Industry Committee on Feb. 5th, 2019

[Laura Jones]

Yes, absolutely. Again, I think if you used a measure like British Columbia or Manitoba has established, they're different, but they both do the same thing. The biggest message I can leave you with respect to measurement is to make it comprehensive and keep it simple. Don't overcomplicate it. What's happened in the past is that measurements have been dismissed by saying that it's too expensive and complicated to do it across the system, so we won't measure anything. To me, that's making the perfect the enemy of the good.

[Brian Masse, NDP, Windsor West, ON]

Do I have any time left?

[The Chair, Liberal, Dan Ruimy]

You have two minutes.

[Brian Masse, NDP, Windsor West, ON]

Okay, that's great.

I think that's where we get to the two-for-one strategy and stuff like that. It's just let's get at her and see, because you get to the point where it's too complicated and you get nothing done.

The Canadian chief economists made a presentation complaining about the fact there were government programs, but there was no longer government staff to do those programs and they were always talking about reducing the public service. Have you looked at what you're asking for here in your recommendations, and how that would be supported in the current public service, because there's work to be done here? When I used to work for the Association For Persons With Physical Disabilities, I could show that investing in my program lowered government costs by reducing the number of people on ODSP and other types of disability support, the Canada pension plan disability benefit, and so forth.

At any rate, do you feel that if there were an injection into that we could reduce costs? I'll leave that to you to finish.

[Laura Jones]

I feel that the benefits you would get from this would far outweigh the costs. When you look at what's happened at the provincial level, again, by not making the perfect the enemy of the good, if a province like British Columbia or Manitoba can do what we would say is a very good job at it, certainly we feel the federal government could do it too. They didn't create huge armies of people, huge teams to execute this.

[Ryan Greer]

The federal government has tremendous resources. Many departments and agencies have incredibly large staff focused on new regulatory initiatives, whether it was the minister or the government that has declared some priority that they're now working on. But taking some of those staff, taking a step back and saying before they regulate in this new area, if it isn't some pressing health or environmental emergency, why don't they use that staff to take account of what we have in stock, what's working, what isn't working, what needs to be modernized? We think there's a tremendous opportunity to spend some time, as you said, looking back at what exists before branching out and continually adding new regulations on top of it.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Chair.

[The Chair, Liberal, Dan Ruimy]

We're going to move on to Mr. Baylis.

You have seven minutes.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Could I ask you to go back to your slide 7, please?

On the questions about regulations, in this I see two types of issues. One that I think Mr. Greer talked about is the challenge that we're in a rapidly changing environment, so regulations constantly have to be updated. If we have a self-driving car, well, we just don't have the regulations for that. So we can complain if the government makes new regulations, but by gosh, it has to do it because those just don't exist.

When I look at this—and I want to have your comments on this—I tease out two things. On the number one issue, which is payroll taxes, there is no innovation there. Payroll taxes 10 years ago, five years ago or today are exactly the same.

If we say that we're in a rapidly changing environment, that's not impacting the concerns of the top ones, which are all CRA—payroll taxes, GST, income tax and any record of employment. There is no innovation going on there. But then if I drop down to sectors, I notice the first sector is environment, which has tremendous innovation going on, and then transport and agriculture.

I'd like to hear your thoughts. As I see this, there are two issues about regulations. One is just the burden, which is not changing—it's static—and one is a very dynamic environment.

How do you see that, Mr. Greer, and then we'll move on?

[Ryan Greer]

First, I think departments and regulators generally don't do well with outcome- or risk-based regulation. They like prescriptive, command and control. They'll prescribe how somebody will meet the outcome, and I think payroll and CRA-type taxes are an exact example of that, especially when it comes to money issues.

Where some departments that are trying to keep up with evolving technology or markets are having some success, it's my understanding that they need to accept more risk-based regulations that actually just focus on the highest areas of potential non-compliance.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

That's where you have an innovative environment—something is new, something is changing—and you have to balance risk with regulation.

[Ryan Greer]

Exactly, and I would just add the need for more outcome-based regulation as well. Set a standard, but let industry figure out a way to get there.

There are examples of this. Fuel efficiency would be one where there has been success, and different manufacturers will take different routes to get there. However, those tend to be the exceptions rather than the rule, which is very prescriptive requirements for most regulators, which prescribe a very clear path.

We have some of our members in the oil and gas sector who talk about the long path to implementing a new piece of equipment in one of their operations. Even if it's more efficient, more environmentally friendly and safer, it's such a long path to get there that often they'll delay the investment or it won't happen—

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Because it's got to go through so much regulation—

[Ryan Greer]

There is so much regulation. As soon as they implement it, then it's the race for second place. Every other service will follow them immediately afterwards.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

So that's the battle with the regulator versus balancing risk and reward.

Now, if I come to the question of, say, payroll taxes—QPP, CPP, EI—there is no risk reward, is there? Just fill in the form. It's just a lot of forms.

Can we talk a little bit? These are your slides. We can sit here and say we have to balance risk and reward, but we don't have to balance any risk or reward on the top four. It's just purely filling in the forms. Have you looked, or is there any argument—we're halfway in there—of using technology just to simplify CRA's interaction, or are there other things there?

[Corinne Pohlmann]

Yes. I mean, that's part of it, but I can tell you that one of the most widely cheered changes that CRA made was changing thresholds on GST and payroll taxes, meaning that you don't have to file as often. Depending on how big your payroll is—

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

You mean the $30,000 going to the—

[Corinne Pohlmann]

You pay GST annually between $30,000 and $50,000.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

[Inaudible—Editor] file quarterly or annually or monthly, and all of that.

[Corinne Pohlmann]

Correct, and by changing those thresholds, that meant a whole bunch of people didn't have to pay as often during a year, so that's reduced—

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Tell me the thresholds that were changed.

[Corinne Pohlmann]

GST was changed in about 2007-2008. I don't think it's been changed since. Payroll tax was changed around 2013 or 2014, somewhere in there. But they hadn't been changed for decades before that. That counted more—

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

That is the rate of filing that's necessary, right?

[Corinne Pohlmann]

Correct, so it's about reducing the burden, so you don't have to file as often.

With the record of employment, they still create eight million, I believe. The number is around eight million a year, of which maybe one million are used. So every year, every time you separate from an employee, you have to fill out these forms that are still on paper. These are all things that I think—yes, you're right—you have to do if you run a business. But there are ways we can do them much more efficiently than we can today, and it's just adding to that burden because this is just federal, and then there is provincial and municipal—

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Let's keep that in mind when we're looking at these two issues. As Mr. Greer has pointed out, there are a number where the government is forced to come in and look for regulations to balance risk and innovation, and then there is just a phenomenal burden that every month they have to fill this in. Can they make it quarterly or can they make it monthly, depending on how much money they owe the government?