Evidence of meeting #17 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was need.
A video is available from Parliament.
12:10 p.m.
Liberal
Sophie Chatel Liberal Pontiac, QC
I have two other questions for you. Thank you.
I think immigration is indeed very important. In refugees, for example, we have very talented workers there. Thank you.
On the senior tax credit that is in the mandate letter of the Minister of Finance for seniors who remain in the workforce, what I've heard is that we need to do more to maintain our seniors in the workforce, if I understand correctly. Just a yes or no, please.
12:10 p.m.
Associate Professor, Sprott School of Business, Carleton University, As an Individual
Absolutely: We have to keep more people in the workforce past 65, yes, if they're healthy and able.
12:10 p.m.
Liberal
Sophie Chatel Liberal Pontiac, QC
I have a question for Mr. Strickland, if I have time, Mr. Chair.
You mentioned the tax credit. I have just a quick question. These are for employees, so I'm again a bit surprised about why our employers do not support or cover those fees, Mr. Strickland.
12:15 p.m.
Executive Director, Canada's Building Trades Unions
It is for employees. In some cases, employers do cover those costs. That's largely on large, multi-billion-dollar, resource-based projects. Oftentimes, the nature of the construction business is that it's a low-margin, high-volume business, and it's very difficult for contractors in a competitive environment to absorb those additional costs and win a project. That's why it's important to put this tax deduction into place to encourage workers to go to where the work is.
12:15 p.m.
Liberal
Sophie Chatel Liberal Pontiac, QC
If I have time, I just want to confirm that this is a real problem in rural areas, because they have skilled workers. If they don't have the expenses to go to another area, then they might not go.
Could you confirm that this is particularly important in rural areas, Mr. Strickland?
12:15 p.m.
Executive Director, Canada's Building Trades Unions
Absolutely, 100%. It's important in rural areas, and it's important in urban areas. I can cite many examples within provinces, from rural to urban, and across provinces, where the lack of this tax deduction proves to be a real barrier for worker mobility.
Workers often will make the decision to stay at home and not go to work. If this deduction were in place, it would encourage them to go where the work is.
12:15 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Ms. Chatel.
We're moving to the Bloc, and Mr. Ste-Marie, for two and a half minutes.
12:15 p.m.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
Thank you, Mr. Chair.
Mr. Roy, you told us that one of the problems is that the programs are voted for one or two years and they are not recurrent. It would be simpler to have recurrent and predictable support programs, with an increase that takes account of inflation. However, during your presentation, you also said that funds are voted, such as the Recovery Funding for Professional Arts Presentation Organizations, and the Reopening Fund for Heritage Organizations, if I understood correctly. The funds are voted, but they are still not accessible and we still don't know the criteria. Could you tell us more about that?
I guess we have two minutes left. I'm listening.
12:15 p.m.
Executive Director, Festivals and Major Events Canada
First of all, I would like to make a distinction between COVID‑19-related programs and regular programs. The problem we are currently experiencing is with the Major Festivals and Events Support Initiative, which has been voted and is very ad hoc and focused on reviving the festivals and events sector. We don't necessarily work on a year-by-year basis, but rather on a festival or event-by-event basis. While there were originally supposed to be two editions of the program, there is now just one, as it took eight months to set up.
In the case of the Department of Canadian Heritage's regular programs, the problem is not that the programs are not permanent. They are, but the new investments are done on a piecemeal basis and are not currently assured beyond 2024, because they opted for an annual approach. So the problem is really about the duration of the programs.
12:15 p.m.
Bloc
Gabriel Ste-Marie Bloc Joliette, QC
Thank you.
In your presentation, you talked about all the festivals and events that are not cultural, so they are not currently supported. Could you expand on this idea?
February 7th, 2022 / 12:15 p.m.
Executive Director, Festivals and Major Events Canada
Yes, of course.
In general, the problem at the moment is the approach or philosophy of the federal government, which views festivals and events first and foremost as cultural events. In many cases these festivals are indeed cultural events, but not always. The real common denominators are the economy and tourism, because even if not all events are cultural, they are all tourism-related or economic. In some provinces and territories, this is well understood, particularly in Quebec, where festivals are mainly supported by the Ministry of Tourism. At the federal level, events are supported by the Department of Canadian Heritage. So that leaves a whole category of festivals and events, whether they are sports or pure entertainment like fireworks competitions or events...
12:15 p.m.
Liberal
12:15 p.m.
Liberal
The Chair Liberal Peter Fonseca
We're moving to the NDP, and Mr. Blaikie, for two and a half minutes.
12:20 p.m.
NDP
Daniel Blaikie NDP Elmwood—Transcona, MB
Mr. Strickland, we've been talking a bit about the proposal to ensure that tradespeople get fair treatment under tax law, like others who have the ability to make deductions or receive a tax credit when they move for employment.
You mentioned in your opening remarks that this is something that New Democrats have supported for a long time. In fact, in the last Parliament, Scott Duvall, who was then the MP for Hamilton Mountain, worked arm in arm with the building trades to prepare a private member's bill that subsequently has been reintroduced by my colleague, Matthew Green, from Hamilton.
Could you take a moment, and I know you did this a bit, to illustrate what the current provisions are for other types of workers, and why it is that tradespeople, even though they may be employees—although sometimes they're independent contractors—should have that equal treatment in order to be able to go where the work is?
12:20 p.m.
Executive Director, Canada's Building Trades Unions
Absolutely, we are appreciative of the long-standing support of the NDP on this issue.
For us, the inequity is quite simply.... The example that I provided in my opening remarks is quite illustrative. I live next door to someone—let's say hypothetically—who is a salesperson selling conduit, the kind of PVC material you run wires through. You'd be familiar with that. My neighbour travels some distance to sell this conduit to a job site and is able to deduct their travel per kilometre, their meals, if they have any, and their overnight accommodation, if required. I am a tradesperson who installs the conduit. I have to travel the same distance as my neighbour who sells it, incur the same costs as my neighbour who sells it, but I'm not entitled to the same deductions under the Income Tax Act as the person who sells it.
We see that as an inequity within the tax act, something that should be addressed. If it is addressed, it will help encourage workers to go to work within provinces and across provinces where you have a shortage of work in one area and a surplus of work in another.
In Canada we do not have a very mobile labour force. In construction, we do not have a very mobile labour force, but with this kind of encouragement, through the tax act, we'll be able to provide opportunities for workers to go to where the work is, improve productivity for Canada, reduce the reliance on temporary foreign workers in some cases, and bring our labour markets back into balance in some of these areas where they're out of balance.
12:20 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Mr. Strickland.
That's your time, Mr. Blaikie. Thank you.
We're moving now to the Conservatives. We have Mr. Stewart for five minutes.
12:20 p.m.
Conservative
Jake Stewart Conservative Miramichi—Grand Lake, NB
My questions are for Ian Lee, professor at the Sprott School of Business.
Professor Lee, thank you for taking the time to meet with the committee today. I've been looking forward all weekend to asking you questions.
Is it true that you were trying to warn people that we should watching for inflation at the same time as government was worried about deflation?
12:20 p.m.
Associate Professor, Sprott School of Business, Carleton University, As an Individual
Yes. I lived through it in the 1970s. I lived through it in the seventies, and we experienced that throughout the seventies. Central banks and senior decision-makers were saying it was under control, and in fact, wage and price controls were declared, six per cent and five per cent, in 1974. Then, when they were taken off, it kept ratcheting up, and we know where it ended.
I was the mortgage manager of the fourth-largest branch of the Bank of Montreal in Canada, at the Ottawa main office. You, the House of Commons, went and bought that building, by the way. It's now the parliamentary reception centre. I worked there when rates were at 20%. I'm not suggesting we're going to 20%; I'm not suggesting that at all. I'm simply saying that when you let the genie out of the bottle—and I'm talking about the inflation genie out of the bottle—it's very difficult to put the genie back in the bottle unless you take quite draconian measures.
That's not an opinion or a theory. We can look at the 1970s and where it ended up in 1980, and it took interest rates to 20% with Paul Volcker, and it caused the worst recession in North America since the Depression.
So yes, there are solutions to inflation, but they're very, very painful, and sometimes I think it's much better to be pre-emptive and say we won't let the genie out of the bottle; we'll hit it before it has taken off, because, if we postpone and kick it down the road, it will be worse. The solutions will become worse.
12:20 p.m.
Conservative
Jake Stewart Conservative Miramichi—Grand Lake, NB
Can you please explain to the committee...? I guess you've already explained how you saw it coming, because you've experienced it in your lifetime. Are there certain market conditions that you're seeing currently that draw a comparison with your prior experience?
12:25 p.m.
Associate Professor, Sprott School of Business, Carleton University, As an Individual
Well, what we saw in the 1970s.... I don't want to get into who caused it, because I don't think that's fruitful. I don't believe Canada caused the inflation of the 1970s, but I and many others believe that we exacerbated it. I don't believe that Canada caused it this time either, by the way. We know it was global supply chains being disrupted by the pandemic, but governments can contribute to inflation by pouring in huge amounts of monetary stimulus and fiscal stimulus.
Milton Friedman—I know some people don't like him—was an extraordinarily distinguished professor at the University of Chicago. He won a Nobel prize for this very issue, showing that inflation is hugely influenced by monetary and fiscal policy. Throughout the 1970s, we were pumping billions of deficit financing into the economy while the economy was growing. I understand the argument. I'm very Keynesian. When the economy collapses, goes over the cliff, you spend money, sure, but we were spending money throughout the seventies, when the economy was growing at six per cent, seven per cent and eight per cent. Just like right now, we have the economy growing stronger than before COVID, and we're pumping billions of dollars in, and we've recovered all the jobs. That's why the PBO said there's no economic reason remaining now to do the stimulus.
I'm just looking at the evidence, based on the data and the numbers that we can see and measure.
12:25 p.m.
Conservative
Jake Stewart Conservative Miramichi—Grand Lake, NB
I appreciate these comments.
Should we really be spending an additional $70 billion in regard to Bill C-8 with a new economic stimulus?
12:25 p.m.
Associate Professor, Sprott School of Business, Carleton University, As an Individual
No. I'm very worried about it.
I have no dog in this hunt, to use Bill Clinton's famous phrase. I don't belong to any political party. I don't consult anybody. I teach at Carleton. I do research.
I'm very much following Anne McLellan. I thought her comments were absolutely spot on. We have to pivot now, change. We did what needed to be done when COVID came along, but now we have to focus on growth. We have to generate growth, which will generate tax revenues to pay for these social programs and to pay for health care.
We have a lot of demands on our plate, we know that. There are people here who are advocating for more spending. We need the growth to pay for it.
Again, I want to keep reminding everybody: People think we can solve our shortage of workers with more immigrants. I strongly support immigration, but we have to be prepared for the idea that immigration may start to slow down, and we need more workers. The million in shortages is going to get worse post-COVID. It's not going to get better.
12:25 p.m.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Mr. Stewart. That's your time.
We're moving to the Liberals and Ms. Dzerowicz for five minutes.
12:25 p.m.
Liberal
Julie Dzerowicz Liberal Davenport, ON
I want to thank all the witnesses for their excellent presentations today.
I have questions for everyone, but I don't have enough time.
I'm going to start with Mr. Strickland.
Mr. Strickland, thank you so much for being here today. Thanks for your excellent recommendations; I have them in front of me. Thanks so much, also, for your leadership within the building trades unions and movement within our country. You've been an excellent leader. I really appreciated all our previous conversations.
The first question I have is not on something you've mentioned, but it's something we've talked about. We have a number of non-status workers who are working in building trades unions across the country. Is it time for us to find a way to normalize the non-status workers who have been here for years, who have already been trained and who contribute to our economy already? What is your position?