Government Operations Committee on June 5th, 2020

[The Chair, Conservative, Tom Lukiwski]

Even without a date, Mr. MacKinnon, I take it from Mrs. Block's comments that she is not in agreement with your proposed amendment.

I do not see any other hands up wishing to speak on this. If that is the case, we will go to a vote.

(Motion agreed to: yeas 10; nays 0)

We will now continue with our line of questioning.

We now go to Mr. MacKinnon for five minutes, please.

[Steven MacKinnon, Liberal, Gatineau, QC]

Thank you so much, Mr. Chair.

My thanks to all our witnesses.

I thank them for presenting the views of their members, their industries and their companies.

My question is going to be principally, as you would imagine, reflecting the department I represent, the construction industry. I know we've spent a lot of time thinking about how we manage through this crisis and how we manage to emerge from the crisis. I would simply point out, colleagues, we have had a remarkable run of operating safe and secure work sites. I say that, of course, in the knowledge that we need to continue to be vigilant, but the federal construction projects, and construction generally, have been operated in a safe manner. I think history will record that even in the worst days we were able to maintain the very important project on Parliament Hill in operation.

I want to thank Madam Van Buren and her membership for their leadership in proposing protocols and measures respecting the safe operation of construction sites.

My question will be for Madam Van Buren.

I know your statement contained some information on this, but perhaps you could give just a few seconds on some of the costs you're encountering, some of the unexpected or important measures I know you're having to adopt that are going to represent cost overruns or cost magnification for the industry as we go through the COVID pandemic.

[Mary Van Buren, President, Canadian Construction Association]

Thank you very much for this opportunity to speak.

We have had a very strong partnership with PSPC and with many government departments. We appreciate that. On behalf of our 20,000 members, we are very appreciative of the steps that have been taken to date by Parliament to help Canadians and businesses during this COVID-19 crisis.

As you've said, the safety of our workers and our communities was always the number one priority as we worked through the pandemic. I think we've shown that we were very resilient and moved quickly to continue to deliver on the projects. Some of those costs would include, of course, all the PPE, including the masks as well as the sanitation. In some cases projects were delayed, so we had to extend the leasing, which led to financial costs.

In terms of physical distancing, we could have fewer people on the work site than we normally would—one person per truck, for example. We could have only a certain number of people in an area for a certain amount of time and we would have to look at the sanitation of equipment, pre and post. There are numerous costs that have been incurred by the industry, in terms of both productivity and hard costs. Our ask is that the government, which we know is a responsible and fair owner, will reimburse us for these costs on federal projects.

Normally these sorts of things would be treated at the end of the contracts, but for some of these federal contracts, that could be 12 months to three years from now. Many of our contractors are very small. Seventy per cent of our industry consists of small and medium-sized enterprises. Getting them this cash is very important now as we lead into the ramp-up and we help Canada get back to economic recovery.

[Steven MacKinnon, Liberal, Gatineau, QC]

Thank you very much, Ms. Van Buren. I greatly appreciate your collaboration during this pandemic. As Mr. Wilson said for the manufacturing sector, the construction sector has traditionally been able to help us get out of an economic crisis like the one we are experiencing now, or the one a decade ago.

I would like to hear your view on stimulating the economy through construction projects and infrastructure. What is the industry's perspective, as you see it? How significant will it be as we move out of this economic crisis?

[The Chair, Conservative, Tom Lukiwski]

Madame Van Buren, could we have a brief answer as well, please?

[Mary Van Buren]

Of course, investment in infrastructure is the economic enabler, and we know that regardless of the sector, whether it's manufacturing, tourism or retail, it all depends on having excellent infrastructure that connects businesses to communities. We've seen with multipliers in the past that every dollar invested in infrastructure returns about $1.35 to the country. If you look at the number of people employed, we're talking about 1.5 million Canadians. We represent 7% of GDP, so a healthy construction industry—

[The Chair, Conservative, Tom Lukiwski]

Thank you very much. Madame. I'm going to have to stop you there because we have limited time. If you have additional information, I would ask that you respond as quickly as possible in writing to our clerk, who can then distribute your full answer to all committee members.

We'll now go to our next round of five-minute questions.

Mr. Barsalou-Duval, you have five minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Chair.

My first question goes to the Canadian Manufacturers & Exporters.

Since the crisis began, the Bloc Québécois has been asking the government for all kinds of measures, changes, modifications, and new programs to allow taxpayers, the public at large, but also companies, to keep their heads above water in this these difficult circumstances.

One of the measures that the Bloc Québécois asked for was the good old fixed costs subsidy. Certainly, companies have variable costs like staff salaries, but companies often stop paying those variable costs if they are not active. However, it must continue to pay its fixed costs. We saw that it was necessary to provide significant assistance for those fixed costs and we very much regret that the government provided very little.

In fact, the only measure that the government provided was the Canada emergency commercial rent assistance. This restricted assistance targets only mortgaged property and monthly rent to a total of less than $50,000. That is quite limited, and, on top of that, the owners have to be in agreement.

Is that frustrating for the manufacturers and exporters in Quebec, who often need major facilities and a lot of space for their activities?

[Mathew Wilson]

Thank you for the question.

You mentioned two things, and I'll add a third. On the lease program itself, frankly, the feedback we've received from our members is that it's not really relevant, for a variety of reasons. It's too small, and it relies on the landlords themselves to apply for the funding and then eat the 25% losses.

We're suggesting instead that the money, just as in the wage subsidy program, should go directly to the tenants, and then the tenants can pay the landlords that way.

We think the program has been designed backwards. We've communicated that, and hopefully we'll see some adjustments on it. It needs to be bigger and targeted at the tenants rather than the landlords.

The other piece you didn't mention, which was mentioned by others, is the absolute cost of operating safely. The extra barriers that are put in place and the PPE that's required, based on new government guidelines and regulations, are incredibly expensive. Even the ability to continue social distancing and operating at the same time means things like break rooms can't be used the same way they used to be.

There are a lot of additional costs, such as on-site testing for temperatures and things like that, which some of our members are doing. We need some type of support for that, in addition to the training of the executive and the staff. We need some help on those fixed costs in those areas for sure.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

I am pleased to hear what you have to say in this regard. Your remarks are very enlightening, I feel. I also feel that it is not too late for the government to act. We are seeing bankruptcies and job losses pile up. We have not come out of the crisis and I feel that companies still need help along those lines.

My second question goes to the Canadian Construction Association. During this crisis, we have heard a lot about supply problems and the importance of buying locally in order to help our companies to continue to operate and to keep their heads above water. In terms of the recovery, we hear a lot about infrastructure and construction. Infrastructure projects are going to be built.

If we embark on these infrastructure programs, do you believe that it is important for there to be sufficient local content for society to really benefit from it economically?

[Mary Van Buren]

Thank you for the question.

CCA has communicated what we believe are important principles in economic stimulus. One of those is that they have to be sized properly. We are not looking for three $5-billion projects. We believe they have to be appropriate to all regions across Canada, all sizes of businesses, whether small or large. They also need to have all sectors involved, whether that's road building, maintenance or building towers.

What we're really looking for is a very balanced approach that is also coordinated with the local municipalities and the province so that the projects that are delivered meet the needs of those communities.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

We'll now go to Mr. Green for five minutes, please.

[Matthew Green, NDP, Hamilton Centre, ON]

Thank you, Mr. Chair. Once again, I have to thank the previous speaker for teeing me up on this one.

For those who don't know, I'm the very proud member for Hamilton Centre. Here in Hamilton, for the last 15 years, we've been working toward a significant infrastructure project in the development of LRT, which would spur thousands of jobs and economic development for the construction of low-rise residences, condos and so forth.

I'm wondering what role the member from the Canadian Construction Association feels that public infrastructure projects related to urban infill and best practices of transit nodes and corridors might have in the recovery post-COVID in restarting the economy.

[Mary Van Buren]

Thank you for the question.

It's critical. We know that Ontario has something like $7 billion that has not been committed through the Invest in Canada program, which is a very important program. It's not even new money; it's already money that's been earmarked there.

Again, that goes to how the federal government and the Government of Ontario can work together, in your case, to make sure that the investment is made, those jobs are happening and the quality of life is improved for Ontarians.

[Matthew Green, NDP, Hamilton Centre, ON]

As it relates to the job force, what impact does this pause have on the labour force that's being trained as apprentices and trained in the skilled trades to be able to backfill an aging-out demographic of workers?

[Mary Van Buren]

Attracting skilled labour to the aging workforce is a priority for the entire industry. We have many apprentices already in that stream who are looking for employment. You are right that continued delays mean those apprentices are delayed in their training, which takes quite a while. You can't just make these people expert overnight, so it's very important that we continue the investment in apprenticeships and look for opportunities to continue to train them.

[Matthew Green, NDP, Hamilton Centre, ON]

Where do you see those opportunities? I'm concerned that if there's a second wave, a second stall, we might lose a cohort of skilled trade workers. What are you hearing in the industry about ways we might be able to utilize this time to our best ability to ensure that we have a diverse and newly trained workforce?

[Mary Van Buren]

We are very proud of our track record in safety. We believe that given the culture we already have and our demonstrated ability to conduct construction projects safely by prioritizing our communities and workers, we should be well positioned should another COVID-19 spike unfortunately hit. Our goal is to continue to train.

We have a campaign ready to go on construction as diverse and inclusive. It was delayed because of the pandemic, of course, but it's certainly a priority. It's to encourage women, indigenous people and new Canadians to join our industry in well-paying jobs, and they can link purpose with their careers.

[Matthew Green, NDP, Hamilton Centre, ON]

I'm certainly proud of the work that's happening here in Hamilton Centre with community benefits networks. Industry, the labour unions and the general public have come together to plan and plot this out.

In your opinion, is the pandemic going to induce pent-up demand? Do you anticipate there's going to be a boom, or is there so much economic uncertainty that projects are being taken off the table at the moment?

[Mary Van Buren]

There is an important mix between what the private sector and various governments are doing, so we are monitoring private-level investment.

We heard anecdotally that the private sector has cancelled numerous contracts. We're continuing to follow up on that. That's why it's so important for the federal government to maintain its leadership role in investment in infrastructure.

[Matthew Green, NDP, Hamilton Centre, ON]

We floated the idea of a home energy retrofit program to help offset the demand on fuel for the economy of sustainable urban development. What role could your association play in more sustainable urban development?

[The Chair, Conservative, Tom Lukiwski]

Please give an extremely brief answer, if it's possible.

[Mary Van Buren]

We'd be happy to participate in any way we can.

[Matthew Green, NDP, Hamilton Centre, ON]

That's appreciated.

Thank you so much for your time today. I appreciate your answers.

[Mary Van Buren]

Thank you.