Industry Committee on Dec. 9th, 2009

[The Chair, Conservative, Michael Chong]

Thank you very much, Mr. Van Kesteren.

Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Just for the record, I want to note that I hope the business community will help put pressure on the Uribe government in Colombia. They have a long record of corruption. It's a narco-state where citizens are assassinated. I think there are many of us who will continue to oppose that until it is resolved and we see significant improvement. Hopefully we can see some leadership there, because that would help everyone.

From your perspective, how is the HST going to affect your members?

[Shirley-Ann George]

The HST is one of the issues that, just like Parliament, is also difficult for broad groups like the Canadian Chamber of Commerce. But we have been on record for many years as supporting a harmonized sales tax. It is very clear that when you look at the economics overall, it is in the best interest of the country as a whole. If you look at individual sectors and sub-sectors, then it becomes much more challenging. There are groups that are lining up in the provinces looking for some kind of exemption or special status.

There will be a tax shift. We expect to see higher prices overall. If you look at the C.D. Howe and TD Bank reports, we expect to see overall price increases of about 0.4%. If you work that out, for every $100 spent it will cost an extra 40¢. But the incremental benefit will far outweigh that. They are projecting as many as 561,000 new jobs over the next 10 years. That's 561,000 more people who will be getting haircuts.

[Brian Masse, NDP, Windsor West, ON]

What specific jobs will there be and in what industries?

[Shirley-Ann George]

I don't know that I have—

[Brian Masse, NDP, Windsor West, ON]

I've heard these wild numbers, but I've yet to see even what sector they're in.

[Shirley-Ann George]

I'd be happy to talk to my chief economist to get you the breakdown on that. It wasn't a question I was expecting today.

[Brian Masse, NDP, Windsor West, ON]

That's fair. I'd appreciate that.

I've heard that many times in some reports and from some politicians, but nobody has ever said....

What about the areas it's going to negatively affect, like insurance and mutual funds, for example? How much revenue do you think the government is going to collect from those newly taxed products that previously had no taxes applied to them?

[Michael Landry]

We will have to get back to you on those numbers, Mr. Masse. I think there's some recognition, and some groups have certainly been more vocal about some of the more product-specific impacts. We will undertake to get back to you on that.

I think there's some hope that over time, as impacts are understood, some accommodation—I don't know if that's quite the right word—will be made to ensure they're at least minimal.

[Brian Masse, NDP, Windsor West, ON]

I guess the really tough part is that no real study was done to look at the affected areas, like the tourism sector and the financial sector, to see what could be done to ameliorate it or phase in a series of things.

Have you ever been consulted by the federal government or provincial government on this?

[Shirley-Ann George]

The Canadian Chamber and our chambers across the country--through a vote--have been supporters of the harmonized tax. There have been studies that looked at which sectors will be affected positively, which sectors will be affected negatively, and what the overall impact will be. I've written on it, but if you're interested I'd be happy to share with you a document we prepared that explains it at perhaps a higher level than what you're looking at. It actually names which areas we expect a little higher prices.

I think it's important—and I'm going to come back to this again—to note that when you get $36 billion of additional capital investment and you get 561,000 additional jobs, that has far greater benefit to the economy than the marginal increases. We see from the experience in eastern Canada that the majority of the savings that businesses receive are passed on to the consumers.

[Brian Masse, NDP, Windsor West, ON]

When the GST was brought in by our good friend Brian Mulroney, the food and service industry sector really got hit hard, and just recovered to the level of that. They actually estimated around a $7-billion loss. That's been studied as well.

That's part of the concern I have. I look at the tourism sector and other members that you represent—small businesses—and they're going to take it on the chin. A high dollar from a petro-dollar policy, U.S. passports, visitation—our actual numbers on visitation are down, and Americans represent three-quarters of all the customers we have coming over for tourism. On top of this increased cost, they lost the GST rebate that we had available. So my concern is that not enough planning in supports is being done for those businesses that need some adjustment.

I'll leave it at that, Mr. Chair. I'm being called to the House.

Thank you.

[The Chair, Conservative, Michael Chong]

Thank you very much, Mr. Masse.

We'll end the testimony from our witnesses here.

Go ahead, Madame George.

[Shirley-Ann George]

Could I just make one additional point? We asked for the potential for the committee to look at updating your previous report. If that's not possible, I would like to stress how important it would be for the committee to re-adopt the report so we can ensure that the government comes forward with a response. That would be very helpful to the industry.

[The Chair, Conservative, Michael Chong]

Okay, we'll take that under advisement. Thank you for that recommendation.

I want to thank our three witnesses for appearing. I appreciate your understanding because of these unscheduled votes. It is nearing the end of the session, so these things do happen.

We're going to suspend just for 30 seconds so we can go in camera for the discussion of three items of committee business. We'll ask that the witnesses and other non-essential staff leave the room so we can have that in camera discussion.

[Proceedings continue in camera]