Finance Committee on Oct. 26th, 2022

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you, Chair.

I'm going to move out of Canada. It's not a great place to live, from the testimony and some of the accusations here today. It's very interesting.

We live in a pretty good place. I may not agree with the Canadian Taxpayers Federation, but one thing we did agree on in his preamble is that millions of Canadians were hurting for the past two years, and this government stepped up. In my home province, 33,000 people were out of work just like that—in the blink of an eye. I'm glad to hear that he has a little bit of compassion for those individuals.

The other thing is that Canada ranks 23rd out of 190 countries for ease of doing business. That's from the World Bank. We're going in a direction that may not be perfect, but we're certainly going in the right direction.

Mr. Asselin, I want to go to some of your comments there at the beginning.

The U.S. has a very aggressive climate change plan. They're looking at charging tariffs on non-committed importers to their country with not very good climate change plans. We're seeing the markets around the world starting to invest in businesses that have good, sustainable practices.

How is this going to affect...? How important is it for Canada to identify climate change as a very important entity in investments?

[Robert Asselin]

Thank you, Mr. Chair.

There's no question that the world is moving there. It's not about the what; it's about the how. On the how, what we've seen in the last few months in the U.S. is very consequential. It's a very surgical approach to attracting private investments on clean energy in key sectors of the economy.

I think everybody—certainly in the business community and our council—has been very supportive of any effort to reduce emissions. It's a very important goal that is shared, but you also have to see it through a lens of economic competitiveness. This is where I find, on the regulatory side, that project approvals, for example, and the nimbleness that is required to move those forward is where we could do better.

No country is perfect, as you said. It's not a question of accusing anyone. It's a question of having to do better as team Canada, both on the business side and on the government side.

This gesture—the strong direction that the U.S. has just taken—requires a Canadian response. It requires a very surgical one. I'm encouraged by what I'm seeing on EVs. I'm encouraged by what I'm seeing on a strategy for critical minerals, but we have to move faster than we are moving because the world is moving fast.

[Heath MacDonald, Liberal, Malpeque, PE]

I want to move now to the Green Budget Coalition.

Your budget submission contains a lot of really good recommendations. However, as you know with a budget, there's only so much funding that can go around. Can you give us perhaps three to five of the top priorities from your submission that you would like to see the government expedite?

[Andrew Van Iterson]

Sir, we can turn to the five things that we have highlighted on the cover of our document.

In the submission, which I realize you may have only gotten yesterday, it's around investments in zero-emissions electricity, in a renovation wave to build energy efficiency, and in land and ocean protection. We want permanent funding to protect lands and oceans across Canada.

It's also about sustainable agriculture, working with partners to make Canadian agriculture more sustainable and more environmentally beneficial.

There is also investing in an office of environmental justice to ensure that a portion of all clean energy and climate funds goes to disadvantaged communities.

[Heath MacDonald, Liberal, Malpeque, PE]

We just went through Fiona on Prince Edward Island. The farmers were hit extremely hard. I was asking the federation of agriculture the day before yesterday about.... We hear about the investments and how we should be investing now, but how do you invest in the future?

There's a second part to this. You talk about cover crops. Are the farmers being evaluated appropriately and scientifically on carbon capture for what they're doing?

[Shaughn McArthur]

Yes, thanks for the occasion.

You were talking previously about competitiveness with the U.S., where we've just seen quite a substantial investment in sustainable, climate-positive and nature-positive agricultural practices.

As I was starting to say previously, one of the biggest challenges we have in Canada is data harmonization between ECCC, Agriculture and Agri-Food Canada and StatsCan. Monitoring, reporting and verification at the farm and field level is where we need that granular data. That is the role of the central, federal government so that farmers can report that, so that the financiers can speak to the markets and so we can report competitiveness on carbon emissions. Right now, that is very difficult.

We have a number of different recommendations about how we can work through more of a multi-stakeholder lens to support farmers. We need researchers in universities working on this. We need extension services, which is the on-farm education. Previously, it was the role of the province—it still is in Quebec—but it has now shifted over to more of a corporate lens.

[Heath MacDonald, Liberal, Malpeque, PE]

Thanks.

[The Chair, Liberal, Peter Fonseca]

Thank you to members and witnesses.

I think we have an opportunity to go to a third round, but we will have to curtail it a little bit. We'll take one minute off members' question time for each of the five minutes, and the two and a half minutes will be curtailed to two minutes.

We're starting with the Conservatives for four minutes.

I have MP Chambers for four minutes, please.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, Mr. Chair.

I'd like to go back to Mr. Asselin for a moment.

Mr. Asselin, what is happening with government revenues right now?

[Robert Asselin]

They are rising fast, mostly because of inflation and because of commodity prices in global markets.

[Adam Chambers, Conservative, Simcoe North, ON]

I know you've written about this previously, because in budget 2022 the government was also seeing some very significant unexpected revenues then. We're continuing to see incredibly significant unexpected revenues now. Over five years, we're looking at $150-plus billion.

In your recommendation, what do you think the government should spend these unexpected revenues on?

[Robert Asselin]

I don't think they should spend it, to be honest. I think that given what we have been through in the last few years, all the unexpected revenues with these rising revenues should go towards deficit reduction.

I think what is important is not just quantity of spending, but quality of spending. On investments and on industrial strategy, there are plenty of current buckets we could reallocate more surgically and intentionally to have a good industrial strategy.

It's not just a matter of quantum, but I would agree with the premise that these unexpected revenues should not be spent.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you.

I just have one final question. We've seen, as you mentioned, different priorities.

Let's set aside all the COVID spending for a moment. If you compared total annual spending pre-COVID versus the total annual spending now, that's a 25% increase that's projected this year versus the year before COVID.

Would you characterize that as fiscal restraint?

[Robert Asselin]

I would not. I would characterize it as expansionary fiscal policy. We are spending, at the federal level, about $140 billion more than prepandemic levels.

Not all the spending is unwarranted. I think reasonable debate can happen on each of these measures that were not COVID-related. For example, I think there's a lot of merit to child care spending.

I would agree that, overall, there was an overstimulation in the last few budgets.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, sir.

Mr. Fogel, I just have 30 or 40 seconds left.

Do you believe there's a double standard with respect to hate against certain groups in this country and how that compares to the hate we see in anti-Semitism and how it's treated, discussed or addressed?

[Shimon Koffler Fogel]

I think different forms of hate are understood differently, so there isn't a level playing field that way. There are those that are very obvious and those that are less obvious. It is self-evident that marginalized communities within the BIPOC basket are experiencing some very real challenges and discrimination. Look at a Jew, who typically looks white, and you have a perception of Jews as being successful and being part of white privilege—if we can use “woke” terminology. For many, it doesn't satisfy the criteria of discriminated or marginalized communities.

Education is an important part.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chambers.

Now we'll go to the Liberals and MP Dzerowicz for four minutes, please.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

I want to thank all the presenters for their presentations.

I'll start off with Mr. Asselin.

You have suggested that we have a new fiscal anchor—a 10% of debt servicing. Has that ever been an anchor for Canada in the past?

[Robert Asselin]

It's a very good question. I don't believe so.

[Julie Dzerowicz, Liberal, Davenport, ON]

Does any other country have that as a fiscal anchor?

[Robert Asselin]

I do not believe so.

Just to be clear for everyone, a fiscal anchor is really a guardrail for the finance minister to say no to colleagues or to caucus members. It's not an official thing that government has. When we think about fiscal anchor, it's a bit of a notional concept.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

I think most people see it as an outside-looking thing as opposed to an inside-looking thing, but I appreciate your clarifying that.

You moved on to an industrial strategy, and you said that it would take too long for you to run through the whole thing, so you only highlighted three key areas. Could you kindly submit your full submission to us? That would be really helpful. Would that be possible?

[Robert Asselin]

With pleasure, absolutely.

[Julie Dzerowicz, Liberal, Davenport, ON]

Before I ask you a few questions about the industrial policy, one of the key things we have heard very clearly from the Business Council of Canada is your support for interprovincial trade barriers to come down and to harmonize regulations, fundamentally believing that it would be low-cost or no-cost but a huge gain for our economic growth. Do you still believe that?

[Robert Asselin]

Absolutely, we do.