Industry Committee on Oct. 26th, 2016

[The Chair, Liberal, Dan Ruimy]

I call the meeting to order.

Welcome, everybody, to meeting 30 of the Standing Committee on Industry, Science and Technology.

Today on our last day of witnesses for the manufacturing study, we have, from the Department of Industry, Paul Halucha, associate deputy minister of strategic policy sector, and Gerard Peets, director general, manufacturing and life sciences branch, industry sector.

From the Department of National Defence we have Marc Fortin, assistant deputy minister of science and technology, and we have senior officials from Public Services and Procurement Canada.

Before we move forward, I understand, Mr. Halucha, that you have to leave by 4:30. Is it just you, or does Gerard Peets have to leave too?

[Dr. Marc Fortin, Assistant Deputy Minister, Science and Technology, Department of National Defence]

I do as well.

[The Chair, Liberal, Dan Ruimy]

I know, Mr. Fortin; you have to leave at 4:30 too.

Mr. Peets, are you able to stay afterwards?

[Gerard Peets, Director General, Manufacturing and Life Sciences Branch, Industry Sector, Department of Industry]

I am able to stay, yes.

[The Chair, Liberal, Dan Ruimy]

Okay, good.

Just so you know, for questions, we will lose those two folks at 4:30.

I see a hand up. Go ahead, Mr. Nuttall.

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

Thank you, Mr. Chair.

It's unfortunate that two of our witnesses will have to leave at 4:30. Perhaps we can get this done very quickly.

As you know, in a previous meeting, Mr. Chair, I asked a question regarding carbon taxes and the potential effects on manufacturing, as we're dealing with this study. I know we have two wonderful parliamentary secretaries here who were also at that meeting. I'm not sure if they have any information for us since then that they can provide. If they don't, then I have a motion, but if we can have the information brought forward to us, then I won't need a motion.

[The Chair, Liberal, Dan Ruimy]

What are you asking our parliamentary secretaries? I'm not sure.

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

What I asked for before was data related to the effects of carbon taxation, specifically once it is ramped up to $50 a tonne on manufacturing in Canada. I'm assuming there is nothing.

[The Chair, Liberal, Dan Ruimy]

Go ahead, Mr. Beech.

[Terry Beech, Liberal, Burnaby North—Seymour, BC]

Thank you for your question from last week.

Greg Fergus and I discussed it. We are still discussing it, so we don't have anything for you today. If that means there is a motion, then I guess there is a motion.

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

Okay, so in light of that, and this being our final meeting on the manufacturing study in which we're working with witnesses, I'll be moving a motion regarding this matter.

Quite frankly, Mr. Chair, I don't care how it's interpreted, if you want it to be done separately—

[The Chair, Liberal, Dan Ruimy]

No, go ahead; move your motion.

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

—or as part of this current study.

As a little bit of background on this subject, I actually can't think of an item that's going to cause more questions. If you were a manufacturer and you were thinking about what's coming down the line in the future, the number one question that you would have would be about the effects of a carbon tax by tonnage. What are the effects going to be on my business? What's my carbon footprint? How am I going to manage those new costs to my business?

I obviously can't speak for individual manufacturers across the country, but what I can say is that we can peg what the global cost of this tax will be in 2022 across the country. We can also peg what the difference is between the regimes that exist right now in differing regions of the country.

[The Chair, Liberal, Dan Ruimy]

Mr. Nuttall, can I just interrupt for one second?

I know you have a motion. I just want you to be careful, because I know that you were discussing a lot of this in camera before. I just want you to be careful that—

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

And now I'm discussing it in public.

[The Chair, Liberal, Dan Ruimy]

If you have a motion, then I'm just saying—

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

This is my preamble to the motion. I can either move the motion and then talk to it, or just give my preamble, move it, and then let us move on and vote on it.

I'm guessing I know where the vote will go, but I still think I should be able to put my two cents forward.

[The Chair, Liberal, Dan Ruimy]

Go ahead.

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

We can peg what the cost is going to be in 2022, what the cost is today, and what regimes will be coming into place in jurisdictions like Ontario, where there is a $20-per-tonne regime that will start in 2019.

According to StatsCan, the carbon footprint for manufacturing and export-related industries is roughly 76.5 megatonnes, which translates into 76,500,000 tonnes of carbon. When we do the multiplier effect, we come up with roughly $3.825 billion that's going to be levied on the manufacturing industry by 2022.

Of the jobs that exist within manufacturing in Canada, 740,000 are in Ontario and 450,000 are in Quebec, which means that roughly 75%—a little higher, actually—of these jobs are in Ontario and Quebec. There is a $3.8-billion tax that's going to be levied on them, of which 75% will have to be assumed within these two provinces.

Not just as a member of Parliament who sits on the industry committee for our country, but as a member of Parliament who represents people in Ontario—in a manufacturing town that has had a lot of pain over the years, starting in the 1990s and working on through—I think it falls upon us, if we can't answer the question, at least to start the conversation as to what the effects are going to be down the road.

This is our last meeting to discuss this subject in terms of manufacturing, and I think we have a huge hole in our report. If we are not willing to bring in witnesses to discuss this specific item, I don't know how we can comment on it in a report.

We can give opinions. We can say, “We know there's this issue, but we didn't bother calling anyone to ask them what they thought.” We know that the CFIB has conducted a study, which will be out in the next two or three weeks. Why we wouldn't have them come in and bring their data to us, I'm not sure. We know the Canadian Manufacturers & Exporters association is conducting a study. That we wouldn't have them bring in their data to the committee towards this report makes no sense to me.

One of the things I am looking forward to after the testimony from the witnesses is finding out what data they have that's specifically related to this subject. If the government is going to move in a certain direction on taxation, that will encourage behaviours in one way or another. I know they must have data to provide to us as to what the effects of that will be. Otherwise, why bring in a tax in the beginning that you think is going to move behaviours in a certain direction, if you don't have the data to show that this is what is going to happen?

With that, Mr. Chair, do you want me to pass this around?

[The Chair, Liberal, Dan Ruimy]

The clerk will take care of it.

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

I just have a quick question for the clerk. Do I need to read this into the record?

I move:

That pursuant to Standing Order 108(2), the Committee conduct a pre-budget study on the effects that the recently-announced Liberal Government carbon tax would have on the manufacturing sector; that this study be comprised of no less than four meetings to be held at the Committee's earliest convenience; that departmental officials from Innovation, Science, and Economic Development Canada be in attendance for at least one meeting; that the Committee report its findings and recommendations to the Minister of Innovation, Science, and Economic Development Canada no later than February 15, 2017.

[The Chair, Liberal, Dan Ruimy]

As I read this, this is actually—

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

I'm listening.

[The Chair, Liberal, Dan Ruimy]

You're asking for a separate study.

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

I don't care which way we do it. This motion is for a separate study. I tried to approach it as a part of this study previously, but I don't want to get into that, because I know it was not public.