Finance Committee on April 11th, 2024

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

Thank you, Mr. Chair.

I am going to start with a point of order. We may have to go for votes in the House all night, and the votes may start around 5:45 p.m. I would ask you to let us know, over the course of the day, what your decision is as to what we are going to do for the last panel of witnesses we are supposed to hear today, out of respect for them. I do not need an answer right away, but the committee should have a chance to consider this question.

Greetings to all the witnesses. Once again, we have a very interesting panel.

My questions will be for the representative of Electric Mobility Canada, Mr. Breton.

The government has made announcements, but the details of the various criteria will be released later. What are the consequences for the companies you represent?

[Daniel Breton]

When the government makes an announcement, but that is not followed by the measure it has announced, the industry waits.

In March 2019, for example, the federal government announced a rebate on the purchase of an electric vehicle. However, because it had not specified a date or an amount, people stopped buying electric vehicles while they waited to hear the details. So for two months, we did not get anything.

In another case, there was an announcement about electric school and city buses. We had to wait two years to find out the details of the electric school bus program. This meant that transportation companies all across Canada, and all the people responsible for placing orders, waited two years to find out what the criteria for the program would be, so all electric school bus purchases came to a halt. As a result, companies had to lay people off, because they did not know what was coming. At the start, they thought they would place orders and hire staff to prepare for the wave of orders, but the two-year wait for the details resulted in a slowdown in the industry. In addition, when the announcement of the details came, it did not reflect the initial announcement, and so companies had to lay people off.

For off-road vehicles, the announcement was made a year and a half ago. I was very happy with it. Since that time, however, I have been contacting officials to get a definition of what an off-road vehicle is. It seems to me that this is not all that complicated; it is a vehicle that runs off-road. Our members and I are impatiently awaiting this information. During this time, there are companies that have laid people off, because the announcement has come to nothing.

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

It's extremely worrisome. The government needs to understand the message. The industry must adapt to its announcements, and so it's important for it to be consistent and to quickly publish the criteria so that the industry can adapt appropriately.

The government has still not come up with a definition of off-road vehicles. Do you have one to suggest?

[Daniel Breton]

Yes. As I said previously, it's not all that complicated. An off-road vehicle is a vehicle designed to operate off public roads. This usually brings to mind things like personal watercraft, snowmobiles and all-terrain vehicles, or ATVs, but there are also mining vehicles and airport vehicles like baggage tractors and airport snowblowers. These are not road vehicles. Fully electric models of all these types of vehicles are currently being built in Canada.

In short, whether we're talking about boats, personal watercraft, snowmobiles, ATVs, mining vehicles or airport vehicles, they all need to be included in the definition of an off-road vehicle. I'm extremely surprised that after a year and a half, we still don't have a clear answer. That's why we submitted our own recommendations and our own definition, which we developed on the basis of federal government criteria.

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

Can you repeat the changes you are proposing for Bill C‑59 with a view to further enhancing and supporting the industry?

[Daniel Breton]

It's simply to come up with a clear definition of what an off-road vehicle is, which should have been done in accordance with what was initially said in the 2022 fall economic statement, and in the 2023 update, with respect to clean technology and the zero-emission off-road vehicles described in class 56.

As I was saying, businesses, and even the government, need to be able to purchase these vehicles. The federal government should be setting an example. In a country like ours, we expect the government to purchase zero-emission snowmobiles, personal watercraft and boats for the various departments to use. It's all part of what is called the greening of the government's vehicle fleet. It's perfectly logical.

I would nevertheless like to make a point, after hearing someone talk about a free market as opposed to what we call a corporatist economy. Electric Mobility Canada is in favour of measures that would promote the purchase of electric vehicles, and funding for electric vehicle projects. Some people are saying that we should allow the free market to run its course, but that's nonsense. You're an economist, so you know it as well as I do.

According to figures released by the White House, the United States has been subsidizing oil companies for 111 years. According to the International Monetary Fund, in 2022, implicit and explicit subsidies, direct subsidies and tax credits for fossil fuels totalled $7,000 billion. So when I hear people talking about a free market, I find it amusing. Ours is not a free market. Some people say they want to support the free market, but that's just a fantasy. People who study these things are really studying something that doesn't really exist. In real life, there are all kinds of subsidies for companies, and the fossil fuel sector has been benefiting from it for 100 years. An industry like ours therefore has 100 years of catching up to do.

We're not asking for the equivalent of 100 years of subsidies to close the gap; far from it. It won't take anything like that long to catch up, because we are becoming increasingly competitive. Nevertheless, we need some startup assistance for Quebec and Canadian companies like Taiga, Theron and Voltari. There is also the Lion company, which has 300 suppliers across Canada. These companies need a hand to make up for lost time, in view of the subsidies given to oil companies for the past 100 years.

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

Thank you. That's very clear.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste‑Marie.

Next is MP Davies.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chair.

Thank you to all the witnesses for being with us.

Ms. Houle, in 2022, the Office of the Federal Housing Advocate released a series of research reports that explored the growing trend of financial firms using housing as a commodity to grow wealth for their investors. That report confirmed that this phenomenon, known as the financialization of housing, is contributing to unaffordable rent increases, worsening conditions and a rise in evictions. The research estimates that about one-third of all seniors' housing in Canada has been financialized, along with 20% to 30% of purpose-built rental buildings.

In your view, what steps should the federal government take to address this?

[Marie-Josée Houle]

This was the subject of a HUMA committee study not too long ago.

As you said, the research we've commissioned has clearly shown that financialization in the purpose-built rental market has caused great harm. It's not just a causal effect; there really is a correlation, especially in targeted areas.

The recommendations we had made at the HUMA committee included ensuring that real estate investment trusts are properly taxed, because they are subject to a tax loophole. We would also recommend instituting a capital gains tax on properties transferred or distributed to financial firms.

Of course, the GST rental property rebate that we talked about was extended to co-op housing, which is really wonderful.

Another recommendation would be to ensure that any public funds given to the private market actually come with strings attached to ensure actual affordability, which has to go beyond the first renter and the first buyer for investments in home ownership.

Of course, it's also important to look at the investment trusts—especially the federal investment trusts—and the pension funds need to be looked at to make sure their investments are not actually leading to social harm, because right now they are.

There are many more measures around security of tenure that need to be looked at as well.

[Don Davies, NDP, Vancouver Kingsway, BC]

It's a big issue.

You recently published a report on tent encampments across Canada that calls for urgent action on what you've described as a “life and death crisis.” That report, entitled “Upholding dignity and human rights”, outlines six calls to action to address ongoing encampments in Canada.

Can you provide this committee with a brief overview of those calls to action?

[Marie-Josée Houle]

What we're calling for is for the federal government to have an encampments plan, a national plan to lead the way that involves all levels of government, including indigenous governments, and that includes new funds. This plan needs to be in place by August 31 of this year. That date is really important, because that's when we start talking about what we do with people in encampments over the winter months. We can't have another winter with people in encampments.

We can't be robbing Peter to pay Paul either, so we need new funding that's directly related to this situation. It has to uphold the human right to housing, as well as indigenous rights. These elements need to be in place.

We also need to properly engage with people who are living in encampments. I can't stress this enough. It's not just a question of listening and saying, “We already have a plan, but we're going to listen to you and then implement what we always planned to implement ourselves anyway.” A top-down approach does not work. Working with people with the lived experience who are in encampments will shed a very interesting light on what's not working. Why are they choosing to live in such brutally vulnerable situations? Why can't they access shelters? Why won't they access shelters? What are the barriers? The barriers are different from one community to another, and the way encampments manifest is different.

The solution is not shelter; we're talking about the human right to housing, and permanent housing that meets people's needs is the solution. While we're waiting for that to happen, people's human rights to dignity and safety have to be met, and that means servicing the people in encampments.

[Don Davies, NDP, Vancouver Kingsway, BC]

You know, it's funny. Tonight when we leave these rooms, we will see people sleeping in the streets two blocks from Parliament Hill in the nation's capital. That's been a fixture in this town for as long as I've been a member of Parliament, and it's getting worse, so thank you for those words.

Ms. Love, first of all, thank you and all of Canada's dental hygienists for your contributions to Canadians' health. Dental care, oral health care, is primary health care, and thank you for your work in this.

I have two quick questions. I'd like to get the general reaction of Canada's dental hygienists to the Canadian dental care plan.

Second, what reason, if any, has the government given to you for that 15% discrepancy in fees to independent dental hygienists? I would think that independent dental hygienists, if anything, would have a claim for higher fees because they have overhead, but at least they should be paid equally to hygienists in dental offices.

What has the government told you about that?

[Ondina Love]

Thanks very much.

First of all, hygienists in Canada are thrilled to have a national dental care plan for Canadians, especially vulnerable Canadians, because dental hygienists are focused on preventing disease before it happens. That's why we're very pleased to be listed as a provider along with dentists and denturists in this historic plan, so $13.5 billion was totally supported.

Is the plan perfect? No, but we didn't expect it to be, and government said it won't be perfect when it's launched, but they've committed to work with us.

As for the fee disparity, we have no idea why, but we have met with the minister, and he has committed to look at the pay equity issues, especially since we're a primarily female-dominated profession. It is an issue. It's very complex because it's based on fee guides in every province and it's based on frequency limitations, and we're looking at pre-authorizations.

We're looking at the 15% disparity. There are some other issues we're looking at, but government is listening. We're meeting on a weekly basis with them, so we're committed to working with them to ensure that the oral health of Canadians is enhanced.

That's our bottom line. We'd rather work with government than against government to ensure that we can improve access to oral health care for Canadians. That's been our position all along.

We don't expect it to be perfect, but we expect government to continue to work with us to get it somewhere where it's reasonable and fair.

[The Chair, Liberal, Peter Fonseca]

We have about 10 minutes left, members and witnesses. We're going to do two minutes per party, and that will bring us to the top of the hour.

We're starting with MP Lawrence for a couple of minutes.

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

Thank you very much.

My questions will be focused on Mr. Wudrick.

You gave some great testimony with respect to competition, but, of course, the reason we are pursuing competition is to improve overall prosperity and do that by increasing productivity.

You've written in the past about the need for a productivity commission and the need for tax reform, which I think are all great ideas. What I don't think is getting across, unfortunately, to the general public—it is definitely getting to the Bank of Canada—is the trajectory we're on. We just went through a lost decade. We had basically zero economic growth over 10 years. The gap between the United States and Canada has never been larger. We are falling into a prosperity hole.

Could you please paint the picture of what it might look like if we have another lost decade?

[Aaron Wudrick]

I think you'd see that in the much-vaunted global rankings of where countries stand, we would tumble even further than we have fallen now.

Every government has to wrestle with the trade-off between growth and redistribution, and I think it's fair to say that the government we have today places more emphasis on the redistribution part. Even former members of the government itself stated, once they left office, that this government is less concerned about growth than about redistribution.

I think we have that balance out of whack. Redistribution is great and it's hard to argue against it, but growth determines the total amount that you have to redistribute. The idea that you're going to calibrate growth in exactly the same way, rather than growing as much as you can and then sharing the spoils after the fact.... I think the better approach is to focus on growth. The rising tide lifts all boats, and when you have more resources to work with, you can worry about redistribution after the fact.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Lawrence.

Now we go to MP Weiler, please, for a couple of minutes.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you, Chair.

Thank you to the witnesses.

I want to start by correcting something that was said on inflation earlier by our colleague Mr. Morantz. The governor of the Bank of Canada said yesterday that he's not going to cut rates until he sees progress towards price stability for a much longer period. Removing the carbon pricing would not provide that type of sustained confidence, since it's a one-time decrease. This scapegoating of carbon pricing is not only inaccurate as the cause of inflation in interest rates but a shameful distraction. What's really behind the increase is the cost of fossil fuels in Canada.

In my province of B.C. and in metro Vancouver, the price of gas jumped 22¢ in the last month, but the carbon price added only about three cents. What's really behind this is that type of behaviour from oligopolies, global instability and a lack of refining capacity, which means that the fossil fuel industry ends up benefiting from that considerably, but of course we won't hear the Conservative Party talking about that.

I will ask a question to Madame Houle.

You mentioned in your opening remarks that the investments from the Government of Canada should be focused solely on non-market housing, but the reality in Canada is we have a challenge in getting the supply of all types of housing, including market housing, built overall.

Last year, in Bill C-56, we did announce a cut to the GST on all purpose-built rentals, including market purpose-built rentals. I hope you are able to comment on that and on whether you see a role for the federal government to ensure that more supply of housing overall gets built as well.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Weiler.

Madame Houle, I will need a very short answer.

[Marie-Josée Houle]

I want to clarify that the private market certainly has a role to play and that any money that's invested in the private market for incentives needs to have strings attached to ensure there is indeed affordability that's felt by the public, beyond the first buyer and the first renter. That needs to be said.

That said, we have a lot of programs. We've been pushing for an acquisition fund to bolster non-market housing and to prevent the loss of existing homes that are currently affordable on the market before they're financialized, as well as investment funds for the development of new non-profit housing and social housing.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Weiler.

Now we go to MP Ste-Marie.

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

Thank you, Mr. Chair.

Mr. Breton, you argued that it was important for the federal government to do more to electrify its highly varied vehicle fleet.

The finance minister will be presenting her budget next Tuesday. What do you expect to see in this budget?

[Daniel Breton]

We would like the Zero Emission Vehicle Infrastructure Program to restart. The program has been closed for months now and this interruption has contributed to delays in the deployment of charging infrastructures.

We'd like to see the government pursue its ongoing commitment to electrify its vehicle fleet, and I'm not only talking about light vehicles, but also medium and heavy vehicles such as buses, school buses and trucks. We would like to see the zero emission standard included in the act.

Several measures were introduced by the Canadian government, and that's laudable. The government is indeed contributing to the transformation of Canada's automobile and truck industry with a view to creating jobs with a future.

But one of the reasons why Canada is not being effective is that the cost of energy is too low. For an economist like you, or someone like me who has specialized in the field of energy for four decades, it's surprising to hear people say not only that the carbon tax is expensive, but also that we are not effective. You can't have it both ways. If we lower the price of energy, we won't be effective.

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

Understood. Thank you.