Finance Committee on May 2nd, 2022

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

Thank you, Mr. Chair.

[Julie Dzerowicz, Liberal, Davenport, ON]

I have a point of order, Mr. Chair. There's a lot of chatter in the room, and I often couldn't hear the answers of our guests who were speaking before.

Could we please make sure that we keep talking to a minimum? Thanks.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Dzerowicz.

Yes, we want to hear all of the answers to the many questions.

MP Ste-Marie, please continue.

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

Thank you once again, Mr. Chair.

Once again, I'm going to discuss the luxury tax that would apply to aircraft used for personal purposes.

We realize the tax applies to sales made in Canada, not to sales of aircraft for export. However, the tax is designed in such a way that the manufacturer pays the tax on all aircraft, including those that are exported, and is reimbursed once they've been exported. It's all done on a quarterly basis, as we were reminded during the technical briefing.

However, industry representatives tell us the quarterly basis is a problem because, in actual fact, an aircraft sold to a person outside Canada may remain in Canada for several additional months to be modified as the purchaser wishes and therefore may be in the country far more than three months longer.

For the primary manufacturer that exports these aircraft, the exported portion represents a very high percentage of its production, approximately 90%. That therefore reduces the manufacturer's cash flow because it's required to pay the luxury tax on every aircraft produced, whereas a very small portion of its production is sold in Canada or to Canadians. That causes a liquidity problem.

In real terms, as a result of months of waiting, this may represent hundreds of millions of dollars that have to be advanced because that's how the tax is designed.

My question is for the Department of Finance representatives.

Was this problem considered, and what solutions were proposed?

[Miodrag Jovanovic]

Yes, that issue was raised. We're well aware of it and understand the problem. We're studying it to determine whether there's ultimately a way to propose minor adjustments.

It's certainly an issue that we've recently discussed with the sector and that we now understand more clearly. It's under review.

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

All right. Thank you.

[The Chair, Liberal, Peter Fonseca]

That is the time, MP Ste-Marie. Thank you.

We're moving now to the NDP and MP Blaikie for two and a half minutes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Could I just get someone to confirm the date the Canada emergency sickness benefit and the Canada recovery caregiving benefit are coming to an end? I imagine somebody from ESDC has that date ready at hand.

[Nicholas Leswick]

I want to say May 7, but I want to be very cautious. I would invite someone from ESDC just to speak up.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

I believe it is indeed May 7. I don't want to lose all my time having ESDC trying to find the right person to answer the question.

[Nicholas Leswick]

That's fair enough.

[George Rae]

That's correct, Mr. Blaikie. They are scheduled to end May 7.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you.

When it comes to the large employer emergency financing program, I'm wondering what the date of expiration for that program is.

[Nicholas Leswick]

I apologize. I'd have to get back to the member. Again I'm just cautious about dates of new financing arrangements and when the facility will close.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

In that case I'm wondering whether there even is a date. I'm noticing that when it comes to larger companies—I think they have to have a revenue of at least $300 million in order to qualify for the large employer financing program—there doesn't seem to be a date, or at least I'm not aware of one, whereas the workers' support measures are coming to an end on May 7. I just wonder how it is that the government can believe, on the one hand, that the pandemic is over with respect to workers and how it can believe that it continues with respect to large companies. Surely, if one no longer requires support it would stand to reason that the others no longer require support.

Maybe there's somebody who's a little bit more familiar with the details of the large employer financing program who could explain why it is the pandemic continues for well-resourced companies but not for workers.

[Nicholas Leswick]

Again, I apologize to the member. I don't have the dates. I don't believe there's anyone on the line who could speak to the dynamics of the LEEF facility.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

I would happily accept a follow-up in writing for the committee on that question.

I'm also curious to know from ESDC how many people have been accessing the Canada emergency sickness benefit and the caregiving benefit in 2022. Again, if they'd like to follow up in writing with the committee, I'd be happy to receive that information in writing.

[The Chair, Liberal, Peter Fonseca]

Okay. We could have a follow-up.

Thank you, MP Blaikie. That is the time.

Members, I'm just looking at the time. To the top of the hour, we have about seven minutes left.

In this round, I have the Conservatives and the Liberals up, so we'll split that into three and a half minutes each, and that will take us to the top of the hour.

Next is MP Stewart.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Thank you, Mr. Chair.

Thank you to the officials for being here today.

I want to paint a little picture of where I live—Miramichi-Grand Lake in New Brunswick—and how this budget affects it.

Miramichi-Grand Lake, my riding, is the size of Prince Edward Island. There are probably about two places to plug in an electric car. Most people who order them are waiting a year—and sometimes two—because they can't get them and, of course, the government has basically stood by and watched China grow its ability to produce lithium.

The people where I live drive SUVs, trucks and muscle cars. They have boats. We have a marina. We live on one of the greatest salmon-fishing rivers in the world.

We're not seeing the million jobs referred to here today. It's nice to hear. We don't see them in Miramichi-Grand Lake. In Miramichi, we were a port facility, dating back to the mid-1800s and right up until the early 1990s, and then it slowed, so in recent years, the river hasn't been dredged. A company from Quebec wanted to dump $12 million on their own dime into the port. The were called “Groupe Gagné”. The government's role was to fix the navigational aids for $1.5 million. They said no, which stifled a minimum of 15 to 20 companies that would have been producing wood pellets, lobster, wood products, steel, fabrication products.... Basically, the current government has stifled every economic opportunity we had locally.

Now, with respect to this budget, inflation is currently at 6.7%, but it's 7.4% in New Brunswick, so it's much worse in my home province—as I've said—with no sign of it slowing down.

I don't see immediate relief for Canadians inside of this budget, but I'm going to ask the officials today, what in Bill C-19 is going to address the inflation crisis that Canadians and Miramichi-Grand Lakers are facing today?

Thank you.

[Nicholas Leswick]

That's a difficult question to answer, quite honestly. I don't think I could pick any one element out of this bill.

From a macroeconomic objective—this isn't much of a response in consideration of the local and regional issues and hardships faced by your community, Mr. Member—it's to take the edge off inflation over the coming quarter and get it back to target and to normalize those physical and monetary policies so that the economy is operating at full capacity, but there are these negative spillovers from high inflation affecting households and businesses, for sure.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Do I still have time, Mr. Chair?

[The Chair, Liberal, Peter Fonseca]

You still have one minute.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Thank you.

I'm not sure really if there was a response in there. I can't fault the officials for the political decisions of the government either, but with private investment already down.... I've told you about the project that was stifled locally: $12 million out of the pockets of a private company and $1.5 million for the government to pay for the buoys. That's a drop in the bucket for the federal government. For this government in particular, that's a minor drop in the bucket.

Did the department consider how part 4 of this bill will impact private investment in the economy? If so, what did you consider and how did you go about it?

Thank you.

[Nicholas Leswick]

Listen, again, it's not very region- or locale-specific. The government, in the department, does their best—

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

I'm sorry. I don't mean with respect to the region. I just mean with respect to the bill itself.