Finance Committee on April 9th, 2024

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Davies.

MP Davies, that is how we have conducted our business here at this committee. That's how I've chaired these meetings, and that's how I will continue to chair these meetings, as long as the members agree to that.

I will now go to MP Chambers.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, Mr. Chair.

I'd like to move to a vote very quickly, although I was persuaded to make a comment.

I find the comments from my new NDP colleague on the committee quite persuasive. We know the results of the vote.

However, I'd like to make an offer to the government members, since they're so concerned about moving this bill very expeditiously, which was introduced prior to Christmas. We'll be here until 7 p.m., and I'd be prepared to move a unanimous consent motion to send this bill immediately back to the House unamended.

You can call me at any time to do that. I don't think I'll get a phone call, because we all know there are very substantive amendments coming to this bill in two areas that haven't been tabled, which is why the bill has being delayed.

The bill has not been delayed because of Conservatives. The bill has been delayed because there are problems with the legislation, and everybody knows that.

The problem with this town is that everybody talks. We know there are substantive amendments coming to the bill, and if you would like to move it unamended, you could take me up on my offer at any point between now and 7 p.m.

Thank you very much.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chambers.

Very sincerely, I apologize to the witnesses that you have had to experience this and have gone through this exercise we have had here. Unfortunately, you were not able to answer many of the questions that I'm sure many of the members have for you.

Because we did not have the time with this panel as well as the panel before, members will submit their questions for the witnesses. The answers will be sent to the clerk, and they will be incorporated into our report. We thank you very much.

At this time, we are going to transition to our third panel.

I'm sorry. There's the vote.

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

On a point of order, this is a democracy, Mr. Chair. Your authoritarian regime—

[The Chair, Liberal, Peter Fonseca]

I'm trying to stay on time here.

Clerk, please call the vote.

(Motion negatived: nays 7; yeas 5)

The motion is defeated.

We'll suspend.

[The Chair, Liberal, Peter Fonseca]

Members, we are back.

We have some excellent witnesses with us. From Alaphia Financial Wellness Inc., we have financial planner Natasha Knox. She is joining us via the web. From Canada's Building Trades Unions, we have the executive director, Mr. Sean Strickland, who is with us. From the National Council of Unemployed Workers, we have their spokesperson, Pierre Céré.

Welcome.

We are going to start with opening remarks by Natasha Knox, please.

[Natasha Knox, Financial Planner, Alaphia Financial Wellness Inc.]

Thank you, Mr. Chair and committee members, for allowing me to speak with you today.

I have four main points I'd like to address that concern planning for people with disabilities that I have encountered in my private practices. I think if these issues were addressed, it would be greatly helpful to people with disabilities and their families. It would be a ray of hope for a more inclusive and supportive future.

The first thing I'd like to talk about is with respect to the inclusion of siblings as successor holders of RDSPs, which is part of Bill C-59. This change, which I am very heartened by, addresses a very real need and concern for parents of children with disabilities. It makes their planning process more streamlined, more flexible, and it gives certainty and comfort around knowing their children's savings will be seamlessly managed when they're gone. This is a major worry for people who have children with disabilities.

However, this measure is still temporary, and it expires at the end of 2026. I believe this excellent measure should actually be made permanent. I would hope that whatever negotiations or mechanisms need to be implemented to make this change permanent can be done.

The second point that I would like to talk about today concerns specified disability savings plans. These are for beneficiaries who have shortened lifespans. Regular RDSPs can be designated as specified disability savings plans when a doctor or a nurse practitioner provides a written opinion that the beneficiary is unlikely to live more than five years. At a really high level, the current provisions allow for a withdrawal of up to $10,000 of the taxable disability assistance payments or the LDAP formula, whichever is greater, without having to repay the grants and bonds.

The issue here is that with older plans that were funded early on, the taxable portion of those plans could be well in excess of $50,000—so $10,000 times five years. With a beneficiary with a significantly decreased life expectancy, this current structure ends up creating estate value, which is not the purpose of these plans. These plans are intended to help the lives of people with disabilities while they're living. What would be more helpful instead would be perhaps a percentage withdrawal, rather than a specific dollar value limit that would allow those people with disabilities, who also have a shortened life expectancy, to properly access their savings, to make their lives easier and more comfortable in their final years.

My third point today concerns inter vivos Henson trusts. It would be helpful if those could regain access to the principal residence tax exemption. The loss of the principal residence exemption for these types of trusts happened in 2016. It has had unintended consequences for people with disabilities, who have a property that they live in in this type of trust that was set up for them prior to 2016. The particular issue here is that the 21-year rule causes a deemed disposition and causes capital gains to be paid on all trust assets. Without the principal residence exemption, these trusts have to pay capital gains based on the increase in the value of the property since 2017. This is unjust since these properties are in fact the principal residence of the person with disabilities living in them. Further, it's problematic, because it imposes hardship on the beneficiary if the trust assets don't have sufficient money to pay the capital gains.

The final piece I will mention today is around expanding access to the disability tax credit itself for people who have a diagnosis of a degenerative illness or an episodic disability. The disability tax credit is the key that unlocks access to lots of programs, including the ability to establish a RDSP, which is the aspect that I personally encounter in my work. When we're talking about RDSPs, the time value of money is significant. The earlier on that a person can start saving, the more meaningful those savings become.

It's a real shame that someone who has a diagnosis of something degenerative in nature like MS, for example, that progresses over time, is unable to start saving. They could get the grants and bonds and all of the sheltered growth on those savings when they first get the diagnosis versus the situation now, which is that they have to wait a number of years for their condition to get bad enough to qualify for the DTC in order to even open up an RDSP.

Recently there were some provisions made, which was a really great step in the right direction for people with type 1 diabetes to automatically qualify for the DTC. What I would love to see is if we could make even more strides in that direction and continue expanding access.

Thank you very much for giving me the opportunity to speak with you today.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Knox.

We'll now hear from Canada's Building Trades Unions.

Mr. Strickland, please go ahead.

[Sean Strickland, Executive Director, Canada's Building Trades Unions]

Thank you, Mr. Chairman and committee members.

My name is Sean Strickland, and I serve as the executive director of Canada's Building Trades Unions, the national voice for over 600,000 skilled tradespeople in Canada who belong to 14 international unions and work in more than 60 different trades and occupations.

I am pleased to be here today to talk about the positive impacts that the skilled trades anticipate from the investment tax credits and the substantial benefits to the broader construction industry from the measures in this bill.

I want to be clear with members of the committee that the investment tax credits are a game-changer for all construction workers, union and non-union. We urge Parliament to move forward as quickly as possible. That's because, for the first time, government incentives in the tax code that encourage investment in priority projects are being directly tied to delivering benefits for skilled trades workers. The investment tax credits are a true win-win for skilled trades workers, businesses investing in clean technology and for all Canadians.

Bill C-59 will require that companies that are claiming ITCs and investing in projects involving clean technology, clean hydrogen, clean electricity, nuclear and carbon capture that want to receive the maximum benefit must pay good wages—union wages and benefits—to the skilled trades workers who are building these projects.

The prevailing wage requirement in the investment tax credit is, without a doubt, the best definition of prevailing wage in Canadian labour history. Regardless of whether a skilled trades worker is one of our members or not, they will be paid the robust wages and benefits we've negotiated through multi-employer collective agreements.

This bill is also a monumental win for developing our Canadian skilled trades workforce. The provisions of the investment tax credit require companies to hire apprentices. This is important. Developing the skilled trades workforce for the future requires high-quality, well-paid apprenticeship opportunities. It is critical that companies receive incentives to invest in training of the next generation clean economy workforce, and the 10% apprenticeship requirement is an outstanding measure to help ensure that we're doing what we need to do to build the clean economy workforce of the future.

Moreover, because of the strong prevailing wage requirements, many more Canadian workers will be attracted to the skilled trades to the benefit of them and their families. Beyond benefits to the workforce as another critical reason to advance this bill, there is regulatory certainty. You've heard that from other delegations today. There are tens of billions of dollars in final investment decisions—and I don't say that lightly—awaiting the certainty that the passage of this bill will bring.

From new net-zero petrochemical production facilities in Alberta and carbon sequestration to small modular nuclear projects in Ontario and New Brunswick and hydrogen projects in Atlantic Canada, there are billions of dollars on hold that can start flowing into our economy, including wages into the jeans of Canadian workers.

We know that these measures do work. We've seen it in the United States under the Inflation Reduction Act and the CHIPS act. On behalf of the members of Canada's Building Trades Unions, we have one overriding message to this committee: We can't wait.

To the benefit of Canadian construction workers, our environment and the Canadian economy, we look forward to the passing of this bill. Let's get to work.

Thank you, Mr. Chairman.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Strickland.

Now we will hear from Pierre Céré of the National Council of Unemployed Workers, please.

[Pierre Céré, Spokesperson, National Council of Unemployed Workers]

Thank you, Mr. Chair.

Ladies and gentlemen, members of the House of Commons Standing Committee on Finance, thank you for inviting me to appear before the committee.

I represent the National Council of Unemployed Workers. You will understand that the word "unemployment" is not a word or a fact we are afraid of. In our economy, unemployment is a fact of life in the labour market.

Today is my birthday. I am 65 years old, and I have been involved in the unemployed workers movement for 45 years, since 1979, in fact. In appearing before you today, I have only one wish: that at the end of this discussion period, you keep in mind the importance of a social measure like employment insurance, which is an important part of the social edifice of Canada itself, a social program that falls squarely within the political and constitutional powers of Canada.

In the 45 years I have been involved, I have seen and understood what has been done to this program, how it has been damaged, starting in the 1990s, how entire segments of the existing social protections were dropped, how it has been downgraded. Its name was even changed in 1996 by replacing the word "unemployment" with "employment". We are no longer insured against unemployment, we are insured for finding a job—which is just a figure of speech.

There are some who see this program as just a column of figures. We see human beings, working men and women. As I speak, there are more than a million active employment insurance claimants from coast to coast. In the last year, starting on April 1, 2023, over 3 million claims were processed and 2.5 million people received benefits under the scheme. Canada's labour force consists of about 21 million people. These unemployment rates, despite the fluctuations, nonetheless remain low. In Quebec, we have become the Canadian champions when it comes to low unemployment rates. In fact, we account for only 17% of the benefits paid to active Canadian claimants.

I am not here to ask or beg for anything. I am here to try to show you a vision, a vision of a social program that is important in the lives of hundreds of thousands of Canadian families, a program that is important for hundreds of thousands if not millions of working men and women who are going through periods of unemployment, whether short or long, depending on the job situation.

The present government formally committed to undertaking a comprehensive reform of the employment insurance scheme, to modernizing it and to bringing it into the 21st century. Between 2021 and 2022, we participated in countless consultation sessions. The reform was to take effect in the summer of 2022, before it was pushed back, more than once. We believed in it until last year's budget was announced. There was nothing in that budget, not one measure relating to the protections provided by employment insurance, a big fat nothing.

In the November 2023 economic statement, four additional weeks were added to the five already provided in a pilot project for seasonal workers in 13 administrative regions of Canada. That was it. That measure will end on September 7. Once again, it is just a temporary measure.

My message is this: We need meaningful or impactful measures to help working people during periods of unemployment. We need solutions to real problems, the problems of seasonal workers and of parents, especially women, who lose their jobs while on parental or maternity leave and find themselves with no protection. Family caregiver benefits for adults, which are only 15 weeks, have to be increased. General eligibility for the scheme has to be improved, for example by making the penalties for terminations of employment for reasons considered to be invalid more flexible. There is much to be done.

When I finish speaking, it will be up to you, the MPs on this committee, to go back to your respective caucuses in anticipation of the budget. It will be up to you to put the subject on the table. After all, you must know how important it is, since there are people going to your constituency offices to ask for help because of problems relating to employment insurance.

Don't wait until the next crisis. It will come, that is for sure. Always remember that we are talking about working people when we talk about columns of employment insurance figures, that we are talking about working men and women, about human beings.

Thank you for your attention.

[The Chair, Liberal, Peter Fonseca]

Merci, Monsieur Céré, for your opening remarks.

On behalf of the Standing Committee on Finance, I congratulate you and wish you a happy birthday.

Members and witnesses, we are moving to questions. In this first round, each party will have up to six minutes to ask the witnesses questions.

We are starting with MP Morantz for the first six minutes.

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

Thank you, Mr. Chair. I want to thank our witnesses for being here.

Mr. Strickland, I want to thank you for being here. I want to ask you about something.

Last year, just after Minister Champagne announced the deal to give $15 billion to Stellantis and NextStar to build the Windsor plant, it came to light that NextStar was hiring at least 900 foreign workers to do that work. You were in the media quite a bit about this. Since you're before the committee now, I want to give you the opportunity to express your concerns around that issue. It goes without saying that $15 billion is an awful lot of taxpayers' money. For the minister not to cut a deal to guarantee that the skilled trades in Ontario would do this work seems to me to be negligence, essentially.

You've been on the record as calling this a slap in the face to Ontario workers. You said that Ontario construction workers are fully able to construct the plant and install the specialized equipment required, and it's an insult—very strong language—to skilled trades to suggest they are unqualified. You said it's absolutely unconscionable.

I'm going to give you a platform here to tell my Liberal colleagues on the committee exactly what you think in person.

[Sean Strickland]

Thank you very much, Mr. Morantz.

I stand by my comments that I made back in November and December. I can say that right now in Windsor on the NextStar plant there are approximately 1,400 Canadian workers building the base building. That will peak at about 1,600.

We still have some concerns around the procurement methodology for the process equipment and install, and we have not satisfactorily resolved how many Canadian workers we're going to be able to provide jobs for to install that process equipment right now. We're continuing to work through that process with the federal government and also with NextStar, i.e., LG and Stellantis.

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

Okay.

The deputy governor of the Bank of Canada recently said that we are in the middle of a serious productivity problem in this country. I think she said something like, in case of emergency, break the glass. You talked about the tax credits but if you think about the demands for skilled workers in this country over the next eight to 10 years.... CMHC has said we need to build an additional three million homes. There are all the billions of dollars in projects that you talked about for small nuclear reactors and a number of other infrastructure projects in the energy sector that you touched on in your opening statement.

From your perspective, does Canada have the skilled trades or will it have the skilled trades it needs to meet its obligations to build these projects over the next time horizon?

[Sean Strickland]

That really is the secret sauce to determining how much labour we need for projects that aren't strictly defined. Many projects that would appear on a pipeline of projects await final investment decisions. One of the challenges that we have in the construction industry is providing enough skilled trades workers for the jobs that are actually going to happen.

I would say that in Canada, and I've said this previously, we lack a sophisticated labour market demand tool for construction. There are groups out there who do work around this, but the challenge really is in the methodology to determine how you plan to provide workers for projects that may or may not happen.

I would also say to you that the building trades have been around since 1908 and before that we've been around for hundreds of years, the guilds of Europe, etc. We've always found a way to train young people and bring apprentices into the industry to meet the labour force requirements of the future. Right now the current situation is that in Canada we bring in approximately 100,000 apprentices a year, union and non-union. That is enough to keep pace with our retirements. We have an aging demographic, so we're bringing enough in. We're marketing and bringing apprentices in and putting them to work enough to keep pace with the retirement.

When you overlay that with these future work opportunities, which still remain uncertain, we'll have a challenge. There are a lot of different ways in which we can address that challenge and I think the investment tax credits are a big part of that with mandatory apprenticeship requirements. I think we need to look at ways that we can leverage the immigration system to bring in more skilled trades workers into Canada, as well.

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

I just have a quick question.

I want to thank Ms. Knox for bringing up the RDSP. That policy was actually brought in by the last great finance minister of Canada—from the Conservative Party of Canada—Jim Flaherty. I can tell you that I used it myself. My son Nathan was diagnosed with autism when he was only two years old. I had a chance to thank former minister Flaherty personally—before he passed away, of course—for bringing in that program.

I want to thank you for your advocacy on that. If there is a way to make it better, I'm all for that.

Thank you.

[Natasha Knox]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Morantz.

Now we're going to MP Dzerowicz.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

I'm going to be splitting my time with Mr. Baker since we might only have one round.

I want to thank all of the witnesses for their excellent presentations.

I only have time to ask questions of maybe one, and they will be directed to you, Mr. Strickland.

In my riding of Davenport, I have a lot of members of unions, particularly construction unions. Ever since I was elected just over eight years ago, I've been very focused on them, very focused on their issues.

I will say to you that I'm very proud of our government. Over the last eight years, we've made huge improvements in worker rights and in more supports for unions. We very much started out with actually repealing two pieces of what I would consider very anti-union, anti-worker legislation when we first came in: Bill C-525 and Bill C-377.

I want to thank you for your leadership, Mr. Strickland. You have really pushed us to do quite a few things. I want to thank you also.... You were very laudatory today about the labour requirements around ITCs, as well as the funding that we have and the importance that we have in the fall economic statement around apprenticeships. Both are game-changers.

What I want to talk to you about is this: There are also measures in here around breaking down barriers to the internal labour mobility in our country and also around prioritizing construction workers for permanent residency. I would love it if you could comment on both of those. We have already introduced a new labour mobility tax deduction. Again, it's something that you very much championed, but now we're moving to the next phase to remove more barriers to internal labour mobility.

The second part is that we are actually, in our express entry immigration system, prioritizing construction workers. Can you talk about how important both of these elements are to our moving forward on the construction that we need, particularly in housing, across this country?

[Sean Strickland]

With regard to the labour mobility tax deduction, that was a very progressive measure that was passed in the previous budget, in 2022, I believe. That is something that Canada's Building Trades Unions has been working on for decades in terms of providing incentives for construction workers to leave their home provinces, their home communities, to go to work.

Previously, if you were to do that, the tax act was such that you weren't able to deduct any of those expenses related to that travel to work. That was an impediment for workers to go to where the work is. Putting that into place has provided an incentive, a benefit, for workers to relocate and now deduct some of those expenses from their income. It's not a credit but a tax deduction, which I think is critically important.

The second piece in terms of interprovincial labour mobility is that the unionized construction industry has a lot of mobility across provinces. That's the way we work. We work mostly on large projects. For example, at LNG Canada right now, I would say that we have 2,000 workers from all over Canada there in British Columbia.

With the provinces being responsible for labour, the challenge we have is with regard to the recognition of trades. In some cases, a Red Seal trade in one province isn't recognized as a Red Seal trade in another province, and this is vexing to our industry. It's something that should be solved, but it's been hanging around, in the nature of federal-provincial relationships, for over 25 years. That could be fixed, and that would help with labour mobility as well.

As for the third piece around express entry, we support that. With regard to express entry for immigration, our position is that the union should be allowed to act as the sponsor of the immigrant when and where a union is interested in doing so, because it's not homogeneous across the country. Some unions would like to do this; some wouldn't. However, where they would like to do it and where there's a need, we think it would be very beneficial to the industry and also to the new Canadian, because now they're in the union hall, and they receive the requisite training, English as a second language.... They're protected from exploitation. We're able to build our workforce in a more sustainable manner than with temporary foreign workers, for example.

[Julie Dzerowicz, Liberal, Davenport, ON]

Yvan.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

How much time do I have, Mr. Chair?

[The Chair, Liberal, Peter Fonseca]

You have just under two minutes.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you very much.

Thank you, Mr. Strickland, for being here and for your advocacy.

I noted during your presentation that you talked about the investment tax credits, the ITCs, being a game-changer for workers and for businesses.

Could you share with the committee and for the folks in Etobicoke Centre or across Canada who might be watching this what you think is the biggest impact of this legislation for workers? How will it impact the everyday folks, especially the skilled workers you're representing?