Industry Committee on June 21st, 2022

[The Chair, Liberal, Joël Lightbound]

I call this meeting to order.

Good afternoon, everyone.

Welcome to meeting number 29 and the final meeting of the session for the House of Commons Standing Committee on Industry and Technology.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Friday, April 8, 2022, the committee is meeting to study the competitiveness of small and medium-sized enterprises in Canada.

Today's meeting is taking place in a hybrid format, pursuant to the House order of November 25, 2021. Members and witnesses may attend in person or remotely using the Zoom application. As they are familiar with the health rules that are still in effect here, in Ottawa, those who are attending this meeting in person should conduct themselves accordingly.

Before the introductions, I want to thank the witnesses for their patience. Some speeches and voting had a slight impact on the House schedule. I thank them for remaining here with us.

Without further delay, I'll introduce our witnesses, whom we are honoured to have joining us today.

We will be hearing from Mr. Jean‑Guy Couillard, as an individual; Mr. Vincent Rousson, rector of the Université du Québec en Abitibi-Témiscamingue, also as an individual; Mr. David Macdonald, senior economist with the Canadian Centre for Policy Alternatives; Mr. Benjamin Dachis, associate vice-president, public affairs, with the C.D. Howe Institute; Mr. Mathieu Lavigne, director, public and economic affairs, with the Fédération des chambres de commerce du Québec; and Ms. Audrey Langlois, workforce and economic affairs adviser, also with the Fédération des chambres de commerce du Québec.

I thank you for being with us today.

Mr. Couillard, you have five minutes for your presentation. You have the floor.

[Jean-Guy Couillard, As an Individual]

Good afternoon.

My name is Jean‑Guy Couillard, and I've been retired from the Desjardins Group since 2001. I'm 78 years old. I returned to the labour market in May 2019 to work at a grocery store after seeing my doctor, who suggested that I take part in an activity that could improve my health.

I began suffering from aches and pains. I chose to return to the labour market to improve my health and help the co‑op in my community, which was short of staff. After just three weeks, my physical and mental health began to improve.

At the grocery store where I work, we have a serious staffing shortage. Since I'm retired, I was quickly asked to help recruit new employees from among the retirees I know. Since then, I've approached several retirees to ask them to return to work. Out of 100 contacts, only three agreed to work. Almost all the others, over 75% of them, refused to return to the labour market because they would pay too much income tax.

Personally, I've just filed my income tax returns and had to pay $2,500 to the two levels of government for the year that just ended. Most people my age would have to pay the same amount if they worked. I had to pay that amount on top of what was deducted from each pay.

During that time, several studies were conducted to find solutions to the staffing shortage. In my opinion, there's one solution that could be quickly effective: not collecting income tax on employment income earned by retirees who remain on or return to the labour market. In addition to addressing the staffing shortage, having retirees on the labour market would keep them healthy longer, saving governments money on health care. Indeed, those savings could be much more significant for the government than the tax revenues it could collect from the incomes of retirees.

According to La Presse, one day in hospital costs $1,369. A day in intensive care costs $3,776. Few retirees have remained on or returned to the labour market, and if nothing is done, some of those can be expected to leave the labour market, finding that they pay too much tax. Many people are expected to retire soon, which will increase the labour shortage. Retirees can be a solution: they have experience, they are punctual and they have a strong work ethic.

It's also important that people receiving the old age security pension and the guaranteed income supplement not be penalized. Nor should those who have retirement plans.

In companies, employees who are approaching retirement would stay on after retirement if there were no taxes to pay on their employment income. Time's of the essence, and the solution I'm proposing could be applied quickly and provide access to a skilled workforce. That's why I feel that such an initiative would need to start in 2022. My employer entirely supports my proposal, believing that it would be good for them and for other businesses in Canada.

In closing, I'd add that not collecting taxes on the employment income of people 65 or older would benefit everyone.

Thank you for taking the time to listen. I'm very grateful for having been given this time. My employer supports my proposal and has sent a letter indicating that.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Couillard, for your comments. We greatly appreciate it.

Mr. Rousson from the Université du Québec en Abitibi-Témiscamingue now has the floor.

[Dr. Vincent Rousson, Rector, Université du Québec en Abitibi-Témiscamingue, As an Individual]

Good afternoon everyone.

Thank you very much for this opportunity to address your committee this afternoon.

Abitibi-Témiscamingue is a region that has a serious labour shortage, particularly owing to a strong economy in the mining sector. At this time, there are over 4,300 job vacancies in the region, compared with 1,925 in 2019. The unemployment rate is at a historic low of 3.4%, two points below the national average.

In addition, the percentage of the working-age population continues to decline and is not expected to level off until 2030. In the next 10 years, we could lose close to 8,000 workers.

Given that shortage, employers often turn to non-resident fly-in fly-out workers. That practice could become widespread if nothing's done soon, which would limit economic development in the regions of Quebec. Since the labour shortage remains a prevalent national phenomenon, the logical solution is to turn to immigration or international students completing their studies.

Current Canadian and Quebec polices are inconsistent in terms of immigration and the needs of the regions, like Abitibi-Témiscamingue, francophone universities in Quebec and the labour needs of businesses here.

While Quebec universities, like those in the rest of Canada, had similar refusal rates in 2015 of about 30% for applications for study permits, the gap between our universities has continued to increase since then. Currently, 52% of applications for study permits for francophone universities are refused by Immigration, Refugees and Citizenship Canada, or IRCC, compared with 33% for universities elsewhere in Canada. That's a difference of almost 20%.

For example, the refusal rate for Tunisian students, the second-largest recruitment pool for our university, rose from 33% in 2016 to 50% in 2020.

Among all universities in Quebec, those in the Université du Québec network, which includes all universities in the regions, are penalized the most by refusals. Over the last three years, the refusal rate for applications for study permits by foreign students who would attend one of those institutions have often exceeded 60% and even 80% for some countries.

Refusal rates are much lower for anglophone universities. In 2019, McGill University had a refusal rate of only 9%, compared with 23% for Concordia University and 27% for Bishop's University.

In Abitibi-Témiscamingue, the situation is even worse for CEGEPs, where we see a refusal rate of 75%. In vocational education, the refusal rate is 95% for foreign students who are not from France.

We can also see a considerable difference between acceptance rates for students for the Certificat d'acceptation du Québec, or CAQ, and for study permits. For example, in 2019, a total of 12,182 CAQs were issued to Algerian students. Only 2,679 of those received a study permit.

Several factors determine whether a study permit is refused or accepted, but the financial capacity of students is the main reason for refusal cited by IRCC for our student population at the university. As well, over 50% of our students are granted bursaries that cover not only their tuition, but also their living expenses. Despite this, these students are still refused their study permit.

Immigration officers can also refuse an application, without any appeal, if they question the applicant's good faith. We feel that this practice is totally discriminatory, since the decision is based not on objective evidence, but on perceptions.

In addition to this, there's the new application processing system called Chinook, which was created without any legal oversight, according to documents filed with the Federal Court. The system lacks transparency, because it doesn't keep any written notes following decisions by immigration officers and doesn't require them to consider evidence submitted by the candidates applying for temporary residence.

In response to our questions, authorities told us that francophone candidates in general or African candidates in particular are not being refused, but rather that candidates from economically or politically unstable countries were being refused because of the problems that raises. However, permits are granted to foreign students attending an anglophone university, but are refused for students from the same country who are supposed to attend francophone universities in the regions.

Canada cannot and must not deprive itself of highly skilled people if they wish to stay in this country and be actively involved in its economic, social and cultural development once their education is complete.

The Université du Québec en Abitibi-Témiscamingue, or UQAT, is seeing a significant increase in the number of international students, like all universities in Canada. We are therefore important players in the success of the Government of Canada's international education strategy for 2019‑24.

We're also a real solution to the labour shortage in this country: we train highly skilled workers for businesses; our students offer an important workforce for service businesses during their time in university; our foreign students are integrated culturally and linguistically into their host community; our students help address the demographic decline in the regions; and our students are actively involved in Canada's economic development.

It's therefore essential that the Government of Canada, in seeking solutions to the labour shortage and economic development of all regions, include universities among its immigration tools. The process for issuing study permits needs to be streamlined and accelerated so foreign students can play a decisive role in this country's economic development.

Thank you very much for your attention.

I would be happy to answer your questions.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Rousson.

We will now hear from Mr. Macdonald, from the Canadian Centre for Policy Alternatives.

Mr. Macdonald, thank you very much for being with us. You have the floor.

[David Macdonald, Senior Economist, Canadian Centre for Policy Alternatives]

I'd like to thank the committee for the invitation to speak today on its study of small and medium-sized businesses.

The last two years have been a difficult time for small businesses in Canada. Our businesses across this country received unprecedented government support through the wage subsidy, rental subsidies and the Canada emergency business account—or CEBA—loans. Business supports, in fact, represented the largest government spending category during the pandemic, with worker supports coming in second and health care expenses coming in a distant third.

Now the problem for businesses isn’t applying for government supports but rather finding employees to help customers who are lined up out the door. It is important to point out, though, that there remains a very clear relationship between the wages offered for new jobs and the job vacancy rates. That is to say that a business offering higher wages for positions will have fewer of those positions remain open.

Furthermore, workers in hard-hit sectors like food and accommodation, who were laid off in the initial months of the pandemic, weren’t idle. Instead, they used CERB benefits to move into other sectors that remained open and needed workers. The net result is that when the economic reopening happened in earnest in the fall of 2021, those workers were no longer available to fill previous positions, because they were already employed elsewhere, likely for higher wages.

Expansion of the temporary foreign worker program has been the most recent federal government answer to high job vacancy rates. Specifically, the government allocated new funding to process more applications faster; workplaces can now have 20% of their workforce composed of temporary foreign workers, up from 10%; workers can be kept much longer, up to 270 days; and temporary foreign workers will be allowed in areas with unemployment rates that exceed 6%.

The danger of this expansion is that we will suppress workers' wages, which would otherwise have risen to attract new workers. Workers' wages have risen 3.9% in the past year, well behind inflation, which has stood at 6.8% over the same period. More temporary foreign workers will work to suppress those wage gains, particularly for low-wage workers.

For temporary foreign workers who come to Canada to work, the program as structured creates dangerous power imbalances between the employer and the employee, favouring the employer. The basic workers' rights that Canadians enjoy are either explicitly or effectively denied to temporary foreign workers. For example, the basic right to change a job in order to obtain better wages or better conditions is denied, and complaints about workplace treatment can easily be met with extradition. Keeping wages low by importing workers who have been stripped of basic workplace rights is inconsistent with the government’s strategy for an inclusive labour market.

For Canada, as a country that welcomes a diversity of immigrants, a better approach to obtaining new workers would be to accelerate the process of accepting new Canadians. These new Canadians could and should be drawn from the pool of temporary foreign workers who would prefer to live in Canada permanently. Without the rights suppression inherent in the temporary foreign worker program, new Canadians are freer to bargain for higher wages and better working conditions, and generally do.

There is no doubt that higher wages will render some low-margin employers incapable of competing in a postpandemic world. Higher business debt following the pandemic will further pressure some businesses as interest rates rise, but the reality is that business bankruptcy rates were far lower during the pandemic than they were prior to the pandemic, entirely due to federal supports.

A well-functioning economy is one that experiences the renewal of businesses, such that some close and new ones take their place. The closure of one business frees up resources in the form of space, workers and equipment for new businesses that may be more viable. This is a desirable and necessary feature of our economy.

For some businesses, there may not be a viable path forward, and for those businesses we need to accelerate and not delay bankruptcies to settle obligations and hopefully allow entrepreneurs to go on to start new businesses in the future. We should encourage an off-ramp, as it were, for businesses that are no longer viable as wages rise.

Thank you. I look forward to your questions.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Macdonald.

I now give the floor to Mr. Dachis, from the C.D. Howe Institute.

[Benjamin Dachis, Associate Vice-President, Public Affairs, C.D. Howe Institute]

Thank you very much for the invitation to speak to this committee today.

Your study contains many issues the C.D. Howe Institute has covered over recent years. There are many topics I can cover in the Q and A, such as tangible steps to solve interprovincial trade and support Canadian supply chains, what can be done on regulatory requirements, as well as labour shortages and inflationary pressure.

It's no surprise that these limitations on the productive capacity of the Canadian economy are all tied together, so your study linking these themes and how they affect SMEs in particular will be really important, and I look forward to that.

However, I want to focus my remarks today on an element of your study on the Competition Act that is particularly on the federal agenda. The last time I was here, I discussed the issues with proposed amendments to the Competition Act via the budget implementation act or BIA. The BIA appears to be rushing towards passage, so my comments on that a month ago stand for your study.

Now, though, I want to look forward. The government has committed to bringing in more Competition Act reforms, so here's what I suggest it do and your study can and should advocate for with respect to how competition reform can help small business.

First of all, with respect to process, we need a proper panel and publicly discussed paper, unlike the reforms to the Competition Act and the BIA, which just landed on people at the last second. We need to fix that process.

Moving on to substance, here are a few ideas that you should be thinking about.

As authors David Rosner and Julie Rosenthal have argued in a C.D. Howe memo, we need to further develop case law to improve enforcement of the Competition Act against abuse of dominance. This underdevelopment stems from two restrictions in the act. First is that the act gives the commissioner of competition a near monopoly on enforcing action against monopolies. The BIA expands private access as a way of fixing this irony.

However, much further action is going to be needed in regard to a few things to make this change work, in particular for small businesses. What this committee should be recommending is to remove the competition tribunal's exclusive jurisdiction to hear cases on abuse of dominance.

There are many reasons that I can briefly list here or that I can get to, if we have time in the Q and A, if you are interested. One is to speed up the courts, which will especially improve access for small firms and make competition law more inclusive of other voices.

The BIA also gave a new power, such that, if a claimant business successfully establishes the elements of abuse of dominance, the competition tribunal can order the firm abusing its competition to cease its unlawful behaviour but also to pay an administrative money penalty, or AMP.

As I mentioned in the last meeting, the new AMP amount, as created by the BIA, is potentially unconstitutional. On top of that, in a very perverse set-up, the AMP would go to the government and not the business that successfully demonstrated that it had suffered competitive injury. There is no provision for the government to transfer any of that AMP to the damaged business as compensation.

What's important is that, especially for small businesses, this may not be sufficient incentive to commence proceedings, and without the ability to obtain damages, a victimized firm is left less than whole.

In a memo to the competition law community released today by the C.D. Howe Institute, author Peter Glossop argues that we need to adopt the practice of damages going right to plaintiffs. We need to have a balance between including safeguards to protect small firms so they can afford the litigation they need to take against dominant competitors, and preventing vexatious litigation. Australia has a model in section 82 of its Competition and Consumer Act, which I can elaborate on if that would be of interest.

Finally, notably absent from reform discussions so far, as the former head of the Competition Bureau George Addy has argued in a C.D. Howe Institute memo, is any mention of a major unaddressed legislative gap—the absence of oversight, accountability and transparency with respect to the use of resources provided to the commissioner of competition.

Police forces across Canada are subject to some form of civilian oversight, such as by non-serving members of police commissions, who review budgetary decisions and priorities. There is no equivalent body for the Competition Bureau.

It's time for such a body, with more input from Parliament on the bureau's priorities but, importantly, not on specific enforcement decisions. Again, I can go into detail if there's interest.

I could go much further into Competition Act reforms that are needed and that this committee could be looking at, such as middle-ground suggestions on amendments to the efficiencies defence, why Canada should consider adopting something akin to the U.K.'s Digital Regulation Cooperation Forum as its approach to digital economy regulation, and what the right purpose of competition policy is.

I'll stop there. I look forward to questions, if we have time.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

I now give the floor to Mr. Lavigne, from the Fédération des chambres de commerce du Québec.

[Mathieu Lavigne, Director, Public and Economic Affairs, Fédération des chambres de commerce du Québec]

Mr. Chair, members of the committee, good afternoon.

My name is Mathieu Lavigne, and I am the director of public and economic affairs with the Fédération des chambres de commerce du Québec, or FCCQ. I'm here today with my colleague, Ms. Audrey Langlois, adviser, workforce and economic affairs.

Thank you for the opportunity to appear today by video conference from Montreal.

The FCCQ, which some of you know well, is an organization that comprises 125 chambers of commerce and 1,200 member businesses, for a total of over 50,000 businesses. Our members operate in all sectors of the economy in every region of Quebec. As the largest network of business people and businesses in Quebec, the FCCQ is also a provincial chamber of commerce and defends the interests of its members with respect to public policy.

We thank you for inviting us to take part in this study on the labour shortage and the productivity of our small and medium-sized enterprises, or SMEs. It's a topic that is obviously at the heart of our work at the FCCQ.

I'll quickly share a few observations and, above all, some recommendations on the various elements included in the study, but rest assured that we can discuss other topics in response to your questions, if time permits.

First and foremost, I'll begin with the labour shortage. It's clearly the main concern in the economic sector in Quebec. For example, in March, there were 259,170 job vacancies in Quebec, double the number there were at the end of 2019, before the pandemic.

There are many causes for the shortage, hence the importance of deploying a wide range of measures. I'd like to draw your attention to some of those, beginning with attracting foreign skilled workers.

Our members are very concerned about the slow processing of applications of would‑be immigrants. While the processing time for a skilled worker is 32 months in Quebec, the wait time for a similar program in another province in Canada will soon be set at six months. Accelerating the processing of immigration applications and the issuing of work permits should be a top priority for the federal government. I want to take this opportunity to second what the rector of the Université du Québec en Abitibi-Témiscamingue said earlier. We're on the same page.

Obviously, immigration is not the only answer to the labour shortage. There's also a need to better train current and future workers on an ongoing basis, and encourage the unemployed to quickly return to work and experienced workers to remain on the labour market longer if they wish to do so.

That's why we are proposing that the federal government create a voluntary lifelong learning savings plan, based somewhat on the registered education savings plan model. We also suggest that the government undertake a real overall review of the employment insurance system to refocus it on its primary mission, temporary income support with support measures to promote a quick return to work. Finally, we recommend that the government increase the income threshold at which guaranteed income supplement benefits are reduced.

The regulatory and administrative tax burden is another major obstacle to growth for our SMEs. Here again, the federal government can and must act, beginning by bringing former Bill C‑208 into force quickly. The bill promotes the transfer of business ownership within a family. The current tax rules make things difficult for SME owners and hinder the transfer of family businesses to the next generation. The bill must come into effect.

Another source of obstacles for business owners is the duplication of reporting requirements under similar federal and Quebec laws. We've been asking the federal government for several years to undertake discussions with the Quebec government to come to an agreement regarding a single income tax return; we recommend the pragmatic and innovative approach of focusing the process solely on the interests of taxpayers.

We then suggest that the federal government learn from its Quebec counterparts, who have brought forward an omnibus bill on regulatory relief measures for the second year in a row. There's no doubt that, every year, some of the many federal laws and regulations could be eliminated, and others, streamlined, to make life easier for business owners.

In closing, I thank you for taking a serious look at the productivity and labour challenges that our SMEs face.

We would be glad to answer your questions.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Lavigne.

We're ready to begin the rounds of questions.

Before proceeding, I simply want to advise my members that our meeting must end at 5:30 p.m. if we want to have 30 minutes to look at the report on quantum computing. I'll need to reduce the time allotted for questions. There will be only one full round and, probably, part of a second round.

Mr. Deltell, you have the floor for six minutes.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Thank you very much, Mr. Chair.

Good afternoon, honourable members.

Good afternoon to those taking part in this meeting. Your comments are very interesting.

I'll begin with Mr. Lavigne from the Fédération des chambres de commerce du Québec.

Mr. Lavigne, I'd like to address several points with you. First, I want to point out that Bill C‑208 was passed and is ready to come into effect. It just hasn't yet.

In your opinion, what would be the benefits of the legislation coming into effect immediately?

[Mathieu Lavigne]

Indeed, it shouldn't be referred to anymore as Bill C‑208, since it's now an act.

In our opinion, it's a matter of fairness for business owners who want to transfer their business to family members. This is a very important issue because there are a lot of owners in Quebec who are nearing the end of their careers. There's a pool of young people, often within the same family, who are ready to take over. However, the current tax rules penalize people in this situation, both those transferring the business and those taking over.

It's essential to relax the tax rules immediately. We're pleased that the government at least mentioned it in its last budget, but we'd have liked for it to move much faster on this issue and make that relief a reality.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

I don't need to tell you that we also want that.

Earlier, you mentioned the situation of foreign workers. Their applications take six months to process if the workers are going outside Quebec, and 32 months if they're coming to Quebec. Quebec has a say over immigration and wants to have more authority in that area. We'll probably have a political debate in the next three months in Quebec on that issue.

I'd like to hear your comments on the fact that, for some 40 years, Quebec has worked with the two approaches, federal and provincial. They are combined, but it clearly takes a lot of time.

In your opinion, why does it take longer to process files in Quebec? Is the reason that Quebec is working with the approaches of two governments in its efforts to move things forward?

Conversely, is the reason that Quebec is much more thorough in choosing immigrants so they can properly integrate, which delays the review and analysis of their cases?

[Audrey Langlois, Advisor, Workforce and Economic Affairs, Fédération des chambres de commerce du Québec]

Good afternoon, Mr. Deltell, If I may, I'll speak on that.

My name's Audrey Langlois and I'm a workforce and economic affairs adviser with the Fédération des chambres de commerce du Québec.

To answer your question, I would say there's definitely shared jurisdiction between the federal and Quebec governments. That has become a sensitive and difficult issue that has led to a lot of debate. I'd even say that it's a societal debate. When things become challenging, it's important to discuss the situation and find solutions.

At this time, it's hard to say why exactly processing times are longer in Quebec. Some would say that it is due to the fact that the files are still paper-based. Others would say it has to do with the immigration thresholds, which are limited in Quebec. Regardless, there's certainly a problem.

The federal government currently has an important role, ensuring the same processing times as in the rest of Canada. Some businesses are feeling the effects of those processing times. For 90% of them, immigration is needed if they want to ensure their productivity and not limit their production activities. We're therefore asking that the federal government reduce those processing times and bring them in line with those in the rest of Canada, and eliminate any delays.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Processing times are nonetheless five times longer in Quebec.

[Audrey Langlois]

That's right.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

I understand that some files may require more attention than others, but we're currently talking about processing times being five times longer in Quebec. If it was a month longer, that might be fine, but processing times that are five times longer make no sense.

The risk is that people will immigrate to Ontario and then come to Quebec, because it's a lot faster to do it that way.

[Audrey Langlois]

Unfortunately, it's a reality that we're already seeing. A lot of businesses have told us about it, particularly in Abitibi-Témsicamingue and the Outaouais, where workers have been able to obtain residency much faster in Ontario or elsewhere in Canada before finally coming to Quebec.

It's important to understood that the situation is awful—difficult for everyone. Businesses are paying an economic price as a result. They're the big losers, as are immigrants who want to live in Quebec. They're at a disadvantage compared with other people outside Canada.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Ms. Langlois, you referred to experienced workers, who should remain on the labour market longer. That ties in with a point made by our first speaker, Mr. Couillard, whom I'm going to turn to now.

First, Mr. Couillard, I thank you very much for sharing your personal experience. At 78 years old, you're an inspiration to all of us. It's true that you're part of a generation that worked very hard, and we understand that you would like to continue working.

You mentioned the possibility of retirees who return to the labour market not paying income tax.

I'd like you to explain your line of thought. In your opinion, should they pay no taxes or only low taxes?

[The Chair, Liberal, Joël Lightbound]

Mr. Couillard seems to be having a technical issue.

We'll come back to you, Mr. Couillard, once the technical issue is resolved.

I now give the floor to Ms. Lapointe.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

I'm sharing my time today with my fellow member, Mr. Erskine-Smith.

Mr. Macdonald, you recently published a report entitled “Truth bomb: Corporate sector winning the economic recovery lottery”. You state that the corporate profit-to-GDP ratio is the highest of any recovery in the past 50 years in Canada. Can you tell us what this means for small and medium enterprises trying to compete with large corporations?

[David Macdonald]

The study looked at all the recessions and recoveries that occurred in Canada at any point in the last 50 years, of which there were six. After each one, it gauged how much benefit workers versus corporate profits had attained following that recession and recovery. In some cases workers were up, and in some cases corporations were up.

What was quite unique about this recovery was how much more corporate profits were up—three times more than in any previous recovery in Canada. It's unprecedented in Canadian history to see this kind of concentration of the recovery of GDP going to the corporate profit side. Workers are actually slightly worse off than they were in 2019, in large part because wages haven't kept pace with rising inflation.

The implications for small and medium-sized businesses are unclear. The way the GDP accounts work is that corporate profits are for larger or medium-sized enterprises. Smaller enterprises, where it's more difficult to determine what is profit and what is revenue, are put into a category called “mixed income”. That's not represented in this particular study.

I'm not sure what it says about small businesses. It might tell us something about medium-sized businesses, but it's mostly about large businesses.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

The floor is yours, Mr. Erskine-Smith.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks very much.

I want to stay with you, Mr. Macdonald. You are contradicting Service Canada, and I didn't get a clear answer from IRCC with respect to the TFW program and the impact of the TFW program in suppressing low-income wage growth. It seems obvious, though, that it would suppress wage growth, so I appreciate your answer.

Do you have a comparison in any way between the low-income wage growth we've seen in the United States versus the low-income wage growth we've seen recently in Canada, and the impact of inflation specifically? Are we seeing much lower low-income wage growth in the Canadian context, and certainly being outpaced, and to a significant degree, by inflation?