Finance Committee on Feb. 7th, 2022

[Sean Strickland]

Absolutely, Building Trades supports the normalization of people working on our construction sites who aren't Canadian citizens. I think we need to provide a pathway to Canadian citizenship.

There's a pilot project that many of our affiliates have been working on through the department of immigration and citizenship, and that's had some really good results. We'd like to continue that work and provide pathways for more citizenship for workers on construction sites who can continue to provide good value to the Canadian economy.

[Julie Dzerowicz, Liberal, Davenport, ON]

My next question is this. In my opinion, part of the reason we haven't had enough skilled workers come through our immigration system is that the language levels have been too high. As well, the education requirements have been a disconnect with the requirements of some of the skilled or semi-skilled workers we need.

If we were to create some sort of a clear pathway whereby we would adjust those requirements for skilled and semi-skilled workers, do you think it would help address some of the labour shortages within the building trades unions across the country?

[Sean Strickland]

Absolutely. A construction worker won't qualify to immigrate to Canada right now under the current requirements for immigration, so that needs to change. Recognizing that we have shortages in some areas and pockets of high unemployment in others, we need to look at all kinds of different ways to get more people into the construction industry.

We have to introduce it earlier in our grade schools. We have to provide mobility supports. We have to bring more immigrants into Canada. We also have to provide pathways for people who are already working in the construction industry. It has to be a multi-faceted approach in order for us to continue to build this country.

[Julie Dzerowicz, Liberal, Davenport, ON]

My next question is this, and you're touching on it a little. There's a lot of red tape between the provinces sometimes in terms of the mobility of our workers. Is there any recommendation you have around some interprovincial trade barriers that might come down, or harmonizing some of the regulations that might actually facilitate the movement of workers across the country to where they need to go? Would you have a recommendation or two for that?

[Sean Strickland]

There have been the interprovincial ministry objectives, and work has been done on removing those kinds of interprovincial trade barriers to the recognition of different qualifications among tradespeople across provincial barriers. There's a Red Seal working group, which has all those ministerial folks on board. They're looking at those kinds of issues.

More work needs to be done there. We need more flexibility amongst provinces in order to recognize qualifications in one province versus those in another. The Red Seal program helps with that, but overall, Ms. Dzerowicz, it's a great question. We need to have all these kinds of different tools to encourage this mobility.

We've also looked at binational mobility, at getting more workers from the U.S. into Canada and from Canada into the U.S. We've looked at recommendations around temporary foreign workers, whereby unions could be designated as potential employers so they could control and manage the temporary foreign worker program a bit better than maybe private sector interests could.

There's a whole series of recommendations and initiatives—provincially, internationally, binationally—that could be done to improve the number of tradespeople within Canada.

[Julie Dzerowicz, Liberal, Davenport, ON]

In my last 10 seconds, could I ask you this, Mr. Strickland? In terms of the top two or three restrictions within Canada that you think we should be focused on beyond the Red Seals that you talked about, I'd be grateful if you could send a recommendation over to our committee for our consideration.

[Sean Strickland]

I'd be happy to take a more comprehensive view of that, and we'll certainly send that along to the committee.

[The Chair, Liberal, Peter Fonseca]

That's great. Thank you, Mr. Strickland. Thank you, Mr. Dzerowicz.

We're moving, members, to round three of our questions. We have the Conservatives up first. Welcome to our committee, Mr. Lawrence. You're up for five minutes.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you very much, and it's an honour, obviously, to appear at the finance committee.

I'm going to focus most of my questions on Mr. Lee here. I want to speak plainly about this and get his comments on some of my comments.

It's my belief that the more products we build, the more workers we have, the more services we deliver, the more prosperous we are as a nation. Do you know what gets me excited? I certainly don't begrudge people who achieve financial freedom—that's great—but it's economic growth. That's what we call that when we produce more products, have more workers. That lifts millions of Canadians out of poverty. That's what gets me really excited.

The challenge we have is that we're headed in the opposite direction. The Canadian economy is facing a two-headed or maybe, Mr. Lee, a three-headed monster right now. We have deficit spending, which is leading, at least in part, to inflation. Inflation means that every dollar that someone has earned is worth less.

The other part is eventually that deficit spending has to be paid for. At some point, you have to pay the piper. There are only two ways of doing that, that I'm aware of. One is reducing spending; two is increasing taxes. What “increasing taxes” means is that all those workers who go out there every day, particularly those at the lower end of the economic spectrum, get to keep less of what they earn. They're going to get punished two ways with this continued reckless spending. One, every dollar they earn is going to be worth less; and two, they're not even going to be able to keep as many of their dollars.

Many experts have come before this very finance committee and said that when you add in the amount of clawbacks and withdrawals, in addition to the tax rates, people who are earning $50,000 or $60,000 are actually facing effective tax rates of 40% or 50%. You add inflation on to that and it gets to a very scary place, where we could see prolonged labour shortages and a lack of prosperity in Canada.

Mr. Lee, would you comment on that, and if I'm incorrect, please correct me.

[Dr. Ian Lee]

The World Bank has done massive studies on this and poverty alleviation around the world. They have shown that competitive, productive markets have removed over one billion people around the world—and I think it's a billion and a half—from the lowest levels of poverty.

You look at the empirical evidence, and there's no question that when you have a strong and vibrant economy, it raises the standard of living for everyone, not just the people at the top. There's no doubt about that, I don't believe. I don't think my views are any different from those of Don Drummond or David Dodge, the former governor of the Bank of Canada, or the people who are so-called “blue Liberals”, if you want to call them that.

Very quickly, to unpack one more very important point you raised, Arthur Okun, the great Liberal economist in the sixties, wrote a famous book called Equality and Efficiency. He said that there's a constant balance in public policy in a mixed economy between, let's call it, policies of social justice versus policies of economic growth. He said you have to strike the right balance because you need the growth to pay for the social justice policies.

I think that right now there's more of an imbalance. We focus so much on income redistribution, which is important, but at the same time we have forgotten, or we're neglecting—and that's exactly what the former Liberal deputy prime minister is saying—and are not focused on policies of growth. We have domestic investment leaving our country.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

I'd like to go just a bit further on that train. One of the other things that can actually happen as well is that, if we go the the other way and start declining in economic growth instead of growing the economy, when that growth reduces it actually reduces the amount of income for the government, because obviously it's a tax base. It's called the Laffer Curve. I was wondering if maybe you could give us 30 seconds on that as well.

[Dr. Ian Lee]

I understand the Laffer Curve is controversial. I won't even use the Laffer Curve.

Governments—federal, provincial and municipal—share in the growth. You look at the revenues, the sensitivity in western economies, and Canada is exhibit A. That is to say, when the economy is growing, revenues gush. They just pour into the federal treasury, the provincial treasuries and municipal governments. Then go look at the impact on the revenues flowing into governments when they fall off of a cliff and go into a recession. Their revenues just disappear.

Governments are very sensitive to growth. The more governments grow, the higher the GDP growth rate in the economy, the more money flows into the treasury that can be then spent on health care, on social income support and so forth. Anybody who believes in more social income support should be screaming their support for economic growth, because it generates more money to spend on those policies.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Lee.

Thank you, Mr. Lawrence.

We are moving now to the Liberals, with Mr. MacDonald for five minutes.

[Heath MacDonald, Liberal, Malpeque, PE]

I'm going to address this to CBTU. During the pandemic, global supply chains have caused inflation in many sectors and industries, including the construction group. Can you tell us now where those issues are in relation to cost and supply?

[Sean Strickland]

Absolutely. It continues to be a challenge in terms of supply chain. It continues to be a challenge in terms of the cost of raw materials. Also, the deliverability of goods is causing some delays on construction projects. It certainly is an issue for the industry and is creating upward pressure on the final prices of construction projects.

[Heath MacDonald, Liberal, Malpeque, PE]

I'll go back to what Ms. Dzerowicz was saying, with a bit on the labour force. I come from Prince Edward Island, and I've just seen recently that our construction association is advertising 1,000 openings, and it's becoming very difficult. It's contributing to all sorts of impediments.

I want to ask you this, more specifically in terms of where she was coming from, relative to K to 12, post-secondary and standardized education for the trades: Is it time that we standardized trades across the country in educational systems? There was a point in time in the seventies and eighties, supposedly, that it was the place to be, and then all of a sudden everyone decided they wanted a business degree. Our economy changed, and now we're starting to see a real shortage in the supply of that labour force.

[Sean Strickland]

Thanks for the great observation. I would make a couple of comments.

In Prince Edward Island, you have a residential boom happening right now. A thousand workers are required. Meanwhile, in Newfoundland and Labrador, we have a surplus of workers. This is exactly why a skilled trades workforce mobility tax deduction would help, even in Atlantic Canada, for those workers in Newfoundland to potentially come to Prince Edward Island, rather than sometimes getting on a plane to go much further afield. Similarly, in Halifax, Nova Scotia, there are requirements for workers, and there's a surplus of workers in Newfoundland. It would really make sense to have that tax deduction in place to help with that.

In terms of standardization across the country, trades and trade regulations are in the purview of the provinces. We believe there should be more standardization right across the country, as long as that standardization is rising to the top and not going to the bottom. There is some pressure to try to deskill the trades. We do not support that. If there's going to be any kind of standardization, it needs to be at the higher lever, not the lower level.

[Heath MacDonald, Liberal, Malpeque, PE]

That's interesting. I know Prince Edward Island is even using virtual reality to get young people in [Technical difficulty—Editor] exactly what's it's like even before getting into the classroom and learning with the Red Seal programs. It's interesting.

Can you expand on the vast economic potential for jobs in your industry as a whole, relative to the green economy? What potential do you see for the construction association? What could possibly be leading the way, relative to residential or business construction?

[Sean Strickland]

In terms of introducing young people to trades, you can also go to our website. On our website we have videos. We're in conjunction with all provincial building trades affiliates right across the country in developing videos to help introduce younger people to the trades and help them understand what a millwright does, for example, or an operator. That's a really important piece of the work we do.

In terms of the economic opportunity, the challenge for us just on transition is that on one hand you get a report saying we're going to lose 450,000 workers between now and 2050 in oil and gas, then you get another report from the Royal Bank saying we're going to need $2 trillion in investments to build the energy sources of the future.

We're working to continue to provide those necessary jobs in oil and gas, and also positioning our workers for the new energy sources of the future, carbon sequestration, hydrogen, small modular reactors and nuclear. There are all kinds of opportunities in Canada for these new energy sources of the future. We need some support from industry and the government to make sure our workers are there to do that. The union training and innovation program is one program that's really helpful. There are sectoral initiatives that are coming out of the marketplace as well.

We need those kinds of supports to continue to position our workers in order to capitalize on this great opportunity that's ahead of us as we go to net zero.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Strickland and Mr. MacDonald.

We now move to the Bloc, and Monsieur Ste-Marie, for two and a half minutes.

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

Thank you, Mr. Chair.

Mr. Roy, as you pointed out, you had submitted pre-budget requests last summer, assuming that we would finally be out of the pandemic.

Is there anything you would like to highlight from these agreements, or anything you would like to remind the committee of?

[Martin Roy]

I would first like to reiterate, in relation to your previous question, that we are still waiting for the money that was announced in the budget almost a year ago. This is fundamental. You can make all sorts of announcements, but if at the end of the day, the money has not been paid out, it is not very effective. That's my first point.

In terms of normality in the sector, as I said earlier, we need to make the investments that were made in 2019 permanent; at the moment they have been extended piecemeal until 2024. These investments are in response to greater client demand at Canadian Heritage and they end a 10‑year freeze. We do not understand why these investments have not been made permanent and integrated into the budget base of the two programs in question. This is an investment of $8 million in the Canada Arts Presentation Fund and $7 million in the Building Communities Through Arts and Heritage program. This is fundamental.

As I was saying, at this point, these 2019 investments are not even doing what they should be doing, which is addressing the problem that exists. We also believe that $30 million in new money needs to be invested, $15 million into the Canada Arts Presentation Fund and $15 million into the Building Communities Through Arts and Heritage program. This will finally stop the decline in grants.

The problem right now is that festivals are receiving less now than they were before the federal government invested new funds in 2019. It is incomprehensible that these investment increases of 25% to 40% do not translate into an increase in grants. The reason for this is that there are more and more clients. In the Building Communities through Arts and Heritage program, the funds are simply distributed according to the requests and the amount of money available. This can actually lead to a decrease in grants.

Finally, as I said earlier, I think it is important to create a complementary program that will support festivals and events that are not supported by Canadian Heritage. I'm talking about this whole category which also includes agricultural fairs and these types of events that are not supported by Canadian Heritage, because they are not considered to be cultural events.

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

Thank you.

[Martin Roy]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste‑Marie.

We are moving to the NDP and Mr. Blaikie.