Evidence of meeting #139 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was dentists.
A recording is available from Parliament.
Associate Professor, Sprott School of Business, Carleton University, As an Individual
Yes, because if you threw out the fall budget, which was put out a year ago essentially, the uncertainty would cause too much economic disruption.
I didn't have time to deliver what I recommended, but I propose that things can be done to deal with our productivity crisis and economic growth. I would focus on those larger, more macroeconomic policies that focus on investment and economic growth.
Liberal
Julie Dzerowicz Liberal Davenport, ON
I'm glad our government is doing one thing right with these investment tax credits.
Thank you for being here today.
Thank you, Mr. Chair.
Liberal
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
Thank you, Mr. Chair.
Thank you to the witnesses for being here.
Mr. Lee, thank you for your presentation. I'm going to ask you some questions about Bill C‑59. In your presentation, you said that your comments were general and more macroeconomic in nature. However, some bills, such as Bill C‑59, amend the Competition Act.
What should regulations, laws and standards look like in a competitive economy, in your view? How should the act govern that?
Associate Professor, Sprott School of Business, Carleton University, As an Individual
Thank you very much for that question. I didn't expect it, but I am really pleased that you asked it.
I think we made a mistake, and I say that with great respect for the Competition Bureau. There are some very fine people there, but we've engaged in what I call nose counting—how many companies are in or the concentration ratio. I use concentration ratios in my courses too.
To go back to Schumpeter, who understood this more deeply, I believe, than anyone else, he argued that it wasn't the concentration ratio that's critical; it's the contestability of markets. How easy is it to enter the market with substitutes? That's where competition increasingly comes from.
Jeff Bezos taught us that. He deconstructed the retail physical bricks and mortar because he had a brilliant idea in 1995. He understood that you can sell stuff online when everybody was laughing at him. It's contestability that's critical, not looking at the existing status quo. It's like looking in the rear-view mirror.
My overarching philosophical criticism is that we should be asking how we can make all of these enclosed markets more contestable, whether they have to do with airlines, banking or other areas that are protected.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
Thank you for that.
Every microeconomics course teaches that barriers to entry determine the level of competition possible in a market.
Do you think the act as a whole should be revised in light of that? I see you nodding, so thank you.
Bill C‑59 also aims to prevent corporations and wealthy individuals from using tax avoidance, tax evasion and tax havens to pay less tax.
Do you have any comments on that?
Associate Professor, Sprott School of Business, Carleton University, As an Individual
I understand your question, and believe me, I've looked at the literature, because this is important.
It would have been Mr. Chrétien's administration and Bill Clinton's in the States that got the OECD moving on this, so give them credit. However, I want to distinguish between tax havens and good old-fashioned illegal cheating. I think that's important, but I'm going to focus very quickly, because of the time, on your question.
I think the availability of tax havens is diminishing because of the OECD tax treaty that Canada belongs to and because they increased media scrutiny on it. I don't see it as a large issue for conventional, publicly traded companies that are very worried about their brand and reputation. We've also dealt with the competition between countries by setting a minimum corporate income tax, so I think this issue is diminishing in importance.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
Thank you for that.
I'll turn to the monetary policies of the Bank of Canada and the U.S. Federal Reserve, the Fed.
If I understand you correctly, you're critical of the fact that the Bank of Canada drove the interest rate so low. You believe it should never have done that.
What are your thoughts on current monetary policy management by both the Bank of Canada and the Fed?
Associate Professor, Sprott School of Business, Carleton University, As an Individual
I don't want anyone to think that I'm just a professor sitting in the ivory tower. I do read. I promise you that I do study this intensely.
Mohamed El-Erian, the very distinguished chief economist, formerly with PIMCO and now with one of the major European financial institutions, was extremely critical of this. He said they drove rates far too low. So did Lawrence Summers. We knew what would happen. When you cut interest rates to that level, it is the same as making a very steep tax cut. You're introducing huge amounts of stimulus. We tend to think of stimulus as only fiscal and not monetary.
What happened? Well, people did exactly what we would expect them to do—they went out and borrowed like there was no tomorrow. I don't think we caused inflation—as we all know, it was caused by the shutting down of supply chains—but we certainly exacerbated inflation.
Very quickly, to your question, I support the interest rate increase, because I don't believe there's any other effective tool in all the western countries that have studied this. It's a blunt, harsh tool, but it works. I lived through it when interest rates hit 20%. We killed inflation under Governor Bouey and Governor Volcker. They brought inflation from 14% down to zero, basically.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
Thank you very much for those answers. I'll probably have a chance to ask you more questions in the second round.
Liberal
NDP
Don Davies NDP Vancouver Kingsway, BC
Thank you, Chair.
Dr. Da Silva, you said the availability of dental care for individuals with developmental disabilities can be problematic due to the shortage of dentists and dental hygienists who are willing or trained to provide treatment to this group. What are the principal barriers preventing dentists and dental hygienists from providing treatment to individuals who have developmental disabilities?
Past President, Canadian Association of Public Health Dentistry
I think for many it's a lack of exposure during training to deal with the complex issues or complex medical needs that many individuals with disabilities have. For one thing, there's a lack of comfort level, which may deter them from realizing they can, with practice or mentorship, work on that. It's not really structured into education or post-graduate training unless you're in a specialty that deals with it.
There could also be some physical barriers with equipment, such as specialized chairs that can accommodate wheelchairs, or lack of access to hospital service, where a lot of these individuals need to be. Lots of hospitals or dental departments within hospitals have had cuts over time, so it's very hard to get them there.
NDP
Don Davies NDP Vancouver Kingsway, BC
To give us an idea of the scope of the problem, if you can, what portion of Canadians with developmental disabilities currently lack access to dental coverage?
Past President, Canadian Association of Public Health Dentistry
I don't know if I've ever seen a national survey or percentage on that, but I imagine it would be pretty high. Almost 60% to 70% would have some challenges, whether it's with transportation, accessibility within an office or finding a provider within a reasonable range of where they are.
NDP
Don Davies NDP Vancouver Kingsway, BC
To what degree do the funding levels provided by existing public programs derogate from provincial dental fee schedules?
Past President, Canadian Association of Public Health Dentistry
Is that for those with special needs or just in general?
Past President, Canadian Association of Public Health Dentistry
It varies by province. Some of the lowest I've seen could be in the 30% to 40% range. I've seen some provinces—Saskatchewan, for example—in the 70% to 80% range. It varies quite considerably. It depends on how often each province or payer of a plan re-evaluates their fee and reinvests into it. We'll say that some are worse than others.
NDP
Don Davies NDP Vancouver Kingsway, BC
It's my understanding that most plans, whether private or provincially delivered, provide inadequate funding for sedation, general anaesthesia services or extra units of time for, say, non-verbal patients, which are often required by individuals with developmental disabilities. What advice would you give us in that regard as we develop the CDCP?
Past President, Canadian Association of Public Health Dentistry
Again, the needs of individuals with disabilities are more complex. The plan should reflect that. Most of the codes based on time.... It almost takes twice as much time to deal with some of these patients. We see that with pediatric patients as well, even healthy ones. It may take more time for them.
For the standard formulas that may be used to decide fees, if there is a time component, it needs to be adjusted for the extra needs some patients have. That could be for seniors as well or those with more issues.
NDP
Don Davies NDP Vancouver Kingsway, BC
Professor Lee, if I caught your testimony correctly, you said that inflation was caused by the “shutting down of supply chains”. Is that what you think is the principal cause of inflation, not deficits?
Associate Professor, Sprott School of Business, Carleton University, As an Individual
Deficits contribute to inflation over time, I believe. However, in this specific context, we had stable inflation from 1981 until the pandemic. Then we shut down the supply chains, and we know the reason why. We didn't realize how complex they are. I believe we thought we could just turn on a switch, they would all flow back in and everything would be fine.
In that instance, it was about shutting down the supply chains, but you're asking about deficits. We've seen countries—Argentina is exhibit A—let their deficits get out of control.
Yes, it can be. Friedman wrote about that.
NDP
Don Davies NDP Vancouver Kingsway, BC
The country I'm thinking of is the United States, which right now is performing much stronger economically than Canada but has a deficit of—I've seen figures—between six and eight times higher than ours, as a percentage.
How do you explain that?
Associate Professor, Sprott School of Business, Carleton University, As an Individual
I can. I talk about it in my classes all the time, believe me.
The United State is sui generis—unique. It is truly in a class of its own. It is the world's superpower and the world's reserve currency because it has the largest economy in the world. They can do things that ordinary mortals cannot do in other countries.
