Finance Committee on May 18th, 2023

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie.

Now we're going to the NDP with MP Bachrach.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

Finishing up on air passenger rights and in the interest of giving credit where credit is due, I wonder if Dr. Lukács could share with the committee which aspects of Bill C-47's portions on air passenger protection he feels the government has gotten right.

[Dr. Gábor Lukács]

Thank you for the question.

Clause 466 is correct. It increases the amount of maximum penalty. That's something we recommended recently.

Also in clause 465, proposed subparagraph 86.11(1)(b)(iii) corrects a drafting error with respect to baggage delay. We had actually flagged it for the government in 2017 or 2018.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you very much.

This is my final question on this topic.

Do you feel that what the government has put forward is salvageable? Could the committee choose to amend what the government has proposed in a way that really protects Canadian air passengers?

[Dr. Gábor Lukács]

Yes, it is salvageable. It would take some work, and we have outlined in our brief the seven points of the amendments.

The first is that proposed sections 85.09 and 85.14 would need to be deleted, as well as clause 462.

In clause 459, in proposed subsection 85.06(1), the word “information” should be replaced with “evidence”.

In clause 459, proposed subsection 85.06(2), should be amended to read, “(2) An order referred to in subsection (1) is an order of the Agency.”

Proposed section 85.12 should be deleted, and proposed section 85.1 should be cleaned up in terms of its reference to proposed section 85.12.

Subclauses 465(1), (2) and (3) should read as do subclauses 4(1), (2) and (3) of Bill C-327, the private member's bill.

Proposed subsection 85.07(2) should read as does proposed section 85.2 in clause 3 of Bill C-327.

Lastly, clauses 467 to 470 in Bill C-47 should be deleted.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Dr. Lukács.

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Bachrach.

Now we go to MP Chambers.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, Mr. Chair.

Mr. Cross, I'd just like to follow up with you on a comment you made about how we've had a lower growth rate over the last 30 years. However, if you listen to the government, one of the things they say is that we're leading the G7 in growth. By the way, we're not leading the G7 in growth. There's at least one other country ahead of us.

How do you square that circle in terms of what the government is saying versus what some others are observing?

[Philip Cross]

I really can't. I'm not going to try to devine how this government thinks. I would just note it's the slowest growth over the last 10 years, not 30, as you indicated.

What's really important is not how we compare to countries halfway around the world. What's really important is how we compare to our neighbour to the south. We can see that every day. Every time we cross the border, every time we turn on the TV, every time we look at social media, we're comparing ourselves to the United States. The comparison that really counts is how we compare with the U.S. There we do very badly. All of this comes from Edmund Phelps and his work on innovation.

The U.S. is by far the most innovative economy in the world. When you go to Europe, they want to know how the Americans do it. How did they create Facebook, Apple, Google—these world-beating companies? How do they do this over and over again? Everybody wants to recreate that level of innovation.

We used to have world-beating companies. Ten or 20 years ago we had half of a dozen of the leading hundred companies in the world. Today we have one, Shopify, and it's had some trouble recently as we get away....

I think it's especially useful to compare ourselves to the U.S. We have the example right next door on how to do it right, and we don't seem to be looking at that at all. Instead we look at the U.S. and say, “Oh, they did this wrong or that. They're idiots about capital punishment and gun laws.” They get innovation, and we should be learning from that.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you.

There is one measure that we've heard a little bit about, although this government doesn't like to talk about it anymore. They used to put a chart of GDP per capita growth in the budget. That chart disappeared this year. This is my reading of it. In fact, if we do what you're doing, if we compare ourselves to the U.S. on GDP per capita growth, we're actually continuing to fall further and further behind. In fact, we're near the bottom of our OECD peers.

Can you tell us why GDP per capita growth is an important measure to consider?

[Philip Cross]

It's important because population growth by itself automatically increases GDP. People have to eat, have to be housed and have to put clothes on, so automatically, there's going to be more spending and more income from that.

What's interesting is that the only two countries that are growing rapidly these days in terms of population are Canada and the U.S. I go back to, again, the economists recently looked at the U.S. economy. They were lavish in their praise for its ability to innovate. They noted one of the strengths of the U.S. economy was that they had what they called a demographic advantage.

Isn't that interesting? We have an even better advantage. We have faster population growth. We have a higher rate of immigration. The Americans were able to turn that into an advantage and into more growth, yet in Canada we weren't.

I suspect the reason they dropped GDP per capita was that we had this record surge in population in the last 12 months, partly because of a catch-up going back to the pandemic shutdown. The population growth we've had in Canada in the last year was, I think, the 12th strongest in the world. We're up there with African nations and Afghanistan. This 2.8% growth is a significant stimulus to growth, yet GDP does nothing.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much.

I have a final question for Mr. Lee, if he can hear me.

Mr. Lee, you mentioned the cost of building going up. I'm wondering whether you've been consulted on the proposed building code amendments and changes that the National Research Council is considering. My understanding is that the industry believes it might add about $30,000 per unit in new building costs. Is that something you're aware of?

[Kevin Lee]

Yes, of course. We are heavily engaged in all aspects of building code development. Yes, the move to net-zero ready levels would have cost about $30,000 prior to the pandemic, but now that price escalation is upon us, it would be quite a bit more at this stage.

We're definitely concerned about all the things going on in the building code that are adding costs. We're hoping we can work together to find innovation to bring down the costs of those and hopefully not regulate too fast so that we can find ways to do all of this affordably.

[The Chair, Liberal, Peter Fonseca]

Thank you, and thank you, MP Chambers.

We have one final questioner and that is MP Baker.

MP Baker, please, you'll have the final five minutes.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you very much, Mr. Chair.

I won't ask questions of you, Mr. Cross, but I will say, after hearing some of your testimony, sir, that I think it's important that we be focused on economic growth, and I think that's economic growth per capita and some of the other measures that have been discussed.

You've compared us a lot to the United States. My impression of your assessment is that we are lagging behind the United States in some key areas. I actually think we're ahead of the United States in many key areas. I don't accept your assertion that we don't have global-leading companies. I don't accept your assertion that GDP growth is an important metric and should be focused on to the exception of so many others.

For example, yes, the U.S. economy has grown, as has the Canadian economy, and those numbers are very similar. What's interesting is how that growth has been enjoyed by a much broader group of people here in Canada than it has in the U.S.

I spent a couple of years living in the United States. I have many friends in the United States. When you observe the Canadian economy, I think what we're seeing is a much higher participation rate in employment. You're seeing a much broader growth in terms of the number of people and the share of the population that's enjoying that growth and the quality of life, which I think is measured in part by GDP per capita, but it's also measured in other ways.

I just wanted to get that on the record, because there was a lot of discussion and I didn't have a chance to ask you questions.

I do want to bring my questions back to our friends at Équiterre and Madam Brazeau, if I could.

Ms. Brazeau, earlier we talked about the importance of the pollution pricing system. You then said that it proved to be the most effective system. Can you explain why?

[Andréanne Brazeau]

Yes, thank you.

I will also add something to the GDP discussion because, in 2023, it's important to use other measurement indicators. I invite all of you to visit the website Indicateurs.quebec, which presents all kinds of factors to consider, such as GDP per capita, of course, but also the social economy, the unemployment rate, the motorization rate per family, as well as various indicators related to land use and biodiversity. In short, I believe the way we calculate wealth must be as close as possible to the classic vision of sustainable development, with the three pillars.

That said, I will now answer your question. Carbon pricing is very relevant because it sends a signal about pollution. In fact, it directly applies the polluter pays principle. Given all the social and health costs associated with pollution, it's important that the biggest corporate polluters pay the price. Various public policy research centres have done all sorts of tests that confirm that this form of eco-taxation is the best, not only for efficiency reasons, but also because the message it sends has a powerful impact on the public and businesses, among others.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you very much.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Baker.

Thank you to our amazing witnesses. Thank you, again, for coming to us on such short notice. We really appreciate it. You had very fulsome answers to the many questions from members. Thank you for your testimony, which will help inform this study.

Thank you very much, members.

We are adjourned.