Finance Committee on Oct. 8th, 2024

[The Chair, Liberal, Peter Fonseca]

I call the meeting to order.

Welcome to meeting number 157 of the Standing Committee on Finance.

Today's meeting is taking place in a hybrid format. All witnesses have completed the required connection tests in advance of the meeting.

I'd like to remind participants of the following points. Please wait until I recognize you by name before speaking. All comments should be addressed through the chair. Members, please raise your hand if you wish to speak, whether participating in person or via Zoom. The clerk and I will manage the speaking order as best we can.

Today, pursuant to the Standing Order 83(1) and the motion adopted by the committee on Thursday, September 26, 2024, the committee is resuming its study on the pre-budget consultations in advance of the 2025 budget.

I'd now like to welcome our witnesses.

As an individual, no stranger to this committee, we have associate professor from the Sprott School of Business from Carleton University, Ian Lee. From the Canadian Centre for Caregiving Excellence, we have its director of policy and government relations, James Janeiro. Kelly Paleczny, who is the chair of the Canadian Urban Transit Association, is with us. From the Festivals and Major Events Canada, we have executive director Martin Roy. From the Grain Growers of Canada, chair Andre Harpe and executive director Kyle Larkin are with us.

From Green Budget Coalition we have a number of people with us: manager Andrew Van Iterson; manager, buildings, Pembina Institute, Jessica McIlroy; lead specialist, government relations, World Wildlife Fund-Canada, Will Bulmer; and policy strategist for government relations, Yellowstone to Yukon Conservation Initiative Canada, Sarah Palmer.

Each of our witnesses will have up to five minutes to deliver their opening remarks before we proceed to the members' questions.

We will start with Professor Ian Lee, please.

[Dr. Ian Lee, Associate Professor, Sprott School of Business, Carleton University, As an Individual]

Thank you, Mr. Chair.

First, my disclosures—I don't belong to any political party or donate money to any political party. Second, I hold no stocks or bonds or investments other than my personal home, and thus, I have no conflicts of interest.

Three months ago, I completed a major strategic analysis of Canada Post, which was an update to my 2015 Macdonald-Laurier Institute study of Canada Post. I titled it, “The Tipping Point Has Arrived”.

In researching and preparing for my presentation today to your august committee, it dawned on me that the existential problems facing Canada Post are a microcosm of the profound existential problems facing Canada today. Restated, the tipping point has arrived for Canada as well. Carolyn Rogers at the Bank of Canada was absolutely correct. It's time to break the glass—but what glass?

I've lived in Ottawa all my life. It's been a deeply held belief by a significant number of decision-makers in Ottawa, sometimes characterized as the Laurentian elites, that Canada can and should tax, subsidize, protect and print our way to prosperity. Throughout the 35 years in my classes at the university and in media interviews, I've characterized this vision as the Argentine model in honour of Juan and Isabel Perón, who were able to drive Argentina, one of the wealthiest countries in the world in 1918 on a per person income basis, to the poverty-stricken country of today with approximately $13,000 per person per year, in steep economic decline.

Before I review the most critical trend metrics in Canada today, and just in case, before any of my analysis is dismissed as “far right wing rhetoric”, it must be disclosed that my analysis is fundamentally very similar to the published outlooks of David Dodge, former governor of the Bank of Canada; speeches by former Liberal deputy prime minister John Manley; the report of the Coalition for a Better Future, co-chaired by former Liberal deputy prime minister Anne McLellan; statements by former Liberal B.C. premier, Christy Clark; and the research of the C.D. Howe Institute.

What is the problem?

As Professor Tombe of the University of Calgary, in his very recent stunning analysis, found, “A longer historical perspective reveals a striking reality: the gap between the Canadian and American economies has now reached its widest point in nearly a century.” Put another way, real GDP per capita in the United States is now 43% higher than in Canada. Only nine years ago, per Professor Tombe, the gap was only 23%. In nine years, we've almost doubled the gap between us and the Americans on a per person basis, even though Canada and the U.S. occupy the same North American continent, the same time zones, a similar English common law legal system, similar levels of education, a similar democratic system and a common free trade agreement.

How can this be?

In a single word, it's policy. For example, a recent C.D. Howe study found that capital available per Canadian worker has been shrinking since 2015. I keep saying this in my media interviews because people's eyes glaze over when they hear the word “capital”. Capital is the jobs and the factories of tomorrow. If we don't have capital, we're not going to have those good jobs of tomorrow. Worse, the gap between investment per worker in Canada versus the other OECD high-income countries is widening. Today, Canadian workers only receive 66 cents of new capital for every dollar their OECD counterparts receive and a mere 55 cents per dollar compared to U.S. workers.

Last month, Professor Mintz at University of Calgary found that, overall, the increase in the capital gains tax rate at both the corporate and personal levels is expected to discourage business investment in employment. He found that the increase in the capital gains tax will reduce Canada's GDP by $90 billion, real per capita GDP by 3%, its capital stock by $127 billion and employment by 400,000-plus workers. This is stunning. We are effectively telling our investor class, “Don't invest in Canada; go invest in the United States to make them even wealthier.”

As Robert Asselin, a former senior adviser to former prime ministers Chrétien and Martin, stated, “Canadians will not be able to sustain their living standards—including...social programs—if the country doesn’t change course.”

At this point, it's necessary to expose an argument I've heard for years upon years. It's a fallacious assumption of those who say, look, we're doing something not that different from the European Union, so it can't be all that bad.

However, Mario Draghi, the brilliant former ECB governor and the former prime minister of Italy, just released his very massive analysis of the existential failings of European Union policies. They have collapsing competitiveness; they have very profound problems.

For example, in 2000, the European Union GDP was equal to—the same size as—the United States GDP. Today, 24 years later, the European Union is 40% smaller than the United States. That's just astonishing. The Italian prime minister said, “America innovates, China replicates, Europe regulates.” In Canada's situation, I believe empirically, if you put the numbers side by side, that we are worse off than the EU.

What is to be done? We must explicitly repudiate the failed economic vision that I've been describing: the centralized, top-down, state-directed, command and control, relying on taxation, subsidies and protectionism, the EU and the Argentine model, and the assumption that it's superior to decentralized, market-driven, privately funded and privately determined economic decision-making—for things like battery plants—concerning capital and competition. This is the economic philosophy that underlies the largest, most dynamic, most innovative, most productive economy on planet earth: the United States.

Members of Parliament, it's not too late to end Canada's holiday from economic history.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you.

There'll be a lot of time during questions to expand, Professor Lee.

Now we'll hear from the Canadian Centre for Caregiving Excellence.

Mr. James Janeiro, go ahead, please.

[James Janeiro, Director, Policy and Government Relations, Canadian Centre for Caregiving Excellence]

Thank you very much, Mr. Chair.

Ladies and gentlemen, I appreciate the opportunity to speak to you today as part of your pre-budget consultations.

My name is James Janeiro, and I'm with the Canadian Centre for Caregiving Excellence. We are a pan-Canadian organization focused on caregivers, such as parents, siblings, friends, neighbours and so on, as well as care providers such as personal support workers and direct support professionals who support people with disabilities. Our goal is to make Canada the best place in the world to give and receive care.

I have two budget proposals to bring forward to you today. The first is that the budget begin to fund the promised national caregiving strategy by converting the Canada caregiver credit from a non-refundable tax credit to a refundable credit of a minimum of $1,250 per year, per the 2021Minister of Finance mandate letter commitment.

The second is that the forthcoming federal budget allocate sufficient resources to the national caregiving strategy, including multi-year funding for ongoing priorities and initiatives.

One in four Canadians is a caregiver today, and one in two will be a caregiver at some point in their lives. Half of all Canadian women are caregivers already today. Unpaid family and friend caregivers provide three hours of care in the community for every hour of care provided by the health care system.

Caregivers are also the unseen backbone of our economy. They spend 5.7 billion hours each year supporting others and contribute the equivalent of 5% of our national GDP. Insufficient support for caregivers is costing our economy nearly $1.5 billion in lost productivity, and the equivalent of half a million full-time employees.

Caregivers, care providers and care recipients are in crisis. Our recent report, “Caring in Canada”, confirmed that caregivers are struggling with mental health, physical health and financial distress.

About 65% of caregivers reported financial hardship. More than one-third of caregivers reported significant financial hardship in the past year alone. Approximately a quarter of all caregivers are out-of-pocket about $1,000 a month for necessary expenses like dietary aids, incontinence supplies and care services. We suggest that funding the national caregiving strategy begin with converting the existing non-refundable Canada caregiver credit, the CCC, into a refundable credit, per the aforementioned commitment in the minister's mandate letter.

The Canada caregiver credit is a little-known non-refundable tax credit that can be claimed if a person supports a spouse, a common-law partner or a dependent with a physical or mental impairment. Many features of the credit make it difficult to access and prevent it from supporting caregivers who need financial support today. Only 8% of caregivers access the CCC as it stands now.

Since the credit is non-refundable, it can only lower the tax bill a person owes rather than create a new cash-in-hand payment. This means it only benefits people who have tax owing on their net income and does not benefit lower income caregivers or those who do not owe tax.

The federal government should support caregivers by making this credit refundable and adjusting the full amount to a minimum of $1,250 per year. It would directly impact the lives of millions of caregivers who do not typically have taxes owing and who face significant financial strain. Enacting this change to the credit is a necessary first step that can form the basis of a comprehensive and fully funded national caregiving strategy.

Best estimates, using publicly available data, suggest that this amendment to the credit would cost approximately $70 million per year using current, publicly available uptake figures.

Though the national caregiving strategy is yet to be released, budget 2025 must include sufficient funding to implement the policy changes and initiatives that will be included therein. Moreover, the funding must be structured to fund new initiatives in the long term and beyond whatever timeline is stipulated in that strategy.

We recommend an ambitious and comprehensive approach to the strategy that meets the needs of both today and tomorrow. It must cover financial supports, changes to employment insurance care leaves and benefits, and Canada pension plan reform, which would ensure that seniors are not punished for being caregivers well into their retirement years.

I'm happy to elaborate on these and our other ideas for the strategy during the question and answer period of our meeting.

Thank you, Mr. Chair. I look forward to your questions.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Janeiro.

Now we go to the Canadian Urban Transit Association. We have Kelly Paleczny, please.

[Kelly Paleczny, Chair, Canadian Urban Transit Association]

Good afternoon, Mr. Chair and members of the committee.

I'm Kelly Paleczny, general manager of the London Transit Commission and chair of the Canadian Urban Transit Association. I am pleased to present our association's recommendations for the 2025 federal budget.

For those unfamiliar with our association, CUTA has been the voice of public transit in Canada for over 120 years. Our members include transit systems, public bodies, companies that supply the sector and experts in urban mobility. Every day millions of Canadians depend on public transit. It's not just a convenience; it's an essential service that connects our communities, drives our economies and enhances our well-being.

Now we find ourselves at a critical juncture. Public transit systems across Canada face unprecedented challenges, and our recommendations today offer suggestions to address them with a focus on affordability and prosperity for Canadian families.

Transit agencies across the country welcome the launch of the Canada public transit fund, which represents a stable and predictable source of funding for transit infrastructure. Unfortunately, the planned 2026 rollout of this fund creates a significant infrastructure gap due to the sunsetting of the investing in Canada infrastructure program in March 2023. That is why it's imperative that we accelerate the rollout of the Canada public transit fund's baseline stream to budget 2025, rather than waiting until April 2026.

Many systems are grappling with aging infrastructure that threatens service reliability. Large systems in Toronto and Montreal have estimated their unfunded state of good repair needs at $900 million and $500 million annually. Smaller systems are continuing to rely on buses that have travelled in excess of one million kilometres and are at an age that makes it difficult to procure parts.

Accelerating the baseline stream of the fund will help address these critical shortfalls and enable transit agencies to continue to provide service to Canada's rapidly growing communities. We need to ensure that our transit systems remain efficient, sustainable and capable of supporting Canada's future needs. Every day we delay, maintenance backlogs grow, making it harder to meet current and future demands.

In addition to accelerating the Canada public transit fund, we must also act to protect it by enshrining it in legislation. This act will provide long-term certainty and prevent potential cuts to transit funding that would only exacerbate our current challenges. It will also enable transit agencies to confidently plan for and implement long-term projects, ensuring the sustainability of our transit systems.

In addition to the infrastructure challenges I've mentioned, many transit agencies are also facing critical operating shortfalls since the pandemic. TransLink in the metro Vancouver area faces a structural deficit of $600 million in 2026. The Toronto Transit Commission faces operating pressures of $354 million in 2025, and the ARTM, which oversees the transit systems of the greater Montreal area, currently faces a total operating deficit of $561 million.

Again, these issues are not isolated to Canada's largest systems. Many medium and smaller systems are unable to respond to the unprecedented ridership demand resulting from the rapid population growth being experienced in their communities as people move away from larger centres in search of affordable housing.

Transit agencies have attempted to cover these shortfalls through the use of municipal reserves and other funding sources and, in many cases, the less desirable options of fare increases and service reductions. None of these options is sustainable, especially in the context of Canada's current affordability crisis. Further inaction on this front will lead to less frequent, reliable and affordable transit services, ultimately undermining the aims of federal funding programs and discouraging transit ridership, which in turn decreases fare box revenue and worsens our operational deficits.

Effective and affordable transit services are fundamental to the success of priorities for all levels of government. This is why we are calling on the Government of Canada to take a leadership role in establishing a national task force that brings together federal, provincial and local governments as well as transit agencies to develop a comprehensive national public transit strategy. This strategy should address operational shortfalls and create a new funding model that supports transit agencies' evolving needs.

Public transit is not a luxury; it's a lifeline. It connects Canadians to jobs, education and essential services. It reduces congestion, cuts emissions and fuels economic growth. For every dollar invested in transit, more than two dollars flow back to our economy.

We need to rethink how we fund transit in this country. As we've seen in other countries, operational funding from higher levels of government is crucial for maintaining high service standards. Canada cannot afford to fall behind. We need a funding model that builds new infrastructure while also maintaining and operating the transit systems we already have in place.

Thank you for your time, and I'll be happy to answer any questions.

[The Chair, Liberal, Peter Fonseca]

We're now going to hear from Festivals and Major Events Canada.

[Martin Roy, Executive Director, Festivals and Major Events Canada]

Thank you, Mr. Chair.

Members of the committee, good afternoon.

I'll deliver my remarks in both official languages.

My name is Martin Roy. I'm the executive director of Festivals and Major Events Canada, also known as FAME, which represents over 500 festivals and events across the country.

Since 2017, I have repeatedly told the committee about the challenges for promoters supported by Canadian Heritage, be it through the Building Communities through Arts and Heritage program, BCAH, or the Canada Arts Presentation Fund, CAPF. These are more than 1,500 organizations, which can be festivals or event promoters from across the country.

I'd like to thank the committee for its ongoing support. Its recommendations have often echoed our own.

In the last budget, we received partially what we asked for. The government extended again for two years the reinvestment in the CAPF. In 2019-20, the amount was $8 million and this time, the reinvestment is $15.5 million until April 2026.

However, that amount has still not been added to the budget base and as a result in a few months we will once again have to fight for the renewal of that amount as well as for the $7 million allocated to the BCAH program.

It represents 45% of the resources. I cannot begin to tell you how much frustration there is among people on the ground due to this unpredictability and uncertainty. What will happen to all these events if, one day, the amounts are not renewed, and the programs are cut by nearly half? That is not to mention the subsidies that often go down, despite the increase in overall funding. Those who received the maximum amount from the BCAH program prior to the pandemic, which was about $110,000, received about $50,000 this year.

This is the context for the second recommendation in our brief, which calls for top-up amounts to be integrated into the base budgets once and for all. Recommendation two is also related to the first recommendation.

It has been clear for some years now, on the one hand, that Canadian Heritage can no longer meet current needs. On the other hand, economic and tourism programs for festivals and events, whether put forward by the Conservatives in 2009 or by the Liberals before, during and after the pandemic, were, each time, short-term programs. They have alternated between speeding up and slowing down our sector's growth.

In our view, the situation must be remedied by creating a new program dedicated to the growth and attractiveness of Canadian festivals and events, managed by the regional development agencies, with an annual budget of $60 million. Among other things, this program would support a category of festivals and events that are not recognized by Canadian Heritage. It would add other assessment criteria and a new, different grant for those already supported by Canadian Heritage.

This program could include components and levels, and would be tailored to the needs of festivals and events of all sizes with growth potential and the ability to attract more domestic and international tourism.

Within the ecosystem, it would enable a form of upgrade: Festivals and events recognized in Canada would increase their international attractiveness, while others recognized regionally could have a greater impact throughout Canada. It would be in line with strategies aimed at restoring Canada's status as one of the world's most popular destinations and regaining market share.

Grants awarded through this program should be given as a priority for the festival's operations. Attendance, the origin of participants and, ultimately, results achieved would be taken into account. The program should not be targeted at new projects that require investments too many organizations are not able to make.

Support for festivals and events has a multiplier effect on tourism. It has been shown that for every dollar spent by a participant, 25¢ is spent on accommodation and 33¢ is spent on food, not to mention transportation and other expenses. A number of communities and commercial arteries derive, in a single short period of festival or event, revenues that are comparable to those for the entire year, and we must add to that the tax revenues and economic spinoffs.

In 2011, in its evaluation of the marquee tourism events program, the Government of Canada concluded that “the program responded to the need for an immediate economic stimulus to the tourism sector” and “created positive benefits for recipients.” This is what we are suggesting to you to do again today.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Roy.

We'll now hear from the Grain Growers of Canada.

[Andre Harpe, Chair, Grain Growers of Canada]

Thank you, Chair, and thank you to members of the committee for inviting us.

My name is Andre Harpe. I am a grain farmer from the Peace River country in northern Alberta. I am also chair of the Grain Growers of Canada, known as GGC. I am joined today by our executive director, Kyle Larkin.

As the national voice for Canadian grain farmers, GGC represents over 65,000 cereal, oilseed and pulse producers. Of these growers, 98% operate family farms run by fathers, mothers, sons and daughters, just like mine.

We are the backbone of Canada's agricultural sector, but we have also been challenged in recent years due to a number of issues. These include the rising cost of inputs such as fertilizers and pesticides, increased taxation, changing weather patterns, labour disruptions and challenges within our international markets. This is why we are here today to highlight our pre-budget recommendations, all of which seek to bring government on as an equal partner with grain farmers.

First, we are asking the government to reverse the capital gains tax increase on family farms for intergenerational transfers. This tax hike has targeted farmers' retirement plans, has moved the goalposts for younger farmers and, frankly, has priced out many families. While the changes to the Canadian entrepreneurs' incentive will benefit some farmers, most farmers who produce the majority of food that Canadians and the world rely on will continue to see a tax increase.

Furthermore, this added complexity introduced by the CEI, alongside the increased inclusion rate, will drive up accounting and legal expenses for all farmers. To ensure the next generation of farmers can afford to take over the family operation, we require the capital gains tax increase to be reversed.

Second, we are asking the government to exempt the on-farm use of propane and natural gas from the carbon tax. When this tax was first introduced, gas and diesel used for on-farm activities were exempt to allow farmers to remain competitive. The same rationale holds true for propane and natural gas since they are essential for grain drying, which is needed to prevent food spoilage. On my farm, I use a grain dryer, which has cost me thousands of extra dollars in carbon tax without any viable alternative available. This is why we are asking for tax fairness for all farm fuels.

Third, while we appreciate the 18-month extended interswitching pilot that began last fall, it is not long enough to receive valuable data from shippers to assess the success of the pilot. Extended interswitching is important for grain farmers as it increases competition between the monopoly railways, which improves cost, service and efficiency.

Unfortunately, farmers like me in northern Alberta, northern Saskatchewan and British Columbia are unable to access this program because of where we farm. Therefore, in addition to the 30-month extension, we are also asking for the radius to be increased from 160 kilometres to 500 kilometres and for the program to be expanded to the B.C. Peace River country.

Lastly, many grain farmers have benefited from the accelerated investment incentive since 2018. This measure has allowed farmers to write off a larger share of the cost of newly acquired equipment, such as tractors and combines, at a rate of 45% versus the original 15%. However, American farmers have been able to access 100% bonus depreciation during the same time period, with data showing that new modern equipment can increase efficiency and lower emissions. We are calling on the government to stop the phase-out and to enhance a permanent accelerated investment incentive.

As mentioned, family-run grain farms are looking for an equal partner in government to support them to remain financially viable and help them grow in the future. These four recommendations are key examples of how the government can support family farms.

Thank you again to the committee for inviting us. We'd be happy to take any questions.

[The Chair, Liberal, Peter Fonseca]

Thank you, Chair Harpe.

Now we're going to hear from the Green Budget Coalition and Andrew Van Iterson, please.

[Andrew Van Iterson, Manager, Green Budget Coalition]

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

The Green Budget Coalition, active since 1999, is unique in bringing together the expertise of 22 of Canada's leading environmental organizations collectively, with over one million members, supporters and volunteers. The Green Budget Coalition's 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'm pleased to be joined today by three of my expert colleagues, including the coalition's current chair and past co-chair, to help answer your questions.

From the Green Budget Coalition's perspective, budget 2025 provides a prime opportunity, responsibility and imperative for the federal government to renew and strengthen action on the linked climate and biodiversity crises, while making life more affordable, reducing future costs, creating quality jobs and protecting health and safety, particularly for vulnerable communities. Fires, floods, stronger storms, extreme heat, ecological disruption, dramatic loss of wildlife populations and a rapidly warming Arctic are being felt in Canada, in the United States this week and around the world, causing widespread harm, particularly to low-income and vulnerable people, as well as huge economic costs. Science indicates that these and other impacts will intensify if climate change and ecosystem destruction remain unchecked.

At the same time, global efforts and investments to address these crises, such as the U.S. Inflation Reduction Act, are expected to create many trillions of dollars in economic benefits and help their countries be economic leaders for years to come.

In that context, for budget 2025, the Green Budget Coalition is featuring five recommendations as part of a comprehensive package of timely and ambitious budget and fiscal recommendations that will also reduce future costs and improve affordability and quality of life for people across Canada.

The first is delivering on nature commitments. Renew and expand existing funding to continue Canada's leadership on nature protection and deliver on Canada's 2030 nature strategy and the Kunming-Montreal global biodiversity framework obligations.

The second is retrofitting for resiliency and affordability. Expand and coordinate retrofit programs that integrate health, affordability and adaptation targets, and that accommodate the unique needs of low-income households and indigenous, northern and remote communities.

The third is using the sustainable agriculture strategy to cultivate success and help producers in Canada be leaders in sustainable and innovative agriculture, with a resilient and diversified food system. That helps people like the Grain Growers of Canada here.

The fourth is sustainable jobs for workers and communities. Create green job opportunities for youth, expand regional workforce development approaches, enable indigenous clean energy pathfinding and undertake labour market analysis.

The fifth is establishing a permanent, high-level office of environmental justice to ensure that environmental protection programs, policies, investments and laws account for community and population inequities.

On Sunday evening, I sent you each, by email, our more detailed recommendations for budget 2025. It's a document in English and French. This document provides updates, much more detail and many other recommendations supporting our submission to the committee, including on sustainable finance, how to raise needed money, international climate finance and biodiversity contributions, climate adaptation, electricity, electric vehicles, carbon pricing and a windfall profits tax on oil and gas companies. Our public transit piece aligns with what you heard from the Canadian Urban Transit Association just minutes ago.

Implementing these recommendations would lead to dramatic progress in advancing a healthier future for people in Canada, from coast to coast to coast.

I would like to thank you, again, for inviting the Green Budget Coalition to appear today. We look forward to your comments and questions.

[The Chair, Liberal, Peter Fonseca]

Thank you to all the witnesses for your opening remarks.

We are going to get to members' questions right now. In this first round of questions, each of the parties will have up to six minutes to ask questions.

We are starting with MP Kelly for the first six minutes.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Thank you.

Professor Lee, will increasing the capital gains tax improve or help deal with the productivity crisis that Canada is in?

[Dr. Ian Lee]

Reducing or increasing...?

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

They are planning to increase the inclusion rate to 66%. Will that help productivity?

[Dr. Ian Lee]

I have certainly read as much as I possibly can of the peer-reviewed research on this. It's my judgment that the majority consensus is that it's not going to help productivity.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Okay, so it's beyond your opinion. This is a consensus opinion of those who have studied this.

[Dr. Ian Lee]

I'm quoting the research I've read, the peer-reviewed journals I've read. Of course, there are enormous numbers, as I'm sure you realize, but these are the ones I've read. I try to read the academic stars, if I can put it that way, because they're of a higher quality, in the higher quality journals, and that's my judgment.

Professor Mintz, I have mentioned him already because he has published over 400 articles in peer-reviewed journals. It's an unimaginable number. It's on his website, by the way. If you publish 10 or 20 articles in a life, it's an amazing life. However, I have mentioned him because this is his expertise. He is a tax accountant.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

If I can get down to some of the points that you got into in your opening statement, you said the estimate is that the increase to the capital gains inclusion rate will suck $90 billion out of the Canadian economy. Is that correct?

[Dr. Ian Lee]

That's the number I'm quoting from Professor Mintz's study. That's right.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Dividing that out, $90 billion, that, in itself, will result in a significant decline in Canada's per capita GDP.

[Dr. Ian Lee]

It's a 3% decline in GDP.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Okay. You said, over the last nine years, since 2015, roughly coinciding with when this government took office, capital in Canada is shrinking.

[Dr. Ian Lee]

Yes.