Finance Committee on Feb. 10th, 2022

[Greg McLean, Conservative, Calgary Centre, AB]

I'll move on to my next question. You talked about 560,000 jobs in the clean energy sector by 2030. Right now $600 million has been announced to replace auto manufacturing facilities in Ontario with zero-emission vehicle manufacturing facilities. That's for 3,000 jobs, so that's $200,000 of taxpayer money per job. Those jobs might last five or six years before they revamp the whole facility. That's $200,000 per job we are subsidizing just to get the jobs here. We also subsidize those vehicles by $5,000 to $12,000 per vehicle at the consumer level, and you're suggesting we subsidize them more.

At what point in time will this industry actually become a taxpaying industry in clean energy? There is only so much to go around here, and right now $25 billion a year comes from the petroleum and natural gas industry into government coffers.

That $25 billion is being redistributed to programs like these, yet where's the outcome once we get to your endgame? It seems like we're going to subsidize these jobs forever.

[Daniel Breton]

If you look at the International Monetary Fund, they came out with a study last year that said that we subsidized fossil fuel at a level of $5,900 billion in 2020. Across the world, we've been subsidizing fossil fuel for decades. Back in 2012, President Obama said that they had been subsidizing oil and gas in the U.S. for more than 100 years.

If we are to be subsidizing cleaner vehicles and energy because we're making an energy and technology shift, I agree with you that we should not be subsidizing that for decades like we have been.

[The Chair, Liberal, Peter Fonseca]

That's your time, Mr. McLean.

We are moving to the Liberals for six minutes, and I have Mr. MacDonald.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you very much, Chair.

Thank you to the guests today.

I come from Prince Edward Island. Tourism is an extremely important industry on P.E.I. It's about 6.5%, almost 7%, of our GDP. It was hit extremely hard. It's mainly a seasonal economy on Prince Edward Island, and I sympathize with many owners and operators of small and medium size, which most of them are in this industry.

I hear you about relevance to changing the percentages and adding three months on, and I hear that from owners. To me, those are short-term and need to be dealt with. I understand that, but I want to ask you a question about the long term and getting the tourism industry back to where it was prior to COVID-19.

It's imperative to have multi-level coordination between all levels of government. I want to ask you what governments can do beyond the next three months to expedite some of the issues relevant to tourism that it has faced over the past two years.

[Beth Potter]

Thank you very much for the question, I really do appreciate it.

I will tell you that one of the first things that has to happen is we need to reopen our borders and make it easier for people to travel to and from Canada. Right now, that is the biggest stumbling block. That is what consumers are basing their decisions on when deciding whether they are going to book right now, which is the booking window for March break and for the summer season.

International visitors are not booking travel to Canada. There's a lot of interest in Canada, but they're not booking Canada because of the testing requirements predeparture and on arrival. We have examples right now of families arriving in Calgary for a 10-day ski trip and spending five days in a hotel in isolation while they wait for their on-arrival test. That doesn't bode well for our brand reputation on the global stage.

Something that governments can do right now is get together and get the testing issues resolved. We're seeing it in other jurisdictions around the world, and we are the only G7 country left that requires these tests.

[The Chair, Liberal, Peter Fonseca]

Ms. Potter, please move your boom up on your mike. We're getting a bit of a popping sound.

That may be better. Can you speak a bit to see if that's okay?

[Beth Potter]

I hope that works better for everyone.

[The Chair, Liberal, Peter Fonseca]

That's great. Thank you.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you for that.

It's interesting. The Smart Traveller Survey, which you're likely familiar with, shows that 70% of U.S. travellers—who make up about 15 million of our visitors to Canada per year—believe that vaccine passports should be required. I'm assuming that's starting to change....

I'll move on to another question. I hear a lot that a lot workers in the tourism industry over the past two years have left and gone on to other jobs. We always hear that folks who leave the tourism sector cite lack of job security, low wages, lack of benefits, etc. How can governments at every level help to address some of these issues?

[Beth Potter]

That's a great question.

We, as an industry, are working right now, as an example, with the Ontario government on their mobile benefit program. It's a pilot program and it looks like it could be a really good way of maintaining and keeping staff.

Right now, that's not the issue. Right now, the issue is that because travel and tourism has been made out to be the bad guy and the one place you don't want to go, the thing that everybody has been denied during this pandemic....

So many people have been laid off that they have picked up their skills and taken them off to other industries. We're actually in a deficit position. In January, we had the worst month of employment loss than even through the early days of the pandemic. The accommodation and food services sector was down over 113,000 people. That's an 11% loss. That is massive.

When you have other sectors and industries talking about being back at capacity, we're nowhere near it. There's a lot of work to do and it's a mixed message. Industry is very much aware that they have work to do on it. We are stepping up and doing that work, and we would love to have government at the table as our partner.

[Heath MacDonald, Liberal, Malpeque, PE]

Chair, how much time do I have?

[The Chair, Liberal, Peter Fonseca]

You have about 40 seconds.

[Heath MacDonald, Liberal, Malpeque, PE]

Just quickly, on climate action and tourism, we know many travellers will be looking for this when things hopefully get back to normal. I just want to know how the tourism industry is going to address this to ensure they're doing everything possible relevant to reducing carbon emissions and climate change and marketing themselves as such.

[Beth Potter]

I'm going to let Blake take this one.

[The Chair, Liberal, Peter Fonseca]

Please provide just a short answer.

[Blake Rogers, Executive Director of Tourism Industry Association of the Yukon, Tourism Industry Association of Canada]

Thank you for the question. I'll do the best I can in a few seconds here.

I think it's just looking at R and D, working with airlines to encourage more innovation in that way, and really promoting sustainable travel in any way we can. I could go on for a while with this one, but that would be my short answer.

[The Chair, Liberal, Peter Fonseca]

Thank you. That was well done.

Thank you, Mr. MacDonald.

We're moving to the Bloc and Monsieur Garon for up to six minutes.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you, Mr. Chair.

I want to start by thanking all the witnesses. In particular, I want to let Ms. Potter know just how aware we are of the challenges that our tourism industry workers face and continue to face. I certainly appreciate everything she talked about in her presentation. Thank you very much.

My first question is for you, Mr. Breton. This isn't the first time I've heard you speak, and I'm always fascinated by what you have to say.

When people are considering purchasing an electric vehicle, certain factors can be barriers, whether it be vehicle autonomy, the environmental impact of the battery or the quality of the charging infrastructure.

Are those factors truly barriers for the EV industry? If so, how do we get rid of them?

Also, tell us more about what role the government can play in changing people's perceptions.

[Daniel Breton]

Thank you for your question.

First, the government has a very important role to play. We are talking about a technological change that will lead to economic disruption. Earlier, a Conservative member asked me why the government should subsidize electric mobility, whether it be at the manufacturing or purchasing end. It's not complicated: if the Canadian government does not provide support, financial or otherwise, for the transition to electric mobility, Canada's auto, truck and bus industries will likely vanish, and those jobs will leave the country. What will end up happening is that we'll be buying vehicles made elsewhere.

There's no denying that the Canadian government has a role to play here. The pace of technological change is extremely fast. China, the U.S. and Europe are currently overhauling their strategies. They are looking to fight climate change and air pollution at the same time.

As for the barriers you mentioned, the main one revolves around education. A lot of people think they can't travel very far in an electric vehicle. Last week, I had a meeting in Toronto. I live in the country, in Quebec. My family and I hopped in the car and drove the 630 kilometres to Toronto with no issue. It was -20°C when we left that morning, four grown-ups, children, the dog and all of our bags in tow. It is possible to travel long distances in an electric vehicle in Canada and in Quebec, even when it's cold out.

In fact, Norway is currently the mecca of electric mobility, and it is by no means a tropical country.

It takes infrastructure, and that infrastructure is being installed. The government has a crucial role to play in accelerating the transition.

[Jean-Denis Garon, Bloc, Mirabel, QC]

I may be wrong, but I would like to think that Canada could show industrial leadership. This is a sector with jobs and development. Lion Electric comes to mind. It's a fantastic Quebec company, in the Lower Laurentians region.

Is Canada lagging behind? Where does it stand in relation to its competitors?

What steps should Canada take to develop this technology here, to create this domestic wealth and even to export some of these technologies, including patents and the expertise acquired throughout the process?

[Daniel Breton]

To be perfectly honest, I have to tell you that Canada is lagging behind, but that is also true of the entire western world.

Take battery manufacturing, for instance. In 2021, China, South Korea and Japan accounted for 85% of battery production.

European countries realized they were lagging behind and, in 2017, established an organization with the goal of building an EV battery manufacturing ecosystem.

Last year, Electric Mobility Canada helped create Accelerate, an alliance working to build a Canadian electric mobility supply chain, bringing together mining, mobility, battery and powertrain stakeholders.

Yes, Canada is lagging behind, but it isn't alone. The Americans have suddenly woken up. Canada needs to make up for lost time, and it's not too late. That said, this is a sector where things advance at a breakneck pace, so now is the time to take action.

Twelve years ago, during the last financial crisis, President Obama introduced a plan to accelerate R and D in the electric mobility sector. That has given the U.S. a bit of a lead. Canada didn't step up. Now, we have a second chance, but it will probably be our last because everyone is coming to the same realization.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Basically, you're saying that if we turn our backs on the industry and swim against the current, it's like living in the past. To a certain extent, we would be forgoing an industrial revolution.

[Daniel Breton]

That's right.

I would add that we don't want to repeat the mistakes of the past, when we shipped Canada's and Quebec's natural resources out of the country for processing. Softwood lumber, oil and ore come to mind.

In February 2021, Canada and the U.S. signed an agreement to deploy a critical minerals strategy, as well as an EV battery strategy. Canada should work with the U.S. as much as it can.

Canada mustn't send its raw minerals overseas for processing only to have those value-added products resold to us afterwards. Otherwise, we can kiss thousands of quality jobs goodbye.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you.

I want to use the last little bit of my time to tell you that, further to last year's pre-budget process, the committee made recommendations on how the government could support the development of charging station networks.

Where are we, in Canada? How are we doing on charging stations? Why should the government invest in that?

[The Chair, Liberal, Peter Fonseca]

Sorry, Mr. Garon.

That is the time. We've gone over it, but I'm sure there will be more opportunities.

We are moving to the NDP and Mr. Blaikie, for six minutes.