Industry Committee on Feb. 21st, 2019

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

What specifically does the U.S. do that is more progressive than in Canada?

[Michael MacGillivray]

The USDA is the overarching body that sets the overarching framework. The states then can only do a certain amount. It's not like in Canada where we have in Ontario OMAFRA doing certain things.... When we start to look at how many agencies get involved in an agrifood process, it's significant because we have the health units, we have OMAFRA and we have CFIA, whereas in the U.S. a lot of the time, it's just the USDA as the overarching....

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

So having one regulatory layer is the best in your opinion.

[Michael MacGillivray]

It simplifies it and it allows for cross-province and interstate trade.

[The Chair, Liberal, Dan Ruimy]

Thank you.

We're going to move to Mr. Sheehan.

You have five minutes.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you very much, Mr. Chair. Thank you to all our presenters. It's been very informative. We're undertaking a very important study and, obviously, is something that needs to be reviewed continually.

I've been in small business development for many years and this is always a top priority for people when they want to start businesses or scale up, so, again, your thoughts on established regulations, and perhaps new regulations, are important.

I'm going to ask my question of Tim McEwan.

You had indicated a concern with community benefits legislation that's been introduced recently. I think it was a private member's bill from the now Minister of Immigration, in which the Minister of Infrastructure and Communities can dictate.... Because we've made investments in infrastructure historically all across the country and a lot of shovels are in the ground, the community can recommend—not dictate—to the minister that local trades be used, apprentices must be onsite, or it could be that green space be developed. There are a number of things.

Tim, could you please describe some of your trepidation with the regulation?

[Tim McEwan]

Yes. The concern that we have is related to what's happened in British Columbia. The current government has put in place—they call them community benefits agreements, but they're really project-labour agreement frameworks, where certain public projects will be designated as Building Trades Unions only. Essentially, you are procuring the contract for Building Trades Unions and excluding non-union and non-affiliated union contractors.

Recently, the government in British Columbia indicated that it was going to pursue the SkyTrain extension to Arbutus and prospectively to UBC, using that procurement model. Our point to you here today is that if there are federal dollars going into, for example, the SkyTrain extension, then the procurement should be done in a fair and open way that doesn't exclude non-union and non-affiliated union contractors. This is a deep concern of our membership and, as I said earlier, we represent the non-union and non-affiliated union segment in British Columbia, which is 85% of the industry.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Drawing our attention to the two different pieces, there's a federal community benefit process and a provincial one. The provincial ones may look different in each of the provinces, so would you suggest that there should be more alignment between the federal and provincial benefit?

[Tim McEwan]

My point is simply that the federal dollars shouldn't be going to provincial projects that the Government of British Columbia designates under their union-only procurement framework. The project should be tendered in a manner that keeps it open to non-union and non-affiliated union and Building Trades Unions contractors.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

That would make for interesting discussions between the feds and the provinces. They get together and talk about infrastructure, so that's duly noted for the report. I appreciate that.

Regarding other recent federal proposals, one that came out of the Senate—and again I'm going back to you, Tim—was on the prompt payment legislation. Do you have thoughts on the prompt payment legislation and what it's proposing to do, as it relates to projects the contractors are working on for federal infrastructure and the subcontractors and what not?

[Tim McEwan]

Yes, we're supportive of that. We signed a letter with something in the order of 20 different trade associations that made that pitch, so we're highly supportive of that. To the greatest extent possible, that kind of legislation should be harmonized across all jurisdictions as well.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Why do you support it, Tim? Why is this regulation important, if you will?

[Tim McEwan]

For small businesses, it's simply so that they get payment in a timely fashion and that there should not be undue delays in receiving payment. For some of our small contractors, getting timely payment is the difference between making it and breaking it.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Cash flow. I get that.

Michael, you talked about abattoirs. I'm from Sault Ste. Marie and in the area is Northern Quality Meats. Could you explain the difference again between the provincial regulation and the federal regulation and why it's so important to have more federal regulation of abattoirs?

[The Chair, Liberal, Dan Ruimy]

Could you respond very briefly, please?

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Sorry.

[Michael MacGillivray]

I think it's not one or the other, but maybe creating one across Canada and adopting one instead of having provincial regulations. Right now, if I process in an Ontario, abattoir, I can't sell my product in Quebec. If we had an overarching regulation, like the USDA example, that would allow me to be able to sell my product anywhere in Canada.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

I appreciate it. Thank you.

[The Chair, Liberal, Dan Ruimy]

Now, we're back to Mr. Nuttall. You have five minutes.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

My question goes back to Mr. Moody. I'm not sure if it aligns with the other sectors here that are making their presentations and testimony known.

One of the things that I've found incredibly frustrating at the federal level—I'm not sure if you've dealt with any of these to date—is when we look at something like the Canadian Bank Act. From a governmental perspective, the regulations are created to provide a fair system for customers of said banks to operate in. At the same time—and this question is open to anybody who'd like to answer it—these types of regulations actually prevent small businesses from being created and operating in the space. I'll give you an example to substantiate that.

If an online start-up in the sharing economy wants to do some sort of business-to-business lending or to use an RRSP to lend to somebody else who's looking for a mortgage, these types of regulations actually prevent small business start-ups—specifically tech start-ups, which we all know are the future—from even getting going.

Have you seen any of these types of regulations outside of the Bank Act that actually end up protecting existing industries against start-up competition, or are they unique to the Bank Act?

[Kim Moody]

I can start.

I'm not familiar with the Canadian Bank Act, but with respect to the Income Tax Act, there are very specific rules under section 146 and in the companion provisions thereof that require the definition of what's called a “qualified investment” to be met before RRSP funds can be deployed into, say, start-ups, as in your example.

As I understand it, the policy intent of those rules is to make sure that those investments are rather safe, so as to provide retirement funds for Canadians. I understand that a good chunk of funds are there in order to provide leverage for start-ups—I get that—but to me it's very difficult under the existing legislation to allow for that in many cases. To me, it's a policy question whether or not it should be done, and I can see both sides of that coin. Start-ups are more risky. Therefore, there's the question of whether allowing that complements the risk aversion policy that's probably consistent in the act right now versus allowing funds to be deployed for the future.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

On that specific point, it's interesting that in 2008 I could have invested in a plethora of banks on the stock exchange through my RRSP, but I couldn't after 2008. In 2011-12, I could no longer really do a self-directed RRSP into my own mortgage without jumping through humongous hurdles and qualifications.

I hear what you're saying in terms of risk aversion policies. At the same time, it looks like these policies are actually in place to protect the business that the banks have rather than to protect the consumer or to protect start-up businesses that come down the road and want to take advantage of said instruments in the financing.

[Kim Moody]

I can't really add much to that, but I do hear your point.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Now we're going to move to Ms. Ludwig.

You have five minutes.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you all for you testimony this morning.

I'm going to be splitting my time with my colleague, so I have about two and a half minutes. I'm going to focus on the organic industry with you, Mr. MacGillivray.

Do CFIA accredited organic certifiers collect a royalty?