Thank you, Mr. Chairman, for the opportunity to address you and the finance committee today.
My name is Oliver Technow, and I'm accompanied by Ms. Heather Delage. The organization we lead, right here in Charlottetown, Prince Edward Island, can truly be considered a prime example of how an entrepreneurial vision can turn into global leadership in one of the most competitive areas: pharmaceutical ingredient manufacturing.
I have two objectives today with my five minutes. I would like to share a little of our BioVectra story with you so that you can envision how innovative clusters can help create and lead a knowledge-based economy, not only in what we consider the big centres in this country, such as Toronto, Montreal, Vancouver, or Calgary, but also right here in beautiful in Atlantic Canada, where we have some of the best universities and colleges in the country and a very talented and highly skilled workforce that is looking for ways to drive the economy here.
Second, as you know, BioVectra has provided a written submission and has developed alongside that a very compelling business case that would help operationalize a major facility in Windsor, Nova Scotia, which we've purchased and have started retrofitting. We are asking the finance committee to recommend federal government investment in BioVectra in its pre-budget report. I want to be very clear at this point that this is not a corporate handout. This is a very smart investment that will quickly pay dividends for many years to come and can lead to the creation of hundreds of jobs in the outskirts of Halifax.
I truly hope that you see how our current business model and our future vision will help to answer all three of the finance committee's questions that have been posed: by boosting employment in rural Canada; by expanding an innovative and knowledge-based company that supports economic diversification in Atlantic Canada; and as well, as an organization, by providing cutting-edge technology and innovation and exporting that to the globe.
Let me introduce you briefly to what BioVectra does. We are a contract manufacturing and development organization applying world-leading technology in the pharmaceutical manufacturing sector. We have a speciality in the area of fermentation, which is a technology that is used in a lot of innovative drugs these days. We are headquartered here in Prince Edward Island. BioVectra can already be considered as the premier life sciences company in Atlantic Canada, which has a growing bioscience cluster. We have three active manufacturing and research and development facilities in total and we employ already a little over 300 people here in Atlantic Canada. I would strongly encourage you, if you fly out later today from the airport, to just turn your head to the left so you can see our biggest facility right there at Aviation Avenue, where we produce commercial-grade active pharmaceutical ingredients in both the synthetic and biologic products areas.
I'll give you a bit of the history as well. BioVectra is on a very impressive growth trajectory, which sets us quite apart from our competition. It started off very small, truly as an entrepreneurial dream and vision in the 1970s. The first couple of decades were clearly dedicated towards developing expertise in scaled chemical manufacturing, which then led in the 1990s to the first outreaches into the market as a contract manufacturing organization. Only in the last few years has BioVectra truly reached the stage of global competition where we consider ourselves one of the leading organizations in our space. We do have strong relationships, business relationships, and long-standing long-term contracts with probably most of the top 20 pharmaceutical and biotech companies in the world.
Now that you've heard a little about who we are and our outreach and our organization, I would like to share my vision for the organization and how to expand into eastern Canada.
Our operation in Windsor, Nova Scotia, has been the subject of a major retrofit. Our objective is to install large-scale fermentation there, which is an important addition to our manufacturing continuum and is important for our competitiveness in the global world. We have already invested $20 million for the retrofit of this facility over the last two years, which was acquired in 2014.
Today, we are at the point that to still have a viable business case that benefits the Canadian economy, we are looking to secure partnership government grant support so that we can complete the work and get the site up and running. We envision this to be possible in 12 to 18 months. I ask for an investment of $10 million from the Government of Canada. With this investment, this partnership grant, BioVectra would be able to get this operation up and going.
The key question, obviously, is why: why would the Canadian government consider this investment in this organization? I believe this is a very strong and simple case to make. If the plant is operationalized.... As I've said, we believe we could do this in 12 to 18 months. Please have a look at the binder we gave you, which shows that this site already exists; we have a couple of pictures that bring to life where this currently stands. If the plant is operationalized, it would create up to 70 new jobs. That is a rather conservative guess on our end. For both the commercial fermentation and laboratory process development at this site, we will require a very unique set of highly skilled talent. We need microbiologists, biochemists, and biochemical engineers, as well as highly trained and skilled operations staff.
While direct employment may add up to 70 jobs, it's the spinoff jobs that truly make a big difference in this investment. Based on experience, we know that once a facility and a manufacturing site of this scale becomes operational, hundreds of spinoff jobs are created in the immediate environment for vendors, suppliers, and everybody who has to help to keep this site going. This would create a significant economic boost to Nova Scotia. BioVectra would be committed to attracting and retaining workers in Nova Scotia's highly educated workforce and in driving the diversification of the local economy, consequently reducing unemployment in this area.
We believe this investment is directly aligned with and supports the federal government's innovation agenda and, equally, the Atlantic Canada growth strategy. A positive return on this investment of the federal contribution in terms of the spinoff jobs, the growing tax base for the province and the federal government, would be quickly realized—you can do the math—in a couple of years, and it would continue in perpetuity.
We have reached out to many stakeholders in Canada over the last few weeks to share our vision for expansion into eastern Canada. We spoke with the Atlantic Canada Opportunities Agency, ACOA, and to members of Finance Canada, Innovation Canada, and other federal organizations, and, as you would imagine, with the local and provincial governments in P.E.I. and Nova Scotia as well. Everyone is excited about this opportunity because it's such a compelling case to make.
This is truly about a knowledge-based company and a knowledge-based economy growing in Atlantic Canada, boosting exports into the globe. It's not only for the pharmaceutical cluster in New England and between the Ontario-Quebec corridor. This is truly about competing on the world stage out of Atlantic Canada. It would create a future for highly skilled Canadians and immigrants who you would have to attract to run this organization in Nova Scotia, in an area that probably needs growth like this more than other areas of the country. BioVectra is truly ready and wants to play a key role in that vision in close partnership with the Government of Canada.
I thank this distinguished committee for giving me the opportunity to be part of this discussion. I'm looking forward to your questions.
Good morning, Chair and members of the Standing Committee on Finance. Thank you for the opportunity to speak to the committee on the topic of the 2017 federal budget.
The chamber serves as the voice of business in the greater Charlottetown area, and that takes in Stratford, Cornwall, and Charlottetown. We are a very active provincial chamber, and we provide services, opportunities, and advocacy support for members to enhance their ability to do business. We have close to 1,000 members, and we reflect a diverse network of businesses from almost every industry sector and profession in our region.
It is our philosophy that Prince Edward Island, if it is to prosper, must have a business development strategy that is private sector driven, export oriented, and focused on innovation. We also must possess the quality and quantity of human capital and strategic infrastructure appropriate to the task. This is a core message of the chamber and drives our advocacy efforts on behalf of our membership.
With these principles in mind, we initially provided written recommendations to the committee on August 5, addressing five issues that could be influenced by the federal government's actions. Today, I will highlight some specific recommendations that pertain to the following five issues: strategic physical infrastructure, innovation and commercialization, access to capital, taxation, and demographic and labour issues.
To begin, I'm sure you would all agree that the quality and quantity of local infrastructure are essential to advancing the Island economy. Infrastructure such as roads, water and sewer, electrical power, and broadband Internet are basic requirements for the prosperity of Island communities. It is worth recognizing that phase one of the new federal infrastructure program has made important investments in public transit, clean water, and affordable housing; however, it is still unclear where phase two funding will be allocated.
With this in mind, we emphasize the importance of federal investments in innovation and commercialization projects that will accelerate new product development, local manufacturing, and scaling of export-oriented businesses. Strong inroads have been made with past strategic investments in physical infrastructure at our post-secondary institutions and scientific research institutions. Additional investment in these areas is critical for the growth of P.E.I.'s existing knowledge-based industries.
Further to this, financial infrastructure must also be in place for individual firms to realize innovation and commercialization success. In this case, the importance of federal R and D financial assistance programs, such as ACOA's Atlantic innovation fund, SR and ED, and the NRC's IRAP cannot be underestimated.
Still on the topic of strategic infrastructure, the chamber continues to actively pursue the issue of the federal airports capital assistance program, or ACAP. I think you might be hearing more about that this week. Because of its location on federal land, the Charlottetown Airport is one of six small airports in the national airport system that is currently ineligible for funding through ACAP for safety-related maintenance and upgrades. Members of the Canadian Chamber of Commerce, representing over 200,000 Canadian businesses, recently approved and support a resolution to pursue this issue further with the federal government. We do urge you to consider the connection between the prosperity of P.E.l.'s business community and adequate access to our country's transportation network through a safe and financially viable airport.
Access to capital is another crucial aspect of an effective business development strategy for P.E.I. A range of programs is available for new businesses seeking financing, but gaps still remain. Through its Island advance initiative, the chamber is expanding connections among potential investors and entrepreneurs. I want to recognize our Island Advance advisory board chair Ron Keefe, who is very actively involved in the Island Advance initiative. The chamber recommends that the federal government continue to pursue initiatives to support entrepreneur development, whether it be through a specific venture capital strategy or a combination of taxation measures to promote venture capital investments and encourage first-time entrepreneurs.
Finally, a significant priority of the chamber has been to stress the central role that international immigration plays in P.E.l.'s economic growth. We spoke to a number of demographic and labour market issues in our written submission, but today I want to highlight the efforts of the chamber's PEI Connectors program, which is supported through federal funding from Immigration, Refugees and Citizenship Canada.
The importance of attracting international immigrants to the Atlantic region was underscored by the recently launched Atlantic growth strategy. Retention through integration is the key aspect of building on this goal, and the PEI Connectors program has been at the forefront of this work by helping entrepreneurial immigrants make connections and establish themselves on P.E.I. As such, the chamber would like to reinforce the importance of federal government support for this program as an effective method of ensuring the future economic prosperity of P.E.I.
I want to thank you for the opportunity to provide comments on behalf of the business community. l look forward to your questions.
Honourable Wayne Easter and members of the committee, good morning. It is a privilege to welcome you to Prince Edward Island, and to welcome a couple of you back to Prince Edward Island, and to offer comments on economic infrastructure as you carry out your consultations.
As Penny has indicated, one of the main themes we are looking at is innovative economic infrastructure in the province. That is my purpose here today. With me today is Martin Yuill. Martin is the director of incubation for the PEI BioAlliance and head of the Emergence bioscience business incubator program.
The Prince Edward Island BioAlliance was incorporated as a private sector-led not-for-profit in 2005 to coordinate and accelerate the development of the P.E.I. bioscience cluster. Since that time, the BioAlliance has been the catalyst in aligning the efforts of government partners, research and academic organizations, and bioscience business leaders to build a new economic pillar for the province and, indeed, for the Atlantic region. Since the incorporation of the BioAlliance, the bioscience industry in Prince Edward Island has grown from 16 companies to more than 45. Private sector revenue has tripled to more than $200 million in export sales, and employment in the sector has risen from about 450 jobs to more than 1,500 jobs.
About half the companies in the cluster are locally grown from early entrepreneurial efforts, and we witnessed one being discussed this morning—BioVectra. The other half of them are from other parts of Canada and the world. We are home to business units of three multinationals, all of which are here because they invested in local small and medium-sized enterprises, and they continue to invest. Our companies produce human, animal, and fish health products, including cosmetic ingredients, natural health products, feed additives, vaccines, diagnostics, and pharmaceuticals.
Early on, we recognized, as others have, that Canada needed to improve its commercialization efforts from new technologies developed in academia and the start-up companies. This has been a core part of our development strategy: to become a Canadian leader in commercialization. We’ve done this through our collaborative partnership model. As a result, we have established a winning environment for early-stage businesses in P.E.I.
Key partners in our cluster, which support strategic implementation and business growth in a variety of ways, include: Holland College; the University of Prince Edward Island and other regional universities such as Dalhousie, Mount Allison, UNB, and St. Francis Xavier, etc.; Innovation PEI; the NRC; Ag Canada research; ACOA; and NSERC.
With our recent successes in two important federal competitions—the Canadian accelerator and incubator program and the Centres of Excellence for Commercialization and Research—we have established both the Emergence Bioscience Business Incubator and Natural Products Canada. These entities are exponentially increasing business development and business attraction opportunities and are assisting in building our reputation in Canada and the world as an innovation leader with the experience and infrastructure to commercialize new products and new ideas.
One of the consequences we are now facing is that we are exceeding the capacity of our incubation and acceleration infrastructure in the province, in the region, and in Canada. This is, as you can appreciate, a good consequence. We must, as an urgent priority, establish strategic infrastructure—something that Penny also mentioned—including laboratory, manufacturing, and scale-up facilities and the services necessary to exploit this opportunity and grow our economy.
I chair the multi-stakeholder steering committee of the BioAlliance, which has worked for the past few years on the conceptual design and business plan for a solution to our space and service needs. The solution is what we call the “centre for bioscience commercialization” or, simply, the “BioAccelerator”.
It is a 70,000-square-foot facility that incorporates technical and business services, accelerator space for early-stage businesses, and manufacturing space that allows companies to scale to global markets. It would be located at the BioCommons Research Park in Prince Edward Island. The current cost estimate is $38 million. Its construction will allow for the establishment of 30 new companies within the cluster and the capacity to initiate commercialization and ultimately lead to expansion of stand-alone facilities across the province, the region, and Canada.
The BioAccelerator will be part of Canada's national innovation connectivity, supporting new product development and commercialization in biosciences. There is no reason why Canada can't be a leading nation in the manufacturing of innovative science-based products. Our competitive advantages are our people and infrastructure. We have spent significant dollars on research and innovative institutions. We now need to commercialize these innovations and reap the economic rewards in this country.
Our request today is that the federal government ensure that strategic economic infrastructure, such as the BioAccelerator, is a priority for funding under phase two of the federal infrastructure program. Infrastructure such as the BioAccelerator, when placed in the midst of a successful cluster partnership, will ensure that the federal government achieves a full return on its investment of public funds. It supports Canada's innovation agenda, enables commercialization of technologies for global markets, attracts talented immigrants, increases foreign direct investment, and mobilizes Canadian capital for investment in Canadian business.
We wish to thank you today for your time. I would be pleased to answer any questions you might have. Thank you.
Good morning, everyone.
On behalf of the the literacy coalitions in P.E.I., Nova Scotia, and New Brunswick, I'd like to thank you for the opportunity to appear before you today.
We have a lot to say on the issue of low literacy in Atlantic Canada and in Canada at large. In the interests of time, we've decided to review the highlights of the brief that all of you received.
To realize a stronger, more prosperous Canada, we need to strengthen the skills of Canadians across all regions. Literacy and the other essential skills are the foundations for all learning and involve not only reading but interpreting information in all forms. Literacy, numeracy, and problem-solving skills are key to the ability of Canadians to fully participate in our society and to contribute to economic growth. However, 49% of the working-age population in Canada is ranked below level 3, the level that workers in many Canadian occupations need to perform effectively.
The problem isn't necessarily about not being able to read. All but 15% of these workers have mastered the act of reading, a skill that allows them to apply routine procedural knowledge. What these workers cannot do is read well enough to be efficient problem-solvers and to apply their technical skills and knowledge in non-routine ways.
Atlantic Canada has some of the lowest literacy and essential skills levels in the country. The percentage of working-age adults in Atlantic Canada with low literacy is 46% in P.E.I., 50% in Nova Scotia, 54% in New Brunswick, and 56% in Newfoundland and Labrador. Since people of low literacy skills are more than twice as likely to be unemployed, it's not surprising that Atlantic Canada also has some of the highest unemployment rates in the country.
As organizations that provide much-needed literacy services, programs, and supports, we see the difference that literacy makes in the lives of individuals and their families. We would like to tell you the story of Kim, a learner in one of our adult literacy programs.
Kim began our program unable to read, due in part to a learning disability. Her early life in school was very challenging. Despite her desire to learn and despite her best efforts, she believed herself to be inadequate. To put it in her terms, she felt “stupid and unable to learn”. In Grade 10, Kim dropped out of school.
She worked at manual labour jobs for many years. After sustaining an injury that left her unable to continue working in labour jobs, and with no skills to secure another line of work, she had to rely on social assistance to provide for herself and her two children. Her confidence was shattered, and she spiralled into a cycle of addictions, poverty, and reliance on social assistance.
When Kim decided that she wanted a better life for herself and her family, she sought treatment and joined an adult literacy program. It was a big step toward her goal of independence. In less than a year, and with the help of the literacy tutor, she is well on her way to achieving her goals. With her new skills, she is now helping her children with their reading, for the first time since they began school.
Kim no longer feels as though she's inadequate or worthless. She believes in herself. With the continued support of the program and her tutor, Kim wants to write her GED test nd pursue a college diploma that will enable her to gain steady employment.
Each of our coalitions has stories of success like Kim's. Each story is unique, but given the statistics, Kim is typical of a woman who has low literacy skills and who is more likely to be unemployed, or employed in the lowest-paying jobs, and a single parent. There are many others like her who need access to supports in order to be successful and contribute to growth in Atlantic Canada.
Overall, Canada's opportunity for economic growth is hindered by the fact that 51% of workers have literacy skill levels below those needed to do their jobs well. These skill gaps hinder our opportunity for economic growth and cost our health, justice, political, and social systems. The hidden cost of low literacy in Canada is estimated at over $32 billion U.S.
A highly skilled workforce may not be the only contributor to economic growth in Canada, but it certainly plays a very large role. An investment in human capital—that is, in education and skills training—is three times as important to economic growth over the long term as investment in physical capital such as machinery and equipment. A 1% increase in literacy and essential skills in Canada would create a workforce that is 2.5% more productive and would increase Canada's GDP by 1.5%.
All levels of government would realize significant benefits from such an investment: for example, higher tax revenue, reduced income supports and payment of EI, social assistance, and workers' compensation, totalling over $2 billion per year, and reduced health expenditures, totalling $688 million per year.
An increasingly knowledge-based economy demands that our population grow and adapt to an evolving society. In Atlantic Canada, for example, because of the automation of traditional industries such as fisheries and aquaculture, forestry, and agriculture, employers are facing labour shortages as they attempt to hire and retain employees with the appropriate skills.
There are other populations of Atlantic Canadians, including first nations and immigrants, who are especially vulnerable to low literacy. Their needs must be met on an urgent basis, since these two groups will account for much of the growth in the labour force in the next few decades. It's also crucial to ensure that rural populations have access to literacy and essential skills supports.
There is clearly a need for literacy and essential skills services and supports in our country. In order to meet this need in Atlantic Canada, we must have the opportunity to leverage the strengths of our coalitions and community literacy organizations to grow supports for our residents. We are aligned with provincial and federal visions to form partnerships that will be more efficient and effective. We have the expertise to address the adverse impact that low literacy has on our communities, civic engagement, health, crime rates, and the economy. Each coalition plays a crucial role in our respective provinces and, by working together, we will strengthen our region as a whole.
As we collaborate to form the Atlantic partnership for literacy and essential skills, we are asking for funding from our federal government in the amount of $600,000 per year over four years. This funding will provide us with the stability we need to develop a collaborative approach with all stakeholders to ensure that quality and accessible programming is in place in our region.
This will enable Atlantic Canadians to have opportunities to participate fully at work, at home, and in their community. It will also sustain and grow our ability to identify needs and gaps in services and develop an effective strategy that responds to the needs of our communities, and to share knowledge and successful models of literacy, training, and supports in areas such as workforce development and also in the area of youth, early years, family, and adult literacy in our region, as well as other jurisdictions in Canada.
A minimum investment in literacy and essential skills will allow us to make a broader impact in the our region and to produce measurable outcomes that will have a positive and lasting impact on the lives of all Atlantic Canadians.
On behalf of the literacy coalitions in P.E.I., Nova Scotia, and New Brunswick, I would like to once again thank you for the opportunity to share how, together, we can change lives and communities in Atlantic Canada by investing in literacy, essential skills, and lifelong learning.
Thank you, Chairman Easter, for the opportunity for the Prince Edward Island Fishermen's Association to present to the Standing Committee on Finance this morning.
My name is Ian MacPherson. I'm the executive director of the PEIFA. Today I am joined by our association president, Mr. Craig Avery, who has over 40 years' experience in the fisheries for commercial lobster and various other species.
In terms of the mandate of the House of Commons Standing Order 83.1, we would like to expand on item two, which asks what federal actions would assist Canada's businesses to meet their expansion, innovation, and prosperity goals, and also on item three, which asks what identifying federal measures in rural and remote communities would encourage expansion and prosperity in serving domestic and international customers.
The Prince Edward Island Fishermen's Association represents the interests of 1,300 core fishers on Prince Edward Island. The association is dedicated to making positive changes in the fishery so that current and future generations can remain active and financially viable in the fishing sector for many years to come.
In Atlantic Canada, the owner-operator model, which works well in many countries around the world, is strong and effective. Organizations such as the PEIFA strongly support the continuation of this independent business model. Each of our captains has a significant financial investment in their fleets, which translates into a direct connection with our fishery and a desire to improve it.
Our fishery, along with agriculture and tourism, is one of the top three economic drivers of the Prince Edward Island economy. Our organization supports the diversification of export markets and has made this position recently known to the standing committee dealing with the Trans-Pacific Partnership agreement. In addition to market diversification, we also feel that the rationalization of licences is an effective way to increase the financial viability of fishing fleets in Atlantic Canada. Fleet rationalization will be the focus of our presentation today.
One of the most impactful and effective methods to improve our multiple-species fishery is the permanent retirement of licences, which allows those who want to exit the fishery the ability to do so in a dignified and planned manner.
The primary objectives of our proposed rationalization program are as follows: to enhance the sustainability of our multi-species resources; to add additional conservation measures to existing conservation programs; to ensure we have sustainable fisheries that can meet the demands of the global seafood markets; to ensure eco-certifications are obtained and maintained; to ensure effective fishing efforts are achieved; to create higher-income opportunities for those remaining in the fishery; and, to create and enhance existing jobs, particularly in coastal communities.
These goals are consistent with the recommendations of the Fisheries Resource Conservation Council, the FRCC, which stated that one of the main goals in improving various fisheries is the reduction of fleet numbers. The FRCC also recommended that the following outcomes be outcomes be sought through fleet reductions, and many of these initiatives have taken place or are planned in the near future: increasing the viability of the fleets; increased biological viability of the area; increased use of electronic monitoring and data collection; reduction of gear being fished; shorter fishing seasons; and finally, combining licences to reduce environmental footprints.
The PEIFA has been one of the leading organizations in Atlantic Canada in fleet reductions. For example, one of three lobster fishing areas on P.E.I., LFA 26A, has achieved the following results over the past five years: 33 lobster licences have been retired, at 300 traps per licence, and in addition, each individual fisher in this area also gave up an additional 28 traps per active licence. These two reductions resulted in over 19,800 traps being removed from the water.
These reductions were part of a detailed and comprehensive program that considered seven key components. These were: overcapacity in an area; core licence retirement; multi-species retirement; residual viability of the core fishing enterprise; location of the licence activity; fisher age; and, fisher health.
The reduction in traps and licences has increased catches for many harvesters and has increased their overall economic viability in a positive manner. Positive environmental impacts were also significant as a result of this rationalization program.
As noted above, the PEIFA has an effective, proven, and implementation-ready program that can be applied to other species. Now that the industry is trending in a positive direction, a joint PEIFA-Department of Fisheries and Oceans Canada rationalization document has set priorities to also rationalize groundfish, herring, mackerel, and tuna licences.
This does not mean the lobster fleet rationalization has been completed. However, a focus on these additional species will achieve two goals: one, to bring the number of licences much more in line with available quota and, two, to further increase the economic viability of those captains remaining in the fishery. At present, many secondary fisheries only last several weeks or just a few days before the quota is caught by the large number of harvesters licensed in those fisheries. It is important to note that active participation may be as low as 30% of the eligible licence-holders in some of these fisheries.
Fleet rationalization will reduce operating costs and carbon footprints will be reduced significantly when trips result in increased catches and a reduction in the number of trips.
I realize that I'm just about out of time, so I'll paraphrase here.
The Chair: That's good. I thought I was going to have to slow you down because the translators are having a hard time keeping up.
Mr. Ian MacPherson: Okay. I'll summarize. I apologize.
At any rate, we have embarked on a rationalization program to eliminate groundfish and other licences, but we're having limited success. A federal contribution of $3 million toward the retirement of these licences, and $7.5 million toward the retirement of tuna licences, would have a significant positive impact on these fisheries. In terms of order of magnitude, if we could retire 400 to 500 groundfish licences out of 872, and 180 out of 363 tuna licences, this would have a huge impact.
We feel that this is an investment in our fishery. These retirement programs have taken place in areas such as tobacco and hog production in the agricultural sector. This would be a significant positive investment in the future, and we would get away from the crisis management that we've pretty well operated our fishery with in the last number of years.
Good morning, Mr. Chair and committee members.
My name is Mary Robinson. I am president of the Prince Edward Island Federation of Agriculture. With me today is Robert Godfrey, our executive director.
Thank you for this opportunity to present here today in beautiful Charlottetown. Welcome to our province.
The PEIFA is Prince Edward Island's largest general farm organization, representing 80% to 85% of farms across the Island. The federation is comprised of approximately 600 farms and 15 different commodity member associations. Our membership is made up of family farms, many of which have been farmed for generations. Canada's agrifood sector employs one in eight Canadians and provided $108 billion to Canadian GDP in 2014.
In Prince Edward Island, agriculture is the largest industry. Provincially, in 2014 it provided 4,000 direct jobs and more than $435 million to GDP. Our industry is working to meet the opportunities presented by a changing climate, a rising global population, and a domestic consumer base looking for diverse agrifood products. P.E.I. agriculture continues to suffer economic limitations due to a shortage of labour, as well as access to deepwater ports.
Our remarks today will echo many of the same things you've heard from our national counterpart, the Canadian Federation of Agriculture: one, income tax revisions to enable family farm transfers; two, clean technologies in an era of carbon pricing; and three, market access opportunities.
I'd like to start by thanking the chairman and the members of the committee for the invitation to speak to you today.
My name is Shane Devenish, and I'm the executive director of the Canadian Camping and RV Council, a federal non-profit association representing 2,347 private campgrounds across Canada.
With me today is Wayne Hambly, president of the P.E.I. Home and RV Centre.
Campgrounds offer an opportunity for families to spend time together, to create lifelong memories, and to discover Canada's natural landscape. Camping creates a sense of community that is unique to this form of travel accommodation, and it is also an industry that plays an important role in the health of Canada's tourism sector. It also makes a significant contribution to the economy.
Campgrounds stimulate economic activity and create jobs for Canadians in urban areas and rural communities coast to coast. The Canadian Camping and RV Council contributes $4.7 billion to the economy, employs 60,400 people full time, and pays almost $1 billion in federal and provincial taxes. There are 5.8 million Canadians who camp annually, with travel-related expenditures totalling $2 billion and another $850 million spent on non-travel-related camping expenditures.
The camping and tourism industry provides a growing source of income for rural and remote populations, not only through RVing and camping, but through the local businesses the incoming visitors support and utilize around campgrounds.
The small business tax reduction reduces corporate tax that Canadian-controlled private corporations would otherwise have to pay on the first $500,000 of their income derived from an active business. An active business does not include a specified investment business, which is, one, a business with the principal purpose of deriving income from property—for example, interest, dividends, rents, and royalties—and two, a business that does not employ more than five full-time employees.
For the past several years, campground corporations have been able to qualify for the small business tax reduction of around 15%. However, CRA's interpretation changed earlier this year, without notification to either campgrounds across Canada or their accountants, and they reassessed a number of campgrounds at the large corporate tax rate of approximately 45%. CRA and National Revenue representatives are stating that their interpretation of campgrounds that employ less than five full-time employees as a specified investment business is a question of fact, as written in the current Income Tax Act, and they're acting accordingly. This now has campgrounds grouped unfairly in the same category as apartment buildings and mobile home parks, not to mention large Canadian corporations.
CCRVC estimates that nearly 75% of its private campgrounds do not employ five full-time employees, meaning that up to 1,760 campgrounds are impacted. Most campgrounds are required to close during the winter months in order to comply with local zoning bylaws. Because it is a seasonal business, the majority of campground employees are part-time. It is not financially feasible or necessary to employ them year-round. Simply, on average, campgrounds are small family-run businesses with limited staff working endless hours, and they are financially incapable of sustaining their business if they're paying a triple increase in their taxes.
With required environment and infrastructure expenditures, new campgrounds entering the Canadian market are virtually non-existent. For Canada to remain an attractive destination for domestic and international travellers, current private campgrounds must remain vibrant, and we need help from this government to remain financially stable.
CCRVC endorses the following potential solutions.
The definition of income in a corporation for the year from an active business should be modified so that it includes income that is derived in whole or in part from property where at least 500 hours of time is spent by employees of the corporation or by contractors retained by the corporation in the income-earning process—this would allow for the inclusion of seasonal worker hours when determining if the business is “active” or not—and/or establish tourism exception guidelines similar to ones that currently exist for hotels, motels, and inns, or any other similar premises, to aid in the determination of whether a business is an active business and therefore eligible for the small business tax deduction.
For the 2017 budget, CCRVC respectfully asks the finance committee to endorse a modification to amend the Income Tax Act that clearly distinguishes campgrounds as “active” businesses, which would provide private campgrounds eligibility for the small business tax deduction, ensuring that the campground industry remains strong and financially viable.
If that is unsuccessful, rural areas across our country will be impacted with numerous campground closings, leading to decreased tourism numbers, negative economic growth, job losses, and lost tax revenue in the regions that we need to support the most.
With that, I conclude. I'm very happy to answer any questions that the committee may have afterwards.
Thanks for inviting us to speak to you today.
Cooper Institute is a community-based social justice collective. We've been active since 1984 in communities across P.E.I. in working on social, economic, and environmental issues that are vital to Island residents.
In our presentation today, we're going to touch on several issues of particular importance to us: justice for migrant workers, addressing poverty, and sustainable communities.
It was with great enthusiasm that we read in the mandate letter to the the request to work with other departments to develop a strategy to address poverty. This is first and foremost a matter of fundamental human rights. It's also a budgetary concern. Acknowledged as a leading social determinant of health, poverty is costing Canadians billions of dollars annually.
Cooper Institute supports the concept of a basic income guarantee—BIG—and encourages the federal government to collaborate with provinces and territories, and especially with the community sector, to develop a model for implementing such a program. This is a long-term goal; we still need to invest in programs and services that support low-income Canadians, including affordable housing, universally accessible child care, and public transit. The BIG and other poverty reduction strategies must be seen as investments and could be paid for with revisions to the tax system. We support other groups in asking for tax fairness, including an increased corporate income tax and an end to corporate offshore tax dodging.
In Prince Edward Island, our rural communities and economies have been built and sustained by seasonal workers in fishing, farming, and tourism. Employment insurance is essential. It's paid for by workers and employers. It's essential to workers and businesses and the sectors in which they are employed. It's essential to the health and the economic well-being of their communities. The federal government must honour its commitment to reverse the 2012 changes to EI, reinstating the five extra weeks in all regions of the country. We have a high unemployment rate here, and our workers have been affected by the oil industry changes. We're asking for the working-on-claim provision to be fixed to make sure that workers are fairly compensated when they take work while on EI and for a re-evaluation of the regional divisions, which were particularly unfair in P.E.I.
Federal measures should support communities to develop their own policies and plans to meet the needs of people who live there. Cooper Institute is concerned about the impact of trade agreements, such as the CETA and the TPP. Under NAFTA, investor-state dispute settlement provisions have led to Canada being sued on numerous occasions and being forced to pay millions of dollars in compensation to foreign corporations. These costs are borne by all Canadians. The CETA and the TPP contain the same ISDS provisions that grant excessive power to corporations and impede government's ability to develop policies and programs that benefit communities and the environment.
Just a few months ago, we worked with MPs and to organize consultations on climate change. In total, a hundred people attended and shared their ideas about what should be included in a climate change strategy for Canada. Not surprisingly, a common theme was the need to make a transition to a green economy. Specifically, people said they wanted no new infrastructure to support a carbon-based economy; no new investment in fossil fuel extraction or transport; investment in local renewable energy infrastructure and local food production and distribution; all government decisions to pass a climate test; avoidance of trade deals that will worsen climate change; and, a phasing out of fossil fuel subsidies.
For the past six years, Cooper Institute has also been working on issues of migrant workers in Prince Edward Island. We are engaged in this issue on a national level as well, through work with the Canadian Council for Refugees, the National Farmers Union, and the Coalition for Migrant Worker Rights Canada.
Migrant workers contribute enormously to Canada's industries, particularly those related to food production as it occurs in rural and isolated areas. Over the past 50 years, industrial agricultural operations have grown to depend on this flexible workforce to operate in a context of dwindling rural populations. Canada's temporary foreign worker programs have been variously lauded and demonized with the changing tides of industry demands and media scandals. Further changes are expected following the recent release of the HUMA committee's report.
The policies of Canada's temporary foreign worker programs create systemic vulnerability for workers. One of the core constraints on workers is that their temporary work permits, which are tied to only one employer, effectively restrict their human rights. The deepening difficulty and expense of hiring foreign workers has the effect of driving employers towards the often unregulated international recruitment industry, which is known to traffic and extort workers.
Migrant workers pay into EI and CPP programs but are usually disqualified from claiming benefits from these programs. They pay Canadian taxes, but many of them are denied access to Canadian health care, and all of them are denied access to federally funded services offered to other kinds of immigrants. Canada's food system is now largely dependent on workers who have little or no access to rights and, in many cases, workers are routinely repatriated in the case of injury or illness. Some of them have been working and paying taxes in Canada for eight months each year for over a decade, but they are still denied basic rights and are not eligible to settle in Canada.
Migrant workers in Canada are propping up our economy. They are living and working in our rural communities, communities that are starved for new residents, young families, children in the local schools, volunteers for local fire departments, and workers in the local plants. These people and their families are needed and wanted, but they are ineligible for current immigration programs that prioritize affluent immigrants. The federal government should take immediate steps to make all migrant workers eligible for permanent residency status. This step would ensure that these workers' rights are respected, as befits Canadian workers, and would ensure that an industry does not profit from violating human rights.
It is worth questioning the economic ideology that promotes migration. Industry has demanded a flexible workforce, and this flexibility has been facilitated by federal policy through both the temporary foreign worker program and the changes to employment insurance. But whether we're talking about domestic or foreign workers, a flexible workforce is created out of desperate people willing to go anywhere and do almost anything for a paycheque. Flexible workers are, by definition, disposable. Desperate and disposable workers are more profitable for industry, and industry has the luxury of externalizing the real social and economic costs borne by Canadian and international societies when families are fractured and the social fabric is torn.
Migration is not a tool for development. Migration is more often a tactic of survival when other livable choices have been taken away. I urge this committee to reconsider the kinds of economic growth that are valued and what the true cost of those is.
In the maritime provinces, we can see very clearly the economic forces at play behind forced migration, and we've also seen what disposability looks like when the jobs dry up. We urge the finance committee to end the race to the bottom for workers, to grant status to transnational migrant workers, and to bring an end to forced economic migration within Canada.
Thank you, Mr. Chair. I will be checking all your personal profiles later to make sure that you weren't updating your status during our presentation.
Voices: Oh, oh!
Mr. Michael Pearson: First of all, I would like to commend you on the choice of location for this meeting. I've been in a lot of stuffy meetings rooms, and this is just a wonderful place to be for a meeting such as this. Whoever is responsible for this made a great choice. Thank you.
My name is Michael Pearson. I'm the president and founder of a software and technology services company called CONTAX. As you may have guessed, I am not from Canada. I wasn't born here. I came to Canada as a young man by myself. I had about enough money to buy a suit and get a job. I got some experience, saved some money, and started my company. That was quite a few years ago. Since then, my company has grown to have over 150 employees in four countries, with nine office locations, including right here in Charlottetown, P.E.I.
I've learned a lot about running a business, from the ground up. Many things I've learned the hard way, and I've had to become an expert in taxation and foreign currency hedging and things that I would never would have dreamed would be important qualities when I first started my business. I'm very appreciative of the opportunities I've had in coming to Canada; I don't take that for granted.
We have a wonderful system here. Many things are great about living in Canada, but it's also a great place to start and grow a business. There are many tax policies and other great things that encourage people to start businesses and grow and prosper here, and I do appreciate that, but obviously things can always be better. That's the reason why I wanted to come and present to you this morning and make my recommendations for changes that I think would make a significant difference to allowing small and mid-sized companies in Canada to grow and prosper.
My first recommendation is around the small business deduction, the SBD, which I'm sure you've been discussing or have been hearing about many times during these hearings. The SBD allows for a lower tax rate on the first $500,000 of taxable income for a Canadian-controlled private corporation, a CCPC. You're probably already aware of that. I'm sure there have been some requests to lower the taxation rate for the SBD. It's currently at 11%, and I know there's been discussion around its future.
My recommendation is slightly different. I don't necessarily agree that lowering the tax rate would have a significant economic advantage or impact, but increasing the threshold would. My recommendation is to increase the threshold from the current $500,000 to $750,000, and then index that threshold to inflation so that it doesn't erode over time. Most other thresholds, obviously, already have been indexed. The SBD, for some reason, hasn't been indexed. I'm not sure if anyone here knows the answer to this, but I believe the SBD threshold has been at $500,000 for roughly a decade.
Why is this important? As a business owner and a principal of the company, the amount of money I take out of the company is not determined by me. It's determined by you, by the taxation laws. My accountant and my finance department tell me how to minimize tax, obviously by taking advantage of the tax structure. By increasing the threshold, I'll be encouraged to leave more cash in the company, and cash in the company is a good thing. It encourages me and all other CCPCs to invest in innovation, technology, and growth, and to create jobs. Once I take that money out of the company, it's not there to do that. Increasing the threshold encourages me and my company and all other CCPCs to leave the money in the business, where it can be put to good use to create growth and jobs.
My second recommendation is around providing incentives and rewards for companies that are creating jobs. There was a program in 2011 called the “HCSB”, the hiring credit for small business. Essentially, any business paying EI premiums, employee premiums, up to $15,000 a year, could qualify for a $1,000-a-year tax credit. That program existed until 2013.
In 2015 a very similar program was put into place. It was called the small business job credit—SBJC—and it expires in 2016. Again, it's a similar program. It's based on the delta, the year-over-year increase in EI premiums, so an employer who is creating jobs and therefore paying more in EI premiums will get a tax credit, but only certain employers, only those employing up to about a dozen people. After that, you cross the threshold and there is no incentive. It's almost like a disincentive.
Once you cross that threshold, there is no tax break, so my second recommendation, and my final one, is to introduce a job credit program that provides a tax credit, but different from the previous programs. They had a good concept, but I don't believe they were well executed. Remove the threshold. There should be no threshold. Any company, any CCPC, that is creating jobs and therefore paying higher EI premiums should get a tax credit as an incentive, as a reward. That money would go back into the company, and for companies that are growing, innovating, investing, and creating jobs, what are they going to do with more money? They're probably going to continue to grow and create more jobs. Perhaps there needs to be a cap on the tax credit at some point, whether it be $10,000 or whatever number is deemed to be appropriate. That's my second recommendation.
Lastly, I would like to mention that my company has benefited from support from the Province of P.E.I. and from the federal government through jobs programs. We are very grateful for that support, particularly to the Honourable—and absent—Mr. Roach for his support here in P.E.I. also. I would encourage you to ask me any questions you may have about those programs, because we have taken advantage of them, and they have paid off very well.
Good morning, members of the committee. I'm grateful for the opportunity to address you this morning.
As the executive director of the St. John's Status of Women Council, my perspective on our economy and the budget is deeply rooted in the desire to attain economic equality for women in Canada.
Women may be a slim majority of the population, but we are the majority, and therefore our economic security has a substantial impact on the economy. I'm here to urge you to apply robust gender assessment tools, to mitigate the harm economic policies inevitably have on women, and to close the growing gender gap and raise women out of poverty.
As long as we continue to utilize traditional economic analysis, we will continue to recklessly ignore the fact that the status of women has a direct impact on our economy and mechanisms will not be put in place to close the inequalities and mitigate the damage to women. For example, pay equity legislation would dramatically decrease women's reliance on services and substantially increase women's contribution to the economy.
Treating women as a subset of the population is dangerous for women and the economy. We are 52% of the population, and our experiences cross all social determinants. We are seniors, youth, business owners, heads of families, workers, indigenous, sex workers, trans, middle class, sick, immigrants, and disabled.
We hold the majority of low-paying and precarious employment and take on the bulk of unpaid labour and child care, while dealing with a monumental and growing wage gap, now sitting at 72%. We cannot seek a fairer, more just economy without recognizing and addressing the fact that the majority of our poor are women.
Add to this our role as mothers and we are the largest users of services, often multiple services simultaneously. A lower socio-economic status has meant that women are always harmed by cuts in general, and austerity budgets can and do decisively destroy the services we most heavily rely on: health care, education, income support, and, because of the abysmal rates of violence we still experience here in Canada, domestic violence supports and services.
The World Health Organization and others have been calling on all governments to use gender assessment tools when generating budgets and economic policies that lessen this burden on women. A framework of tax and welfare policies can tackle this disproportionate burden. Pay equity, tax relief, and gender assessment tools can play a significant role in elevating the status of Canadian women.
Amidst concerns about the slow rate of growth in our economy, the International Monetary Fund has drawn attention to the need to close the gender gap between men's and women's employment in Canada. Research published by the World Bank suggests that closing the gender gap would be equivalent to 10% of Canada's GDP.
It's long past time for a national child care program. Clear research demonstrates that child care helps stimulate the economy through mothers' paid work, alleviates poverty, and moves women out of precarious work. A national program would create jobs, leave parents free to work or to upgrade their skills, and provide additional support for single parents.
Aside from raising families out of poverty and stimulating the economy, research has shown that early childhood education and care provides an environment where our children thrive regardless of their social and economic status. The numbers do bear out that the costs of subsidized child care are more than worth their cost in terms of returns to our economy. Many sound organizations have created viable frameworks for providing child care through social infrastructure, and it is well past time that we revisit these frameworks.
It is also time to return to a federal minimum wage, a living wage. A strong minimum wage is an immediate and highly effective economic policy to alleviate poverty for women. Women currently hold 59% of all minimum-wage jobs in Canada. A federal minimum wage would immediately benefit many Canadian workers and serve as a standard-bearer for provinces to follow.
Not only must we apply a gender lens to the economy, but we must not forget our human rights obligations. Canada has signed numerous conventions protecting and advancing the rights of women, including CEDAW, where article 3 states that the convention gives positive affirmation to the principle of equality:
States Parties shall take in all fields, in particular in the political, social, economic and cultural fields, all appropriate measures, including legislation, to ensure the full development and advancement of women, for the purpose of guaranteeing them the exercise and enjoyment of human rights and fundamental freedoms on a basis of equality with men.
A robust gender and human rights lens that strives to raise women out of poverty and closes the gender gap must be a prerequisite for Canada in meeting this responsibility.
In closing, I want to impress upon you that the correlation between women's economic security and their personal security is definitive. We must understand—and redress—that the lack of child care, housing, pay equity, access to women's health care, reproductive rights, education, and a fair justice system is not only the cause of violence against women, but is often the very barrier that prevents them from leaving. Women are not born vulnerable. We are made vulnerable by legislation and policies. We all want a vibrant, fair, and just Canada. We cannot reach this goal, however, if we continue to leave half the population behind.
Good morning, Mr. Chair, and welcome to you and your committee members. Let me take the opportunity to welcome you to P.E.I. on behalf of the Province of P.E.I. and all the constituents and residents of Prince Edward Island.
We look forward to having the opportunity to present to you this morning. What we're going to do is pass out a few summaries of our economic performance. It's not my intention to review those with you this morning, but once you look at them, you're free to ask questions.
I know you have a difficult job to do. It is an important one, and I recognize that. I will be doing the very same outreach come January and February this year, when we'll be looking at our own budget here in the province.
Time is short, so I will get to the point. I have three areas that I would like to address.
The first one is infrastructure. We are pleased with the new programs, particularly with water and sewer. We're happy to see the fifty-fifty cost-sharing, but anything that large for a province of this size has a few wrinkles for us. Fiscal capacity is a limiting factor here.
There is a demand locally for projects that don't qualify under the rules of the federal program. It strains our ability to use these funds. We feel that there is a need for broader rules for qualifying for these projects, rules that possibly could be tailored. We believe they should be tailored to small jurisdictions such as ours, and I'm sure you recognize that. We also believe that the process is a bit cumbersome. We know there has to be accountability; however, it is always better to look at local versus national projects.
The second item that I want to speak of is health care. It's a constant financial pressure. We're a small jurisdiction, yet we're expected to provide the health care that's seen in other jurisdictions. Certainly, there's a lot of pressure on this government and on our budget to continue to move forward with that. Your move to drop the health transfers from 6% to 3% in 2017-18 will hurt us. The CHT covers approximately 25% of health costs at present, and the 3% decline will drop this percentage significantly over time.
As in other provinces, new services are required for mental health, home care, drugs, and innovation. Our population is aging, and costs are going to rise above 5%, as an older population requires more health care services.
Certainly, speaking anecdotally, I notice that even in my own district the number of people who have moved for retirement purposes to Prince Edward Island is increasing at an incredible rate. To give you a quick example in my own district, probably half a dozen families of teachers that have retired from the province of Ontario have come here for retirement purposes. Certainly, as they age, those needs will increase, and that's just a small portion. We're starting to see this as a trend. Home care demands are increasing. They have increased already. Pharmacare, or pharmacy, has increased.
I note that the premiers have instructed health ministers and finance ministers to report back to them this fall on a new health funding arrangement. I was on a conference call yesterday with the health ministers in Toronto to review phase one. We need to see action now, because our 2017-18 budgets are just around the corner.
The final item I would like to talk about is the carbon tax. Prince Edward Island is a low carbon emitter. Charts will show that we have lowered our emission rates significantly. Approximately 25% of our emissions come from agriculture and fisheries, 40% from transportation, and 25% from structures, buildings. Not a lot of mitigation is available to these sectors without massive investments in new technologies.
We're in the process now of developing a new energy strategy. It's due to be released later this fall. It will involve making electricity usage more practical as a way to mitigate our carbon footprint. We have no single large users or emitters of carbon. We'd like you to consider policy alternatives to encourage building and transportation conversion to allow a low carbon economy.
One of the things I'd like to point out, certainly, is that the Province of Prince Edward Island has been concerned about carbon emissions for a number of years. For anybody who follows what has taken place here, you will know that the Province of Prince Edward Island has made significant investments in wind energy over the years. Those investments certainly have been made in the past, to the point where we now generate 35% of the electricity ourselves, here on Prince Edward Island. When you look at a small jurisdiction, that's a significant number, and as a province that has been looking toward green and getting away from carbon for a long time, it's one that we hope doesn't get lost.
With that, I want to thank you very much for giving us the time here today and for listening to us. We'll certainly take any questions you may have.
It's a pleasure to present to you again. Welcome to P.E.I. My name is Lori MacKay.
I'm also the chair of the PEI Coalition for a Fair EI, so employment insurance is the topic I want to talk about again.
As I've commented before, the last federal budget has taken a few small steps toward reversing the negative impacts of the devastating 2012 changes to the EI system, but fell well short of the election promises of this government. We are hopeful that the next budget will finally reverse all the changes that were so devastating to this region and many others across the country.
For the PEI Coalition for a Fair EI, the number one priority is to see the additional EI zones reversed. As I explained to this committee in May, P.E.I. was always one economic zone for a reason. The Island is too small, and there is not one major industry that's in one particular area of the province. Fishing, farming, and tourism are spread throughout the Island. Federal jobs are located in both cities. The two largest private sector employers in Prince Edward Island are in the rural zones. It is imperative that our Island be reverted to one zone, because it is the fairest approach to EI benefits for Prince Edward Island.
As the chair and I explained through examples the last time, co-workers are working side by side and living close to one another, but have substantially different EI benefits. The number one ask for the budget from the coalition is to revert the EI to one zone.
There are other key priorities that we'd like you to address.
Restore the additional five-week benefit extension for high unemployment areas. There are a lot of continuous high unemployment areas in P.E.I. Many of them around the country have a lot of precarious but important work that still needs to be done, and workers need the knowledge that they can get from one season to another, or they're going to make different choices, and that is going to create labour shortages in many important industries in P.E.I.
Restore the “best 14 weeks” pilot project and make it permanent. This is the best way to calculate benefits for workers who have sporadic work patterns. Again, for areas of the country with seasonal work, sporadic work patterns are the norm..
Eliminate the classes of workers. This 2012 change perpetuated an unfair assumption about workers in the seasonal industries across the country.
Re-establish the local EI processing centres and the three-party juror system so that unemployed workers get the services they deserve.
Reverse the decision to allow cabinet to make adjustments to EI without the approval of Parliament and implement a wall of protection so that EI funds are for EI purposes only and not used to balance the federal budget.
Probably one of the most important areas you need to consider as a committee is the planned reduction of EI premiums. Yes, the economic sustainability of our country relies on a healthy EI system. It is necessary for our capitalist economy to continue doing that. The money that has been accumulated in the fund recently was on the backs of the seasonal/precarious workers in this country. Instead of recognizing the challenges, with an ineffective job strategy the government of the day targeted seasonal workers.
Our ask: reverse all changes implemented in 2012, stop premium reductions, and create a job strategy that works for all regions in the country so that we reduce our need for the EI system. But to be clear, we will need an EI system in a capitalist economy.
Certainly. Thanks for the question.
As a business in multiple jurisdictions, provinces, and countries, we have a choice about where we hire people. Obviously there are a lot of factors that go into that. One of them is the cost of salaries, wages, taxes, and things like EI premiums, which go into the cost of business. These things can make a significant difference.
Not only is Prince Edward Island a great place to live and do business, but we also received incentives through the minister's previous portfolio, I believe, and it did make a difference in terms of our decision where to locate our operations, hire people, and create jobs.
These incentives are not necessarily the.... You have to have a sustainable business in the long term, with or without incentives, but they do make an initial impact on your decision as to where, how fast, and how many.... Although our business here in P.E.I. is very sustainable and profitable, the fact that the province was willing to make an investment in helping us to grow and create those jobs made a big difference.
The first suggestion we would make—and we have been saying it—is to revert back to 2012 as a starting point, because those changes were really targeted toward seasonal workers and precarious work, part-time work. That would be the starting point.
There's no question that EI is probably the most complicated system we have in the country, and that makes for administrative nightmares and a whole lot of other things. I know that this government had talked about doing a full review, and I believe that's supposed to happen in 2017, but I think the starting point should before all of the changes that have taken place since 2012.
The premium reductions that are planned are going to really tighten the purse strings on the EI fund, which has already gutted a lot of the benefits for a lot of workers. I've had a lot of conversations about EI over the last number of years, and in those conversations, this has been based on the fact that in a system where we have a lot of seasonal workers, the EI system has supported those seasonal economies.
The challenge I have with the previous federal government that made the choices to change the system the way they did was that they targeted seasonal workers without saying what is the job.... Workers want to work. There's no question in my mind workers that want to work. Provide them the jobs and they will work. They didn't even look at that. Instead, they said to target the seasonal workers and get them to be mobile. They wanted a mobile workforce. What are the social consequences for a mobile workforce? That question, we didn't ask. What are the health consequences of low-income, precarious work? What are the stressors on the health system because workers now are afraid of not making it from one season to another? That is compounded, and that's something that as government we have not looked at.
How can we make the EI system fair? Certainly, I would say, don't target certain industries. Recognize that as a country we are vast, we're diverse, and we have seasonal industries, and not not just in Atlantic Canada. There are seasonal industries throughout this entire country, including the north and in northern communities in every province. It's not just the Atlantic region's concern; it's everybody's concern. We really need to focus on the system from a worker's point of view. Every economy has to be considered, and we need to look at what are the consequences to every system that we have when workers aren't supported properly.
I'll ask this question, and maybe Josie or someone else will want to jump in.
I don't want to use the words, “temporary foreign workers”, but I want to say something about “workers”, especially with regard to the seasonal industries here in P.E.I. I've always viewed immigration as a nation building exercise, with the caveat that you will need some people to come into a country, work for a temporary period, and then leave, whether they are working for a conglomerate or a small business and have specialized skills.
For the most part, I would view immigration as nation building. You welcome somebody in, and you want them to stay and build a future and a family. That's what my family did. This afternoon, I hope to go and visit Pier 21 when we arrive in Halifax, where my parents, my grandparents, and my parents' siblings, the children, came in.
On the need for migrant workers here, and the skilled labour force, if you had to rate it on a scale of one to ten for P.E.I., where you would see it? Ten would be the optimal and one would be the really not optimal. We've had some large changes. TFW went from being very easy to have folks come in to very difficult. The pendulum, I hope, is going back to some sort of balance. I just wanted to put that out there.
Prince Edward Island has a critical worker stream in our provincial nominee program that has allowed workers who don't necessarily have really high fields—though many of them do, but they're just not working in high field positions—and they don't have a great deal of money to invest in a business in Prince Edward Island as immigrants. That's been really positive in terms of allowing some of the temporary foreign workers in Prince Edward Island to settle here. Those families who have children thrive.
They're really committed to staying and working in this province. However, one of the barriers federally is that workers who are in seasonal industries have a difficult time qualifying for that program, even if they are working 14-hour days eight months of the year, which, if you even it out, would be equal to a full-time position. Workers would have to transition out of some of the high-demand industries, such as agriculture and fisheries, and into any other full-time job in order to qualify for that program. I would say that P.E.I. has had some success in that and that provincially there has been work done to give the seasonal industries access to it.
I also would like to highlight that the changes of 2014 were devastating for industry and devastating for workers. The more difficult it is to hire a migrant worker, the more we are funding the under-the-table recruitment industry. Prince Edward Island, unlike other provinces, doesn't have regulations specifically governing that, so I think that loosening up those things to allow employers to hire workers a little more easily, but also allowing workers to leave dangerous or abusive situations, is important.
Personally, in the company of migrant workers, I have assisted in communicating their ask to the federal government surrounding the 2014 changes, surrounding the HUMA committee's review, and also surrounding the lack of follow-up from the 180-day exemptions that were issued for the seasonal industry right now, which has left these workers with nowhere to go.
There are various issues, but I encourage the committee and everyone here on this panel, when they're talking about the temporary foreign worker program, to not only consider the needs of industry but also to consider the needs of the workers.
You said it was the last question, but you didn't tell me how much time I had.
Mr. Raj Grewal: Fair enough. That's why you're a minister.
Hon. Allen F. Roach: That is a great question.
I think that sometimes it's easy to say that there's a study to show that around the world there's waste. I know from being in the positions I've been in around the cabinet table, and certainly as a member of the Treasury Board and the chair for the last five years, that when I see the requests come through the Treasury Board, I see the management plans that come forward for budgets.
When I look at health care, I look at the way we send them back year after year to find savings. I can only speak on behalf of my own province. Again, we're a small jurisdiction, but we get to look at things a little more microscopically than perhaps the larger provinces like Quebec, Ontario. and B.C. We can really see, dollar for dollar, where everything goes.
I'll speak on behalf of my province very clearly. I don't think there's much wastage in this province, if any. We're just too small a jurisdiction. We count on every dollar. I know that you could talk to the previous health minister about discussions he and I had last year, and he'll tell you that we certainly went back to him and said, “No, we can't afford it.” I believe we're very prudent.
To reply to that question with regard to child care, a national subsidized child care program is something that we've been fighting for over 45 years, and it would be huge. It's the last bastion for women's equality and to improve the status of Canadian families and children. It's long overdue. It's time. As I said in my presentation, it has been costed out several times, and the cost of a child care program is well worth what it would bring in terms of the improvement in and stimulation of our economy.
With regard to gender assessment tools, our Canadian government does use some. They're not very robust and they're not used across everything, but they are an economic tool that is used. There are several frameworks. Many people have put them forward and costed them out, from Oxfam, to the World Bank, to the World Health Organization, and they aim to mitigate women's current socio-economic status, which is much lower.
As a country, we really need to be very upset and very concerned about the fact that we have a huge wage gap that is growing. It's not improving. Even though women's participation in education and in some parts of the workplace is growing, we have a monumental 72% wage gap. Women are only making 72 cents on the dollar relative to men. This can't be accepted in Canada any longer. As I said, of the minimum-wage workers, 59% are women. We need to put some economic tools in place right from the beginning in order to help mitigate some of that damage for women, so that they can be stronger contributors to the economy.
In terms of gender assessment tools, there are many of them out there, and they need to be part of the structure when we build economic policy. There are critical analyses that simply look at the financial impact on women, as opposed to men, if we generate a policy such as EI, health care, or income supports. What we find is that many governments have them, but they're kind of on side of the table, and the policy office at Status of Women Canada has to look that over before it actually becomes.... What we want to see are very robust gender analysis tools used when any economic policy is generated, and they need to have a human rights lens. Globally, the status of women in our country is falling, and we need to stop that trend immediately and make it fairer for both genders.
Order. I know that you guys are sorting out corporate taxes and deductions over there, but we have to start.
Thank you, Minister, and thank you, Michael.
We shall reconvene for the open-mike session. Just before we do that, we had a suggestion, and we are going to hear from the head of the economic advisory committee, Dominic Barton, next Thursday morning at 8:30. That will be great for Raj.
Voices: Oh, oh!
The Chair: He is going to do it by video conference from South Korea.
We also had the suggestion that, because we are looking at economic growth and supporting business for growth, we should also, in an hour-long session, have the Export Development Corporation and BDC appear, the two together, if it can be arranged. Are people okay with doing that? It would be another hour on top of all the other hours. Okay? We will try to arrange that.
In our open-mike session, we have three presenters: Leo Broderick, Edith Perry, and Joe Byrne. What we'd suggest, because there are only three of you—not 23—is that all three of you come up at once to the table and take a mike. We'll give you about three minutes apiece. I think you all know how the open-mike sessions work. It's a way for you to get on the record. There are no questions from members, but it's a way to put on the record the things that you think should be considered in government policy and pre-budget consultations.
Welcome. We'll start with Leo Broderick.
Thank you very much for the opportunity to speak to you. I'm pleased to be here. I do want to say a special welcome to Steve MacKinnon, a former student. We're delighted—
Voices: Oh, oh!
Mr. Leo Broderick: We're pleased he's here.
I'm here to make a statement on behalf of the Council of Canadians and as a strong supporter of Canadians for Tax Fairness.
We have the means in this country to eradicate poverty at all levels. We have the means to provide a national child care program, a national pharmacare program, and a national home care program, and we can eliminate the gender pay gap. The following suggestions will add an additional $30 billion to the federal treasury. I will have six points.
First, raise the corporate income tax rate from its present 26.3% to the U.S. corporate income tax rate of 39%. The federal tax rate now is 15%, and that would mean increasing it by 12 percentage points. Corporations in this country have never been more profitable. At this very moment, they have in their accounts $630 billion. Some refer to it as “dead money”. I refer to it as money that belongs to the Canadian people and to Canadian workers.
Second, close tax loopholes. There are at least eight serious loopholes in the Canadian tax system. You have been given those in a report.
Third, stop corporate offshore tax dodging. There are at least close to 100 Canadian corporations that use offshore tax havens.
Fourth, tax e-commerce companies to level the playing field.
As well, Canada should eliminate tax subsidies to big oil, which are at the moment $1.5 billion, and we should eliminate subsidies to the arms industries in this country.
Also, if we're fortunate enough to be able to rely on the people of Bologna and Belgium, and CETA is defeated, we would save an additional $2 billion in drug costs. It would also mean additional financial support to the Island dairy industry, so let's hope it is defeated, and then, following that, that the TPP is defeated in the United States.
The question is simply this: do you as a federal government want to serve the 99% or to continue to deliver the profits to the 1%?
Thank you very much.
The Chair: Welcome.
Ms. Edith Perry: Welcome to all of you.
I guess I'll be the face of the low- and fixed-income population in Prince Edward Island, as well as a woman who's presenting.
Thank you, Wayne, for being, finally, a male on this panel who asked a question of the representative from the advisory council on the status of women. It speaks quite loudly that questions weren't directed to her when she gave a very credible presentation about the gender gap in wages and the fact that we don't have a national child care program. After all, the Liberals and Conservatives have been in government, as I believe somebody mentioned, for 45 years. We're still waiting for those two things to come into play. I wanted to make that observation.
I'll just reiterate my concern, as long-time social justice advocate, that we should certainly stop corporate offshore tax dodging, which I think was brought up during up the Conservative government regime; close tax loopholes; raise the corporate income tax rate from 26.3% to the U.S. corporate income tax rate of 30%; tax e-commerce companies to level the playing field; and put basic income guarantee projects back on the government's radar. It could be, indeed, another publicly funded health care program—i.e., medicare. The time is here for that.
Many P.E.I. residents deal with low incomes and high living costs. That includes a 15% increase, just recently, of HST, which includes nearly all forms of heating. We expect that it will also be tacked on to fuel oil as well. Our electricity rates are very high-cost in Prince Edward Island. That also then means that we have higher prices on good food and other necessities of living. This is where basic income guarantee can play a role, for certain.
I think it's time that people who look at financial strategy should include social justice as an equal standing in how they approach things. I'm a little skeptical about whether or not this new government will indeed address all these needs.
I'll sign off here. Those are my observations and comments.
Thank you to all of you.
Welcome to Prince Edward Island.
I also want to acknowledge the contribution your team makes to these deliberations.
Thank you for having me here today.
My remarks are made on the basis of the studies and presentations that I've had access to over the last 20 years. The overarching theme that I'm asking the committee to consider is, for all the policy proposals you're going to consider, that the lens used to assess them is, how are they affecting the most vulnerable around us?
Effective policy should allow us to draw a straight line between the policy and the effect it has on people living in poverty, those with mental and physical health issues, or those living with disabilities, one-parent families, especially single mothers, children, and our first nations communities.
The corollary of this principle of looking at how it affects the most vulnerable is that we need not actively pursue policies that focus on benefiting the wealthiest among us. They're doing quite fine.
The social analysis I'm using is one that's been used for a long time, which is “see, judge, act”, and you can enter that circle from any point. I'm asking the government to act quite quickly on two particular issues. This could be a dissertation, but I just want to focus on two particular issues right now. They are housing, and employment and income. The actions there will lead you into that same circle of see, judge, act, but it needs to get started immediately.
We need reliable and predictable investment in public housing stock. There are plenty of good experiences with programs such as home retrofits, but we need an expansion of multi-family units in public housing right across the country. I'm asking the government to recommit to co-op housing, not just to the existing co-op housing, but also to the expansion of the co-op housing stock over the next 20 years.
Just a few blocks from here, walking through the streets, we can see the places where we're asking our families, friends, and neighbours to live in substandard conditions. It's really unacceptable in Canada in the 21st century. We recognize the efforts of landlords to make some of that housing affordable, but we see people living in places that are overcrowded, dingy, cold, and dark. We're asking those families to raise their children in that kind of environment, which makes it very difficult to nurture a sense of hope and optimism for the future.
We can study it. We can act. There's a number of programs that the committee can be recommending over the next few years, but we also need to start expanding to see what the future is going to look like. It is going to take time to build the stock and plan around it. We need expansion and maintenance. We have to look at civil society groups to invest their own time and energy in building these communities. The outreach needs to begin immediately. The conversations need to happen at food banks, soup kitchens, churches, and service organizations, but they need a message that change is not just around the corner, it's here.
Second, in terms of unemployment, as we know, most of us want to be in charge of our own lives and our own decisions and to feel that we have a high degree of independence. The ability to exercise control of our spending starts with our income. We need to broaden the discussion, as we heard earlier, about the precariousness of employment. In P.E.I., if you work full time at a job at $11 an hour job, you're making just over $21,000, which is almost $3,000 less than the low income cut-off. We're asking workers to live in poverty.
We need to move more quickly on wages. The federal government could take the lead by increasing the federal minimum wage and encourage provinces to do the same. We also have to encourage workers to organize and to make it easier for workers to organize and for unions to be certified. If you're living in poverty and are dependent on the income you have, you're not going to take very many risks to jeopardize that, because for the future, losing that, as little as it may be, is pretty bleak.
Federal government transfers to individuals can be helpful, but the evidence also says that federal government investment is needed in social infrastructure: a national child care strategy, pharmacare strategies, and a housing strategies are all essential. Stability comes from that. On the increase in direct and indirect transfers, a move to a basic income guarantee would be a major advance.
The final request to the committee is for movement on national revenue: simplify the tax forms and bring back the links to basic personal exemptions at federal and provincial levels. P.E.I. has dropped the basic personal exemption in real terms, and it has the most drastic effect on people who are living most precariously and with the least ability to benefit.