Finance Committee on Oct. 31st, 2024

[The Chair, Liberal, Peter Fonseca]

I call this meeting to order.

Welcome to meeting number 162 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 would now 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.

Pursuant to Standing Order 83.1 and the motion adopted by the committee on Thursday, September 26, 2024, the committee is resuming its study on pre-budget consultations in advance of the 2025 budget.

I would now like to welcome our witnesses.

Thank you for your patience. We had a vote, so we are starting a little after our regular time.

From the Aerospace Industries Association of Canada, we have Mike Mueller, president and chief executive officer, who is no stranger to this committee. From the C.D. Howe Institute, we have William Robson, president and chief executive officer, who is joining us via video conference. From CHIN Radio-TV International, we have Francesco Di Candia, general manager, whom we all know. From Diabetes Canada, we have Glenn Thibeault, executive director of government affairs, advocacy and policy. Glenn is also a former MP and former MPP. From the Macdonald-Laurier Institute, we have Timothy Sargent, director, domestic policy.

If some of you have been on any other committees, Timothy was also a deputy minister of the government in finance, fisheries and....

[Timothy Sargent, Director, Domestic Policy, Macdonald-Laurier Institute]

It was also agriculture.

[The Chair, Liberal, Peter Fonseca]

Now you're wearing a different hat at the Macdonald-Laurier Institute as its director of domestic policy.

From the Qikiqtani Inuit Association, we have Virginia Mearns, senior director, Inuit relations, and its assistant executive director of marine and wildlife conservation, Richard Paton.

Welcome, all, to our committee.

With that, witnesses, you will each have up to five minutes for your opening remarks before we get into the members' questions. We are starting with the Aerospace Industries Association of Canada.

Mr. Mueller, go ahead, please.

[Mike Mueller, President and Chief Executive Officer, Aerospace Industries Association of Canada]

Thank you, Mr. Chair and members of the committee. It's great to be back.

Aerospace by its nature is a highly competitive field. It is also a critical and strategic industry for Canada, fuelling innovation and economic growth and supporting well-paying, family-sustaining jobs right across the country.

Canada's aerospace industry is already a major engine of the economy, contributing over $29 billion to our GDP and exporting $19 billion. Right now, more than 200,000 hard-working Canadians across this country rely on aerospace to support their families.

Like any competitive field, aerospace requires smart and supportive public policy to survive. Without supportive and strategic public policies, we'd likely have no automotive sector, many of our natural resources would remain untapped, and we'd have no railways to move our manufacturers' goods, minerals and grains to market.

Just as strategic policies have enabled these sectors to thrive, an aerospace industrial strategy for Canada will help us reach new heights in this country. However, without political leadership and supportive policy, our aerospace industry risks losing ground on both the domestic and international stage.

Despite its strategic importance for Canada, our aerospace sector is at a crossroads, facing opportunities for growth but also significant policy challenges. This includes a tax on aerospace manufacturing that is killing jobs and the domestic market for our industry.

For three years, I've been before this committee to raise concerns about the potential impacts of this tax. While it was introduced with the intent of collecting revenue, the reality is that it's a job-killing manufacturing tax that's damaging both our sector and the economy while undermining Canada's international reputation.

Despite multiple assessments, reports and warnings, the facts are now clear. By the government's own account, the luxury tax has cost taxpayers $19 million to administer. By the government's own account, only $15 million has been collected related to aircraft. Industry estimates that it has lost over $1.8 billion in sales. According to a report from Professor Roy, those sales would have generated potentially $90 million in GST revenue for the government.

Most troubling, according to the government's own finance department, jobs will be lost, and according to our estimates, this tax is putting nearly 4,000 well-paying aerospace jobs at risk across Canada.

The facts are clear. Government is bringing in $15 million on the backs of industry and its workers. It costs them $19 million to administer, and they're losing GST revenue to the potential tune of $90 million, not to mention the nearly 4,000 Canadian workers and families this tax puts at risk, which is why unions—and I know you've heard from them before—representing aerospace workers are also in favour of repealing this tax on manufacturing, specific to aircraft.

I am here before you again today urging this committee and all parties to reconsider the implications of this tax and to take immediate action to repeal it to safeguard the aerospace sector and protect the thousands of Canadians who depend on it.

This brings me to the opportunities that an aerospace industrial strategy for Canada will bring. Minister Champagne recently announced the government's commitment to develop an industry aerospace strategy for Canada. Recognizing that aerospace is strategic for Canada, I think, is a non-partisan issue. We are calling on all parties to support an aerospace industrial strategy.

With forecasts projecting the need for 40,000 new aircraft in the coming decades, a strategy can potentially—just with a small number of things—do the following. It can enhance defence and national security by addressing procurement delays and identifying key capabilities, enabling Canada to meet its defence commitments and operationalize and institutionalize the goals of the recently released DPU. By prioritizing Transport Canada certification, sustainable aviation fuels and programs like SR and ED, innovation can thrive, while reducing the industry's carbon footprint, and be able to compete globally.

Because of the political leadership shown in the past, we are one of a few select countries that can design, build and certify an aircraft from nose to tail. We cannot let this ability slip away. It must be supported and funded properly. This committee has the ability to shine a light on this, and we should not cede this ability to other competitor nations.

A strategy should also address labour market challenges and help industry create well-paying, family-sustaining jobs, helping to build a robust talent pipeline, now and for the future.

In closing, we urgently need to repeal the harmful job-killing tax on aerospace manufacturing as well as develop and adopt an aerospace industrial strategy for Canada. It cannot be overstated that these should be supported by all parties. They should be economic priorities that will shape the future of our country for the better.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Mueller.

Now we'll hear from the C.D. Howe Institute.

Mr. Robson, go ahead please.

[William Robson, President and Chief Executive Officer, C.D. Howe Institute]

It's an honour to be with you today. I want to commend the work of your staff in helping me connect. I was a troublesome participant, but they handled it very elegantly.

I'd be very glad to answer your questions on federal fiscal policy.

Generally, the stagnation of Canadian productivity and earnings is now a lively topic of conversation. A decade of weak business investment has left us in a very unusual situation, where the stock of productive capital per worker is falling. I have provided the committee with copies of the C.D. Howe Institute's most recent report on that topic, and I think federal fiscal policy, among other things, could help.

I've circulated copies of the institute's most recent annual shadow federal budget. It contains a number of ideas that I think could help to spur economic growth and investment. Again, I'd be happy to answer questions on any of those topics.

Some of the measures in our investment report and in the shadow budget are contentious, but in my opening time with you now, I hope I can touch on something that should not be contentious. It should not attract a lot of partisan division. That's the need for government finances to be transparent and for government financial documents, particularly budgets, to be on time.

Too many people find government finances mysterious. The basics should not be mysterious to anyone who is motivated and who can read a few numbers. I think that budgets and estimates in public accounts documents should present the key information straightforwardly and up front. It does everyone a service if a non-expert can pick them up or open them online and can quickly and confidently get the essentials. If budgets and other documents obscure the key numbers or bury them so deep that a non-expert can't find them, they do us a disservice. People can give up. They can disengage, or worse, they may suspect that the obscurity is deliberate and that they can't trust what is in the budget or the public accounts.

Timeliness also matters. This is a familiar topic in Parliament. Budgets and estimates should come out together, before the fiscal year begins—well before it. Parliamentarians should be able to consider the fiscal plan and the individual items in the estimates before the money is spent. Public accounts and annual reports, for their part, should come out shortly after the fiscal year ends, while the information is fresh and before the opportunity to address any problems they reveal gets stale.

The federal government, for many years, set a good example with the quality of its budgets and its public accounts. It was, for many years, notable for producing timely budgets, but lately, the federal government has not set a good example. There was no budget at all in 2020. The budgets in 2021 and 2022 appeared in April, after the fiscal year had begun. In 2023, the budget appeared on March 28, which is much too short for Parliament to consider the fiscal plan before the year starts, and in 2024, it was on April 16.

We need only look as far as Nova Scotia, New Brunswick and Prince Edward Island to see provinces where budgets, regardless of the party in power, appear before April 1 consistently. The next federal budget should appear in February, as federal budgets used to, and its successors should do likewise.

This is a word on presentation. The federal government's grade in the C.D. Howe Institute's annual report card on fiscal accountability and transparency has recovered from the F it received after no budget in 2020, but it is only getting Ds and C-minuses. One point that I would emphasize is that the key numbers appear hundreds of pages deep in an annex. The rare non-expert who perseveres to find them may find them unclear because some major pension costs are shown below the line. The federal government does not present its main estimates and its budget together, and the accounting in the two documents does not match.

These problems are challenges for parliamentarians and for the public. As I said already, they discourage engagement and encourage cynicism, and they're unnecessary. Many provinces and territories do better. In our latest report card, Saskatchewan and Alberta were in the A range. We're finalizing this year's report card, and it looks as though Yukon will also be an A-grade jurisdiction this year. The federal government should join them at the top of the class.

Thank you for the invitation to be with you and for your attention. I look forward to your comments and questions.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Robson. I'm sure there will be many questions from the members.

We're now going to hear from CHIN Radio-TV International.

I'll tell you, members, when I first got to Toronto, I was two years old and my parents' first place was almost across the street from CHIN Radio. I know Lenny Lombardi, your president and CEO. Is it his birthday today? Yes, it's Halloween, and it's Lenny Lombardi's birthday, so congratulations to him.

We're now going to hear from General Manager Di Candia.

[Francesco Di Candia, General Manager, CHIN Radio TV International]

Thank you, Mr. Chairman.

Canada's history of settlement and colonization has resulted in a multicultural society made up of three founding peoples—indigenous, French and British—as well as many other racial and ethnic groups.

CHIN Radio reaches over 100 cultural communities in more than 50 languages within the greater metropolitan Toronto and southern Ontario areas on CHIN FM 100.7, CHIN AM 1540 and CHIN FM 91.9. In the Ottawa-Gatineau region, we're on CHIN 97.9 FM.

The contribution of CHIN to the cause of multiculturalism is to understand, embrace and celebrate our cultural diversity between people of national, racial and religious origins. In today's multicultural society, it is crucial to be able to reach all ethnic groups in our country and to be able to explain to them in their own language any type of message. This is why the Canadian government has many publications and programs that are translated into different languages.

In Ontario, almost 26% of the province's population identified as a visible minority group. In the city of Ottawa, 24% of the population was born outside the country, and in the Ottawa-Gatineau area, over 50% of the population identified as other than English or French.

Multiculturalism in Canada has established us as a unique society keenly aware and respectful of our cultural diversity as a nation and, through the success of our multicultural policies, respectful of the importance of inclusion for all peoples in Canada.

Ethnic media has played and continues to play a vital role in supporting multiculturalism in Canada. For over 70 years, ethnic media has helped new Canadians interpret the world and society around them and made them feel welcomed, informed and entertained in their new home. We believe the government should do more to help ethnic media achieve these goals.

Unfortunately, ethnic media has not been held in equal status to mainstream media, when considering budget expenditures for media campaigns. Government spending in ethnic media is vastly disproportionate to what mainstream media enjoys, largely due to the built-in bias of the diary-based audience measurement methods used by advertising agencies.

These agencies typically rely on established surveying companies, such as Numeris, which is the sole provider of audience measurement data for television and radio broadcasters in Canada.

Audience numbers are accumulated through the diary methodology, which is only provided in two official languages, English and French. Unfortunately, for ethnic broadcasters, this is an immediate disqualifier if the survey is not provided in the mother tongue of the household. This presents a language barrier and would corrupt the findings. In addition, surveys conducted by phone face the same dilemma. If the respondent has a language barrier, the call is terminated.

Even if the individual broadcasters create their own surveys, they are often rejected by agencies as being proprietary. The end result is that ethnic media, in particular radio and TV broadcasters, are not even considered by advertising agencies due to the lack of measurement. It's not because of lack of audience.

Getting the measurement of multicultural audiences correct has long been a struggle for the industry. It cannot be stressed enough—the vital importance of ethnic media to effectively reach audiences with information essential to successful integration into Canadian society. Often, ethnic media is the only source of important information available in a mother tongue, a service not provided by mainstream media outlets.

Many ministers in the government have had, and keep having, from time to time, segments in our shows. They value the direct connection they can establish through CHIN Radio with the different ethnic groups we serve. If the benefits of ethnic media are important to sustain, we believe the government should consider ways in which this great resource can be encouraged and grow.

It is important that the federal government support ethnic media. This doesn't necessarily mean that more funds be allocated to the advertising budget. The government should direct third party advertising agencies to disburse the budget and allocate a minimum of 15% of the overall yearly advertising budget to ethnic media. This would be the right move towards being more inclusive of the multicultural media outlets. Inclusion is not just the smart thing to do; it is also the right thing to do.

This distribution of funds would permit the government to make a more targeted effort to convey a message to certain ethnic groups and to reach out to the many diverse ethnic entities living in Canada in a very proactive and dynamic way.

With ethnicity and languages, it's an ongoing process. We mostly have an open door immigration policy. The government is pursuing an ambitious plan to welcome 395,000 immigrants in 2025; 380,000 in 2026; and 365,000 in 2027. That's a door that's not going to close anytime soon. It's going to continue well into the future years to come.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Di Candia.

Now we're going to hear from Diabetes Canada.

Mr. Thibeault, go ahead, please.

[Glenn Thibeault, Executive Director, Government Affairs, Advocacy and Policy, Diabetes Canada]

Thank you, Chair.

Through you, I want to thank the committee for inviting me to testify today.

For the more than four million people living with diabetes in Canada, access to affordable medications and devices is critical. In fact, the out-of-pocket costs of things like medications, devices and supplies can be as high as $18,000 per year if individuals are solely reliant on public coverage. I will, therefore, focus my remarks on two areas: the implementation and funding provided for diabetes medications under Canada's new national pharmacare program, and the need for investments to support the national diabetes device access fund.

As we know, earlier this month, Bill C-64 received royal assent, creating the framework for a national pharmacare program, which is a good first step. However, many of Diabetes Canada's concerns remain unresolved. During the parliamentary debate on Bill C-64, Diabetes Canada emphasized that the best approach to establishing a national pharmacare program would be to initially focus on helping people who lack adequate coverage for their prescribed treatment regimes and to ensure there are no disruptions to their private coverage. We recommended the inclusion of a provision very similar to the dental care legislation to clarify that a federal pharmacare program will not jeopardize the current system. We remain concerned about the potential unintended consequences of the legislation.

We have also raised concerns with the current draft formulary for diabetes medications, as they do not align with Diabetes Canada's clinical practice guidelines, also called CPGs, which are developed to inform general patterns of care and public policy. Diabetes is a complex condition that has a constantly expanding list of new therapies and medications, and those medications and therapies should be available and covered as options of care.

Within the legislation that has passed, the Minister of Health is now required to direct Canada's Drug Agency to compile a list of essential medicines that will inform the national formulary. As such, Diabetes Canada continues to call for an immediate expansion and update of the background formulary to reflect the CPGs so that people living with diabetes can access the medications they need to support their best possible health outcomes.

We are also calling for an increase to the baseline funding to ensure that the program meets the needs of persons living in Canada with diabetes. If the program is truly a single-payer universal system, then the initial budget 2024 allocation of $1.5 billion over five years, which covers both diabetes and contraception medications, will not provide a sufficient basis of funding for this program to operate properly.

Let me explain: The estimated yearly cost of diabetes medications, as assessed by the private health insurance industry, is over $1.6 billion per year, and in 2023, public spending on diabetes medications was $1.8 billion, which is close to $3.5 billion per year just for diabetes medications alone.

Beyond pharmacare, I also want to speak about the importance of establishing a national diabetes device fund, which the government committed to last February. One-quarter of the people living with diabetes have reported that the additional cost of diabetes devices affects their adherence to their prescribed treatment regimes, which has significant risks to their short- and long-term health. Over the past few years, Diabetes Canada has worked with many provinces and territories to expand affordable access to diabetes devices. We are proud of this work to increase access and are keen to see further expansion of these programs.

However, since last February, we have seen what I would describe as stasis as provinces and territories await further details from the federal government about the device access program before further expanding their programs. That is why it's critical that the government urgently provide more details on its intentions with respect to a federal device and equipment access program as quickly as possible.

Personally, as someone who lives with type 2 diabetes, I know how dramatically my device has improved my quality of life and ability to manage and control my diabetes effectively. The use of devices and equipment that helps individuals manage their diabetes also contributes to a broader savings in the health care system. We also believe further savings could be seen across the country if there is further action undertaken to implement the federal framework for diabetes in Canada.

In closing, by providing that common policy direction through the framework for multisectoral stakeholders, as well as provincial and territorial governments, we can identify gaps in current approaches, avoid duplicating efforts and provide opportunities for monitoring and reporting on progress. Those six framework components would not only improve the quality of life for those four million people in Canada living with diabetes, but save the system dollars.

Therefore, I look forward to working with members of this committee to ensure that the upcoming budget reflects these realities for people living with diabetes in Canada.

I look forward to your questions.

Thank you, Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Thibeault.

Now, we'll hear from the Macdonald-Laurier Institute and Mr. Sargent.

[Timothy Sargent]

Thank you very much.

Good afternoon. Thanks for the invitation to appear today on behalf of the Macdonald-Laurier Institute.

It's no secret that Canada's economic performance has been mediocre over the last few years. Living standards have stagnated, with real income per capita growing at only 0.4% per annum between 2015 and 2023. That's only a third of the growth between 2005 and 2015, which is a period that includes the financial crisis.

The culprit is Canada's anemic growth in productivity, which is the amount of output each worker produces an hour. Indeed, productivity and growth in the business sector seem to have gone into reverse, with productivity in the second quarter of this year slightly lower than it was in the first quarter of 2019. This is in stark contrast to the United States, where productivity is now 10% above 2019 levels.

It also means that Canada is now close to the bottom of the advanced country productivity league table, with productivity levels well below not just the United States but all of the northern and western European countries, such as the U.K., France and Germany, and even slightly lower than Italy. It's no wonder that Carolyn Rogers, senior deputy governor of the Bank of Canada, made it clear in a speech in March that Canada faces a productivity emergency.

What should the federal government do to respond to this emergency?

The regulatory burden on business is a huge drag on investment in innovation. It's particularly true in the resource sector—it can now take 10 to 15 years to build a mine in Canada—but it's something that affects the whole economy. The government should be more aggressive in requiring new regulations to be less onerous than the regulations they replace, make greater use of mutual recognition so that products approved in other jurisdictions are automatically improved in Canada and streamline the environmental assessment process to be more efficient and less vulnerable to legal challenges.

Canada's tax burden is high and has been growing. Federal tax revenues rose from 13.4% of GDP in 2015-16 to a projected 15.1% in 2024-25. Cutting taxes, particularly personal income taxes, would increase incentives to work and invest, as well as encourage our best and brightest to remain in Canada.

Meanwhile, the size of the government has been growing significantly. At the federal level, the number of civil servants has grown by more than 40% since 2015, and total expenditures have risen from 14.9% of GDP in 2015-16 to a projected 17.9% in 2024-25. This very significant increase in the footprint of the government takes resources, both people and capital, away from the private sector.

Because expenditures have grown even faster than tax revenues, Canada has gone from a virtual balance in 2015-16 to a projected $40-billion deficit in 2024-25, with public debt charges of $54 billion. That is equal to all GST revenues. While deficits were appropriate during the recession, when the economy is largely in balance, as it is today, they make it easy for governments to avoid difficult trade-offs and push the burden of spending into the future.

This means that putting Canada's fiscal house in order should be a high priority. The government needs to reduce the size of government so that taxes can be lowered and the federal budget can be brought back to balance. An obvious place to look for savings would be subsidies to businesses, which have risen massively with no appreciable effect on productivity. Another place to look is areas where the federal government is intruding into provincial jurisdiction. Governments should stick to their constitutional lanes, which make it clear who is accountable for what.

Accelerating immigration, particularly of temporary foreign workers, is another important contributor to our recent productivity problems. A rapid influx of new workers means less capital per worker and, therefore, lower productivity. Furthermore, many of these incoming workers have lower productivity than the average Canadian worker, which also pulls down productivity. This is in addition to the strain the rapid increase in immigration has put on public services, such as health care and education, and on the housing market. It's therefore imperative to reduce levels of both permanent and, especially, temporary immigration and refocus the system on highly skilled permanent residents.

Finally, there is one area where higher government spending is not only warranted but urgently required, and that is defence. Whoever wins the U.S. presidential election next week will expect Canada to rapidly attain our 2% target, and I expect that the U.S. will use the CUSMA renegotiation discussions to put pressure on us in this regard. Canada should make a virtue of necessity and have a credible plan to meet the 2% target by 2028 and ensure that the increased spending is directed toward promoting innovation in Canada's defence industry. It is a sector where Canada has many strengths that can be built on, and it is the source of many high-paying jobs.

To conclude on an optimistic note, Canada has many advantages that other advanced countries would love to have. The world desperately wants what we produce, from oil and natural gas to agricultural products, nuclear power technology, aircraft and defence material.

We are also next door to and have privileged access to the world's largest economy. We should be doing so much better than we are, and we can, but it will require a federal government that is smaller, interferes less in the economy and is more focused on delivering its core responsibilities.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Sargent.

We now go to the Qikiqtani Inuit Association and Ms. Mearns.

I apologize if I mispronounced the name. If you can help us out, just pronounce that for us so that we all get it right.

[Virginia Mearns, Senior Director, Inuit Relations, Qikiqtani Inuit Association]

Thank you, Mr. Chair. You did very well with the pronunciation on that, so congratulations.

Today, I'll be speaking to three areas that our organization has submitted as recommendations for consideration in the upcoming budget. They include Nauttiqsuqtiit conservation centres, the Iqaluit Nukkiksautiit hydro project and the need for continued investment in a distinctions-based, Inuit-led fund for infrastructure in Nunavut.

Before I speak to the specific recommendations, I would like to briefly provide you with some background and context with hopes that it helps to better understand the submission that is before you.

Qikiqtani Inuit Association is a designated Inuit organization established under the Nunavut Agreement to represent Inuit in the Qikiqtani region of Nunavut. We represent Inuit in 13 communities that are situated in the easternmost portion of Nunavut. QIA advances the rights and benefits of Inuit through protecting and promoting social, political, economic and cultural interests, while safeguarding the land, waters and resources that sustain our communities.

Through QIA's leadership, Inuit completed the Qikiqtani Truth Commission, which was a broad inquiry documenting the harms and hardships faced by Inuit as a result of the implementation of colonial policies, which eventually resulted in formal recognition from the Government of Canada, along with a commitment to partner on the implementation of 25 recommendations.

QIA has a long-standing record of providing effective programming and services to Inuit in the region. These programs and services have been made possible through a variety of means, including a strong relationship with the Government of Canada over the past years.

As articulated in the pre-budget submission, Nauttiqsuqtiit conservation centres are an integral part of the Nauttiqsuqtiit program. Please allow me to share the context as to why these facilities are of such importance to Inuit and how these investments link directly to the creation of permanent jobs, for which employment funding is already secured across all 13 of our communities.

The basic premise is that people need a place to work. Everyone in this room has offices and associated infrastructure to support them to do their jobs. This is what we are seeking to achieve for Nauttiqsuqtiit, for our staff in every community, to work out of Nauttiqsuqtiit centres.

Just as importantly, the Nauttiqsuqtiit centres also provide a space for other organizations that want to provide community programs and services. There is such a shortage of available infrastructure that communities often end up missing out. Nauttiqsuqtiit is founded on Inuit stewardship and led by our communities. This program has created a great opportunity to advance Inuit vision to improve community well-being, economic prosperity and the health of their lands, waters and wildlife.

The program provides Inuit jobs as environmental stewards and harvesters. It also provides a foundation for mentorship, training and economic development for Inuit. Nauttiqsuqtiit carry out critical environmental and wildlife monitoring in and around the communities that they are employed in.

While on patrols, Nauttiqsuqtiit are able to carry out harvests, which results in country food distributions in the communities. This helps to address food security but also enables the strengthening and retention of Inuit traditional practices. They also provide workshops geared toward youth, where knowledge and skills are passed on to the younger generation.

One of QIA's most recent achievements with the federal government is the establishment of an Inuit-led conservation economy founded on the comanagement of Tallurutiup Imanga, an area created through the successful negotiation of an Inuit impact and benefit agreement with the Government of Canada in 2019.

Since this time, QIA has partnered with philanthropic organizations and the Government of Canada through a project called Qikiqtani project finance for permanence, or QPFP, with an express goal to ensure all 13 communities will participate in the conservation economy. QIA expects formal announcements associated with the QPFP will occur in December 2024.

While QIA has been extremely successful in acquiring funding for Nauttiqsuqtiit jobs and Nauttiqsuqtiit centres in nearly all of our communities, we are now focused upon addressing the remaining resources required to construct the final Nauttiqsuqtiit centres. Because infrastructure funding typically flows differently from funding for employment, QIA is actively taking parallel efforts to align resources toward our end goal. Once the final resources required for Nauttiqsuqtiit centres are secured, QIA will have aligned enough resources to execute upon a pathway that results in the creation of 120 long-term jobs for Inuit spread across the region, jobs that will provide country food for the community, take youth out on the land and actively monitor the environment.

To be clear, the funding requested for the Nauttiqsuqtiit centres in QIA's pre-budget submission will be used to secure the final three Nauttiqsuqtiit centres.

For the Iqaluit Nukkiksautiit hydro project, it's an Inuit-led project that aims to identify opportunities to improve energy security while reducing greenhouse gas emissions for Inuit in the city of Iqaluit by harnessing nearby renewable energy. The project will see capacity on the part of Inuit to minimize risks, vulnerabilities and harms to the environment and social networks that are essential to Inuit culture. The project aims to bring Inuit closer to energy sovereignty, environmental sustainability and affordability.

Our final priority speaks to a shared goal among Inuit organizations in Nunavut. Today we are asking the Government of Canada to make a renewed investment in flexible distinctions-based infrastructure funding for Inuit organizations. As you know, Nunavut faces a substantial infrastructure gap that negatively impacts quality of life, access to services and economic opportunity for Inuit. The Government of Canada has committed several times to close the infrastructure gap by 2030. Inuit are ready to lead on infrastructure and can see that, when we are given freedom and flexibility to do so, we make smart, forward-looking decisions for the health of our communities.

In our submission, QIA, along with three other Nunavut Inuit organizations, asked for continued investment in the distinctions-based, Inuit-led fund for Nunavut infrastructure at a rate of approximately $70 million per year over six years. This represents a continuation of the current level of funding, plus a small adjustment for inflation. QIA believes it is important that the government continue to maintain a distinctions-based funding program for infrastructure in Nunavut, whether as a renewal of the indigenous community infrastructure fund or the creation of a similar program.

Thank you for your time and consideration.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Mearns. I'm sure there's going to be a lot of opportunity for questions.

Thank you to all the witnesses for their opening remarks. We're going to get into questions right away.

We're starting with MP Kelly for the first six minutes, please.

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

Mr. Sargent, your opening statement was a damning indictment of the economic record of this government. We've just had a report that the third quarter is now the eighth out of nine consecutive quarters with negative per-capita GDP growth. We see that per capita GDP is now lower in Canada than it was when this government took office. The difference between per capita GDP growth in Canada and the United States has never been worse.

Could you comment on how the fiscal and regulatory policies of this government are making Canadians poorer?

[Timothy Sargent]

Mr. Chair, as I said in my opening remarks, Canada's economic performance since 2015 has not been as good as its performance in the previous 10 years. The difference in income per capita amounts to around $4,000 per person had we continued on the same growth trajectory. Certainly we had COVID during the recent period but, as I said earlier, we also had the great financial crisis in the early period, and COVID increased Canadian productivity because we had a bunch of people in relatively low-productivity sectors who exited the labour market.

During that period over the last 10 years, we've seen a very significant increase in government spending, in particular, in subsidies to business and to others. We've seen increasing regulation, particularly in the resource sector and, of course, we've had a very significant increase in immigration, particularly in permanent residents, and we haven't seen any payback from those policies.

Now you could argue that maybe things would have been worse had we not pursued those policies, but the reality is that, if we compare both to our neighbours and to our recent performance, we just haven't performed as well.

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

The recent report on the third quarter shows that per capita GDP is still declining. Is that the appropriate time to maintain the policy of the carbon tax, to proceed with increases and to increase the capital gains tax?

We had testimony recently that the change to the capital gains tax could suppress the capital stock in Canada by $127 billion and result in a further reduction of GDP. The United States, as I understand, does not have any of these policies. Would this explain some of the discrepancy that we are seeing?

Do you think that this is the time to continue to impose new taxes?

[Timothy Sargent]

I think the record is quite clear. We've seen very significant increases in taxes—the capital gains tax, and we've had the carbon tax—and those just haven't produced the results that I think were hoped for. From the carbon tax, we haven't seen a very significant impact on emissions, for instance. I think the question now is whether this the right direction to go in.

Indeed, if we look at economies that are doing better, we look particularly at the United States and particularly those parts of the United States that are growing fastest such as the southern United States. Those are places that have lower taxes. They have lower taxes. They have smaller government. They have smarter regulation, less regulation, and they're growing faster, so that would be a prescription I would want to follow.

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

It's almost like Canada needs a government to axe the tax and do something about the gatekeepers who are holding down the economy.

Do you have some specific comments about regulation and different, specific regulations? You've talked about the resource industry. How about Bill C-69?

[Timothy Sargent]

What we've seen from the Impact Assessment Act is that almost no projects have gone through that system. I think there was a hope that it would streamline the system and that would make it quicker, but what we're seeing is that all of the projects that are in that system are now stuck in the first two stages of the four-stage system. We're just not seeing projects come out of that system.

The time to build a mine and to move ahead on a resource project is just getting longer and longer, and the problem in Canada is that resources are the backbone of our economy. If we can't get these projects done, then of course our GDP per capita is going to fall.

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

If I have enough time for another couple of questions, I'd like to shift to Mr. Robson.

As I said, we had Dr. Mintz, last week tell us that the capital gains tax increase is expected to suppress capital stock by $127 billion. We also had testimony that it may result in the loss of up to 400,000 jobs.

Mr. Robson, do you have your own research or modelling that would support that conclusion? What is your estimate of this policy change?

[William Robson]

I think very highly of Jack Mintz. In fact, the C.D. Howe Institute has a report from him under way right now. The direction is very clear. The magnitudes are open to debate, but there is no way that you could argue that an increase in the inclusion rate on capital gains that affects the entire corporate sector effectively, and many investors as well, is going to have any kind of positive impact.

I agree with a lot of what Tim Sargent was saying just now. I think one thing that's worth highlighting is that the United States, in 2017, had a very substantial tax reform that cut rates and reduced the number of distortions in their system. Anybody who doubts the importance of the corporate tax regime for investment just needs to look at what happened in the United States in the years since then and contrast it to what happened in Canada.

It's clear that taxes do matter, and it's clear that the United States did something in those years that, in my mind, helps to explain why the gap between us and the United States, which had been closing for many years before the middle of the last decade, has opened up since then.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Kelly.

Now we go to MP Dzerowicz, please.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

I want to thank all witnesses for the excellent presentations. I wish I was given an hour to ask all of you questions because I have tons.

I'm actually going to start off by focusing on CHIN.

Thank you so much for being here. I have a riding that has about 50% first-generation Canadians, and I don't know what they would have done without CHIN educating them, informing them of news at all the different levels of government, including community, and then helping them to integrate over time as well. I really appreciated your introductory remarks.

I also heard from you that there's a key challenge that you felt exists where, whether it's federal government or all levels, governments are providing more support to mainstream media.

Mr. Di Candia, do you get advertising support from the federal government? If so, could you articulate how much?