Evidence of meeting #129 for Government Operations and Estimates in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was different.
A video is available from Parliament.
Senior Director, Manufacturing and Value Chains, Canadian Chamber of Commerce
All the policies we put forward are for the interests of all Canadians. Yes, we are a business organization, but everything we put forward as an organization is for the prosperity of all Canadians and to ensure that Canadians' interests are protected.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
However, certain kinds of growth, for instance, contribute to greater inequality.
The World Bank has expressed concern that if that's the direction that countries take, they're not going to be able to sustain that growth, and they're not going to be able to sustain social stability, because widening inequality is corrosive to society, and we've seen that all around the world.
This is the question when it comes to capital gains; this is the nub of the issue. The tax code and the way we've structured taxes have worsened the issue of income and wealth inequality in this country, so trying to reverse that means making changes to make it better.
Do you not support those changes, given what we know about inequality?
Senior Director, Manufacturing and Value Chains, Canadian Chamber of Commerce
With respect to making changes, I talked about it earlier and I'll say it again: That's why comprehensive tax reform is important—to focus on best outcomes, not only for businesses to grow, but to help in terms of prosperity for all Canadians. If we don't have jobs, we have no investment; we don't have growing communities and we're not improving our standard within the world.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
Are any of the tax reforms that your organization advocates connected to reducing wealth and income inequality, and is there any evidence that you can table?
Senior Director, Manufacturing and Value Chains, Canadian Chamber of Commerce
We are focused on equality and fairness for all Canadians.
NDP
Conservative
Conservative
Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB
Thank you, Mr. Chair.
Mr. Greco, I want to spend a little more time on Mr. Beatty's letter, because it's quite interesting.
In the part where he talks about how saying that the inclusion rate is affecting only a small number of Canadians is misleading, he goes on to say the following:
One in five Canadian companies are likely to be directly impacted over the next ten years and the effects of this tax hike will be borne by all Canadians, directly or indirectly [w]hether through...diminishing the creation of new companies and jobs, reducing the availability of medical practitioners, eroding...pension returns, altering the delicate risk-reward balance of countless investments, or threatening the retirement plans of millions of Canadians who pinned their plans on the proceeds of selling a family cottage or a small business grown over a lifetime.
It's a pretty damning statement about the government's plan. Would you agree with the characterization that this is economic vandalism on the part of the Liberal government?
Senior Director, Manufacturing and Value Chains, Canadian Chamber of Commerce
At the end of the day, though, it goes back to the need to have—and I want to stress that this is a non-partisan comment—fairness in the tax system for all Canadians, and right now, I think when you have tax-expense carve-out policies, that is just a signal to the rest of the world about what we do in terms of investment in Canada.
Conservative
Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB
Yes, and speaking of fairness, I want to return to this example, because I don't think we spent enough time on it.
My colleagues around this table, other than the Conservatives, don't seem to recognize that a small business can be incorporated, as in the example I gave of the hair salon that's a sole proprietorship and that is right next door to a hair salon, a small business, that happens to be incorporated. Maybe they went to a lawyer to do it up for them so they could rent space through a company, or maybe it's because they wanted to limit their liability, as people do.
Those two people are treated differently. How is that fair?
Senior Director, Manufacturing and Value Chains, Canadian Chamber of Commerce
Again, I think at the end of the day, there has to be fairness for all Canadians, and I just think that we can't be pitting groups against each other. It has to be fair for all, and I think that's a challenge when we have these different policies.
Policies shouldn't be dividing people. We have to be able to unite people in order to ensure not only that businesses thrive but that Canadians thrive as well.
Conservative
Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB
Mr. Beatty goes on to say that the “tax hike will only...undermine the government's stated policy objectives: bolstering health and dental care..., attracting and retaining skilled professionals, increasing investment and innovation, and helping small businesses thrive.” You couldn't have a more damning position of the government's policy, yet it seems to be falling on deaf ears.
I was heartened to hear you say earlier that before the implementation legislation is tabled, the Canadian Chamber of Commerce will be proactive about this and, hopefully, that enough pressure will come over the summer, like it did with the in-the-dark-of-nighttime changes to the TOSI rules back in 2017, which the government ended up having to back off on. I suspect that a similar thing is going to happen over the summer when businesses—small businesses—wake up and realize they're getting screwed over by the government again.
Do you believe that the Chamber of Commerce will be mounting an exercise to push the government into withdrawing these changes?
Senior Director, Manufacturing and Value Chains, Canadian Chamber of Commerce
It's continuing with advocacy. Our position is the position that was in the letter, and we continue to push advocacy for those changes.
Conservative
Liberal
Parm Bains Liberal Steveston—Richmond East, BC
Thank you, Mr. Chair.
I'm going to go back to growth of business and talk about red tape and regulatory reforms. I'm going to dedicate this round to British Columbia.
My dear colleague here will be sharing some of my time.
My question is for Ms. Jones.
You recently provided recommendations to the Treasury Board on regulatory competitiveness. Can you share some of those recommendations—maybe the top few? Then I'll cede my time to Mr. Hardie.
Chair, External Advisory Committee on Regulatory Competitiveness, Business Council of British Columbia
The top ones that I would like to highlight are, first of all, that we need a kind of a North Star, an idea of what it is we want our regulatory system to do. I think that too often we equate more rules with better protection and fewer rules with less protection. That's sometimes the case, but it's not always the case.
We spend a lot of time talking about what regulatory excellence looks like, and we think that Canadians benefit from high standards. Certainly, our products are very marketable around the world because they're seen as coming from a jurisdiction that has high standards. That's important, but of course we want to minimize the drag on productivity and wasting people's time that unnecessary rules have. That regulatory excellence is the first recommendation.
Second, I just want to come in again on how we need better measurement. I mean, we wouldn't think on the fiscal side of not having really good measures and a budget that's tabled that we can debate and argue about and numbers that are readily available. We don't have that on the regulatory side. We need better measures to support striving towards regulatory excellence.
Also, then, we heard a lot from different people about plain language and just making sure that they're in constant conversation with the people who are regulated, not just before a regulation goes into place in doing a kind of “one and done” consultation, but also making sure that they're then following up. Are we achieving the desired outcomes? Are there things we need to change? Are there burdens we could reduce? Are there things we need to do better? Also, in some cases, are there areas where we're not regulating enough and we need to do more in order to protect Canadians?
These are all important questions, and they deserve more attention than they're getting.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
Thank you, Mr. Bains.
I want to say a quick hello to Ms. Jones. It's been a long time since we sat across the table chatting about taxation and things.
I wanted to talk about productivity again.
Mr. Greco, I'll aim this at you. A chap by the name of Peter Phillips, who's a distinguished professor emeritus at the University of Saskatchewan's school of public policy, wrote something in The Globe and Mail a few days ago. I don't know if you're familiar with that. I think it's a good place to look. I don't expect, actually, to have an answer to this. On the record, it's intelligence that gives us a spot to look at.
He said, “Let's start with productivity.” He mentioned two professors at McMaster University. They concluded, these two professors, that Canada's stagnation in productivity in the past 20 years is “almost entirely because of the oil industry.”
Where they came up with that, I don't know, but it's worth looking at. The article said that when they “netted out the oil components of the economy and looked at productivity in the rest of the economy, they found it rose at about the same rate as in the past and compared [favourably] with the [United States].” Again, it's something to look at.
One thing I would like your reflection on, Mr. Greco, is whether there should be some rules about rollover. You realize a capital gain, but you turn right around and you reinvest it. What kind of advice would you give to the government about how to construct those rules so that somebody who's making an honest effort to build a business in using the proceeds of their investments, etc., doesn't necessarily get swept up in this?
Senior Director, Manufacturing and Value Chains, Canadian Chamber of Commerce
I think one of the things that would just help with productivity.... If you look at Atlantic Canada, for example, they introduced an investment tax credit of 10% to help improve reinvesting in machinery, equipment, environmental performance and other avenues, to help out with what we're talking about, to address productivity.
I think looking at and having specific measures that make it easy for small businesses to invest in that would help, but also making sure that there are strict rules so that nobody gets swept into different challenges would be, I think, one thing.
Second, though, from my perspective, again, I think the simplest way is what I talked about in my remarks: to look at these reforms to the regulatory system and to look at the tax system. That would just go a long way to improving our productivity numbers.
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
Thank you, Mr. Chair. I do appreciate the opportunity to have a round of questioning, even though I have only been here for the last hour.
I would have to say that it's a bit ironic that today's study on regulatory modernization was put forward by the Liberals on this committee with a view to doing a few things, like reducing the unnecessary administrative burden on small and medium-sized businesses, simplifying regulatory processes, cutting red tape and examining regulations that may impede international competitiveness, yet here we are.
They have introduced yet another what I would call “vacuous” policy with their increase in capital gains, which is going to have a huge impact on the members you represent. I think I have heard that in the short time I have been here today. Put that together with the carbon tax, which is already hurting small and medium-sized businesses, and with the increases that are going to be contemplated all along the way.
I know, Mr. Greco, that you asked to return to this committee—that you have been here before, provided some testimony and asked if you could come back. You said that there were some things that you wanted to address.
If I'm covering ground that was already covered in the first hour, I don't want to do that, but I'm thinking that you probably talked a lot about the capital gains policy of the current government. Is there anything that is really pressing that you would like to share with us today, given that you asked to return?
Senior Director, Manufacturing and Value Chains, Canadian Chamber of Commerce
Also, just to be clear, I know that Mr. McCauley mentioned that he wanted me and others back in June, just given the fact that we didn't get into hardly....
One thing I really want to highlight, going back to regulatory reform, is what has been happening in British Columbia. What they did is look at having a minister of deregulation, and that kind of helps separate...to really put a focus on red tape. Then government agencies had to work on tracking and reporting regulatory activity against a baseline.
Furthermore, agencies were put on a regulatory diet whereby, in addition to looking at measurement and monitoring, they had to commit to reducing regulatory requirements by one-third. That was tied into agencies' having to demonstrate why regulations would be introduced in exchange for any new regulations. New regulations that were introduced held greater scrutiny to demonstrate, you know, how many regulations would be eliminated but also to focus on outcomes-based measures, evidence, and a risk-based approach focusing on outcomes. Reform was decentralized, so each agency was responsible for tracking, reporting and monitoring progress.
I mention this because we're looking at reforms to what the Treasury Board is doing. These are things that we have to keep in mind, especially with regard to consultation. Yes, “one and done” consultation has been talked about, but it's also looking at road maps and at that progress. If there aren't those proper work plans in place, then we don't have authentic consultation. It's going to be like we talked about it and then moved on.
I think we really don't want this to be a study where we just sit on a...and say, like, “We're done.” There needs to be this reform, and we have to move it forward. Otherwise, frankly, we're spinning our wheels.
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
Thank you very much.
I want to turn back to the Red Tape Reduction Act and the fact that at the last meeting we had around this, we had some witnesses around the table who weren't necessarily very familiar with some of the requirements in that act on the part of the government and the President of the Treasury Board to table an annual report on federal regulatory management initiatives and provide an update on what the government is doing.
Have you heard from many of your members on this issue—that they may not have a full understanding about what is required of this government when it comes to the act, and given your mandate in representing your members, is there any advice you would provide to us on that front?
Senior Director, Manufacturing and Value Chains, Canadian Chamber of Commerce
That's a great question.
Generally, I think there's a lot of education that needs to be done still. It goes back to explaining what different initiatives are in plain language.
Part of that, too, when you're explaining.... We talk about cost-benefit analysis all the time. Yes, it's based on the data available, in terms of regulatory analysis and what's available from StatCan. It's going into how this affects businesses. They have to deal with different things: compliance, cost of operation, cost of payroll and other technical requirements. That all has to be accounted for. Otherwise, if an initiative is put forward under the Red Tape Reduction Act, there's no accountability. It's not painting the whole picture.
It has to look at everything: economic, environmental and societal considerations. Otherwise, we're not looking at what's in the best interest, not only for businesses but also for Canadians.
