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I call this meeting to order.
Welcome to meeting number 139 of the House of Commons Standing Committee on Finance. Pursuant to the order of reference of Monday, March 18, 2024, and the motion adopted on Monday, December 11, 2023, the committee is meeting to discuss Bill , an act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023, and certain provisions of the budget tabled in Parliament on March 28, 2023.
Today's meeting is taking place in a hybrid format pursuant to Standing Order 15.1. Members are attending in person in the room and remotely using the Zoom application.
I would like to make a few comments for the benefit of members and witnesses.
Although this room is equipped with a powerful audio system, feedback events can occur. These can be extremely harmful to the interpreters and can cause serious injuries. The most common cause of sound feedback is an earpiece worn too close to the microphone. We therefore ask all participants to exercise a high degree of caution when handling the earpieces, especially when your microphone or your neighbour's microphone is turned on. In order to prevent incidents and safeguard the hearing health of our interpreters, I invite participants to ensure that they speak into the microphone into which their headset is plugged and to avoid manipulating the earbuds by placing them on the table away from the microphone when they are not in use.
I remind everyone that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as best we can. We appreciate your patience and understanding in this regard.
All virtual witnesses have been tested. Everybody is ready to go.
With us today we have Dr. Paul Allison, who is from McGill in Montreal. He will be with us to answer questions.
From the Canadian Federation of Independent Business, we have the president and chief executive officer, Mr. Daniel Kelly, via video conference.
Welcome.
We are going to start with Dr. Paul Allison for his five-minute opening statement.
My name is Paul Allison. I'm a professor at the Faculty of Dental Medicine and Oral Health Sciences at McGill University. Thank you very much for the invitation to present to this committee and to respond to your questions on the important topic of oral health and the introduction of the Canadian dental care plan.
Why is this issue so important? Dental decay is the most common non-communicable disease in the world. It is caused by sugar, and it's completely preventable. It results in pain, infection and thousands of people visiting hospital emergency rooms every year and taking time off work and time off school. It is the most common reason that young children in Canada need to have general anaesthetic.
As with many diseases, the poorest and most marginalized Canadians have much more dental decay than wealthier Canadians. At the same time, the poorest and most marginalized Canadians often have no dental insurance and cannot afford dental care.
This is why the CDCP is so important. There are many Canadians with oral diseases who cannot afford oral health care even when they are in pain. My example was dental decay, but gum disease is also very common. Many Canadians have missing teeth, affecting their ability to eat, to smile, to socialize and to work. On top of this, many seniors in long-term care centres who are unable to clean their mouths are at risk of catching pneumonia and dying because of accumulated dirt in their mouths. Also, rates of cancer of the mouth and throat are increasing in Canada.
Oral health is health. Oral health care is health care. It is very important that we put the mouth back in the body and reverse this historical anachronism. The CDCP is an excellent first step in this direction.
Among OECD countries, Canada has nearly the lowest level of publicly funded dental care, even lower than our neighbours to the south. The WHO recently published its global oral health action plan, stating, among other things, that countries should “integrate oral health care” in universal health care. Canada is now moving in that direction.
How can the CDCP help Canadians? It means that the poorest and most marginalized Canadians can obtain a good range of oral health care. It means that young kids can obtain timely care to prevent dental decay and not be subject to general anaesthetic. It means that seniors living in long-term care centres can be more easily visited by an oral health professional to have their mouths cleaned. It means that people at risk of mouth and throat cancer can be seen more regularly by health professionals who are experts in caring for the mouth so they can be diagnosed and treated earlier.
However, there are limits to the CDCP. While cost is the largest barrier to dental care, it is not the only one. The CDCP is an excellent first step in addressing cost, but it does not deal with other barriers. For instance, many seniors living in long-term care centres have limited mobility, and providing dental clinics and/or mobile dental care in those centres is important.
People with a broad range of disabilities have difficulty accessing dental care services that can accommodate their wheelchair, their hearing problem, their communication problem or their multiple other health issues, making their dental care complex. Also, many people live in rural and remote areas with no dental services and need both mobile dental care and teledentistry services, and care integrated with the other health services they receive.
Oral diseases have the same causes and occur in the same people who have a range of other chronic diseases, such as diabetes, heart disease, asthma, arthritis, cancer and dementia. These people often access community health centres for a range of health and social services. Dental care needs to be integrated in these community centres on a large scale.
An unfortunate unintended consequence of the CDCP has to do with university and college clinics, where dentists, dental hygienists and denturists are trained. They used to be primary sites for dental care for people who had problems accessing dental care, but the CDCP will mean that many of them will be able to access that care more quickly in private offices. The CDCP is inadvertently depriving future oral health care professionals of essential training opportunities. This issue needs to be urgently addressed.
What needs to be done to address the non-cost barriers?
We need to better integrate dental care with health care in community health centres, long-term care settings and hospitals. We need to better train oral professionals to care for people with more complex oral health care needs and to provide a broader range of services using modern technology in a broader range of settings.
We need to recognize that caring for a person with, for instance, Alzheimer's disease is more complicated and takes more time than does caring for a healthy adult. Alternative, additional compensation models for the professionals providing those services need to be developed.
We need to use the data that Statistics Canada is collecting to evaluate the new CDCP services so we can adjust them as needed. We also need to better integrate the university and college dental training programs into CDCP-related activities so they can train personnel appropriately in a range of settings and develop tests and evaluate programs to address the non-financial barriers to dental care that I have outlined.
Thank you very much.
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Thank you so much, Chair.
It is good to be with you all. I am coming to you from Calgary today.
I was in Ottawa earlier this week, so budgets are fresh on my mind. I was there to review the provisions of the 2024 budget. It's been a busy week for you and for me on that front.
Small and medium-sized businesses that are members of the Canadian Federation of Independent Business remain at this moment very fragile. There are lots of concerns, lots of worries about the months ahead. Many businesses have been hanging on by a thread over the last several months, and sadly it would take very little to push them over.
I think we should all pay very close attention to what's happening with respect to both business closures and business start-ups right now. We have a huge number of business closures, up dramatically from previous years, and we have had, over several months, for the first time in recorded history, more businesses closing than businesses opening. That is a very worrisome trend across Canada.
In recent days, some of our data at CFIB has shown a little glimmer of hope on the horizon. The potential of lower interest rates may provide some help to small and medium-sized companies. However, we also have to put that in the context of what's happened over the course of the past few months considering there have been four federal tax increases since January 1—an increase in Canada pension plan premiums, an increase in employment insurance premiums, a significant increase in the carbon tax on April 1 and a more modest increase, but an increase nonetheless, on liquor taxes across Canada.
With respect to the substance of the piece of legislation, Bill , there are three big categories we've paid attention to. One of them is intergenerational business transfers. Another is employee ownership trusts, and the third is amendments to the Competition Act. On all three of these files, the legislation does, I think, move the ball forward.
We are pleased that the legislative changes being proposed for the intergenerational business transfers don't seem to dramatically veer from the intent of the private member's bill that was adopted by the House of Commons, so that is a good thing. However, we do worry that there may be a lot of administrative procedures gumming up the works. Some tax experts have told us that there are going to be 12 different tests to determine the legitimacy of an intergenerational business transfer. I worry about the red tape and paperwork we are creating through that process, recognizing that we want to make sure that these are valid transfers nonetheless.
On employee ownership trusts, there has been some positive momentum, in both the subject of Bill and this week's budget. We are particularly encouraged by the allocation of a capital gains exemption of up to $10 million with respect to transferring a business. That's not in this legislation, but I imagine it will be in the implementation of the current budget, and that is good news. We think this is a good pathway for small and medium-sized firms and we are pleased to see this moving forward.
Also, there are some good amendments to the Competition Act. Canada has fairly weak competition laws, generally speaking. Small firms really do need strong competition law to prevent the creation of monopolies and oligopolies, and we support some of the amendments that have been proposed.
I'll leave it there. I suspect I may get a question or two about the 2024 budget. I am happy to take any of your questions on this or on the previous one.
I want to clarify for the record that Newfoundland and Labrador, my province, does have a dental program for children, but it's certainly nowhere near the scope that's needed. There's a huge gap there.
Dr. Allison, earlier today, we heard from someone from the Canadian Society for Disability and Oral Health. She recommended that dental care—oral care, health care—for disabled persons become a specialty as a way to break down the barriers the disabled population is encountering.
You referenced integrated care and specialized dental care in your opening remarks. I drew from that in my language that it's the places where people reside, whether it's long-term care for seniors or community health centres in particular. That then lends itself to a primary health care model, where there's an integrated multidisciplinary approach.
Why, in 2024, are we still struggling with the integration of oral health care into primary health care? How do we bring the medical schools and the dental schools forward so that we truly see this as wraparound primary essential care?
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As I referred to in my opening remarks, we have this unfortunate anachronism where we have separate doctors for the mouth compared to the rest of the body, and that's reflected in all elements of training and service delivery. Canada is not the only country doing this, as I'm sure you're aware. It's the model pretty much everywhere in the world.
In my view, that's an unfortunate model, and we should be bringing oral health care professionals into the primary health care team on a very large scale. There's no difference between the causes of dental decay and the causes of many other chronic diseases. It's just about how they manifest. I think it's very relevant to have oral health care professionals in primary health care teams, and in a range of settings, as I said.
Getting back to issues around people with disabilities, clearly we need models where people who care for the mouths of those people go to them, because often they have great difficulty getting into private offices. They can also come to a local hospital or a local community health centre setting, and the oral health care professionals can go there. I think on many fronts, for people with complex diseases, young kids and many other people, going to the community health centre and getting oral health care there would be the best model.
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It is very good news that after five long years of waiting, small and medium-sized firms are going to see government make good on its commitments to rebate a small portion of carbon tax revenues to SMEs. We at CFIB estimate that businesses in general pay 40% of the cost of the carbon tax, but to date they've received almost none of the revenue back. Also, the $2.5 billion that has been sitting on the books of the Government of Canada obviously prevents the government from making a credible case that the tax is in fact revenue-neutral. It is really good news that the government is intending—I hope—to give that money back to small businesses later this year.
The breakthrough was significantly expanding the eligibility rules. Under the previous scenario proposed by government and planned for over the course of the past five years, the intention was to give the money back to only emissions-intensive, trade-exposed businesses. Government documents suggest that might have been only about 20,000 businesses. With the change that has been made, 600,000 small and medium-sized businesses will be getting back a portion of the carbon tax revenue. That is certainly good news.
We don't yet know the dollar amount, so we're waiting. There are a whole host of details that need to come back, but this is positive and we have received it as such with the 2024 budget package.
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Small businesses look at capital gains from two perspectives. Primarily our members—small and medium-sized companies—look at the capital gains treatment when they sell their businesses. Most small business owners count on the sale price of their businesses to fund their own retirement. They don't have pension plans as other Canadians might.
On that front, it is very good news that the lifetime capital gains exemption will rise from $1 million to $1.25 million. We are also encouraged by the new Canadian entrepreneurs' incentive, which will provide, over a 10-year period, up to $2 million at a lower capital gains treatment than there was before. We think those two measures are positive.
There are a bunch of exceptions to this. I have to tell you that the Canadian entrepreneurs' incentive is going to be an incredibly divisive policy, because we estimate that about half of Canada's small businesses, given what the government has proposed, would be ineligible for that additional $2 million. We are quite worried about that.
The other capital gains treatment, though, involves capital gains within the corporation itself, and all of that will now be taxed at 67%. We're hearing from small and medium-sized businesses about their significant worries over the increase in capital gains and where it comes in. There's no keeping $250,000 at 50% for corporations. That's all going to be taxed at 67% now, and that is a big worry for a lot of small businesses, particularly start-ups and technology firms.
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No, I certainly don't. There have been some advancements, including in the 2024 budget, but sadly, there have been a host of government policies that set small businesses back.
I mentioned at the beginning of my commentary the four tax hikes we've seen just over the last four months. Those are not good for small and medium-sized firms. Small firms tend to be very payroll-intensive, and the increase in employment insurance premiums combined with the increase in CPP premiums creates big worries and takes a big bite out of the payroll budgets of every business across Canada.
Also, at the beginning of the year, we saw the Canada emergency business account deadline come and go. While many businesses were successfully able to repay the government by coming up with the $40,000 to repay their CEBA loan—many did that—I think about a quarter of small businesses did that by borrowing from the bank. The government got its money back, but the businesses didn't get any of their debt relieved other than the $20,000 forgivable portion. They still have that loan, and it is now at higher bank interest rates, which is a big worry.
Over the course of the past three years, the pandemic years, small firms were hit incredibly hard. Canada kept lockdowns in place for longer than almost any other jurisdiction in the entire world, so small firms in retail, hospitality, the service sector, arts and entertainment, travel and tourism were desperately weakened from the restrictions. Sadly, that damage—the debt that has been created and the lack of sales—has been a problem.
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We're starting to see the price of some of those policies and the lack of changes. We were, of course, very happy to have your party's support for an increase to the CEBA deadline. Unfortunately, that didn't happen. The consequences are significant. Right now we are seeing dramatically higher business bankruptcies—not just bankruptcies but also failures.
I will note something that often surprises people: For every one business that goes bankrupt, there are nine other businesses that just quietly close their doors. We believe bankruptcies represent, essentially, one in 10 business closures. Most businesses just find an orderly way to close their doors, pay their bills and cease operations. It's heartbreaking to see some of those businesses fail.
I will say that business failure is an accepted part of being an entrepreneur. Businesses fail in good times and in bad times with good government policies and bad government policies. However, we are seeing such a dramatic rise in business bankruptcies and, along with it, a reduction in the number of business start-ups. Those two things have not been seen together in the way they're happening right now—ever. We now have a net outflow of business owners. I worry the back-end damage of the CEBA loan program will push more over the edge. Businesses are not going to make it, not because they're not viable businesses but because they can't outrun their debt.
It is good news that there's going to be some money coming back from the carbon tax rebate. It's long overdue. That, of course, isn't going to be the case in Quebec or British Columbia, but it is the case in the eight other provinces. Also, we are hoping that some pieces of the capital gains changes that are positive will send a good message to some entrepreneurs. However, I worry about where we're headed in Canada. For small business owners, these are not easy days.
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The intergenerational transfers are very significant. We have a massive exit of business owners, but not because of business failures. The other demographic reality facing us as Canadians is the fact that many business owners are getting older.
Business owners often talk about their retirement in very different terms. My favourite story is about a farmer who was delighted that his dad finally showed him the books of the company, because he was the successor. The son in the story was 65. The dad shared the books of the operation so his son could take it over. This is a classic entrepreneurial story. Time runs out for business owners, and we have to make sure the succession from one generation to the next is made successful.
The reason these intergenerational transfer rules are so important is we want to make sure that when people transfer their businesses to their kids, people in their community or employees, there's a greater chance the business will stay in the community rather than be bought up by, perhaps, a big American company that would be buying it for its client list or product. The jobs often disappear after that.
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As I alluded to in my opening remarks and previous response, I think we need to create clinics and infrastructure in community health centres, long-term care centres and rural settings. We need to put the facilities that provide dental care, and the professionals, where the people are who need them.
At the moment, the model that works very well for most people is setting up a private office and having people come to it in the normal way. That works for most of us, and that's fine, but it doesn't work for lots of people, unfortunately, such as people with disabilities, people who are in rural and remote areas, very young kids, and seniors. They tend to be the poorest people and they tend to be the people with the highest level of disease, so we need to do that sort of thing moving forward.
Ultimately, in my opinion, we should be making oral health care part of the medical care system, as we do with all other parts of the body.
I want to thank Dr. Allison and Mr. Kelly for their testimony already.
The biggest issue I'm hearing from small businesses in my riding, particularly in Whistler, Squamish and the Sunshine Coast, is that they can't find workers because they can't find a place for their workers to live. They're very happy with the investments that are being made in housing and the launch of Canada's housing plan in this budget, which, in my opinion, makes some pretty transformational changes in the way that housing is going to be built so we can close the housing supply gap we have.
Mr. Kelly, what type of an impact do you see this having on small businesses across Canada and their ability to house workers?
Hello to all my colleagues. I'm glad to be back with you.
Hello to all the witnesses as well, and thank you for being here.
My questions are for Mr. Kelly from the Canadian Federation of Independent Business, or CFIB.
My first question pertains to Bill , the massive budget implementation bill, not for this week's budget, but for last year's budget. That is what we are concerned with here today.
Does the CFIB have any comments on the changes the bill makes to the Competition Act? If so, what are they?
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We like some of the amendments to the competition laws in Canada. This is a big deal for small firms. There's been so much consolidation. Small firms feel like they have very little bargaining power with some of the large oligopolies and monopolies that exist in Canada, so it is good news that we are starting to strengthen competition laws across the country.
Modernizing the merger review regime, improving the effectiveness of some of the investigations of anti-competitive conduct, strengthening the enforcement against abuse of dominance by big companies and introducing right-to-repair rules are positive measures that we saw. These are fairly modest competition changes. These aren't big ones, but it is the first time in a long time that we've seen some additional teeth put in competition law in Canada, and that is a good thing.
We'll have to test this out and see how it works. We will, as an association, always give feedback to government and all opposition parties, like yours, as to how things are going.
With us now, from the Canadian Association of Public Health Dentistry, we have Dr. Amrinderbir Singh, president. Welcome.
From the Saguenay Port Authority, we have the president and chief executive officer, Carl Laberge.
We will start with Dr. Singh, please, for opening remarks.
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Thank you, Chair and committee.
Good afternoon, everyone. My name is Dr. Amrinderbir Singh. I'm the current president of the Canadian Association of Public Health Dentistry. I'm also an assistant professor and the director of inclusive community outreach at the College of Dentistry, University of Saskatchewan.
I am extremely honoured to be invited today to represent the Canadian Association of Public Health Dentistry, which I'll refer to as CAPHD, as a witness before the House of Commons Standing Committee on Finance in view of its study of Bill . The CAPHD is the national voice for dental public health in Canada and exists to support members, government, institutions and agencies dedicated to improving oral health and assuring oral health equity for Canadians.
First of all, on behalf of CAPHD, I would like to applaud and acknowledge the tremendous efforts made by the federal government in the latest phase of the development of the Canadian dental care plan. This unprecedented initiative will enable many of our equity-deserving Canadians to access much-needed oral health care, potentially improving their overall health and well-being while decreasing the burden of oral disease in Canada.
The CAPHD promotes and advocates for equitable oral health care for all Canadians. We will continue working with the government, partner organizations and our membership to support the CDCP and advocate strongly for its uptake and utilization across Canada.
The CAPHD is closely following the phased rollout of the CDCP and eagerly awaits early reports regarding plan enrolment and utilization. Our association believes that it is critical for the CDCP to remain responsive to the evolving needs of Canadians. Continuous evaluation of the CDCP will be important for informing data-driven policy adjustments, and interdisciplinary collaborations will be vital for enhancing the CDCP's effectiveness. As the plan matures, the CAPHD looks forward to more emphasis on preventive services for caries and periodontal diseases. This includes upstream services that increase oral health literacy, such as oral health education and counselling and the encouragement of interventions addressing the microbiology of dental decay and gum disease.
To encourage more health care providers to support the plan and increase access to care for underserved Canadians, the CAPHD proposes alignment of the CDCP fees with the existing provincial fee guides in the future. We believe that harmonized compensation rates will encourage more providers to participate in the plan.
Additionally, the CAPHD would like clarification on how health care providers can coordinate benefits for individuals eligible under more than one public insurance plan, be it federal, provincial, territorial or municipal. This clarification is essential to streamline the processes for health care providers and ease the financial burden for eligible individuals, which aligns with the CAPHD's preference for minimizing out-of-pocket expenses for patients.
By addressing these key areas, the CAPHD aims to encourage greater provider participation in the plan and support a sustainable model of care. Success in these endeavours is contingent upon the active involvement of health care providers, equity-deserving communities and high-risk populations. The CAPHD commits to advocating for enrolment strategies that actively engage all crucial stakeholders and promote provider enrolment within its membership. These collaborative efforts may enhance the plan's reach and impact and support Canadians in accessing the oral health care they need.
However, I would like to take this opportunity to emphasize that access-to-care barriers are complex and multi-dimensional, especially for rural and remote communities and high-risk population groups. If I may, I will extend that to include inner-city areas. Hence, in future planning, we urge the government to consider investing more resources to address the access-to-care barriers.
Again, the CAPHD expresses profound gratitude for the recognition of oral health’s vital role in the overall well-being of all Canadians. The CDCP has the potential to contribute towards increasing our population health significantly in the forthcoming years. By prioritizing oral health, we anticipate a notable reduction in the overall burden of disease, thereby alleviating pressures on our health care system.
Thank you.
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Hello, Mr. Chair and members of the Standing Committee on Finance.
To begin, thank you for inviting me to appear before you today.
As a Canadian port authority, the Port of Saguenay is recognized as one of the 17 largest and most strategic ports in the country. It plays a crucial and growing role in Canada's supply chain, with its strategic location at the heart of the corridor formed by the Saguenay, the St. Lawrence and the Great Lakes.
We are a young port with great development potential. In addition to our strong maritime capability and strategic location, we are currently working to develop one of the largest industrial and port zones in the country, with more than 3,000 acres of land earmarked for major industrial projects related to our port activities.
We are working with the governments of Canada and Quebec to attract development projects to Canada in order to develop new and innovative industry sectors. In this regard, our region is particularly well positioned for promising projects, including those directly related to Canada's critical minerals strategy, thereby contributing actively to the global transition to clean energy.
As you probably know, the Saguenay River is a key commerce corridor in eastern Canada. We are making it a hub that is productive, prosperous and above all sustainable for the Canadian economy, since it will be powered by renewable energy forms.
The Port of Saguenay therefore offers a unique opportunity to support growth of the Canadian economy that is both responsible and sustainable.
Through the National Trade Corridors Fund, or NTCF, the Government of Canada is supporting us in that process.
I would also like to commend the excellent co-operation we have received from the team of , the Minister of Transport. We have received financial assistance to develop new strategic infrastructures in the port, including the electrification of transshipments, which directly improves the appeal of our site.
Our transshipment capability has been improved, but our growth is now limited by our ability to meet shipping demand. Our shipping infrastructure currently has just one berth. As a result, ships requiring transshipment operations that last several days monopolize all port facilities, creating a bottleneck.
We applied to the NTCF for funding to improve our shipping infrastructure. Specifically, we want to build a new berth to reduce waiting times for ships that enter our port and thereby boost our productivity and the increase the flow of goods.
The Quebec government has already confirmed its participation in this new dock project by announcing last November its contribution of $20 million. Now, we are still waiting for the reply to our funding request under the NTCF.
Today we wish to reiterate the crucial importance of investing in our port infrastructure through this essential program.
I will also use this opportunity to speak to you briefly about the request to increase our borrowing limit, as set out in our letters patent.
As you know, Canadian port authorities have borrowing limits that are regulated by the government and that are generally lower than their potential and real needs. This limits access to funding and as a result undermines their ability to attract private capital, requiring us to make massive investments in our infrastructure if we want to stay competitive and innovative.
In June 2023, the Port of Saguenay therefore submitted an application for a supplementary letters patent to increase its borrowing limit in connection with its major ongoing infrastructure projects, which are funded by the NTCF. We have still not received that supplementary letters patent.
We have major projects under way and have committed all of our liquid assets so as not to delay the schedule and investments or stop our work. We are waiting for the additional funding we need, which must first be authorized with the issuing of a supplementary letters patent.
I would like to mention that we were told that our application has been favourably recommended, but it is still being analyzed by the Department of Finance.
Those supplementary letters patent are essential to our organization and for the development of our infrastructure.
We are running out of time. The processing time for our request, which we consider unreasonable and excessive, could undermine our organization and the project's success.
Nonetheless, we are hopeful that with your support we can prevent delays and continue developing the Port of Saguenay and our community and continue to contribute to an effective supply chain throughout Canada.
Thank you for your attention. I will be pleased to answer your questions.
I would like to acknowledge Dr. Singh and Mr. Laberge.
My questions are for Mr. Laberge.
Thank you for being here. I found your remarks inspiring. You reminded us that your facilities, located around the Saguenay, St. Lawrence and Great Lakes, are among the 17 largest and most strategic in the country. You spoke about 3,000 acres of industrial area capacity, among the largest in the country. This holds enormous potential for new industries, such as critical minerals and the transition to renewable and sustainable energy.
In Parliament, we're concerned about productivity in the struggling economy, along with supply chains.
How do your facilities play a strategic role in meeting these needs?
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Thank you for your question.
The Port of Saguenay is strategic in a number of ways. It's one of the only deep‑water ports in Quebec. It can accommodate large transoceanic vessels from the St. Lawrence, which provides a unique advantage. It's also directly connected to the railway system, and has fairly large storage capacity. However, it has certain infrastructure limitations.
As I said in my remarks, we're in the process of significantly improving part of our infrastructure with a mechanized bulk materials transportation project. We're quite pleased with this project. Another project will improve our shoreside infrastructure so that we can keep pace. For this project, we're currently applying for funding from the national trade corridors fund.
The Port of Saguenay is located in the middle of one of Canada's major industrial hubs. It serves the aluminum industry in particular and the forestry industry. As you said, we have great and unique potential for industrial development in Canada around our facilities with the new industries. However, to serve these clients, we need to develop the infrastructure at the same time. We're heading in that direction. We have infrastructure under construction and commitments, especially from the Quebec government, another key partner in the development of industrial infrastructure.
We're currently implementing the right conditions to make the Port of Saguenay a significant part of the logistics chain. We're doing this by strengthening our transportation and transshipment capacities to ensure that they remain substantial and consistent. Investments in our port facilities also give the area a capacity for large‑scale industrial development. The area already has the necessary energy and land available, provided that the right infrastructure is in place.
Investing in the port means investing in our future. Around here, it's often said that you can't go wrong when you invest in unique projects of this nature. We have enormous potential here. It's important not to give up. We already have the support of all levels of government. However, this support must continue, especially the support from the federal government. In the recent federal budget, we would have liked to see additional funding for current infrastructure programs to help us make decisions.
The Port of Saguenay is truly strategic. It helps us achieve all our goals. Basically, your applications will help further develop the economy.
You said that things were going well with Mr. Rodriguez and the Department of Transport. However, your application for funding for the new berth, which you explained is vital, remains unanswered. Quebec confirmed its $20 million commitment last November. That was five months ago if I counted correctly. You still haven't heard back from Ottawa.
Did you send your application to Ottawa five months after sending your application to Quebec City, or did you send both applications at the same time? Is Ottawa a bit slow?
You said it very well. It is historic. It is a milestone for all of us. Oral health care is on the table, and like many others, I am pleased to see that.
We are aware that the mouth is literally the gateway to the body. It impacts how we function day to day and what we eat. If someone has experienced any type of dental pain in their life, they would know that it is quite discomforting in the way that it inhibits anybody's ability to eat, to smile and to function.
I think this investment has a lot of potential to improve not only oral health, but overall health. There are many demonstrated systemic oral linkages, so this has the potential to also decrease the burden on acute care settings and emergency settings, where people end up in an emergency for oral health care issues.
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The national trade corridors fund, or NTCF, has been a popular and valued program.
As you know, we hear a great deal about supply chains. The national supply chain office, which the government set up, is starting its work. Investments will be needed in this area.
Ports are highly strategic public assets for the country. They need upgrades and maintenance. To that end, they need the appropriate funding. This program has been quite popular. As far as we know, funds for this program have dried up, creating issues across the country. We think that this is important.
There are many priorities. However, this is certainly one of them.
The CAPHD has said it would like “clarification on how health care providers can coordinate benefits for individuals eligible under more than one public insurance plan”. That means a federal, provincial or territorial plan. It said that's “essential to streamline the process for health care providers and ease the financial burden for eligible individuals, which aligns with the CAPHD's preference for minimizing out-of-pocket expenses for patients.”
It's my understanding, Dr. Singh, that the federal government is in active negotiations with the provinces. That likely will make the federal government the first payer, and then, if a person is on a social services program, the province or territory will be the second payer. In your view, would that be an acceptable coordination of benefits?
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Welcome back. We are here with our final panel for today.
We have with us Mr. Ian Lee, associate professor at the Sprott School of Business, Carleton University. He is no stranger to this committee.
We also have here in person, from the Canadian Association of Public Health Dentistry, the immediate past president, Dr. Keith Da Silva.
Welcome, Dr. Da Silva.
We are going to start with Professor Lee. Please provide your opening remarks to the members, and then we will go to Dr. Da Silva.
Mr. Lee, please go ahead.
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Thank you, Chair Fonseca.
First, I have my disclosures. One, I do not belong or donate money to any political party at any level in Canada. Two, I have taught at Carleton University for 37 years, teaching the strategy capstone course that evaluates the competitiveness and value creation of industries and firms across the United States and Canada. Three, over the last 30 years, I've taught the EMBA over 100 times in multiple developing countries that experience very low economic growth, massive inequality, corruption and poverty at levels not seen in Canada.
As I am not here to plead on behalf of any interest group, business or NGO—after all, I'm not a lobbyist—I will deal at the level of the macroeconomic, philosophical direction of the budget implementation bill.
The fundamental problem, in my judgment, with the previous budget and the current budget is the overarching belief in the following fundamental principles. One, the top-down or centralized decision-making by politically directed non-market bureaucracy using the public funds of citizens produces superior outcomes to decentralized private decision-making by investors taking risks with their own money. Two, superior economic growth and prosperity will be realized by expanding the role and size of the public sector to direct and guide, substituting their decisions for private strategic decisions by corporations and investors. Three, fairness is defined as treating business investors or risk-takers as equal or possibly inferior to employees, requiring taxation to equalize investors with employees.
In my judgment, each of these fundamental assumptions in the budget bill is wrong, false and destructive of the greater public good in Canada. The market economy, from its origins in the late 1700s to the present—250 years of economic theory and practice—and the over 50 Nobel prizes in economics have taught us that a decentralized economy of private investors and decision-makers making private decisions concerning capital investment, research and development, production, pricing, distribution and innovation produces the incredible standard of living of the high-income OECD countries, documented by the World Bank.
The “hockey stick of human prosperity” was named and documented by growth scholar Professor McCloskey of the University of Chicago and the University of Illinois in over 250 peer-reviewed research articles. I urge you to read her article called “How Growth Happens”. However, it was Joseph Schumpeter, the brilliant economist at the University of Vienna, then Harvard, who taught us the why and the how.
Competition causes firms to endlessly, ceaselessly innovate in order to differentiate their product offerings and achieve a sustainable, competitive advantage—the holy grail of any private firm. This process creates “gales of creative destruction”, the famous phrase of Schumpeter. It is not profit maximization, as claimed by critics unschooled in growth theory and economic philosophy. Schumpeter taught us that there are five types of innovation: product innovation, process innovation, business model innovation, source of supply innovation, and mergers and divestments, which I would call “corporate strategy innovation”.
The budget unwittingly undermines every type of Schumpeterian innovation by attempting to displace and replace private producer or investor strategic decision-making concerning these types of innovations. This replaces private investors with the very worst kind of economic policy decision-making and political decision-making and has false assumptions concerning the superiority of knowledge, understanding and decision-making in private markets.
In any large economy, there are literally trillions of economic decisions that occur daily. Many are as trivial as the decision to go to Tim Hortons for a coffee. It's an economic decision. However, the trillions of microeconomic individual decisions aggregate to macroeconomic trends and macroconsumer behavioural trends—the domain of strategy and value creation.
It is a conceit that people at the top of the non-market sector possess knowledge superior to the wisdom of crowds and to the outcomes of thousands of markets reflecting the decisions of millions of consumers and investors. There is no factual basis to this conceit. There is no supercomputer in the world fast enough or powerful enough, nor any AI algorithm or great leader smart enough, to process, aggregate and understand the meaning of the trillions of economic decisions in real time and then respond with the appropriate strategies and policies.
This explains the failure of every centrally managed economy everywhere, and we don't even have to look to the famous U.S.S.R. We can look at the failures of Argentina. We can look at the failures of Turkey and the failures of Venezuela.
What must be done—because I'm running out of time—
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Thank you to the chair and to the committee for having me here today. I was more than happy to trade in the snow in Saskatoon for the rain here in Ottawa this morning.
My name is Keith Da Silva. Right now, I'm the only dually trained pediatric dentist and dental public health specialist, which gives me a unique perspective of the private and the public sides. I'm the past president of the Canadian Association of Public Health Dentistry. You heard from our president earlier today. In that role I was fortunate to be part of a number of different task forces and working groups, and still am as it relates to the CDCP. I've been involved with it from the start.
I want to start by acknowledging and appreciating the magnitude of this moment. This is a historic investment in oral health care, one that will have the potential to improve the health and quality of life of a lot of Canadians who can't afford care. What I don't want to lose in this moment—and I don't think we're talking about it enough—is that there is widespread recognition for really the first time, in the media, in public platforms and even in committee meetings like this, that oral health is an integral component of our overall health. It's something we can't lose anymore, and it's really a paradigm shift: No matter what the policies or programs become, we can't undo that we know this is important for our overall health.
As a clinical pediatric dentist, most of my practice was a safety net. I would treat children from low-income families—and this used to be in Toronto—who couldn't be treated anywhere else, whether that was because they were too young, their behaviour didn't allow them to be seated in the chair or other practices could not take the insurance they were on due to reimbursement rates. It was a difficult time for a lot of these children, especially in Ontario, where fees were being reimbursed somewhere in the 30% to 40% range. These were children with a mouth full of cavities and who often required us to take them to the operating room to have all their teeth fixed. Aside from the risk that comes with treating children under general anaesthesia, it's also a costly and inefficient way to have teeth fixed, and it really does strain the overall hospital system.
I cared for a lot of children with special needs. These are also individuals who have many challenges accessing care. I believe you heard from Joan Rush today about that. Again, that could be due to their coverage, financial resources, lack of specialized facilities or just the training and comfort level that some providers have because they don't have the expertise to do it. My experience providing care for these children and their families is really what led me from pediatric dentistry to incorporating dental public health, because I couldn't overlook some of the barriers they were facing when getting treatment.
While my clinical focus is on pediatrics, in public health, I have expanded to address access to care for seniors, particularly in long-term care facilities; for all low-income individuals; and, in Saskatchewan, where I currently am, for those living in northern areas of the province. Without question, the cost of care is the most profound barrier right now to oral health care. No individual should ever have to choose between paying rent, buying groceries and having a tooth fixed when it comes down to it.
I believe that the $13-billion investment in the plan will make dental care more affordable for a lot of Canadians, particularly those who have been priced out of the private system. However, I must emphasize that the launch of this plan and investment in this plan should be looked at as the initial step of what will be a long road going forward to improve oral health outcomes.
Of particular concern for us is that, although care will become more affordable for many, this doesn't always mean it's going to become more accessible. There will still be many Canadians who enrol in the program who won't have dentists or oral health care providers living in their communities, so they will still have to travel or they won't have access to the specialized care they need. Again, this is meant to be a start. We can't solve every problem in one plan, but these are things we don't want to lose.
We will still need to do more to incentivize members of the oral health care team—the full team, which includes specialists, dental hygienists, denturists and dental therapists—to get them where they're needed the most, as well as support training and educating the next generation of professionals. I'm optimistic the oral health access fund will address some of these issues with some creative solutions going forward.
Before concluding, I want to leave you with three points. I'm sure many of these have been addressed today.
First, we still need to do a better job of emphasizing prevention. Both public and private plans, by design, are geared towards diagnostic and treatment services, but they're very lights on preventing disease. We still need to develop—and this doesn't have to be solved in any one plan—a system of surveillance, health promotion and prevention. I truly believe, from my own experience, that we can keep kids out of emergency rooms and hospital rooms with a more targeted approach to prevention.
Second, there's lots more to be done with this plan to evaluate it in real time and—this is the harder part—make changes as we get more data. Some initial questions will need to be addressed: Are the right services covered? Is there an evidence base for these services? Are Canadians enrolling in the program, and if not, what are the barriers to that? For those who are enrolled, are there difficulties accessing services, and if so, how do we fix that?
Lastly, I'd be remiss if I didn't say that this plan will not succeed without the acceptance of the full scope of dental professionals. There are still some barriers to that. I'm very encouraged by the level of engagement. I don't think there have been this many stakeholder meetings and this much engagement with all of the national professions and provincial professions, so there is progress in that. Although there are barriers, I think they can be overcome over time, but there is still work to be done.
In closing, I thank you for allowing me to speak here today.
Mr. Lee, thank you for being here.
The , the and the Bank of Canada all at one point said that interest rates would be low for a very long time. After that, we saw 40-year highs in inflation and the most aggressive interest rate hikes seen in Canadian history.
In a BNN Bloomberg interview during that time, you talked about how much unprecedented government spending was happening, and you predicted much of what we're seeing today with high interest rates of up to 5%. You said that it was government-engineered and that it would get to this point.
Can you expand a bit on what happened? I think a lot of mortgage holders today who are renewing at double or triple the rate or the ones who can't afford their mortgage want to know what happened.
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I did say that at the time. This wasn't Monday morning quarterbacking, as we know four years later. When we drove the rates down to a quarter of one point and the and the were saying to borrow because they were going to stay at these levels, I instantly realized that they had made a mistake. Let me explain why.
I did my research. Rates had never in the history of Canada or the United States gone down to a quarter of one point. I went all the way back to the U.S. Civil War and they never went down to a quarter of one point. In Canada, in the Great Depression, which was 10 years—much longer than the pandemic and with a third of the population out of work—they didn't go down to a quarter of one point.
My point is that rates were so low that it was inevitable that they were going to go up. It was not possible, by any rational analysis of the historical record of interest rates, that they would remain at basically zero. I was very critical of that, and I lived through the seventies, when rates went to 20% to deal with the inflation of the government at the time, which hit 14%.
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I've been talking about this in my classes for literally 35 years. I've studied and read, I think, every major document in our country on this topic, going all the way back to the seventies and eighties. I've come to the conclusion—and I agree with the senior deputy governor of the Bank of Canada—that reduced competition, because we have so many protected industries, is a major contributor. I'm not suggesting it's the only contributor.
This is straight out of Schumpeter again. If you're not forced to compete, then you're not going to compete. You're not going to innovate. Why would you innovate if you don't have to innovate? We have created a lot of protection in multiple industries, which is allowing these industries not to innovate.
To your second question—again, the research on this is very clear—displacing and crowding out the private markets with government spending that's classified as investment is not going to increase productivity, at least from any of the evidence I have seen. We have a crisis in this country. That's not just from the senior deputy governor of the Bank of Canada. David Dodge has talked about this. John Manley, the former Liberal, has talked about this. Bill Morneau has talked about it.
This is not a Conservative view. The numbers are shouting at us that we have a profound problem that's going to hurt our young people.
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I have been very critical of them, and not because I'm opposed to helping people who need help. Of course we help them. That is the Canadian way. We have been doing this my entire life. As my late mother, who grew up in the Depression in Saskatchewan, reminded me, there was no public health care. There was no old age pension in the thirties. There were none of the programs we have now.
This is not about dismantling the social programs for people who need help. However, universality, which is giving money to high-income people and upper-middle-class people like professors, is simply wrong. It is just wrong to say that I should be getting free medicine from the taxpayer when I have a private insurance plan.
We should be targeting it to people who need help at the bottom, not privileged people like members of Parliament, professors and public servants. That's squandering desperately scarce public funds, when we should be targeting them and then focusing on growth to create the economy and growth of the future. That is going to generate, by the way, tax revenues for governments to then redistribute among various consumption programs.
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Thank you so much, Mr. Chair.
I want to thank both of our speakers today.
My first question is for Dr. Da Silva, although you kind of ruined it. At the end of your talk, you had your three recommendations. I'm going to be touching on one of them.
When I was a kid, long ago but not too long ago, I could not afford to go to a dentist. A lot of people at my school could not afford a dentist. Every year, we had public health nurses come. They were trained in dental hygiene. They would teach us how to brush our teeth, and they did that every year. They showed us a video and a couple of slides, and they literally gave us a toothbrush and told us how to brush our teeth. They walked up the rows in the gym to make sure that we were doing it properly.
I think there must have been a dentist there, because I remember individually going up to the dentist and the dentist looking at each of our mouths. The next day, you would get either a yellow paper or a red paper. The red paper meant you should see a professional dentist, who would say you needed braces. Every year I cringed, because every year I got a red slip of paper. However, there was no way I was going to show it to my parents, because there was no way we could have afforded dentists.
It sounds like a sad story, but the good news is that I never had a cavity until I was 21 years old. Also, because my parents had no money—I don't know if they meant to fool us, but they fooled us—they told us that dessert only ever happened on Sundays, so we only ever had sugar on Sundays. I think that played a big role in why I had my very first cavity when I was 21 years old.
The question I have for you is how we ensure a continued emphasis on prevention and keeping teeth healthy while we introduce this really excellent Canadian national dental care plan.
School-based systems, I think, have always been shown to work for finding kids who have high needs. Some provinces have targeted school-based programs where providers go to schools in areas where they know the risk is going to be higher. In Ontario, for example, some areas might have screening and fluoride. Varnish is applied, and depending on the scope of practice for the dental hygienist or dental therapist, they can offer treatments within the schools. Saskatchewan used to have probably one of the most world-renowned school-based programs through the sixties, seventies and eighties. The challenge is that they are costly to run, and given all the pressure that provinces have, those tend to be cut or stripped down first.
The idea is that there need to be parallel systems within the provinces and within local municipalities. This requires partnerships with school boards, but not just focusing on children. We do a pretty good job with oral health prevention and screening for our younger kids, particularly those in kindergarten up to grade 7. Once they hit high school, we lose track of them, and that's even more so for seniors in long-term care, where we're not going to assess their needs as readily.
It's about combining resources. It doesn't have to be just the oral health professionals involved in this. We need to partner with any caregivers, like nurses and physicians, who can look in the mouth to identify problems so patients can get into the system, whether it's to be referred to their dentist for private care or enrolled in a public program. That broadens how we get patients into the programs they need, and then they can get care.
It starts by looking in the mouth, whether it's in the schools or the areas where that's needed the most.
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Let's not lose that. That's very important. I think the reason it was done when I was younger was that it was the only thing the school system, the health care system, could afford, because it didn't cost a lot of money. We want to do that. Also, whatever I learned in grade school, I very much carried through in high school. I just want to say that as a reminder to us all.
Thank you for your leadership, by the way. I really appreciate all the work you have done.
My second question is for Mr. Lee.
Mr. Lee, you might be the guest most invited to the finance committee. I've been on this committee for almost four years now, and I think I've seen you for just about every single study.
We're here to talk about the fall economic statement, so I want to ask you a question on that. We have heard a number of industry guests who have come before us talk about the fall economic statement. They very much support the investment tax credit, and they have been very vocal in telling us to get going in approving the fall economic statement and Bill .
Would you agree with them?
Thank you to the witnesses for being here.
Mr. Lee, thank you for your presentation. I'm going to ask you some questions about Bill . In your presentation, you said that your comments were general and more macroeconomic in nature. However, some bills, such as Bill C‑59, amend the Competition Act.
What should regulations, laws and standards look like in a competitive economy, in your view? How should the act govern that?
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Thank you very much for that question. I didn't expect it, but I am really pleased that you asked it.
I think we made a mistake, and I say that with great respect for the Competition Bureau. There are some very fine people there, but we've engaged in what I call nose counting—how many companies are in or the concentration ratio. I use concentration ratios in my courses too.
To go back to Schumpeter, who understood this more deeply, I believe, than anyone else, he argued that it wasn't the concentration ratio that's critical; it's the contestability of markets. How easy is it to enter the market with substitutes? That's where competition increasingly comes from.
Jeff Bezos taught us that. He deconstructed the retail physical bricks and mortar because he had a brilliant idea in 1995. He understood that you can sell stuff online when everybody was laughing at him. It's contestability that's critical, not looking at the existing status quo. It's like looking in the rear-view mirror.
My overarching philosophical criticism is that we should be asking how we can make all of these enclosed markets more contestable, whether they have to do with airlines, banking or other areas that are protected.
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I understand your question, and believe me, I've looked at the literature, because this is important.
It would have been Mr. Chrétien's administration and Bill Clinton's in the States that got the OECD moving on this, so give them credit. However, I want to distinguish between tax havens and good old-fashioned illegal cheating. I think that's important, but I'm going to focus very quickly, because of the time, on your question.
I think the availability of tax havens is diminishing because of the OECD tax treaty that Canada belongs to and because they increased media scrutiny on it. I don't see it as a large issue for conventional, publicly traded companies that are very worried about their brand and reputation. We've also dealt with the competition between countries by setting a minimum corporate income tax, so I think this issue is diminishing in importance.
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I don't want anyone to think that I'm just a professor sitting in the ivory tower. I do read. I promise you that I do study this intensely.
Mohamed El-Erian, the very distinguished chief economist, formerly with PIMCO and now with one of the major European financial institutions, was extremely critical of this. He said they drove rates far too low. So did Lawrence Summers. We knew what would happen. When you cut interest rates to that level, it is the same as making a very steep tax cut. You're introducing huge amounts of stimulus. We tend to think of stimulus as only fiscal and not monetary.
What happened? Well, people did exactly what we would expect them to do—they went out and borrowed like there was no tomorrow. I don't think we caused inflation—as we all know, it was caused by the shutting down of supply chains—but we certainly exacerbated inflation.
Very quickly, to your question, I support the interest rate increase, because I don't believe there's any other effective tool in all the western countries that have studied this. It's a blunt, harsh tool, but it works. I lived through it when interest rates hit 20%. We killed inflation under Governor Bouey and Governor Volcker. They brought inflation from 14% down to zero, basically.
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I think I can, and forgive my arrogance. I read a ton on this.
I've come to the conclusion—I think Senior Deputy Governor Rogers, David Dodge and many others have too—that it's because we have too many protected industries. We don't even have free trade in Canada among the provinces. The IMF estimates that if we had genuine free trade between B.C. and Ontario, etc., it would be the equivalent of a 22% tariff reduction. That's massive in terms of the impact on GDP.
We've met the enemy and it's us. We've done it to ourselves. Our banking is protected. Our airlines are protected. The fees are twice as large. I mean, dairy is protected, as we all know, through supply management. We have many protected industries.
I'm as cynical about business as any progressive, and I'm not a progressive. I'm a fiscal conservative. I don't hide it. Corporations—
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Please believe me, thank you.
We have to remove the legislative protections that protect those firms against external competition. I know there are people who will say, “Oh, my goodness” to that. I'm unionized, by the way, at the university, and I hear union colleagues saying, “Oh, my goodness, if they come in, we're going to create massive unemployment.” I don't believe it. I lived through Balcerowicz, when he did the cold shock therapy of 1993 to 1995 and Poland was destitute, impoverished and bankrupt. For 24 months they went through a deep recession, and then Poland took off. No other country, the IMF has evaluated, has been as successful in the post-Communist era as Poland, and they adopted all the pro-market reforms we're talking about.
We have to open it up. I don't believe there will be mass unemployment. The new entrants will employ the Canadians who are laid off by Bell or Rogers—that's great—or the other industries that are opened up. It would create growth and create productivity, not unemployment, if we open them up and remove the legislative prohibitions against foreign firms coming in. Let Verizon come into Canada.
I think you're referring to his final book, Capitalism, Socialism and Democracy, but that was a cultural interpretation. He said that capitalism is the most efficient form of all. It will be destroyed because of what he called “the sociology of the intellectual”—people like me. Well, it's not me literally, but it's that intellectuals don't like markets. We don't like business. We don't like competition.
All you have to do is listen to any professor on CBC, CTV or Global. About 98% of them will verify that. We have this hostility, this deep philosophical opposition. For those who say I'm wrong, please read “The Sociology of the Intellectual”. It's in chapter XIII in Capitalism, Socialism and Democracy. It's the most brilliant exposition ever of how and why intellectuals think the way they do.