Industry Committee on Dec. 9th, 2024

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

It's yes or no. Will it be above or below $60 billion?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

—is strong and sustainable—

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

It's a simple question. Why won't you answer whether or not it will be above or below $60 billion?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

—and continues to be the strongest in the G7.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Did you have your officials leak that on purpose to control the expectations?

[The Chair, Liberal, Joël Lightbound]

Thank you, MP Perkins. Your time is up.

I'll now turn it over to MP Arya for six minutes.

[Chandra Arya, Liberal, Nepean, ON]

Thanks, Minister, for coming here.

I would like to place on the record my appreciation for the tight postpandemic economic management. Canadians faced a lot of pain due to high global inflation. That led to a record hike in interest rates. I'm glad that the government held tight and worked in tandem with the actions taken by the Bank of Canada.

After two long, painful years, we are seeing a better position in terms of inflation coming back to 2%. I think that, in two days, we'll see a fifth interest rate cut, hopefully to 3.25%. The consumer confidence index is increasing. It's a good thing.

Minister Freeland, I would like to ask a question on credit guidance to banks. Postpandemic, things are changing. Globalization as we knew it is dead. International free trade is no more, with friendshoring, nearshoring and onshoring. We have to focus on self-reliance. Our share of manufacturing is still low. We need to increase that.

The banks are increasingly lending mostly to the real estate market, both residential and commercial real estate. I think they may be lending about 50% to the real estate market, combined. Most of this funding to the real estate market is refinancing existing stock, not creating new capital stock. That, unfortunately, is not happening. Their net income was around $50 billion to $60 billion in the last fiscal year. In fact, their profits are much higher than our deficit.

The thing is that, going forward, capital resource is not infinite. I think the government has to conserve its capital resources in case another pandemic hits or if there are major changes to the global scenario. We need to make sure that the banks lend to new capital stock, whether it's investing in new manufacturing companies, new real estate developments, the clean economy or infrastructure. The banks are not doing that.

Is it not time for us to go back to what Japan did after the Second World War or what South Korea was doing until the 1990s? They directed banks to invest in the sectors that aligned with their economic objectives. I'm not saying that the banks should not make profit; they should continue to make profit. I'm not asking to jack up the tax rates for the banks. No, let them make a profit. I'm talking about lending to the economic sectors that are required for Canada today and tomorrow.

Minister, do you agree that it's time for us to look at credit guidance?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

There are a lot of ideas in there, Mr. Arya. Thank you for your question. Thank you for your hard work. Thank you for all the contributions you make and for the many conversations we've had.

I want to comment on two aspects of what you said—three aspects, actually.

First, you are absolutely right that Canada's soft landing from the economic challenges of the COVID recession, and the inflation and high interest rates that followed, is the single most important fact of today. That has been a hard time for Canadians. It is really good news that we're experiencing a soft landing. Our government has worked to accomplish that.

Second, I really agree with you that the focus, now that inflation has been in the target range for the past 10 months, must be on growth. Growth does require investment. Growth does require capital. I think the focus, for all of us, needs to be on how we can get that capital and on how we can get that investment so that we can have more growth and more jobs.

Then finally, third, I think you're also very right to be pointing out, as my colleague the industry minister did in his comments, that the world has changed. The sort of “end of history” period that Francis Fukuyama described is over. We are living in a time of more protectionism, of more mercantilism, and of more economic nationalism, and our policies do need to recognize that this is the world Canada is in.

I think the industry minister wants to add a few things.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Thank you for your comments. What I think you are talking about is a framework of generational opportunities. You talk about the industrial base, and I liked that you mentioned Japan and South Korea. I would add Germany. If you look at countries around the world that, over a long period of history, have succeeded in creating jobs, creating prosperity and being strategic in their supply chains, you will see Korea, Japan and Germany. This is based on a very strong manufacturing base.

You've seen that, thanks to the policies we put in place with the Minister of Finance, we have been attracting a record level of investments. In 2023, Canada was number three in the world for attracting investment. After the United States and Brazil, you had Canada. If you would just add on a per capita basis, we would be first in the world.

Let me give you an example. The largest single investment of Dow Chemical, in its more than a hundred years of history, was in Fort Saskatchewan, Alberta. That is the largest investment in its history. If you look at the largest investment of Honda in 75 years of history, it was $15 billion, and it chose Canada. Look at BHP and the Jansen project. BHP has more than a hundred years of history. It's the largest mining company in the world. If you talk to the CEO, phase one of the Jansen potash project in Saskatchewan was the largest investment in their history, more than a hundred years of history. Phase two was the second largest. It's close to $20 billion that you've seen the largest mining company invest in Canada.

That's why I would echo your words. Stability, predictability and the rule of law are in high demand and in short supply in the world. I think Canada stands out, and that's why you've seen a record level of investments. That's why we should celebrate Canada and our workers.

[The Chair, Liberal, Joël Lightbound]

Thank you, Minister.

Thank you, Mr. Arya.

Mr. Savard-Tremblay, you have the floor.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you, Mr. Chair.

Ms. Freeland, Mr. Champagne, thank you for your testimony.

Although, according to the motion adopted by the committee, today's meeting is specifically on Supplementary Estimates (B), let me take advantage of your presence to highlight certain points and ask specific questions that are of interest to the committee but not necessarily related to the budget's theme.

Mr. Champagne, for three months now, the committee has set aside its study on the famous Bill C‑27so that you can propose a solution to the fact that some people oppose the creation of a new tribunal. A number of jobs, particularly in the cultural and creative industries, depend in part on this bill.

When do you think you can propose an off-ramp so that we can get back to studying Bill C‑27? We're getting a little impatient here. We are keen on moving forward with the study.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Savard‑Tremblay, your comments are music to my ears and those of everyone watching us this evening. Honestly, if there's one person who wants things to move forward, it's me. I think that all Quebecers and Canadians want it too.

Bill C‑27is important in two ways. First, it's important from a privacy perspective, because we want to give people more control when it comes to transferring and protecting their personal data.

Second, Quebec, and more specifically Montreal, is a leader in artificial intelligence. Think of Yoshua Bengio or the Canadian Artificial Intelligence Safety Institute, which has just been established. We're taking into account the suggestions made by our colleagues, whether it be you or other colleagues, to find a way forward.

I think the work of this committee is important. If we want to continue to be a leader on the international stage when it comes to responsible AI, we also have a duty to make progress at the national level. European Commissioner Vestager commented on the framework we were proposing, saying that it was the ideal Canadian version o AI legislation to add Canada's voice to the debate around responsible AI.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

I agree with that. However, when a government is in a minority situation—and it was chosen through a democratic process—it has to deal with the opposition parties. They are opposed to the bill on one specific point.

You say you want to find a way forward, but when will you have something to propose? Do you have any idea?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I have more than an idea; after all, it's Christmastime. I even recently spoke with your leader to find a solution. You talked about a specific point that some are opposed to, which is the establishment of a new tribunal. We've said that we're willing to lok at this to move Bill C‑27 forward It's going to take a commitment from all parties.

If our Conservative and NDP friends supported us, we could show Canadians that a minority Parliament can still work in the interest of Canadians. That's certainly what we want to do in the AI space.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

So you still don't know when you'll be able to propose something to us.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

We will do that ery soon. We've had discussions with all parties.

Mr. Savard‑Tremblay, I know you're a great negotiator. If you could take your Conservative colleagues by the hand before Christmas and lead them to the way forward, I think we'd get there faster.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

If they agree to come and have a beer with me, we can discuss a lot of things.

We were recently contacted by representatives of the Coalition québécoise des fournisseurs d'accès Internet. They shared their concerns with us about certain provisions of the Copyright Ac. They're concerned about statutory damages, including the interpretation of statutory damages.

In Canada, Internet service providers aren't responsible for online copyright infringement committed by their subscribers. However, providers have a number of obligations when they receive a complaint from a copyright owner alleging copyright infringement by a subscriber. They include providing notice to the alleged infringer and confirming to the copyright owner whether or not notice can be provided.

If the provider does not meet the obligations, the copyright owner can seek damages, and the damages can be fairly significant. It can vary from $5,000 to $10,000. However, a number of copyright owners hav taken advantage f the ambiguity in the act—we know this—and believe that they are entitled to damages each time a subscriber infringes on a copyright. That's a completely different thing, after all. It's not about seeking damages for each instance of copyright infringement, regardless of the number of times it takes place. Otherwise, providers could be liable to pay several hundred million dollars in damages.

We know that the department involve is discussing this with your office. What's your position? When can we expect an answer? As you can see, here I am once again being a great negotiator.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Thank you—

[The Chair, Liberal, Joël Lightbound]

Please give a brief answer.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Okay.

Mr. Savard‑Tremblay, thank you for the question.

We launched consultations because we believe it's important to ensure that copyright is respected in the digital realm and to ensure adherence to the Patent Act. These new technologies offer new ways to communicate, but we mustn't forget the fundamental principles of rights, such as copyright and the Patent Act, which must remain in effect.

We're holding consultations, and we're very aware of the concerns around this. When we've completed the consultations, I will be happy to come back to the committee and present our position. We need to hear from all parties first. This is a complex and very important issue.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

Mr. Bachrach, the floor is yours.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

Welcome, ministers. It's good to have you at committee.

Minister Freeland, I'd like to start with a question about the part of the world that I represent. Since you mentioned Haida Gwaii when I walked in the room, I know you're familiar with their unique predicament. Haida Gwaii is separated from the north coast by a 100-kilometre, seven-hour ferry ride when the weather's good. Sometimes the ferry is docked for several days in bad weather. There are all kinds of reasons why people need to get off Haida Gwaii—for appointments, shopping and those sorts of things—and all of their goods rely on that ferry link, so the cost of living on Haida Gwaii is extraordinarily expensive due to their remoteness.

This is an issue that, for many years, has been advocated for. Thirty years ago, a Liberal government cut their access to the northern residents tax deduction in half, and they've been fighting ever since to have it fully restored. It seems to me that, during a cost of living crisis, when the heightened cost of living from remoteness is accentuated by what's happening in the larger economy, it would be the perfect time to make things right and to restore their access to that important tax deduction.

Is that something your government is willing to do?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Thank you very much, Mr. Bachrach, for your hard work in advocating for your constituents and for Haida Gwaii, which I think is one of the most precious parts of our amazing country.

As you know, this is an issue that you and I have discussed in the past. I've appreciated those conversations. I have nothing to announce today, but let me just say that you are a very strong and effective advocate for your community, and I'm glad that we have been talking about it.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Minister.

Minister Champagne, I'll turn to you about something that relates to your department's focus and mandate—and it's about in the same part of the world as my first question was. Your department funded an important undersea fibre optic link between Prince Rupert and Haida Gwaii, and between Prince Rupert and the rest of the north coast, all the way down to Vancouver Island. The federal government invested $23 million in that project. It's been installed, and it's in the process of being commissioned and connected to communities. Some communities have already been connected—Haida Gwaii was connected, for instance—and yet, since it was installed, there have been six instances in which the cable was severed. There's no redundant link, and so, when it's severed, all of the communities and businesses on Haida Gwaii, everyone who relies on that fibre optic link that your government helped create, are cut off. They have to use a backup connection with much lower speed and less bandwidth, and it's totally insufficient. Right now, that fibre optic cable is not functional.

The company that installed it, CityWest—which is a company based in Prince Rupert—has been trying to get your attention. I approached you at the airport about it. I've been working at trying to get Mr. Turnbull to look into it as well. I sat down with Minister Hutchings, who provided an update from the department. The update from the department was, “The cable is broken.”

We desperately need to get two things: We need to get the cable armoured—we need money from your department to armour the cable—and we need a redundant link, so that when one of the cables is severed, the Internet connection—the connectivity to this remote part of Canada—isn't also severed. Will you commit today to funding the project that they've applied for, which is to put in that armoured cable so that it's not severed in the future?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Thank you, Mr. Bachrach.

I'll commit to always being nice to you when I see you at the airport and to making sure that I meet the CEO of the company—that I can commit to. To be honest, you've been describing a situation that requires attention. I don't have all the details, as you can probably appreciate, about what kind of remedial action can be taken, but I'm pleased to commit...and to say to everyone watching how effective you are as an advocate for your community—as we should all be.

I would be pleased, obviously, to meet the CEO of the company. After the meeting, I'll share my number with you. Doing it in public could create a lot of phone calls tonight. However, I'll share it with you privately, and then you can give it to him. I'd be happy to have him give me a call. We will look into that, with the officials, to look at what is possible under the circumstances. I appreciate your raising that at committee.