Finance Committee on Feb. 3rd, 2022

[Marc-André Viau]

Thank you for your question and your introduction in French.

I am not saying that the industry cannot develop this technology; rather, the government of Canada should not be subsidizing these measures. As I said, the technology will not lead to achieving targets. We're spending a great deal of energy and financial resources on developing this technology to limit fossil fuel extraction emissions, but we're not talking about negative emission technologies.

If we want to reduce emissions, this is not the way we are going to get there; it will be by reducing the sector's emissions. It is not by encouraging production while telling ourselves that we will get there, that we might reduce emissions, when in the end it does not work.

[Greg McLean, Conservative, Calgary Centre, AB]

I appreciate what you are saying, and it is expensive. It has been expensive to this point in time and, as the technology has advanced, it is coming down in price. We have made a significant investment in this technology sector in Canada through public money, both provincial and federal.

We were once the world leader in this technology for good reasons. We've lost that lead now to the U.S. The U.S. is the leader. They're going to continue to advance this technology. The latest technology has it bringing it down to potentially $50 per tonne to store carbon underground. That is world changing.

As we say, as we develop these technologies, they become more efficient. As we're losing this to the United States because of bad government policy that hasn't kept up, we're going to lose this technology, we're going to lose this industry and we're going to lose this environmental benefit.

Everything I've heard you talk about, like green hydrogen, is much further down the development curve. Can you tell me how long you think it will take for green hydrogen to start delivering some environmental benefits? Is it one decade or two decades? No matter what, I'm going to propose to you that it's significantly longer than getting environmental benefits from carbon capture utilization and storage.

[Marc-André Viau]

I am also not saying that green hydrogen is a panacea. It is actually the opposite. We think that green hydrogen is the only type of hydrogen that should be developed. That does not mean, however, that it will change the world. We cannot count on this solution to reduce emissions in a significant way; rather, it can reduce them in a targeted way in some industrial sectors that are harder to decarbonize. This includes the heavy trucking sector, for example, or industrial sectors that are the most difficult to decarbonize. Those are the sectors we are targeting. These are therefore very specific uses of green hydrogen that, of course, will not happen tomorrow.

When it comes to carbon capture, no environmental advantage has yet been demonstrated for it. I am all for giving the benefit of the doubt, but I find it curious that we are the ones insisting that taxpayer money not be used to invest in it, when there are no successes that...

[Greg McLean, Conservative, Calgary Centre, AB]

That's okay. There's one second there.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. McLean. That is your time.

We're moving to the Liberals now with Madame Chatel for five minutes.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you, Mr. Chair.

I have a question for Mr. Harvey, but before I turn to him, I want to correct something.

I'm sure Madame O'Born didn't say that we will need to introduce a patent box in our tax system. As a reminder to everyone, it's an OECD and Canadian commitment not to have a patent box in the country's tax system. Globally, it's a minimum standard to prevent base erosion and profit shifting.

I wanted to highlight this.

[Dana O'Born]

May I respond very quickly?

[Sophie Chatel, Liberal, Pontiac, QC]

No. If I have time, I will go back to you.

[Dana O'Born]

Okay.

[Sophie Chatel, Liberal, Pontiac, QC]

I just want to flag that it's Canada's minimum standard.

Mr. Harvey, you spoke earlier of the impact on the regional network. This is an important subject, because we are on the cusp of a new economy. We also spoke with Ms. O'Born about innovation issues.

I know that currently, the CFDC Network, or Community Futures Development Corporations, can fund projects that are, all told, small projects. When we talk about innovation, we're talking about strategic investments into major projects, 20 million or 30 million dollars.

Between these two extremes, is there a middle ground that would help us to ensure our regions can innovate outside of just very small or very big projects? Would that be possible?

[Pascal Harvey]

I thank you for your question.

There is, in fact, a great deal of room. We are doing what our means allow us to do with the businesses we fund, which are businesses with 20 employees or less and sales of 2 million dollars and under. We want to introduce them to a culture of innovation. As you may suspect, Ms. Chatel, by introducing them to a culture of innovation, we are far from funding projects that would lead them to making this culture a reality.

A few years ago, the network created an innovation committee and an innovation group. We were trying to find out how we, within our own organizations, could establish a culture of innovation in order to better help other businesses. However, we quickly saw that impostor syndrome could come to the forefront. Ideally, there would have been money to access the ecosystem, consultants, innovation specialists in Quebec as well as educational institutions. This would have allowed us to better support businesses.

All that we could do was bring the message about innovation to their door, but it stopped there, because we did not have the means to do anything else. As you said, big businesses can access funding that allows them to lead innovation projects, whereas the small businesses or medium businesses have a harder time doing so.

If the federal government, through its agencies, were to grant us a certain amount to fund our clientele's innovation projects, that would be a significant asset for our network and our members.

[Sophie Chatel, Liberal, Pontiac, QC]

You mentioned an innovation committee. In each large region, there are innovation super-committees—I think there are five. These are partnerships with businesses and universities, for instance. We are currently in an economic shift.

Could we do the same in the regions, perhaps on a smaller scale?

[Pascal Harvey]

Absolutely.

The model you are referring to is drawn mainly from the innovation superclusters model. The only problem is that gateways need to be built between the clusters. Indeed, these clusters often work in isolation. The goal is to promote the emergence of smaller clusters in smaller regions, that is to say in rural and semi-urban areas.

However, creating gateways would be important so that the clusters could communicate back and forth. Often, innovation clusters are attached to specific economic sectors. It would worthwhile to break the clusters open so that more businesses could benefit from their expertise, as is the case in the circular economy.

[The Chair, Liberal, Peter Fonseca]

That's your time, Madame Chatel.

I'm looking at the time, members, and there are so many questions. I know we have many, but we're getting close to the end.

We just have enough time to allow each party one quick question and answer.

We'll start with Mr. Chambers from the Conservatives.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, Mr. Chair.

This is for the Canadian Taxpayers Federation.

You mentioned a spending review at government. It's been 10 years since the federal government has done any widespread review of its spending. That's a really long time for a government to have the increased spending to the degree it has and not actually having focused on where they're getting value for money.

Do you want to comment any more on that?

[Franco Terrazzano]

I think it's very important.

We have to remember that even before the pandemic, in 2018 and 2019, the federal government was spending at all-time highs—and that's accounting for inflation and population growth. We're seeing a ton of wasteful spending. We saw the federal government blow $8,800 on a sex toy show in Germany and hundreds of millions of dollars for the Ford motor company.

I think those examples make it very clear that we need our federal politicians on the Hill to start taking the spending problem seriously.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Chambers.

We'll now move to the Liberals with Ms. Dzerowicz for a quick question and answer.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

My last question is for Mr. Kronick and Mr. Zelmer.

What is your top recommendation for budget 2022?

We'll start with you, Mr. Kronick and then go to you, Mr. Zelmer.

[Jeremy Kronick]

My top recommendation for budget 2022 is around the bank tax. I think the bank tax should be avoided at this moment in time; I don't think it will be helpful for growth. At this point, we're looking for as much productive growth as we can.

[Julie Dzerowicz, Liberal, Davenport, ON]

Mr. Zelmer.

[Mark Zelmer]

Thank you.

My top recommendation would be to make sure that Canada's public debt-to-GDP ratio for all levels of government stays towards that of the better part of the pack of G7 countries so we have the room to cope with the fact that the private sector has record levels of indebtedness globally and over time.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Dzerowicz.

Mr. Ste-Marie, of the Bloc Québécois, now has the floor.

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

Thank you.

Mr. Viau, should Parliament pass green finance legislation that would promote private investment in transition programs instead of projects that pollute more?

[Marc-André Viau]

It is hard to say no to this proposal.

Of course, we did note some of these proposals during the last election campaign. We were highly motivated to work with parliamentarians on the issue of green finance.

As we said earlier, when we raised the issue of the minister of Finance's responsibility in terms of transparency and accountability, there is transparency and accountability, but there are also commitments in terms of investments. These commitments must align with our greenhouse gas emission reduction targets. We will get there only if investments follow that same path.

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

Thank you.