Evidence of meeting #86 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was question.
A video is available from Parliament.
Liberal
The Chair Liberal Peter Fonseca
Thank you.
We built in some flexibility there, but we're off to MP Blaikie, please.
NDP
Daniel Blaikie NDP Elmwood—Transcona, MB
With apologies to Ms. David, I have a couple of questions about the PSPIB.
I understand the desire to have some of the expertise of folks who work at PSPIB evaluating investments be applied to growth fund investments. There's the question of expertise, but I guess I'm also wondering if the expectation is that those folks from PSPIB would also bring knowledge of projects or potential investments that have been brought to the PSPIB.
What would that look like or how would that work? Is the expectation that investors will come independently to the growth fund, or is the expectation that that PSPIB folks will bring some of their existing knowledge of existing proposals? How exactly is that interaction meant to work? Is there meant to be an interaction at all?
Do you think it's worth considering whether there would need to be some safeguards or not in terms of folks who are involved with PSPIB being involved with investment decisions at the growth fund and going ahead investing growth fund money in a project, but then also recommending PSPIB money be allocated to the same project?
How does government imagine those interactions?
Senior Director, Crown Investment and Asset Management, Department of Finance
PSP will be managing the growth fund assets separately and will be also managing its existing pension plan assets. The two will be managed independently. There will be a new investment committee set up for growth fund investments. That investment committee will be totally separate and different from the PSP investment committee.
In addition, PSP will establish conflict of interest procedures in order to ensure that any conflicts of interest are properly managed and disclosed, so those investment decisions are made following those particular procedures.
Of course, as an experienced investment manager, PSP will bring its existing knowledge in the field, its experience, its investment teams and the fact that it has seen projects and things like that. That is the expertise that is being brought to the table.
Investment decisions will be made by two different committees with two different sets of people on them, according to proper conflict of interest procedures.
Liberal
The Chair Liberal Peter Fonseca
I'm sorry to interrupt. Ms. David, could we get a little bit more distance as we are still getting quite a bit of feedback? Just move any electronic devices away from the mike. I apologize for that.
MP Blaikie, go ahead with your question.
NDP
Daniel Blaikie NDP Elmwood—Transcona, MB
Thank you.
Am I hearing correctly that the idea is there would be kind of a firewall between the regular PSPIB investment activity as a pension fund and whatever business is conducted for the growth fund?
Does that mean that folks who are being seconded are properly being seconded in that they're being brought over to do growth fund work and won't be doing any PSPIB work while they're assigned to evaluating growth fund investments?
Senior Director, Crown Investment and Asset Management, Department of Finance
Thank you for the question.
PSP will establish a subsidiary to manage growth fund assets, so it will be a separate investment team. That team would be dedicated to the growth fund, while the other remaining PSP teams would be dedicated to the pension fund assets.
Obviously, there will be economies of scale by sharing certain corporate functions, but the investment teams, including the investment decisions made by the investment committee will be completely separate and they will be done in a subsidiary of PSP. It will be a whole new entity within PSP.
Liberal
Conservative
Scot Davidson Conservative York—Simcoe, ON
Thanks, Mr. Chair. You saved the best for last.
We're going to talk about York—Simcoe this afternoon. I don't know if anyone has ever been to the soup and salad bowl of Canada. It's home to Lake Simcoe, which is the ice fishing capital of Canada. Make sure you chime if you haven't.
Conservative
Scot Davidson Conservative York—Simcoe, ON
I know. It's unbelievable.
I have a couple of questions. I haven't gotten through the BIA yet. I'm getting there. It's quite a document.
My farmers in York—Simcoe, on the Holland Marsh, are struggling. Just so colleagues understand, they're struggling with the carbon tax.
That matters because half of my riding is on propane. If we believe in natural gas being a bridge fuel...we don't even have the infrastructure there for natural gas for my farmers. That matters because we dry onions, beans and a lot of other things.
That's the first reason they're struggling. Again, why that matters is that they got hit with the 35% tariff on fertilizer. We have kind of have a double whammy happening there. They're watching outflows going outside the country and they're kind of there on the outside looking in.
They're just wondering if there was anything in the budget—yes or no—for the fertilizer tariff to come back to farmers.
Director, Trade and Tariff Policy, International Trade Policy Division, Department of Finance
With respect to the measures that have been in place since March 2 of last year that apply a 35% tariff, those are only for the imports of a certain form of nitrogen fertilizer coming in from Russia. Those would be maintained. The legislative amendment would make that 35% permanent.
Since then fertilizer imports from Russia...basically have diversified their sources, so the 35% has worked quite well.
Conservative
Scot Davidson Conservative York—Simcoe, ON
Okay. I have to get these questions in.
Secondly, I noticed that in the budget—anyone can correct me—there are $650 million for the freshwater strategy. We've been waiting since 2016 for the Lake Simcoe clean-up fund to come back, which this government cancelled.
That's $650 million over 10 years, which is $65 million a year for every Great Lake, Lake Winnipeg, the Winnipeg River and the Fraser Valley, where they had the floods.
I'm just asking for York—Simcoe. How is the allotment going to be set up with that $650 million? Does anyone know?
Director General, Federal-Provincial Relations and Social Policy Branch, Department of Finance
There's no one here today who would be able to answer that question, unfortunately.
Conservative
Scot Davidson Conservative York—Simcoe, ON
Galen, thanks very much.
My third question is this. I had a concerning letter. My first nations, or our first nations.... I call it “my” because my wife and my son are first nation and I live on the first nations. It's the Chippewas of Georgina Island. This government legalized cannabis. We have a great business centre with a tobacco store—a cannabis store. One of our chartered banks sent a letter a couple of months ago saying that it was going to close their accounts because of a risk appetite. I made inquiries and asked what the risk appetite was. They wouldn't quite say what the risk appetite was.
They had over 40 employees. You can understand. They have Visa machines, debit machines, payroll cheques and all those sorts of things. They had their account closed by a chartered bank, if you can believe it.
Have you heard of anything like that, Finance Canada?
Director General, Federal-Provincial Relations and Social Policy Branch, Department of Finance
No, I'm not familiar with that particular case.
Conservative
Scot Davidson Conservative York—Simcoe, ON
Okay.
Lastly, I was reading the budget document and was shaking it, saying that there had to be a couple of pages missing. I was looking for the financial vision for the country.
Where is this government taking us? Where are we taking Canada? What is the vision for the country, whatever that is? Did anyone find what the vision is for Canada?
Liberal
Liberal
Julie Dzerowicz Liberal Davenport, ON
I appreciate the very intelligent question by my colleague, but we're here to talk about the BIA, not the overall....
It's for the government to respond to that question, as opposed to our technical experts, who help us with the different parts of this bill.
Liberal
Conservative
Scot Davidson Conservative York—Simcoe, ON
Okay.
Through you, I thought, even in the BIA.... I was just looking for the vision for the country. My constituents keeping asking me that: Where you are taking us? Where are we going?
I just haven't found it. I thought it might be a simple answer and that someone could just say what the vision for the country is.
Okay.
