Finance Committee on Oct. 31st, 2024

[Francesco Di Candia]

We used to deal directly with the federal government until 2023. Every year, the investment that was done through our media outlet has never been very high. Actually, it was less than $5,000 in Ottawa, and pretty much the same amount of money in Toronto.

During the COVID-19 pandemic, we had more investments because it was a matter of public health. Therefore, the government recognized that in order to reach all Canadians, even those who had no access to mainstream media, they had to use CHIN Radio.

The government, I believe, thinks that CHIN Radio is the medium to reach all ethnic people in Canada. It seems that, when it comes down to the marketing portion, there is someone who makes the decision to reserve only a very small, insignificant amount of money for our company or, in general, for the ethnic radio and TV broadcasters.

In 2024, Cossette Media took over the advertising campaigns with the federal government. We faced even further cuts, to the point where it was really minimal. I can just mention that for Ottawa, for Canada Day, there was an investment of merely $2,000. We had to, of course, produce the spots in the language, translate them and be responsible for talent and production. We had to charge another $2,000 for that. In terms of campaigns, with $2,000, the average spot rate is $35.

How many spots can you get for Canada Day, which is a staple? On every Canada Day, there's always a swearing-in of new Canadians. These newcomers to Canada become Canadians.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

I want to get to another person before I end with you, but I have one more quick question—very quickly, please.

What is your direct ask of the federal government?

[Francesco Di Candia]

We would like to see at least an increase in the realm of 15% to 20% in order to cover all the languages that we serve, all the communities we serve. We have more than 50 languages, so if you want to do a targeted campaign, we need more investments for sure.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much. Thank you for the great service that CHIN does for our nation.

I want to turn my attention to Mr. Robson.

I have a general comment, Mr. Chair. I know there's a bit of a conversation about our economy. Often my Conservative colleagues make it seem like our economy is awful and in the tank. I will say to you that we have heard testimony at this committee that the carbon tax is not responsible for all the price increases in Canada. We've also heard testimony that, when the capital gains tax was increased during the Mulroney years, it did not end up having a negative impact on innovation and productivity, but I don't have time to go into that.

I do want to talk about productivity specifically. My question for Mr. Robson is the following: In the 1990s, Australia engaged in a fairly robust competition and productivity study. It took them about two and a half years to actually set the whole thing up—how they set it up and what were they going to study, as it was going across the different states. At the same time, not only did they set up the study, but once they got it going, they were also going to monitor any competition or productivity changes and report on any progress. It then took 10 years to do the actual review and the reform of 1,800 identified laws and regulations that were impacting productivity and competition.

Do you believe this type of a study is something we should be engaging in here in Canada?

[William Robson]

The Australian Productivity Commission, which is part of the larger effort that you were describing, is a good idea. I think that something along those lines in Canada would be helpful, just as we have other independent agencies that report on the status of our health care system, the status of our education system and so on.

Having a steady voice out there that is continually looking at productivity issues would be helpful for simply giving us an additional lens through which to see many of the policies that get put in place and get implemented by various governments that might have incidental effects on productivity.

I think Canada is probably in a good place to do that right now because, unfortunately, it's become a bit of a kitchen table topic. Productivity used to be quite an alarming word to people. It sounds like faster assembly lines, but what it's about is getting more reward for every hour you work. Who wouldn't want that?

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Dzerowicz.

We'll now go to MP Ste-Marie.

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

Thank you, Mr. Chair.

Good afternoon, ladies and gentlemen.

Thank you to the witnesses for being here.

This panel has given us a lot of very interesting information. As Ms. Dzerowicz mentioned, we'd like to have more time so we could ask all the witnesses questions. I want the witnesses to know that we are taking notes and that all of their comments will help to inform our pre-budget consultation report.

Mr. Chair, I'd like to thank Peter Fragiskatos and Rachel Bendayan, who followed up on the request for the updated data from the Canada Mortgage and Housing Corporation, or CMHC. Mr. Fragiskatos promised me that I would have the data no later than early November, but it's still October—Halloween, to be precise—and I already have the information.

Obviously, I wanted to be able to share that response publicly. Since the document containing the data is addressed to the Standing Committee on Finance, I assume it came with a confidentiality disclaimer. I checked with the clerk. He did indeed receive it, but the confidentiality disclaimer prevents him from sharing the document with the committee members.

I would like to ask my fellow members for consent to—

[The Chair, Liberal, Peter Fonseca]

Yes, MP Ste-Marie, it will be distributed to all members, with the confidentiality disclaimer there.

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

Very good.

I have another special request for my friend Mr. Fragiskatos. When we get updates, we would like to be able to share them. We'd like to post them to the finance committee's portal so they're available to the public. Therefore, I would ask him to have the confidentiality disclaimer withdrawn. We can follow up on that once we hear from the CMHC. Thank you.

Before I get to my questions for Mr. Mueller, I have a special request for Mr. Robson, from the C.D. Howe Institute.

Mr. Robson, you referred to a report you'll be releasing based on Mr. Mintz's study on the changes to the capital gains inclusion rate. Mr. Mintz appeared before the committee. What he found is very different from what the Government of Canada advances, not to mention the International Monetary Fund, or IMF. I asked him to send us his sources and the methodology he used so we could replicate his calculations. He told us he would soon be publishing his study through the institute. When Mr. Mintz's study comes out, would you be able to send it to the Standing Committee on Finance so we could see his sources and methodology? Thank you.

Mr. Mueller, thank you for being here.

The last time you appeared before the committee, the meeting was in Charlottetown, Prince Edward Island. It was for the pre-budget consultations just over a year ago.

In your opening statement, you mentioned Professor Roy's updated figures. Would it be possible to send Mr. Roy's report to the committee? Thank you.

[Mike Mueller]

Thank you for your question.

I just want to thank you and your colleagues for supporting our industry.

You're right. I did mention an update to Professor Roy's report. I think we've shared the last couple with this committee. This is the third iteration of the report. The first one was taking a look at what the potential impacts could be from this tax on manufacturing, on aircraft manufacturing specifically. When I say “aircraft”, I mean jets and helicopters also.

The second one was an initial review from the industry the first year in. We are now two years into this tax on manufacturing. We have updated numbers from this committee also. I want to thank all committee members.

Mr. Davidson, you were instrumental in that by also asking some of these questions. It is an update to that. I'd be happy, once it's finalized, to again share it with the committee, of course.

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

That would be very appreciated. It will be very helpful to us. Thank you.

You said in your opening statement that the luxury tax was putting 4,000 jobs at risk.

Can you explain why?

[Mike Mueller]

Thank you again for the question.

In my opening remarks, I reiterated the results that we are now seeing from this tax. Again, the government has only collected $15 million, but it has cost the industry $1.8 billion in revenue. Any time you take out $1.8 billion in revenue from an industry, you're going to see jobs being impacted. Aerospace is a long-term supply chain, so over the next number of years, that is the impact when you take that kind of money out of the system.

I would also say it's very concerning to us that we are seeing the impacts on jobs. That is why the unions have been very vocal also in opposing this tax on the manufacturing of aircraft, because they, too, see that this is a job-killing tax that is in place.

The other thing I'll just mention is that we see the taxes impacting jobs not only within the manufacturing but also throughout the supply chain right across the country. The impacts are everywhere within the industry, and it's quite concerning.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie.

Now we will go to MP Davies please.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chair.

Thank you to all the witnesses for being here.

This is for QIA, if I could start with you please.

You wrote to the committee and said, “The Government of Canada has committed to closing the Indigenous infrastructure gap by 2030.” It is 2024, and no concrete plan has been put in place to achieve this goal. Can you elaborate a little on that and tell us a bit more?

What is the indigenous infrastructure gap? Can you quantify that in some way?

[Virginia Mearns]

Thank you for the question.

In terms of quantifying the gap that exists for indigenous infrastructure, I'm not able to speak to that in a national context. We're in a position to speak to the realities of what's happening in our region within Nunavut, but also in Nunavut as a whole.

The creation of the indigenous community infrastructure fund was the first real opportunity for a group of indigenous people to be able to access a source of funding that enabled them to create a portfolio of infrastructure projects that would benefit from direct funding from the Government of Canada. It will enable our communities to begin the long process of addressing the severe infrastructure gap that has been plaguing our region and our territory since the creation of the territory.

[Don Davies, NDP, Vancouver Kingsway, BC]

Let me focus on Nunavut a bit, because you also wrote that you want the government to “continue to invest in a distinctions-based Inuit-led fund for Nunavut infrastructure, at a rate of $70 million annually over six years.”

I have two questions. Can you explain to us what “distinctions-based” means? Can you give us an example of what the lack of infrastructure looks like in Nunavut and what the funding could be used for?

[Virginia Mearns]

Sure. What we're referring to when we describe what we're recommending with “distinctions-based”...it essentially enables a category of funding that is specifically, in our context, for Inuit to access.

Because of the fact that we have a modern treaty in which our jurisdiction operates...and it's not only the Government of Nunavut. We have Nunavut Inuit organizations that carry out very specific functions. They are also provided an opportunity to create opportunities for Inuit through partnerships with the Government of Canada and, more specifically, by being able to access very specific scopes of funding.

The traditional funding mechanisms in the past enabled very few opportunities, usually on a one-off basis for one specific project and usually for the territory as a whole. Having a distinctions-based funding source enables Inuit to think long term and be decisive about what types of infrastructure can create the foundation that is desperately needed in the territory.

[Don Davies, NDP, Vancouver Kingsway, BC]

Could you give us some idea of a successful example of this approach in action? I think you've mentioned one project already. I think it was a hydro project. Maybe you can give an example of another project that you see could be funded if we were to allocate the proper resources.

[Virginia Mearns]

The Iqaluit Nukkiksautiit hydro project is definitely one of those that could benefit from this type of funding arrangement with the Government of Canada.

I can speak to some of the initiatives we've been able to carry out in our region alone by having distinctions-based funding available to us. It's enabled us to create three day cares, two clean energy projects, a land development project and a multi-use facility in one of our larger communities, as well as to put funding toward a research and training centre in north Baffin.

[Don Davies, NDP, Vancouver Kingsway, BC]

I'm wondering what you could tell us about housing in Nunavut. It's a crisis in lots of places in Canada. I understand it's not different in Nunavut.

Can you give us a picture of the affordable housing situation in Nunavut and an idea of the extent of the crisis? What do you think we could do about it?

[Virginia Mearns]

It's been an ongoing issue as a huge part of the infrastructure gap that exists in the territory. It is a priority for all stakeholders in Nunavut. It's top of mind every day, not only for Inuit organizations but also for the territorial government.

This is an area the QIA is endeavouring to address by creating affordable housing in our communities. We've started in five of our 13 communities with the hope of being able to expand to all 13 communities to provide affordable housing options for Inuit at the local level. This will enable them to come out of territorial social housing and create an opportunity for them to build up the means to pursue their own homes in the private market if they become available in our communities.

The majority of our communities have a very small private market. Iqaluit, the capital, has the largest private market, but the prices are so high that it is essentially unattainable for Inuit—even for double-income families—to be able to own their own homes right now.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Davies.

Members and witnesses, we're moving into our second round of questions, and we're starting with MP Morantz for five minutes.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Mr. Sargent, I'll start with you.

I've become increasingly concerned during my time on this committee about the economic vandalism that has been committed on this country by this Liberal government. The Governor of the Bank of Canada was here on Tuesday. They had predicted a 1.5% increase in Canada's GDP. I asked the governor whether or not he thought the capital gains increase would affect that, and he refused to answer me. I can see why he didn't want to talk about it. Just today Stats Canada released a report that said the GDP growth was flat, at 1% less than the bank had actually predicted. My colleague, Mr. Kelly, talked about the fact that our GDP has declined in the last eight out of nine quarters, and that the United States economy grew by 2.8% in the third quarter.

Let me ask you the question that the Governor of the Bank of Canada refused to answer at this committee. Do you think that increasing the capital gains inclusion rate will further damage our flat economy?

[Timothy Sargent]

I think there's no question that increasing the inclusion rate is going to be a disincentive to investment in Canada. Weak investment has been a problem in the Canadian economy for many years now. We need to be thinking about ways to increase the incentive for people to invest, not reduce that. That is very much the source of our weak productivity growth.