Industry Committee on Dec. 7th, 2009

[Christopher Jones]

No. In fairness, though, some of this does, despite your earlier comment, lie at the feet of the governments in B.C. and Ontario, to some extent, in terms of deciding which sectors are going to be grandfathered or exempted.

[Brian Masse, NDP, Windsor West, ON]

Yes. That's correct.

[Christopher Jones]

I know there is a lot of frustration that in the wake of the termination of Tourism BC, you suddenly see a few months later the unilateral imposition of this HST. The industry out there is pretty animated. We're just expressing some of that frustration here.

[Brian Masse, NDP, Windsor West, ON]

And you are correct, it is the exemptions. The issue is how much fiscal capacity those provinces will have. There already have been winners and losers picked.

How much time do I have, Mr. Chair?

[The Vice-Chair, Liberal, Anthony Rota]

You have about 30 seconds.

[Brian Masse, NDP, Windsor West, ON]

All right. I can use 30 more seconds for railing on the HST.

[Voices]

Oh, oh!

[The Vice-Chair, Liberal, Anthony Rota]

We've already heard your railing.

[Brian Masse, NDP, Windsor West, ON]

On a serious note, I do want to put something on the public record about the ADS, because it's important. This committee, led by Dan McTeague and including Mr. Van Kesteren, went to Beijing, to China, to push this issue. It was a good initiative, but we do need to have a full-on strategy.

You're right about the amount of planes and cargo capacity and so forth. People think there will be thousands of people running over here right away; it's not the case.

[Anthony Pollard]

It's not a panacea.

[Brian Masse, NDP, Windsor West, ON]

Yes. We have to work at it.

[The Vice-Chair, Liberal, Anthony Rota]

Very good.

We will continue with the second round, beginning with Monsieur Garneau.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Thank you, Mr. Chair.

I too am very glad about the approved destination status for China. I think perhaps it might have happened a few years ago if circumstances had been a little bit different.

I'd like to ask a question concerning EI. The government, as you know, will be increasing premiums for EI starting in 2011. As was mentioned, this is a labour-intensive industry. I believe Ms. Reynolds said one million people, and I think Ms. McKenzie said 660,000 people. Have you looked at the impact on your industry of this payroll tax starting in 2011? Or is it too early for you to be looking at that?

[Joyce Reynolds]

We're already concerned. The economic and fiscal projections in September seem to indicate that premiums on payrolls are going to go up 21¢ per $100 every year from 2011 to 2015. The impact of that will be devastating for a labour-intensive industry like food service. It's extremely frustrating when you consider the over-contributions of $57 billion to a rainy-day fund. We were one of the groups that were pleased to see EI in a separate fund, so that the tap was turned off for over-contributions by employees or employers. But now we're in a situation in which the new financing board lacks the funds necessary to keep premiums at a level that won't hurt job creation and economic growth.

We would like to see the federal government divert some dollars back to the board, so that there isn't a need to raise EI premiums. We would like to see a yearly basic exemption that would give relief to lower-income workers as well as labour-intensive businesses. That would be our recommendation.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Mr. Pollard, do you have any comment?

[Anthony Pollard]

In the hotel business, labour is our largest expense after debt servicing. The continued increases spell trouble for us, especially when you have something funded at $57 billion. To continue increasing that doesn't make sense to us.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Mr. Pollard, you mentioned something on HST that I didn't realize—HST has been in place in a number of provinces for a number of years. Can you explain whether there were exemptions in the restaurant or hotel business? Did they have to adjust to the payment that we're talking about? Did Ontario and B.C. put in exemptions? If so, what was the experience in those provinces?

[Anthony Pollard]

I'm a gentleman. Go ahead, Joyce.

[Joyce Reynolds]

In the three westernmost provinces—Saskatchewan, Alberta, and B.C.—there is no tax on restaurant food. There's food tax fairness. In Atlantic Canada, when the HST was brought in, there was already tax on restaurant meals, so there wasn't the sticker shock that consumers will experience now. But the overall rate of the tax diminished.

That didn't mean there wasn't a lot of concern. Our members in British Columbia are extremely concerned about what the sticker shock will do—it will drive them to those tax-free alternatives. Some of those tax-free meals are produced offshore, yet the same products that are produced by Canadian labour in B.C. businesses will be taxed. A 12% difference is very significant, and consumer behaviour will be influenced by it.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Thank you.

[The Vice-Chair, Liberal, Anthony Rota]

Thank you, Mr. Garneau.

We'll move on to Mr. Lake.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Thank you, Mr. Chair.

And thanks to the guests for coming.

I want to use the first part of my time to clarify some comments made by some of the members across the way.

First of all, the government doesn't set EI rates. We changed that a couple of years ago. We put in place an independent financing board after--as one of the witnesses noted--the Liberals took $54 billion of EI money and spent it on other things. So we put that process in place, and it was widely lauded by witnesses who came before the human resources committee at the time. Of course we're always looking for ways to improve on things, so we welcome your input on that.

The second thing I have to clarify is a previous comment about the Mexican visa situation. Of course it would be quite ridiculous to pre-announce or consult on the fact that you're going to impose a visa restriction to deal with an illegitimate refugee claimant issue. As one of the witnesses mentioned, that would lead the way to mass numbers of illegitimate refugee claimants rushing our borders to beat the deadline before the visa was imposed.

It was the previous Liberal government's long-term inability or unwillingness to deal with the issue of bogus refugee claimants--

[The Vice-Chair, Liberal, Anthony Rota]

I'll ask you to stick to the facts and lay down on the editorial. We're very interested in what you're saying.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

I am getting to where I'm going.

[A voice]

Did you do the same thing for them?