Finance Committee on May 19th, 2022

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

Yes. Thank you for that. I appreciate your going into greater detail on that as well.

With Canada's deficit at a staggering $148 billion this year, would you agree that this government is not taking the urgent steps needed to protect Canadians from personal and corporate tax increases and service cuts in the near future?

[Benjamin Dachis]

I would add that we have to think about this through the lens of provinces as well. If you look at the overall state of Canada's fiscal outlook, we're looking at very large health care expenses in the future and an echo boom of education payments and paying for students in schools. There are some very large looming costs, not to mention things that we've already mentioned in terms of liabilities for dealing with emissions reductions and the consequences of climate change. We have a lot of fiscal pressures coming our way and no clear plan for how to pay for it.

Yes, there are some concerns. In the future, we're going to have to face some pretty large increases at either the federal level or the provincial level. There's one taxpayer. If the federal government is spending that fiscal room, provinces are going to be in real trouble.

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

Thank you for the answer.

Taking into consideration the current government's costly new programs that have no revenue to cover them in what looks like a stagnating economy, we will most certainly see the next generation of Canadians saddled with massive dealt. What does C.D. Howe have to say with respect to the top three failures in the planning surrounding this current budget?

[Benjamin Dachis]

I would start from your first point, which is programs that don't have a commensurate revenue plan to pay for them. Programs under new government spending do not pay for themselves. Taxpayers must pay for the programs that we want, whether it's pharmacare, dental care or child care. We have to have revenues, new revenues, that accompany new programs.

Those are the three major new programs that we're looking at. I'd ask what revenue will be accompanying them and have the government say, “We're going to give you this new spending, but we're going to ask you to pay for it with this.” That's what I would be asking the government to explain more.

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

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Stewart.

Now we'll hear from the Liberals.

MP Dzerowicz, you have five minutes.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

I want to say a huge thanks to all of our presenters today. We really have an outstanding group of presenters with some very important information. My initial questions are going to be directed to Mr. Steven Tobin.

Mr. Tobin, you have raised an issue that is literally on the minds of all of us and that comes up in the House of Commons almost every single day, and that is how to address our skills and labour shortage issue. Thanks for reminding us that those are two very different things. I hear you very clearly when you talk about your three-point plan, the comprehensive labour strategy, diagnosing the labour issue first and then the cohesive and integrated skills strategy.

The first thing I would like to ask you to do is something I'm hoping you'll be able to submit. In terms of where we start with the comprehensive labour strategy, you had indicated that it's important to meet with a series of stakeholders, and I wonder if you wouldn't mind submitting in short order to this committee the list of stakeholders you would propose that we have. If you could do that, I'd be very grateful.

I'm going to move to my next question. I'll also have you respond to that first one, but on your second part, in which you diagnose the labour problem across the country, you talked about streamlining open access or providing open access to existing sources of information and EI. Could you elaborate a little bit more on those existing sources of information and a little bit more on what you mean by EI?

Is there any other data you think we should be collecting that we haven't started collecting yet?

Thank you.

[Steven Tobin]

Thank you for the question.

The quick answer to your first question is yes. I would be happy to give some consideration as to the stakeholders that should be consulted as part of the development of a comprehensive labour market strategy so yes, with pleasure.

On the second point, with respect to data, traditionally as a researcher I would always say that more data is always better of course, but when I think about policy, there needs to be some consideration as to the cost and benefits of acquiring new data. This is why in the first instance my proposal on the labour and skill shortages is to leverage and harvest the data that's already there so we can better diagnose the problem.

When I think about that issue, I think about two sources of information. One is about the source of information with respect to people. We have great information on unemployed people across this country. It's very detailed and very granular, and it's from those who are receiving employment insurance. It exists of course. It's individual-level data, so it takes some time to process. We need to be careful with respect to privacy and data quality, but allowing a more streamlined, open access while protecting the privacy of that data will give us great and detailed insights as to the availability of the labour pool across this country.

Right now there is some availability of that data, but it comes with a significant delay. It's very difficult to access but it is there, and I think we should start by leveraging access to that information.

At the same time, we also have very good information on the demand for labour from vacancy surveys through Statistics Canada. Again, there's a wealth of information available on the types of jobs that employers are asking for. Having greater and more open access to that information will give us some insights into the types of jobs that employers are looking for.

I'd start by harnessing and leveraging those two existing datasets.

If asked and pushed with respect to what further data we need, I would again start by seeing what that information would tell us, but to my point about the difference between skills and credentials, right now we continue to lack good information on the types of skills that employers are looking for, which puts us in a difficult place with respect to how we can develop and design training programs that will give individuals those skills. Even the way we collect information today is very much about, I would say, skill level, but in essence we're talking about qualifications and credentials. This is the one area in which we need to be considering where and in what manner we should be collecting better information.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Dzerowicz. That is the time.

We are moving to the Bloc and MP Ste-Marie for two and a half minutes, please.

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

Thank you, Mr. Chair.

I would like to ask Mr. Mueller and Mr. Chartrand one more question.

Mr. Chartrand, it is indeed deplorable that the government has not commissioned a study on the economic impact of this ill-conceived tax, which will hurt the aerospace industry.

In your opinion, how much concern do you see in the industry regarding the impact of this legislation? Is it going to damage the reputation that we have on the international stage?

I would ask you to each take a minute to answer the question, if you could.

[David Chartrand]

This will certainly damage our reputation.

Would you like me to speak in French or English?

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

It's up to you.

[David Chartrand]

When principals decide to locate in Canada to work in aircraft or parts manufacturing, for example, they evaluate three aspects: labour availability, supply chain and government support.

Of course, it's like a three-legged stool, and if you take one of those legs away, the stool falls over. This is obviously how it works. When principals assess government support, they look at the programs that the government is implementing to help them. They also look at what the government is doing in the context of a crisis or an issue to encourage companies to locate here, and what the government is doing to support the industry in terms of the workforce, the training programs and the assistance that can be provided. When you create taxes that put up barriers and cause more hardship, it doesn't help the industry at all.

I will turn the floor over to Mr. Mueller.

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

Thank you.

Mr. Mueller, you have the floor.

[Mike Mueller]

Thank you for your question.

Absolutely. I think you mentioned the economic impact assessment. We're very concerned with the understanding that it hadn't been done, again just by the results we've seen by going out and surveying our members. It's 1,000 jobs and a billion dollars lost in revenue.

However, the uncertainty that this brings, and we've talked a lot about the international reputation piece.... I'll just give a little example that has come up in consultations on potential free trade agreements. There's a lot of discussions about how you lower tariffs to make sure we can sell our aircraft internationally, and we have a whole department of international trade focused on that specifically. Then, isn't it contradictory that we have another government department, in Finance Canada, putting a 20% tax on that same plane if it's bought domestically? There's absolutely international reputational damage being done here.

We've talked a lot in the past, and still do, about the need for a national aerospace strategy. Again, it goes to that support from the government for what is a strategic sector.

All of our competitor nations have aerospace strategies. We do not. All of our competitor nations do not have a tax of this nature, and we're contemplating putting one in place. It makes no sense. We need that predictability. We need that certainty. The legislation is flawed.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Mueller.

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

Thank you.

[Mike Mueller]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste-Marie.

Now, for two and a half minutes, MP Blaikie, please.

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

Thank you very much.

Mr. Rubinstein, Bill C-19 incorporates another government bill, Bill C-17, which has among other things, some money for housing and transit. I understand the need for ongoing operating support for public transit and certainly understand the need for public investment in housing.

I'm still trying to get a better sense of how the government intends to mix those two in this funding pot. I'm wondering if you're aware of any work or consultation that's gone on to better define for provinces and municipalities how those two important policy areas are meant to interact within this funding envelope.

[Daniel Rubinstein]

Chair, thanks very much. I appreciate the question.

You're right. This subsumes a piece that was in Bill C-17—a really critical piece of funding for our members' transit systems that continue to face shortfalls due to the pandemic. It's taking much longer than I think we'd all hoped to get back to the ridership levels we had ahead of the pandemic.

On this question of integrating transit and housing, we're seeing it across different types of interventions and programs. It's really critical that we do that right, that we think about how to develop our cities and transit-oriented development as a strategy, for example, linking housing and transit.

As it relates to this funding, the core intention here is to support transit systems and municipalities with those pandemic shortfalls. The way I read the intention from Finance Canada is to make sure that, as this funding is delivered, provinces and territories are working with their municipalities to talk about housing supply and about having an integrated vision to tackle that challenge. We welcome that.

As I said, it's work that we're doing with Infrastructure Canada on programs, with CMHC for sure, across both transit and housing, in an integrated fashion. We look forward to that work continuing.

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

It seems to me that, with $750 million, by the time you address the transit operating shortfalls there's probably not a lot left for housing. Is it your understanding that it's meant to be more of a kind of notional planning type of direction inside that funding envelope and that it's not actually meant to build any housing, but it's meant to try to incorporate housing into transit design?

[Daniel Rubinstein]

Certainly, the way we approached this question earlier in the year, ahead of the budget and when this was first announced early in the spring, was to talk about these transit pandemic shortfalls, these operating shortfalls. That is the need, for sure.

I mentioned in my opening remarks that we have this suite of measures in the budget that tackle housing supply. They're all connected to each other. There is the accelerator fund and there are changes to the national housing strategy that are really welcome, as is the rapid housing initiative. We need all of that. The challenge is huge.

Unfortunately, on the transit shortfalls, our members are really constrained. We don't have the fiscal tools and the fiscal flexibility of higher orders of government to tackle some of those shortfalls, so this support is critical, as is the support from the provinces to tackle those shortfalls.

[The Chair, Liberal, Peter Fonseca]

Thank you to the two Daniels.