Finance Committee on Feb. 3rd, 2022

[Sophie Chatel, Liberal, Pontiac, QC]

As Ms. O'Born said, innovation is critical. In terms of the economy, the big winners will be the ones prepared for the digitization of the economy, green technology innovation, robotics, and so on. Personally, I feel that we're experiencing a bit of a historic moment, and we need to properly establish ourselves.

How do we bring innovation to our areas? Do we create innovation centres? If so, how do we get our areas to discover what will make them successful in the economy of tomorrow?

[Dana O'Born]

I think it's really important to consider, first of all, that there are some thriving centres of tech across the country. Six months ago nobody would have thought that Alberta would have been such a tech hub, and there's a lot of tech activity also happening in your home province as well.

If the idea is to create new structures maybe adjacent to the superclusters program, or I guess even in thinking about what the new CARPA program will look like, it's going to be really critical to understand what those investments look like for companies and make sure that they're serving the local, domestic ecosystem.

I talked a little bit about research and development tax credits in my deputation. Our budget submission also spends a lot of time talking about creating what we like to call “marketplace frameworks”, which include the right standards and regulations to ensure that the wealth is staying here in Canada and servicing Canadians. That means that ideas that are generated are not picked off and taken out of Canada—and that's protected through tools like a patent box or through the Innovation Asset Collective that the government has already established to protect IP. A lot of that really has to be done in concert with Canadian technology companies.

It's a great question, but the planning of some of these structures really needs to be very strategic, especially if we're competing on a global landscape with countries like China, Israel and the U.S.

[Sophie Chatel, Liberal, Pontiac, QC]

Maybe there are—

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Chatel.

That is your time. I know it goes fast.

We are moving to the Bloc with Mr. Ste-Marie for six minutes.

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

Thank you, Mr. Chair.

I want to acknowledge all the witnesses and thank them for their insightful presentations.

Mr. Harvey, I can tell you that SADCs are very well established in our communities. In my constituency, we have one in Matawinie and D'Autray‑Joliette. They're great teams that make a difference. I tip my hat to them.

My questions are for Mr. Viau from Équiterre.

Mr. Viau, thank you for your presentation and for the brief that you submitted last August. As you said, there have been a few additions since then. First, I'll address the last point in your presentation, which was about Canada's responsibility for climate change, just so we're on the same page. Bill C‑12 was passed and the government has responsibilities with respect to climate change.

Could you explain that again and repeat what you're asking the government to do?

[Marc-André Viau]

Thank you, Mr. Ste‑Marie.

First, I want to make a quick comment. Your colleague, Mr. McLean, referred earlier to the witnesses as rent‑seekers. I want to clarify that only one of my four recommendations today calls for money. The others concern, for example, the elimination of fossil fuel subsidies. If you want to work on reducing federal government spending, I'll gladly work with the government.

Regarding your question, Mr. Ste‑Marie, I want to draw your attention to section 23 of Bill C‑12, which was passed, or the Canadian Net‑Zero Emissions Accountability Act:

23. The Minister of Finance must, in cooperation with the Minister [of the Environment], prepare an annual report respecting key measures that the federal public administration has taken to manage its financial risks and opportunities related to climate change. The Minister of Finance must make that report available to the public.

We're asking that this section be implemented as soon as the budget is tabled and that the parameters be defined. This good responsibility was established. However, we don't have all the parameters on what climate accountability will look like. We need these parameters, because we must know how the various government departments and agencies will ensure that they support the greenhouse gas reduction targets, which have been set at 40%, 45%.

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

Thank you.

This wasn't in last fall's economic update. You're asking for it in the next budget. That's very clear.

With respect to mobility, your proposal is zero cost. It's a tax on higher‑polluting vehicles that would be used to encourage the purchase of lower‑polluting vehicles. You said that the system of subsidies for the purchase of electric vehicles had run its course. I'd like to hear your thoughts on this.

[Marc-André Viau]

We noticed this in the first implementation phase of this subsidy program, which was an important program to generate buyer interest in electric vehicles. In terms of switching the entire personal vehicle fleet to electric vehicles, we're a long way from that. In the first version of the program, the budget was exhausted in a year and a half, when it was a three‑year program. Zero‑emission vehicle sales currently account for only 5% of vehicle sales.

If we want to reach the 100% electric vehicle target, the government should no longer pay for the incentives for the purchase of zero‑emission vehicles. Instead, the buyers of polluting vehicles should fund the incentives until parity is reached. The various incentives can then be removed. That said, we aren't recommending a 100% electric vehicle target, since our roads can't handle that. You need only look at the current growth in the vehicle fleet to understand that there will be endless traffic congestion if all new vehicles are replaced by zero‑emission vehicles.

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

Your answer was very clear. Thank you.

You talked about eliminating fossil fuel subsidies progressively, but completely. You said that carbon capture and storage did not seem to be an interesting or promising solution.

In your opinion, public funds should not be invested to support this type of initiative. Is this correct?

[Marc-André Viau]

Previous witnesses talked about innovation. We have nothing against the fact that the industry is pursuing this type of research for development and innovation, if that is what it wants to do. However, in our opinion, taxpayers should not have to pay for these technologies.

We already pay very high environmental costs for the production of fossil fuels and its uses. We are paying the bill for cleaning up orphaned wells, for example. We already have a steep bill and should not ask the public to shoulder a burden that belongs to the industry.

The effectiveness of these technologies has not been proven. All over the world, 0.1% of emissions have been captured, and 80% of projects attempted in the United States have been abandoned. Let's just say that the rate of success is not really convincing. We must reduce emissions as of now, and we should try other solutions.

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

Thank you.

Have you studied the issue of hydrogen development? Is it promising or not?

[Marc-André Viau]

We have stated our opinion on this issue, both at the federal level and in Québec.

[The Chair, Liberal, Peter Fonseca]

Give a short answer, Mr. Viau, please.

[Marc-André Viau]

We are in favour of green hydrogen and the deployment of the green hydrogen sector, but only from that sector. Other sectors will serve only to continue to use fossil fuels.

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

Thank you very much.

I will come back to the issue of agriculture.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste-Marie.

We are moving to the NDP and Mr. Blaikie for six minutes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much.

To Mr. Macdonald with the CCPA, I know that in your alternative budget you're recommending the establishment of a Canada livable income program and a Canada disability benefit. I just wondered if you might be able to speak to some of the ongoing challenges as Canadians try to find work and get enough hours in pandemic-affected industries, and some of the cracks that folks have fallen through, particularly since the Liberals made access to pandemic benefits much harder. Could you speak about how the establishment of benefits like this would help with that, both now in the pandemic context but also as we look down the road towards economic disruption as a result of climate change.

[David Macdonald]

Certainly when it comes to coverage of workers in the omicron wave and in future waves, this isn't necessarily the federal government's fault but there is this ongoing problem of paid sick leave, particularly for low-income workers. This is not just generally provincial policy. The federal benefit, the CRSB, has been a failure, frankly, because the take-up rates have been so low. That wasn't really the best approach. The best approach is to have this legislated provincially. I think the federal government could certainly do more to push for these types of sickness benefits being incorporated within provincial labour law, such that low-income workers have access to them, whether they have COVID-19 or any other illness.

Certainly when it comes to the coverage of self-employed workers, what's interesting is that the best coverage they had was at the very start of the pandemic, and the coverage has gotten progressively worse over the course of 2020 and 2021. The sequence of events started with the CERB, which was very easy to access for both people who were eligible for EI and those who weren't—who were self-employed but weren't eligible for EI. Those benefits were capped under the CRB and limited to $300 a week. Those ended at the end of October and then we saw the creation of the lockdown benefit, which seemed like it wasn't a real benefit until lockdowns happened again and then all of a sudden we had to put the websites together. It seems like the federal government wasn't prepared.

This is a benefit that is and will be accessed by self-employed people who don't have eligibility under the EI system. There does appear to be a commitment to include self-employed workers within the EI system by January, essentially by this time next year. I look forward to those details. I know those consultations are ongoing. That certainly was one of the big lessons of COVID-19, the lack of coverage for self-employed workers. Many of them are part of the gig economy, and part of the problem is just straight misclassification, a problem that could be rapidly addressed by the federal government, which is to say that workers who look like they're self-employed but who really don't have choice in what they're taking—I think of an Uber driver—be correctly classified as employees and that the employer contributes to the EI fund. That would be something that could be rapidly addressed.

There are certainly employees who are legitimately self-employed and are not presently covered by EI. Hopefully changes in the EI system that we'll see over the course of this year will help to address that.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Mr. Viau, we have heard from the Green Budget Coalition about the necessity of having a very ambitious program, much more ambitious than previous federal government programs, to deal with the issue of renovating residential and commercial buildings.

Is this an initiative supported by Équiterre? What kind of budget should the federal government have in order to implement such a program and fund these renovations?

[Marc-André Viau]

I am not as well placed as my colleagues who appeared last Monday on behalf of the Green Budget Coalition. We support the Green Budget Coalition, but we are not responsible for the housing sector. That said, we fully support the requests made, given that we are in the same Coalition.

The importance of energy-efficient retrofits is undeniable. We know full well that renovated buildings and new ones should be energy efficient. Related to mobility, perhaps, I would add that we should make sure electric charging stations are included in buildings' parking lots so that electric vehicles are always ready to be used. This includes not only residential buildings, but those of Crown corporations. For example, in the eastern part of the island of Montreal, Canada Post is building a new centre without charging stations for electric trucks or charging stations for its employees. This should be looked into, and the state should set an example here.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

When it comes to charging stations, are you talking about help only for Canadians or a broader public network? Can you give us an idea of what the federal government could do to support the implementation of a public network?

[Marc-André Viau]

I don't have the numbers in front of me for the current deployment. I know that efforts have been made to connect all of Canada's communities. Further efforts should continue, certainly.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Members, we are moving to our second round. We have the Conservatives, with Mr. Stewart for five minutes.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Thank you, Mr. Chair.

My first question is for the C.D. Howe Institute, either Mark Zelmer or Jeremy Kronick.

The C.D. Howe Institute published its annual federal, provincial and territorial report card this past year, a report card that saw my home province of New Brunswick receive an A-minus grade, along with Nova Scotia, Saskatchewan, Alberta, British Columbia and Nunavut. This same report card gave our federal government an F grade.

Can either Mr. Zelmer or Mr. Kronick explain to me how the federal government, with the answer key, can still receive a failing grade?