Finance Committee on May 26th, 2026

[Éric Lefebvre, Conservative, Richmond—Arthabaska, QC]

Thank you very much.

Earlier, you talked about the policy changes you would like to see implemented. Could you elaborate on what you would like us to look into?

[Brad Goddard]

Right now, Canada's definition of a small independent craft brewer is 75,000 hectolitres. Many of the fastest-growing craft markets in Canada define it as 350,000, 400,000 or 500,000 hectolitres. That is the big challenge of the Excise Tax Act right now. It measures the size of a business of 20 years ago, not the size that our businesses have grown to. That is the top challenge.

Excise in and of itself is built structurally quite well. It's a progressive tax. On January 1, all breweries start at the lowest tax bracket, and then, regardless of brewery size, as you grow each month, you get remeasured for your tax rate.

We like the functional structure of it. It's just that we would like a longer runway, as it were. Instead of a brewery hitting the top tax bracket at 75,000 hectolitres, the brewery would hit the top tax bracket at 500,000 hectolitres. That would be the top change, and then all of the graduated rates in between those two points would fall in step.

[Éric Lefebvre, Conservative, Richmond—Arthabaska, QC]

According to your analysis, the formula you are proposing would have few financial repercussions. Would it be possible to submit your proposal to the committee in writing?

[Brad Goddard]

Yes, absolutely.

We worked with MNP to model out proposed excise tax rates at a 50% reduction using 500,000 as a top rate. Working with MNP, we were able to model out the economic impact of very modest growth for the breweries that are impacted by this excise tax reform. The growth that goes along with those breweries offsets the lost revenue to the government.

We will send that along to the committee.

[Éric Lefebvre, Conservative, Richmond—Arthabaska, QC]

Thank you.

My next question is for Mr. Tierney, from the Federation of Canadian Municipalities.

Good evening. Thank you for being here with us.

People here know that, before becoming a federal member of Parliament, I had the privilege of serving as a member of the provincial legislature for eight years, but I also had the privilege of serving as a municipal councillor in my home city, in the city centre, just as you have been doing for a number of years in Ottawa. I see your commitment and I find your career path very impressive.

I would like you to provide a brief update. When it comes to municipal infrastructure, we always use the example that we are about to forge ahead blindly.

In your opinion, if nothing is done in the next few years, what will happen to municipalities?

[Tim Tierney]

Thank you for the work you've done federally, provincially and municipally. That's very important.

Look, we see a big problem that's taking place with infrastructure. People remember how much they pay in municipal taxes, as you know. They have a harder time with federal and provincial taxes.

We always need the assistance to ensure our infrastructure stays in place and is well built. This ties directly into what our ask is. I'm a city councillor here in Ottawa, and with the assistance of the housing accelerator fund and a lot of the great programming that's coming out, in Ottawa we've actually doubled housing to create new housing for people. There is a massive connection between having stable infrastructure.... It allows us to help out more on the homeless side as well.

We see in Calgary and we've seen in Ottawa in the past...where infrastructure is failing across the country. Certainly, that's why we're here today. It's to preach on the fact that if we can get more money for infrastructure, you will see, dollar for dollar, a return within your communities.

[Éric Lefebvre, Conservative, Richmond—Arthabaska, QC]

One of the things you're telling us is that, if we don't have the necessary infrastructure in place, 36,000 housing units cannot be built. We recognize that we are facing a housing challenge and that we need to build, but if the basic infrastructure isn't there, we can't build. So it's a chicken and egg situation. We have to invest heavily and give you the necessary tools to build.

[Tim Tierney]

It really is. That's exactly it. In every municipality across the country, we're not looking for big, beautiful things to build anymore. We're really focused on municipal infrastructure so we can deliver what Canadians want and need right now.

We have a homelessness crisis right now. To achieve what we want to do with the assistance of the federal government, we need infrastructure in place, because there is a big cost. There is a noted change from what we've seen in the past, which we're very thankful for, but we need a bit more.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Tierney.

Thank you, Mr. Lefebvre. That concludes your speaking time.

Mr. Leitão, you have the floor for six minutes.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Thank you very much, Madam Chair.

I will be sharing my speaking time with my colleague Mrs. Church.

Gentlemen, thank you very much for participating in this exercise, which is very important for us as we prepare the upcoming budget.

Mr. Silès, I'll start with you. We actually spoke not too long ago. You raise a very important issue that is perhaps not discussed enough: fast fashion. This is certainly not just a passing trend. We can see that it's taking root.

As you well know, consumer protection falls under provincial jurisdiction. However, the federal government can and must also play a role, that's for sure. How do you see that? What would you like the federal government to do? Should it take action in terms of product traceability or in terms of protecting Canadian consumers' health?

How do you see the federal government's role in this matter?

[Damien Silès]

Thank you, Mr. Leitão.

Your question is essential, as it addresses a problem that is currently exploding in Quebec and Canada.

If you are sick, before taking medication, you will have a doctor assess your symptoms. The reason we are asking for a legal definition of ultra-fast fashion is that we need to give customs officers tools, for example, so they know which products to inspect. Hundreds of thousands, if not millions, of products arrive by plane at airports across Canada and around the world. So we have to be able to identify these products.

I'll give you an example. Temu manufactures 7,300 new products a day. That's ultra-fast fashion. Zara, which is also considered a fast-fashion company, manufactures 150 new products a day. So, it's clear that we are not talking about the same things. To be able to give customs tools, for example, we first need to be able to legally define ultra-fast fashion.

We're not alone in this. Europe is ahead. It has decided to impose taxes on these products. The United States, for its part, has decided to eliminate the de minimis threshold to regulate this very issue.

However, the first thing we need to do is determine exactly how to define this. Once we have that definition, we can envision working with customs and then begin identifying specific products.

Temu has 600,000 products priced under $30. Typically, inspections start between $20 and $30. So, if we don't have rules to define ultra-fast fashion, it's very difficult to—

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Thank you, Mr. Silès. Time is passing quickly.

I now give the floor to you, Mrs. Church.

[Leslie Church, Liberal, Toronto—St. Paul's, ON]

Thank you very much.

Thank you for a very rich and expansive discussion this evening on a variety of topics.

Mr. Tierney, I'd like to come to you and the question of housing and homelessness. Thank you very much for raising such an important topic for us.

As you know, as part of Build Canada Homes, there is a set-aside of $1 billion being directed towards supportive and transitional housing. It offers a great opportunity for collaboration with municipalities by unlocking land and with non-profits, with wraparound supports being built into projects from the ground up.

How can we ensure that these funds are used or deployed as efficiently as possible to get the right kinds of projects up and running quickly to tackle the problems you're talking about?

[Tim Tierney]

It is absolutely that: Accountability is key, as is making sure that delivery happens almost immediately. Ottawa is a gold star example of what we're doing right now. You're seeing the money being invested immediately.

Municipalities across the country also want to invest immediately, but having the development charge made whole was always a concern. It looks like there's been a lot of clarity on that. I think it's going to help.

Obviously, there's still concern about the rural and less suburban northern areas, but we're working with the government and we think we have a plan. We're going to roll that out even if it means working with the provinces. We have no objection to that, but we must ensure there are benchmarks so we're rolling things out in a timely fashion.

Municipalities are ready to deliver. We've proven it here in Ottawa, and across the country we're quite ready to do the same.

[Leslie Church, Liberal, Toronto—St. Paul's, ON]

If we had to prioritize one or two spots among the different types of services or different features of these projects as they're coming together, what would they be? What could we really hone in on while working with you to get these projects up and running quickly? Is it the wraparound piece? Is it finding the municipal land and better ways to unlock it, or is it the matchmaking between the partnerships? What advice would you have for us to really accelerate what we're doing?

[The Chair, Liberal, Karina Gould]

Make it a very brief response, please.

[Tim Tierney]

Do you know what? It's all of the above, unfortunately.

In Ottawa, we have a great relationship with all, but at the same time, again, it's about making sure we have money for infrastructure. That leads to creating even more homes for people, which is important.

[The Chair, Liberal, Karina Gould]

Thank you very much.

Mr. Garon, you have the floor for six minutes.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Madam Chair, thank you for the third time today.

I'd like to welcome all the witnesses and thank them for being here with us today.

I'll start with you, gentlemen from the Union des producteurs agricoles. Welcome.

Mr. Ross, in your brief, you reiterated the importance of adequately funding research and innovation related to agricultural practices. You can see where I'm going with this. As a result of the cuts imposed by the Carney government, Agriculture and Agri-Food Canada has just closed its research and development centre in Quebec City, in Minister Lightbound's riding, after 58 years of operation.

What will be the real consequences of these decisions, and why is it essential to preserve our agronomic expertise?

[Charles-Félix Ross]

One of the consequences is a loss of competitiveness in international markets. Already, if we look at agriculture and agri-food as a share of the gross domestic product, Canada invests 50% less in public and private research than other comparable countries, such as the member countries of the Organisation for Economic Co-operation and Development or our neighbour to the south. These cuts will undermine the competitiveness of Canadian agriculture in the markets. So we'll be taking a step backward instead of moving forward.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you very much.

I would add that, in a context where we're talking about increasing productivity and adapting to climate change, this is all the more important, but the government is closing this centre, which is of critical importance.

I would like to talk to you about AgriRecovery. I don't know the program in great detail, but I remember that, a few years ago, there were floods, and the Bloc Québécois agriculture critic asked the minister in charge to trigger the program. He was chasing after the minister, almost like an uncle chasing after a case of beer, but he couldn't find him. It has been very complicated, which leads us to believe that the program is not triggered quickly enough and that the criteria are unpredictable. There are Canada-wide criteria, among other things.

You are constructive in your brief. You say that the AgriRecovery objective is sound, but that the way to achieve it is inadequate.

So what are the needs of Quebec farmers that should be taken into account in the context of an AgriRecovery reform? How should this program be modified?

[Charles-Félix Ross]

When disasters or very serious climate events, such as floods, occur and core programs like AgriStability, AgriInvest and AgriInsurance are unable to respond quickly to assist businesses, either because they don't cover the losses incurred by those businesses or because those losses are extraordinary, agricultural producers need rapid assistance to meet their cash flow needs or to restart their operations with new investments.

In the case of the AgriRecovery program, the full extent of the losses must be assessed, a diagnosis carried out and a request submitted to the provincial government concerned. The provincial government must then agree to ask the federal government to intervene, and at that point, a series of criteria and frameworks come into play. If assistance has already been provided for the same type of losses in the past, it is not possible. These criteria make it difficult to obtain additional funding when the same type of event occurs again. The demonstration the provincial government must make to the federal government is very difficult. Moreover, first and foremost, the provincial government must also be convinced, as it is responsible for 40% of the cost.

[Jean-Denis Garon, Bloc, Mirabel, QC]

In short, if I understand correctly, there are too many steps, it's too long and proper oversight could be exercised over the application of the program's criteria without having to go looking for the famous A38 permit all the time.

[Charles-Félix Ross]

Exactly.

What we're proposing is really an improvement to the AgriStability program. The problem is that when revenues have been low for several years and costs are too high, producers no longer have a safety net. Their reference margin, which determines their level of support, disappears. As a result, the AgriStability program becomes ineffective.

What we're proposing as part of the pre-budget consultations is something we've been proposing for several years. It involves establishing a floor for the AgriStability program. At a minimum, a portion of the investments made by businesses in a given year should be guaranteed, particularly for planting and for feeding animals. If revenues fall short at the end of the year due to all kinds of events and risks—

[Jean-Denis Garon, Bloc, Mirabel, QC]

Since time is running out, I'd like to quickly ask you about investments, which you mentioned.

We have a different agricultural model in Quebec from what we see elsewhere in North America. It's a land-use model characterized by smaller family farms. It's often more environmentally friendly, and we want to preserve it.

I understand that you're proposing a 40% tax credit for small farm businesses that purchase equipment. Could you explain the importance of such a measure for the Quebec model specifically?