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Results: 1 - 30 of 104
View Elizabeth May Profile
GP (BC)
Thank you, Mr. Chair. I rise to present two petitions today. The first deals with the issue of oil tankers on the west coast of Canada. Petitioners call on the government to establish a permanent ban on the entire west coast to protect British Columbia's fishery and tourism and coastal communities.
The second petition, which is somewhat dated, obviously, urges the Government of Canada not to buy the Trans Mountain pipeline, which is described as a pipeline that is old and likely to leak, as it just did.
View Peter Julian Profile
NDP (BC)
Thanks very much, Mr. Chair.
I should note that the Conservative motion from a few weeks ago, which was not voted on in Parliament, would have only given us three and a half hours for discussion of the estimates tomorrow night. We actually have more because of the NDP motion than we would have had with the Conservative motion. I think that's an important note to make.
Thank you very much to our witnesses for being here. We deeply appreciate your availability. We hope that your families are safe and healthy.
I have two questions to start for the Ministry of Finance.
First off, are there any projections in terms of corporate loan writeoffs for this year? In 2018, the federal government wrote off about $2.6 billion in corporate loans. Earlier this year, 2019-20, they wrote off $196 million. We still don't know which company received that benefit.
The second is on the amount, the line item in the main estimates around managing government assets including the Trans Mountain pipeline. We are losing $150 million a year with Trans Mountain. Is there a projection within the Ministry of Finance for the construction costs currently?
Has it been updated? The last one we had from the company is way out of date. The costs have skyrocketed since then.
Has the Ministry of Finance done an estimate of the cancellation costs? If we cancel the project right now, how much would Canadians save?
Those are my questions to start.
Thanks for being here.
Evelyn Dancey
View Evelyn Dancey Profile
Evelyn Dancey
2020-06-16 17:36
Sure.
On the first part of the question, in respect to corporate loan writeoffs, the Department of Finance does not extend loans directly to companies, to my awareness. That information wouldn't be reflected in our individual departmental reporting.
My understanding is, for example, the financial Crown corporations or the departments that extend repayable contributions are all reporting on a departmental or organization-based basis on what their provisioning is and any breakdown of the assets for which they're responsible. I don't have that kind of estimate to offer.
In respect of the TMC entities, I know this committee had a meeting last Thursday where Mike Carter from the Canada Development Investment Corporation was present. He received a very similar question. I can reiterate his response, which continues to be the timely response, which is the public cost estimate most recently provided by Trans Mountain Corporation, which is a subsidiary of CDEV, where Mike Carter is the executive vice-president. It continues to hold as our best estimate right now of the construction costs. At this point, TMC is spending on construction, but that is actually an investment activity.
Overall, the entity is not experiencing a loss. It is making investments, however, that are using up cash from that perspective.
These estimates are disclosed through the TMC reporting as a federal Crown corporation as well as subsumed in the parent's reporting—that's CDEV's reporting.
Thanks.
View Paul Manly Profile
GP (BC)
Madam Chair, the government spent $4.5 billion to buy an old, leaky pipeline. Since 1961, there have been 82 reported spills from the Trans Mountain pipeline. Over 1.5 million litres of crude oil has spilled into the surrounding environment. This weekend, the Trans Mountain pipeline leaked again, dumping 190,000 litres of oil. How much is this spill going to cost Canadian taxpayers to clean up? How much contingency funding has been budgeted to repair the environmental destruction from spills?
View Navdeep Bains Profile
Lib. (ON)
Madam Chair, I want to thank the honourable colleague for his question.
He full well knows that the acquisition that we made with regard to the TMX initiative is a reflection of the fact that we want this initiative to move forward in a sustainable manner and in a manner that protects the environment. I'll continue to work with my colleagues to endeavour to make sure that we have the appropriate processes in place to protect the environment and at the same time create good-quality, middle-class jobs for Canadians.
View Elizabeth May Profile
GP (BC)
Mr. Chair, it's an honour to rise in meeting number 22 of the COVID-19 committee, otherwise known as something like the House of Commons.
I'm here to present two petitions containing hundreds of signatures on the issue of the treatment of Falun Gong practitioners by the People's Republic of China, particularly the practice that's alleged of involuntary organ harvesting. The petitioners ask the Government of Canada to condemn this practice and to publicly call for an end to the persecution of Falun Gong in the People's Republic of China.
The second petition is from residents throughout Saanich—Gulf Islands concerned about what was, at the time this petition was submitted, a future problem. It remains an issue, and I present it on behalf of petitioners who wish the Government of Canada not to put public funds into purchasing or maintaining the Trans Mountain pipeline or towards any expansion of the pipeline.
View Jenny Kwan Profile
NDP (BC)
Mr. Chair, I rise to table two petitions.
The first petition deals with the COVID-19 situation. The petitioners note the pandemic is having a devastating impact on many Canadians nationwide, especially those who have low to modest income, small business gig workers, freelancers, artists, film industry workers, non-salaried workers and individuals on fixed incomes such as seniors and those on disability.
It further notes that rent, mortgage and utility payments are due at the end of each month, putting countless Canadians at risk of losing their housing. It is paramount there be safe self-isolation opportunities for all individuals in this country. To that end, the petitioners are calling for the government to immediately enact a nationwide rent freeze, eviction freeze, mortgage freeze and utility freeze, enforce mortgage deferrals for homeowners without penalty or interest charges from financial institutions and provide direct assistance in the form of a monthly, universal, direct payment of $2,000 per month for all, with an additional $250 per child immediately.
The second petition deals with the Trans Mountain pipeline expansion. These petitioners join the hundreds of thousands of people who are opposed to the expansion. Trans Mountain, in building the pipeline, brings massive environmental and economic risk with no substantial benefit to British Columbia or to local residents. Approximately 40,000 barrels of oil have already leaked from existing Kinder Morgan pipelines, including two major spills in Burnaby since 2007.
I might note, Mr. Chair, that just this past weekend there was yet another spill to the tune of 1,195 barrels here in British Columbia.
There is no known scientific technology to clean up the bitumen when there is a spill, and the number of tankers would go from eight to 34 per month into the Burrard Inlet. It puts at risk many residential neighbourhoods and the traditional territories of at least 15 first nations.
View Jenny Kwan Profile
NDP (BC)
Thank you, Mr. Chair.
The petitioners are calling for the government to immediately act to prevent this new oil pipeline from proceeding through British Columbia.
Michael Carter
View Michael Carter Profile
Michael Carter
2020-06-11 18:21
Thank you, Mr. Chairman. I'm happy to give a short introduction.
The Canada Development Investment Corporation consists of a small group of people who are responsible to the Minister of Finance for looking after assets that the government gets and probably wants to resell. There are examples in the backgrounder.
When the governments bailed out Chrysler and General Motors, the shares in General Motors and Chrysler were given to us to look after and to sell. More recently, when the government purchased the Trans Mountain Corporation, the was given to us because the government does not intend to keep the Trans Mountain pipeline forever and will, presumably, sell it in the near future. More recently, we have, at the request of the government, incorporated the Canada Enterprise Emergency Funding Corporation, which is to carry out the LEEFF program, the large employer emergency financing facility program.
Thank you for inviting me to the committee. I'd be happy to field any questions on that.
View Xavier Barsalou-Duval Profile
BQ (QC)
Thank you, Mr. Chair.
My question is for the representative of the Canada Development Investment Corporation.
Due to the COVID-19 pandemic, oil prices have collapsed. As a result, investment in certain sectors will potentially be more difficult, particularly the oil sands. Indeed, the break-even point in this sector is quite high.
Mr. Carter, does this affect Trans Mountain, which is now owned by the Government of Canada?
Michael Carter
View Michael Carter Profile
Michael Carter
2020-06-11 18:36
Thank you for the question.
We have two partly related subsidiaries in the energy business.
In one case, the government owns an 8.5% interest in the Hibernia oil field offshore in Newfoundland. It is still producing, and obviously prices are lower, so the revenue is lower, but it is still producing at full steam.
The other company is the Trans Mountain pipeline. The pipeline is full and continues to be full, so COVID has no effect on its business. The expansion of the pipeline is going ahead because it was deemed by the Alberta and British Columbia governments to be an important project, so construction can continue, obviously with all sorts of safeguards for COVID.
View Xavier Barsalou-Duval Profile
BQ (QC)
With regard to additional protective measures, would it be possible to have a cost projection or an update on the costs associated with the construction of this famous pipeline? I suppose it will cost more than was originally planned. Isn't that right?
Michael Carter
View Michael Carter Profile
Michael Carter
2020-06-11 18:37
The cost estimate that was produced last January was for $12.6 billion. So far, we don't see any likelihood of an increase in that cost. At present, things are going according to plan, and the pipeline should be completed by the end of 2022. Every indication we have is that the $12.6 billion number is still a very sound number.
View Peter Julian Profile
NDP (BC)
Yes, fair enough.
I have two questions for the Department of Finance and three questions for Mr. Carter.
As a comment to CRA, I'm glad you put that out. These are all elements covered under the Criminal Code already. The police can already do a follow-up when it comes to systemic fraud or people misusing social insurance numbers. I'm glad you have publicly said that. That's very important.
My comment would be that we have publicly available information around the Bahamas papers, the paradise papers, the Panama papers, the Isle of Man scam. No corporation has ever been charged, let alone convicted. I think it's a bit rich to focus on widows and students who may have inappropriately gotten the amount.
My questions are first for Mr. Carter.
You mentioned Trans Mountain. The construction costs obviously have to be revised. I'm a few blocks from Trans Mountain and there's not a single person in the Lower Mainland who believes that the costs will not be anything less than 50% higher than what you're projecting. I think it's about time that Trans Mountain did a revised construction schedule. My question is this: How much did we lose on Trans Mountain, including interest payments last year?
In terms of the LEEFF program, I have two questions. First off, how does CDEV intend to monitor executive bonuses and all of the things that are supposed to be conditions around the LEEFF, such as not to issue executive bonuses? What is the process in terms of LEEFF loan forgiveness? We've seen a lot of loans that have turned into grants and gifts in the past, even in January of this year. What would be the process if a company just wanted their loan forgiven? Is it the finance minister going to the board? Is it the board making a recommendation?
I have two questions for the Department of Finance.
Could I have some clarity around the supplementary unemployment benefits? There is still inconsistency about whether or not somebody on the CERB can receive a SUBP. We're hearing from other ministries that they can't. We heard from Finance that they can.
Last, I have a question on ferries as designated organizations. I'm thinking of BC Ferries. Where are we in designating ferry companies as organizations that are able to obtain the wage subsidy?
Thank you very much.
Michael Carter
View Michael Carter Profile
Michael Carter
2020-06-11 18:44
Thank you, Mr. Chairman.
I'll answer them in reverse order.
There is no intention that any loans will be forgiven. Our mandate from the minister is that once we make a loan, we become purely commercial, the same as a bank.
As for the second one, with respect to executive compensation, there are limits put on executive compensation as a part of the loan program, and those will be strictly enforced. They will be attested to by the senior officers of the company and by the directors of the company on an annual basis.
As far as the Trans Mountain numbers are concerned, I don't have them in front of me. Our annual report was put up on our website and was tabled in Parliament recently. I'd be happy to come back to you with a written answer to that specific question.
View Peter Julian Profile
NDP (BC)
Mr. Giroux and Dr. Yan, thank you very much for being here. You're rock stars, because you protect the public interest. You're very credible when you talk about issues during the pandemic, and in terms of coming out of the pandemic, you've identified a number of ways in which the government can ensure that we stop handing out money to Canada's wealthiest corporations and actually invest it to make a difference for people.
Another aspect of the recovery is making sure that every dollar counts, and we're actually making investments that help people, so I have to ask the question. You've explored the issue of the Trans Mountain pipeline. We spent a billion dollars more than we should have to purchase it, and recent construction costs have been evaluated at anywhere from $15 billion to $20 billion. It's the biggest boondoggle in Canadian history.
I'm wondering if you have a revised construction cost or whether the PBO has been looking into the escalating construction costs of Trans Mountain, and also whether you're looking into the escalating costs of climate change and its impacts on government operations, of course, and the Canadian economy.
Yves Giroux
View Yves Giroux Profile
Yves Giroux
2020-05-12 16:54
Mr. Julian, I have disappointing answers to both of your questions. It's, no, we haven't looked at providing an update to the construction costs of Trans Mountain, and we haven't looked at the cost of climate change. That being said, over the next several weeks we will be releasing an update on Canada meeting—or not—its Paris targets. There will be some work that will be released over the next several weeks. I don't want to give a timeline in front of the committee without being certain that we will be meeting it, but work is currently being done.
Hopefully by the end of the summer we'll have something for you on that, but sadly, not the cost of climate change nor a revised cost for Trans Mountain.
View Wayne Easter Profile
Lib. (PE)
Okay. Thank you for that.
I would just throw in there, because Peter and I have had this discussion before, you should factor in the fact that the Alberta discount costs Canada close to $500 billion a year because we don't have a proper outlet for our oil.
Mr. Morantz.
View Peter Julian Profile
NDP (BC)
This is something that you're asking government to do. I think it would be important for us to follow the reports that have come out over the years from very respected people such as yourself who actually tell Canadians how government should be structured. Instead of the secrecy and these special closed-door agreements, often with lobbyists involved, we need to make sure that we're protecting the public purse and that every dollar actually counts.
Seniors who are struggling to put food on the tables, families who are struggling to keep a roof over their heads and Canadians who are struggling to keep their jobs should receive the best possible disclosure and transparency around every dollar that's spent. That wasn't the case under the previous government; it hasn't been the case under the current government; and it definitely needs to change.
I want to come to the issue of the use of the Canada account. Particularly, we've been told at the finance committee that coming out of COVID-19, coming out of the pandemic, that there will be a massive splurging of somewhere around $15 billion to $20 billion in construction for the Trans Mountain pipeline. That's in addition to the purchase of all of the assets, which was done, basically, with no due regard to the public purse.
I'm wondering to what extent you're concerned about the use of the Canada account in such an an egregious way, basically bypassing Parliament to spend tens of billions of dollars, potentially, in this case, for a project that the private sector walked away from because it's simply not a project that has any economic foundation.
Are you concerned about the use of the Canada account in this secretive way?
Sylvain Ricard
View Sylvain Ricard Profile
Sylvain Ricard
2020-05-12 17:47
Again, as I mentioned earlier, it's too early to comment on specific transactions; I'm not familiar enough with all of the various elements.
What I can say about the Trans Mountain component is that last year we issued our first audit report on their financial statements. We will do that again this year. I would say, probably in the early fall, or something like that. Beyond that, at this point, I cannot make any further comments because I don't have all the details of all of those transactions.
View Peter Julian Profile
NDP (BC)
Okay. Thank you very much for that.
Now I want to raise the mother of all corporate subsidies, which is the Trans Mountain boondoggle. Now at over $17 billion, it is running—
View Wayne Easter Profile
Lib. (PE)
I thought we had that discussion the other day. It's an asset.
View Peter Julian Profile
NDP (BC)
The chair hasn't fully understood all of the ramifications of this project. There's no business case. The private sector walked away. The federal government came up with $4.5 billion—overpriced—to buy the existing assets.
The construction costs are escalating now. The shippers are now backing out, which means you have to subsidize the shippers to try to even maintain the fiction of this being a viable business, so $17 billion, given the $150 million that was lost on the existing project last year, is probably a minor part of what the overall costs will be to the Canadian taxpayer, and it's all done to fuel companies that aren't willing to do their upgrading and refining in Canada. The companies that do upgrading and refining in Canada receive a price differential that is to their advantage.
I would ask both of you this, and anyone else who wants to answer: Do you think it's a good use of taxpayers' money to throw tens of billions of dollars onto the Trans Mountain development?
Jack Mintz
View Jack Mintz Profile
Jack Mintz
2020-03-12 16:42
Well, I'll start on that one.
First of all, I think we need to go back to history a little bit. The project itself would make a lot of money. There's no question that it would have been able to charge a toll that many shippers were interested in. Why? Because it was an opportunity to sell oil to either California, where there was a need for more heavy oil, or Asia, where the margins were sufficient enough. From the financial side, there was no need for government subsidies whatsoever, because both the proponent at that time, which was Kinder Morgan, and the shippers themselves could have easily handled the costs associated with it.
As we know, we've had a regulatory system that keeps moving the goalposts when it comes to approvals. As soon as you start changing the goalposts all the time, and the length, and the delays and everything else, the costs start rising. Kinder Morgan, quite intelligently, said they'd had enough, that there's too much political uncertainty in this country and there was no point in making an investment when these goalposts are continually changing. They said, “We're going to get out of this.”
At that point, because the government said it does believe in responsible energy development, it said that it would support this project because it thinks it's important for it to get built, from the point of view of responsible energy development. The government has now bought the project. It is an asset. It might make enough money to cover it. There might be a loss. We'll have to see.
However, I think we have to ask the more serious question. It is on our regulatory system in Canada, which is absolutely throttling the energy industry right now. Is that something we want to have in this country? It's one of the biggest assets we have. That can be done in a responsible way.
In fact, there were all sorts of very interesting carbon analyses done. I really enjoyed the presentation done by your friend from England, sitting in England. I do know that one technology that people are thinking about in climate change is just actually drawing the carbon, the CO2, out of the air. That could actually be a far better approach than trying to go through a huge energy transition, with huge costs. It also means that we could also continue to develop our resources, which create huge benefits for the country as a whole.
View Peter Julian Profile
NDP (BC)
Thanks very much, Mr. Chair.
I'd like to come back to Mr. Mintz and Mr. Cross.
We are hearing, of course, some very valid stories of supports from the federal government that have worked, and then we have Trans Mountain. Trans Mountain is an example, I think, of what is a pretty egregious form of support for something that simply doesn't make any business sense because of the threats to the fisheries and to tourism in British Columbia.
There's an economic downside, of course. On the issue of climate change, there's a huge environmental downside. Then we have the escalating construction costs. What's interesting is that when you follow public opinion, initially, I think, around Trans Mountain, there was more support than not, but since the escalating construction costs have come to public attention, more recent polls have shown that most Canadians—not just in British Columbia, but right across the country—are now opposed to Trans Mountain.
My initial question relates to the public perception of corporate subsidies being given without real justification—such as with Loblaws—or forgiving a loan when a company is shutting its plant down and throwing workers out of work. Is there a problem when the government indiscriminately applies large amounts of public funds that come from taxpayers to these kinds of projects—a project like Trans Mountain, which will never make money, is losing money now, and doesn't have a business case?
I'll start with you, Mr. Cross.
Philip Cross
View Philip Cross Profile
Philip Cross
2020-03-12 17:19
I would tend to put Trans Mountain in the category of Hibernia and General Motors, as subsidies to businesses during an exceptional time of crisis. It's likely to pay off in the longer term.
I think the business case was there, as Dr. Mintz mentioned. It was a victim of regulatory uncertainty. I think the government's plan to sell this back to the private sector once it's built and this uncertainty is removed is likely to succeed, but that's speculation about the future.
The point is that you and I don't know what the result of that is going to be. I just think that's where the highest probability is. We certainly cannot speak of the project as “obviously a commercial failure”.
View Peter Julian Profile
NDP (BC)
There is no buyer, and the only way the federal government could unload it would be by subsidizing again the so-called sale. That has become evident as well. There's a problem structurally from the beginning to the end, but I'll give Mr. Mintz a chance to answer as well.
Jack Mintz
View Jack Mintz Profile
Jack Mintz
2020-03-12 17:20
I really don't have that much more to add to what I already said. I think I'll just stop there.
View Monique Pauzé Profile
BQ (QC)
Thank you, Madam Chair.
Minister, thank you for your appearance today and your opening statement.
In fact, my question ties in with something you said in your statement. It's about the Trans Mountain expansion project. You said, and I quote: No longer can we think of economic opportunities without also considering environmental impacts.
I'd like to take you back to June 2019. A provision stipulated that, should costs be revised upwards, the bill would be passed on to users, similar to toll highways. That wasn't retained, however. Trans Mountain rejected the option. The Canada Energy Regulator could have stepped in to prevent taxpayers from being stuck with those costs, but it didn't, so taxpayers are the ones who will be on the hook.
Oil companies will get to use the pipeline at a lower cost than the market value. The pipeline won't bring in any profit. Taxpayers are the ones who will have to pay for it, since pipeline users won't be paying any tolls, so to speak. Those costs weren't exactly laid out clearly in the budget.
Isn't the government underestimating the project costs to keep them under wraps, to some extent, so the public doesn't become outraged? The fact of the matter is that the costs are going to go up and the pipeline is going to become more and more expensive.
View Jonathan Wilkinson Profile
Lib. (BC)
Thank you for the question.
I believe the costs associated with the project are the domain of the finance department.
We took a lot of advice from independent advisers with respect to the structure of the transaction on the Trans Mountain expansion. The intention on the part of the government has always been that it would be transacted back to the private sector once the political risks are lower. That is something we have always intended to do. It will end up being a private sector transaction. We are confident that the Canadian public will recoup the costs and then some.
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