you and I agree on one thing. I think the officials at Finance are the absolute best in the entire public service. They are very capable folks. I appreciate your appearance earlier on Bill C-59.
I'm going to try to bring this up and Bill C-59 together a bit, if you'll indulge me. How many FTE people will we hire as a results of Bill C-59?
Liberal
Chrystia Freeland Liberal University—Rosedale, ON
Thank you for the question. It gives me an opportunity to highlight the work of Treasury Board and my colleague Anita Anand on bringing into action our refocused government spending initiative.
I agree with you about the excellence of Finance officials and the importance of a strong and effective public service. I also agree that it's important to be sure we are carefully reviewing government spending, including on our public service, and that it is effective. That's why this exercise has been so important, and it's making a difference.
Conservative
Adam Chambers Conservative Simcoe North, ON
I don't think you know this, and that's okay, but for every financial piece of legislation that's been sent to this committee, including all of the budgets, we ask the same question: How many FTEs will be hired as a result?
The departmental spending plans that are released every year consistently show that full-time equivalents will drop by about 2% every year, except that when the year ends and we get the updated report, FTEs go up. I'm not really sure whether it's a Treasury Board issue or a Finance issue. It doesn't really seem like anyone is paying attention to a people plan, because every year, that goes up when the government's projections have gone down.
We see this in the underused housing tax. You projected the underused housing tax would bring in $200 million a year in the first year and then $170 million every year thereafter. The numbers are in. Since 2022, the government spent $59 million in administration, including hiring 350 people. It has assessed only $49 million in penalties. That's assessed, not collected. In fact, it hasn't even started collecting any money yet.
How has the government's projections been so far off on the underused housing tax?
Liberal
Chrystia Freeland Liberal University—Rosedale, ON
There are a lot of different things mushed together there, but let me make some key points that matter for Canadians.
First of all, I do share what seems to be your point—that it is important for government to be effective. That's why our exercise in refocusing government spending for a total of $15 billion is a really important exercise. It's important to show Canadians that we are careful, and we think it is important to be sure that money is spent where it can have the greatest impact for Canadians—for example, on things like dental care.
When it comes to our numbers and projections, I made a commitment in the fall economic statement to hit some specific fiscal guide-rails, and I will live by that commitment. Today is not the day that we're presenting the budget, but we are going to hit those guide-rails.
Liberal
Chrystia Freeland Liberal University—Rosedale, ON
I'll make a final point here.
I'm glad to hear you, Mr. Chambers, being keen for the government to raise more revenue. You, Mr. Blaikie and I seem to agree that we need to have sufficient revenue to fund the things Canadians need.
Conservative
Adam Chambers Conservative Simcoe North, ON
Minister, with respect, the question is more whether it's a good deal for taxpayers to spend $59 million in administration to collect far less than $59 million. Is that a good deal?
