Finance Committee on May 26th, 2022

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

Thank you.

[The Chair, Liberal, Peter Fonseca]

We know that Vaughan and York Region have a lot. My kids always remind me that Canada's Wonderland is up there, so thank you for that.

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

You're always welcome.

[The Chair, Liberal, Peter Fonseca]

We will now move to the Bloc. MP Ste-Marie, you have four minutes, please.

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

Thank you, Mr. Chair.

My question is for Mr. Lasnier.

If the bill goes ahead as drafted, what impact will it have on the price of cider?

[Marc-Antoine Lasnier]

As I said in my opening statement, a market has developed over the past 16 years, and it's a market for beverages in cans. Ms. St‑Georges is presenting the cans we've marketed. This market is very much like the beer market. In consumers' minds, the product is compared with beer. However, it must be understood that our profit margins are much thinner. Since cider is made from fruit, unlike beer, which is made from grain and water, it's more costly for our producers. It's also more strictly regulated. In many provinces, we're forced to produce our own fruit, which adds to the pressure. In addition, taxes are already lower on beer. Consequently, it will be very difficult for us to raise prices as a result of the new excise tax.

As the representative of Wine Growers Canada said, this will cause major problems for entry-level products. Prices may have to be raised on high-end products, which occupy specialized market niches. However, most Canadian producers make entry-level products, and the excise tax will clearly create pressure. Since we won't necessarily be able to raise prices, producers will have to cut their profit margins. That's precisely why we anticipate job losses and potential bankruptcies.

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

Cider ultimately competes with beer more than wine in the canned beverages market. Furthermore, since cider production costs are higher than those for beer, your profit margins are thinner. Now you'll have to pay higher taxes than are paid on beer, whereas you're a young industry that hasn't reached maturity.

[Marc-Antoine Lasnier]

That's right.

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

That's terrible. The government needs to change that.

[Marc-Antoine Lasnier]

Definitely.

[Catherine St-Georges]

I'd like to add that producers should not reduce their production costs by using raw materials from elsewhere or apple concentrate. The temptation to reduce production costs could become strong if the excise tax returns. The idea is to continue making quality products, while keeping them affordable for consumers.

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

The executive director of Cider Canada spoke to us about the temptation of importing apple juice from the United States as a way of cutting costs. That would lower the quality. What we like about your products is all the work put in by artisans. This tax should not be applicable to you.

[Marc-Antoine Lasnier]

That would of course have repercussions on the rest of the production chain. Apples from the United States or concentrate from China would likely be less expensive. Whether we like it or not, growing apples in our northern country will always be more expensive, and give lower yields.

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

It's obvious. Let's hope that the committee will end up exempting your products from the excise tax.

Thank you, Mr. Chair.

[Marc-Antoine Lasnier]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste.‑Marie.

Now we'll move to the NDP. These will be our last questions for this first panel.

I have MP McPherson for four minutes. Go ahead, please.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you, Mr. Chair.

I have one more question for Ms. Tomkins. Thank you very much for reminding all of the children who may be watching this finance committee to brush their teeth. My son got braces yesterday, and I can tell you that this is going to be a couple years of dire parenting on my end.

Ms. Tomkins, if you wouldn't mind, could you talk a little bit about what the government should be looking for in terms of the investments into the workforce as we scale up access to dental care across Canada?

[Dr. Lynn Tomkins]

That's a great question, and it's something we have been talking to some of your colleagues about, because across the country right now there is a shortage of dental assistants. Even before COVID, there was a shortage, and since COVID, that shortage has been exacerbated, because the demands on a dental assistant....

A dental office operates like a small hospital. Any of you who have been to your dentist, especially since COVID, have seen all the barriers and PPE and everything going on, and the people who actually make all that happen are the dental assistants. They're highly trained and they're very technical. It is not an easy job, and it requires education. In most provinces, it's regulated.

We are applying to the federal government on a project in collaboration with the Canadian Dental Assistants Association and looking for ways that we can increase the number of dental assistants entering into the profession as well as for ways of retaining them in the profession, because with respect to the supports for mental health, for instance, they have been tremendously affected, as have all other frontline workers during the pandemic. It will be a bit of a concern if we get a sudden influx of new patients coming into the system. Dentists and dental office staff will do their best to handle that influx, but there is a shortage of dental assistants.

I think there's another study going on looking at the care economy in the public health system, and we're concerned that we don't forget the health care that's being delivered in private settings, such as dental offices, because if you end up attracting more people into one aspect of the health system, you don't want that to be at the detriment of the private delivery.

There are dental assistants who work in public health. Dr. Aaron Burry himself works in a public health office one day a week, but the majority work in private dental offices and the majority are female, so all the issues around child care and schooling at home and all of that stuff that took place during the pandemic had a tremendous effect on the workforce.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you very much. That's very interesting. I think just those trickle-down impacts are really important for this committee to consider.

[Dr. Lynn Tomkins]

Thank you.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

I'll just end, if I could, Mr. Chair, with one more reiteration that the sector, the experts in charitable direction and control, have given amendments to this committee. They have written amendments. I would urge this committee to consider those three amendments that they have brought forward, and I would just ask that Mr. Mangin, when he has the opportunity to do so, provide some feedback to this committee on the impacts to the charitable sector if we do not get the BIA correct with regard to direction and control.

I will cede my time at this point. Thank you, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP McPherson.

I will just reiterate, members, that if you want to send in questions, Mr. Mangin will provide answers in both official languages back to the committee. Thank you for that.

We want to thank all of you witnesses for providing us with your time and your expertise and for coming before our committee to answer many questions. I know we had many of you here on our first panel, and we really appreciate, as I said, your coming before us. On behalf of the committee, the clerk, the analysts and the interpreters, we thank you and wish you a great day. Thank you very much.

Members, at this time we're going to suspend for a couple of minutes as we transition to our second panel.

[The Chair, Liberal, Peter Fonseca]

Welcome back, everyone.

I'd like to welcome today's witnesses for our second panel.

With us from the Office of the Parliamentary Budget Officer, we have the Parliamentary Budget Officer, Monsieur Yves Giroux. Accompanying Mr. Giroux we have Xiaoyi Yan, director, budgetary analysis.

Please share your opening remarks.

[Yves Giroux, Parliamentary Budget Officer, Office of the Parliamentary Budget Officer]

Good afternoon Mr. Chair and members of the committee.

Thank you for the invitation to appear before you today.

We are pleased to be here to discuss the analysis of your study of Bill C‑19, An Act to implement certain provisions of the budget tabled in Parliament on April 7, 2022 and other measures.

With me today are Xiaoyi Yan, Director, Budgetary Analysis.

In compliance with the mandate of the Parliamentary Budget Officer, which consists of providing independent and non-partisan analyses to Parliament, we published our analysis of the 2022 budget on April 22. In the report, we identified several key issues to assist parliamentarians in their budgetary deliberations, and also presented updated fiscal and economic projections.

I will now continue my remarks in English.

In terms of transparency, budget 2022 includes long-term economic and fiscal projections, which improve fiscal transparency and contribute to sustainability analysis. However, the analysis provided in the budget would be further enhanced by the inclusion of additional details, such as long-term projections of old age security, employment insurance and children's benefits.

It's also worth noting that while the budget includes some of the measures from the Liberal Party's 2021 election platform, the implementation of any remaining platform measures and additional commitments not accounted for in the budget, such as pharmacare, will impact the budgetary balance going forward.

Our report also notes the continued misalignment of financial reporting, as budget 2022 was tabled a month after the government's main estimates. Parliamentarians could be well served by adopting a new legislative or administrative framework to enforce better alignment among the government's various financial reports.

Following this assessment, on May 17 we published a stochastic debt sustainability analysis of the medium-term outlook presented in budget 2022. The report provides a stress test of the government's financial position. Based on past experience, our results suggest that the government could maintain debt sustainability over the medium term. However, our results also suggest that on balance, there is upside risk to the budget 2022 projection of gross debt as a share of GDP.

In addition to our reports, my office has also released independent cost estimates of selected measures contained in budget 2022, including the mobility tax deduction for tradespersons and indentured apprentices and the luxury goods sales tax.

We would be pleased to respond to any questions you may have regarding our analysis of budget 2022 or other PBO work.

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Giroux.

We will move right to our first round of questions.

We have the Conservatives up first, with MP Chambers for six minutes.