Finance Committee on Jan. 31st, 2022

[The Chair, Liberal, Peter Fonseca]

Welcome, everybody. I call this meeting to order.

Welcome to meeting number 15 of the House of Commons Standing Committee on Finance. Pursuant to the motion adopted in committee on December 16, the committee is meeting for its pre-budget consultations in advance of the 2022 budget.

Today's meeting is taking place in a hybrid format pursuant to the House order of November 25. Members are attending in person in the room and remotely using the Zoom application. The proceedings will be made available via the House of Commons website. Just so that you are aware, the webcast will always show the person speaking rather than the entirety of the committee.

Today's meeting is also taking place in the webinar format. Webinars are for public committee meetings and are available only to members, their staff and witnesses. Members enter immediately as active participants. All functionalities for active participants remain the same. Staff will be non-active participants and can therefore view the meeting only in gallery view. I would like to take this opportunity to remind all participants in this meeting that screenshots or taking photos of your screen is not permitted.

Given the ongoing pandemic situation and in light of the recommendations from the health authorities, as well as the directive of the Board of Internal Economy on October 19, to remain healthy and safe all those attending the meeting in person are to maintain two-metre physical distancing, must wear a non-medical mask when circulating in the room—and it's highly recommended that the mask be worn at all times, including when seated—and must maintain proper hand hygiene by using the provided hand sanitizer at the room entrance. As the chair, I will be enforcing these measures for the duration of the meeting, and I thank members in advance for their co-operation.

To ensure an orderly meeting, I'd like to outline a few rules to follow.

Members and witnesses may speak in the official language of their choice. Interpretation services are available for this meeting. You have the choice at the bottom of your screen of either the floor, English or French. If interpretation is lost, please inform me immediately and I will ensure interpretation is properly restored before resuming the proceedings. The “raise hand” feature at the bottom of the screen can be used at any time if you wish to speak or to alert the chair.

For members participating in person, proceed as you usually would when the whole committee is meeting in person in a committee room. Keep in mind the Board of Internal Economy's guidelines for mask use and health protocols.

Before speaking, please wait until I recognize you by name. If you are on the video conference, please click on the microphone icon to unmute yourself. For those in the room, your microphone will be controlled as normal by the proceedings and verification officer. When speaking, please speak slowly and clearly. When you're not speaking, your mike should be on mute. I will remind you that all comments by members and witnesses should be addressed through the chair. With regard to a speaking list, the committee clerk and I will do the very best we can to maintain a consolidated order of speaking for all members, whether they're participating virtually or in person.

The committee agreed that during these hearings the chair would enforce the rule that the response by a witness to a question take no longer than the time taken to ask the question. That being said, I request that members and witnesses treat each other with respect and decorum. If you think the witness has gone beyond the time, it is the member's prerogative to interrupt or to ask the next question. To be mindful of other members' time allocations during the meeting, I also request that members not go much over their allotted question time. Though we will not interrupt during a member's allotted time, I'd like to keep you informed that our clerk has two clocks to time our members and witnesses.

I'd like now to welcome our witnesses.

From the Canadian Mental Health Association, we have Margaret Eaton, national chief executive officer; from the Fédération des chambres de commerce du Québec, Charles Milliard, president and chief executive officer, and Mathieu Lavigne, director of public and economic affairs; and from the Green Budget Coalition, Andrew Van Iterson, who is the manager there. We also have with us the director of conservation for the Canadian Wildlife Federation, David Browne; Doug Chiasson, senior specialist, marine ecosystems and government engagement, World Wildlife Fund-Canada; and Vanessa Corkal, policy adviser for the International Institute for Sustainable Development.

Welcome.

We also have with us, from the Office of the Parliamentary Budget Officer, Yves Giroux, Parliamentary Budget Officer; and, from Tahinis Restaurants, Aly Hamam, co-founder.

Members, if you were with us earlier, you may have heard from the clerk that, unfortunately, due to an emergency, Mariam Abou-Dib, director of government affairs for Teamsters Canada, is unable to join us today.

We're now going to hear opening statements from witnesses. Each of the witnesses—one per group—will have up to five minutes to make their opening remarks before we move to members' questions.

We'll start with the Canadian Mental Health Association.

[Margaret Eaton, National Chief Executive Officer, Canadian Mental Health Association]

Thank you so much, Mr. Chair.

Hello. My name is Margaret Eaton. I'm the national CEO of the Canadian Mental Health Association, or CMHA.

CMHA is the most established and most extensive community mental health organization in Canada. We were founded back in 1918 during the Spanish flu pandemic, and we have 330 community locations, across every province and the Yukon. We reach over 1.3 million people each year and employ more than 7,000 Canadians.

CMHAs are independently governed charities that deliver mental health supports free of cost to anyone who needs them, from counselling and psychotherapy, substance use treatment and youth programs to housing and employment services. CMHAs keep people out of hospitals by promoting mental health and help to prevent mental illness.

As we know, our country is suffering from epidemic levels of poor mental health and mental illness. Each week 500,000 people miss work due to a mental health problem. Today in Canada, 11 people will die by suicide. By age 40, one in two Canadians will have or have had a mental illness—that's half the people in this committee room—yet only one out of every 15 health care dollars goes to mental health. For those who can afford it, this forces people in Canada to spend more than $1 billion per year on counselling and other mental health services, and it costs our economy tens of billions of dollars per year in lost productivity.

We all know that the pandemic has had a devastating impact on the mental health of Canadians, with 41% reporting a decline in mental health since the pandemic began. It has also hit the community mental health sector hard. The phones have been ringing off the hook for the last two years with more Canadians needing our help. Our branches rapidly overhauled how they deliver their services to keep vital programs alive and accessible, providing cell phones and laptops to clients to ensure they could maintain their connection.

When people with severe mental illnesses lost their housing, CMHA branches provided emergency shelter, some even purchasing tents when there were no other options. We're so proud that we were able to continue delivering. For example, across our 29 branches in Ontario, CMHA maintained 96% of its service delivery throughout the pandemic.

Our branches have strained to meet the rising demand for mental health supports, but the needs continue to rise. While significant investments have been made in community mental health since the pandemic began, they are not nearly enough. Our country has chosen band-aid solutions to what is fundamentally a broken, woefully underfunded mental health system.

Now, let me tell you about the possible. Making meaningful progress in mental health requires federal leadership. We believe Canada needs a pandemic recovery plan that invests directly in community mental health, not only to treat Canadians with mental illnesses where they live but also to prevent mental health crises in the first place.

In addition to this recovery plan, at CMHA we believe budget 2022 must address three critical areas. The first is urgent investment in community mental health. We're calling for a direct investment of $57 million for core CMHA programs and services. This would, for example, allow us to reach 10,000 more frontline workers at risk of anxiety, depression and suicide, and support the mental health of an additional 10,000 people through our well-being learning centres.

The second is the housing crisis, which disproportionately affects people with mental illness. We're calling for a direct investment in 50,000 supportive housing units and 300,000 deeply affordable non-market, co-op and non-profit housing to make sure people with mental illness and substance use problems have safe places to live as they recover.

Third, we recommend a substantial increase in funding for indigenous-led mental health initiatives, including doubling the budget of the aboriginal health human resources initiative. Resources and decision-making must be in the hands of indigenous-led mental health organizations, and we stand ready to support their leadership.

From a budget perspective, these recommendations make good financial sense. Mental health supports that keep people connected to their communities save taxpayer dollars and reduce the burden on the already heavily strained health care system.

We have a critical window of opportunity to fix Canada’s mental health system. Let’s not miss it.

Thank you very much.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Eaton.

Now we're going to hear from the Fédération des chambres de commerce du Québec for five minutes.

[Charles Milliard, President and Chief Executive Officer, Fédération des chambres de commerce du Québec]

Good morning, everyone.

My name is Charles Milliard, and I am the president and chief executive officer of the Fédération des chambres de commerce du Québec, or FCCQ. I am joined by my colleague Mathieu Lavigne, director of public and economic affairs.

The federation—which I believe you are familiar with—represents nearly 130 chambers of commerce across Quebec and also has 1,300 member companies. So we represent almost 50,000 businesses across Quebec.

Thank you for the opportunity this morning to share our expectations and recommendations as part of the federal government's 2022‑23 budget preparation.

In addition to the tax measures that fall under the Department of Finance, our recommendations also concern a great many areas and portfolios related to prosperous, green and inclusive economic development, which is our priority at the federation.

Given the limited amount of time we have this morning, I will talk about three main issues—out of the measures put forward—we are focusing on: the labour shortage challenge, public finances and, of course, regional and life sciences development.

As you know, the labour shortage is the biggest challenge Quebec and Canadian businesses are facing right now. It is manifesting across all businesses and sectors, and it is continuing to worsen and to impede our collective growth. The federation feels that the 2022‑23 budget is a golden opportunity for the Government of Canada to focus on that priority, and we refer to it in several respects in our brief. I have a few worthwhile recommendations for you.

First, we are advocating to modernize the employment insurance program to refocus it on its primary mission, to be insurance providing income support that encourages claimants to seek new employment and thereby enhance their skills.

Second is the adoption of measures, including tax measures, that would foster the retention of experienced workers who want to remain employed. I remind you that those incentives, as minor as they may be, may lead to people wanting to remain in the workforce for one, two or three additional days a week. That would ultimately be instrumental for many Quebec and Canadian business owners.

Third is the sustainability of the agreement between Ottawa and Quebec on the relief measures for the temporary foreign worker program, or TFWP, which was just announced and which we feel should remain in place for a long time.

Our second priority is the matter of public finances. We have said this already, but I am taking the time to reiterate it this morning: the FCCQ has approved the current government's public financial management decisions during the pandemic, especially its willingness to create programs to support the Quebec economy. Those programs have been expensive, yes, but they have also helped preserve our entrepreneurial fabric and our collective social fabric across the country.

In the current context, the federation feels that the government's priority is to implement the conditions needed for a robust economic recovery of businesses by avoiding any tax increases in the coming years and by continuing to financially support businesses in sectors that are still struggling to recover. Among others, I am thinking of the events sector and the international tourism sector.

We clearly wish to see the government continue its healthy obsession, so to speak, with the gross debt‑to‑GDP ratio to ensure the long–term sustainability of public finances and of the Canadian business environment.

Our third, but not least, priority is regional development. For the federation, the economic recovery that is beginning must be inclusive, but it must also benefit all of our Quebec and Canadian regions. To that end, the FCCQ would like to see the government help regional businesses move forward on issues of particular interest to them. Here are a few examples: needs in sustainable mobility, public transit and transportation electrification; the implementation, sooner rather than later, of extremely growth-generating programs such as Via Rail's high-frequency train, or HFT; and the very pressing need for investments in a number of regional airports in Canada. We absolutely need to have regional airports that are operational and that have a stable and sustainable service offer.

In closing, I would be remiss if I did not mention the importance of also maintaining a strong and dynamic Canadian pharmaceutical industry, and I believe the committee has a role to play in that respect. The events of these past two years have shown the importance for a country like Canada to be able to count on a solid and innovative pharmaceutical sector that also has the support of our public institutions.

Although the changes proposed to the Patented Medicine Prices Review Board have once again been postponed—this time until July 2022—we reiterate that this reform is problematic for Quebeckers' and Canadians' access to new medications.

That reform project must absolutely be reviewed with industry partners to reflect this new reality and this importance of having some pharmaceutical sovereignty in Canada, among other things.

We will be pleased to participate in the discussions and we thank you for inviting us to appear before the committee.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Milliard.

We will now move to the Green Budget Coalition for five minutes, please.

[Andrew Van Iterson, Manager, Green Budget Coalition]

Mr. Chairman and honourable committee members, thank you for inviting the Green Budget Coalition to speak to you today.

The Green Budget Coalition, active since 1999, is unique in bringing together the expertise of 23 of Canada's leading environmental organizations collectively with over one million Canadians as members, supporters and volunteers. Our mission is to present an analysis of the most pressing issues regarding environmental sustainability in Canada and to make a consolidated annual set of recommendations to the federal government regarding strategic fiscal and budgetary opportunities.

As the chair mentioned, I am pleased to be joined today by three of my expert colleagues to help answer your questions. They are the coalition's two co-chairs—David Browne with the Canadian Wildlife Federation and Doug Chiasson with WWF-Canada in Halifax—and Vanessa Corkal with the International Institute for Sustainable Development in Saskatoon.

In November we emailed each of you copies of this document, the Green Budget Coalition's detailed “Recommendations for Budget 2022”. It provides more detail, refinements and additions to the recommendations we submitted to the committee in August.

As hopeful signs appear that Canada is slowly emerging from a painful two years beset by the COVID‑19 pandemic, it is now critical to focus more attention on addressing the related climate and biodiversity crises and shaping a world that is equitable, carbon-neutral and nature-positive for current and future generations of Canadians and people worldwide.

The Green Budget Coalition much appreciated the major federal funding announcements advancing climate and nature progress over the past 16 months, and urges the government to continue to act to seize this opportunity to transform society to address the twin climate and biodiversity crises, to create sustainable jobs, and to ensure enduring prosperity and well-being for all.

Canadians want ambitious action on environmental priorities. The government has repeatedly committed to make progress on climate change, nature conservation and equity—at COP26 in Glasgow, in the throne speech and in the mandate letters most recently. These commitments need to be implemented with funding in budget 2022.

In this context, the Green Budget Coalition has five feature recommendations for budget 2022 that address the three feature objectives of net-zero emissions by 2050, full nature recovery by 2050, and environmental justice.

For climate change, the Green Budget Coalition is featuring two recommendations. The first is for an energy-efficient renovation wave, in partnership with the provinces, with annual investments of $10 billion to $15 billion per year for 10 years. The second is prompt action to phase out fossil fuel subsidies, with a robust definition, and to reorient public finance in line with Canada's climate change commitments.

For a full nature recovery, the coalition is particularly recommending a $1.3-billion investment in a pan-Canadian approach to fresh water, and permanent funding for protected areas starting at $1.4 billion in annual A‑base funding, and rising.

For environmental justice, we recommend establishing a new high-level office of environmental justice, learning from a model already in place in the United States since the early 1990s.

Finally, in our document we outline a number of complementary recommendations regarding transportation, renewable energy, nature restoration, fisheries management, action on toxics, sustainable agriculture, and environmental data and science.

Implementing these recommendations together would lead to dramatic progress in advancing a healthier future for Canadians from coast to coast to coast.

To conclude, I would like to thank you again for inviting the Green Budget Coalition to appear today. We are also looking forward to meeting with the Deputy Prime Minister later this week to discuss our recommendations.

We look forward to your questions. Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Van Iterson.

We will now move to the Parliamentary Budget Officer, Yves Giroux, for five minutes.

[Yves Giroux, Parliamentary Budget Officer, Office of the Parliamentary Budget Officer]

Thank you.

Good morning, Mr. Chair, vice–chairs and members of the committee. Thank you for inviting me to appear today. This is the first time since the start of the 44th Parliament that our office is appearing before this committee, and I am pleased to be here ahead of the pre-budget consultations for the 2022 budget.

Under the Parliament of Canada Act, I am mandated to support Parliament by providing analysis of macro-economic and fiscal policy to raise the quality of Parliamentary debate and promote greater budget transparency and accountability.

Some of you may know that the act also provides that I may conduct research into and analysis of matters relating to the nation's finances or economy at the committee's request. Under this provision of the act, the committee adopted a motion in the 42nd Parliament asking my office to produce a regular economic and fiscal outlook.

On January 19, we published our report, “Economic and Fiscal Update 2021: Issues for Parliamentarians”. Our report identifies several key issues to assist parliamentarians in their budget deliberations. One recommendation is to amend the legislation to change the release date of the public accounts. The report also indicates that since the start of the pandemic, the government has spent or is planning to spend almost $542 billion on new measures. Almost one-third of this was not included in Canada's response to COVID-19.

In addition to this report, my office has recently released other publications, including independent cost estimates for cleaning up Canada's orphaned oil and gas wells, a fiscal analysis on the proposed premium reduction for mortgage insurance and a report that assesses the insurance properties of the fiscal stabilization program.

It would be my pleasure to answer any questions you may have about the PBO's work as a whole. My office and I look forward to reviewing your suggestions on how we can best serve the committee and help you in your work during the pre-budget consultations for the 2022 budget and throughout the 44th Parliament.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Giroux.

Now we are moving to Tahinis Restaurants with Aly Hamam for five minutes.

Mr. Hamam.

[Aly Hamam, Co-Founder, Tahinis Restaurants]

Ladies and gentlemen of the finance committee, thank you for having me.

My name is Aly Hamam. I am the co-founder of Tahinis Restaurants, a chain with nine restaurants in Ontario and growing. My family and I grew up in Egypt and decided to move to Canada after the Arab Spring of 2011. My father was a hard-working math teacher and had worked his entire life, only to watch the money he had in the Egyptian banks get devalued by 65% against the U.S. dollar over the course of a few years. Inflation is a problem that's affecting all Canadians right now—businesses and families alike. Even though we won't see the debasement against the U.S. dollar, which is also debasing at a fast rate, we can see the value of our money going down against the costs of housing, education for our kids, education for our families, a good steak, our grocery bills and our retirement.

I'm here to propose to the committee the idea of embracing the new technology of money called Bitcoin. It's fixed in supply, which gives it integrity. It's digital in nature, which makes it native to our modern digital economy. It's secured by energy and the largest computer network in history, which makes it safe and reliable. It's decentralized and not controlled by any one person, company or country, which makes it apolitical. We're in a tough yet critical time in Canada, but I'm here to be constructive, not pessimistic. I'm here to offer to the committee ideas and positive changes that we can make to grow our country's productivity.

Our leading industries in Canada are energy and finance. Both can be integrated with Bitcoin. Let's not focus all of our energy on trying to fix an old system. Instead, let's build and integrate with a new parallel system as well. With Bitcoin, we can do that. In the energy sector, we can sell the excess energy to the Bitcoin network for 30 to 40 cents per kilowatt hour. That's a lot better than letting it go to waste or selling it to the U.S. for three cents per kilowatt hour. Let's offer financial incentives to energy producers to mine Bitcoin with this excess energy. With our finance industry, we can integrate all of our banks, fintech companies, insurance companies and tech companies into this leading-edge technology of modern finance. This will not hinder or hurt the old way we do finance. This is a parallel system that could be built on top of the old one to improve it. We could do this by providing clear regulations to the Bitcoin industry and better accounting rules that would help nourish innovation, not stifle it. We could do this while still protecting Canadian citizens against scams and Ponzi schemes in the wider crypto industry.

The Bitcoin network is being worked on by the brightest engineers all over the world, from Canada, the U.S., Europe and Australia. This is mainly western technology, and we should all be proud of that. Every software engineer and Bitcoin company is working on making the network harder, stronger and faster, and when they succeed, it benefits everyone on the network. Let's work on becoming the country that benefits from this global co-operation.

A good example of a country that's doing this right now is El Salvador. They recently did everything that I'm suggesting today at this committee. They are mining Bitcoin with renewable geothermal energy; they have made Bitcoin legal tender and embraced the technology to help bank all of their citizens. Today, more Salvadorans have Bitcoin wallets than have bank accounts. More money is flowing into the hands of local citizens than to intermediaries like Western Union and Visa, which used to suck the country and its citizens dry. North of $400 million per year is going to the Salvadorans.

This past week, an Arizona state senator proposed a bill that would make Bitcoin legal tender in the state. Florida, Texas, Wyoming and New York are passing legislation that is friendly and inviting to Bitcoin companies. Miami is even buying Bitcoin on the city's balance sheet.

The world is moving fast, and we should move with it. The countries that move first will reap the biggest rewards. Let's beat them to it and make Bitcoin legal tender here in Canada alongside our proud Canadian dollar.

My last proposition to the committee is that we borrow $10 billion from the Bank of Canada and buy Bitcoin with it. Our country's balance sheet is in shambles, and we need to strengthen it now more than ever. Let's be honest—what's another $10 billion after the years of 2020 and 2021?

Thank you very much.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Hamam.

Thank you to all our witnesses for your opening statements.

We are now moving to questions from members.

We're starting with our first round. It will be a six-minute round. That means that every party will have six minutes to ask questions of the witnesses.

We're starting with the Conservatives.

Mr. Poilievre, you have the floor for six minutes.

I can't hear you, Mr. Poilievre. I'm not sure if your mike is on.

[Terry Beech, Liberal, Burnaby North—Seymour, BC]

I don't think he's here, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Mr. Poilievre, I can't hear you. I can see you, but I can't hear you.

[Terry Beech, Liberal, Burnaby North—Seymour, BC]

You can see him?

[The Chair, Liberal, Peter Fonseca]

Yes, I can see him.

Clerk, can you see Mr. Poilievre?

[Terry Beech, Liberal, Burnaby North—Seymour, BC]

I can see him. Yes, he's here.

[The Chair, Liberal, Peter Fonseca]

We cannot hear you.

[Pierre Poilievre, Conservative, Carleton, ON]

Can you hear me now?

[The Chair, Liberal, Peter Fonseca]

We can hear you now. Yes, there you go.

[Pierre Poilievre, Conservative, Carleton, ON]

Okay. I have a problem with my microphone. I apologize for that.

Mr. Hamam, thank you very much for being here. I'm very interested in your story.

First of all, I would like you to explain how it is that you were able to anticipate inflation in Canada when all the so-called experts, including our finance minister, said that we would have deflation. Why is it that you, as a small businessman and an immigrant from a country that had abused its own money, were so much more prescient in foretelling the future than were the people who make all the big bucks to predict these things?

[Aly Hamam]

Well, we were on the ground when the pandemic started, Pierre. The thing that we saw right when the pandemic started was that there was more money going around than before the pandemic started. We quickly realized that this was something that was going to lead to inflation, because if you just think about it from first principles, if you have more money chasing the same amount of goods, it's going to lead to higher prices.

We decided that we had to act and we had to move to protect our own money from getting debased. That's when we started researching and digging around. We found a solution of a better technology for money called “Bitcoin” and we were able to act on it. The result, a year and a half later, is that it did protect our wealth and it grew our purchasing power.

[Pierre Poilievre, Conservative, Carleton, ON]

Just to be clear, what you did is that you used the liquid part of your balance sheet to hold Bitcoin instead of holding Canadian dollars. Is that the sum total of it?

[Aly Hamam]

Yes, agreed.

Like I said, we saw what was coming. We knew that there was going to be an inflationary environment moving forward, so we took our balance sheet as a company and we bought Bitcoin with it. Our reasoning was that because there was more money flowing around us, as simple as that—

[Pierre Poilievre, Conservative, Carleton, ON]

Right.

[Aly Hamam]

—and, yes, here we are, two years later.