Finance Committee on May 26th, 2022

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

Mr. Paszkowski, if sales are negatively affected, wouldn't producers then be required to potentially reduce employee levels to compensate for the losses?

[Dan Paszkowski]

Yes. I guess if profitability is impacted, they're going to have to take a look at all mechanisms. The first casualties will be grape producers. The demand for grapes will have to decrease. Production will go down. That's the first element of the supply chain that will be impacted.

The second one will be employment, as I mentioned in my comments. If the excise exemption is lost, we're looking at at least 2,400 jobs that will be lost, and 350 winery closures. Those are real numbers. That is the impact of an excise tax that is already one of the highest in the wine-making world. The U.S. tax is 35¢ a litre and ours is 70¢ a litre, but the U.S. provides a tax credit to their producers that brings it down to 2¢ per litre. One of our biggest competitors is France. They don't pay any excise tax.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Paszkowski.

Thank you, MP Stewart.

Now, moving to the Liberals, and also from the east coast, we have MP MacDonald for five minutes.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you, Chair. Thank you to the witnesses here today.

I'm going to jump around a bit. I want to go back to Mr. Poirier.

I know your organization was very vocal during the blockades on the supply chain issues. I want to talk to you a little bit about the vulnerability of our supply chains and how important they are to the economy. I think you quoted that Canadian manufacturers and exporters are 10% of our GDP.

What do we need to do in the future to ensure that things like that never happen again because it is critical to our economic value in Canada?

[Matt Poirier]

I agree that it is.

As an anecdote, at the association level, whenever we hear from our members that it's the worst is whenever we have blockades or transportation network disruptions. It affects them the most, and certainly manufacturers are the biggest users of Canada's transportation network.

We approach this from the angle that everyone has the right to protest. Everyone has a right to do that. However, there are.... We have done the exercise of deeming certain things to be critical infrastructure, and we would argue that transportation networks are critical infrastructure. Our industry is held hostage every time they're shut down. Our solution is to designate those and make them out of bounds for protest activities. However we want to design that designation is a discussion we can have, but from a fundamental perspective, that's how we view it. It would still leave 99% of the country open for legitimate protests.

Just ensure that those networks are protected on that front, because the reputational damage that Canada takes every time we have to close down our transportation network, whether it's for a strike, a blockade, or what have you, is significant. Our members tell us that they have to have really tough discussions with headquarters and other countries to justify why they're still making stuff in Canada and operating in Canada.

We don't want our members to have to do that. It's unnecessary, and it's a big threat to that 10% of GDP.

[Heath MacDonald, Liberal, Malpeque, PE]

I want to follow up on what my colleague Ms. Chatel was talking about and touch base with you on small and medium-sized enterprises.

I come from the east coast, where there are a lot of smaller businesses. The government put forth a $5-billion green bond, and I'm wondering how your organization is presenting that as an opportunity for small companies to possibly reduce their emissions and get involved in the innovative side for reshaping how they do business.

[Matt Poirier]

That's part of it. What we're noticing, at least from the government, is.... We're starting to piece together our incentives and plans, and there are various elements to that. That is one of them. Our general feeling at this point is that they're all introductory moves, first steps, because when we look at it, billions of dollars have been put on the table for this type of transition. We think it's probably around $100 billion for the entire industry.

That's why my comment focused on this. It's great, and we asked for it and we got it, but we need to make sure the money is there to get the full transition happening. That's not to say the government has to fund all of it. It will be a partnership with industry, certainly, but our initial assessment at this point is that it's a good first step but more is needed. Obviously, it also means working with us during the process so that it's not a one-size-fits-all government program that's designed in Ottawa and there's no uptake from SMEs, for example.

[Heath MacDonald, Liberal, Malpeque, PE]

That's good. I'm glad you said “designed in Ottawa”, because I'm on the east coast and we are quite different from some other parts of the country.

Mr. Poirier, we've heard a lot and seen a lot over the past number of years about protectionism. We talk a lot about diversifying our markets, and we are dependent on our biggest trading partner south of the border. We've also seen disruptions in global supply chains and so forth. How do we plan for a future that eliminates some of these possible consequences, especially for your sector?

When you hear “buy America” or what have you, or when you see China set rules and regulations, even most recently with COVID-19, how do we overcome that? What's your sector's opinion on ensuring that we continue trade, which is so important to the economy of our country?

[The Chair, Liberal, Peter Fonseca]

I'm going to ask for a very short answer, Mr. Poirier.

[Matt Poirier]

Basically, there are mechanisms in our trade deals, such as the competitiveness chapter in the new NAFTA, for example, that are designed to do exactly that, and we should embrace them, get working on them and leverage them to their maximum extent. We haven't done that yet. That would be my quick comment.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP MacDonald.

Members and witnesses, I'm just looking at the time. We're coming to the top of the hour pretty soon; that will be the end of our first panel, so what we're going to do is divide up the time equally, as we usually do in this committee. For this round, each party will have four minutes to ask questions.

We'll begin with the Conservatives. MP Albas is up for four minutes.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you, Mr. Chair, and thank you to all of the witnesses who are here today. I appreciate your expertise.

I'm going to start with Dr. Lynn Tomkins. Thank you very much for appearing today on behalf of the dental association.

I'd like to talk a bit about the ways forward on this aspect. In the last few elections, the Conservatives have talked about the need to work with the provinces and territories as co-operative partners to effectively fill in gaps that may exist in some systems, rather than a wholescale change that might totally change the experience that many Canadians have of programs they already know and trust.

With regard to dealing with some of the gaps that currently exist, can you identify where they would be and which provinces or territories you think would bear the most fruit in easing the gaps that are there?

[Dr. Lynn Tomkins]

Certainly it is our perspective that in co-operation and collaboration with the provinces, the federal money that has been set aside for dental care was distributed to the provinces to sustain and stabilize the existing programs. Across the country, all of the programs are in need of some sort of support. There are better programs than others in certain areas, but there's no one perfect system.

I can't give you a single province that I think you should single out for special treatment. It's Canada; we need to treat everybody equitably.

Yes, there are existing programs, and there are existing administrations, and there are existing relationships among the stakeholders within the provinces, so we don't really need another top-down, administration-heavy, stand-alone program. What most of the programs need is funding so that they can increase the funding levels to cover the cost of providing treatment, because a lot of them don't even cover the cost of providing treatment. Any dentist or dental office that treats a patient on some of these provincial programs is subsidizing the programs out of pocket, and that's not sustainable.

I think that going with the existing programs would be the way to go. The people are there, and they can expand the program to include more people according to the goal that the federal government has, such as the zero-to-12 age group. It would be much better to do it that way, rather than creating a top-heavy, top-down, new administrative program that might capture people who already have dental plans. The eligibility criteria may capture people who already have dental plans. We're already hearing some hints that some employers might be saying that they'll drop their dental plans for people who would be covered by the federal plan, so there would be this unintended consequence.

We feel very strongly that the best way is to flow the money through the existing programs.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

I take your point about the government, which can't seem to issue passports on time, let alone fix its Phoenix payroll debacle.

On universality, who wins in that case? Is it people who are wealthy enough to provide for themselves through private plans? Is it the private insurers themselves? Ultimately, will taxpayers, even low-income taxpayers, be subsidizing people who are well off?

[Dr. Lynn Tomkins]

We already have a good system in Canada. Two-thirds of Canadians are covered by some sort of plan, whether it's through an employer-sponsored plan or through some government plan, and 75% of Canadians report that they feel they have good access to care.

Again, it goes back to our original position. We feel that flowing the money through to the provinces to build up, stabilize and support the existing programs is going to be most equitable. The people who are at the top end of the income range and already have dental plans don't need to be on a federal plan, even though technically they might be eligible.

[The Chair, Liberal, Peter Fonseca]

Thank you.

We'll hear from the Liberals for about four minutes. Go ahead, MP Sorbara.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Chair. It's great to be here today with all my honourable colleagues.

I'm looking at my screen. Is Ms. Vass Bednar not on anymore? Did she sign off?

[The Chair, Liberal, Peter Fonseca]

Ms. Bednar had to leave at 11:40 a.m.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Chair.

I want to put on record that Ms. Bednar's comments in terms of the changes with regard to the Competition Act, which Deputy Prime Minister Freeland and Minister Champagne have championed in the budget and now in the BIA. I applaud them with full vigour. They are long overdue and well needed. It's great to see us tackling the issue and ensuring that there is competition within the economy and within sectors, that anti-competitive policies are being addressed, and that the Competition Bureau and the Competition Act are being given more teeth and more resources to ensure that Canadians are put first in consumer choice.

I want to speak to Mr. Poirier from the Canadian Manufacturers and Exporters.

Mr. Poirier, I've interacted with you folks for many years and have had a lot a great meetings. York Region area, where I live and which I represent, is a manufacturing hub. We have the largest auto parts supplier in the world, Magna, and the third largest in Canada, Martinrea, which is about a kilometre and a half from my constituency office. We are an agri-food processing hub. We are a place where a lot of folks invest and work. We are a logistics hub. We have the largest CP intermodal facility, the busiest one in the country, in my riding. Vaughan has the largest CN yard in Canada, and I know Peter loves to hear that.

I want to ask some questions about the issues that we need to address on the supply chain. We have a supply chain working council. We have put money into the funds, and we have the national trade corridor fund. We are making progress on the supply chain, although it is difficult.

Could you provide any sort of recommendations that you think, top of mind, would assist us in addressing the issue even further?

[Matt Poirier]

Yes. All those initiatives you mentioned, Mr. Sorbara, are needed and are good. In addition, we're noticing that because of the relatively small size of Canadian manufacturers, we're struggling to move up in the pecking order for critical components. We're still seeing those problems in our industry today.

That's why I mentioned emergency, temporary, bridging financial help. We can discuss how that looks, but as it comes to us, it's a wage subsidy. Because it's such a tight labour market, our members are really afraid of losing workers while they're waiting for the critical parts to be able to produce goods. There's that component there, but it's also the labour shortage. That's driving this too.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Matt, I want to say that within the BIA, if I'm not mistaken—I remember reading all 464 pages or thereabouts—there is something with regard to the ministry of immigration and some legislation there that would allow the minister to identify certain areas within the economy, such as with the NOC codes, to allow faster access or more efficient access to those pools of labour.

There is a shortage, but there is also what I would call a skills mismatch within the economy in terms of providing the right skill sets to workers. Wouldn't you also agree on that front?

[Matt Poirier]

Absolutely. That's why we call for industry councils that can help coordinate with government, with labour and with all the players involved to help coordinate those labour market needs. They're always changing, and they'll be different by region as well.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Okay.

Peter, am I finished?

[The Chair, Liberal, Peter Fonseca]

That is your time, MP Sorbara.