Transport Committee on Feb. 21st, 2017

[James MacKay]

Thanks for the question.

There definitely are some challenges being based in a community of 9,000 and working with cities such as San Francisco, but also with towns the same size as mine, New Glasgow, with 9,000 people.

The big thing for us really is funding, whether it comes out of the pockets of privately held companies or it's pushed for by the municipal level we're with and talking to. The challenge for the municipalities is always the funding. They may want to be “smart”, but they don't know where to get the money to do that.

I think if the federal government did help and did promote green initiatives—and I know that's certainly a buzzword these days—and green technology, it would not only help with the smart communities but also help with the environment. You'd be killing two birds with one stone. When you have a unique product like mine that is very smart and connected, and also very green, it does save municipalities money.

If the government could help fund these communities with these types of products, they would definitely make some additional revenue.

[Sean Fraser, Liberal, Central Nova, NS]

Is this potentially a fund that a municipality or community organization could apply to and say, “Look, we have a bright idea, but we don't know how to get it off the ground”? Is that the model you think would work?

[James MacKay]

I think so, and I think a lot of it is education. I think a lot of the smaller cities don't think they can be smart, and really, it's the contrary. Maybe “smart city” is the wrong term; maybe it should be “smart communities”. If we are talking about our local community, New Glasgow, I don't think it would even suggest that it could be, but I think it could very easily become a very smart community.

I do like starting with parking, because that generates revenues. The additional revenues being found from these smart metres and the efficiencies found can then be used to fund additional smart pieces of that puzzle.

[Sean Fraser, Liberal, Central Nova, NS]

If we're going to be investing in these kinds of things, would you suggest that we start with any kind of revenue-generating infrastructure, whether it's parking or transit, or even affordable housing units that bring in revenue?

[James MacKay]

I do. I think it's important to at least start the ball rolling, because I do see that the blocker typically is the revenue piece, so if a city can generate revenue right off the bat, that ball starts rolling, and that snowball starts getting bigger to help fund additional pieces.

[Sean Fraser, Liberal, Central Nova, NS]

I know you mentioned, in response to Monsieur Aubin's question, the potential to jump on electric vehicle chargers. I see global trends moving that way. I see that last year the Netherlands mandated that by a certain year there would be no more gas vehicles.

Is there something the federal government can do to help spur research and development to ensure that the innovators in our communities are taking advantage of these global trends?

[James MacKay]

I think so, absolutely. Any funding that a privately held company such as my own could receive to promote Canadian business and promote Canadian technology being used in Canada would be fantastic.

I do business all over the world, and I see trends all over the world. The Government of Canada has the ability, with the companies it has in this country, to harness and utilize Canadian-built and Canadian-made and also to promote and put in initiatives to help municipalities use Canadian products.

[Sean Fraser, Liberal, Central Nova, NS]

Excellent.

Mr. Lazenby, I just want to touch on the need to build fibre infrastructure. Is the right way to go about this for the federal government just to do it directly? Should we be creating funds that municipalities can apply to? What's the best mechanism to actually get the infrastructure that you have mentioned into place?

[Bruce Lazenby]

I think it's the regulatory issue. If we look at some of the smartest cities in the world, none of them have had their infrastructure built by the private sector. None of the Bells and Teluses and the comparables of the world have been able to put in sufficient bandwidth to make a city smart, because it doesn't work out for them financially. It's not because they are bad guys; it's just that their business model doesn't allow them to make those kinds of investments.

Just as we took the independent water and independent road out of the hands of the private sector, I think we have that kind of opportunity here. I think your mechanism for doing that is probably the CRTC where they can encourage that kind of behaviour.

Nobody wants to have to go to court to try to do the right thing, but that seems to be where we are now. In St. Louis, Chattanooga, Barcelona, and other cities where they have done this, it has had to be led through government regulatory freedom, if you like, to set it aside.

I think now is the time for that too, because if we look at the larger organizations, the Bells and the Teluses, they have stopped making money from the fibre and have started making money on content. So I think they are ready to have that conversation now, but somebody needs to take the leadership, and, frankly, I think your body is the best placed.

[Sean Fraser, Liberal, Central Nova, NS]

That's it for my time. Thank you.

[The Vice-Chair, Conservative, Luc Berthold]

Thank you very much.

I now give the floor to Mr. Badawey for six minutes.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Mr. Chairman.

I want to go to where Mr. Fraser left off and Mr. Rayes was discussing with respect to funding. This is a question for all of you.

I come from the municipal sector in a previous life. I understand the challenges that we have trying to play catch-up with our infrastructure—waterways, water especially, but also roads and facilities and things of that nature—and that our asset management plans continuously squeeze our existing budgets.

The gas tax funding has always been used to play catch-up for those different pieces of infrastructure. Now we're talking about existing and incremental infrastructure like digital, for example. A funding source in that regard was mentioned earlier.

My question for you is twofold. Based on the $186 billion that we've announced—and we're going to be investing that money in that very infrastructure—I'd like to know if it would be appropriate to do one of two things. One is simply to enhance the gas tax fund—not only the amounts, of course, but also the other pieces of infrastructure it can attach itself to. Two is to have a dedicated fund. We could call it a community improvement fund, a community improvement growth fund, or whatever you want. It would be a separate dedicated fund that would attach itself to existing and incremental work.

[Bruce Lazenby]

I can start if you like.

I drive a beautiful, 6-cylinder, 300 horsepower vehicle, which burns more gas than it should. Should I pay more tax than I am for that? Yes. We all know it's not good for the economy, and I should be paying more. I remember going to Europe for the first time 20 years ago and seeing what they were paying in gas compared to what we were paying. We haven't caught up. I think it makes sense.

Maybe the answer to your question is both. There should be some funding there. When I talk about urbanization, what has happened is that because the urban centres have become larger and more focused, they are the closest to most of the taxpayers, yet they are the least well funded. Most of the funding goes into the federal government. Then, it goes down to the provincial governments, and then it goes down to the cities. Therefore, the people who have the most direct contact and influence with the average citizen are at the bottom of the pecking order. Anything we can do to provide them some funding is good.

The second thing we can do with another fund is to make it competitive—although that's very un-Canadian—and have people apply for it. Therefore, if Laval, Victoriaville, or Ottawa has an idea, the city can submit that to the fund and it can bid on trying to provide the right answer. Then there can be some adjudication that says this is a better idea than that one. You get $100 million; you don't.

[Vance Badawey, Liberal, Niagara Centre, ON]

Gentlemen, those of you who are on video, do you agree?

[Martin Lessard]

If I may, I'll continue in French if you don't mind.

Yes, I agree with Mr. Lazenby. I think that the money set aside for that should go to municipalities, and that they should be allowed to decide what they will do with it. The decisions should be consistent with certain parameters, of course, in the sense that the municipalities would be forced to work on developing a smart city.

However, the idea of submitting projects whose relevance would be assessed by the federal government is not at all in line with how we see municipal autonomy, at least in Quebec.

[Vance Badawey, Liberal, Niagara Centre, ON]

I appreciate that answer because, again, coming from the municipal sector, where I have been for the past 14 years, I fully recognize that municipalities know best even though the federal and provincial governments do provide funding for different infrastructure projects and programs. The municipalities, through their asset management plans and strategies, best know how to distribute those dollars.

We're going to be listening to the PBO in a bit and some of the challenges that we have with trying to dole out those dollars, both in the past with the previous government as well as the current government, with respect to performance measures.

With that, those performance measures would obviously be dependent on the outcomes and indicators that you, the municipalities, establish.

That said, do you find that through your asset management plans and through your established outcomes, that that would the best model to put in place for performance measures as we distribute these dollars throughout the nation?

Any one of you can start.

[Martin Lessard]

From my point of view, yes.

[Vance Badawey, Liberal, Niagara Centre, ON]

Are there any other comments?

Bruce, did you have any other comments?

[Bruce Lazenby]

Yes, I agree that municipalities know best, but there's a difference between fair and equal. The equal thing to do is not necessarily the fair thing to do. In this case, the guys with the best ideas would get the most funding.

So, yes, do provide additional funding and let municipalities do smart things with it. However, when it comes to major projects, set up an $800 million fund. People can come in and make bids on that, and may the best man win.

[Vance Badawey, Liberal, Niagara Centre, ON]

And with the best outcomes, with the best returns on those dollars.

[Bruce Lazenby]

Absolutely.

[Vance Badawey, Liberal, Niagara Centre, ON]

Okay.

Now, that said, obviously we have to report back to the federal and provincial governments so that we can see where those outcomes are very strategic, especially in phase two, when we start looking at transportation-related investments based on the economy and, of course, creating work here in Canada.

[Bruce Lazenby]

Yes.

[The Vice-Chair, Conservative, Luc Berthold]

Only 30 seconds remain, Mr. Lazenby.

[Bruce Lazenby]

We have that model. We have cities that are bidding for.... In the case of Ottawa, it's a light-rail project. The federal government has contributed money towards that; thank you very much. Do they have specific outcomes they have to meet? Absolutely. I don't think anyone would feel it was an obligation.