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Results: 1 - 46 of 46
View Anju Dhillon Profile
Lib. (QC)
Thank you so much.
My next question is for Ms. Lalande. You spoke very eloquently about the need for immigrants and the importance of immigrants. I'd like to cite a few statistics. There are currently four Canadian workers for every retired Canadian, but by 2035, there will be only two workers for every retiree. Without immigrants to help support the needs of an aging population, younger Canadians will end up paying more per person to provide the same benefits.
Could you speak to this a bit, please?
Lisa Lalande
View Lisa Lalande Profile
Lisa Lalande
2021-06-07 16:59
It is at the heart of why Century Initiative was established as a charity. It was to raise awareness of the connection of population growth and immigration with our long-term prosperity.
I'm going to let my colleague, Jon Medow, speak on that point a bit more.
Jon Medow
View Jon Medow Profile
Jon Medow
2021-06-07 16:59
Thank you very much.
The dependency ratio, which you referred to, is something we speak about a lot, that is, the number of working people in Canada supporting each person who is retired. Immigration is very critical to address that issue. The topic we're speaking about today, the retention of immigrants in rural communities, is even more significant. What we see is that an aging population and a population in decline is advancing much more significantly in many smaller and rural communities. In fact, there's a divide that's growing between smaller and rural communities and Canada's large cities.
One of the things that's quite important and this committee is addressing is how do we make sure that immigration is really going to benefit the whole country? How do we make sure that the growth in the workforce that we need across the whole country will not just be occurring in Canada's large cities?
We've had a great opportunity today to hear about the implementation of the rural and northern pilot project in Thunder Bay, and I'm really grateful to the CEDC representatives who have walked us through that.
One thing that is good to point out is that these kinds of programs are quite unique in Canada. Internationally, there aren't that many national governments that want to share responsibility for selecting immigrants. Canada's really out ahead in involving communities in the selection of immigrants, and Century Initiative believes that this is a really important trajectory to continue and keep building upon. The opportunity to hear from those who are on the ground doing it is extremely valuable.
View Anju Dhillon Profile
Lib. (QC)
Thank you for that.
I'd like to continue with your organization, Ms. Lalande or Mr. Medow. I have less than a minute to ask you this question. There are some people out there who say, “There's too much immigration; they're taking jobs away.” According to statistics, 26% of people in Canada are immigrants.
Could you please talk to us a bit about this?
Jon Medow
View Jon Medow Profile
Jon Medow
2021-06-07 17:01
Public opinion and public sentiment research that Century Initiative has commissioned has shown a consistent increase in support for immigration. There is an understanding among Canadians of how critical immigration is to the country's future.
Similarly, an analysis conducted by organizations like the Conference Board of Canada is consistently showing the effects of immigration on GDP growth and government revenues, including that critical measure of the dependency ratio, which you highlighted initially. Those are very much supported by immigration. We think there's a recognition of the facts by Canadians.
View Dean Allison Profile
CPC (ON)
The minister said that he'll stay.
Minister, thanks for being here.
Obviously you know about the study we are doing on temporary foreign workers, and agriculture has been raised over and over again in that context—food processing. Food security I think should be key for our country in many ways. COVID just showed us how vulnerable we are when it comes to our food security and our food supply chains.
I met with a group of farmers this week, and I hear over and over again about access to temporary foreign workers, when it comes to the program. My question is not on that. If I had five minutes, that would be the second part.
When we look at 400,000 permanent residents coming in, one of the things I'd like to ask is whether we could get you to champion a national economic immigration program. I believe we need strategies for our critical sectors, and food is one of them. I'm talking to farmers who say, “Listen, we need three people. We're getting one. It's not happening quickly enough.” If we don't plant the food, we can't possibly harvest the food.
I guess my question to you is whether there is any way, when we talk about permanent residence of 400,000, that we could be looking at economic streams. I know we have pilot projects, but I am talking about working specifically with sectors. There are a number of sectors that have said they need strategies so they can make this happen. I would like to know your thoughts on that.
View Marco Mendicino Profile
Lib. (ON)
Madam Chair, I think there is much merit in what my colleague has put by the way of a question, and I thank him for his advocacy.
What I would say is that we do indeed work very closely, not only with the agricultural sector and farmers—I just recently met with a number of them in Quebec—but right across the economy to create those opportunities, those pathways. Yes, there are some pilots like the agri-food pilot. However, I would also point to the essential workers pathway, which offers an opportunity for many essential workers, in the sectors that my friend referred to, who may otherwise have a harder time staying here.
Of course, we embrace that. We believe that immigration drives the economy forward. It does create jobs. It does create opportunity.
I'm always happy to collaborate with my friend to talk to any of the leaders in his community.
View Dean Allison Profile
CPC (ON)
My final thoughts are on the temporary foreign worker program—and this will come out in our committee report—which has been difficult, challenging and not always timely. I mentioned to the minister that any way we can simplify that to help our ag workers—as has been mentioned today by my colleagues from Quebec—would be greatly appreciated.
I'll leave it there.
Stephen S. Poloz
View Stephen S. Poloz Profile
Stephen S. Poloz
2021-05-18 12:58
Thank you very much, Chair.
Good afternoon to you and to the committee. Thanks for asking me to participate in this study of Bill C-30.
I would offer three points by way of introduction. The first point concerns the context in which we find ourselves. The impact of COVID-19 on people and our economy has been massive. There will be some permanent damage. However, the damage has been mostly limited to sectors that have been shut down. In a typical recession, bad news in one sector usually infects the other sectors through lower confidence. This has not happened this time. I think this is the main reason that the economy has significantly outperformed most forecasts during the past year.
This economic strength has generated a debate around the appropriateness of fiscal stimulus. It has given the government far more fiscal room to manoeuvre than previously expected. However, any major economic trauma will scar the economy. These scars will run deeper the longer it takes for the economy to heal. Scarring manifests itself as a level of national income that would be lower than it otherwise could be—literally forever—and so I therefore subscribe to the view that it makes sense to push the economy harder during the early stages of recovery, because this will encourage business investment and create new economic growth.
My second point concerns fiscal sustainability. A credible fiscal plan in which the level of government debt relative to national income stops rising and debt service costs are manageable meets the minimum—or, we should say, perhaps technical—standard of sustainability. I draw your attention to the table on page 328 of the budget, which shows that these criteria are met. By the way, comparing this table with a similar one from the 2019 budget two years ago demonstrates that this budget does not represent a sharp turn toward big government, as many have said. The planned budgetary expenditure trend line returns to about 15% of national income, just as it was pre-COVID. The budgetary revenue trend line does exactly the same.
There is a legitimate concern that this minimum standard of fiscal sustainability would leave the economy vulnerable to future shocks. Well, that issue is for broader political debate, a debate that I think should acknowledge the challenging fiscal situation in our provinces. When we combine federal and provincial debt together, as we should when considering Canada's future resilience, our fiscal picture is not very different from that of other major economies.
My third point is that there are many ways to build future resilience without government austerity or higher taxes. If we put our minds to it, we can grow out from under our COVID debt burden, just like we grew out from under our World War II debt when I was young. There are many ways in which we could boost our long-term economic growth rate and grow our way out of our indebtedness.
First of all, immigration is Canada's most important economic growth engine, just as it was in the 1950s and 1960s. Anything we can do to make that process more efficient will be a good investment in future growth.
Second, a national child care program, as announced, can also help boost labour force growth. I do hope it can be deployed without delay. This is the sort of program that can literally pay for itself. If we can boost the level of national income by a mere 2% in this way, which amounts to $40 billion to $50 billion more national income every year, then $6 billion to $8 billion will automatically land in government coffers, also every year.
Third, as I've argued before in this committee, one of our biggest untapped sources of future economic growth is to harmonize provincial regulations across the country to reduce interprovincial business frictions. This initiative has about twice as much economic growth potential as the child care proposal, and in fact would cost nothing to implement. It seems to me that finding innovative ways to boost economic growth and avoid raising taxes should be at the top of our list, at this most precarious time, at both the federal and provincial levels.
Thank you, Chair.
View Julie Dzerowicz Profile
Lib. (ON)
Thank you so much, Mr. Chair.
Thank you, Ms. Dwivedi, for your great presentation.
You have already mentioned that the amendment would enable funds to be used for infrastructure and economic development purposes.
Are you able to speak a little bit more about how this amendment would help with economic growth and creating jobs?
Garima Dwivedi
View Garima Dwivedi Profile
Garima Dwivedi
2021-05-17 14:44
For example, if a first nation wanted to build, let's say, a gas station or some other economic development type of activity, it could build that using the revenues from FNGST or FNST, and it could get a loan to build that through the First Nations Finance Authority and through the capital markets at reduced rates.
That would generate economic activity.
View Julie Dzerowicz Profile
Lib. (ON)
Thank you so much, Mr. Chair.
I want to thank Mr. Watton for his patience and for answering all of our very detailed questions.
My question relates to the intention of this program and these amendments, as it relates to to economic growth and creating jobs. Can you speak to that, please?
Steve Watton
View Steve Watton Profile
Steve Watton
2021-05-17 15:28
Yes, this program is designed to increase access to financing for small business owners who would not otherwise be able to get this sort of financing. A lot of these small businesses are modernizing. We're in a bit of a digital economy. It is a knowledge-based economy, and a lot of the assets and financing, if you will, are softer sorts of costs like intangible assets, start-up costs, inventories, marketing, promotion and websites; those sorts of things. In the past, this program has been used for real property, equipment, leaseholds and improvements.
We're trying to modernize the program and make it possible for more small business owners to access the types of financing in the amounts they require to start up, scale up and modernize. As a result of these changes alone, the expectation is that we would facilitate an additional $560 million and help on the order of an additional 2,900 businesses over and above the $1 billion, and the 5,000 to 6,000 small businesses, that we already do. As a result of that, you would get additional employment, additional economic impacts, etc., and additional positive benefits to society.
View Ed Fast Profile
CPC (BC)
View Ed Fast Profile
2021-05-11 16:39
Minister, I do not want to rain on your parade, but many of us had hoped this would be a historic growth budget.
I sent a letter to you, suggesting that we needed comprehensive regulatory and tax reform. We asked you to address the flight of foreign direct investment from Canada. We needed a new comprehensive innovation strategy, not just the same old, same old.
As you know, many economists have lamented the fact that this budget is more about short-term benefit than positioning our economy for long-term success.
I am glad you referred to outside validators, because I have a few of those.
For example, Mark Carney, someone you know well, a former Bank of Canada governor, said, “What we’re seeing in some other jurisdictions is that the focus is more squarely on the growth.” David Dodge, also a former Bank of Canada governor, highlighted “a lack of growth-focused initiatives in the budget.” Robert Asselin, a former top economic adviser to your government, described the new spending as “unfocused and unimaginative.”
Finally, today, a former Clerk of the Privy Council, the highly respected Kevin Lynch, made so many different points. I will just summarize a few of them. He said that the budget “misses an urgent opportunity to rebuild our longer-term growth post-pandemic.” He added that “It does not set a clear fiscal anchor.” Furthermore, “Despite the extraordinary emphasis on stimulus, there is little focus and few measures to rebuild Canada’s longer-term growth.” He went on to say, “Our potential growth will drop...due to weak productivity, tanking competitiveness, and labour force challenges.” He ended by saying, “This budget’s intergenerational transfer of debt and risk is unprecedented.”
Minister, your own fall economic statement and budget betray the reality that as you raise more money through tax revenues and otherwise, you're simply going to spend more and borrow more, but there is nothing to position our economy for long-term growth.
This is a huge let down. Why?
View Chrystia Freeland Profile
Lib. (ON)
Thank you, Mr. Chair.
Mr. Fast, as you know, I have a great deal of respect for you, as a person, and as a former minister, but I have to very respectfully say that I disagree very strongly with all of your contentions just now.
Let me take them in turn. First of all, when it comes to outside validation of the budget and of the fact that our budget is on a sustainable and responsible fiscal track, from my perspective, there is no better judge than the credit rating agencies, which are paid to assess the credit worthiness of borrowers.
For me, it is therefore really important to underscore for Canadians that S&P, a week after the budget, came out with a very strong endorsement, reaffirming Canada's AAA credit rating, and reaffirming that the outlook for Canada was stable. It really doesn't get better than that.
I would also like to refer members of this committee, and you, Mr. Fast, to the comments of the former governor of the Bank of Canada, Stephen Poloz, who was appointed by former Prime Minister Harper. He gave an interview, published today, in which he talked about the budget as being sustainable. He spoke about the conservatism in the numbers that he saw in the budget, and he spoke about the fact that this sustainable plan was put together without a meaningful increase in taxes of any kind. I couldn't agree more strongly.
When it comes to growth and innovation, let me point to three elements in the budget that, to my mind, are absolutely critical.
One is early learning and child care. We have heard from the IMF, Bank of Montreal, Scotiabank, TD, and from economists across Canada and around the world that investing in early learning and child care is a powerful long-term driver of jobs and growth. That is what this budget does. I think that is well understood across the country.
A second really important investment in long-term growth in this budget is the Canada workers benefit. In fact, BMO picked up on how that investment, which supports the lowest paid Canadians, is going to increase labour force participation.
Finally, I want to mention a third really important element, the unprecedented investments this budget makes in Canadian small businesses, allowing them to invest in themselves and giving them support to become more innovative.
View Peter Fragiskatos Profile
Lib. (ON)
Thank you, Chair.
Governor, thank you for being here. You shared with the committee in your remarks that you and the bank are foreseeing very robust economic growth in the year to come.
What are some key sources of potential risk, things that could stand in the way of that, things you worry about?
I know it's hard to predict that, but sources of risk are important.
Tiff Macklem
View Tiff Macklem Profile
Tiff Macklem
2021-04-27 17:03
I couldn't agree more, and as I said previously, there is a lot of uncertainty.
As I highlighted in a previous answer, the biggest uncertainty is the course of the pandemic itself. We're assuming this is a very nasty third wave. We are not through it yet. In our base-case projection, we have restrictions being lifted toward the end of May through June. If that gets extended, if there are new variants, if there are problems with vaccines, those will all have consequences for our economic outlook.
Beyond the pandemic itself, there are a number of uncertainties. I highlighted, in a previous answer, that the U.S. economy is doing well. We expect we will get some positive spillover effects from that. That will boost our exports, but there are risks to our exports. To be frank, we've been disappointed in the past.
Certainly, if the Canadian dollar were to be materially stronger, that could undermine the competitiveness of our exports and create a new headwind for our exports. There are also some risks with respect to protectionism. The U.S. has a buy America program. Hopefully, Canada and the U.S. can sit down and work this out, so that we can have an integrated North American market, but if there were new protectionist measures that limited our access to the U.S. market, for example, that would also dampen our exports.
To date, corporate bankruptcies have actually been quite low. That has a lot to do with the various supports that have been provided, but there's no question that there are many companies just hanging on. It gets back a bit to my earlier risk with respect to the pandemic. The sooner we can get through this and we can gradually reopen the economy in a safe way, those businesses can restart, but if that gets delayed, there are risks that bankruptcies could increase.
There are a number of upsides, as I mentioned. There are a lot of accumulated savings. That creates some upside risks. The U.S. economy is strong, but there are downside risks, and we're certainly weighing both of those. We will be assessing how those evolve going forward. I look forward to coming back to the committee and updating you.
View Peter Fragiskatos Profile
Lib. (ON)
Thank you, Mr. Chair.
Thank you, Mr. Giroux and your officials, for being here.
I want to ask you the same question I asked Governor Macklem a few minutes ago, and that relates to impediments to growth posed by risk.
At the end of March, I saw that you and your office forecast that this year, 2021, 5.6% is what's predicted in terms of economic growth for the country. In 2022, that drops a bit to 3.7%, but it's still robust. Those predictions are roughly in line with where the Bank of Canada forecasts things, as we heard earlier today.
My question to you is this: What sources of potential risk do you see that we all need to be mindful of and that could stand in the way of that strong growth?
Yves Giroux
View Yves Giroux Profile
Yves Giroux
2021-04-27 17:26
Like the governor said, I will probably identify the same risks as he did. The biggest risk, by far, is how the pandemic evolves and, flowing from that, how Canadians behave. What I mean by that is how secure they feel to resume what will be the new normal if it is back to where we were pre-pandemic. The recovery will be highly dependent on Canadians' confidence that they can go about their daily lives with travel, going out, etc., without getting sick. A lot depends on how the pandemic evolves.
Another big risk or uncertainty is the level of recovery in the U.S. If the pace of recovery in the U.S. is faster, as many expect, then it will have beneficial impacts on Canada.
Another risk is the risk of faster-than-expected rising interest rates. Faster interest-rate rises could dampen growth by weighing on households and businesses that then have to support a higher burden of debt servicing costs—and governments as well.
I could go on. There are upside risks and downside risks, but these are the main ones that come to mind.
View Peter Fragiskatos Profile
Lib. (ON)
Thank you very much.
I don't usually ask the same question twice. It's simply because we had the governor here today and you, and I think it's important to get on the record where both of you think the risk is, how both of you judge it and the sources of potential risk. The fact that your answers line up almost entirely with each another—you gave virtually the same answer, Mr. Giroux, as Governor Macklem did—says a great deal about these factors. They are the key things to pay attention to for us as a committee, so I appreciate it.
With that, I'll turn it over to my colleague Mr. McLeod.
View Annie Koutrakis Profile
Lib. (QC)
View Annie Koutrakis Profile
2021-04-27 17:52
Thank you, Mr. Chair.
Thank you, Mr. Giroux, for being with us this afternoon. It's always a pleasure to see you.
We know that economic growth is the best way to deal with rising debt after a crisis.
Do you think the federal government's policy response throughout the pandemic, as well as the measures announced in the 2021 budget, will be effective in generating the economic growth needed to address the pandemic-related debt?
Yves Giroux
View Yves Giroux Profile
Yves Giroux
2021-04-27 17:52
Thank you for the question.
This is a very risky question for me as a non-partisan officer of Parliament. It's difficult for me to answer this question.
My team and I will certainly focus on determining the economic impact of the measures announced in the budget. In particular, we'll be looking at the impact it will have on the economic growth as well as the level of employment.
However, it isn't for me to determine whether or not the measures are appropriate from a public policy perspective. These are eminently political choices. If you ask people of different views, they will have different opinions on how best to generate economic growth. It's a question to which, unfortunately, I can't give a clear and definitive answer.
View Ted Falk Profile
CPC (MB)
View Ted Falk Profile
2021-03-18 11:33
Thank you, Mr. Chair.
Thank you, Mr. Giroux and Ms. Yan, for your testimony this morning at committee.
I think that penalizing the individuals who have become wealthy is very short-sighted. I think the government should be focused on creating initiatives and plans for individuals to become wealthy, for our country to prosper and for there to be economic growth and abundance here.
I'm wondering if you can comment on that. Have you seen anything at all from this government that would indicate they have plans for people to prosper and to become wealthy?
Yves Giroux
View Yves Giroux Profile
Yves Giroux
2021-03-18 11:34
That's a broad question. Generally speaking, the best way to increase wealth across a country is to increase the productive capacity of an economy. That could be done in a few ways, but not that many ways.
One way is to increase the number of people who participate in the labour force, by providing incentives to work and join the labour force. Another good way is to provide incentives to increase the capital, the machinery and equipment. Finally, there are measures that increase productivity, and these take a variety of ways, depending on the sector that you are targeting or looking at. These are generally the main ways of increasing the wealth of a nation.
As to whether we have seen that many initiatives from the government, that's an area that's probably highly sensitive politically and policy-wise, so I'll let each and every one of you be the judge of that, because different persons may have different perspectives on that. By that, I mean that some investments that are socially oriented might increase productivity in the economy, while others could be reducing the productive capacity of an economy, and not all investments are created equal.
Ian Lee
View Ian Lee Profile
Ian Lee
2021-03-18 12:11
Thank you, Mr. Easter.
I apologize for the technological hiccup. I do have a very high-speed connection, I assure you. I have Bell Fibe.
I want to thank the finance committee for inviting me to appear.
My disclosure is that, first, I do not belong to or donate to any political party, nor allow lawn signs on my lawn at all. Second, I do not consult to any company. I am paid by Carleton; that's who pays me.
Approximately 50 years ago, a very distinguished liberal professor of economics, Professor Arthur Okun, adviser to President John F. Kennedy, wrote a small monograph that became very influential. I studied it during my Ph.D. studies 30 years later. It was called Equality and Efficiency: The Big Tradeoff.
Professor Okun argued that almost every last public policy decision involves a trade-off between these two fundamental values, which could be understood, he said, as—to use synonyms—rights versus markets or equality versus efficiency. While most understand the idea of equality or equity today, or what some call “social justice”, the idea of efficiency or markets seems to be less and less well understood with the passage of time. “Efficiency” was the catchword that Professor Okun used to signify markets, economic growth, productivity, standard of living, jobs, or what Adam Smith characterized 300 years ago even more succinctly as simply “the wealth of nations”.
Restated using Professor Okun's phrases—and to be fair, I may be contradicting Professor Okun a little bit—equality requires efficiency; equality requires markets; equality requires growth, just as efficiency requires equality or equity if markets are to succeed. To state it even more bluntly, rights need markets if rights are to be achieved, while markets need rights to succeed.
Some may disagree. You can see the fact that I have travelled and taught, for 30 years, over 100 times, in developing countries, and I have noticed that remarkable correlation. The countries with the greatest degree of rights are the wealthiest and most successful countries, the OECD high-income countries of the world.
Unfortunately, it's increasingly fashionable among populists to claim that rights and markets, or equity and efficiency, are opposed to each other, antithetical. I am directly challenging the simplistic slogan “people over markets”. You hear it regularly.
Professor Okun understood that equality or rights are not free. Indeed, from Professor Okun's time in the 1960s to our time today, we have developed a much deeper appreciation of how costly policies and programs are to try to develop and achieve inclusion, equity and social justice. This is why we are at a critical point in Canada. The costs of equity have become so very large, and the deficits even larger, that we must seriously discuss, once again, efficiency or growth if we do not want to unwittingly undermine or sabotage policies to continue to offer programs to support equity or social justice.
If that is seen as a little bit extreme by some people, I just want to remind you of the 1995 largest downsizing in Canadian history. I wrote what was, I think, the definitive article on that in How Ottawa Spends.
I turn now to these issues in Canada, and to my criticisms, in order to make my philosophical comments to this point much more concrete.
One, no budget or plan has been presented to Parliament to provide the analytical and policy justification for increasing the debt ceiling. I would merely note that many years ago, in the seventies and eighties, in my previous incarnation in a decade-long career as a mortgage and commercial lender, I lent millions and millions of dollars. If a business owner met me to discuss their borrowing needs and they didn't have a business plan, I told the owner to go away, create the plan, and then return to talk to me about the plan, which was, is, and always will be the foundation or basis for credit authorization.
Two, there is simply no justification for delaying the presentation of the budget. The Government of Canada has an excellent digital financial infrastructure for financial reporting and accounting. Indeed, if I may say so, some of my finest graduates from our program over the past 30 years—I've been teaching for 32 years—have entered into the Government of Canada as financial analysts and accountants, and have become very successful at modernizing the now excellent financial and accounting systems. As someone who has lived in Ottawa for over 60 years, and with friends and relatives inside the public service of Canada who are familiar with the financial reporting systems, it is simply inaccurate to suggest that the empirical data of daily, weekly and monthly expenditures in the Government of Canada is unavailable to produce a budget.
Three, there is an urgent need for a fiscal anchor, per the IMF, the OECD, David Dodge, Don Drummond et al. There are many others. Contrary to those opposed, a fiscal anchor is not a lockbox that prevents government decisions. It is a tool of evaluation and accountability for all stakeholders. I understand that no one wants a bad report card. I can tell you that I hate student evaluations if they say bad things about me. I love them when they say nice things about me. But the genius of liberal democracy lies in the myriad of checks and balances that go far beyond mere elections. A fiscal anchor is a critical check and balance of fiscal policy.
Four, concerning the post-pandemic recovery, I urge the committee to debate and discuss whether the stimulus that has already been provided over the past 12 months via income support programs—I strongly supported them, as I think every Canadian did—and that drove the savings rate from roughly 2% to just under 30% is stimulus. I'm referring to the $200 billion. It can be argued that the Government of Canada, perhaps unwittingly and perhaps wittingly, engaged in post-pandemic stimulus with the plethora of income support programs.
Restated, there is approximately $200 billion—per the TD Bank and their economic analysis of only this week—in bank accounts in Canada, waiting for mass vaccination and confidence to return to individuals and businesses before they start spending. What I'm suggesting is that I don't think we need to stimulate the stimulus. However, although I don't think further stimulus is needed, I recognize that a good number of people out there do think that.
If we do proceed with stimulus, I urge the committee to recommend to the finance minister that we shift from consumption and income spending to investment. If stimulus is decided upon, it should refocus from general consumption and income support to infrastructure, and I mean real infrastructure, not mislabelled consumption spending on day care centres or hockey arenas, but investments that enhance the productivity of the economy: ports, roads, rail, airports, pipelines and digital infrastructure.
The economy has not underperformed due to lack of resources. Large numbers of Canadians, and I am one of them...I have been sitting in this house since last March, and 99.999% of my life has been in this house, because I am waiting for a vaccine, along with millions—
View Tamara Jansen Profile
CPC (BC)
I think these are for the finance officials here.
The Business Council of Canada said, “The pandemic ignited an explosion in public spending and debt. The federal debt-to-GDP ratio was 30 per cent before COVID-19 but now [is over] 50 per cent.” They're clear that what we need is an economic growth strategy, rather than a stimulus strategy.
Since we were told by the finance minister that the stimulus package was pre-loaded—that's why we spent so much more than the rest of our G7 partners—are we going to be growth-focused going forward?
View Wayne Easter Profile
Lib. (PE)
I will turn to officials, but if it's a policy decision of the government, officials can't answer that. They can answer questions on things that are in Bill C-14, but if it's a policy position of the government, we can't expect officials to answer to that, and I think that's one.
Go to your next question, Ms. Jansen.
View Francesco Sorbara Profile
Lib. (ON)
Thank you, Mr. Longfield.
Welcome, Deputy Minister, to the committee again, and thank you for availing yourself.
I wanted to get to the aspect of digitization. You came back today, and we wanted some clarification on the finance department's estimates on numbers with regard to digitization, in one aspect. In terms of looking at the overall economy, and even looking at the NextGenerationEU fund that's been set up with a heavy focus on digitization of not only the European economy but how that's paramount for all economies, how important is it that we take a whole-of-government approach working with industry, private sector, charitable and non-charitable sectors in terms of how we view digitization?
Michael Sabia
View Michael Sabia Profile
Michael Sabia
2021-03-09 12:51
It's very important. If we've learned one thing in this pandemic, it's that digitization and digital access is not a “nice to have” anymore; it's an absolute fundamental. I'd go further than that. In terms of the future economic growth of the country, not just digital access in the sense of broadband connectivity but digitization of businesses, the adoption of digital technology across small and medium businesses is absolutely fundamental.
It should be a national priority, because that's where the jobs and Canada's economic growth will come from in the years ahead. It's an area in which, if I can speak personally, I'm particularly interested, in terms of finding the new locomotives of growth for our national economy. This one is hugely important.
It starts with expanding broadband connectivity, because that's intuitive and important. It goes beyond that. It's the capacity of small and medium businesses to adopt these technologies, to have access to the people who can help them do that. There's a whole range of issues here that are important to the future economic growth and well-being of Canadians.
This issue applies very much, and I agree with you, across governments. It very much applies to an earlier question that was asked about how government interacts with organizations outside of government itself. This is something that Canadians have to get serious about, more serious than we've been.
I say that because the challenge of growth facing our economy is the biggest economic challenge we'll have once we get our way through this pandemic. This is something that warrants a lot of time and attention. It warrants a serious look in terms of government policy as to how to enhance what we're doing in this area.
View Catherine McKenna Profile
Lib. (ON)
Thank you very much.
I'd like to start by acknowledging that I'm in Ottawa on the traditional unceded territory of the Algonquin Anishinabe peoples. I'm really delighted to be here with my deputy, Kelly Gillis, and her amazing team.
Good afternoon to everyone on the committee. It's great to see you again.
Thank you very much for inviting me to discuss the importance of investing in infrastructure for Canadians and the role that the Canada Infrastructure Bank plays in our infrastructure plan. I want to thank the committee for undertaking this really important study.
First, I'd like to say that our government is committed to making critical infrastructure investments across the country that will help us build back better, create good jobs, grow our economy, create inclusive communities and tackle climate change.
There is no question that the Canada Infrastructure Bank plays an important role in our plan. The bank has already committed to infrastructure projects that contribute to creating jobs and growth, building inclusive and resilient communities, and helping us meet our climate targets.
By attracting private sector and institutional investors to infrastructure projects in the Canadian public interest, the Canada Infrastructure Bank brings a new approach that will impact how infrastructure in Canada is financed.
There is no question that the Canada Infrastructure Bank plays an important role in our plan. The bank has already committed to infrastructure projects that contribute to Canada’s economic growth, building inclusive and resilient communities, and that help meet our climate targets.
By attracting private sector and institutional investors to infrastructure projects in the Canadian public interest, the Canada Infrastructure Bank is taking a new approach that will impact the way infrastructure is funded in Canada.
The pandemic of the last year has challenged Canadians in countless ways. On top of the impact of the illness, death and public health measures to stop the spread of infection, we're now facing the challenge of building our economy back. The work we do and the decisions we make in the coming months and years will define our country's path for decades to come.
This is why the government is undertaking Canada's first national infrastructure assessment. By mapping out where we need to go, where gaps exist, what needs to be prioritized and how we will finance the investments in infrastructure that we need, we will enable provinces, territories, municipalities and indigenous communities to identify projects of key importance and get them built in the best interests of Canadians.
Let me take a couple of minutes to talk about where the Canada Infrastructure Bank is today. It has entered a new phase of development under a strong and capable leadership team. The bank is committed to developing and executing $35 billion in investments to get maximum long-term benefits for Canadians in five priority areas: clean power renewable generation, storage and transmission; broadband in underserved communities; building retrofits; agriculture irrigation projects to help prairie farmers; and zero-emission buses and charging infrastructure.
As the CIB is an arm's-length Crown corporation, the government sets the policy priorities and the CIB's board of directors is responsible for the organization's management and investment decisions. To ensure the organization's priorities remain aligned with the government's, last month I updated the CIB's statement of priorities and accountabilities. It now includes a target for the bank to invest at least a billion dollars in total across its five priority areas in revenue-generating projects that benefit indigenous peoples.
Additionally, last fall, our government joined the Canada Infrastructure Bank in announcing its growth plan, a clear plan for the crucial next three years. The three-year, $10-billion growth plan will be a key driver of our plan to build back better through its five major initiatives: clean power, broadband access, energy-efficient buildings, agricultural irrigation, and zero-emission buses.
The CIB has taken immediate action to implement its growth plan, first with a $407-million investment towards the largest agricultural irrigation project in Alberta. Recently, it announced an engagement with what is anticipated to be the largest battery storage facility in Canada, working with an indigenous community. The bank is also backing the REM, the largest public transit project in Montreal in half a century, and it's looking at how to expand the capacity of the New Westminster rail bridge in B.C. to boost trade and transportation.
The CIB now has priority sectors, an investment plan and a strong leadership team to play significant role in getting more and better projects built for Canadians across the country.
I am confident that the Canada Infrastructure Bank's investments will help to drive Canada's economic recovery and build the infrastructure we need, in all communities, for Canada's long-term success.
Canada's infrastructure plan is investing in thousands of projects across the country, creating jobs and building more inclusive communities.
Thank you.
View Lyne Bessette Profile
Lib. (QC)
Thank you, Mr. Chair.
I want to thank the witnesses for being here today.
My questions are for you, Mr. Davies. I took note of your remarks. You said that, with its 30 years of experience, Olymel has a successful business model based on a large workforce that requires foreign workers. We know that labour is a major issue for food-processing plants.
Can you explain why hiring temporary foreign workers is necessary and beneficial for your business?
Second, I want to know what other measures should be taken to support the hiring of workers in processing plants, particularly in the regions.
Third, in your opinion, what limits growth in the processing sector?
These were my questions. I'll give Mr. Blois the rest of my time.
View Annie Koutrakis Profile
Lib. (QC)
View Annie Koutrakis Profile
2020-12-08 17:24
Thank you, Mr. Chair; and thank you to all our witnesses.
I'm not sure to whom to address this question, so I'll just ask it and leave it open.
Benjamin Tal, the deputy chief economist at CIBC and an ex-colleague of mine many moons ago, recently pointed to significant savings of Canadian businesses and households as a potential source of massive economic growth as people regain confidence in the economy and return to normal spending habits.
Would you agree with Mr. Tal's views, and is there any reason to be concerned with the savings Canadians have collected during the pandemic? Would this, in the long run, help our economic recovery?
Nicholas Leswick
View Nicholas Leswick Profile
Nicholas Leswick
2020-12-08 17:25
Yes. Thank you, Mr. Chair.
Following the release of the Canadian economic accounts for the third quarter, we saw a significant buildup of savings, added onto savings that we started to see emerge in the late summer and early fall, which in nominal terms is roughly $150 billion of savings sitting in deposit accounts, liquid accounts, at Canadian financial institutions.
Indeed, a lot of economists are pointing to that and using the term “pre-loaded stimulus”, because when the economy gets back to normal and virus risks are contained—whenever that is, because we don't have a crystal ball—consumers and businesses would be more willing to re-engage in the economy with those lower risks and would start to draw down on those savings. Therefore, they could provide a significant boost to the economy if some of those savings brought consumer spending back to its pre-pandemic levels, or even beyond if people have pent-up demand that they're going to release because they're sitting on all these cash accounts.
We'll see, but that's the general theory.
Darlene Bernard
View Darlene Bernard Profile
Darlene Bernard
2020-11-16 18:04
I don't think we're going to get there really quickly, so for this winter....
P.E.I. is small. I think we could get a lot of things done. We could come together in unity on a bunch of things. We want to talk to all of P.E.I. We want all islanders to understand our treaty rights and we want them to be a part of it. When we're doing really well, P.E.I. does really well. That's just a known fact. We've done studies.
George Ginnish
View George Ginnish Profile
George Ginnish
2020-11-16 18:05
Absolutely. It's the same here. If our nations in New Brunswick prosper, everyone else feels that, Miramichi especially.
Darlene Bernard
View Darlene Bernard Profile
Darlene Bernard
2020-11-16 18:05
Yes, it's a ripple effect.
View Lianne Rood Profile
CPC (ON)
Thank you, Chris and Christine, once again, for being here today.
I want to talk a little about the departmental plan. In the 2018-19 AAFC departmental results report, on page 13.... I'm not sure if you have that there for reference.
On page 13 you're using an average annual growth rate between 2017 and 2025 to calculate the percentage change in the economic performance of the agriculture and agri-food sector as well as the percentage change in agri-food products sold. The same criteria were used in the 2019-20 departmental plan on page 10 of that same report.
However, in the 2020-21 departmental plan report, which was just released, you've changed the criteria on both categories. Specifically, you're now using a compound annual growth rate rather than the average annual growth rate to calculate the targets between 2017 and 2025. Furthermore, this change to using compound annual growth rate changed the actual results for the previous years.
Not only that, but to calculate percentage change in economic performance of the agriculture and agri-food sector, you've now gone back to 2007 as the beginning year rather than 2017. To calculate the percentage change in agri-food products, you've gone back to 2012 as the beginning, rather than 2017.
I'm wondering if you know what the reason was for the change in the department's calculations from using average annual growth rate to compound annual growth rate.
Chris Forbes
View Chris Forbes Profile
Chris Forbes
2020-03-12 16:39
The basic answer on that is that those should be synonyms, basically. It may have been just a clarification language that when we call it a compound annual growth rate.... When we calculated an average before, it should have been the compound annual growth rate—
View Lianne Rood Profile
CPC (ON)
It was calculated differently, though. When you look at it, the numbers are completely different. Why would the average annual growth rates for the percentage change in the economic performance of the agriculture and agri-food sector be different in 2018-19?
Chris Forbes
View Chris Forbes Profile
Chris Forbes
2020-03-12 16:39
There are a couple of things. To be fair, I'm not looking at the numbers, so I apologize for that. The changes in the numbers could have come about for a couple of reasons. One could be historical revisions to data, like new date that becomes available. Sometimes Statistics Canada will revise back a couple of years.
To be quite honest with you, I'm not sure I can answer the question around the start date, but that may have been about better availability of data. I'm happy to come back if there's more information you'd like on the specifics of the calculation.
I'll just say that overall the average that we were calculating before should have been a compound annual growth rate as well, because that's sort of the way we would try to calculate. There must be, I would think, some data change in there, some historical revisions, that might have driven some of that.
View Gerald Soroka Profile
CPC (AB)
View Gerald Soroka Profile
2020-02-20 16:37
I think it was Brian who mentioned that under NAFTA we went from $9 billion to $45 billion in trade. That is pretty impressive. Now with the concessions that we're giving here, do you see a similar kind of growth, or is there even potential for much more growth? Is that even a possibility? I'm asking whoever wants to answer that question.
Brian Innes
View Brian Innes Profile
Brian Innes
2020-02-20 16:37
Yes, we do see opportunity for growth, not just in trade in North America but also in trade from our North American value chain to the world.
On the first part, within North America, expanding access for processed products like margarine and sugar-containing products does represent incremental growth opportunities that weren't available in the original NAFTA. For example, the original NAFTA was created at a time when the way we made margarine worked with the agreement, but now the technology has evolved and we no longer use hydrogenation. It was no longer possible to produce margarine in Canada and trade it to the United States without having tariffs on it.
That was not extended, unfortunately, to other products like shortening, so there are still a number of areas within NAFTA, or the new CUSMA, that are not tariff-free in agriculture, but the areas that were tariff-free remain tariff-free, and that enables us to continue to grow in the world. Being integrated makes us more competitive in exporting, whether it's to China or Japan or elsewhere.
View Mona Fortier Profile
Lib. (ON)
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.
Thank you.
View Pierre Poilievre Profile
CPC (ON)
You've given some suggestions on how we can consume less wealth. How can we produce more of it?
Ian Lee
View Ian Lee Profile
Ian Lee
2020-02-04 13:24
I'm glad you asked that because these aging numbers are not theories. They're not opinions. It's called demography, and the demography is just relentless. We're going to have one in four people over 65. What we can do though, as you just suggested, is to try to reduce the barriers to economic growth. We're going to have to do that. We should be looking at ways....
I'm not talking about cutting taxes. For those who think that's always the solution and people like me just advocate for cutting taxes, I'm not arguing that. We have a lot of barriers to growth right now. We have barriers to pipelines in this country. We have barriers to natural resource development. We have to reduce those barriers, without compromising the environment of course.
I've been very lucky in my career over a third of a century. I've travelled around the world to many countries. I'm talking about developing, third world countries. We have, without any doubt, one of the cleanest countries in the world in terms of air, water and soil.
Marta Morgan
View Marta Morgan Profile
Marta Morgan
2020-01-30 9:34
Thank you, Mr. Chair and members of the committee. My colleagues and I are very grateful today to have the opportunity to give you some background on China and Canada's relationship with it.
Let me start by acknowledging the preoccupation that I know we all have with the coronavirus outbreak in China and the impact this is having on Canadians. The safety and well-being of Canadians at home and abroad is of paramount importance to the Government of Canada. Canada is deeply concerned by the current outbreak of the novel coronavirus, particularly regarding its potential impacts on Canadians in the Wuhan area.
Global Affairs Canada is working closely with the Public Health Agency of Canada and supporting their engagement with Chinese health officials to provide a timely and coordinated response to the outbreak. Some 156 Canadian citizens have contacted Global Affairs Canada for departure assistance. The government has secured a chartered aircraft and is now working on the diplomatic front with officials in China to obtain the authorizations to proceed with an assisted departure.
This latest crisis is occurring after a long period of instability in Hong Kong and, as you are well aware, a difficult year in Canada-China relations. Canada's relations with China are complex, with both opportunities and challenges. Now more than ever, Canadians are asking questions about what China's economic growth and governance model means for their future prosperity, their security and Canada's place in the world.
The committee is taking on important work at a crucial time. A common understanding of where the People's Republic of China is going and how it touches Canada's national interests will make our policy better. The committee will decide what issues to examine in closer detail and will have the opportunity to hear a wide variety of views from experts and stakeholders. Ambassador Dominic Barton, whom you will meet next week, will provide an excellent view from the ground in Beijing.
The governments of Canada and China have, or at least had until the end of 2018, close ties in a number of areas. Few government departments or agencies do not have a partnership with their counterparts in China, in one form or another, and do not have a mandate in which China occupies a major place. Global Affairs Canada is taking a lead role in coordinating the Government of Canada's approach to China, in order to ensure that our relationships are consistent.
I am here to present a general background, which I invite you to consider when you are establishing your program.
For many years, citizens of Canada and the People's Republic of China have built bridges between our countries. While October 2020 will mark 50 years since we established diplomatic ties, many years before that Canadian missionaries helped found leading medical schools in China, and Canada traded wheat to stave off famine across China in the early days of the People's Republic.
It is remarkable that Canada and Canadians, despite our ideological differences, reached out across the Pacific to support the people of China even without an embassy to support them. With the founding of diplomatic relations, Canada launched a broad official relationship, including a bilateral aid program that wound down in 2013.
Through our aid and engagement, Canada supported China's modernization and opening up. Canadians made substantial contributions to reform in the non-profit, legal, educational and agricultural systems over the decades. For example, Canadian programming helped Chinese farmers adapt to the WTO as China completed a accession process.
Reform was critical to China's success in alleviating poverty. According to the World Bank, China has lifted 850 million people out of poverty. China's poverty rate fell from 88% in 1981 to 0.7% in 2015. In 2018 China's GDP was 174 times the size it was in 1952, and per capita annual income had surpassed $10,000 U.S.
As China's economy opened and grew, Canadian trade and investment in China did as well. China is now Canada's third-largest trading partner after the U.S. and the EU.
While still only accounting for roughly 5% of Canadian exports, Canada's trade with China has grown rapidly in recent years. In 2018 two-way merchandise trade between Canada and China reached $103.2 billion, including $27.6 billion in Canadian exports and $75.6 billion in imports.
As my colleague Steve Verheul will explain in the next session, Canadian exports to China fell in 2019. Canada exports mostly raw materials to China under the direct oversight of the Chinese government. As we have been able to see, Canadian exports of canola can be vulnerable to interventions from the Chinese government, interventions that contravene international rules and standards.
Our commercial relations with China have grown not only in exchange of goods, but more broadly. In 2018 service exports to China were valued at $7.4 billion, while imports from China were valued at $2.8 billion, a 6.1% year-on-year increase in two-way services trade.
China is Canada's third-largest source of tourists and its second-largest source of international students to Canada.
But as China's market grew, so did competition for access to it, and China itself has become more competitive. China's economy now accounts for nearly one third of global growth each year. Even at modest rates for China of 6% annual growth, China adds the equivalent of an Australia to its economy every year.
China has enormous potential to contribute to resolving common global challenges. Indeed, when it comes to global problems such as climate change and health, China, by virtue of its population and economic weight, will continue to play a significant role in tackling our collective problems.
As a permanent member of the UN Security Council and an increasingly important economic and military power, China's influence on Canada's international security priorities cannot be ignored.
On December 10, 2019, Parliament passed the motion establishing this special committee to examine all aspects of the Canada-China relationship. December 10 is also International Human Rights Day, and December 10 is also the day in 2018 when Michael Kovrig and Michael Spavor were detained arbitrarily by authorities of the People's Republic of China.
December 10, 2018, is a day that changed Canada's outlook on its relations with China. Canada and many of our partners were shocked and saddened by the detention of Michael Kovrig and Michael Spavor.
We condemn arbitrary detentions and sentencing. Coercive practices, especially those that target innocent individuals for political ends, undermine the norms and principles that are the foundation of international relations. International partners have also condemned the detention and the practice of residential surveillance at a designated location that falls outside of any recognized judicial process for many detained in China.
We have also raised concern about the failure to recognize the residual immunities of Michael Kovrig, who is a colleague and friend for many in Global Affairs Canada.
These detentions reflect broader features of China's governance that pose challenges to human rights and the rule of law: the Communist Party's increasingly authoritarian grip on power; restrictions on civic freedoms in Hong Kong and abuses of human rights in Xinjiang; coercive diplomacy against individuals and countries that threaten the Chinese government's interests; and threats to democracy and democratic institutions.
The Government of Canada has not shied away from disagreements with the Government of the People's Republic. We have called at every opportunity for the immediate release of Michael Kovrig and Michael Spavor, as well as clemency for Robert Schellenberg and all death penalty cases.
As an absolute priority for the Government of Canada, Canadian officials have worked tirelessly to advocate for these cases bilaterally and multilaterally, while remaining consistent in our policy approach to bilateral relations with China.
We have always indicated our deep concern with the restrictions on the rights and freedoms of the Uighurs and other Muslim minorities. We do so both in our bilateral relations and in multilateral forums such as the Human Rights Council. We have asked the Chinese authorities to respect the freedom of religion of all Chinese citizens in Xinjiang and in Tibet, whatever their faith—Muslim, Christian, Buddhist or practitioners of Falung Gong. We have also asked them to put an end to the efforts to silence those standing up for human rights.
We have argued in favour of Taiwan's genuine participation in international forums where international action is needed, such as the World Health Organization.
On these issues, Canada is not alone. Like-minded partners have added their voices to call for the release of Michael Kovrig and Michael Spavor and an end to arbitrary detention. Canada enjoys the good company of many democratic nations in our call for an end to human rights abuses in China.
In the face of these challenges, however, we must also recognize our deep people-to-people ties, including the nearly two million Canadians of Chinese descent. Exchanges take place not just between governments, but between companies, students, tourists, artists and athletes. Governments play a facilitating role in these people-to-people exchanges, which are an important foundation for progress.
Looking forward, the relations with China will continue to be complex, and Canada will need to chart a path that allows us to protect Canada's interests, to work with China on issues of mutual benefit and to continue to press for justice and human rights.
Canadian businesses will benefit from the growth of the Chinese economy, which will become the biggest in the world, and from an increasing role in the value chain for goods and services.
Whether we are involved in global solutions to climate change, financial systems, or pandemics, we have to rely on participation from China. Multilateral cooperation begins with the creation of solid bilateral relationships.
Canada needs to enhance our understanding of China, not only to adapt to the opportunities it presents, but also to better defend the core values of democracy, human rights and freedoms that Canadians enjoy at home and abroad. This can only happen, I believe, with enhanced people-to-people ties and ongoing engagement, all of which starts with the return of Michael Kovrig and Michael Spavor and clemency for Robert Schellenberg.
The work of this committee presents an important opportunity to review all aspects of the Canada-China relationship and to chart a path forward that takes into account both risks and opportunities.
I wish you much success in this important work.
I will be pleased to answer your questions.
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