Finance Committee on June 4th, 2026

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

—they don't like facts, Madam Chair. When I present facts, they don't like it, but that's the answer.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

I asked you if you agree with the PBO, and you talked about something completely different. That's not an answer. It may be a response. They're words. You say words at committee, but that's not an answer.

Will you answer the question? Your credibility has been challenged by the PBO. Do you agree with the PBO's assessment, yes or no?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Madam Chair, I will even cite—

[The Chair, Liberal, Karina Gould]

Thank you, Minister. That concludes the time we have.

Thank you, Mr. Kelly.

We will now continue for five minutes with Mr. Leitão.

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

I have only five minutes. That's excellent, but this is going to be tough.

Good morning, Minister.

Thank you for joining us.

The country is indeed facing an extremely complex situation. As you have said a number of times, a fog of uncertainty hangs over everyone. This is particularly true for Canada, since our economy is still highly integrated with the American economy. So the fog is denser here than in other places.

One item noted and made public in the economic update is the following. The deficit is lower than forecast in the November budget. The main reason for this decrease of about $11 billion is that income taxes generated higher‑than‑expected revenues. When income taxes generate higher revenues, even in a situation where we lowered the tax rate, it means that the Canadian economy has performed quite well and is quite resilient.

What are your thoughts on this?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Thank you, Madam Chair.

First of all, I want to thank my colleague Mr. Leitão. He's a great economist, and he gets it.

I think that puts this discussion in perspective.

The first thing is to look at the macroeconomic situation. I also know Canadians aren't easily fooled. They understand the macroeconomic situation very well, for sure. The International Monetary Fund was talking recently about a global fog of uncertainty. I would say Canada is like a beacon in that fog. Despite the economic integration with our neighbour to the south and this very complex, very volatile global situation, the Canadian economy is truly more resilient than people had estimated. Canadian workers and the Canadian industry are more resilient.

I know Canadians understand that. In a world filled with uncertainty, what can we do? The Prime Minister has been very clear on this: We need to focus on what we can control. What is that? We control the investments we can make at home. That's why we're making generational investments in housing, infrastructure, productivity, innovation and defence.

As Mr. Leitão knows, as a great economist, and as the International Monetary Fund has reiterated, countries that have the fiscal capacity can implement this kind of measure. In the IMF's declaration, two countries were mentioned, Madam Chair, not 10, and those were Germany and Canada. Why? Because we're the only two countries with a triple-A credit rating. It was said that if we made generational investments simultaneously in sectors that would generate economic growth, we would see the benefits.

That's what we're seeing. Our plan is working, and we are moving forward. The global macroeconomic environment certainly doesn't spare any country, but I think Canadians watching us this morning understand when we say Canada's growth is nearly double that of some of our G7 partners. It shows how resilient workers are, how resilient the Canadian economy is and how smart our investments are. We're talking about logistics corridors, doubling our exports and attracting investments here.

We're talking about developing infrastructure through agreements like the one we signed with Quebec a few days ago to inject close to $10 billion in infrastructure. This is a historic agreement to develop infrastructure in Canada, in this case in Quebec, for hospitals, but also for schools. That's the kind of thing we can do to help the Canadian economy, our workers and our industries.

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

Thank you, Minister.

Of course, I fully share your point of view. As you've already mentioned many times to this committee, it's important to look to the future.

The most recent report from the Organisation for Economic Co-operation and Development, or OECD, released yesterday or the day before, states that Canada is the second fastest-growing country in the G7 in 2026-27. It's not just the OECD saying this. This week, the Bank of Montreal and CIBC released their economic forecast for 2026‑27—the other banks will follow—and both forecasts are relatively similar to that of the OECD. Everyone sees that Canada, after the little break—

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Leitão. Your time's up.

We're going to finish this hour with Mr. Ste‑Marie.

Mr. Ste‑Marie, you have the floor for two and a half minutes.

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

Thank you, Madam Chair.

Minister, I was very disappointed a year ago when I saw your government backtrack on the digital services tax, more specifically on web giants that make money here, but don't pay their fair share of taxes. That decision was made on the basis that it would allow Canada to conclude an agreement with the U.S. government by July 2025. Obviously, that didn't happen.

That said, the Canadian Radio-television and Telecommunications Commission, or CRTC, which the government claims is an independent tribunal whose decisions must be enforced, is requiring online platforms such as Netflix to invest more money in the creation of Canadian content and shift their contribution from being self-funded to being paid.

However, we learned this week that the government was reversing that decision, because it irritated the Americans and it was better not to make them chip in. Your colleague Marc Miller acknowledged that. This means the government will pay the tax itself.

It's good that there's money for the creation of Canadian content, but isn't it important that even American multinationals that come here and make money pay their fair share?

I understand this requirement is an irritant—by the way, the American ambassador called it that—but isn't it a sign of weakness to act this way and lay down arms before the Americans, even before starting negotiations?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I'd like to thank Mr. Ste‑Marie for his question.

There are two things. We've made very important investments to support the French language culture and vitality, and we will always be there for the cultural industry. I think artists know that very well. More specifically, we've made announcements recently, and you even saw yesterday that the Association québécoise de l'industrie du disque, du spectacle et de la vidéo, or ADISQ, understands the complex situation we're in. First and foremost, artists recognize the federal government's support for the cultural industry.

As for the rest, I would say, Mr. Ste‑Marie, that you're a very wise man. We must always stand up for Canada's interests, in every part of the country. As you can appreciate, these negotiations are complex, even volatile sometimes in many respects.

However, our position is always to defend the best interests of all sectors and all workers, to position Canada in the best way while continuing to very clearly and strongly support all sectors.

You asked about forestry. We're here for those in the forestry sector. We are there for those in the aluminum sector. We are here for those in the steel and auto sectors.

[The Chair, Liberal, Karina Gould]

Thank you.

On behalf of the committee, I'd like to thank the minister for joining us today.

Committee members, we're going to take a 10-minute pause before we return for the next session.

Thank you.

The committee is suspended.

[The Chair, Liberal, Karina Gould]

I call the meeting back to order.

I'd like to welcome the witnesses.

From the Canadian Federation of Agriculture, we have Stéphanie Levasseur, second vice-president, and Brodie Berrigan, senior director, government relations and farm policy.

From the Labourers' International Union of North America, we have Eric Olsen, the political director for western Canada.

From the Montreal Economic Institute, we welcome once again Renaud Brossard, vice-president, communications, and Gabriel Giguère, senior policy analyst.

From the International Aeronautics and Civil Aviation Observatory at the Université du Québec à Montréal, we have Mehran Ebrahimi, professor and director of research.

I'll remind participants of a few points. Before speaking, please wait until I recognize you by name. For those participating by video conference, click on the microphone icon to activate your mike. Please mute yourself when you're not speaking.

Those on Zoom requiring interpretation, at the bottom of your screen, you have the choice of floor, English or French. Those in the room can use the earpiece and select the desired channel.

I want to remind the witnesses that members of the committee can ask their questions in French or English. If you need interpretation, take a moment now to prepare and select the listening channel you'll need in advance so we can make the most of the time set aside for questions.

We'll begin with the witnesses' opening statements.

Witnesses, you will have five minutes each.

We'll start with the Canadian Federation of Agriculture.

The floor is yours.

[Stéphanie Levasseur, Second Vice-President, Canadian Federation of Agriculture]

Thank you very much.

Good morning, everyone.

Thank you for the opportunity to speak today.

My name is Stéphanie Levasseur, I am the vice-president of the Canadian Federation of Agriculture, or CFA. I'm also an apple producer in Frelighsburg, in southern Quebec.

As you know, the CFA is Canada's largest general farm organization. We represent over 190,000 Canadian farmers and farm families.

As you also know, agriculture does not operate in a vacuum, so decisions made across multiple departments, for example regarding health, the environment, trade or financial issues, directly affect the competitiveness, resilience and viability of Canadian farms. A whole-of-government coordinated approach is essential to preserving the vitality of our food system and our competitiveness in global markets. Fundamentally, food security depends on the agricultural sector's productivity and economic viability.

For years, Canadian producers have been calling for regulatory mandates that explicitly recognize the importance of protecting not only the health of Canadians and the environment, but also our economic viability, competitiveness and access to affordable food. In this context, we welcome and support the recognition of economic and food security with the proposed amendments to the Pest Control Products Act and the Canadian Food Inspection Agency Act in Bill C‑30. The effectiveness of these amendments will ultimately depend on their effective implementation, which in turn depends, among other things, on decisions remaining science-based.

We also advocate for continued collaboration with industry and agricultural sector stakeholders to ensure these considerations are truly integrated in day-to-day regulatory decision-making, rather than just remaining overarching objectives.

From the CFA's perspective, one way to achieve this is through a more balanced, risk-based regulatory approach. Effective regulation should focus on managing risks rather than systematically seeking to eliminate them through disproportionate means or without considering the actual terms of use. Excessive caution or zero tolerance for risks can have adverse effects. It can delay approval, restrict access to essential tools and reduce productivity without actually improving safety. With rising costs, climate-related challenges and global competition, farmers need access to efficient products to protect their crops and care for their animals.

At the same time, we want to be clear about what these legislative changes shouldn't do. They shouldn't add new layers of bureaucracy, extend already lengthy approval times, or impose additional requirements and uncertainties on registrants or producers, nor should they require regulators to undertake extensive independent economic analysis, as doing so risks slowing down decision-making processes further.

Resources are also a major challenge for both the pesticide regulatory directorate and the Canadian Food Inspection Agency. Sufficient resources are critical to maintain inspection capabilities, address animal and plant health risks and ensure Canada is aligned with key trading partners. To maintain its reputation as a reliable supplier of safe, high-quality food, Canada needs a well-oiled regulatory system. Having more predictable and timely regulatory decisions would allow producers to plan confidently, invest in innovations and remain competitive in a rapidly changing global market.

In closing, we look forward to working with parliamentarians and regulators to ensure these changes are implemented in a way that strengthens Canada's agricultural sector without weakening public confidence in our regulatory system.

I look forward to your questions.

Thank you very much.

[The Chair, Liberal, Karina Gould]

Thank you, Ms. Levasseur.

We will continue now with Mr. Olsen from the Labourers' International Union of North America.

You have five minutes.

[Eric Olsen, Political Director - Western Canada, Labourers International Union of North America]

Madam Chair and members of the committee, thank you for inviting LiUNA Western Canada to appear before you today.

My name is Eric Olsen. I'm the political director with the LiUNA Western Canada subregion.

For those of you who may be unfamiliar with us, we are the Labourers' International Union of North America. We are the largest private sector construction union in North America. We have over 500,000 members and more than 140,000 in Canada. Our western Canada subregion has approximately 20,000 members in four locals servicing the four western provinces and the north with a proud 100-year history of building some of the most important and vital infrastructure in the country.

A few of the notable projects our members have built recently in western Canada are the Trans Mountain pipeline, the Keeyask dam, LNG Canada and the Site C dam. All of these major construction projects require skilled labour from across Canada.

Labour mobility will be a key element as Canada builds major energy, transmission, port, road, rail, mining and defence-related infrastructure throughout western Canada and the north in the coming years. Our highly skilled, experienced members transfer easily between locals in order to deliver the critical labour that will be needed on specific projects.

At times, this comes at a cost to the member. LiUNA Western Canada applauds and supports the changes to the labour mobility tax credit contained in this spring economic update. We urge this committee and all MPs to support moving forward with the implementation of the provisions designed to support the building trades members who build this country.

Thank you.

[The Chair, Liberal, Karina Gould]

Thank you very much, Mr. Olsen.

I now give the floor to the representatives of the Montreal Economic Institute.

Mr. Brossard, you have the floor for five minutes.

[Renaud Brossard, Vice-President, Communications, Montreal Economic Institute]

Thank you very much.

Good morning, everyone.

I would first like to thank you, on behalf of myself and my colleague Gabriel Giguère, for inviting us to appear before you today.

For those who aren't familiar with the Montreal Economic Institute, or MEI, I'd say we're an independent think tank with offices in Montreal, Ottawa and Calgary. The institute has been involved in Canadian public debate since 1998 through its research and media interventions. One of the key topics we're looking at is the sound management of public finances. That's what we're here to talk about today.

We're concerned about the Canadian fiscal path of the past decade. Each of the last 10 fiscal years has ended in a deficit. A deficit is projected for the current fiscal year, and we still don't see a balanced budget on the horizon. If nothing changes, the federal deficit will reach $117 billion in 2035, nearly twice what it is today. That's not good fiscal management.

Despite the federal government's predicted unending deficits, new programs are still being announced, as though we're wallowing in surpluses. The best example is probably the creation of the Canada Strong Fund announced by the Prime Minister the day before the tabling of this economic update.

The model most often cited when we talk about sovereign funds is that of Norway, specifically its Government Pension Fund Global, whose assets now exceed 20 trillion Norwegian kroner, or $3.5 trillion Canadian. I would point out that we're talking about billions in French, which is trillions in English.

The situations in Canada and Norway are quite different. While Norway has run only one deficit since the beginning of the century—at the height of the pandemic, in 2020—Canada ran more deficits than ever before, and still has no realistic plan to return to balanced budgets. In other words, every dollar Ottawa invests in this new fund won't come from a surplus generated through sound management, but rather from borrowing at high cost in debt markets.

Because of its regulatory framework, the Norwegian sovereign fund is not allowed to invest its money in Norway to avoid overheating its economy. This also limits the possibility of political interference in the allocation of funds.

The fund put forward by the current government proposes instead to allocate funds exclusively to Canada in a handful of selected sectors, when it needs to be a sovereign fund like Norway's. Instead, the federal government is proposing to create yet another business support fund, whose only innovation is to allow individuals to put their money there, if they believe public servants and oversight bodies are better than them at managing their money. Looking at the various projects subsidized by the various levels of government, I doubt that.

While the federal government can play a role in driving our economic prosperity, it is not well equipped to play a financial role, nor should it play such a role. Individuals and institutional investors who risk their own money are in a much better position to do that.

What the government is fairly well equipped to do, and where it's appropriately engaged, is to create an environment conducive to growth and investment. It should review the environment and the tax and regulatory costs it imposes on all Canadian families, rather than trying to select a handful of businesses or winning or losing sectors.

Unfortunately, by proposing a debt-financed fund managed by public servants, the government seems to persist in a top-down approach that has cost Canada a lot of money, with very little to show for it in recent years.

Thank you for your time and attention.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Brossard.

We're still waiting for Mr. Ebrahimi. We'll see if he can join us later.

We'll begin the rounds of questions with committee members.

We will begin now with Ms. Cobena for six minutes, please.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

Thank you, Chair.

Thank you to all the witnesses.

I'd like to start with Mr. Brossard.

You noted in your opening statement that a lot of your analysis focuses around sound management of public finances. I'm sure that when the Prime Minister promised to spend less and invest more, this was a topic of interest for you.

In this morning's PBO report, it is confirmed that the government operational costs were actually revised up $18 billion over the last four years to $142 billion. What do you think this means for Canadians more broadly? Also, do you think this meets the Prime Minister's definition of spending less and investing more?

[Renaud Brossard]

Thank you so much for the question.

I would say that if operational spending is going up, it is not investment. It's spending more, and we're not necessarily seeing more investment out of this. Unfortunately, this has been the trend for a long time with the federal government.

We've seen massive increases in hiring. We've seen that there's also a lot more money going towards the public service. Unfortunately, Canadians are not seeing results from that, whether it's when you show up at the passport office and it takes so very long and is so very hard to get a passport, or just in terms of everyday services that we can easily rely on. They're seeing an increase in cost, but they're not seeing that translate into a better quality of services, unfortunately.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

The report this morning also noted that there's a less than 1% chance of the government meeting the new fiscal anchor, which is a declining deficit-to-GDP ratio. Of course, this is after the fact that they chose to give up the last fiscal anchor. What message do you think this sends Canadians and investors?

[Renaud Brossard]

Thank you for the question.

I think it sends the wrong message. We've been promised sound fiscal management by this government. We've been promised sound fiscal management for the past 10 years, and we have yet to see it.

At the MEI, we looked into modelling what was going to come, not just until 2030—there's some modelling in the finance department on that—but what was going to happen after 2030. Are we going to be on track to get back to balance?

Unfortunately, when we looked at the pace at which spending is increasing and at all the planned increases that have been promised by this government, the deficit is going to increase to $117 billion in 2035 if nothing gets done. That's about twice as much as what it is today. This is not prudent fiscal management, and it is unfortunately going to keep costing future generations of Canadians even more money in debt interest payments every single year.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

Also, of course, this is a big deal, because Canadians pay a lot of taxes. They pay taxes when they earn a paycheque, when they buy a house, when they own property, when they spend money and even when they die. For Canadians, there is no chance to avoid the taxman, and they're paying a lot of taxes. Now, they're seeing their government giving away their taxes and not managing these taxes responsibly. It's difficult to see, particularly in the context of the affordability challenges we have. Now we're in a recession, so we're not seeing any results from any government policies.

What do you think about the state of the Canadian economy right now?

[Renaud Brossard]

Yes, we are in a recession. The definition is really clear—we've had two consecutive quarters with negative growth. It's a textbook definition that unfortunately fits that.

What's more worrying than the last six months is what has been happening over the past 10 years. We see that we've had very low growth when we look at our GDP per capita. What does this mean? It means that Canadians' standard of living is not going up—or it's going up very slowly, stagnating—whereas some of our other peers in advanced nations are seeing theirs go up. It means that Canadians are unfortunately having a little bit more trouble balancing their budgets at the end of the month, simply because they don't have more funds. They don't have more money to spend on the everyday goods they need.

Just in the last five years, when we adjust for inflation, the growth in GDP per capita, or the economic pie per person, has only been up 3.5%. That is abysmally low. That's why we would like to see this government work to reverse this. Unfortunately, creating a new government fund to try to direct subsidies to specific industries is not the way to do that.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

On that topic, we just had the finance minister here at committee, and I asked several questions around the fund, because there are details that are still not clear. You did an in-depth analysis in your opening statement in terms of the issues and the differences between this fund and Norway's. We just found out that the interest on the debt—the $25 billion of debt that this government is going to take on to seed this fund—will be $750 million per year. That doesn't include the cost of the bureaucracy, of course. It doesn't include the executive salaries that we have seen inflated in other bureaucracies.

Are you concerned with the lack of transparency with this fund that we've heard about so far from this government and the finance minister, who refused to answer questions?