Finance Committee on Oct. 3rd, 2024

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

How do we change the culture of risk aversion that exists within DND, at PSPC, and fix the procurement piece to make sure that Canada—and the Canadian Armed Forces, in particular—is an early adaptor of our technology.

[Benjamin Bergen]

Yes, I think that's critical. I think that is definitely something that we need to be working towards. In our two submissions, that really is highlighted.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Bezan.

Now we'll go to MP Thompson, please.

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

Thank you, Mr. Chair.

Ms. Tessier, perhaps I could start with you, please. I'm a fan of co-op housing, but I have to give a shout-out to the very strong supporters in my province of Newfoundland and Labrador, who work so hard to really build capacity for co-op housing and also push against some of these stereotypes and barriers that, as a province, we faced in really promoting this as a real choice for the so many people who need affordable and secure housing.

I was really pleased in June for our government to invest $1.5 billion in co-op housing. In light of a very solid federal commitment to this sector, how can we address some of the challenges that I'm seeing around co-op housing, as it's an important part of an overall housing strategy and the urgency to get these homes started?

[Patricia Tessier]

Thank you for the question.

Yes, you do point to the fact that sometimes there is misunderstanding or a negative perception around co-op housing. Definitely it's a mixed solution. It's not social housing. I have worked as well in the non-profit community housing. The co-op housing sector is very different. It is about empowerment. It does actually lead to skills development due to the model as well, which is another point that reinforces the link between economic development and the co-operative housing model and its potential.

Regarding the challenges I alluded to, one is ensuring that we have sufficient capacity, having the resource groups and the technical expertise. We are working quite quickly, and we say we are ready. We have been getting ready because, prior to the announcement, the members set a vision to grow co-op housing.

You will see in the pre-budget announcement as well that we are not near the average of the OECD in terms of the amount of non-profit community housing. Increasing that to be on par with other OECD countries will also contribute to our GDP. Really, the main challenge is the funding to ensure affordability because that is primarily what non-profit co-op housing members with CHF Canada provide.

Can we build? I think you'll see that generally in all sectors, building housing right now is a challenge because no one can afford...even buying.

The continued investment.... It was noted before as well, when the program was axed, absolutely 100% of the development of co-op housing basically stalled. We were in the city of London not long ago where there has been no development of co-op housing there in 22 years or something, and actually, that was a surprise to some. They didn't realize.

Absolutely, the contribution...and it doesn't need to be a lot. As you said with the $1.5 million, it's $500 million in contribution. It just needs that leg up, and the benefit is long term. Our “The Co-op Difference” research report shows that the housing also becomes more affordable over time. It really is...to act now because this is a long-term solution that provides affordability and security of tenure, having the house and not being fearful of being kicked out and being able to have a family because you're not going to be kicked out or renovicted.

I think the challenges are more in the mindset shift of understanding co-operatives. That's a very big one, I think, and the continued funding and more funding, so we very much hope that this program will demonstrate the need. We have a long list. We know there is more need out there.

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

Thank you.

I certainly hope that this funding does provide that lift, and that certainly I am able to see more co-op housing in my area.

I have a very quick question, Mr. Duceppe.

You mentioned national pharmacare and the importance of implementing this, and certainly you know we're moving forward with diabetes medication and prescriptive contraceptives.

Could you comment on what this means for your members, and moving forward, where you'd like to see this program go in terms of priorities?

[Yvan Duceppe]

Thank you for the question.

I just want to note that, as we said, we welcome the initiative that has been taken. Yes, we understand it is limited to contraceptives and diabetes medication. That said, what we would like is for it to be extended to other types of medications, because this is an important element of social policy.

People often find themselves with very high bills, whether for drugs or for insurance. This is important to our members and we hope it will be gradually improved. Still, I think this is a step in the right direction.

[The Chair, Liberal, Peter Fonseca]

MP Thompson, that's the time. We're over time, actually.

We will move over to MP Ste-Marie, please.

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

Thank you, Mr. Chair.

Mrs. Paré or Mr. Claus, you are asking that the $1.25 million exemption be removed; it was special and temporary but has been in place since 1997, if I am not mistaken. Is that the case?

[Simon Claus]

Exactly. The exemption, which was introduced in 1997, was temporary, yes. It ultimately became a sort of subsidy for radio stations, indirectly paid by rights holders and depriving them of legitimate revenue for the use, here again, of their works. So it is just a normal payment to the rights holders—the performers, the producers—for the work they do.

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

So I understand that what is owed to performers and the industry should be paid, but this does not preclude other solutions to provide better support for our media, which are in trouble. Thank you.

Mr. Duceppe, I would like you to tell us about new housing, and specifically the importance of there being a larger non-market share of housing stock. What do you mean by “non-market”?

[Yvan Duceppe]

I would say that the rise in the cost of housing is often a result of flipping. Speculation means that we end up with housing that is more expensive for landlords, who pass the bill on to tenants.

Some housing is referred to as “non-market”, as in the case of co‑operatives. That housing is here for good, so there are no resales, and it is the historic cost of construction that applies. Renovations have to be done occasionally, of course, but there is no speculation.

Earlier, I heard Ms. Tessier say that co‑operative housing actually produces diverse communities. They are not communities solely for low-income people, as we might think. Yes, there are low-income people, but the aim is to have diversity. That also applies to housing provided by NPOs, not-for-profit organizations.

We therefore need to have non-market housing. I want to note that Canada has had a very weak track record in this regard for years. Barely 5% of Canada's housing stock is non-market, while in countries like France and the United Kingdom, non-market housing accounts for 14% or 16%, not to mention Sweden, where it is 40%.

However, I do want to point out that housing is also a right and should be accessible to everyone. Non-market housing is the best way to achieve this.

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

I hear you. So it is not enough to have affordable housing, we really have to provide non-market housing, or social housing, as it is also called. Thank you.

One of your requests relates to restoring the funding under the labour market development agreements and workforce development agreements. Can you tell us more about this?

[Yvan Duceppe]

Yes.

If I had my colleague François Bélanger, an economist, with me, it would definitely be easier for me to answer.

I can tell you that in Quebec, the Commission des partenaires du marché du travail, which brings together employers and unions, is calling for the cuts to this funding to be cancelled, because they result in reductions in worker training budgets. Those budgets are enormously useful.

I heard earlier that we may not always be as productive as we might hope. In our opinion, training is precisely a tool to make our workers more productive and better able to do their jobs—and yet the federal government is cutting budgets that are being spent appropriately, in partnership between employers and unions, as I said. I think companies consider it important to ensure that Canada has what it needs, when it comes to training, and that workers are properly trained.

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

Thank you.

I have about 30 seconds left.

If the Association québécoise de l'industrie du disque, du spectacle et de la vidéo has a last word to convince committee members of the merit of their requests, please go ahead.

[Eve Paré]

This year, our requests have no budget implications, apart from making funding permanent, so no additional money is being requested. The amendments to the Copyright Act have no effect on the public purse, but would be hugely beneficial for our industry.

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

Thank you

[The Chair, Liberal, Peter Fonseca]

Thanks to the witnesses.

Thank you, Mr. Ste‑Marie.

We now go to MP Davies.

MP Davies, you are the final questioner of our excellent witnesses today before we conclude.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

Mr. Schiavo, I think I agree with you, if I understand your testimony correctly, that Canada could and should be using our procurement policy to help better support the Canadian environment for businesses.

Do you agree that provisions in Canada's trade agreements that prohibit Canada from distinguishing between foreign and Canadian domestic bidders for procurement are harmful?

[Nicholas Schiavo]

I do. I think the risk aversion we see across procurement also applies to some of our trade agreements. We stick to them to a T, which is, of course, important for our allies but sometimes comes at the cost of Canadian industry.

[Don Davies, NDP, Vancouver Kingsway, BC]

Following that, the United States seems to be intermittently liberal in terms of trade policy, and then they get protectionist. In the latest iteration, I think, under the Biden administration, and I think even under the Trump administration, they were very avowedly protectionist. Do you see that as giving us a little bit of political room as a country to be a little bit more rugged, I guess, in terms of using our procurement policies to help Canadian business people?

[Nicholas Schiavo]

I do. I think a lot of what CCI preaches is not novel. It is what we're seeing in other advanced economies, including the United States. I think regardless of who wins the White House, with USMCA/CUSMA up for renegotiation, Canada does need to be smart and aggressive about ensuring that domestic industries are well supported, looking at things like IP and digital rights.

However, we see other countries with smart industrial policy, and what we are saying is that we should follow suit.

[Don Davies, NDP, Vancouver Kingsway, BC]

I'll just give one more question to you, then. I'm thinking of other countries like the Scandinavian countries that are considered to be relatively high-tax, high-regulation jurisdictions, and they seem to be performing very well. They historically performed very well.

Are there any lessons in your experience that we can learn from those Scandinavian countries and apply here to help achieve the same kinds of stellar results?

[Nicholas Schiavo]

Benjamin, do you want to field that one?

[Benjamin Bergen]

Yes, for sure.

If you look at the Nordic countries with high productivity, higher taxes and really wonderful services that I think often we reference here in Canada, you see it really is how they're supporting their domestic innovation economy.

Look at a country like Denmark. Novo is the company behind Ozempic, which folks might be familiar with given its popularity right now around the world. Novo is really supported by the Danish government. They marshal their education. They marshal research and development in that space. As an open, small economy, that's where they've really decided to be players. Novo is such a large company in Denmark that they actually calculated the GDP with and without the company involved in it, because it shifts the overall wealth and prosperity of the country so far.

As we march forward, looking at where there are opportunities for Canada to be winners in certain sectors and where we really marshal our forces on capital, talent, customers and freedom to operate, that will really lead to, I think, some of the similar outcomes that we're seeing in other small, open economies that are smart.