Finance Committee on May 17th, 2023

[Peter Davis]

Absolutely. It is a troubling prospect that I don't think has gotten enough attention in the public policy discussions we've had with government stakeholders on how best to support low-income people and non-filers. The CRA, I don't think, has recognized how significant this conflict is in fact.

It just feels nonsensical using the scenario of automated tax filing, where the CRA has, on its own, determined what the individual should receive, what their potential tax liability is and what they owe the government. At the same time, it has made that determination, so who, then, does the taxpayer get to appeal to? Is it the same person who prepared their taxes in the first place?

There is a very important principle that there does need to be separation between the tax collector and the tax preparer, and it is for the benefit of Canadians. They have the right to prepare and to file their taxes in a way that best suits their individual circumstances and that limits their liability to the government. For the government to push that aside and to directly file taxes is not a good thing or a beneficial move for Canadians.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Davis.

Now we're going to the Liberals for five minutes.

MP Chatel.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you very much, Mr. Chair.

I would like to thank the witnesses for being here; they had very little time to prepare.

I want to go back to agriculture. What we are seeing is that climate change is causing soil degradation and water shortages, especially in the southwestern United States. The drought level is a major concern there.

It is said that, in Canada, agriculture is a pillar of the economy. In fact, not only is it a pillar of the Canadian economy, but it is also fundamental to food security for Canadians and the world.

Mr. Northey, you talked a lot about grain exports. I would like to come back to a measure in the pilot project and your comments on it. I was very moved when you said that it is essential that Canada have the infrastructure it needs to export its grain as efficiently as possible and that there is no better way than by rail.

Can you tell us more about your position on this measure?

[Greg Northey]

For grain crops particularly, we have a whole system built that's based on elevators and on using the rail system to move the grain to ports. Compared to other countries, we have some of the longest hauls moving that grain in the world. Our competitiveness, the predictability and the efficiency that we can achieve on the rail system, particularly in making sure we can make that haul and make it effective, is really important. We need the infrastructure to do that. Transportation, ultimately, is one of the largest costs we face as far as our exports go.

With interswitching in particular, as I mentioned, we did have extended interswitching for three years. One of the things we did realize at the time was that, when we needed to make an interchange between railways, we needed those interchanges to have the infrastructure and the facilities to make sure it could be done efficiently and effectively. With increasingly longer trains, those interchanges need to be increasingly bigger.

In western Canada at the time, there were only five interchanges that could accommodate a large unit train, but there are much more interchanges that can't. It's in the bill now, and certainly there is a requirement that we need to see some investment into the interchanges that we do have in order to unlock the potential of this interswitching.

As I said, with the competitive forces we want to see, we want to see them not only for small shipments but also for large shipments. If you only have five interchanges that can handle a unit train, you're really limiting the effectiveness of a provision like that. We need to see investment in those rural areas so that we can have those larger interchanges.

[Sophie Chatel, Liberal, Pontiac, QC]

I would like to know what Mr. Corey thinks about this pilot project.

[John Corey]

As Greg says, we currently have regulated interswitching at a very small distance, 30 kilometres. Greg's suggestion of 500 kilometres or what the government is proposing, 160 kilometres, would allow regulated interswitching to be more available to shippers. Also, it gives the opportunity for a shipper to use interswitching as leverage to get a better price with a competing...with this host railway. I don't think that's well understood.

The railways are pushing back very hard on extended interswitching in the media in the last few weeks. They are putting out, I call it, alternative facts that there are going to be job losses and that American carriers are going to eat Canadian carriers' lunch. Those things are scare tactics by the railways.

The biggest cutter of jobs in the rail industry is the railways themselves. CP cut 6,000 jobs when Keith Creel got there. CN cut 1,800 jobs at the beginning of the pandemic. They complain that there are not enough workers to fill the jobs currently because a lot of the service issues are lacking crews to man locomotives. It's ironic that extended interswitching is going to create job losses when they can't fill the positions they currently have.

As far as competition goes and the U.S. carriers taking away Canadian traffic, if the railways say that Canadian railways have the lowest rates in the world, how is it that a foreign carrier is going to take away traffic when Canadian carriers have the lowest rates? Even if someone takes away that traffic through interswitching, all the host carrier has to do is offer the same rate and they keep the traffic.

A lot of the rhetoric we're hearing from the rail industry, frankly, doesn't make any sense.

[The Chair, Liberal, Peter Fonseca]

Madam Chatel, that is the time.

We are going to the Bloc and MP Ste-Marie.

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

Thank you, Mr. Chair.

My question is about air transportation and is for Ms. De Bellefeuille or Mr. Plourde.

As for consumer protection in the airline industry, we have such a long way to go that it is important to applaud what Bill C‑47 proposes, as you have done.

In your opinion, could the government have gone even further, for example by comparing Canadian standards to those in effect in the European Union? Do you believe that amendments to the bill should or could be proposed?

[Sylvie De Bellefeuille]

At the moment, a certain amount of information is missing from the bill.

The details related to changing the various types of flight disruptions will have to be assessed in the regulations. The bill provides that the government, or more specifically the Canadian Transportation Agency, will have the opportunity to establish the various reasons that carriers can use to reduce their liability. As the saying goes, the devil is in the details. I think we will first have to see what will be in the proposed regulations and see if any additional amendments should be made.

As I mentioned in my opening remarks, most of the recommendations have to do with a number of situations. What is not in the bill is the issue of overbooking. Overbooking is the ability of airlines to sell more tickets than there are seats. In our opinion, this is a practice that goes against good faith and contract rules. Airlines should not be able to do that.

We feel that this practice should be abolished. We would have liked that to be part of the bill, but that is not the case.

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

Thank you. We'll be considering that.

In terms of the saying you mentioned, I would change it a bit. I would actually say that, in Ottawa, everything is in the regulations. Of course, it is the ministers who have the power to amend the regulations.

Thank you very much for your answer. I will have another turn to speak in about 20 minutes and I will be able to put other questions to you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste-Marie.

Now we'll go to MP Blaikie.

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

Thank you very much, Mr. Chair.

I have just a point of clarification because I worry that an earlier statement might have been confusing.

The bill proposes to introduce auto tax filing, but unfortunately, it does not propose to introduce automatic registration for income benefits. I take from Ms. Sarangi's testimony that she is interested in seeing the government go further than the bill does, which is to have automatic enrolment in income support benefits.

A previous comment I made that I don't think was confusing was about the nature of broad-based tax relief versus income support. In that case, I think my Conservative colleague is simply confused.

Mr. Kelly, I want to follow up on the question of the CEBA loan extension. The New Democrats were very vocal in arguing for the CEBA program. We have argued consistently for CEBA loan extensions. We appreciate the work that small and medium-sized businesses do, and we understand the predicament they're in, particularly those businesses that have been struggling to make those loan repayments.

We've heard already quite a bit about the carbon tax at this table. Where time is the currency, on Parliament Hill, we hear a lot of advocacy around the carbon tax reduction from the Conservatives. Do you think it would be helpful if they took more of their time to talk about the CEBA loan extension, something we, as New Democrats on the Hill, would gladly do if we had more time?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

You need more seats, then.

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

We're working on that.

[Daniel Kelly]

As a non-partisan association, I encourage all parties to talk about CEBA loans often, until such time as businesses are able to repay them. This is a big deal. These are not small loans for a lot of small businesses: $40,000 or $60,000.

When the CEBA loans were first issued, it was a very helpful program. However, we thought that the pandemic would last a couple months and that we'd get back to normal. As the pandemic restrictions stretched on for two years, business owners were running out of time. To be fair to the federal government, we were delighted when Deputy Prime Minister Chrystia Freeland, extended the deadline to repay the CEBA loans by a year, from the end of 2022 to the end of 2023. Sadly, though, many of our members right now feel like the recovery phase from COVID started at the beginning of this year. Now they have very little time to repay these loans. Most have not paid a nickel back.

We'd love to see some additional forgiveness. We're suggesting raising that to 50% of the loan. More than anything, we need more time for businesses to repay these loans in order to keep the benefit of the forgivable portion and the interest-free protection.

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

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

Now we go to the Conservatives.

MP Kurek.

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

Thank you very much, Mr. Chair.

It's good to be back at the finance committee.

Mr. Northey, it's good to have the perspective of an ag organization, one of those that are doing good work across the country. I hope my father is in the tractor right now. He was when I talked to him earlier. He's probably wishing that I was there helping him.

There has been a ton of supply chain uncertainty. I know you've talked about some of the rail issues. Can you share some of the aspects of the supply chain that you're hearing about from pulse growers across Canada, specifically the costs that are being incurred?

I'm going to try to get a few questions in here, so answer quickly if you can.

[Greg Northey]

During the pandemic, we saw prices increase for inputs, as far as getting them into Canada went, due to supply chains. Anything from tractor tires to fertilizer.... Anything that required an integrated supply chain coming from overseas had a massive supply chain issue. From our perspective, container traffic and anything to do with shipping was also a major issue for us, such as getting shipping containers, because we ship a lot of our product in containers.

The government did respond with a national supply chain task force and, certainly, there are elements in it. However, supply chains are always a number one issue for our members, particularly around rail. It's always the biggest because it's the ultimate limiter for us as far as growth goes and as far as exporting our product goes.

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

Thanks for that. I'm going to change subjects a little bit.

I'm glad you previously mentioned nitrogen fixing. It seems like our Minister of Agriculture has learned recently about that innovation, which is as old as pulses have been around—and encouraging....

It's unfortunate that sometimes the advance payments program seems to be this government's solution to everything. Although I certainly know many farmers who appreciate that program, simply loaning more money is not the solution to all the challenges faced by farmers.

I hear from many producers that they are facing a competitive disadvantage with regard to aspects of our supply chain because of some of the regulatory uncertainty, because of the increased costs associated with the carbon tax and because of the musings of a nitrogen reduction that would impact—although not specifically pulses—the broader spectrum of agriculture. Have you heard that uncertainty from the members that you speak with?

[Greg Northey]

Yes, absolutely.

Our organization has two streams of work. One is creating efficiencies, which really comes down to cost. It comes down to how we make sure that our producers can produce at the lowest cost possible and have as many export markets as possible as well, and have the supply chain there to do it.

It's consistently the number one issue. Any kind of increased cost or regulatory uncertainty is always a big problem for the sector because we face inflation just as everybody else does, and ultimately farmers, as you would know, are cost-takers in many case, so cost is an essential part of our work.

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

They're cost-takers on both ends, so there are slim margins.

Mr. Kelly, I have about a minute and a half left.

I've heard from many small businesses—and farmers are small business owners as well—across the spectrum with respect to concerns about the GST being charged on carbon tax, the increases associated with the carbon tax and how those impact the entire Canadian economy, quite frankly, at every stage of the supply chain.

Could you comment briefly on what you're hearing from your members? I hope to get one more quick question in, so can you answer quickly?

[Daniel Kelly]

Sure.

Really quickly, our members do see the tax on tax on tax as one of the many implications of this. The lack of any kind of rebate coming their way is another of the issues. This is going to hit them at escalating rates and they're not able to pass those on. Some will and, of course, any business will ultimately need to—

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

Thanks, Mr. Kelly. I hope to get in a quick question here.

I was at the opening of the Happy Belly Restaurant in Drumheller, Alberta, here on the weekend. It's a really exciting small business. An immigrant family is investing, taking the risk to open a small business, but the owner shared some of the uncertainty in relation to immigration delays.

I'm wondering if you've heard from your members about how other aspects not directly related to the business community are creating uncertainty that is harming the ability of small businesses to take risks in Canada.

[Daniel Kelly]

Immigration challenges are a big part of some of the labour shortages they face. It is good that we have been increasing the numbers of immigrants and there has been more flexibility on the temporary foreign worker program but—