Finance Committee on May 30th, 2024

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

Thank you.

Welcome to all the witnesses.

I'm going to start with you, Dr. Norman. I have a quick follow-up on the previous series of questions.

Thank you for linking in that primary health care is accessed through many providers. Often in this committee I hear the reference that it is simply physician-led, but of course it's not. It's multidisciplinary. Thank you for that.

I want to touch on why it's so important for women to have access to a range of contraceptives.

Could you again, with a little more depth, go into the barriers that women often face in accessing contraception? Why is it so important in this program that we address that and why does it need to be universal?

[Wendy V. Norman]

As many of you may be aware—through history rather than your own knowledge—in the 1960s, when contraception became available and prevalent, there was a transformation in gender equity in our society. We were seeing a huge increase in the number of women, who now had control of their fertility, enrolling in colleges and universities, entering the job market and contributing to civil society and governments. The ability to decide whether and when to become pregnant for a pregnancy-capable person—a woman or a person with a uterus of any gender—is fundamental to being able to achieve their own goals and have control of their life.

Studies across Canada have shown that the number one access is cost; it's the affordability of contraception. If we fail to make contraception accessible for people, we are leaving people in situations with intersecting barriers where their income and education do not have the chance to improve across their generation and in subsequent generations because they are unable to control their fertility. They are left to have unintended pregnancies, raise unplanned children and be in an ever down-spiralling cycle regarding family income and family education. That's often accompanied by intimate partner violence as the situation becomes worse.

MP Thompson, thank you for the question. I'm not sure if I've addressed what you were looking for.

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

That was very helpful, and I appreciate it.

Just because I know time is so limited, I want to direct the next question to Momentum.

Mr. Loomis, thank you for your opening comments. I appreciate the importance of financial literacy. I saw it repeatedly in my work life. Thank you for highlighting how important Bill C-69 is for the most vulnerable families, in many cases, in our communities.

I want to link into, first of all, the importance of automatic tax filing. I think that's incredibly important, and thank you for highlighting it. What an opportunity it is to allow people to access services without penalizing them when, for a variety of reasons, they aren't able to go through that process. It can be very difficult for some to file their income taxes, and of course, that keeps them out of the portal of being able to access much-needed supports.

I want to link the first question to Prosper Canada. How important is it for community groups to become part of supports to protect people from criminal rates of interest?

[Jeff Loomis]

It is really important for community organizations to provide fair and honest information about different forms of financial services. Working with Prosper, a number of organizations across the country have contributed to growing the field of what we call “financial empowerment”. An important part of financial empowerment is money management—financial literacy, as you describe it—which includes ensuring that people have good information about different financial services and products. Ideally, we as community organizations can connect people to the most affordable and fair financial services and products.

That is a really important role of community-based financial services. It's not only about providing the information, but about helping people make an informed decision about what financial services and products they end up using.

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

In a similar thread, could you speak to the Criminal Code amendments? You don't need to go in depth with this, but why are they important for protecting people from predators and criminal rates of interest?

[Jeff Loomis]

As we've experienced over many years, there have been so many examples of people taking out a loan without knowing how expensive it was. It can create a debt trap for people. It's very difficult to move forward financially when people are struggling with those debt payments. We believe that lowering the criminal rate of interest can create better opportunities for people to access affordable and fair financial services and products.

As we see with people struggling to make ends meet, especially with the rising cost of living, it is important that we don't have additional costs from borrowing. We believe that the criminal rate of interest being considerably higher across the country—other than in Quebec—for a generation now is patently unfair because the people who are often the least able to afford credit are actually paying the most for credit. It is a very significant change to lower the criminal rate of interest and improve the enforcement of the criminal rate.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Thompson.

We go now to MP Ste-Marie.

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

Thank you, Mr. Chair.

I would like to welcome all the witnesses.

I would have liked to speak with each of you, but since the time I have is limited, I am going to address my questions to Mr. Lambert. First, however, I would like to ask Mr. Loomis a brief personal question.

In addition to your role as executive director at Momentum, are you the famous guitarist who has received such acclaim worldwide, or are you his namesake?

[Jeff Loomis]

That's someone with a lot more hair than me, that's for sure.

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

That's good. I thought I had detected a resemblance, so I asked you the question just in case. I wish you good luck in your projects.

Mr. Lambert, craft distillers all over Canada are developing microdistilleries and playing an extremely important role for the economy outside our urban centres and for the economy in general. Essentially, you are saying that the excise duty burden is disproportionate, particularly when compared with the United States or with microbreweries.

Is that correct?

[Vincent Lambert]

That's right.

In fact, our proposal has two components.

First, we have to base our policies on the precedent that already exists in Canada, which imposes different excise duties depending on production volumes, as in the microbrewery industry. So that should be applied equally to distilleries and spirits.

Second, we need to line up with American excise duties. In our industry, the strongest competition we face is from the United States.

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

Right. Thank you.

You said that for a bottle of spirits that sells for $40, only $10 ends up in the craft distiller's pocket, and the excise duty is $4, while it is only $0.29 in the United States. Is that right?

[Vincent Lambert]

That's right.

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

If the $4 were reduced to $0.29, it would change things significantly in terms of the viability of your members, the local craft distillers.

[Vincent Lambert]

Absolutely.

Take the example of a $40 bottle, which is about the median amount for craft spirits. In that situation, excise duties represent 10% of the price of the bottle, or $4. That would actually be a significant amount, applied to the volume of sales.

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

I think we benefit a lot collectively from having all these microdistilleries all over in our small communities. They help our communities develop both our culture and our homegrown produce. However, this excise duty, which is very high, puts quite a lot of pressure on the small actors.

I believe your industry is having some difficulties at present. I am thinking of the recent bankruptcy of the St. Lawrence Distillery in Rimouski. I was very sad to learn that.

Would adopting what you are proposing mean that actors the same size as the St. Lawrence Distillery would find it easier to make a go of it?

[Vincent Lambert]

It would certainly give the industry some relief. The St. Lawrence Distillery had actually been in business for ten years. It was part of the distillery landscape in Quebec. It was a pioneering visionary for the entire industry and operated in over 15 countries. Commercial success was in sight, but its wings were clipped by regulations and laws that date from the 1920s and tax spirits at a truly atrocious level. That is what caused the company to close.

At the Union québécoise des microdistilleries, we are very sad to see that a number of distilleries are also heading in that direction. Obviously you are not responsible for Quebec's laws, but reducing excise duties would enable the industry as a whole to recover, not just in Quebec but everywhere in Canada. There is a strong appetite for these kinds of products, not just in Quebec but also in British Columbia, Ontario and Alberta, where there are a number of distilleries in operation.

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

Yes, it is a problem for your members in Quebec, but also for the industry all across Canada where the same model is found. When the sliding scale excise duty was put in place for microbreweries, it led to the emergence of that entire craft sector all across Canada, regardless of the province. We certainly hope that this model will be adopted here for excise duty.

Do you have other information to provide to the committee?

[Vincent Lambert]

Off the top of my head, I want to thank the committee, which adopted the proposal by the Union québécoise des microdistilleries in its recommendations to the Department of Finance in its pre-budget consultations report. That is recommendation 331, which adopted our proposed model.

I should point out that national models for excise duty vary from country to country. In some countries, the distilleries are still very large and very industrialized and excise duties remain high, but those countries are also adapting to the emergence of microdistilleries. They recognize them and provide them with tax relief and government incentives.

At present, that is not the case in Canada when it comes to excise duties, although we have a very large microdistillery industry developing. We have to keep pace with the new entrepreneurial and social circumstances in the country.

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

Thank you.

As you pointed out, the tax rate was established over a century ago, during the prohibition era, when the aim was to discourage alcohol consumption. However, we now have the emergence of local producers who use homegrown produce and have a wealth of know-how, but they are being held back, particularly in comparison with their American competitors from outside Canada.

It would be a good idea to revise the legislation to enable microdistilleries to emerge and to support them and contribute to their viability.

I hope my colleagues are listening to what the industry is requesting and that we will agree on making an amendment to this effect.

We will keep up the fight because we care about you. The contribution you make is significant in all regions and in our economy. Thank you very much.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie. That's all the time we have.

Now we're going to MP Davies for the next six minutes.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

Dr. Norman, in a 2023 interview with the UBC faculty of medicine about B.C.'s free contraception program, which I take it had just started, you said, “It was costing the government more to pay for the management of unintended pregnancies than it would cost to be able to provide free contraception for everybody in the province.” You've given that testimony here today.

How solid is the evidence that if we expand this program nationally, we will achieve national savings economically, replicating B.C.'s experience?

[Wendy V. Norman]

It's a great question, Don.

The statement at UBC was based on about 10 years of research that we'd undertaken in partnership with the Government of B.C. and that was funded by the Canadian Institutes of Health Research. We did due diligence by collecting data from every sector of the province through sexual health surveys and putting them into a complex series of modelling that looked at all of the alternatives for how to support people to reduce the rates of unintended pregnancy.

What we found is that universal coverage of first-dollar for all methods was the most cost-effective way for the Government of B.C. to go about this. We spent two years looking at alternative models, including fill-in-the-gap models and supplementing in different areas, and every time we moved away from universal first-dollar coverage, the rate of unintended pregnancies went up and the government's costs went up.

You asked how that relates to the rest of Canada. We've been working with Statistics Canada and the federal government for about eight years to take what we've learned in B.C.... Looking at the sexual health survey and at all representative parts of the population is what governments need to do to get the data to understand and improve health and equity in sexual and reproductive health.

As you may know, in the 2021 budget, the government funded Statistics Canada to roll out a national sexual health survey that will first field this fall. We will be able to do academic analyses disaggregated by a wide range of equity sectors in the population to answer exactly your question. In the meantime, we can take B.C.'s data and make it analogous to the rest of Canada. It should be relatively reasonable to hold those assumptions.

[Don Davies, NDP, Vancouver Kingsway, BC]

It sounds like there's an overwhelming economic case for universal access to contraception.

You briefly touched on the macroeconomic impacts of facilitating the entry and participation of women in the workplace. Is there data or established research that can quantify the value of women's participation in the economy as a result of having reproductive control?

[Wendy V. Norman]

It's a great question.

By way of an overarching answer, I would look at the declaration by the American Public Health Association on the top 100 public health interventions over the past century, from when we came to the year 2000. This is basically from 1900 to 2000. The number one public health intervention across the country—and this was during the time we developed penicillin, vaccines and all of these things—was the introduction of family planning to support the success and engagement of pregnancy-capable people throughout our society.