Finance Committee on Feb. 3rd, 2022

[The Chair, Liberal, Peter Fonseca]

I'm sorry. I heard the chair called out, but I didn't hear—

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

It's just a point of order.

[The Chair, Liberal, Peter Fonseca]

Oh, it's a point of order. Go ahead.

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

I don't know if it's the same for everybody else, but the French and English translation are at the same volume. I don't know if that's unique to me or if other people are having the same issue.

[The Chair, Liberal, Peter Fonseca]

I'm hearing it okay, but I'll look around the room....

Everybody else is okay.

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

I'm sorry. I'll adjust my set-up, I guess.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Beech.

Continue, please.

[Marc-André Viau]

Perfect, thank you.

What we are asking for, among other things, as an equitable organization, but also as a member of the Green Budget Coalition, are investments that will allow us to ensure good soil health.

If we want good soil health, it is because soil is a tool to fight climate change. It can capture carbon, but it is also a tool to increase the resiliency of our agrifood system. The more carbon is integrated into the soil, the better production becomes and the less necessary it becomes to use inputs that are not natural, such is nitrogen fertilizers.

That means this is very important to us. This is a tool for adaptation and a tool that leads to using best practices to ensure that we produce better, as well as capture carbon.

Among the financial requests, more specifically, there is 50 million dollars to test soil health programs and practices; 6 million dollars to develop a soil health strategy over a period of 3 years; 2 million dollars for a network to share information; and 3 million dollars over two years to analyze the cost-effectiveness of soil health and to assess measures put in place. Added to that are training and hiring programs for new regenerative practices and soil health advisory services officers.

That covers the whole of the requests we have made for this area.

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

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Thank you, Monsieur Ste-Marie. That is your time, including stoppage time.

We are moving now to the NDP and Mr. Blaikie for two and a half minutes.

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

Thank you.

Mr. Macdonald, the alternative federal budget by the CCPA talks about the need to create hundreds of thousands of new, affordable, non-market housing units, as well as a number of other measures having to do with housing, including an acquisition fund to help non-profits to secure assets, whether it's existing buildings or land, in order to be able to compete in the current market.

I think it's pretty clear from a moral point of view why this is necessary. I'm hoping that you can speak to some of the economic benefits and some of the salutary effects that moving forward with these things might have on the situation in the current housing market.

[David Macdonald]

Thanks so much for the question.

There are really two sides to this. One has been the increasing activity of real estate investment trusts in buying up traditional purpose-built housing with the goal of maximizing profits from those assets, as opposed to maintaining tenants in those apartment buildings for long periods of time.

This is a change from the traditional ownership structure that you'd see in purpose-built housing from smaller, more local enterprises that might be focused on steady streams of income versus larger, profit-oriented publicly listed companies whose goal is to extract as much profit as possible from tenants.

On the one side, I think it's important to eliminate the tax preference for real estate investment trusts, which is one of the reasons they've gained so much prominence. The other side is to put co-ops and non-profits on an equal footing for their ability to purchase purpose-built housing and to retain it not for the profit of investors, but for a livable place for tenants to live—likely lower-income tenants—often in downtown cores.

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

Can you take the time remaining to spell out a bit more some of the recommendations CCPA has in respect of housing?

[David Macdonald]

Yes. Certainly, in terms of a land and existing assets acquisition fund, we're recommending a fund of $340 million a year. This would be partially offset by the removal of the real estate investment trust tax preference, which allows the pass-through of profits that investors can then deduct on their side, often because they're not in RRSPs. This trade, in essence, would shift the balance of power, to some degree, back towards non-profits.

I think the other thing to mention, of course, is that there has been a fair amount of recent attention on the national housing strategy and the fact that it does appear to be funding many at-market units, in essence. Its definition of “affordable” is extremely generous, and many projects that were going to go ahead on the private side are being funded in any event, and some of the structures within the NHS actually make it more difficult for non-profits and co-ops to gain access to the funds.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Thank you, Mr. Blaikie.

We are moving to the Conservatives and Mr. Patzer.

Welcome, Mr. Patzer.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you very much, Chair. It's an honour to join this committee today.

My questions are for Mr. Terrazzano.

In Bill C-8, an act to implement certain provisions of the economic and fiscal update, there's a provision for the Income Tax Act to introduce a new refundable tax credit to return fuel charge proceeds to farming businesses in backstop jurisdictions.

Have you had a chance to look at that? What are your thoughts on that system, and is it essential to have in place?

[Franco Terrazzano]

I have not seen that specific proposal, but we do hear from a many farmers and businesses that the additional taxes—carbon taxes, fuel taxes—are really a pain. We've put out an analysis that shows, depending on the province, that between 31% to 42% of the pump price comes through taxes.

One thing we would like to see is some tax relief during the pandemic. We've seen a number of other countries around the world...Spain and France are reducing their electricity taxes. We've seen South Korea reduce its gas tax by 20%. We've seen other countries provide their citizens with relief, but unfortunately we've seen Ottawa stick its constituents with a higher tax bill.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

If I'm not mistaken, that's supposed to only increase on April 1, and no, it's not an April Fool's joke.

Do farmers get back more than they pay in carbon taxes in Canada?

[Franco Terrazzano]

You know, I've heard that thrown around sometimes, but it's really magic math to think that the government is going to hammer us with a tax and then somehow make people better off. The truth of the matter is that the carbon tax is causing a ton of pain, and so are booze taxes and payroll taxes which continue to go up.

The first role of government during a pandemic should be first, do no harm, but as you mentioned, the carbon tax is set to increase for the third time during the pandemic. It's supposed to continue to go up all the way until 2030 where it will be nearly 40¢ per litre. Also, we have a second carbon tax coming in through fuel regulations. You mentioned a rebate, but as far as I'm aware, there is absolutely no rebate on the second carbon tax, which could add another 11¢ per litre to the price of gasoline.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Unbelievable.

One of your recommendations for the government is to end the gun ban and buyback program. Have you had a chance to do a fiscal analysis of that? What are you projecting that the buyback program is going to cost the taxpayer?

[Franco Terrazzano]

The Parliamentary Budget Officer has done a partial analysis, and it could cost $756 million, but that's just a partial cost. That's only to reimburse gun owners. We have seen an analysis done by a professor at Simon Fraser University who says that the biggest cost hasn't even been factored in, and that's administration and staffing, which could add billions of dollars to the price tag.

Not only is it going to be expensive but we've also heard from the officers who are charged with protecting us on the front lines. The largest police union in Canada, the NPF, has said that the gun grab is not going to address the current and emerging themes or urgent threats to public safety, and even worse, the gun grab and buyback program could make Canada less safe, because it would be diverting resources from actually cracking down on crime to targeting law-abiding Canadian citizens.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

One other recommendation you have that is of particular interest to me, because I hear about it on a daily basis from my constituents, is to phase out equalization.

Could you comment on that one further?

[Franco Terrazzano]

That's correct. We have a plan to phase out equalization over 20 years. Next year, some provinces would still get $19 billion.

One of the key concerns.... I'm from Calgary. That's where I have lived over the last few years. It's just so unfair. I mean, really, how many more Albertans need to lose their jobs before Ottawa understands that a $650 bill per person for Albertans is just too much through equalization? But it's not just Albertans that it's harming; it's also harming the residents of Newfoundland and Labrador.

This is how absurd the program is. Under equalization, Newfoundland and Labrador is considered to be a “have province”, but then you still have the federal government doing backdoor bailouts with that province. We do think that equalization does need to be phased out over 20 years.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you very much.

Chair, I only have about 15 seconds left, so I'll cede my time.

[The Chair, Liberal, Peter Fonseca]

Thank you.

We're now moving to the Liberals and Mr. MacDonald for five minutes.