Thank you. I want to thank you for having me here to share my thoughts with you about the upcoming budget.
I've been a witness at this committee on other issues before, but just by way of background, I've been an income tax practitioner for over 30 years. While my comments today will be some of my income tax observations, they are informed by years as a student, as an employee, as an accounting student, and for the last 20 years, as a business owner running an accounting practice.
I'll be honest with you. We're all still licking our wounds from the battle that was waged over the government's private company tax changes. You'll be relieved to know I don't plan on rehashing all of that today. I know what this is about. We have what we have.
The only thing I'd like to say about it is that, during the process, I don't think the objectives of that process were flawed. Some of the ways of going about achieving the objectives were much too complicated, but they are what they are. We have complicated rules to work with instead of simple ones. In 10 years or so we might find we have some judicially determined answers to what are seemingly unanswerable questions right now, to be quite honest, with respect to the TOSI rules, the income-splitting rules.
I'm hopeful that the upcoming budget won't include similarly complicated proposals, and as a Canadian, to be very honest, I hope that they also won't include a lot of the divisive rhetoric we've seen in recent years. I personally found it very disturbing and really not productive to achieving what we as Canadians want.
I also just want to state that contrary to what I think many Canadians believe, business owners are not any more nefarious in their tax matters than employees are or, to use the government's term, the middle class and those working hard to join it. There are a number of employees who are very aggressive in their tax planning. I don't deal with aggressive tax planners. I don't want anything to do with them. I pay my fair share of tax and I think everyone else should. I don't really want to subsidize people who are cheating our tax system. I don't think anyone should have to pay more than their fair share but I don't think they should pay less. It's not really morally acceptable, in my opinion, to pay less than your fair share.
We live in a great country. We have a high standard of living. We should maintain that. We have great social safety nets. Some of them could be improved, but we look after our citizens and we look after our people and vulnerable Canadians. That, to me, is what I think our tax system should be doing. I'm happy to give suggestions to help keep funding that and using the funds efficiently to meet those objectives.
With that in mind, I'll just give you a few of my suggestions that will, hopefully, be considered in the budget or post-budget in further dealings. Hopefully, the 2020 budget will stray away from partisan positions and rhetoric and just take a more conciliatory approach to be more productive and to work with people who can help be part of the solution, instead of part of the problem.
In that spirit I'd like to suggest that the government commit to three actions. First, we've invested in hiring more auditors, but I think the money needs to be spent now on training those auditors. What we're experiencing in the field, particularly at the audit level, is that a lot of people who are new to the audit world as auditors have not necessarily been trained in income tax provisions. They follow audit manuals. Honestly, they're not well trained. Decisions are being made at the audit level that trickle all the way through to appeals and to the tax courts. When something's not handled well at the audit level, the trickle-up effect happens.
I could give you a lot of examples. I have a situation right now that should be a simple matter. Something was purchased before a certain date, and the auditor thinks the act says it had to be purchased after a certain date. It's clearly not correct. It's really simple when you read the act. It's a mistake. The proposal right now is to assess my client as having $6 million of capital gains because they sold a smaller property they were working out of and moved into a newer one. The act allows you to defer the tax when you do that. Because of this misreading of the act and saying that the new place had to be purchased after a certain date, my client now has to deal with appeals to try to get that reversed.
What concerns me is not just that the auditor misunderstood something relatively simple in the act but the fact that the supervisor signed off on that audit as well. I think that's a function of workload. I'm not judging anyone, but the training of auditors, to me, is much more important now than hiring more auditors.
I gave you that example. I think that hiring people without training them defeats or undermines the objective of why we are hiring them. I'm all in favour of enforcing more compliance for people who aren't in compliance with our tax rules, so don't get me wrong on that front. I think that using the auditors better, training them, would get us a better result, recovery-wise and cost efficiency-wise, than just hiring more people.
Second, I'm hopeful that the government will continue on its path to making the system easier to navigate and manage for people with disabilities—physical disabilities and mental infirmities. I was appointed inaugural co-chair of the first disability advisory committee back in 2005. That was a committee that reported to the minister of revenue, just as the current disability advisory committee does. At that time John McCallum was the minister of revenue. That committee was created in a budget. I remember reading the budget, as a tax practitioner, and it said it proposed to create this committee to advise the minister on ways to better administer the disability tax credit. I applied based on that and got the position. It was a very productive year, before the committee was cancelled when the government changed.
We have had luck in having the committee reinstated recently. My concern, though, is why. We shouldn't need the committee to exist anymore. I was appointed in 2005, so that's 15 years ago, and we still have the need for a committee to help advise the government on how to administer the disability tax credit.
I think it's time to consider a new role for the disability tax credit or perhaps a new model. It's very complicated, the way it's worded. It's a very old system, and so are some of the medical expenses. I'll give you some examples. I think a look at the overall treatment of disability tax measures and medical expenses in general is really overdue.
We have, for example, in the medical expense section, limits on how much you can claim in certain circumstances for full-time attendants. The limit was set in 1997, $10,000. We're now in 2020 and that limit hasn't changed. In over two decades that $10,000 number that was set back in 1997 dollars hasn't changed, and people looking after or paying for full-time attendants to look after their loved ones have a very restrictive amount they can claim in certain circumstances. It's time to relook at that. That's just one example.
Another one is that a number of years ago people with celiac disease lobbied—I'll use the term—the government because the cost of gluten-free food was much more expensive than the cost of regular food. The act was amended to include a provision that said for people with celiac disease the incremental cost to purchase gluten-free food is a medical expense. I think that was great at the time. More people are affected now by gluten problems than just people with celiac disease, but that provision hasn't been amended.
I don't deal specifically in disability-related matters, but I do tax planning with people. I had a client whose father couldn't swallow food properly. He had been rendered quadriplegic in a car accident. All of his food had to be pureed, but not in a blender at home. It had to go out, actually, to a food processing facility. It was very expensive. There's nothing in the act that allows something like that. They're quite common now, swallowing disorders. For people with Alzheimer's disease, dementia, that's a common symptom. There's nothing in the act that addresses that.
I'm just trying to give you a flavour. There's a whole area in our act that really needs to be revamped and brought up to date, and maybe even relooked at in a different context. That's what my third comment is.
I think—no, I know—it's time for the government to commit to convening a multidisciplinary, comprehensive, bipartisan panel to look at a comprehensive review of our tax system. I know there's not an appetite for it. It's something that has been falling on deaf ears. It's really important.
I'll give you two analogies here. I think of our tax act over the years; it's like a pair of socks. Holes have popped up here and there, and we've darned them, sewn them, closed them shut, but now we have this tattered pair of socks that we really can't walk around in.
To give you a better example, in 1972 Canada had the best hockey team in the world. We all remember the Canada-Russia series in 1972. That was also when our tax act was last overhauled.
Thank you, Mr. Chair, for the invitation to speak with the committee today as we meet on the unceded territory of the Algonquin nation.
The Assembly of First Nations has developed a submission reflecting a broad range of investments that would support the participation of first nations in the economy. I believe it has been distributed to members. My thanks to the clerk.
As we have noted with this committee in the past, closure of just the education and employment outcome gaps between first nations and other Canadians would provide an additional 1.5% to Canada's gross domestic product. Among the investments set out in the document we have provided, I'd like to highlight four priorities that I believe could provide the greatest return on investment, with each of these moves forward a shared priority of first nations and the Government of Canada, building on important work already done and being done.
The first is the implementation of the , passed by the previous Parliament. The revitalization of first nations languages is a key step in reversing one effect of Canada's former residential school policy—the erasure of our languages. Knowledge of one's language also leads to better educational attainment and supports better employment prospects, part of that GDP growth to which I alluded earlier. The investments detailed in our handout were calculated by former associate deputy minister of finance Don Drummond, and take into account the investment made in budget 2019.
The second priority I'd highlight is similarly about implementing legislation passed in the previous Parliament, . Again, the roots of that legislation lay in our colonial history and the failure to provide adequate care to first nations children. The important step of recognizing the jurisdiction of first nation governments through legislation is most welcome, but that jurisdiction needs financial support. The investment called for in our submission will support implementing first nations' jurisdiction. It would result in fewer children in the system and reduce the social costs of the damage being done to them currently. Those reduced social costs will be joined, once again, by better outcomes for first nation citizens and concomitant benefits to Canada's economy.
The third area I would like to highlight is housing. Regional Chief Picard of the Assembly of First Nations Quebec-Labrador spoke to this in this committee yesterday, so I will use this time solely to augment his remarks. I would point out that the investment called for in our submission would also give effect to one of the simplest and most concrete recommendations from the inquiry into missing and murdered indigenous women and girls that this government conducted over the previous Parliament. As that inquiry reported, lacking suitable housing alternatives, young women move out of their communities and find themselves in environments that are not secure and that expose them to harm. This investment can prevent that vulnerability and save lives.
In addition, it is well established that the ability to function at both school and work is dependent on the quality of housing. Committee members can easily imagine how difficult it is to function at school or work the next morning when upwards of 20 people are sharing a three-bedroom house, as is too often the case in first nation communities. Addressing this need will reduce social costs and provide benefits to the greater Canadian economy through enhanced productivity.
The final priority I'd like to bring to the committee's attention is governance funding. The Assembly of First Nations welcomes the unprecedented investments made by the current government over the past four budgets. The investment in governance detailed in our submission will increase the return on investments made to date and any that may come in the future. Every government requires strong governance systems in order to make efficient and effective use of the resources at their disposal. First nation governments are no exception.
Funding for first nations governance has not risen by more than 2% in any year since 1997, thus failing to keep up with inflation, let alone other cost drivers. As a result, current funding for first nation governance amounts to just over 3% of spending, whereas most governmental organizations operate in the 10% to 15% range of expenditures. This is simply unsustainable for our governments. The investment outlined in our submission would provide for institutional development; the creation and functioning of shared service organizations; recruitment and retention of qualified staff; and the strengthening of financial management, human resource, and IT systems, and all other essential governance structures required to run an effective and efficient government. By investing in good governance, first nations are able to make better use of the resources available to them.
Canada and first nations share a desire to increase self-determination for first nations, as we agree that this, above all else, will improve the quality of life of first nations' citizens. However, jurisdiction, without the fiscal capacity to exercise that jurisdiction, is hollow. This investment in governance funding could be the most important step that Canada can take to support the important work that first nations and Canada are engaged in together.
First nations' priorities are Canada's priorities. The return on investment is clear and benefits us all.
I look forward to your questions.
Thank you. Wela'lioq.
Thank you to the committee for the invitation to be here today.
I represent the Co-operative Housing Federation of Canada. We represent over 250,000 Canadians living in housing co-operatives from coast to coast to coast, in every province and in every territory. I'm joined here today by my colleague Courtney Lockhart. Our mission is to inspire, represent and serve our members across the country.
I'm not here to talk about, necessarily, the interests of our members here today. I'm talking about an issue that is affecting so many Canadians, and that's the housing crisis. Everyone needs and deserves a place to call home that is affordable, attainable and sustainable. I'm sure that all of you around this table have heard from your constituents about the housing crisis and the lack of affordability and supply in your communities. We are far from providing safe and affordable housing for all Canadians.
Today, among renters across the country, nearly one in five is spending over half of their income on rent, putting families and individuals at risk of homelessness and reducing their capacity to afford basic necessities. The problem is getting worse and more robust federal action is needed.
When it comes to housing options, people know that they can buy and they can rent, but there's another choice that has been underutilized, and that's co-operative housing. Housing co-operatives are owned by their members. They provide security of tenure and they're affordable forever. For example, here in Ottawa, a two-bedroom apartment now costs, on average, $1,400 per month, whereas a two-bedroom apartment in a co-operative costs approximately $1,000 per month.
Here we are at the pre-budget consultation for 2020 and we have three actions that we'd like to propose to the federal government that will augment and accelerate the good work that is already under way with the national housing strategy.
First, CHF Canada is calling on the federal government to invest in non-profit and co-operative housing. This is not a new or radical idea. During the 1970s and 1980s, Canada developed many programs that successfully started most of the co-ops that exist in Canada today, sprouting up in every province and territory. These federal programs were cut in the 1990s or devolved to provinces, creating a serious shortage of affordable housing in communities across the country. Had these programs continued, we would have half a million more affordable, community-owned homes across our country.
To get back in the game, we are proposing that the federal government establish a $300-million quick-start co-operative housing development fund.
Second, CHF Canada recommends that the federal government enhance the federal lands initiative under the national housing strategy that is already in place today. The cost of land is one of the biggest obstacles to developing new co-operative homes. The federal government should transfer $15 million in surplus land to the co-operative housing sector to develop new co-op housing. This would spark the creation of permanent affordable housing for generations to come.
In B.C., for example, the co-op sector has leveraged government surplus lands to develop community land trusts and hundreds of new co-op homes that will be permanently affordable in one of Canada's most expensive markets. With an enhanced lands initiative, we can replicate this model and build more co-op and non-profit housing across the country.
I'll turn things over to my colleague Courtney.
Thank you, Mr. Chair, and good afternoon, committee members.
Thank you for the opportunity to appear to discuss the 2020 budget. My name is Kim Moody. I'm a chartered professional accountant and the CEO of Canadian tax advisory services for Moodys Gartner Tax Law and Moodys Private Client in Calgary.
I have a long history of serving the Canadian tax profession in a variety of leadership positions, including as chair of the Canadian Tax Foundation, co-chair of the joint committee of the Canadian Bar Association and CPA Canada on taxation, and chair of the Society of Trusts and Estate Practitioners for Canada, to name a few.
Before commenting on the 2020 budget, I want to start by sharing the significant tax changes we've seen in the last few years, for two reasons: first, to outline the significant challenges that are still outstanding to emphasize that we need to get it right; and, second, to highlight the divisive rhetoric that we all experienced to emphasize that this needs to end so that we can move forward with sound economic tax policy.
The last four years' budgets have been plagued with disturbing and divisive rhetoric, pithy branding messages and, ultimately, poor taxation policies. Some examples are, one, qualifying most budget contents with the phrase “middle class and those working hard to join it” when no credible definition of “middle class” exists; two, attacking the so-called wealthy with a 4% increase in personal tax rates at a time when our neighbour to the south was decreasing personal tax rates, which has put our country's competitiveness at risk; and, three, introducing the private corporation tax proposals of July 18, 2017, with the government effectively calling private corporation business owners tax cheats.
Such proposals, while scaled back, resulted in the introduction of the tax on split income regime and the new passive investment rules—more on this later—and the introduction of the journalism tax incentives, which frankly are an assault on our country's free speech.
Woodrow Wilson, the 28th President of the United States, who served from 1913 to 1921 and was widely regarded as one of the better presidents of the U.S., once said the following about a nation: “a nation is a living thing and not a machine”. I find that very wise and sage. With that in mind, I'll put recent history aside and move on to try to make a positive contribution to our living thing, Canada, but frankly, I believe all of us have an obligation to positively contribute to building a great Canada. We should be working together to develop positive policy and not simply revert to partisan politics. Such working together should be in a co-operative manner, with a conciliatory tone.
Given such, here are some tax priorities that I believe should or should not be part of budget 2020.
Number one, take a permanent pause on the implementation of the stock option proposals. Overly simplified, I believe the government and the Department of Finance have not provided a compelling case to change the status quo, as I have written about extensively in June 2019. Such proposals are very complex, with minimal tax revenues predicted to be raised, and the joint committee on taxation has pointed out some of the technical problems and the complexity of the current proposals. The proposals could have a detrimental impact on growing businesses' ability to attract skilled labour if they are not exempt from the new regime. Again, in my view, these proposals should be permanently abandoned.
Number two, do not increase personal tax rates. While I note that the Liberal election policy platform did not contain an explicit proposal to increase personal tax rates, it—and the 's mandate letter—did contain a proposal that the minister “Undertake a review of tax expenditures to ensure that wealthy Canadians do not benefit from unfair tax breaks.” With respect, such a review was done during the previous government's mandate, so another review in three years is, simply stated, code for tax increases aimed at the wealthy. Such indirect tax increases would cause even more capital to flee Canada and discourage the best and brightest from staying in Canada. This needs to be avoided.
Number three, decrease corporate tax rates. U.S. tax reform has had a significant impact on the competitiveness of our Canadian businesses. In my home province of Alberta, now going into its sixth year of recession, the impacts of U.S. tax reform have been felt greatly. While our provincial government has responded with corporate tax rate reductions, the federal government has not responded in a meaningful way to competitiveness issues caused by U.S. tax reform. One way that could occur is with modest corporate tax rate reductions.
Number four, do not increase the capital gains inclusion rate. Again, the Liberal Party election platform did not contain explicit comments regarding the capital gains inclusion rate, but it did contain the aforementioned tax expenditure “review” to ensure that wealthy Canadians do not benefit from tax breaks. With the 50% inclusion rate being one of the largest tax expenditures, many are concerned that the inclusion rate could increase in the 2020 budget. Such an increase would be devastating to the investment community and to the ability of our country to attract capital. Don't do it.
Number five, do not introduce the interest deduction limitation rule proposed in the Liberal election policy platform. Such election policy platform proposed a new rule to limit interest deductions to 30% of EBITDA. This appears to be a copycat proposal from the U.S. tax reform. However, the U.S. rule was introduced concurrently with a series of other anti-stripping rules and a 14% corporate tax rate reduction. In the domestic context I am unaware of the need for broad-based change, and would suggest careful and comprehensive review before such a rule is proposed. A sloppily introduced rule could have a devastating impact on the business community, especially capital-intensive businesses that hire hundreds of thousands of Canadians and form the backbone of the Canadian economy.
Number six, amend the TOSI regime. As many have likely already told you, the TOSI regime is extremely complex and broad-sweeping, resulting in massive tax increases for so-called middle-class business owners and their families. While there may be a compelling policy case for some sort of anti-income splitting regime, the current regime is untenable and, frankly, unfair. These rules need a complete rethink.
Number seven, repeal the journalism tax incentives. These rules are an attack on free speech in Canada. Some, including me, believe that the regime could lead to biased media reporting in an era where the average person believes that our media is already biased, which is not good. While these incentives may be well intentioned, the tax system is certainly not the right policy lever to deal with the foundational challenges that the print media around the world are facing.
As Woodrow Wilson said during World War I in 1917:
I can imagine no greater disservice to the country than to establish a system of censorship that would deny to the people of a free Republic like our own their indisputable right to criticize their own public officials. While exercising the great powers of the office I hold, I would regret, in a crisis like the one through which we are now passing, to lose the benefit of patriotic and intelligent criticism.
In my view, the journalism tax incentives will indeed lead to a form of indirect censorship, and ultimately, this slippery slope needs to be avoided.
Number eight, introduce meaningful changes to enable a fair succession of the family business and farm to the next generation.
Finally, as many presenters have told you before, this country needs comprehensive tax review and reform. Yes, I know many of you are tired of hearing this. I've had a chance to listen briefly to yesterday's panel, and three of the speakers said the same thing, and so did Peter Weissman.
Perhaps there is something to all the smart people who have appeared before you. Perhaps certain academics, bureaucrats and parliamentarians, who think that comprehensive tax review and reform are not necessary or that Canadians are not ready for such a review, are simply wrong. In my view, Canadians are ready. They're ready for real and refreshing change for the better, ready for positive change to assist our living thing to get ready for the next generation.
I realize that this committee has recommended it before, but the government does need to take action.
Thank you. I'd be happy to take questions.
I'm pleased to present to your committee key priorities for Canadians affected by MS. Canada has one of the highest rates of MS in the world. An estimated one in every 385 Canadians live with the disease. It's a chronic, episodic, progressive and often disabling disease of the central nervous system. Since that includes the brain, spinal cord and optic nerve, MS can affect vision, memory, balance and mobility. On average, 11 Canadians are diagnosed with MS every day.
The MS Society has heard the personal and profound stories of life with MS from Canadians, the struggles in the workplace, the financial difficulties families are facing to make ends meet, the frustrating barriers in accessing Health Canada-approved therapies, appropriate care, housing and social supports, and of course, the hope that research gives to the tens of thousands of Canadians living with this disease.
To address these realities, I'll present our recommendations on employment and income security, access and accelerating research.
First is employment security. People with MS want to work but struggle to continue to work. We need to update the definition of disability to include episodic. A staggering 60% are unemployed and that needs to change. Often the problem is one of flexibility and accommodation, and an understanding of episodic disability.
Last year, the HUMA committee studied Motion No. 192, episodic disabilities. Its report, “Taking Action: Improving the Lives of Canadians with Episodic Disabilities”, made 11 important recommendations that now need to be implemented, including extending the duration of the EI sickness benefit from 15 to 26 weeks.
The second area of priority is income security. The costs of paying for medication, services, equipment and treatment are a significant burden for people with MS and their families. Intertwined with this burden are complicated application processes, requirements for numerous verified medical forms and strict eligibility criteria for programs. When MS stops people from working, they should be able to access adequate income and disability support. This situation is amplified for women. In Canada, MS affects women three times as often as men.
We recommend the following. First, make the disability tax credit refundable. Second, implement the 11 recommendations in the HUMA committee's Motion No. 192 report. Third, change the eligibility criteria for the Canada pension plan and disability tax credit to include those with episodic disabilities, using the new 's definition of disability.
The third area of priority is access. Access to comprehensive treatment, care and appropriate housing is a must. We recommend the following to make access a reality for Canadians. First, implement the to ensure a barrier-free Canada, with a specific focus on programs and service delivery, employment, built environment and transportation. Second, we recommend, through intergovernmental health agreements, investing in comprehensive home care, and for those unable to remain at home, funding the development of appropriate housing through the national housing strategy. Third, we recommend increasing access to Health Canada-approved treatments, as early intervention is vital to avoid many of the long-term economic and personal costs that result from unnecessary, irreversible disability. The needs of people with MS and their families should be at the centre of health and drug policy decisions.
The fourth and final priority area is accelerating research. Research is key to new treatments, better quality of life, and ultimately, a cure. Canada remains at the forefront of MS research around the world. Through generous contributions from donors, corporate sponsors and fervent fundraisers, the MS Society has invested over $175 million in research since its inception in 1948.
The MS Society continues to fund fundamental research, as we still don't know what causes MS or how we could prevent it in the future. First, we recommend the federal government continue to invest in basic scientific research. Second, we recommend that the federal government connect with health charities to ensure the patient voice is part of setting research priorities. We believe that federal research funding programs should be informed by the perspectives of patients, their caregivers and health care providers. Finally, our third recommendation is to partner with health charities to turn innovative research into real-life treatments.
There are a number of partnership opportunities within the impact goals of our own new strategic plan: advance treatment and care, enhance well-being, understand and halt disease progression and prevent MS. For example, the Canadian prospective cohort study to understand progression in MS, otherwise known as CanProCo, is an innovative public, private and philanthropic partnership that will allow researchers and clinicians to observe a large group of people living with MS from across Canada over a period of time, and collect data from them. Analyzing this data will answer fundamental questions as to why and how progression occurs, which is key to improving diagnosis, treatment, health services and health outcomes.
Thank you for this opportunity to speak and share with you the priorities that Canadians affected by MS want you to take action on: employment, income, access and research.
Good afternoon to the committee. I want to thank you for the invitation to present today. My name is Brian Sauvé. I was recently elected and confirmed as the president of the National Police Federation, representing almost 20,000 members of the RCMP across the country. With me today is vice-president Peter Merrifield, as well as two other vice-presidents sitting in the gallery, Michelle Boutin and Dennis Miller.
I provided copies of the speaking notes to the clerk, as well as a short presentation that I'll refer to. First, I want to give you a bit of history on the RCMP, and then we'll get into what the NPF is all about.
This past weekend we celebrated our 100th anniversary as the Royal Canadian Mounted Police. For those who don't know, in 1920 the Royal North West Mounted Police merged and assimilated the Dominion Police, forming what you have today, which is the Royal Canadian Mounted Police. Effectively we've had this name for 100 years. We're approaching our 150th anniversary in 2023 because the North West Mounted Police was founded in 1873.
Many Canadians will know the RCMP from their presence here on Parliament Hill or the storied musical ride. Our responsibility is to enforce all federal statutes in Canada including national security and organized and commercial crime. However, in addition to those high-priority mandates the RCMP also provides contract police services in over 150 communities across Canada. We have over 929 work sites, both domestic and international.
Many of those communities are remote and isolated. For example, from Grise Fiord, Nunavut, all the way to Surrey, British Columbia, to Gander, Newfoundland, to Red Deer, Alberta. When all those residents dial 911, we show up. We are the police jurisdiction and they expect someone to treat them with courtesy and respect, as well as to investigate their crimes and solve their issues.
Here's a little about the National Police Federation. For those of you who don't know, that coming up on its150-year history, the RCMP membership was unable to organize and certify a bargaining agent. We are the first one ever. We made history in 2017 by filing the first application for certification. The Federal Public Sector Labour Relations and Employment Board certified the NPF in July last year as the first-ever bargaining agent for all 19,000 police officers across the country. Overnight the NPF became the largest voice of organized police labour in Canada, the second-largest voice of organized police labour in North America, and most probably, close to the fifth- or the sixth-largest one in the world.
We're a fairly large body now and we're still learning as we go. We're keeping our voices respectful and professional. We're solutions-based. For now the membership of the RCMP has a voice to speak out about all the trials and tribulations, successes and pitfalls, we have encountered through our 147-year history. The primary focus of the NPF is to ensure RCMP members are properly compensated, resourced, supported and trained to maximize public and police officer safety.
We are entering into collective bargaining on contract issues with Treasury Board later this winter. However, that's not the reason I'm here today. It's an introduction to who we are, but I do want to cut to one case that is specific to the budget and this committee. The RCMP is drastically underfunded and under-resourced. The deck I provided on page 3 shows a cross-section of British Columbia. I could do every province but it would be a very long presentation. That data is from 2016. It shows you that the RCMP, in every community we police in British Columbia, offers fewer police officers per population than comparative municipalities.
Our Mounties are extremely efficient, and I would put a Mountie up against a munie any day. However, I would suggest to you that a reasonable person would assume that we are stretching them beyond their capabilities. If we're going to talk about priorities of happy, healthy work-life balance, mental resilience, mental health in the workplace for our first responders, they cannot be as overworked as our membership. They are continually at risk of burnout. You will see provinces across this country making legislation for post-traumatic stress related to our first responders' jobs that is directly linked to that exposure. We can train them to be resilient, but we also need them to have time off to decompress.
In order to improve that resiliency and to provide a healthier work-life balance, which can only lead to improved service delivery and a safer Canadian public, the RCMP needs more police officers. I can't bargain that with the employer. This committee can recommend to the minister to improve the funding for the RCMP and increase that funding for the number of cadets who go through Depot in Regina.
Although dated, a 2010 white paper was written by the Senate entitled “Toward a Red Serge Revival”. It speaks specifically to the human resource crisis the RCMP was facing in 2010, and one of the recommendations was that we hire an additional 5,000 to 7,000 police officers to address that crisis with our increasing mandate and the demands placed on us in 2010. We are now 10 years further down the road, and I would suggest to you that if that report were written today, similar conclusions and recommendations would be made.
Respectfully, we need to act. The RCMP is in need of additional funding to increase its ability to recruit and train more police officers to provide those members working day in and day out the ability to enjoy a healthy work-life balance, remain healthy and maintain public safety in the communities they police. I know it's a little odd to have a labour group come and ask for funding for its employer, but that's where we're at.
I thank you for your time. I appreciate the invitation, and we're open to questions.
Mr. Chair and committee members, thank you for the invitation to be here and to take part in these consultations.
The Business Council of Canada represents the chief executives and entrepreneurs of 150 of Canada's leading companies in all sectors and regions of the country.
Canada's economy faces serious headwinds including an aging population, weak productivity and rising global protectionism. Our economy is barely growing on a per capita basis. Over the past decade we have witnessed growth of around 0.5%. That's half the pace achieved by the U.S. and half the OECD average.
Slower growth over the long run will inevitably mean fewer opportunities for our children and grandchildren, higher rates of unemployment, and less money for vital public services such as health care, education and transit.
To better understand these challenges and to identify solutions, last year the Business Council launched a task force on Canada's economic future, in which we engaged Canadians from across the country to advance policies that enhance growth and ensure a better future for all.
The task force report and recommendation outlines how government business and other stakeholders can work together to strengthen Canada's economic capacity and spur investment for the benefit of all Canadians. At the same time, it calls on employers to enhance Canada's human potential by embracing diversity and inclusion in the workplace, promoting mental health, and supporting a more skilled and innovative workforce.
The report recommends that the government modernize the regulatory environment, prioritize nationally significant infrastructure projects, modernize and simplify the tax system, rethink Canada's foreign policy in a changing world, increase immigration flows to build the future labour force that Canada needs and, finally, develop a national resource and climate strategy.
Of these recommendations, we believe that regulatory modernization has the greatest potential to improve the lives of citizens, drive innovation and enhance business activity across the board.
This is something we heard consistently during our consultations, and we think now is the time for a new approach to regulation in Canada. I am happy to provide some details on that in the question period.
As Canada's largest employers, our members are committed to doing their part to nurture Canada's workforce. That includes increasing labour force participation among indigenous people, encouraging greater diversity and inclusion in the workplace, promoting the adoption of proven mental health strategies, investing in employee learning and development, expanding career opportunities for young Canadians and supporting the next generation of Canadian innovators and entrepreneurs.
Now, I recognize that some of the priorities I have just talked about are what you would expect from the Business Council of Canada. As I said at the beginning of my remarks, we represent 150 of Canada's leading companies, and we recognize that as parliamentarians your focus is on building a better future for all Canadians. That means not just the large companies that we represent but also entrepreneurs, small businesses, indigenous-owned firms and innovators of all kinds. In other words, we challenge ourselves to focus on the broader interests of Canadians today and in the future.
Tomorrow we plan to release a statement in partnership with the Canadian Council for Aboriginal Business, the Canadian Federation of Independent Business, the Canadian Chamber of Commerce and Canadian Manufacturers & Exporters. Collectively, the member companies of these five organizations employ millions of Canadians in every corner of this country and every part of the private sector.
I can tell you from experience that these five organizations don't always agree on the same priorities, but we are coming together because we all recognize that without a healthy and growing economy, our society and our governments will not be able to afford the vital programs and services that Canadians depend on. Without a healthy and growing economy, our children and grandchildren will not be able to look forward to a better future.
I look forward to sharing with you that statement when we release it tomorrow.
Thank you for the opportunity as always, and I look forward to questions.
Thank you, Mr. Chair and committee members.
My name is Francis Bradley, and I am the president and CEO of the Canadian Electricity Association. CEA is the national voice of electricity. Our members operate in every province and territory in Canada, and include generation, transmission and distribution companies, as well as technology and service providers from across the country. Canada's electricity sector employs 81,000 Canadians and contributes $30 billion to Canada's GDP. Indirectly, our sector supports essentially every job and industry in Canada. Electricity is the foundation of the modern economy.
Electricity is also at the heart of Canada's transition to a low-carbon economy. Over 80% of Canada's electricity generation is already non-emitting, making it one of the cleanest grids in the world. In fact, the Canadian electricity sector has already reduced GHG emissions by 30% since 2005.
Electricity will play an essential role as Canada transitions to a low-carbon economy. The sector is uniquely positioned to help advance Canada's clean energy future and provide, as the throne speech aspires, clean affordable power in every Canadian community.
Sustainable, affordable Canadian power offers the opportunity to decarbonize and electrify other sectors such as transportation and industrial processes. To do so will require substantial investments in the sector to accommodate new demand and evolving technologies. We must do so while maintaining the reliability and the affordability in the system that Canadians have come to expect.
We're pleased that the government has supported this transformation in past budgets, with pilot programs for new technologies such as smart grids, deployment of EV charging infrastructure, electric vehicle purchase incentives and energy efficiency. Looking to the future, we’ve identified a number of ways that the federal government can support this process. I’ll highlight some of those recommendations from our submission.
First, the government, in conjunction with provinces and territories, should complete a national electrification strategy to ensure that government policy, utility investments and customer expectations are built on a robust and actionable plan.
The Conference Board of Canada estimates that there is a need to invest $1.7 trillion—that's trillion with a “t”—in the electricity sector by 2050 to reach climate goals. It’s important that we base this investment on a national plan.
Second, the government should target investments to meet the electricity needs of tomorrow. This includes encouraging the commercial deployment of energy storage. Batteries and other technologies will help revolutionize our grid, allowing power to be used well after it has been produced. Previous programs facilitated the early deployment of wind and other renewables, and they could serve as a good model for storage.
Third, we must enable innovation by modernizing our regulatory models. This includes updating the Electricity and Gas Inspection Act to permit new metering technologies to reduce barriers to the deployment of advanced technologies such as LED street lighting and electric vehicle charging infrastructures. Similarly, a regulatory innovation fund would allow provincial and territorial regulators to minimize price impacts on Canadians as new technologies are deployed.
Finally, we must continue to invest in cybersecurity. Canada has taken meaningful steps forward in the past few years to address cybersecurity issues. Unfortunately, we continue to face dedicated and innovative adversaries who seek to undermine our critical systems.
Information is the best defence. Canada should expand the Project Lighthouse pilot nationally. The program shares timely, actionable intelligence between government and electricity customers on a daily basis. It has already had an impact in Ontario and it offers opportunity for the rest of Canada.
To conclude, it's no secret that the electricity sector is undergoing unprecedented transformation. The pace and scale of the changes we have experienced are nothing like we've seen in generations. CEA and our members have an important role to play in enabling innovation, but we can't do it alone. There's an important role for other partners, including the federal government, to help drive this transformation.
Thank you, members and Mr. Chair. I look forward to your questions.
Mr. Chair, I would like to thank you for this opportunity to speak with members of the Standing Committee on Finance as part of the pre-budget consultations. I have come to talk to you about the employment insurance program, of course, and I do so as the spokesperson for the Conseil national des chômeurs et chômeuses. We bring together 10 regional organizations in Quebec and New Brunswick.
During the last election, last fall, the Liberal Party of Canada, which forms this government, committed to a number of employment insurance measures: a career insurance benefit for long-tenured workers; an employment insurance disaster benefit to be introduced in 2021; an extension of sickness benefits from 15 to 26 weeks; and the transformation of the pilot project for seasonal employees into an enhanced permanent program. The key measures are the extension of sickness benefits and the permanent program for seasonal workers. It is these measures that I will speak about.
I'll start with sickness benefits. It does not seem to be a given that sickness benefits will be announced in the next budget. We think that would be a serious mistake. The government has made a commitment to the public. The needs are great, and people are waiting. Thousands of people suffer from serious illnesses and, in many cases, have only EI sickness benefits to support them financially. In 2017-18, sickness benefits supported more than 400,000 people in Canada, 36$ of whom have received the maximum 15 weeks of benefits. The rate of exhaustion of these benefits is highest among those aged 55 and over.
I would like to bring the following facts to your attention. Of all the G7 countries, excluding the United States but including Russia, Canada has the worst health benefits coverage of any country in the G7. I did say the worst. France grants 156 weeks; the United Kingdom, 52 weeks; Germany, 78 weeks; and Japan, 72 weeks. I'll let you do the math. In Canada, the sickness benefit component was created in 1971 and has never changed. It is 15 weeks, and it's time for that to change.
The government is proposing to extend it to 26 weeks. We consider that to be a minimum. We believe it should be extended to 50 weeks for those who are seriously ill. That is our proposal. In fact, according to a study by the Parliamentary Budget Officer released in April 2019, the additional cost of extending sickness benefits, if they were increased from 15 to 50 weeks, would be $1.1 billion by 2020. On this subject, the Parliamentary Budget Officer said the following in his study:
Therefore, the increase in the duration of benefits is expected to raise the employee premium rate by a total of 6-cents from the baseline rate ….
There is an urgent need for action, and it is important not to subject this commitment to political calculation.
Let's talk about seasonal workers now. The realities of seasonal work are part of the working world and our economy everywhere. The government understands that seasonal workers, and I quote from a government press release, “are an important part of Canada's continued prosperity”.
These workers often find themselves without any other employment opportunities when the work season is over. Their employment, like the length of the working season, is often subject to the vagaries of the climate, available resources and the market. That is why, in August 2018, the government implemented a pilot project targeting seasonal workers in 13 administrative regions by granting them five additional weeks of benefits. This pilot project will end on May 30. The government's commitment is to improve this program and make it permanent. We believe that it does indeed deserve to be improved by better targeting seasonal employees in these regions, perhaps by identifying seasonal employers to better target seasonal employees. We also believe that an exception eligibility criterion, set at 420 hours of work, should be added for these seasonal workers.
Similarly, we believe that this program should also be offered to indigenous communities that experience high unemployment rates and that, in fact, face the same constraints as seasonal employees. In other words, we believe that we must protect our regions, protect seasonal workers and protect indigenous communities.
The government must move quickly to improve this measure and announce it in the next budget in March of this year. If we are talking about money, I would like to bring to your attention the fact that the cumulative surplus in the employment insurance fund currently exceeds $4 billion. I would also like to point out that, according to an OECD study entitled “Social Protection and Well-being”, in terms of social spending on unemployment, Canada spends 10% less per capita than the OECD average.
We think the role of the employment insurance program is to help people who lose their jobs by providing them with economic security. It is also the role of a responsible government to ensure that the program fulfills that function.
Thank you for your attention.
Hello. Thank you everyone for taking the time. I appreciate that the committee has been drinking from a firehose of information, so I hope to be concise, clear and hopefully give the committee something interesting to take away.
As mentioned, my name is Bilal Khan, and I'm the managing partner at Deloitte. I'm head of Deloitte data, which really focuses on data analytics and artificial intelligence, primarily around governance, strategy and public policy as they relate to the new economy. In addition to this, I sit on the Province of Ontario's digital and data task force, which is a private sector task force responsible for setting a series of recommendations for the future of the province. Prior to being with Deloitte, I built one of the largest scale-up innovation hubs in Canada called OneEleven, which is focused on late-stage technology companies.
Deloitte is one of Canada's leading professional services firms. We employ well over 14,000 people across the country. Deloitte's purpose is to inspire and help our people, communities and our country thrive by building a better future for us all, something I think we all can relate to. We take great pride and responsibility in contributing our perspective on the issues that matter to our country and that affect the Canadian business community, more broadly.
As part of our commitment to the future prosperity of Canada, we've established the future of Canada centre. It's our research and public policy branch designed to spark vital discussions about the country's future to help all Canadians thrive in the new economy.
At Deloitte, we believe that Canada has an opportunity, in fact, a responsibility, to be a global leader in the new economy. My remarks today will focus on how Canada can compete on the world stage as a true global leader in the artificial intelligence and data-driven economy. To set the context a bit, Canada is extremely well positioned to reap the benefits and opportunities of an AI and data-driven future, thanks in part, first, to early leadership from our academic institutions; second, a highly trained workforce; third, an effective skills-based immigration system; fourth, continued investments in artificial intelligence; and fifth, the Canadian government's leadership in creating an open data ecosystem.
Canada lags behind other countries when it comes to the commercialization and adoption of artificial intelligence. Canadian businesses don't believe Canada is well positioned to lead in the data economy. Our research shows that Canadian businesses are facing several challenges when it comes to the new economy. Canadian businesses significantly trail their peers on AI adoption. At least 71% of Canadian businesses have not even begun their AI journeys, partly because as a mid-sized economy we have smaller datasets than companies in larger countries. In the new economy, data scale matters.
Most Canadians don't understand AI or its implications, which is holding back business investments. Businesses and consumers distrust AI and are concerned over unintended consequences from AI-powered decisions and data privacy. There's a lack of clear regulations on artificial intelligence and data, creating uncertainly for businesses and lack of trust for consumers.
We've identified three key areas where bold action is needed to successfully achieve prosperity in the new economy.
First, fuel the AI economy. Good data makes good AI possible. If AI is going to drive our economy, which it eventually will, Canada needs to increase the quality and quantity of public data available to researchers and businesses to commercialize. This is especially true for companies in less populated countries like Canada that often have fewer resources and smaller datasets than larger countries, like we see with the domination of the United States and China.
The Canadian government can help spur innovation by making more public data available in machine-readable format for commercialization purposes and making it easier to use. Other countries are already leading the way. France, Germany, Australia and of course China have made publicly held data such as utility data, transportation data and health care data a feature of their national AI strategies.
Public data is even more valuable when combined with privately owned data. To accelerate this, governments across Canada can increase collaboration with the private sector to ensure that data is being released in algorithm-friendly, machine-readable format.
Second, prepare Canadians for AI and data-related change. In our research we found that only 4% of Canadians were confident in their understanding of AI. We need to better equip our workers for a changing labour market and shield Canadians from being negatively affected by the new economy. To prepare Canadians to respond to social changes that the new economy will bring, governments need to ensure that all Canadians achieve a basic level of AI and data literacy. For example, in Finland they've created a program called elements of AI, a free online course geared to people with no technical background. Experts told us that the popularity of the course outside Finland has also increased Finnish prominence in the global AI ecosystem.
Third, mitigate risk and build trust in AI and data. Trust is the currency of the new economy. In our research we heard from Canadians that they did not trust AI. This mistrust is holding back the adoption of AI. Businesses and consumers alike told us they had concerns about using AI-enabled tools they didn't trust. This is in part due to outdated legislation that does not provide transparency and clarity by clearly laying out the rules concerning AI, data, privacy and security.
We understand that governments must balance both protecting consumer rights, data, and privacy while ensuring and encouraging business innovation. I'm encouraged by this government's effort to update Canada's privacy and consumer protection laws and the digital charter. Legislation must be updated to reflect the reality of today's AI and data-driven economy and legislation should give businesses a clear set of guardrails and consequences to operate within the collection, storage and sharing of data. This is an area where clearer legislation wouldn't necessarily be detrimental to business innovation. This is because, absent timely and specific legislation, the grey zone that businesses are forced to operate in is far worse for innovation.
With a cross-cutting approach to public policy and strong private-public collaboration, we as a country can seize the opportunity to be a true global leader in the new economy. We can achieve AI and data prosperity in a way that will benefit all Canadians.
I look forward to having a discussion through your questions.
Thank you very much.
We also continue to recommend an exemption to the stress test where borrowers have paid as agreed through their initial term and wish to move their mortgage at renewal. Maintaining the current requirement is anti-competitive and, frankly, anti-consumer. Canadians with a proven payment history should not be tied to their incumbent lender's renewal offer.
Also, while the program is in its infancy, the newly implemented first-time home buyers incentive plan seems not to be providing the level of support the government had projected. Numbers published recently describe funding of roughly 50% of the projected take-up rate.
We acknowledge that the winter months are traditionally a slow period for home purchases, but given the feedback received from our member mortgage brokers across Canada, we do not expect to see much of a change in the overall level of activity. We contend that the income multiples are the largest deterrent to the program's overall success, if success is defined as having the $1.25 billion allocation actually issued in equity mortgages.
Program participants are limited to four times their income, up to a household maximum of $120,000. If purchasers decide not to take a shared equity mortgage and instead simply use the existing mortgage insurance option, all things being equal and in today's low interest rate environment, they'll qualify to borrow significantly more than four times their income.
Our members also note that the program as currently structured does not assist anyone to qualify to purchase a home who would not otherwise already have qualified. The election campaign promise to increase the income limit and its multiplier to five times, and $150,000 in greater Toronto, greater Vancouver and Victoria, will go some way to increase participation and invites a discussion on regionalization of mortgage policy through the future design of this program.
Our ongoing primary recommendation to assist first-time home buyers is for the government to reintroduce an insurable 30-year amortization exclusively for first-time buyers. As a practical alternative, it would also reduce monthly carrying costs for the purchasers, who are traditionally the cohort with the highest propensity for income growth. Our own research has confirmed year after year that Canadians pay off their mortgages much faster than their original amortization schedule requires.
If a reintroduced insurable 30-year amortization is not deemed appropriate at this time, even though unlike the first-time homebuyer incentive it would receive 100% participation from mortgage lenders, we recommend increasing the qualifying maximum income multiple to 4.5 times. While we don't believe this will be as supportive a change as the reintroduction of the insured 30-year amortization, it will increase the number of would-be first-time buyers, would-be owner-occupiers and generally young and aspiring middle class Canadians benefiting from the program.
It would also place the limits more in line with commentary from the IMF that loans greater than a 450% loan-to-income ratio present the greatest risk. Increasing the income limit to 4.5 times nationally, therefore, should not raise the ire of the international financial community.
Thank you very much indeed. We welcome any questions.
Thank you for the invitation to join you today.
You've heard from business, energy and financial services. I'm here to talk to you about families in Canada. Families are the engine of our economy and the cornerstone of our society. Families are the primary caregivers, helping people recover from illness and injury.
We live in an increasingly complex and interconnected world with unparalleled access to information—information about families and family life. However, despite the fact that we have enormous volumes of data, data is not the same as understanding. At the Vanier Institute, we focus on enhancing the national understanding of how families interact with, have an impact on and are affected by cultural, environmental, social and economic forces.
The Vanier Institute is an independent national charitable organization dedicated to understanding the diversity and complexity of families and the reality of family life in Canada. We envision a Canada where families fully engage and thrive in a caring and compassionate society, with a robust and prosperous economy, in an inclusive and vibrant culture, in a safe and sustainable environment. The Vanier Institute is an evidence-based learning organization and a national resource for anyone interested in or involved with families in Canada.
Governor General the Right Honourable Georges Vanier and his wife, Pauline, created the Vanier Institute in 1965 as a royal standing commission that should never be discharged. We continue to provide a wealth of information about families and family life, family experiences, expectations and aspirations. We've circulated some material for you just as a sample of what's available to you as you do your work. I think we've sent you some material on student finances and some of the other material that's available, as well as materials dedicated to seniors and finance. You name it, we have it, and if we don't have it and you want it, we can likely get it for you.
By analyzing data and synthesizing information, organizing resources and mobilizing knowledge, we expedite research to practice. We facilitate meaningful partnerships and collaborations across all sectors to maximize the impact of research on policies and practices. We engage in conversations and collect stories from families and from people who study, serve and support families. We are a resource for those who fund or invest in research, services, policy analysis, program delivery and innovation. We identify leading and promising practices in communities, organizations and workplaces, and we share our findings across Canada and around the world.
We have a broad and inclusive functional definition of family, focusing on the important role that families play in the lives of the individual family members, the workplace and the communities in which they live, using a family lens to explore a wide spectrum of topics, since there are few things in life that don't affect or aren't affected by our circles of kinship. We make evidence-based forecasts while anticipating, planning and preparing for the future. For example, in our recent work on intergenerational transfers of wealth, we've estimated that $750 billion will be exchanging generational hands in the next decade.
We know that the fastest pathway to poverty is either divorce or loss of a life partner, and that disproportionately impacts women who are seniors. We continually seek and embrace new and innovative ways to reach out to researchers, educators, students, journalists, service providers, faith leaders, policy-makers, business entrepreneurs and others with an interest in families and family life. With decades of experience and commitment, we've earned the respect of our peers in the voluntary, public and private sectors.
Since our founding 55 years ago, we've earned a reputation as one of the country's thought leaders by sparking important conversations across boardrooms and around kitchen tables alike. Family finances and family policy have been a focus of ours for the last 25 years, as we've studied income, expenditures, savings and debt, wealth and net worth.
The last year we've been focusing on three issues that may be of interest to you. These are the Canadian family policy monitor, the family well-being index and the family research network. The monitor provides evidence-informed decision-making and evidence-based policy development and evidence-inspired program innovation. The index provides an opportunity to measure the way in which families are thriving and we're working with our colleagues in New Zealand, Scotland, Iceland and Australia and building on their work.
We engaged with Canadians on our listening tour across Canada: families affected by incarceration, military veteran families, first responder families, people working in early learning and child care, and families navigating the system designed to support adults and children with disabilities. This month we are meeting with LGBTQ2S youth who have been rejected by their birth families and have created chosen families, as well as Inuit elders who have been forced away from their families in order to receive medical care. The network will bring all of these together.
In the spirit of reconciliation and to further our relationships with indigenous peoples, we are aligning our efforts with the calls to action. In the spirit of a global community, we are aligning our work with the UN's sustainable development goals.
In closing, I want to leave you with a quote from a report that was written by Mr. Khan's colleagues in New Zealand. They write that there are three evidence-informed foundations for the efforts that are going on in New Zealand:
First, people care about their wellbeing as much as their income. Second, wellbeing depends on a range of factors, only some of which can be purchased. Third, public policy that is exclusively or primarily focused on increasing income (or GDP in aggregate) may actually end up decreasing wellbeing now, or in the future.
In closing, I'm not asking for anything specific in the budget—although it would be nice if you found some funds for the Vanier Institute in your budget, as our counterparts in Australia are receiving $4 million a year from their government, and we aren't—but we are here to provide you with answers to whatever questions you need answered in order to make your decisions going forward for budget 2020.
First of all, Quebec and Canadian society has long expressed a need for sickness benefits. When a comparison is done, it is not to our advantage. When we compare Canada to similar countries, we see that it is the worst in terms of the protection provided by its sickness benefits in the event of a serious illness. We face immeasurable tragedies every day. Canada must assume its responsibilities and rebalance EI sickness benefits. We have been hearing about this for a long time.
In the last election, the Liberal Party of Canada, which forms this government, committed to advancing and extending sickness benefits to 26 weeks. Our position, which is also the position of many in society, is that this should be the minimum and that benefits should be extended to 50 weeks for those who are seriously ill. People need it, and their testimonies show that.
For example, on the Facebook page of the Conseil national des chômeurs et chômeuses, we posted a message about sickness benefits two weeks ago. It has been shared 1,300 times to date, and there are nearly 130 comments. I will share a few of them with you.
One person said that she had 15 weeks of sickness benefits, was still waiting for surgery and had no income. Another person said that she had had 15 weeks of health insurance benefits during her radiation treatments and all of her exams in Montreal, that she was no longer employed, that she was undergoing chemotherapy treatments and that it did not make sense. Another said that she had been off work for 15 months, that she was lucky to have had wage loss insurance and that she had taken her savings for the remaining five months. Finally, one person said that his spouse had cancer, that he did not work last year and that he had only had 15 weeks of sickness benefits, and that a person cannot get very far with that.
People's testimonies are sometimes overwhelming. They tell us that the government needs to rebalance sickness benefits. The Parliamentary Budget Officer's study tells us that there would be a 6-cent increase with a premium rate that keeps going down. Indeed, the employment situation is good. More money is flowing into the employment insurance fund, and to offset this, the contribution rate is being lowered.
We could arrive at a balanced rate that would be reasonable for everyone. Take the case of an employee who earns the average Canadian industrial wage of $50,000 a year or $1,000 a week. The contributions would increase by 6¢ per $100 of salary. That is 60¢ a week. What do we do with 60¢? That is $31 a year, but $31 a year per citizen to provide better protection in the event of serious illness. It's time to take action to change things.
I would be delighted to talk about carbon capture and utilization.
First off, as you noted and in the material we circulated, we have some real global leaders here. We have some groundbreaking work that is taking place in Alberta by Alberta companies, as well as by the universities in Alberta.
We are not yet at a point where we're going to be able to immediately move away from fossil fuels. It's something, of course, that we're planning on doing over time, but we have already figured out how to capture carbon. The first commercial-scale carbon capture and storage plant on an electricity generation facility was built in Canada by SaskPower, a world leader, in Estevan, Saskatchewan.
We continue to be world leaders now in the area of not just capturing the carbon, but figuring out what to do with it. It gives it both an opportunity to reduce the carbon footprint and it creates a separate stream and separate business for the companies themselves.
We're quite confident that this research is going to result in very useful products being produced, such as the carbon nanotube approach that's being looked at by a couple of the projects, including work by Capital Power, for example. These are products that may be used in Kevlar vests in the future, and in advanced manufacturing, in aeronautics, and so on.
The current product stream is actually just waste. In the future, that waste will likely be turned into very useful high-tech products.
As you know, CHBA is the voice of Canada's residential construction industry—new construction, renovation and land development. With over 9,000 member firms across the country, we represent an industry that is the source of 1.2 million jobs and 160 billion dollars' worth of economic activity.
The recent election campaign confirmed how concerned Canadians are about housing affordability. It showed the dream of home ownership is still very much alive in Canada, and the next generation of new Canadians is very concerned about home ownership slipping away. It doesn't have to be this way. We can protect the financial system, and, in fact, strengthen it through policy adjustments around housing.
We know there have been successive demand-side measures to address financial system vulnerabilities, but we also know these have had an impact. The problem is that the impact in some cases has been quite severe, and it's definitely time to recalibrate the system accordingly.
CHBA estimates that 147,000 potential buyers have been knocked out of the market by the stress test. About half of those are first-time buyers. Arrears rates have gone up in some struggling areas. Overall, they continue to be below one-quarter of 1% nationally, and young Canadians have the lowest arrears rate of any cohort. The mortgage system right now is penalizing the wrong group.
We, therefore, continue to recommend adjustments to the stress test to reduce it the longer the term of the mortgage. Leave it at 2% for one-year terms, but decrease it over the longer term down to 0.75% for five-year terms. To encourage even longer-term mortgages, as promoted by the Bank of Canada, there is no need to stress-test seven-year and 10-year terms. This will maintain financial system stability, promote longer mortgage terms and help more well-qualified Canadians achieve home ownership.
We are pleased to see the federal government is committed to review the stress test with a view to making it more dynamic. We encourage the minister to expand consultations beyond just the financial institutions to ensure industry voices are part of the review.
In addition, regarding first-time buyers, we still recommend a return to 30-year amortizations for insured mortgages. The millennial generation, who are now well into their careers, are ready to get a foothold into housing, and can do so responsibly. Given that most will move up the market, the idea that they shouldn't have a 30-year mortgage is a fallacy, since most will take on another 25-year mortgage in a move-up home in a few years anyway, if all goes well. The average time to pay off a 25-year mortgage is also only about 17 years in Canada. Again, we are penalizing the wrong group when we prevent entry into home ownership. All that said, demand-side measures have been a problem, but fixing them alone is not a solution by itself. Prices are affected by both demand and supply factors.
The federal government can set up its leadership to work with the provinces and municipalities to increase market rate housing supply where we see so much in the way of shortages and resultant price increases that are rightly so concerning to Canadians.
We need more homes that meet Canadians' needs in the places they work and want to live, and this includes units for both ownership and rental. A rental can be best spurred on by tax reform, but I'll leave that discussion for another time. Governments at all levels need to target getting more housing supply online using the various levers at their disposal.
The year 2019 saw a decline in housing starts of over 4,000 units nationally, compared to 2018, at a time when we all acknowledge we need more, not less housing supply. We're also seeing severe declines in the value of building permits in western Canada, contributing to weakening local economies and job losses in residential construction at a time when those jobs and economic activity are so desperately needed. It's time to enact policy to help turn that around.
Like housing affordability, climate change emerged as an important issue for Canadians during the election. Undoubtedly, there is an important role that housing can play, but smart policies are required to ensure that addressing climate change doesn't further erode housing affordability.
CHBA and our membership have always been leaders in energy efficiency, and we continue to do so with our net-zero home-labelling program. Our leading-edge builders are pioneering this space to find best approaches to meet these goals by building net-zero houses for Canadians who want to invest in their homes that way, but the affordability gap that still exists must be closed before code changes and regulations are made. Further R and D and innovation are needed for higher levels of energy performance to be affordable for all.
We are calling on government not to go to extreme levels of energy performance and code until they are affordable for consumers. We're also calling for affordability to be enshrined as a core objective in the National Building Code for energy efficiency and for all other code changes.
Very importantly, CHBA welcomed the recognition in the election campaign of the impact that home energy retrofits can have in helping to meet Canada's climate change goals. We have long called for home energy labelling at the time of resale and an energy retrofit tax credit, both using the Government of Canada's EnerGuide labelling system. We encourage more support for the EnerGuide rating system for houses, expanding and promoting this system as the backbone of all currently proposed housing incentives, tax credits and other energy efficiency initiatives by governments, utilities and all other organizations to build on the same system to maximize results. For instance, the new interest-free retrofit loan program should certainly require the use of the EnerGuide rating system.
Elections sent a clear message. Canadians want a government that works together and works for them. Budget 2020 is an opportunity to do just that. All parties rightly identified housing affordability, home ownership and climate change as key concerns in their platforms. CHBA looks forward to working with you to bring those solutions to these key issues for Canadians.
Good evening, Chair. I thank you and fellow members of the committee so much for having me.
I'd like to begin by acknowledging that we are meeting here on unceded, unsurrendered Algonquin Anishinabe territory.
Climate Action Network Canada is the largest network of organizations working on climate and energy issues in the country. For 30 years we have been the only national organization with a mandate to promote the interests of the climate movement as a whole. Rather than any one individual organization, we have 120 member organizations across the country, working from coast to coast to coast. While climate action networks exist all over the world, Canada's is uniquely diverse in that we bring together in our membership environmental NGOs; trade unions; first nations; social justice, environmental, development and humanitarian organizations; youth groups; and health groups and faith groups. It makes for a very rich dialogue in the membership.
Our members collectively represent millions of Canadian member supporters and volunteers. In fact, you've already heard from several Climate Action Network Canada members over the course of these proceedings, including the Assembly of First Nations, Clean Energy Canada, the Canadian Parks and Wilderness Society and the other 21 members of the Green Budget Coalition. I will be drawing your attention back to some of their recommendations throughout my remarks.
Climate and biodiversity emergencies touch on all aspects of life in society, exacerbating existing inequalities, social injustices and economic hardships, so budget 2020 and all future budgets must take a really multi-faceted approach to addressing environmental challenges and take advantage of the opportunities associated with environmental action.
The three areas of intervention on which I want to focus my comments today are Canadians' everyday lives, Canada's institutional and fiscal frameworks for climate action, and Canada's role in the world.
The story of climate change is fundamentally a human story. We often hear people speak about saving the planet or protecting a particular species that is in peril, and these are of course very noble and necessary motivations, but my motivation comes from acknowledging the fact that climate change poses a real threat to the people in the communities that I care about.
At this point in human history, taking action on climate change is essential to caring about the people that I love. For Canadians to get on board with climate action, they have to see that action touching and improving their lives and the lives of the people they care about. That's why, when considering budget 2020, it's essential to reflect on the recommendations made by the Federation of Canadian Municipalities, the mayor of London, from whom you heard recently, and other municipal leaders who have come before you. Cities are really on the front line of climate change, and municipal governments are the order of government that most Canadians interact with most closely.
With 493 municipalities declaring a climate emergency in the last couple of years, it is clear that resources have to flow to these governments to develop and effectively implement climate change action plans.
The cities caucus of Climate Action Network Canada is a working group of about 20 of our municipally focused member organizations. It recommends that the federal government work to empower local governments to take climate action by providing directed financial resources to municipalities, tying this funding to eco-fiscal policy implementation, and requiring full life-cycle climate tests on expenditures. Second, it recommends incentivizing municipalities to achieve carbon neutrality before 2050 by covering the costs of conducting emissions inventories, developing best practices for real-time GHG measurement, and providing guidelines to identify low-carbon jobs and encourage growth in those sectors.
Recommendations from the Insurance Bureau of Canada on flood plain mapping are also really an essential piece of this puzzle, as are investments in public transportation, electric buses, electric vehicles, building retrofits and green infrastructure, as you heard from Clean Energy Canada and the Green Budget Coalition.
Having just left 400 people gathered at Canada's first nature-based climate solutions summit at the National Arts Centre, it's very clear to me how essential it is to invest in work that lives at that intersection of climate and ecosystem protection.
Twenty per cent of Canadian renewable energy projects are owned, at least in part, by indigenous communities. Indigenous leadership has always been at the forefront of Canada's environmental action, and the climate crisis is really no exception.
As Chief Ghislain Picard highlighted yesterday, indigenous community housing is in critical need of investment in Canada, and that investment can help communities be more resilient and prosperous.
When it comes to Canada's institutional and financial frameworks for climate action, let me state the obvious. If we're going to seriously invest in the solutions, we need to stop investing in the problem. It is essential that Canada follow through with its G7 commitment to phase out fossil fuel subsidies by 2025, and beyond dealing with domestic subsidies, Canada needs to deal with the fact that we continue to fund fossil fuel development via Export Development Canada. While EDC has committed to reducing the carbon intensity of its portfolio, Canada, alongside just three other countries—Japan, Korea and China—has substantially funded fossil fuel development abroad using its export credit agencies.
Just to give an example, Canada, from 2012 to 2017, facilitated 12 times more investment for oil and gas projects than what they classify as clean-tech projects. That's a $62-billion investment in oil and gas projects versus a $5-billion investment in clean-tech projects.
Many witnesses have mentioned the good work of the panel on sustainable finance. We, too, support its work and encourage the committee to consider the potential to support the work of the Institute for Sustainable Finance, which brings together more than 20 academic and private sector institutions with the goal of aligning mainstream financial markets with Canada's transition to a prosperous, sustainable economy.
Finally on this point, budget 2020 must necessarily provide resources for regulatory and legislative processes related to Canada's legislation for net zero by 2050 and the development of a just transition act, both of which were promised in the current governing party's election platform.
The year 2020 is also a big year for the Paris Agreement. It is the moment when Paris Agreement parties are welcomed back to the table to review their Paris pledge and improve upon that pledge, and so the revision and enhancement of our climate commitments is essential in 2020. We have missed every single climate target we have set in this country since the early nineties, and so let's make sure we never miss another one.
Thank you very much, Mr. Chair.
Good evening, ladies and gentlemen.
I represent the Confédération des syndicats nationaux, a labour organization with about 300,000 members, mainly in Quebec but also in the rest of Canada.
Given the time allotted to us, I will present the recommendations in our brief, and I will briefly comment on them because we cover a great deal of subject matter.
The first recommendation, which is directly related to the previous presentation—I agree with just about everything that was said—is that the government must stop promoting fossil fuel production to honour its commitments under the Paris Agreement, in particular by gradually phasing out fossil fuel subsidies by 2025.
The most recent report by the Intergovernmental Panel on Climate Change, or IPCC, notes that, if we want to hold warming to 1.5°C as set out in the Paris Agreement, we need to reduce our greenhouse gas emissions by 45% by 2030. I would remind members that Canada's targets are less ambitious, at 30% from 2005 levels by 2030, and that, in addition, GHG emissions continue to rise in Canada. We are not moving towards the target at all, we are moving away from it. We need to get back on track in a number of ways, including reducing fossil fuel production.
Our second recommendation proposes that the government must take a tougher stance against tax cheaters and accounting firms that develop aggressive tax avoidance strategies.
We all remember the KPMG affair a few years ago, which exposed the accounting firm's use of tax strategies to benefit wealthy Canadians. In the end, there were even secret deals made between the Canada Revenue Agency and the cheaters. Far from being punished, the cheaters were even encouraged because secret deals were cut with them. Clearly, this creates a very real perception of unfairness among Canadians and we must put an end to this type of strategy.
Our third recommendation proposes that, while the OECD is deciding on how to regulate the global tax system, the government must create a temporary tax system to ensure that the digital giants are paying their fair share of taxes. In that regard, we find that the digital giants are unfairly competing with Canadian businesses. The digital giants are getting our content but are not paying their fair share of taxes. In fact, they are not paying any tax at all. While the OECD works on these issues, some countries have taken action to create a temporary tax system. That is the case for Great Britain and Australia and, to a certain extent, for Quebec. We believe that Canada should act in this area.
I believe that the Yale Report, which I have not had the time to fully read, covers these issues. We therefore hope that the will look into the report very soon.
The fourth recommendation specifies that the government should no longer make it possible for companies to repatriate dividends from tax havens without paying taxes. I remind members that the Harper Government amended the tax treaty with Barbados to enable practices of that kind.
In fact, of the Bloc Québécois tabled a motion in the House about this. I believe that the motion was supported by the NDP, but it was sadly struck down because the two other parties in the House opposed it. Here again, there is a very real perception of tax unfairness. We believe that the House should take up this debate again to ban such practices.
In our fifth recommendation, we urge the government to take every opportunity provided by trade agreements to ensure that Canadian content is featured in government procurement.
A number of trade agreements have been signed in the past few years: the Comprehensive and Economic Trade Agreement, or CETA, with the European Union; the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP; and more recently, although it is still being debated, the Canada-United States-Mexico Agreement. If we enter into such agreements, we must be able to retain our ability to encourage Canadian content in government procurement—the government must ensure we do. Many jobs are at stake, and they are great jobs.
Our sixth recommendation aims to ensure the survival of the Davie Shipyard, particularly by incorporating it into the National Shipbuilding Strategy. Obviously, we produced our brief in August. Announcements were then made on the subject in December.
Furthermore, we welcomed those announcements. So it seems quite clear that the Davie shipyard will be incorporated into the National Shipbuilding Strategy. But now it needs contracts. Including it is fine, but let's see the contracts. During a labour shortage, the longer the contracts take to arrive, the more people will have found work elsewhere and the harder it will be to recruit workers when they are needed.
Our seventh recommendation is that the government should enhance the employment insurance program by adopting a hybrid standard that would make people eligible after 420 hours or 12 insurable weeks of work. The minimum number of weeks of benefits payable should be raised to 35 and the replacement rate to 60% of the maximum insurable earnings.
I want to insist on one point that was supposed to be addressed and, in our opinion, is still not. This is the famous black hole faced by seasonal workers who, because they do not have enough hours of work, can still access the employment insurance program, but not for long enough. So they go through a period when they are still unemployed but not receiving employment insurance. Using a minimum of 35 weeks as a measure should almost solve the problem. This is an important issue in the east of Quebec but also in eastern Canada. In Canada generally, some regions are affected by this issue more specifically.
Our eighth recommendation is that the federal government should introduce a public and comprehensive pharmacare program. Work has been done on this in recent years. Canada is one of the few, if not the only, OECD country that does not have public coverage for prescription drugs.
In Quebec, we have what we call a hybrid system that has been in effect since 1997. It is a step in the right direction, of course, but it has its share of problems. We are therefore proposing a public, comprehensive program, which, by the way, would result in decreased costs for medications and better protect all Canadians. We want it to be done in compliance with provincial jurisdiction and there should be the right to opt out with full compensation if, of course, an equivalent or superior program is put in place.
Our final recommendation is that the federal government must, as soon as possible, adopt the expert panel's recommendation and provide greater assistance to print news media. You do not need a long presentation for me to convince you of the precarious situation in which the media find themselves. The media are important in a democratic society, especially in terms of a diversity of voices. We feel that the situation is urgent. There have been some commitments from governments in this regard, but they have to become specific, because a lot of media are still in danger in Quebec and in Canada as a whole.
Thank you, Mr. Chair.
Thank you, Mr. Chair. As mentioned, my name is Rebecca Alty. I'm the vice-president of the NWT Association of Communities, and I'm joined today by Sara Brown who is the CEO for the NWT Association of Communities. We're here on behalf of the 33 communities in the Northwest Territories.
Unfortunately, we did not have the opportunity to translate our documents, because we received the invitation to appear only on Monday. However, if you ask questions in French, we will be able to answer them.
Thank you so much for the opportunity to come and speak today and for the opportunity back in August to provide a written submission. Today we'll provide a bit more information on our written submission and take this opportunity to answer any questions you might have.
First, on infrastructure funding, I want to highlight how much we appreciate gas tax funding, particularly last year with the doubling of the gas tax. We're the front-line government. We're there providing clean drinking water, proper treatment of sewage and proper disposal of garbage, as well as providing community recreation, ensuring that Canadians can remain healthy all year long. With the gas tax, we are able to ensure that we are meeting our community priorities and keeping residents healthy, and really making sure that those assets stay up to date.
Housing is in a dire state in the Northwest Territories. In Yellowknife, in our 2018 point-in-time counts, 338 people were experiencing homelessness. We're talking about the north. It's -42° today in Yellowknife and we have 338 people who are homeless.
In 2019, the NWT Bureau of Statistics calculated that 43% of housing in the Northwest Territories has at least one housing problem. A housing problem is affordability, adequacy or suitability, and the proportion of dwellings with at least one housing problem ranged from 30% in Sachs Harbour, which is up in the Arctic Ocean, to 90% of houses in Colville Lake. Therefore, a long-term federal funding commitment on housing is much needed in the Northwest Territories.
In regard to truth and reconciliation, it will be five years this June since the commission released its report. I would like to draw attention to TRC's call to action number 21, which calls upon the federal government:
to provide sustainable funding for existing and new Aboriginal healing centres to address the physical, mental, emotional, and spiritual harms caused by residential schools, and to ensure that the funding of healing centres in Nunavut and the Northwest Territories is a priority.
In the upcoming federal budget, we do hope this recommendation is actioned.
With regard to land claims, our request is for an increase to the staffing levels in land claims negotiations to speed up and finalize agreements. Right now, about 1.5 days per year are allocated to each land claim table. In the Northwest Territories, Colville Lake has a work plan to get to its self-government agreement in five years, but based on the federal government's allocation of 1.5 days of work per land claim table, that would draw it out to 20 years. From a reconciliation perspective and from an economic certainty perspective, this needs to be addressed. There are a lot of land tenure issues and it's important that they be resolved in the Northwest Territories, as elsewhere in Canada.
With regard to the Arctic policy framework that was approved in the summer of 2019, we hope to see funding for it in the upcoming budget. We all know that without money there will be no progress made. There are many initiatives in the Arctic policy framework that are great; we need work to progress.
With regard to telecommunications, we've identified three areas: broadband service, redundancy and cell service. We've highlighted some recommendations on those.
Right now in the Northwest Territories, all communities have cell service, but for the Internet, it's quite difficult for residents to participate in the digital economy or even stay in contact with one another. Fax machines are still required when the Internet goes down; that's all that you can rely on.
When it comes to cell service, most of our highways have no cell service. If you are about 10 minutes outside the capital of the Northwest Territories, you lose cell service. It isn't so bad if you're in an accident there, because you can probably make it back to town. However, if you're two hours outside Yellowknife, you have no way to reach anybody. Again, at temperatures in the -40°s, if you're in an accident with your family, you have to wait until the next vehicle comes, which means you could be waiting quite a while.
Therefore, we do think cell service, broadband and redundancy of Internet are important issues to be resolved, not only to allow residents to participate in the digital economy but to also ensure their safety and health.
I will turn to Sara, who will discuss our climate change recommendations.
I'm Lisa McDonald. I'm executive director of the Prospectors and Developers Association of Canada. I'm joined here today by my colleague Jeff Killeen, director of policy and programs. We appreciate the important matters before the committee. I thank you for the opportunity to offer comments on behalf of the mineral industry.
PDAC is the leading voice of Canada's mineral exploration and development sector, representing over 7,500 members. Our work centres on supporting a responsible and competitive mineral industry. The mineral industry generates significant economic and social benefits across Canada in remote and indigenous communities and in metropolitan centres, employing over 600,000 workers and contributing nearly $100 billion annually to our GDP. It is the largest private sector employer of indigenous people on a proportional basis in Canada and a key partner of indigenous businesses.
Mineral exploration is a multi-staged process that aims to discover economically viable mineral deposits. It is highly technical and the odds of success are very low, with only about one in 10,000 mineral claims reaching the advanced exploration stage and just one in 1,000 advanced projects becoming operating mines.
Junior exploration companies do the bulk of this high-risk, high-reward exploration work and account for upwards of 70% of all mineral discoveries made in Canada. These companies typically generate no revenue and are highly reliant on capital markets to access the necessary investment capital to advance prospective projects. We have seen the competitiveness of Canada's mineral industry waning as overall investment in this sector and early-stage exploration activity reached decade lows in 2019.
The Government of Canada has recognized the importance of the mineral industry based on the significant effort and public outreach undertaken in developing the Canadian minerals and metals plan. The five-year renewal of the mineral exploration tax credit by government in 2019 is further recognition of the importance of exploration companies in the mineral supply chain. PDAC members very much appreciate this support.
We are also very encouraged by the level of government foresight and the tremendous opportunity created by the Canada-U.S. joint action plan on critical minerals. In this context we must work to ensure that junior mineral exploration companies remain competitive on the global stage. Without new discoveries there will be no new mines, and Canada's capacity to produce the minerals that are critical to our economy and the transition to a low-carbon future will be greatly constrained.
Last August, we offered a comprehensive suite of recommendations to this committee with respect to the upcoming budget 2020. I would like to focus on a single theme and related recommendations for the committee this evening, and that is a renewed commitment to public geoscience. The federal government plays an instrumental role in mineral exploration processes by facilitating public geoscientific research. Given the significant risks involved in exploration, public geoscience is instrumental in identifying mineral prospective regions to attract and accelerate exploration activities by private industry. Recent government research has shown the effectiveness of these programs, in that every dollar in public geoscience spending is estimated to generate more than seven times that much in overall economic benefit to Canada.
The two principal federal geoscience programs—the targeted geoscience initiative, or TGI, and the geomapping for energy and minerals, or GEM—are set to end next month. There has been no commitment to date by the government to fund future public geoscience programming beyond March 2020. Therefore, we recommend to this committee that the federal government make such a commitment. We also recommend continued investment in public geoscience, and we support the development of a pan-Canadian geoscience strategy by renewing and expanding the TGI program to $50 million over five years, to support continued development of new models and tools to improve efficiency by industry in exploring at depth and to extend the lifespan of mines currently in operation.
We also recommend renewing the GEM program with a minimum budget of $200 million over five years. The program should include a dedicated allotment to identify, geologically map and model critical mineral prospective regions in Canada to support evidence-based land management planning.
We recommend creating a federal funding mechanism to help provincial and territorial governments undertake comprehensive mineral resource assessments, based on geoscientific studies, in order to understand and incorporate the value of mineral potential into land management decisions.
We recommend expanding public collaboration by establishing an interdepartmental government-industry task force to investigate policy options and make recommendations to accelerate exploration and development of mineral resources critical for Canada's transition to a low-carbon economy.
The recommendations we have offered will support the establishment of a pan-Canadian geoscience strategy between federal, provincial and territorial governments by 2022, as outlined in the government's Canadian minerals and metals plan.
Thank you for the committee's time this evening and for your consideration of the recommendations we have provided.
Simply put, tourism matters. It matters to our economy through the $102-billion contribution it made last year. It also matters to the 1.8 million people who work in this industry from coast to coast to coast. It's in every single one of your ridings, providing good jobs for Canadians, stimulating development and regional economic benefits, building national pride, and surpassing many sectors of the economy.
Canada's travel economy includes millions of travellers who visit each year for business, meetings, study and leisure. The meetings and conventions sector alone represents $33 billion in economic activity. Travel fosters trade. There's a direct correlation between rises in international travel and subsequent increases in export volumes. According to McKinsey research, each 1% increase in Canadian arrivals can generate upwards of $800 million in Canadian exports. A recent Nanos poll conducted for TIAC found that a majority of Canadians, 77%, believe creating a positive experience for international visitors has a positive impact on how proud they are to be Canadian.
Tourism is one of the few sectors that has seen consistent growth, and it is projected to keep growing worldwide. Considering that more than 1.3 billion visitors travelled the world in 2018 and surpassed global GDP growth for eight consecutive years, tourism continues to be a bright light in uncertain times when other sectors are experiencing challenges and decline. The World Travel and Tourism Council projects that by 2029, one in four new jobs globally will be in tourism, and 1.8 billion travellers will cross international borders.
Here in Canada, we've just recently started to see year-over-year growth after a long decade of decline due to a variety of factors. We're just starting to get back on the upside, but we're still lagging behind other countries. International travel is on the rise. Last year's record-breaking 21.1 million travellers represents only 1.4% growth. Despite all efforts, Canada remains 17th worldwide compared with other countries. Without proactive policies and investments that support growth, we'll continue to fall behind globally. As you well know, we're now entering another period of uncertainty with the coronavirus.
My question to you is this: Where do we want to be in five years? Do we want Canada to continue to lag behind global markets or be a leader? Access barriers remain a significant irritant for international travellers. We're competing with the world and we're not investing enough. We need a visitor visa system that works. You'll be hearing more on that from our sector.
More importantly, there's marketing. Canada's capital investment in tourism falls well below that of Australia, the U.S., the United Kingdom and New Zealand, just as examples. As the Government of Canada continues to focus on creating a competitive Canadian export market, let's remember that tourism is Canada's largest service export. But here too we fall below competitors. Canada could easily improve its competitiveness by raising Destination Canada's base funding to $135 million per year. That would put us on equivalent footing with Australia, for example.
Last year the unveiled an ambitious tourism strategy to take Canada to the next level by 2025, seeking to add 54,000 new jobs, increasing tourism revenues to $128 billion, and increasing international tourist arrivals in the winter and shoulder seasons by over one million people. Investments in the new Canadian experiences fund are much needed, but we need more investment to ensure that we meet those targets. That's why we're asking for $500 million over four years.
Honourable committee members, you have the opportunity to enhance the economic performance of one of Canada's major growth sectors.
In our brief, the Tourism Industry Association of Canada has made a number of recommendations on ways to strengthen Canada's competitiveness on the international stage.
Thank you for the time you have granted me. I will be pleased to answer your questions.
We created a whole handout for the committee as well as all government staff to look at, because there are some unique challenges to funding and operating in the north. There is stuff about flexibility of timing. Some of these smaller communities, like Coville Lake or the community of Lutselk'e, are only accessed during the winter, with winter roads, or they only have a barge. As well, we have three or four communities that are only fly-in/fly-out communities and there's never winter road access. We need to ensure that we get responses on our applications in time to then be able to go and build.
To meet the tight federal deadlines is sometimes a challenge. Having that flexibility of timing and being able to hear back in quick order is definitely required, as well as the distribution of funds as base-plus as opposed to just per capita, because, again, some of those smaller communities are not able to do the cost sharing. There are a lot of different pots and being able to stack federal funding can mean the communities can actually use it.
Simplified applications and reporting is another challenge. Again, for a community with a population of 80, you have one or two staff members. With these long, cumbersome applications, they're not going to apply, and they're the ones who need it. In Yellowknife, we're the biggest community, with half of the population of the Northwest Territories. We had to hire somebody full-time to keep up, to apply for all the great climate change money that's provided by the federal government and to answer to all the accountability questions.
Another challenge is being able to streamline reporting and the broader interpretation of projects. When it comes to the gas tax, it's those broad categories, and then making sure that we meet the same outcomes.
Stuff like the public transit funding was much more defined. Yellowknife was the only community in the Northwest Territories that was eligible, and the only thing we really could do with the funding was buy bus stops. I don't think either of us is meeting our intended outcomes. That's not meeting our community priorities, and I don't think that's meeting what you intended as a federal government. Making your funding so restrictive limits what we're able to achieve.
Again, there's way more information in there. I'm happy to chat about this all day.
Thank you very much, Mr. Chair.
I’d also like to thank the finance committee for inviting me to discuss the pre-budget consultation process that we began on January 13. As well, I’d like to thank the department officials for being here with me this evening.
Before I begin, I would like to talk about a very important measure we put forward last year. Our government introduced a proposal that would lower taxes for the middle class and people working hard to join it. We would do that by letting people keep more of what they earn, up to $15,000, before they have to pay any federal income tax.
We made this proposal because we know a lot of people are feeling the squeeze at the end of the month and need a little help to make ends meet. All told, it's a change that would mean lower taxes for close to 20 million Canadians. At the same time, we've also chosen to take steps to ensure that this help goes to the people who need it most. The wealthiest people in Canada, those in the top 1% of income earners, wouldn't benefit from this change.
This brings me to our work as we prepare budget 2020.
To establish policies that work for everyone and that contribute to a country based on inclusive growth, we need to know more about what Canadians need.
As you know, we have undertaken pre-budget consultations in an effort to reach out to Canadians in every corner of the country to learn what their priorities are. We are meeting with important stakeholders in rural, urban and remote communities across the country to find out what matters most to Canadians.
We recognize that there is still much to do in order to build an even stronger middle class. We are asking stakeholders and individual Canadians specific questions that will shed light on their priorities. We want to know what will make the biggest difference to Canadians’ to improve their quality of life, whether that means reducing the cost of living or supporting well-being.
To better understand the situations facing Canadians and the problems they are dealing with, during our meetings and round tables, we are focusing on four key themes: strengthening the middle class and growing the economy; fighting climate change and protecting the environment; keeping Canadians healthy and safe; and moving forward on reconciliation with indigenous peoples.
As these four themes demonstrate, we are building on the work we started during our last mandate. In that time, we grew the economy while protecting the environment. The themes are also in line with the mandate I was given to establish growth indicators that will provide a clear picture of Canadians’ quality of life and the economy.
Budget 2020 will take into account the findings that have emerged from these pre-budget consultations. Understanding the priorities of Canadians living in different realities—whether they are in Vancouver, Napanee or Montreal—has been very informative to us as we develop the next budget, because we know that a strong economy is one that works for everyone.
I would like to highlight some key ways in which we have helped strengthen the middle class over the last four years.
Since 2015, through government investment and the hard work of Canadians, our economy has added over one million new jobs. The unemployment rate is at its lowest levels in more than 40 years. Our policies have lifted almost 900,000 Canadians out of poverty, including 300,000 children and almost 60,000 seniors.
Our investments in people have also strengthened our economy. We have continually reduced our debt-to-GDP ratio, which is the lowest in the G7. Canada continues to have the best balance sheet in the G7, which gives us a real competitive advantage.
Canada is predicted to have continued growth through 2020. Wages are on the rise. Business profits are solid. We maintain a AAA rating. Thanks to the Canada child benefit, nine out of 10 families with children now receive more money than they did previously. With the enhancements to the guaranteed income supplement and the Canada pension plan, seniors have and will continue to have a more secure and dignified retirement. We created the Canada workers benefit, a strengthened, more generous and more accessible benefit to help low-income workers keep more of their hard-earned money.
We have put gender at the heart of government decision-making. Today, more women are employed and contributing to our shared economic success than at any point in Canadian history. We've made a lot of progress these past years. However, we recognize that far too many families still feel that they are struggling to make ends meet. We know that we still have work to do.
During the pre-budget consultations in Hamilton, I heard that parents see real value in the Canada child benefit, but there is still more work to do to help those caring for young children find available, flexible and affordable child care.
Meeting and round table participants in Montreal highlighted the important role entrepreneurs play in strengthening competitiveness. In every city, we’ve heard about the importance of skilled trades in the workforce.
Another theme at the heart of our conversations with Canadians has been fighting climate change and protecting the environment. We all know that one of the most important issues of our time is the effects of climate change on our communities, our lives and our economy.
From forest fires to floods and droughts to the extreme temperatures and intensifying storms, we are feeling the impacts of climate change everywhere in the country and around the world. Canadians have been clear. They expect their government to take action on climate change and to protect the environment. This is why, over the past four years, we've taken serious action to fight climate change and to protect our communities from its impacts.
Since last year, it hasn’t been free to pollute anywhere in Canada. We put a price on pollution to protect the environment, while putting more money in the pockets of Canadian families. We are phasing out coal power and moving towards 90% clean electricity for cleaner air and healthier communities. Canadians know that climate action can no longer be put off, and we, as a government, know that too. We need to be ambitious as we fight climate change. Finding solutions to both challenges is what will make a real difference in the lives of middle-class Canadians.
We know that, for Canadians to thrive, they need to be healthy and safe. This is why, in our pre-budget consultations, we have focused our discussions on how we can better meet the needs of Canadians when it comes to health care and pharmacare.
We also discussed the needs of communities and the need for people to feel safer. What does a safer community mean for Canadians? How can we protect our communities to ensure the overall well-being of Canadians? This is a vital point of focus as we move forward to better understand what contributes to the quality of life of Canadians and how we can build stronger, healthier and safer communities.
Budget 2020 will also continue to walk the path toward reconciliation with indigenous peoples. Real progress has been made over the last four years, but much more work needs to be done. We are delivering on a renewed relationship with indigenous peoples, working together to improve quality of life and advance self-determination. We know we have a long way to go, and we will continue to work in partnership with indigenous peoples toward closing the socio-economic gaps that exist today.
Clearly, then, our pre-budget consultations are useful. They give us an opportunity to hear what Canadians think about many issues affecting their everyday lives and how they feel those issues should be addressed. We want to know what further actions we should take to make their lives more affordable. We’d like to know what other measures we could implement to put good jobs within their reach.
In short, we want to know what we can do to strengthen the middle class and continue growing the economy.
Our goal is an economy that works for everyone. That said, Canadians have made it clear, both online and during round tables, that helping them earn a good income and keep more money in their pockets is not enough to improve their lives. While they are important elements, truly making the lives of middle-class Canadians better also means ensuring that Canadians are safe, secure and healthy, that the environment they live in is protected, and that the progress towards reconciliation continues.
Whether it’s strengthening our public health care system, providing better access to medications, cracking down on gun crime, protecting the environment or fighting climate change, we know these are the issues that matter to Canadians. The issues raised by meeting participants are complemented by suggestions we receive from Canadians online.
Not only have we been meeting with Canadians in person, but our pre-budget consultation process has spread a wide net, using the Department of Finance's online consultations website. Since the start of the consultations, more than 16,000 Canadians have submitted their ideas on how budget 2020 can best meet their needs. This engagement is very valuable and will be used as we develop this very important budget.
While I have the opportunity, I would like to talk a bit about my mandate as Minister of Middle Class Prosperity and Associate Minister of Finance and the importance of it in the pre-budget consultations, as well as within our government.
While the economy is strong and growing, we know that families are struggling to make ends meet. My role is to work alongside my cabinet colleagues to ensure that economic growth is shared fairly and that opportunities are created for all. This is what the OECD and other countries worldwide have identified as inclusive growth. By factoring inclusive growth as the baseline of our government decisions, we are ensuring that our policies address the gap between economic growth and the financial squeeze felt by too many Canadians. We will work, using a whole-of-government approach, to ensure that the prosperity of the middle class is at the heart of policy decisions.
Through these pre-budget consultations and within my mandate, we want to know how we can best help Canadians have a safe and affordable place to call home, a good well-paying job to support their family, a secure retirement, access to health care and the ability to build a better future for themselves and their families. It is by understanding the full scope of the well-being of Canadians that we can build a framework that informs how we grow the economy in ways that it grows for everyone.
On that note, Mr. Chair, I would be happy to answer any questions you or the committee members have about our pre-budget consultation work.
Congratulations, Minister, and thank you for being here this evening. We are pleased to have the opportunity to ask you about budget priorities.
You gave a very upbeat presentation and it's perplexing to me because it seems out of touch with the reality that so many Canadians are facing.
Canadian families are facing record levels of family debt. It's the worst in our history and it's the worst among all industrialized countries. Half of Canadian families are $200 from insolvency at the end of any month. We're seeing an affordable housing crisis in this country. The food bank lineups are growing. That's the reality that so many of us are seeing. People are not saying that $1.73 a week is going to make a huge difference to these various crises. That's the figure that the PBO did say was the impact this year in terms of the small tax cut. What they are saying is that massive investments in affordable housing need to be made, and that's what we've heard from the witnesses who have been coming forward since Monday, and the briefs that we've been receiving. We need significant investments there.
People have been talking, and our witnesses have been talking about the whole issue of pharmacare, As you came up here tonight, Madam Minister, you would have passed Jim. Jim begs every day on the bridge between the Chateau Laurier and the East Block, and he begs because on social assistance he can't afford to pay for his medication. He needs $500 a month to pay for the medication that keeps him alive.
I have constituents, including the family of a good friend of mine, Cole. The father is facing $1,000 a month in heart medication costs and the family is now having to choose between whether they can stay in their home or pay for heart medication. We need universal public pharmacare.
We heard as well about the number of Canadians—four and a half million—who don't have access to basic dental care, which has an impact on our health care system and an impact on their quality of life. The NDP submitted to the and to the government the proposal that if we cap the tax cut at $90,000, we can actually afford basic dental care for all Canadians.
Those are the needs we're hearing about, and you referenced in your remarks that child care is costing the average family $2,000 a month, but the government is finding money. There's $25 billion a year that leaves this country in what should be tax revenues for overseas tax havens. The government has done very little to address that. In 24 hours, the government came up with $4.5 billion for the money-losing Trans Mountain pipeline, and that was a billion dollars over market value. There is a lot of money that's being invested, I think, in the wrong place. Many people have raised concerns about the construction costs for Trans Mountain, which could be up to $15 billion.
My questions are these. Given the size and scope of the affordability crisis that so many Canadian families are facing, is the government seriously looking at putting in place, through the budget, universal pharmacare that would help millions of Canadians? Is the government looking at that basic dental care plan that the NDP put on the table and that would help four and a half million Canadians? Is the government, and as Associate Minister of Finance, you'd be directly involved, and your mandate letter references this—
Are you all in and all done?
That will end our round of discussions.
Minister, I sincerely want to thank you and all the officials in the room who came as well.
I want to mention, though, that we have had over the last three days, and no doubt will again tomorrow, some excellent presentations by folks with a wide ranging view of recommendations, which we will compile and put in a report to have tabled by February 28. We will be meeting on it as committee members from all sides. We will have a number of recommendations that we certainly hope will be considered, because they're based on heartfelt presentations by people who came on very short notice to this committee.
If you were to talk to the clerk, I think he would tell you that with pretty near every call that was made, the invitation was accepted on very short notice. Therefore, we need to see in the budget that their efforts in coming before this committee to have their say are heard and acted upon in the best way possible. I know we really have to control our spending as well, but that's where we hope to go as a committee.
With that, we will meet tomorrow from 11 until 2 p.m., and from 3:30 to 6 p.m.. As mentioned earlier by the parliamentary secretary, the will be before the committee from 12:30 to 1:30 on February 19.
Thank you again, and thank you to the officials.
The meeting is adjourned.