Finance Committee on April 9th, 2024

[Lucas Claveland]

First of all, thank you very much for the question, Mr. Lawrence.

I understand why you're asking it. I'm sure that the constant phone calls to your constituency office are getting a little tiresome, so I appreciate the opportunity to speak to this group.

Yes, there's definitely an affordability crisis, and it's very much being felt in Cobourg. I speak from personal experience as a single father, as the mayor of the town of Cobourg and as a part owner in a grocery store. I can't live in Cobourg without a roommate, let alone afford a house in our community.

Where do you want to talk about affordability? Do you want to talk about infrastructure affordability and the downloading of infrastructure from this level of government to municipalities? I have a pier that was given to Cobourg in 2004 with a $400,000 cheque. At present, we're sitting at a $40-million to $60-million renovation for our pier with 20,000 residents, yet this level of government found the money to put a brand new Coast Guard station on the end of that pier, and it's about to fall into the water. Where do you want to talk about affordability?

The constituents of Cobourg are using food banks. We are constantly being inundated by requests for more funding from a municipality of $30 million to fund our food banks because our middle class can't afford it.

I appreciate the question, Mr. Lawrence. I guess I'm curious as to what part of our affordability crisis you are interested in.

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

Maybe we'll start off with housing. Could you elaborate on the average cost of a house, if you know, and perhaps what the vacancy rate is for rentals in Cobourg?

[Lucas Claveland]

As a business owner, one of our biggest problems is retaining staff, because there are no available rentals in our community. A one-bedroom apartment in Cobourg currently rents for about $1,950, and for two bedrooms, you're at $2,500-plus. At present, our community has to bring in between five and eight school buses of workers, because we have such a booming industrial complex within our community. We have zero square feet of industrial space. Our entire downtown is full of businesses like it hasn't been in 45 years, yet we don't have anywhere for workers to live in our community.

I notice in Bill C-59 that there are a lot of initiatives being put forth. We know at the county level as a service provider that the way we work with the different levels of government matters. I have a variety of recommendations that I will submit to this committee afterwards regarding how we can implement some of these changes in a more meaningful way that will help those service providers, but, Mr. Lawrence, the reality is that when the mayor of the community he lives in, who owns a business, can't afford to live in that community, that's just the tip of an iceberg that clearly is a problem we need to start addressing.

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

You also mentioned that you're the owner of a grocery store. Perhaps you could talk a little bit about the price of food. I also know that you personally donate on a regular basis, I believe, some of the food to the more vulnerable as well. Thank you for that. Maybe you could comment a little on the price of food.

[Lucas Claveland]

By all means, and thank you for the opportunity.

Yes, we are in the grocery business. We are a fresh food producer. We're the first of its kind, a zero waste producer. We have an eco-conscious business, because we realized eight years ago that this was what was going to happen with the cost of food, so we have a zero waste policy. In that business, we are barely able to break even, but we are a small grocer in a downtown market, and the way we stay in business is through that zero waste policy.

I speak to this because the cost of food in just the last five years from a wholesale perspective has literally tripled, so the cost to a business owner who's selling food has tripled. That goes across the line for all the restaurants we supply. That goes for everyone.

Yes, we are seeing the cost of food increase at such dramatic rates that the people in Cobourg can't even afford the quality of life they had five years ago.

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

It's a sad story.

I'll finish up with the Canada water agency, which was announced in Bill C-59.

Cobourg Beach is an absolutely beautiful treasure. I think it is one of the prettiest places in all of Ontario, but the pier is in need of some repair. Perhaps you could talk a little bit about that.

[Lucas Claveland]

This is of particular interest to me. I am the regional chair of the Great Lakes and St. Lawrence cities initiative, an international agency involving our indigenous allies in Canada as well as U.S. and Canadian municipalities. In the last year, we've grown from 80 individuals to, I believe, 256.

We are unbelievably proud of and excited about the creation of the federal water agency and the funding that is going in that direction. However, we need to start looking at our Great Lakes as the resources they are. They are an opportunity to protect our environment, they are an opportunity for economic growth and they are an opportunity for true environmental stewardship.

When the U.S. government is beating us to the punch in environmental stewardship, I know it's time for us to actually make changes in our country. The reality is that Cobourg Beach is just one of thousands of communities along our Great Lakes coastlines that need help from this level of government in the form of dedicated infrastructure funding.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Thank you, MP Lawrence.

Now we're going to hear questions from MP Thompson.

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

Thank you.

Welcome to all the witnesses.

Mr. Thurlow, I'd like to start with you.

Without a climate plan, there is no economic plan. With that in mind, how does carbon pricing make the economics of your project work and turn your project into a revenue generator?

[W. Scott Thurlow]

In 2021, when the project was first announced, the CEO of Dow made a very public declaration about how important it was to have a market-based carbon trading regime. He used the opportunity to actually call on the United States to create a similar regime there.

For a net-zero facility, an escalating price on carbon is obviously another tangible asset we can sell to make the business more profitable.

In Alberta, there are going to be a lot of individual companies that will have an obligation either under the GGPPA or the Alberta TIER system. These carbon credits have a value, so as the price increases, that is more capital that can be generated to justify these very significant investments.

I will point out that, at this time, these investments don't exactly pencil, which means we are doing them because they are the right thing to do, but there is no intrinsic value in the product that we can see returning to our investors. Having the price in the federal backstop is something that we can build directly into our economic model.

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

Thank you.

Could you tell the committee why the company chose Canada and not the U.S.?

[W. Scott Thurlow]

This is a very long and complicated discussion. We have made significant new investments in the United States as well. It is a very delicate negotiation.

The government support that we received is very important. Whether that's in the form of a tax credit or in the partnerships we have with the City of Fort Saskatchewan, the Province of Alberta and the federal government, it is all part and parcel of it.

However, as a government, when you are looking to make investments and see them come to your jurisdiction and you want to land a big fish, you need to use the right bait, and you don't go fishing for muskies with minnows. These tax credits are going to be incredibly important for what is ultimately going to be a total investment of $13 billion to $14 billion.

As I said before, at the peak of construction, that includes 7,000 jobs, and those 7,000 jobs put income taxes back into the federal reserve.

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

Thank you. This is interesting.

I come from Newfoundland and Labrador on the east coast. The witness who was here from the trades council referenced the number of projects across the country, which includes a significant number in my province. The investment tax credits and the certainty around them is incredibly important right now.

Can you please link back to the significance of moving this bill forward? What will that do for market stability and the ability of businesses to be confident that they can invest in Canada?

[W. Scott Thurlow]

Like Mr. Strickland said before me, the sooner this bill passes, the easier it will be for those investments to come to the fore.

We have made a final investment decision, but we're a long way from putting our project back in operation. We want to put it back in operation by 2030, so the sooner this bill passes, the better.

We'd like to see the hydrogen tax credit that's going to be in the next one pass as quickly as possible as well.

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

Do you have any final words on what you would see as the economic promise of Canada going forward?

I'm saying that as someone from the east coast, where I regularly speak about the opportunities for Newfoundland and Labrador in the climate crisis, for moving forward in greener technologies and what this means for the province in terms of economic growth.

In general across Canada, it's a difficult time. I know people are feeling quite uncertain, but at the same time, I feel that there is an economic opportunity happening.

I would appreciate your thoughts.

[W. Scott Thurlow]

I don't want to create a Canadian heritage moment, but you're right. There are many opportunities in Canada. With the advent of the new chemistries that are being developed and the solutions that are on the table, we can attract them to Canada.

If we don't have the right environment to attract those investments, we won't. It is that simple.

I would tell you that the more of these investments we can attract to Canada with a very strong regulatory environment and strong status of laws, this is better not only for the Canadian economy, but for the global environment on the whole.

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

One final word is that we need to get this bill passed.

Thank you.

[The Chair, Liberal, Peter Fonseca]

You still have a lot of time left, Ms. Thompson.

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

It's been said, so thank you so much.

[The Chair, Liberal, Peter Fonseca]

Now we'll go to MP Ste-Marie, please.

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

Thank you, Mr. Chair.

I would like to welcome the mayor and all the witnesses, whose presentations were interesting and provided much food for thought.

First, I have a comment for the representatives of the Canadian Counselling and Psychotherapy Association.

Thank you for being with us, Ms. Thomson and Mr. Maringapasi. I also want to thank you for your presentation and your suggestions for improving this bill. We are working hard on it.

Thank you for being with us, Mr. Castiblanco and Ms. Levac. I also want to thank you for your presentation and the brief you provided to us. That document is very useful.

Ms. Levac, regarding the part of the bill that deals with the Competition Act, can you explain again why the amendments you are suggesting are important?

[Sara Eve Levac]

In our opening remarks, we talked about the right to repair. We explained that in reality, it can be difficult to repair a lot of products, because you need specialized tools and the parts are difficult to obtain. Our fear is therefore that the provision requiring that a means of diagnosis and repair can be readily supplied might mean that a lot of products are exempted from this new obligation.

Consumers also have trouble getting their property repaired because repairs are very expensive. Sometimes it is better to buy a new product because the cost of repairing is very high and obtaining the parts needed can take several months. The bill does not address those problems for consumers. It might therefore be desirable to consider a provision that the time for obtaining parts and the cost of repairs must be reasonable.

We also talked about applications brought by private parties. Bill C‑59 will expand the possibility of bringing private applications for violations of the Competition Act. We believe that is a positive improvement. The bill will also allow monetary awards to be requested for certain violations of the act, but not for deceptive marketing practices. We therefore recommend that this be made possible.

On the subject of greenwashing, the bill will prohibit false or misleading representations about a product. However, that proposed prohibition would not apply to general representations about the environmental impact of a business. For example, if a business says it is carbon neutral, that is not a representation about a product. We are therefore asking that the prohibition be extended to general representations made by businesses. That exists in the European Union, which has adopted a new greenwashing directive that specifically applies to general representations by a business.

If I may, I would like to talk about one last thing. The bill proposes a new system for the certification of agreements or arrangements related to protecting the environment. We have questions about that provision, however, primarily about the grounds provided by the bill for rescinding certificates. At present, the grounds for rescinding a certificate do not include circumstances in which an agreement no longer serves a purpose. For example, if two businesses agreed to change a chemical component of a product because it would be less harmful to the environment, and scientific discoveries subsequently proved that the component had negative effects, that would not be a circumstance that could justify a request to rescind the certificate, according to the terms currently provided in the bill.

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

Thank you. That is very clear and very useful.

Mr. Castiblanco, this afternoon we will be hearing from representatives of Electricity Canada. They are going to talk to us about tax deductions for interest expenses. Obviously, it is important to do more to combat the use of tax havens and tax avoidance, and those deductions are one of the methods used. We welcome what Bill C‑59 provides in that regard.

That said, I would like to understand better why the electricity sector should be excluded from that. What would Bill C-59 prevent by wanting to more effectively combat the use of tax havens?

[Carlos Castiblanco]

Thank you for the question.

The goal of the bill is to tackle this problem by targeting the multinational corporations that make extensive use of tax havens. Unfortunately, the definition now found in the bill is a bit too broad, and this means that electricity companies might also be affected, since they are very large corporations. Their debt structure is very large, and they carry out projects for the benefit of us all. Small businesses that grow to a certain threshold and corporations that do most of their business in Canada are already excluded. So there is a degree of protection.

However, we are preparing to enter a period of investment in energy and in electrification of many services. In some provinces, certain corporations are regulated. There are corporations, especially in the public sector, to which this measure does not apply. That will create an asymmetry and a potential rate increase, since customers of the corporations affected by this new rule might see their rates rise, but not customers of the other corporations.

It is important to note that the OECD itself is proposing an exclusion for public benefit projects. Are electricity and electrification for the public benefit? I would say yes. In a context where we are seeing climate change and investment in new energy sources, this is very important. That is why we are requesting this exemption.

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

That is very clear, thank you.

I see that time is marching on, so I will stop here, Mr. Chair.

Thank you.