Finance Committee on May 18th, 2023

[Alex Gray]

Those are both important points to consider.

The first one is streamlining the application procedure and making sure people can get here quickly. Even with the best of intentions to harmonize express-entry programs across provinces, we hear our members say they have a promising candidate but, through delays in the system, just aren't able to hire the candidate and bring them aboard on time. Whether that can be automated in some sense, or whether it can be expanded so that certain credentials are more easily recognized and, therefore, appropriate candidates are identified earlier in the process, that is one strong possibility for which we would advocate.

The other thing we need to do, more broadly, is to house these people who are coming in. It's all well and good to bring as many foreign, talented workers as we can, but they need a place to live. They need a place to grow their families. If I ran a restaurant and I typically staffed six people, were I to staff it with 100 people, I wouldn't be that much more productive, frankly. There is just a bottleneck there.

In the Canadian economy, one of the main bottlenecks is the high cost of housing. Again, it is something that we hear from our members: that they have candidates who would like to come from abroad to work here but are just absolutely daunted by the price of a home in Canada.

[Julie Dzerowicz, Liberal, Davenport, ON]

The next question I have is around normalizing non-status workers. That is in the mandate letter of our Minister of Immigration.

If we found a pathway to citizenship for many of our non-status workers who are ready and are here, do you think that would be a positive thing to do in addressing some of the labour shortages?

I'm going to ask Ms. Grynol to respond to the same question.

[Alex Gray]

That is well outside my area of expertise. On the face of it, yes, it would seem sensible.

I hope Ms. Grynol has a more comprehensive answer than I can offer.

[Susie Grynol]

Thank you.

I actually don't know the exact number either, but I would advocate that anything helps.

I would love to come back to your first question about what we can do and what is broken.

To me, it's very simple. If you look at the permanent economic strains and the ways people are coming in—that's the 500,000; the new high-water mark for immigration—it's a points system. It lets in people who have multiple degrees. The challenge there—and we have credentialing issues in Canada, as you know—is that in our sector, the most in-demand positions are entry-level positions.

There is a fundamental misalignment with our immigration program. With a few small tweaks, we could start to resolve this in a meaningful way. We've already provided these NOC codes to IRCC and to ESDC.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

My last question is for Mr. Gray.

We have introduced the national child care program in Canada. We have seen an increase in women in the workforce.

Do you believe that has been positive in terms of productivity in Canada?

[Alex Gray]

Of course, it's a start. The more child care spaces, the better, though.

While the program has done very well in increasing the demand side of that, there are still supply constraints that prevent it from being fully realized. However, in terms of an effect on productivity, it could be nothing but positive.

[Julie Dzerowicz, Liberal, Davenport, ON]

My last question just slipped my brain, actually.

How many seconds do I have left, Mr. Chair?

[The Chair, Liberal, Peter Fonseca]

You're out of time, Ms. Dzerowicz. Thank you.

Members and witnesses, we have time for a full last round. This will be our third round.

We are starting with Mr. Morantz for five minutes.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you, Mr. Chair.

Mr. Chapman, I always love talking to you.

It seems to me that this government never misses an opportunity to put more taxes on beer. I know we've been talking about this for a long time. I guess it was nice that they froze it at 2%, but I want to continue with my theme of how this government has become so brazen about breaking its promises that it's actually doing it in the same budget documents.

Here we have a situation in which the government, after being dragged, kicking and screaming, by our party to freeze the excise tax, deigned it so and froze it at 2%. However, just this morning, the Parliamentary Budget Officer released a report on the second carbon tax—what they call the clean fuel standard—which says it's going to add another 17¢ per litre on gasoline.

That makes its way through the entire distribution chain, does it not?

[Luke Chapman]

It does, yes. I think one thing that differentiates beer from other beverage alcohol categories, like wine and spirits, is that it is heavy, bulky and quite expensive to ship across the country.

The price of beer is certainly influenced by the price of fuel.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Mr. Hannah, I wanted to go back to the part of your submission in which you talked about the possibility that the legislative sledgehammer—which is what it is—of applying GST to what should be an exempted service could trigger trade disputes. You said that the amendment violates Canada's international trade commitments.

Could you elaborate on how that's the case?

[Darren Hannah]

It certainly brings in new challenges, and it brings in new avenues and new concerns.

Our bigger concern, candidly, is the implication that retroactivity has on Canada as a target for investment. It creates a chill. It creates a question about the rule of law and about the certainty of law. It creates uncertainty at a time when Canada needs investment, and at the very time when investors are looking for certainty that they don't have.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Specifically, in your submission, you say that the amendment violates Canada's international trade commitments by treating resident Canadian suppliers and non-resident suppliers differently, opening Canada to trade-related legal challenges. Could you comment on that?

[Darren Hannah]

Potentially it could, absolutely. I can provide some additional details in writing afterwards.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Okay.

Mr. Gray, in your comments, you said—in the time I have left, which probably isn't a lot, Mr. Chair—the government needs to eliminate the disincentives that drive away investment. Could you give us some examples of the kinds of things you'd like them to eliminate?

[Alex Gray]

One of the main avenues we've been focusing on, on that front, is applying an economic lens to regulatory affairs. Again, as I mentioned in my opening remarks, this was something that was first proposed in the 2017 final report of the advisory council on economic growth—that regulators take into greater consideration the economic impact of what they're proposing and how they're regulating.

The main regulatory issue that I think international investors look at is the length of time it takes to get anything built and to get approval for major economic projects. There's a definite economic cost to that, which I don't think is always considered in regulatory processes. We would advocate for as much streamlining as can reasonably be achieved.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

I'm good.

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

We're over to Mr. Sorbara for five minutes, please.

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

Thank you, Chair.

It's great to be here, with all my esteemed colleagues getting along very well today, I see, as always.

I'd like to go over to Luke on the beer industry in Canada. Obviously, we've worked together on ensuring that the escalator increase was limited, and I want to say thank you for working with us and helping us get to where we needed to be.

Can you give an update in terms of the state of the industry in Canada?

[Luke Chapman]

Yes.

First off, thanks for your advocacy on this issue, Mr. Sorbara, and raising it within the Liberal caucus. It did not go unnoticed. We appreciate that.

Despite some of the media commentary over the past couple of years, the Canadian brewing industry is not growing. It's not flat. It is in decline on a volume basis.

As I noted in my opening remarks, from 2019 to 2022, beer sales declined by about 6% in volume, and at the same time we saw the cost of producing beer in Canada rise significantly. Key inputs like barley and packing materials like cans and bottles were up by as much as 60%. Also, brewers are supportive, but they are also spending a huge amount of money to eliminate the use of plastic ring carriers by the effective date of June 2024, so it's been a challenging period.

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

Thank you, Luke.

I want to give a shout-out to all the workers who work at the brewers, whether it's Molson or Labatt, whether it's in London or Etobicoke—all those union members who work there and have good, middle-class jobs and good benefits and so forth, and the workers in the restaurants and the whole continuum.

I'll go quickly to Alex, and then I want to go to Susie.

Alex, in terms of our investments in budget 2023, the income tax credits we put in place, whether it's forming up a solid electrical grid system in Canada—which we know we'll need to expand the baseload for significantly—to the manufacturing tax credits, those are measures that will increase the productive capacity of our economy.

[Alex Gray]

I wouldn't disagree.

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

Thank you.

Susie, one thing I've heard with regard to the hotel industry is actually that the number of hotels in Canada, the number of rooms in Canada and particularly in the greater Toronto area.... There's a trend that some of these hotels are being converted into condos, and there are not enough hotel rooms for our tourism sector. Can you comment on that, the state of the industry and any issues therein?

[Susie Grynol]

Yes, we did see slow development, certainly, over the COVID period. It has been slow to come back, and that is predominantly being driven by high input costs. The cost of development.... Development charges can be up to 40% of a total project. Those are municipal issues. The cost of building is significant, so we are seeing more multi-use facilities, and we have a hotel capacity problem all across the country as we speak.

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

Thank you.

Ms. Dzerowicz addressed the issue of labour, and she's done a lot of great work on that.

There are a number of us who are concerned that we not only encourage people who have multiple degrees, but encourage people who just want to come to Canada, work hard and build a better future. It's much like my parents. They came some 50-plus years ago, with very limited education, but things turned out pretty well with hard work and hope.

This is for the Bankers Association.

The issues of integration and the issues of retroactive taxation are issues I'm very well versed in and very well aware of. Canadian banks are a linchpin of our economy. They underpin our economy and are something we need to be proud of.

You're here. You've stated your case. There's been a healthy interaction with both sides on that case.

What is the numerical amount of the retroactive tax that would impact the industry?