Industry Committee on Nov. 22nd, 2006

[Jonathan Barry]

Personally, I haven't. No.

[Colin Carrie, Conservative, Oshawa, ON]

There is a new program. Actually 15 municipalities are going to be taking advantage of it over the next few months. The federal government is launching that to help streamline the permit process. Maybe that's something we could talk a little bit more about for Toronto.

You also mentioned the concept of the provincial value-added tax. Could you elaborate on what exactly you mean? You touched on that, but none of our other witnesses actually mentioned that specifically, and I'd like to know a little more about that idea.

[Jonathan Barry]

I'll preface it by saying I'm certainly no expert on taxation. Notionally, in New Brunswick, for example, or in the whole of Atlantic Canada, when they went to the HST, it gave an advantage on the input price, so while you're paying for retail sales tax as an input into your production processes, you harmonize the taxes around a value-added tax, and it gives you some advantage on the price or the cost of your goods going in, such that when it comes out at the other end you're more advantaged in the output price that you're able to offer to the market.

[David Black, Policy Advisor, Toronto Board of Trade]

Basically you pay a retail sales tax on your business inputs to the provincial level, but the GST allows an input tax credit. Only the end-user will pay the tax. Having a PST embedded in your production raises the cost of production. It raises the cost of your goods, because you are paying that tax throughout the value change. I would be willing to bet that Celestica pays PST on some of the products it uses in the production of its goods, its modules. It doesn't get a tax credit based on that, but it also pays GST. It gets an input tax credit on the GST, based on the value that's added.

[Colin Carrie, Conservative, Oshawa, ON]

You also mentioned that you don't think our tax cuts are going far enough or fast enough. Could you elaborate a little bit more on that too? Why is there such urgency?

[Jonathan Barry]

Certainly what I see--and I have anecdotes, but we have a broad enough base across the manufacturing sector in Ontario that is real--is that people are making business decisions now to shut operations. The movement at the governmental level, even to the point of showing that there is a focus and a real addressable willingness for us as a nation and as a government, as a sector, to look at and address the competitiveness issue, sends the right directional statement to business leaders. Business leaders look at that. It's a factor when we make a decision as to whether we stay or go. Even a directional change is beneficial.

[Colin Carrie, Conservative, Oshawa, ON]

The direction we're going in is the right direction. It's just not fast enough. Okay.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Carrie.

We'll go to Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair, and thanks to the delegation for coming here tonight.

I'm going to follow that up, Mr. Barry. What specific number would be the breaking point at which you would decide to stay rather than go? In your statement you've addressed your requirements. You've asked for more money for municipalities, more money for infrastructure, a whole series of things that are going to cost money. Do we not reduce the debt? Do we cut other services? In the United States, actually, corporations in the auto sector are putting up hundreds of millions of dollars in public health care money to the government because they see that as an incentive to track and maintain their employment there, so what number is that? What we hear from people back and forth is what we decide to cut and not to cut.

[Jonathan Barry]

It's a fair question. I wish I had the answer, although the respective members probably have a lot better balance on it than I do when we address it in our specific microcosm. I don't have a panacea or an answer for you.

I can tell you that what we look at as the crisis, if you want to call it that, is that people are closing and shutting down, and we're losing jobs. Those decisions are being made, and if we can do something to show directionally the right impetus to these people, that will impact us when we make business decisions. I see that from my colleagues or from the people we work with in the industry, so I know you're addressing me with a fair question. I don't have a good answer for you, unfortunately.

[Brian Masse, NDP, Windsor West, ON]

I don't think anybody really does. It's strategic in terms of where I think we ought to go to support, because other countries are doing that.

Maybe I can ask Mr. McLean a question. Boy, I wish your pressure balancing valve had been available when I was in residence in university; it would have saved a lot of grief, not only for me but for other people.

You talked about infrastructure. One thing that's happening in the Windsor-Detroit corridor.... As well, the Province of Ontario has made a request today for gateway funds based upon what's happening out in the Vancouver region. We're talking about public-private partnerships. What worries me is that, say, if on a 400-series highway or the Windsor-Detroit border we introduce toll roads or additional costs for all our traffic that goes through this region, that'll be different from, for example, Fort Erie and Buffalo, Niagara Falls, Sarnia, where the costs are much cheaper because they're publicly owned and operated.... The Ambassador Bridge has been making a significant profit in my region for a long time, with the investment now going back into the region. It's about 17% to 20% higher per average car, and we don't even really know the figures for transport trucks.

With that, when you talk about an infrastructure, is it something you want to be the lowest cost for the actual service delivery for all of our goods and services? You mentioned rail as well. Is it worthwhile investing in this infrastructure to lower the cost of shipping goods and services to the United States, given how many border problems there are?

[Bill McLean]

Yes, I believe we have to lower the cost to get goods across the country, whether it be east-west, or even north-south with the rail, coming in on ports, as we do, with a lot of our material. We go from port to rail and port to truck. The costs and delays to get across the Ontario region is real in our business. We can measure it with deliveries into the U.S., how long it takes to get across the roads or across the border, and that's the cost of business we're paying now.

I believe we need to invest in the infrastructure to remove that burden of cost off the transportation industry. This will flow back to the manufacturing sector and reduce the cost to move their goods. So investment in transportation infrastructure, I think, is critical for the long-term success of manufacturing in Canada.

[Brian Masse, NDP, Windsor West, ON]

Mr. Crête actually brought up a good point today--it was announced a while ago--about the bioterrorism act enacted unilaterally by the United States. It is going to add another service charge to trucks, regular passenger cars, and air traffic travellers who will be going across to the United States and will be starting very soon. I think something our government has to look at is in terms of defraying that cost, this non-tariff barrier being added under the guise of national security simply because a bunch of peaches went over five years ago and had some type of problem. Tomatoes and everything else--they may see these now as threats.

Perhaps I can quickly move the rest of my time to Mr. Hyatt. I had an opportunity to actually ask some of the automakers, the larger ones, about your situation. I want to make sure it's clear for the record that it is my understanding that General Motors is actually complying and providing the information you're seeking. Is that correct?

[Paul Hyatt]

That is correct.

[Brian Masse, NDP, Windsor West, ON]

And there's no other organization that's providing the same data. Is that correct?

[Paul Hyatt]

That is correct.

[Brian Masse, NDP, Windsor West, ON]

Your story is pretty remarkable. There certainly is some information coming forth on that soon. I've done some research on it.

To Mr. McLean—

[Paul Hyatt]

If I can add to that, I've handed out--and you'll get that later--some information notes somewhat covering some of the problems that each manufacturer and each repairer has received over the last two months, where they can't go any further. That's also covered in there. It'll give you some good background information.

[Brian Masse, NDP, Windsor West, ON]

Mr. McLean, you had a comment?

[Bill McLean]

Yes, a piece of personal input on this situation, having a vehicle with those sensors and having recently replaced the tires and having an issue with one of the sensors where the tire repair shop could buy the sensor--it set me back $80, but that's okay--but they couldn't reset the system in the car. It had to go to a dealership to get reset. That was a huge inconvenience to a customer.

[Brian Masse, NDP, Windsor West, ON]

I want to acknowledge this, Mr. Chair.

Mr. Sloan, I enjoyed your presentation. All the questions I had have been answered. Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you.

Mr. McTeague.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

I do want to give my colleagues a chance, but I want to ask one more question of the Toronto Board of Trade. It seems that you're in competition with this 416 and 905, and I have a riding that straddles both, so I'm in a damned if you do, damned if you don't situation.

This is not about manufacturing, but it does deal with the question of land use. The province has gone ahead with a green belt around Toronto that, in effect, has made land prices a lot more expensive. We've heard from witnesses who've talked about the fact that prices are extremely high here. Does the board have an opinion on that?

[David Black]

The board did respond to the Ministry of Public Infrastructure Renewal's discussion paper on the Greater Golden Horseshoe, and I'd be happy to provide you with a copy of it.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Mr. Shipley now.