Government Operations Committee on April 10th, 2024

[Corinne Pohlmann]

Sure.

Bill C-234 is the bill that will reduce carbon pricing for certain types of farm activities. There is already a reduction in carbon pricing for farms in certain capacities, but this is to touch on some of the other elements that the farm uses energy for that weren't part of the exemption on the carbon pricing in the first place, such as heating barns and other such types of activities.

We have had anecdotal information from some of our ag members that they've seen their carbon pricing go up quite dramatically, which is having a huge impact on things like how they operate their business and how they sell their goods. We are hoping that Bill C-234, in its original form, will be able to go through. We know there are amendments already being placed on it that are dampening down the original piece. We would love to see the original version pass through the House.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Yes, you mean in its original form. Thank you very much for adding that.

Finally, Mr. Greco, I'm sure that you, like many Canadians, have been following the arrive scam scandal, an issue that has seized not only this committee but Parliament and also Canadians. Can you tell us about how the discussion shows the way government conducts business? Is there any discussion, feedback or conversation within your membership about this scandal? What would be their reaction and commentary if business were to be done in the way that we have seen the arrive scam scandal unfold?

[Alex Greco]

I think overall for business to be done properly, broadly speaking, it has to be done openly and transparently. I think that when you're looking at procurement processes, there have to be clear guidelines in general. If departments don't talk to each other, if there's not an ability for that transparency to happen, then it makes it difficult to do business.

I think every business has a budget and everybody has formal guidelines and everybody has the full rules. If you overspend, it's also a challenge as well. There has to be a balanced approach overall, from our perspective.

Tying it back to regulatory reform, if we're transparent, if we're coordinated and aligned, it can lead to better outcomes not only for businesses but also for Canadians as well.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

In your opinion, does the current Canadian procurement system serve Canadian businesses?

[Alex Greco]

From our perspective, I think procurement reform is required. In advanced research or commercialization and innovation of projects, what has been done in the United States with the U.S. DARPA has been the model in what happens with procurement. That ties into the fact that there need to be fair and open procurement practices, and that's the thing we've called for at the chamber.

I think there's a long way to go. I think it's a tie-in to be able to encourage more domestic manufacturing, especially when we're competing with our largest trading partners, but we also want to ensure that we're producing the best goods and services possible for Canadians.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, witnesses.

Thank you, Mr. Chair.

[The Chair, Conservative, Kelly McCauley]

Thanks very much, Mrs. Kusie.

Mr. Sousa, please go ahead, sir.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

Thank you, Chair.

Thank you to the four of you for being here.

On increasing our competitiveness, we're all in favour of reducing the communicative burden of regulatory issues to ensure that we are able to lower some of those other provincial barriers as well as barriers in international trade and then supplement some of that growth, regardless of the partisan rhetoric that happens at times in these discussions. We're all in favour of trying to make our businesses more competitive and ensure that we grow our economy and that we're productive. Those are critical issues. Without that, we can't sustain all the other things that are important to our services and government and the people of Canada.

There are two issues I want to get into with you. In my previous life, I tried to bring forward a capital market securities regulator for all of Canada. We had eight provinces signed on to the deal. It would make us more competitive, lower duplication of services, reduce regulatory matters and enable us to be more competitive on the international stage, but then there's politics. Suddenly it fell apart with every different election, and that's a real challenge in the federation. I think Mr. Bachrach even alluded to it as well. We have to be mindful that when you're talking to the federal government, we're also talking to all the other governments that are part of this equation.

How do you feel about independent regulators? I'm talking about the Ontario Securities Commission, for example. I'm talking about FSRA, the Financial Services Regulatory Authority of Ontario, which we changed. It had been too close to government, so we put it at arm's length to provide independence and to minimize government interference.

Give me your thoughts.

The Bank of Canada is an example of that.

[Ryan Greer]

I'll jump in very quickly.

Some of the independent regulators you referenced aren't necessarily very relevant to our members in the manufacturing sector, but in general, I think you've identified a really important point at the front end, which is that there are different jurisdictions and that we're talking about dozens of regulators across each jurisdiction, all of whom think they're doing an excellent job and are beyond reproach.

For every individual regulator, even the independent ones, in some cases I think there can be some usefulness and helpfulness, but in other cases, their independence can sometimes also become a barrier to the right kind of political leadership that can ask for greater consideration of economic impacts.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

I know that the CFIB will want to talk about this, because the majority of small businesses are affected by some of these issues on matters like safety codes and labour codes. I mean, people die through some of their labour arrangements. Ten years ago we had to change laws and regulatory authorities because of that, and transportation regulations had to change because of rail derailments.

How do you balance the degree of changes that we're making? The one-to-one thing doesn't work, because there are matters that are rarely relevant that have to be dealt with almost immediately, but the cumulative effect is impactful. Which regulations do you want us to reduce? Tell me what it is that we can eliminate to be competitive.

[Corinne Pohlmann]

Again, I can give you a list of a dozen or more regulations right now that have been introduced within the last few years that we think are going to have a big burden on small businesses. They could be forms and they could be all kinds of different things. I can do that, and I mentioned a few in my opening remarks.

I also think it's important to realize that it needs to be more than that. When I look at some of the provinces I see that British Columbia, for example, has done an excellent job of maintaining a cap on their regulations for almost 20 years now. In fact, the NDP government there just announced yesterday that they were going to extend it for another year, so they are continuing to do this over a 20-year period and keeping a cap on it. They put into their budgets every year that these are all the departments and these are all the regulations and these have come up and these have gone down. That kind of thing still needs to be done.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

I'll come to you in a sec.

With the provincial regulations, in the province of Ontario we've been trying to minimize too, but it keeps growing. It still grows. One of those is around carbon pricing. We've identified that we live in a world environment where we're all going to be subject to pricing.

The federal pricing system is a backstop. It's not the rule of law but a backstop, so each province can do what they want to try to be competitive in the pricing. Ontario had a cap and trade system whereby, dollar for dollar, $1.5 billion was reinvested into small businesses and renos and [Inaudible—Editor]. What are your thoughts on the political interference when they wanted to pick a fight with the federal government when they had a system that exempted them from having it?

To the CFIB, tell me how do you feel about that?

[The Chair, Conservative, Kelly McCauley]

I am afraid you only have about 12 seconds.

Mr. Sousa, is it fair if we just ask them to reply in writing to this?

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

No, come on, very quickly. Give me some latitude.

[The Chair, Conservative, Kelly McCauley]

I'm adding latitude to Ms. Atwin's next intervention, so maybe—

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

It will come up in the next round.

[The Chair, Conservative, Kelly McCauley]

Yes, please. Thanks.

We're going to come to our final interventions, because we have a couple of extra minutes. Instead of five, five, two and a half, two and a half minutes, we'll do six, six, three and a half and three and a half.

Go ahead, Mrs. Kusie, please.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

I'll pass my time to Mrs. Block, please. Thank you.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Mr. Chair.

I will be splitting my time with my colleague, Mr. Genuis.

We were speaking about the one-for-one rule earlier in the Red Tape Reduction Act. I have a couple of questions for any of you who would like to answer.

In your experience, have you found that the government generally abides by this rule?

We'll start with Mr. Greer.

[Ryan Greer]

The short answer is that by the letter of the rule in the law, yes. It does require a cost analysis, the standard cost model that Ms. Pohlmann referenced earlier, and then over a two-year period, you have to reconcile costs in and costs out, so in terms of how it's written, yes, but how it's written is too narrow.

There are all sorts of legislative changes, guidance and other rules that the rule doesn't apply to. You can still abide by the one-for-one rule, which the government is doing, and still have a significant increase in regulatory burden. I think I said off the top that the administrative burden baseline, the number of regulations that impose a burden on businesses, has increased from 130,000 in 2014 to 149,000 as of 2022, so we're still seeing, despite that rule, a growth in administrative burden requirements.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much.

I was going to ask you something that perhaps you've already answered, but maybe I'll just see if I've understood you correctly.

Do you know of any jurisdictions that have have successful regulatory modernization initiatives whose lessons or best practices we could adopt from those jurisdictions ? Please give a really quick answer.

[Ryan Greer]

Ms. Pohlmann referenced British Columbia. They actually set out to reduce the overall burdens on business and then maintain that level, so I think it would be a worthy goal at the federal level to reduce and maintain the burden in the same way.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much.

I'll now turn my time over to Mr. Genuis.

[The Chair, Conservative, Kelly McCauley]

You have four minutes, sir.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, Chair.

I found the testimony very interesting today. Thank you all for being here.

I have a motion that I want to move—it's on notice—regarding indigenous procurement. I hope we'll be able to come to some kind of a consensus on that quickly. The motion I put on notice is regarding the creation of a subcommittee to study the issue of indigenous procurement. Members had it, are familiar with and can look at it.

For those who were not following us on Monday, I will quickly review it. This motion would involve our doing a study through a subcommittee specifically on government operations and indigenous reconciliation to look at some of the issues and potential problems with the indigenous procurement system.

I'd like to make a few comments, first on substance and then on process.

First of all, indigenous procurement is extremely important to us, and I hope to all parliamentarians. Creating jobs and opportunity, supporting the development of indigenous businesses and ensuring that indigenous communities across this country benefit are very valuable and very important.

Through our study of ArriveCAN, we've seen that there have been what appear to be abuses. Tiny companies that are not seeking to provide benefit to indigenous peoples in a broader way are simply receiving contracts and then subcontracting to non-indigenous businesses. I believe that this is contrary to the purpose of the program. Getting to the bottom of what happened and recommending changes are important in seeking to restore credibility and confidence in the process.

This is an issue that is separate and distinct from the ArriveCAN issue, although there's obviously a link. I think it involves looking at both procurement issues and the policies of the indigenous affairs department.

Why am I proposing a subcommittee? I see this as being a policy area that is at the nexus of what would be INAN's mandate and what would be OGGO's mandate. I know that both committees are very busy. There are other studies that members have wanted to do at this committee, and INAN frequently receives government legislation. Both committees are very busy.

I think a subcommittee that brings together people with specific expertise in both of those areas would be the most effective way of doing it. It could be time-limited in its operations, but I think it's important. We don't want to crowd out other priorities, but we want to make sure there's a forum that can get this done.

I do want to work towards having a motion that can succeed on this issue. I'm very much open to amendments. I understand that Ms. Vignola may have an amendment that I'm very much disposed towards accepting.

I hope we can have a conversation that leads to our being able to undertake this work in a collaborative way. It's important work. We want to be able to restore confidence in the indigenous contracting system and ensure that we have a procurement system that is delivering real benefit to indigenous peoples across Canada and is not being hijacked by well-connected insiders who know how to work the system but are not providing those real benefits.

That's why I've put forward this motion today, Chair, and I'm very open to some amendments. I expect we'll see some and have a good discussion about them.

Thank you.