Finance Committee on May 16th, 2022

[Bruce MacDonald]

I think it is important that as charities start to have more and more of these relationships with non-qualified donees to serve vulnerable populations here or abroad, they can have the financial strength to be able to do that. What we want to ensure is that organizations are able to have dollars that go toward supporting that.

If a donor wanted to come and work with a charity to create a new innovative program on an indigenous reserve, they would want to be able to ensure that those dollars are going to that. As long as they're in furtherance of the charitable purpose, we want to make sure that that can happen.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Lawrence.

Now we'll hear from MP MacDonald. You have the floor for five minutes.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you, Chair.

Thank you to the guests here today. I know Mr. Strickland has left, Chair, but I have some questions that I hope we can provide him with. Is he still here?

[The Chair, Liberal, Peter Fonseca]

Mr. Strickland, are you there?

[Sean Strickland]

Yes, I'm still here.

[Heath MacDonald, Liberal, Malpeque, PE]

I thought he had left. Thank you.

Mr. Strickland, there's millions of dollars transferred to the provinces each year for labour market development agencies in each of the provinces.

Can you give me your opinion on some of the most effective programs that work, relevant to your industry?

[Sean Strickland]

The union training and innovation program is a really good one that works quite well. The budget will be doubling that amount to $84 million, so that's something that directly benefits 197 training centres right across Canada. It works quite well in providing opportunities to improve not only the capital and the ability of the union training centres to put into place the right kind of equipment for modern construction techniques, but it also provides an opportunity for outreach into the community to get more people into the construction trades. That's a really good program that works pretty well.

There are also apprenticeship incentives that are available through various government initiatives, and government programs that also provide some support for apprentices getting into the construction trades. EI has numerous programs, but an EI program itself needs some improvements that could better support construction workers, especially apprentices.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you, Mr. Strickland. The review of EI is ongoing, so it's interesting.

I am wondering if you have any suggestions on the temporary foreign worker program. I come from Prince Edward Island and I think we're short about 600 to 1,000 construction workers on a small island of 160,000 people. It's extreme. The temporary foreign worker program.... We had initially created an Atlantic growth strategy that seemed to work very well, and they've adopted it permanently in Prince Edward Island and Atlantic Canada.

Do you have any suggestions to improve the temporary foreign worker program? Is there a possibility of a pilot for construction workers? What scale would you suggest?

[Sean Strickland]

Absolutely, MP MacDonald. That's a great question.

The Atlantic pilot project is something we're looking at as a possible path forward for a construction pilot project. I don't really know what the number is in Ontario. I know what the demand is, based on having conversations with various construction industry executives and union leaderships in Ontario. I mentioned earlier that 25,000 alone in Ontario could go to work today. You mentioned 6,000 in Prince Edward Island, because you're going through a housing boom right now. BuildForce Canada indicates that, in the next 10 years, we'll need well over 100,000 workers in Canada to meet the demand and also to close the gap from retirements.

We need a construction immigration pilot project. I don't know what the right number is, but we need to start it in a province where we have the greatest demand right now. We also have to make sure it's achievable. One number we're looking at is 10,000 construction workers for the province of Ontario. [Technical difficulty—Editor] That number would increase and be reflective of the demand in the various provinces.

We need to get beyond our growing reliance on temporary foreign workers. The temporary foreign worker program is not a long-term sustainable solution to our labour market demands in Canada. We also need to encourage more Canadians to get into the construction industry. That's something the government has also put some initiatives on the table for, in terms of apprenticeship services and sectoral initiatives. There is a lot of money coming to help our industry attract more people into the trades. We need more of those kinds of things.

[The Chair, Liberal, Peter Fonseca]

You have about 30 seconds.

[Heath MacDonald, Liberal, Malpeque, PE]

One thing you didn't mention, which we continue to raise, is the identification of trades and exposing them to students in K to 12 at some point, whether that be grades 7 to 12. It doesn't seem to be consistent across the country.

Can you give me a quick comment on that, and has your association initiated anything to do this or to raise awareness?

[The Chair, Liberal, Peter Fonseca]

Make it a quick answer, please.

[Sean Strickland]

This is a real challenge. You probably all heard it before within your own communities. The shop classes of the seventies have all been closed down. Learning models have changed, so it's very difficult for a high school student in many jurisdictions in Canada to be even exposed to the trades.

Where I live in Kitchener-Waterloo, there is only one high school that offers an opportunity to take an electrical courses. There's only one that offers sheet metal. If you're interested in that, you have to travel from all over the region to go to that school.

Our unions, and unions in different communities and provincial associations, are working hard to try to turn that around, but it's a big uphill [Technical difficulty—Editor]. We are seeing some initiatives at the provincial level, and we encourage that.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Strickland. We're starting to lose you a bit with your Internet there. You're right: there are great careers in the trades.

We are now moving to Monsieur Ste-Marie for two and a half minutes.

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

Thank you, Mr. Chair.

Life is better when you live next to a lake, but unfortunately, people in the regions often have to deal with connectivity issues. That is still a huge problem.

My next question is for Mr. Rooke, of Cider Canada.

Mr. Rooke, I am really impressed by the quality of the cider our craftspeople produce. In the past few years, product quality has been tremendous. My latest discovery is a cider produced by Qui Sème Récolte, a business in Saint‑Jean‑de‑Matha. Not only is the industry booming, but it's also a source of great pride.

I want to make sure I understand the problem. Bill C‑19 would restore the excise duty on wine, further to a World Trade Organization, or WTO, ruling in a dispute between Canada and Australia.

As I understand it, the dispute had to do with grape-based wine. The problem is that Ottawa doesn't distinguish between wine made from grapes and other alcoholic beverages such as cider and mead, so the excise duty will apply to your members.

Do I have that right?

[Barry Rooke]

Yes, that is correct. Cider is currently classified under wine by the government. It's produced in a similar fashion with fresh fruit as opposed to beer, which is with barley.

It is one of the areas we are interested in exploring in order to work with the government to separate it out from wine, because it does have all of those different production structures and costs associated with it. We think that will help to address the concerns that it brought up with the excise duty. There are also entire challenges for taxation within alcohol at the federal level, and will probably need a review across the current three: beer, spirits, and wine.

We think an industry-led solution, something similar to the BTAP, which happened in B.C. in the past couple years, might put Canadians in a better position to be both stronger economically for the organizations they run but also be able to produce and experience that really good product that we make across the country.

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

Thank you. That was very clear.

I completely agree with you, Mr. Rooke.

In Quebec, we distinguish between wine made from grapes, called wine, and other alcoholic beverages, like cider, in our legislation.

You think Ottawa should adopt a similar distinction, in addition to reviewing the taxes on alcohol.

Is that correct?

[Barry Rooke]

Yes, I think it would make a lot of sense to classify cider individually or separately from wine. It is growing and has the potential to become a much larger industry overall. We were talking about how around two to four per cent of total alcohol consumed would be cider, and that number is growing.

Being able to develop its own needs and solutions within the tax structures and systems not only will help the individual producer, but will help the Canadian consumer to access that type of product.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie.

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

That's very clear.

Thank you.

[The Chair, Liberal, Peter Fonseca]

MP Blaikie, you have two and a half minutes.

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

Thank you very much.

I want to return to Mr. Cochrane.

We had the opportunity to talk a little bit about housing, but he had also mentioned climate action as being one of the areas that he had hoped to address in his testimony. I wanted to offer Mr. Cochrane the opportunity to talk a little bit about that issue in the context of the budget implementation act.

[Dr. D.T. Cochrane]

Thank you very much.

Our general comment with regard to climate action in budget 2022 is that there's nowhere near enough direct actual action with funding to achieve the types of economic transformations that we need. We're concerned that there is excess reliance on tax credits. In this specific implementation bill, there's a reduction of the corporate income tax for zero-emission technology manufacturers. We're always concerned anytime new complications are introduced into the tax code.

Mr. Strickland already brought up the fact that the tax system works best when it's kept simpler. We're always concerned when something is introduced that's going to reduce the tax rate for some sub-segment of the corporate community because there's so much opportunity for gamesmanship around this. We're concerned that this puts an excessive burden onto the CRA to have to oversee what is actually qualifying as zero-emission technology.

On the other side of things, if you're going to be reducing tax rates to try to encourage certain types of manufacturing, then let's have the balancing act of perhaps raising tax rates on the production of technologies that contribute to higher emissions. We just think that this is very asymmetrical as it's introduced and there's a lot of substitution of what looks like action for actual action.

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

In the budget, about two and a half billion dollars or a little bit more was announced for carbon capture and sequestration to encourage that practice. We saw a reduction of a fossil fuel subsidy on flow-through shares, which the government projects is going to be about $9 million worth of revenue.

Do you want to speak to the orders of magnitude involved there in the difference between new fossil fuel subsidy spending versus what they're rolling back?

[Dr. D.T. Cochrane]

We're very happy to see the end of the flow-through shares for investments in oil and gas companies. We take issue with the flow-through share structure more generally. It really only benefits the absolute elite investors and encourages investment in what are otherwise not profitable undertakings. It can encourage money-losing in ways that is destructive for the places where that investment is actually encouraging action.

The carbon capture subsidy is also incredibly concerning. It strikes us as being a subsidy that will mostly benefit the oil and gas industry, which has already enjoyed decades of an effective subsidy by not charging for the emission of carbon. We have an incredibly over-developed oil and gas sector and we need to transition as quickly as we possibly can. We don't think that trying to encourage carbon capture technology that way is the way to achieve what needs to be achieved.

We would much rather see direct investment in creating these technologies without it risking becoming effectively a new tax dodge by companies that, frankly, are experts at avoiding taxes.