Natural Resources Committee on March 5th, 2013

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Allen.

We go now to Ms. Liu, followed by Mr. Calkins.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Thanks, Mr. Chair.

Thank you to our witnesses.

I'll be questioning in English. I can see you reaching for your earpieces.

I have questions for Mr. Dickie.

Thanks for your presentation. It was very complete. I see that you actually did a costing of your propositions that show total government revenues will rise due to the reform, and not fall. I found that very interesting.

I was doing some reading and you cite the U.S. as being a model. I know that in the U.S. there are many low-income housing projects that actually include energy efficient measures. I was reading about a project in the south Bronx. There are some boiler-room houses with a microturbine system that actually reduces greenhouse gases. I know there are projects like this in cities like Boston and Chicago.

I am wondering if you've heard of any best practices in Canada, or if you think these kinds of projects could be recreated north of the border for low-income individuals and households.

[John Dickie]

There are some similar projects in social housing in Canada. However, there are very few of them in for-profit housing, simply because the economics do not work. They're not far off from working, but they do not work. From that point of view, as I explained, the competitive position of businesses in our sector is that they have to look at the bottom line. If it doesn't work, then they won't do it. Whereas within social housing, there are political decisions made, not just economic ones. In some cases the boards of directors are willing to go forward knowing that according to the metrics this is going to cost them money but they want to do it to be green. It's the same thing with the governments which provide the subsidies for these units. They will sometimes make that political decision to do what does not compute from an economic point of view.

Within the private sector, there are a few people who are very keen to be green and advertise to their tenants that they're green and so on and so forth. They might take a similar approach, but it's relatively uncommon. If you do that across your whole portfolio, you may end up going broke, and that doesn't help you very much at all.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Have you looked at the percentage of GHG emissions caused by housing in Canada?

[John Dickie]

I don't know it as a percentage; I do know it's certainly not trivial. With this proposal, which is a limited proposal, we used the metrics put forward by the Toronto atmospheric fund, which assisted in getting the coalition going. According to that, the savings would be 85,000 tonnes of the measure of greenhouse gas. That is the equivalent of 145, more than 12%, of Toronto's high-rise apartment towers not emitting any greenhouse gas. I know it's countrywide, as opposed to Toronto, but it's a significant amount of greenhouse gas that would be saved.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

That's a significant number. It's very impressive.

Do you think Canada should have a national housing strategy?

[John Dickie]

Oh, I surely wasn't prepared for that question at this committee.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

It's a big question.

Do you think it would help implement your recommendations into policy?

[John Dickie]

I don't believe that a national housing strategy is needed in order to do useful things for housing.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

No, but would it help?

[John Dickie]

I don't have an opinion on whether or not it would help.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Thank you.

I have some questions prepared for Mr. Young as well.

Thank you for appearing before committee. I know that you've appeared before many other committees, including the Standing Senate Committee on Agriculture and Forestry in 2009. In your presentation, your organization asked the federal government to use “research, policy coordination initiatives, science and technology and worker adjustment programs” to fulfill its responsibilities towards first nations.

Since then—it's been a few years—what kind of response have you had from the federal government concerning recommendations specifically contained within this submission to the Standing Senate Committee on Agriculture and Forestry?

[Bradley Young]

Off the top of my head, in terms of a specific response, I'm not sure if we've had a specific response, but I know that in terms of a few forestry-geared programs delivered through Aboriginal Affairs and Northern Development and also Natural Resources Canada and the Canadian Forest Service.... I'm talking in particular about the AFI program, the aboriginal forestry initiative program. Aboriginal Affairs moves a certain amount of funding over to NRCan and they do the forestry thing.

There have been program dollars that we've accessed to look at that complex mix that you bring about and to pull out the best strategy. The best strategy that we've managed to locate is around this idea that for first nations business organizations, first nations in the forest, the communities are ready for innovation.

Because our scale is a little bit different from the FPAC membership, it means that we're being forced to associate and to organize ourselves in a similar but dissimilar and, I think, complementary fashion. I think that's where I would like to push to suggest that this government and also Parliament take a look at, for example, NAFA's funding amount. We have a core of about $244,000 and change.

Take a look. I'm not saying that we're in competition with FPAC or FPInnovations. Their core budget is over $20 million, $30 million, or $40 million, depending on the year. How are we supposed to innovate? How are we supposed to democratize and use the technology on that scale, get it into our mills, and really get and keep first nations in the forest sector moving and driving that investment and job creation cycle?

I'm not saying this in competition, Catherine. I know that your budget—

[Catherine Cobden]

My budget is nowhere near that—

[Bradley Young]

I know it goes up and down, but relatively speaking we can say that your budget is not $245,000.

[Catherine Cobden]

Right. You can. That's fair.

[Bradley Young]

Let's be a little fair here in this. Let's hear that there's some responsible players that want to work with the Government of Canada and all the leadership across Canada and build the aboriginal forest sector. That's how we begin to answer that question. I think it has to be done through the support of free enterprise, of entrepreneurship, and of growing first nations business in Canada.

[The Chair, Conservative, Leon Benoit]

Thank you.

Thank you, Ms. Liu.

We go to Mr. Calkins. We'll close off the questioning of witnesses with Mr. Calkins, and then we'll suspend and go in camera.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thank you, Chair. I've only got one question with about six or seven parts, so let me get to it. I'll ask all my questions up front and hopefully there'll be enough time.

Mr. Dickie, I really appreciated your testimony. I like that you highlighted the fact that your industry group as a whole is not on the cutting or bleeding edge of technological implementation simply because of the nature of the business. I would like you to explain to the committee what specific recommendation you have for the government to take into consideration in the tax treatment, moving from mid-efficiency to mid-efficiency, which is what you said your industry is doing for the most part, and also from mid-efficiency to high-efficiency, so we can get higher efficiency technology into the buildings of your member representation, so that we can recognize those savings. I think you did talk about the tax treatment on that.

Mr. Young, you talked a lot about Meadow Lake and you talked about hockey players. I just want to mention that I did see a sign honouring Ron Duguay the last time I was in Goodsoil. I just want to make sure we understand the generational differences between you and me.

I would like you to engage the committee a little more on employment retention for folks. I represent the four bands in Hobbema and I know employment retention, especially working off reserve, is an issue for employers in my area who want to engage and hire aboriginal people. I want to talk about engagement of the young people who are involved. You mentioned something about having the capital to be able to expand and grow business. The difference between on-reserve and off-reserve is that the rest of us have equity in property and ownership, which is something most people on first nations reserves don't have the opportunity to have. We had some changes in Bill C-45 that may allow that for certain bands who wish to pursue that. I would like any comments you might have on that.

Then if I have any time, I'll get to Ms. Cobden afterwards.

[John Dickie]

With respect to the tax treatment we're looking for, it's for high-efficiency boilers under certain conditions; not an open door, but to be included in class 43.2 to gain the 50% CCA rate, or it could be a new class.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

This would write off the depreciation faster.

[John Dickie]

Exactly. This is a question of how quickly the owner can write off the cost. The point is the upfront cost is higher, so if you can write it off faster, you achieve tax savings. The beauty of it is that because there are energy savings that increase the business's income, the taxes go up, and because there's more work done because it's a more costly job, there are taxes on that. When we do the math on this, we come to the result that the government would be ahead of the game rather than behind the game, which is a nice tax reform.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Absolutely. Thank you.

Go ahead, Mr. Young.

[Bradley Young]

On the HR question, it's a very good question. I hear the request and the opportunity or potential issue with 60,000 employees needing to be hired in the forest sector. To bring it down to some of the entities I've worked with and am working with right now, such as NorSask, they want to start a second line of production. They need and want first nations people from the communities to get into those jobs. They want to work with the unions. They want to work with the communities and the young people to do that. I think there is some good program design that could be done around this. I think the importance is that how those programs interface with the aboriginal infrastructure, if you will, needs to be first nations-led, aboriginal organization-led, because the messaging matters. Who delivers the program and who delivers the technicality of it matters. We are open to partnership, but we need to recognize that it's 2013 and first nations can lead these programs and deliver results.

On Bill C-45, I didn't come to the presentation prepared in any way whatsoever for this question, so I have no comment.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

How much time do I have left, Mr. Chair?