FINA Committee Meeting

     I call this meeting to order. This is meeting number 53 of the Standing Committee on Finance. Our orders of the day are pursuant to Standing Order 83.1, continuing with pre-budget consultations 2014.

    Colleagues, we again have two panels before us in this session.

     In our first panel we have five individuals. One, I think, is en route.

    We have, first of all, from the Canadian Association of Petroleum Producers, the vice-president, Janet Annesley. Welcome to the committee.

    From the Canadian Gas Association we have the president and CEO, Mr. Timothy Egan. Welcome.

    From the Canadian Intern Association we have the president, Claire Seaborn. Welcome back.

    We have Éric Pineault from the Institut de recherche et d'informations socio-économiques.

    Next, we have the Toronto Region Board of Trade and Mr. Patrick Gill. Welcome to the committee.

     Thank you all for being with us here this afternoon. You have five minutes, maximum, for your opening statements, and then we'll have questions from members.

    We'll begin with Ms. Annesley, please.

    Thank you very much.

    Good afternoon, Mr. Chair, and committee members. Thank you for the invitation to be here today.

    As you know, CAPP represents companies, large and small, that explore for, develop, and produce crude oil and natural gas in Canada. Together CAPP's members and associates are part of an industry of about $120 billion a year in revenues.

    Canada's oil and gas industry currently employs about 550,000 people nationally, and this number is expected to grow as production also continues to grow. Canada's energy sector is in an expansionary phase, and Canadian oil and gas developments are expected to create sustained demand for skilled labour over the next decade. In the oil sands alone, hiring requirements for construction, maintenance, and operations are expected to total 98,000 jobs over the next 10 years. Also, efforts to expand through the development of B.C.'s LNG industry are expected to put additional pressure on the labour market.

    While the prospect of higher industry employment has the potential to create strong economic prosperity, access to skilled labour is becoming an increasingly important economic competitiveness issue. Ensuring companies have the right people with the right skills in the right place and at the right time is crucial to delivering oil and gas projects on time and on budget.

     Barriers to interprovincial labour mobility and recent changes to the TFW program have hindered our members' ability to deliver resource projects on time and on budget. Higher costs and higher risk translate into reduced competitiveness and make our country less attractive for capital.

     Given the high impact of skilled labour shortages on the oil and gas sector, my remarks today will focus on skills training via the federal labour market development agreements and, where skilled Canadians are not available, necessary reforms so industry can continue to access labour via the TFW program.

    First, oil and gas companies want to employee Canadians, but Canadians with the right skills are not always available to our industry. At some $2 billion annually, the LMDAs are the single largest labour market transfer program to provinces and territories. Given the government's renewed focus on Canadians first, it is critically important that the LMDAs be as targeted and as effective as possible at connecting unemployed Canadians to the jobs and skills training needed to meet the labour market demands of the future. Skill development and work experience programs are the most effective for improving employment and income levels. The LMDA program, itself, has indicated that “skills development is the most effective intervention in increasing the earnings“ of active EI claimants. Skills programs improve productivity and lower EI, as well. Other LMDA programs, such as the targeted wage subsidy, self-employment program, or job creation partnerships, do not experience as consistent overall benefits.

    We recommend that the government reform the LMDA program to prioritize skills development and work experience programs similar to that of the provincial labour market agreement approach and in a manner that is strongly connected to occupations in demand.

    We believe in hiring Canadians first, of course, and attracting and recruiting within Canada. Oil and gas is a major reason why Alberta, with three million people, leads the country in apprentices. Despite this focus, however, we know we must move beyond our borders to get the skill sets that are not available for the jobs we have. As such, we rely on the TFW program. The hospitality and service sectors where we operate also depend on this program.

    We are supportive of the many changes the government has made to the program, including stronger enforcement and compliance, and the 10-day turnaround for high-skilled, high-paid, and short duration applications. However, since the changes have been announced, the oil and gas producers have experienced significant challenges in accessing the program. A lack of access to skilled construction trades is a critical risk to major project economics. In fact, Statoil postponed its plans for a major oil sands project, citing these types of labour costs as the key reason.

    All companies are watching their costs and comparing our project economics to those of other jurisdictions, such as the U.S., especially in an environment of volatile prices and given higher costs and the projected infrastructure constraints to get oil and gas to markets.

    In the past, construction companies were covered under an Alberta annex for the TFW program as part of the Alberta occupation-specific pilot program. This enabled timely access to construction trades.

     You have one minute.

    Thank you.

    To ensure companies have the labour they need, we recommend the federal government reintroduce a program effecting the same outcomes as the Alberta occupation-specific pilot program, with the option to apply it to other programs as needed.

    In closing, Canada's resource opportunity and the energy, security, employment, and prosperity it brings can only be realized if we have the skills to develop it. We do believe in hiring Canadians first, in training, attracting, and recruiting within Canada. As such, we recommend the government targets the LMDAs, your largest and most effective program, to skills training and work experience programs aligned with the needs of the economy. However, we must also look beyond our borders when Canadians are not available.

    Reform to the TFW program is needed. We recommend the federal government reintroduce a program effecting the same outcomes as the Alberta occupation-specific pilot program in concert with your other changes.

    Well-paid, skilled, safe jobs are a major benefit of a vital oil and natural gas industry, and a thriving skilled workforce can be the backbone of competitiveness for Canada's economy.

    Thank you.

    Thank you for your presentation.

    We'll now hear from Mr. Egan, please.

    Thank you, Mr. Chair.

    Thank you to the committee for the opportunity to speak today. I've a short statement on two of the specific items contained in our submission provided to the committee in July particularly of relevance to the topic that's been put to this panel—maximizing the number and types of jobs for Canadians.

    CGA is the voice of Canada's natural gas delivery industry. The map on page 2 in the package distributed to you illustrates natural gas distribution and transmission companies that deliver energy solutions to more than 6.5 million Canadian customers.

    Today, over half the Canadian population relies on the natural gas delivered to their homes, apartments, buildings, hospitals, schools, and businesses, using almost 500,000 kilometres of underground delivery infrastructure and storage facilities. Since 2005, the distribution sector has invested over $25 billion in this extensive national network, to ensure the safe, secure, and reliable operation and maintenance of our system.

    As all of you know, we use energy in three principal ways: for heating, for power generation, and for transportation. Natural gas is used for all three, although to date its greatest use has been as a heat source. We often talk about how natural gas is an ideal energy choice for any of these applications because it is affordable, clean, safe, and reliable. But today, given the topic of this panel, I want to focus on the affordability attribute, and how this affordability has meant significant savings for consumers and growth for economies as investors have been attracted to our markets' low energy input costs.

    I'll also highlight the opportunity for the natural gas distribution industry, working in partnership with all levels of government, the private sector, and homeowners, to continue to help drive economic growth, investment, and job creation.

    If I could draw your attention to the chart on page 3, this graph illustrates how natural gas reduces energy costs for homes, businesses, and institutions. As you can see, in 2003 the average Canadian household spent between $1,300 and $4,300 for space and water heating. Natural gas is by far the most affordable choice.

    At the end of the day, we know that for all energy users any reduction in energy costs, while enjoying the same level of comfort or maintaining the same or improved level of service or production output, is a significant benefit. It means money in the pockets of consumers, for families in their homes, or for businesses to become more competitive and to expand and grow.

    Because of the abundant supply and ongoing affordability of natural gas, coupled with the rising cost of many other energy options, Canadian utilities are building out their delivery systems to reach more Canadian communities, industry, and the transportation sector. However, there can be challenges in connecting some communities and industrial customers.

     As you may know, natural gas utility investment activities are regulated, and they must apply to their provincial regulators for approval of the investment costs associated with connecting a community. In most cases these costs are approved because the benefits to the community justify the cost, and utilities proceed with the investment. But when the communities are smaller and farther afield, the total benefit may not outweigh the cost to connect the customers, and regulatory rules restrict the amount of cross-subsidy that can flow between consumer groups and regions. This can rule out a community connection project, despite the significant savings per year for homeowners and industry in these regions.

    Let me give the committee some examples of recent partnerships that made up that shortfall through cooperatively funded distribution system extension projects, and give you a sense of the economic benefits seen in each case. The map on page 4 illustrates some of these examples.

    A $40-million project to build a 43-kilometre pipeline into Red Lake, Ontario was funded cooperatively by the federal and Ontario governments, by Goldcorp, the municipality of Red Lake, and Union Gas. The federal government's contribution of $2.7 million was made through FedNor to help support the engineering, design, and construction costs related to establishing the natural gas link to service businesses and residences in the community. Completed in 2012, natural gas became not only an affordable energy source for area mines owned by Goldcorp, but the project brought a lower-cost energy choice to homeowners and local businesses, and served as a catalyst for regional economic development, enhancing business competitiveness and attracting private sector investment to the region.

     You have one minute.

    Red Lake mayor Phil Vinet said in 2012, “Thanks to FedNor's support, this project is a win-win situation. We're seeing cost savings for local businesses, new jobs being created, plus new opportunities for businesses throughout the region.”

     The mayor also noted that natural gas could reduce the cost of living for residents and help reduce energy costs for about 180 businesses. At the time of completion, the expansion project had created over 100 jobs.

    The map shows you other examples: in Quebec, in Thetford Mines; in British Columbia, from Squamish to Whistler, B.C.; and another one in the Northwest Territories, where we're trucking gas over 3,600 kilometres.

    The role of the federal government, we believe, is to facilitate these projects, and we have specific asks in terms of reallocating the existing program or infrastructure money for northern communities and for local communities, and supporting an accelerated capital cost allowance for LNG facilities. Each of these offers direct benefits to Canadians and communities across the country, lowering energy costs and delivering more opportunity for Canadians.

    Thank you.

    Thank you very much for your presentation.

    Ms. Seaborn, please.

    Good afternoon, everyone. My name is Claire Seaborn, and I'm the president of the Canadian Intern Association and an articling student at a law firm in Toronto.

    Today we'd like to make three recommendations.

    First, Parliament should amend the Canada Labour Code to extend workplace protection for interns working for federally regulated companies. Second, the Canada labour program and programs in other federal agencies should also adopt an enforcement strategy regarding employee mis-classification and internships. Third, Statistics Canada should begin tracking internships as part of the labour force survey.

    I'm going to take the next few minutes to provide some context on intern-related issues and expand on these recommendations.

    Internship generally refers to temporary work performed by individuals looking to gain experience or make connections in a new field. Interns aren't just young people and recent graduates. They're also injured workers re-entering the workforce or a mother after a leave or a recent immigrant seeking work in Canada. Internships can be paid or unpaid, and they can be independently organized or part of a school program, such as a co-op or work placement.

    Although some internships are beneficial and legal, many internships contribute to unemployment; facilitate socio-economic, gender, and intergenerational inequality; and violate workplace laws. Under Canadian workplace law the default is that an intern is considered an employee, unless a statutory exemption applies. The Canada Labour Code does not refer to interns, trainees, or students. As a result, there's some legal ambiguity when determining whether an intern should be considered an employee. In 1989, the labour program released a guideline explaining that all training periods must be paid, unless the person is undergoing some pre-employment testing that's of short duration.

    Next week a labour program adjudicator will begin hearing the case of former Bell Media intern Jainna Patel. He will decide whether Bell was required to pay her wages during her internship and hopefully clarify the interpretation of interns under federal law.

    Unpaid wages are not the only problem with this legal ambiguity. Under the Canada Labour Code it's unclear whether interns and students are entitled to workplace health and safety protections as well. You may have heard of the deaths of Adam Keunen, Aaron Murray, Wayne Affleck, and Andy Ferguson. Each of these young men died while in a school internship or co-op placement. Although not all these positions were federally regulated, these tragic events emphasize the importance of health and safety laws and that young workers are greatly in need of workplace protection.

    Our second recommendation is that federal agencies must adopt enforcement strategies regarding the mis-classification of interns. The Canada labour program, CRA, and Citizenship and Immigration Canada all have roles to play to prevent exploitation by employers.

    Our third and final recommendation is that Statistics Canada begin tracking internships. I appeared as a witness before this committee, you'll remember, on March 27 as part of your youth employment study. We are glad to see that this committee's report cited our submission and adopted our recommendation for the federal government to begin collecting data. However, to date no provincial or federal government has collected any information regarding the prevalence or characteristics of internships. The committee's report also stated that the federal government should work with the provinces to ensure appropriate protections under relevant labour codes.

    Many of the provincial governments have already taken action on internship-related issues. B.C. and Quebec have employment laws that require all internships to be paid, unless they're part of a school program. In May, Saskatchewan included the definition of “intern” and “student learner” in their workplace laws and determined that interns are entitled to many workplace protections. Alberta's ministries of labour and education recently announced a comprehensive review of Alberta's employment standards laws for the treatment of interns and all work integrated learning programs. In Ontario, the Ministry of Labour is also taking action.

     You have one minute.

    I want to thank Minister Naqvi and Minister Flynn for their work on Bill 18, which would bring interns and students under the protection of workplace health and safety laws. They've also done some recent crackdowns and inspection blitzes on employers who are hiring interns illegally.

    The Canadian Intern Association would like to thank members of Parliament who have already spoken out about internship-related issues: Scott Brison; Laurin Liu, who is here today; Andrew Cash; Brent Rathgeber; and Justin Trudeau.

    We're very pleased to have this opportunity to address the committee.

    Thank you.

    Thank you for your presentation.

    Mr. Pineault, you have the floor for five minutes.

    Thank you very much.

    The Institut de recherche et d'informations socio-économiques is an economics research institute that has imposed itself over the years as an important actor in policy debates in Quebec. Its approach is characterized by fact-based policy discussions that assume a progressive stance.

    As an associate researcher at IRIS, economist and professor at UQAM, I want to share some recent research on the limits of extractivism as the main driver of Canadian economic policy.

    My presentation reflects the economic case for an alternative policy framework, which in most aspects does not break with any current orthodox ideas on how the Canadian economy should evolve or be managed. I simply here highlight the importance in this setting of investment in driving sustainable and strong economic growth and make the case for economic policy adapted to an era of ecological stress and transition.

    Today one in five investment dollars in Canada—I'm talking private investment dollars—is directed toward the petroleum and hydrocarbon-related extractive industries. This is up from only 5% in the 1990s. It's not just that oil investments have grown in absolute size, they also have replaced other forms of private investment.

    This sea change in investment is mirrored by other structural changes, such as the composition of our exports, the dynamics of our labour markets, and product markets, as our economy adjusts to the long oil sands boom.

    I will not argue here why this could be problematic on environmental grounds, but will focus on the economic risks that these developments imply, and how they affect the number and types of jobs Canadians can expect to have in the near future.

    If industrialism characterized Canadian economic policy up until the late nineties, I think we can define our current approach as one based on extractivism. Such a distinction has nothing to do with traditional differences between interventionist versus non-interventionist policies, or free trade and protectionism. It cuts across these differences.

    Extractivism is an economic policy that sees the resource sector as the principal motor of an economy. Its objective is to induce an ever-increasing flow of extractive and untransformed raw commodities that are bound for export markets. The economic challenge is not only accessing the resource and extracting it but also transporting it across the continent to get it to world markets.

    Extractivism furthermore aims to link other economic sectors such as the service sector, finance, commerce, and manufacturing to primary sector growth.

    Extractivism aims also to change the way labour markets and settlement patterns function, so they can also link to the needs of the primary sector growth. It influences monetary policy, environmental policy, as we've seen in Canada, and policies in the field of science.

    I wish to highlight three limits that I think have a direct impact on the number and types of jobs Canadians can expect to have in the future if we pursue the policy of oil extractivism.

    The first is heightened dependence on international trade cycles and commodity booms. As we have witnessed in the past weeks, the oil sands industry is extremely sensitive to changes in conditions in international markets, especially growth perspectives in Asian economies, such as China and India. The impact of softer demand is complex, but directly ties into the way other sectors have been linked to oil sands, particularly labour and product markets, so that current levels of employment and production are tied to the growth dynamics of the oil sector.

    But most importantly for the future, how a slowdown impacts investment patterns is even more important now that the oil represents 20% of all private investment. Extractivist policies do not seek to mitigate this fragility, they amplify it.

    I'm not saying that the oil sector destroys jobs or stifles growth. On the contrary, the growing dependence of growth and investment in Canada on one sole economic sector, oil, implies heightened sensitivity to the specific fragilities of this sector. Diversity could counter this tendency, but extractivist policies do not support economic diversification.

    The second limit is the so-called carbon bubble. It is the risk that productive and financial assets, that are tied to these oil sands booms, could actually have inflated values and that in the medium term these values could face sudden and violent devaluation.

    You have one minute, please.

    The carbon bubble argument is tied to the environmental assessment of oil sands petroleum versus other forms of energy. This assessment does not depend on the current view the Canadian government has on global warming, whether it believes or not in climate science, or whether it believes that oil sands exploitation contributes to global warming more than another form of energy production.

    Given the extroverted nature of the oil extractive sector, in terms of markets and predominance of foreign firms and foreign capital, the view and polices formulated in other countries and regions, movements in other societies, could have a profound impact on carbon assets.

    This should be obvious after the failure of a quick start for the Keystone pipeline as well as the recent decision by a major Swedish pension fund to divest from part of the carbon sector tied to dirty coal and oil sands.

    The third impact is on the promising area of economic growth, which represents a great potential in terms of job quality and quantity that extractivism has shut out, the wide field of investment in the ecological transition, and the decarbonification of our energy base.

    Paradoxically, Canada is—

     Thank you.

    —endowed with a vast potential to go in either direction. Moving—

    I'm sorry, I do have to be fair with the time. I'm sure you'll have some questions during the question period.

    We'll go now to Mr. Gill, please, for your presentation.

     Good afternoon.

    Founded in 1845, the board is the chamber of commerce of Canada's largest urban centre, connecting more than 12,000 members and 250,000 business professionals across the region. The board plays a vital role in elevating the quality of life and global competitiveness of the Toronto region.

    To this end, the board is grateful for this opportunity to provide the committee with its evidence-based advice on maximizing the number and types of jobs for Canadians.

    The Toronto region continues to be one of the world's most prosperous city regions. It annually generates nearly 20% of Canada's GDP, and welcomes 120,000 new residents and workers each year. However, Canada's most prosperous city region has a problem. It has stubbornly high rates of youth and newcomer unemployment and underemployment. Region-wide youth unemployment stands at above 18%. This is far above the national average and is the highest it has been in a decade.

    It's highly regrettable that our well-educated local talent pool is not being fully leveraged. Of our residents between the ages 25 and 64 years, 55% have post-secondary qualifications, well ahead of other North American regions.

    Let's talk about solutions. One way of achieving greater labour market opportunities for youth and newcomers is through access to superior local labour market information, which allows students, educators, businesses, and policy-makers to make smarter decisions. To address our pressing local needs, the board commissioned a region-specific analysis of labour market needs by occupation and industry. This analysis projects the jobs that will be in greatest demand over the next five years across the Toronto region.

    Across the country, there is a lack of locally relevant data like this. The board's data is now being used by the region's five colleges, NGOs, such as CivicAction, and the City of Toronto to establish job pathways tailored for local business clusters.

    At an industry level, our projections suggest that the largest number of new jobs will be in professional, scientific, and technical services, followed by health and social services. In contrast, manufacturing, information, and cultural sectors are expected to shed jobs over the same period. At an occupational level, the greatest demand will be seen for retail persons, followed by financial auditors and accountants.

    Overall we project that there will be more than half a million job openings across the region over the next five years. Half of these positions will be as a result of retirements alone. The important question to consider is whether local residents who are struggling will benefit, or will businesses have to poach workers from other areas of the country or even move these jobs abroad?

    How then do we ensure that local residents who are unemployed or underemployed will benefit from these vacancies? We must scale up what is already taking place. We should scale up industry and academic co-ops and partnerships, such as the Downsview aerospace hub. We have to scale up intelligent land planning like Regent Park's revitalization, and we have to scale up the use of community benefit agreements attached to major infrastructure projects like the Eglinton Crosstown project.

    Beyond this, there are two other things that can be done.

     First, government can be strategic with its infrastructure investments. Bar none, investing in transportation infrastructure generates the greatest economic impact. Transportation construction not only creates jobs, but boosts productivity, as well, by reducing traffic gridlock. In the Toronto region alone, inadequate transportation infrastructure is costing our region up to $11 billion a year in lost productivity.

    Second, the government can support productivity growth within the existing business clusters through trade. Trade not only opens market opportunities for businesses, but forces them to grow and to compete.

    You have one minute.

    In conclusion, please know that the region's business community understands that they must lead the effort in creating more employment opportunities. Businesses can do simple things, such as giving part-time and contract workers access to internal job boards or skills training. They can also look to hire locally, as RBC did with the Regent Park revitalization project.

    Again, thank you for inviting the board here today, and for listening to the perspective of the Toronto region's business community.

    Thank you for your presentation.

    We will now go to members' questions.

    We are starting with Mr. Caron for seven minutes.

    Thank you very much, Mr. Chair.

    I would like to thank all the witnesses for being here today.

    I'll start with you, Ms. Annesley. Welcome.

    Are you from eastern Canada?

     No, sir, I am a recent transplant from Alberta to eastern Canada.

    I'm asking because I took a look at your pre-budget brief, and I have a problem with your fourth recommendation, in particular.

    You recommend that the federal government introduce experience-rated EI premiums for employers. So, you are recommending that employers in areas with high unemployment, such as in eastern Canada and eastern Quebec, pay higher EI premiums.

    The reality is this. Eastern Quebec, particularly, and the Atlantic provinces, are already at a geographic and demographic disadvantage.

    Since I was elected in 2011, I have tried to attract investment, and I am working with socioeconomic stakeholders to provide development and ensure that the region is less dependent on seasonal work, which is the current reality.

    The high unemployment rate is due to a lack of investments and a significant economic dependence on seasonal work. In the winter, there is no work in agriculture and little work in forestry, tourism and fishing.

    I have a lot of difficulty in considering a recommendation that seeks to increase the problems we have in attracting investment to high unemployment areas, as your recommendation does. Could you expand on your association's recommendation?

    I would with pleasure. We think the EI program as is provides a disincentive for worker mobility and that treating the EI program more like a true insurance program would be helpful in terms of establishing more incentive.

    I also outlined, and we outlined as part of our submission, detailed areas in which we think work experience and specific training as part of the EI program could help address some of the issues that you comment on. And in fact if workers were to get training and move to regions and get experience—for example, as an apprentice in a skilled trade on a project in Alberta or Newfoundland or British Columbia—and then have the opportunity to perhaps move back to their home, that would be of benefit.

    You are proposing an increase to the premiums paid by employers who are trying to attract new investments and by those who work in the seasonal sector. In short, you want to reduce the opportunities for people in eastern Quebec, who often speak only French, are between 45 and 55 years of age, and have always worked in seasonal industries.

    We are trying to reduce this dependence on seasonal work, but it is a lengthy process. Significant progress has been made in this area. Employment insurance reform as it has been applied has already caused an exodus from eastern Canada, and a measure like yours will mean that even more people will leave.

    Once again, I would like to understand how a francophone from the Gaspé or the Lower St. Lawrence, who is 45 to 55 years old, will be encouraged to move to an area with a lower unemployment rate. Since you represent the Canadian Association of Petroleum Producers, I assume you would encourage people to go to Saskatchewan or Alberta. But they won't go.

    Again, this is part of a package of changes that we think need to happen, which includes the skills training and the work experience. In fact, we'd love to see economic development in the region you're talking about.

    By increasing payroll taxes, you are discouraging these regions that are trying to grow and creating a disadvantage for them compared to regions like Montreal, Quebec, Edmonton and Calgary.

    Again, I think we're looking at a suite of recommendations, not just this one alone. We're looking at skills training that would provide value to the people in your region and that would provide an opportunity to acquire new skills to perhaps work in oil and gas within their own communities.

    These changes would be massive, but the results would be very hypothetical.

    Mr. Pineault, I would like to look at something different with you.

    I am familiar with your previous work on macroeconomics. Yesterday, I asked some questions of three different business organizations: the Canadian Chamber of Commerce, the Canadian Federation of Independent Business and the Quebec Employers' Council.

    These three organizations were asking us to reduce taxation—corporate taxes or payroll taxes, in particular—as well as employment insurance premiums. They also asked us to reduce or eliminate income tax for things dealing with income that comes out of intellectual property, a little like what Ireland does. At the same time, another thing they wanted us to do was increase our infrastructure investments. I asked them how we could reduce our income, increase our investments and balance the budget or even pay the debt. The organizations' spokespersons said that tax cuts pay for themselves because of economic growth.

    Could you comment on that?

    Yes, I can comment on that.

    The economic assessment that we can make of the various income tax reduction programs for businesses show that tax cuts for the 1990s and 2000s, particularly for 2010, have not had an impact on the change in investment patterns, either in terms of volume or direction of the investment.

    However, the major change we've seen is with the increase in liquid assets held by companies. The last time I checked, which was for the last quarter in 2013, Statistics Canada assessed that companies are sitting on liquid assets valued at $604 billion. These amounts have not been invested and are not earmarked for investment projects. The value of these liquid assets increases as the taxation rate decreases.

    So, in response to your stakeholders who appeared yesterday and if you accept their requests, you will nourish this increase in saving, which I call the “over-saving” of large corporations. Just for information, The Economist, which doesn't have a reputation for being a particularly leftist organization, published an article on Japan and South Korea. The article states that this “over-saving” by large corporations is a problem, especially in South Korea, where saving represents 34% of the GDP, which hinders economic growth. In Canada, it constitutes 32% of the GDP.

     Okay.

    So you can't do both at the same time. Choices need to be made. the choice of reducing corporate taxes does not translate into additional investments or increased power...

    Excuse me, Mr. Pineault, but I must interrupt you. Thank you.

    Thank you to Mr. Caron, as well.

    We'll go to Mr. Keddy for seven minutes, please.

    Thank you, Mr. Chairman.

    Welcome to our witnesses here today.

    This is a fascinating group and it's a fascinating discussion. We've got a dynamic here that we don't often get.

    I can't help but ask the question to Mr. Pineault, that.... You know, if you look at 18% to 20% of the Canadian economy being based on the extractive sector, oil and gas in particular, I appreciate what you're saying that we really do need to look at that sector like a gold mine. Some day the last of the gold will be mined out of the ground. However, that's a long way away, so I think we have some time to plan for that. But I can't help but ask, if Toronto and the Toronto Region Board of Trade has 20% of the gross domestic product of Canada, we've got the same problem, with a big urban centre. If we had a catastrophe of any kind all of a sudden, there's 20% of your economy down. I'm a bit of the devil's advocate, but I just wanted to get that on the record.

    I do have a specific question. Why don't we look at our extractive sector like a gold mine and then mine that last piece of gold out of the ground, and do it in as sustainable a way as possible? I think the oil and gas sector would agree with that.

    Okay. I want to comment on the first number, then I'll get right away to the question afterwards.

    There's a very big difference between one in five dollars in investments and one in five dollars in economic activity. One is a result, the other one is a motor. Investment is a motor in our economy, whereas GDP just measures the results. When I'm saying one in five investment dollars, I'm talking about the way the economy is building itself, the direction in which it's going.

    It's very good that we have this sector that can be a motor in our economy, and I'm not here to say we should shut down this or that. I'm saying that you build in dependency and dependency engenders fragilities. I'm saying that in the current context these fragilities are...and there's two. There's the very short-term fragility linked to trade cycles, and then there's the more long-term fragility which is...Canada is in some form of environmental denial and that's fine, it's okay. I don't want to comment on that. But I think elsewhere the world is moving, and that's going to impact us at some point.

    Now, getting back to the gold mine approach—

    Very quickly, please. I have limited time too.

    The gold mine approach, I would agree if that was what we were doing. I don't think that we're doing that in the sense that our royalty system, the way we capture the oil rent in Canada, is very particular when compared to other countries that are doing that. Look at Norway. It is using it's oil rent to move out of carbon, and will be out by the time they run out of oil. We're not capturing the rent as efficiently, for a number of reasons, as other countries are.

     Thank you for that.

    The difference between Canada and Norway is that Norway can see the end of their oil at this point, and we're a century away from seeing the end of our oil. That's a significant difference.

    I have a question to the Canadian Association of Petroleum Producers, to Ms. Annesley. That was a good submission.

    One of your statements is that we should “actively steward aboriginal consultation policy leadership, by supporting federal departments in embracing their consultation responsibilities, and implementing the Eyford report”.

    I think the Eyford report was a good report. The difficulty I have—not with the report, but with that statement—is that it's not all up to the federal government. I realize that the association between first nations in Canada and the crown is a unique association. But where is the responsibility of industry? We have a huge resource of young men and women in aboriginal communities who can and should be the workforce of tomorrow. Where is the leadership coming from industry? Never mind waiting for the federal government or the provincial government or the municipality. Where is leadership from industry to embrace that?

    Well, I think the oil sands offer an excellent example of that leadership. To date, some $8 billion worth of goods and services have been purchased from aboriginal entrepreneurs. A large part of that is as a result of the investments that oil sands producers have made in the training and the nurturing and the development of those companies. That continues today, to package projects especially so that companies of that size and with that expertise can bid on them and be successful in doing so. In addition, employing more than 1,100 aboriginal employees makes the oil sands industry the largest private sector employer of aboriginal people in this country.

    In areas in which we've had the ability to move forward, I think the oil sands industry is an example of success. Indeed, the federal government, the provincial government, and the industry have worked collaboratively to address certain land claims and other issues around the Fort McKay First Nation and others. It's that kind of thinking that we think needs to be applied in a broader sense along the right of way of pipeline projects.

    Now, of course benefits are different in that case, in that there is not the immediate proximity to resource development and jobs are of a different nature. But we think it's exactly that kind of reconciliation, if you will, with first nations—with the federal government, industry, the province, and the communities themselves at the table—that needs to happen.

    Thank you.

    I would have to say that there is an opportunity here; there is not a challenge. There is real opportunity: the first nations are looking for opportunity; oil and gas have to be transported to market. There is no reason that both groups can't work together, along with government, of course, which has to be a player.

    This is to Mr. Egan, concerning natural gas. You have an absolutely stunning chart on the cost of space heating a home and heating water with natural gas versus with propane, electricity, or heating oil. I have to be honest with you; I didn't realize there was that much difference.

    I come from a very small community in rural Nova Scotia. How do we extend natural gas pipelines into remoter and more rural parts of Canada, and can it be done?

    You have about 20 seconds for that answer. You may have to say it is to be continued.

    You do it carefully, and it can be done.

    In the case of Nova Scotia, Heritage Gas is doing it. They have a franchise agreement in place in the province and they're working on that right now.

    There are all kinds of specific examples whereby, in the case that the economic formula that is used by any regulator does not work, it is possible to engage other partners in government—federal, provincial, or municipal—or industrial consumers to assist in the effort to build out that system. Red Lake is an example I talked about. There are many others I'd be happy to share with you.

    Thank you.

    Mr. Hsu, please, for seven minutes.

     Thank you very much, Mr. Chair.

    I'd like to start with a question for Mr. Gill.

    You mentioned in your presentation that inadequate transportation infrastructure is costing Toronto something like $11 billion a year in lost economic activity. I'd like to do a little calculation, if you'll bear with me, and just ask if you would agree with it.

    Let's just take one-tenth of that $11 billion a year, so $1 billion a year. We know that the Government of Canada can borrow money at about 3% per year. Let's say we borrow it for 30 years and we pay off 3% of the principle every year. So 3% plus 3%, that's about 6%. That means that Canada could borrow $15 billion and pay it off over roughly 30 years to spend on infrastructure, which is about roughly the size of the Building Canada plan. It seems to me that on just one-tenth of the lost economic opportunity from Toronto transportation infrastructure you could spend the whole Building Canada plan, and that would be a good investment. To me that suggests you could spend a lot more than the Building Canada plan if you could pay for $15 billion of spending from just 10% of the lost economic activity because of poor transportation infrastructure in one city, Toronto.

     Would you agree with that calculation? And would you agree that we could spend more on infrastructure and get a good return on that spending?

    Certainly investing in transportation infrastructure over other capital projects will give you the biggest result. The best example is how when you repair the sewers underneath the city, you're just creating a job; you're not improving productivity necessarily, whereas when you build a subway or build an LRT, you're not only creating that construction job; you're also producing the flow of goods and people.

    A substantial amount of money has been put on the table through the Building Canada plan. As those projects are prioritized, bearing in mind transportation infrastructure first as a main targeted asset, certainly the sooner we can address this problem with additional resources, the better it will be for the country as a whole.

    Okay. Thank you.

    I have a question for Ms. Annesley.

    You spoke about the demand for skilled labour and the need for temporary foreign workers. But something you did not address, which I wanted to give you a chance to address, is interprovincial mobility of skilled tradespeople. When I talk to skilled tradespeople in my riding of Kingston and the Islands, I hear that there are some barriers to mobility. I am wondering if you or your organization have asked the government to think about subsidizing some of these costs, which may not be apparent at first glance, or about subsidizing the interprovincial mobility of skilled trades before we rely too much, or perhaps to relieve the pressure of relying, on the temporary foreign worker program.

    Thank you for raising interprovincial mobility. It is absolutely crucial. We have in the past, for example, joined with Canada's Building Trades Unions to ask government to let workers who are travelling for work deduct the costs of that travel from their income tax. Those types of programs are small. Then in terms of broader systemic changes that are needed, there needs to be more discussion, especially as far as apprentices are concerned, to manage the keeping of apprentice books so that apprentices can move between provinces with greater ease and get credit for their hours. Also, in anything below the Red Seal level there needs to be ongoing discussion between the provinces to enhance worker mobility at that level.

    Good. Thank you very much.

    My last question is for Ms. Seaborn. It is about your request for the government to measure internships, particularly unpaid internships, when it collects data on the labour market. I agree with the Prime Minister when he says you can't manage what you don't measure. I think that's a very good credo to follow.

    When you've talked to the government or when you've written to the government, has Statistics Canada or the Minister of Industry or one of the other ministers responded to your suggestion? How has StatsCan responded? How has the minister responded so far?

     At this point we haven't received a direct response from Statistics Canada despite numerous efforts to contact them. So that's another important reason why we're here today.

    Thank you. How much time do I have?

    One minute.

    I'll go back to Mr. Gill.

     I had a question about your study predicting local labour market conditions and you said five years out. It just seems to me that there are certain sectors where that's easier to do than in others. There are certain sectors where, for example, it depends a lot on provincial policy. Then there are certain sectors, for example, the oil and gas industry, where there's some sensitivity to global market conditions, which at certain times can fluctuate a lot. I'm just worried about the accuracy of trying to forecast five years out. Maybe you could talk a little bit about what confidence students and their families could have when they see these sorts of results that you published.

    Okay. Just a brief response please.

    We're very confident with the results that we published in collaboration with United Way Toronto and the region's five colleges. The data is based on the 2011 National Household Survey. I would just point out that half of those half a million jobs are from retirements and those are pretty predictable based on our demographic population.

    Okay, thank you.

    Thank you, Mr. Hsu.

    We'll go to Mr. Allen, please, for seven minutes.

    Thank you very much, Chair, and thank you to our witnesses for being here today.

    I'd like to start with Ms. Annesley. One of the comments you made that I picked up on when you were talking about the temporary foreign worker program was you appreciated the stronger enforcement—and I think we want to try to get these jobs to Canadians first—but you commented on the difficulty in accessing the program. I'd just like to get clarification on that because I'm expecting, I'm assuming—and maybe you should never assume anything—that the majority of the jobs in your sector would be beyond the medium wage rates that are in the provinces. What are the accessing issues that you're running into in the temporary foreign worker program?

    The accessing issues are specifically around the 10-day turnaround and that this is not a reality for our members; they are just not experiencing the kind of turnaround on applications in practice that the changes have intended.

    Have they given you any signal as to what that issue is related to specifically or is it just volume as they transition to a 10-day?

    It's volume and I think, if you will, there's a sense of confusion and trepidation among the people who are managing the program that if there are any errors made or that permits are not given absolutely a thorough review that takes longer than 10 days there will be consequences. Again, our members support the enforcement. They support the public, sort of, blacklisting of companies that, whether they are in our sector or others, abuse the program and have given certain instructions to their contractors and others about the need for absolute compliance. But in terms of maintenance turnarounds when plant operations can be unpredictable and demands need to be met, meeting those timelines and resourcing the bureaucracies so they can meet those timelines and give it the thorough review that's deserved is needed.

    Thank you very much. That's helpful.

    To both you and Mr. Egan, with respect to the shortage of labour and getting skilled labour, one of the things that Minister Kenney has talked about going forward is the idea, as part of the negotiation of the major transfers, of making sure in regard to post-secondary that we get more reporting back to the federal government on exactly how those dollars are being spent and whether we are being successful and that for the students, whether it be community colleges or universities, we want some—my colleague will probably laugh at me—metrics with respect to just exactly how successful we are in spending this $12 billion a year.

     Do you support us being a little bit more aggressive with the provinces on that?

    Indeed, we support that the performance measurement and accountability are crucial measures that need to be undertaken both with respect to the jobs grants and as well the LMDAs. And in fact our submission highlights that the LMDAs do not contain the kinds of reporting and accountability provisions that the LMAs themselves require. The LMA evaluation provides a useful reference for identifying those kinds of KPIs and benchmarks, including the kinds of credentials that are received as a result of funding, changes for example in average weekly earnings, types of positions filled by sector, number of hours worked, and employment and training success rates. That's all broken down at regional, provincial, and national levels, and that kind of data and tracking is extremely important.

     Just to add, I'd say that in principle we do agree that the labour issues are not the same in the downstream side of the oil and gas sector as they are in the upstream side.

    We are not a significant employer in our own right. The economic benefit we deliver on employment is through delivering affordable energy to others who can then hire. So we're watching at a distance, if you will.

    But we're supportive of enhanced data collection, certainly.

    Okay, thank you.

    Mr. Egan, I'd like to go to you and ask you a couple of questions.

    Number one, you brought up the accelerated capital cost allowances for LNG facilities. I did note in your brief that you were talking about the disadvantaged position you're in, in Canada, with respect to the number of projects that have been proposed but at the same time will not be built because of the disadvantage to the U.S., for example. So you've proposed a little higher accelerated capital cost allowance. That has also been proposed by manufacturers and others as part of these committee hearings.

    Do you have a specific approach to that? How would you compare your accelerated capital cost so that we're comparing apples to apples with the U.S.?

    Again our focus is on smaller LNG facilities, those that would be operated by utilities similar to the peak shaving plants that are in operation today. I can leave it to my colleague from CAPP to talk about their facilities.

    Our proposal is to change the rate to make it consistent with that for other manufactured goods sectors, the argument being that in effect LNG is a manufactured good. We're looking for consistency across the board with other Canadian sectors.

    Ms. Annesley, do you have a comment on that?

    We would apply that same logic, that it's a manufacturing facility. Again, if that kind of treatment as a manufacturing facility extends to smaller LNG facilities, that neutrality of the tax system in treating horizontal activities fairly should be applied.

    Mr. Egan, in your response to Mr. Keddy you talked about getting this gas into rural areas and the way the partnerships can develop on some of this. I certainly understand some of the areas where the federal government is responsible for some of the heating, like heavy bunker oil that's being burned in the north. It makes a lot of sense to replace it with some other type of structure where the federal government's responsible.

    However, when you talk about build-out—one of your proposals talks about $250 million of reallocation of the infrastructure fund—how does a government justify doing a build-out for a commercial or a residential build-out, if you will, as opposed to the ones that are federal government responsibility?

    Just a brief response please.

    You're obviously having to balance a variety of public policy objectives when you're looking at the allocation of infrastructure money. One of those objectives is the return to the taxpayer. In the case of communities where it is currently not economic under the economic formula that a regulator sets for utilities to extend natural gas infrastructure to those communities, that's where the federal government can see merit in stepping in. It may be meeting cost reduction public policy objectives—you have consumers in that region. It may be meeting environmental or industrial development objectives, or if there are particular mining sector activities you'd like to see go forward that would turn on the availability of affordable energy.

    It's a question of which combination of public policy objectives you bring to the table when you're looking at the allocation of infrastructure moneys that you have set aside.

    Thank you.

    Thank you, Mr. Allen.

    We'll move to five-minute rounds, colleagues.

    Mr. Rankin.

    Thank you.

    My first question's for Ms. Annesley of the Canadian Association of Petroleum Producers.

    In your brief you spent some time on the need for reform of the aboriginal consultation process and talked about the confusion and frustration, which I share. You ask that the federal government implement Doug Eyford's report. I know him well and I think he has done an excellent report. He was extremely critical of the federal government's rolling out of their crown responsibilities. He said it was inadequate and made a number of recommendations. Minister Oliver said, we're going to engage and follow up. I haven't seen a lot of action.

    What is your take on where things are going now, post-Eyford?

    We are disappointed with the uptake of the Eyford report. We believe that the aboriginal consultation issues and the need to resolve and reconcile in certain situations the interests of aboriginal Canadians with non-aboriginal Canadians and with industry such as ours is one of the pieces that is introducing a lot of risk into our business, a lot of risk into the regulatory sphere.

    If we have an opportunity to use resource projects that are planned, to work and try to bring some of these reconciliation opportunities to light and into reality, we think that should happen.

     It's a disappointment that we all share.

    The second thing I wanted to raise with you and Mr. Egan deals with Mr. Allen's comments on rapid writeoff, the rapid ACCA changes. You're suggesting from an 8% rapid writeoff declining balance to a 40%. You indicate that the preliminary estimate says that the net benefit of that change would be approximately $3 billion in GDP from 2015 to 2035.

    Just to be clear, this is a tax expenditure. It's moneys that otherwise would have been paid by your industry to government, which now wouldn't be received. When you talk about $3 billion, is that essentially a $3-billion subsidy that you're asking Canadian taxpayers to provide?

    Well, the money would be received. It is just a deferral of tax revenues.

    But it's tax that your industry would have otherwise paid and you're saying we should now change, so as to allow you $3 billion less in tax payments.

    I'd have to look at the specific MPD. I can't comment on the $3 billion, but again, it's a tax treatment in our view that if the government and Canadians wish to realize the tremendous jobs, the resource revenue—

    You're asking us to pay a price for that benefit.

    —that greatly exceeds $3 billion, then certain treatments are required.

    I have such a limited amount of time, do you have a quick comment, Mr. Egan?

    I wanted to respond to that because our numbers are different, but the formula would apply. We were looking at the differential for the investment for small LNG facilities. The tax loss is in the order....You're right, you are forgoing charging a tax to a potential taxpayer.

    So the rest of us have to dig deeper to support you.

    But that's an investment that won't otherwise occur.

    I understand.

    It's the reason you do it.

    So a $42-million tax, in our estimate, for our projects would generate a billion dollars in revenue—

    You have about two minutes.

    —which would generate HST revenue amongst other sources of revenue which would more than offset, which is where we come, I'm assuming, in the numbers on the upstream side as well.

    Mr. Pineault, I wanted to thank you for an expression I have not heard before that I'm going to now use, “the government's environment denial”. I love that. I'm going to plagiarize it from now on.

    The point you talked about was economic. Your third recommendation that you didn't have a chance to elaborate on talked about economic transition to a world without carbon. Mr. Carney, the Governor of the Bank of England, just a couple of weeks ago at the World Bank meeting, said that the vast majority of oil and gas reserves are unburnable because if we're going to commit to a global temperature rise of less than two degrees, that's inevitable.

    You were getting at something to the same effect, with the carbon bubble analysis, that he and so many others have used. Have I got that right?

    Getting back to the gold mine picture, the problem is not the gold in the soil, the problem is we're running out of atmosphere to throw it into. Maybe in Canada we're denying this and that's fine, and it's okay, but elsewhere in the world, that's a fact. It's taken as a scientific and basic fact.

    Most economies are trying to find ways to move out of carbon-based energy without thinking that they can live in a world without oil. I mean, everybody is realistic. We're going to need oil and gas, but maybe a lot less.

    Then things like transport infrastructure projects are occasions where we could diversity our economy and where we could start to move away from this carbon dependency. I'll give you one small example coming from southern Ontario.

    There's a small business that my dad owns, it does hydraulics and robotics. The hydraulic side is putting snowplows on machines to clear the 401. He does this in Canada. He also does robotics for Bombardier for the brake system for high-speed rail and monorails. He fixes these and builds them all over the world except in Canada because Bombardier doesn't sell electrically based high-speed rail or monorails in Canada because Canada is not interested in this technology.

    We'll go to Mr. Van Kesteren, for five minutes.

    Thanks, Chair. I wish we could have a longer conversation, I really do.

    Chair, you and I, and a number of us spoke about maybe getting a few economists together to talk about these things. We need a longer session.

    I want to go to the gas people first. Mr. Egan, I want you to talk to me.

    You don't have a specific ask, do you? If you did, what would you like to see in this budget?

    I guess the question is, are they budget asks or not? Certainly, on ACCA, we have a specific ask. It's very specific.

    In terms of the reallocation of infrastructure money, that's not a new money ask, that's a reallocation ask. We do have a specific ask around transportation that I haven't spoken about today in terms of potential federal support to offset the differential in cost of natural gas for heavy-duty vehicles.

    So they're specific, but in some instances they involve the reallocation of existing federal money.

     I'm listening to this, and as I said, it's a wholly different discussion whether or not we should be moving away....

     If we took energy out of the equation, we'd be in the Stone Age. Quite frankly, we wouldn't even be in the 1700s, because back then they used other forms of energy. The world needs energy, and the world is going to buy the cheapest form of energy.

    Am I right? Can we really expect the world to get off oil in the near future, let alone gas?

    I work for the gas industry. We're interested in selling natural gas. We're interested in maintaining a relationship with our customers that includes using that gas as efficiently and effectively as possible. That means we're looking at all kinds of new technology applications for reduced use on a per capita basis, for renewable natural gas, for partnering with renewable technologies, and other things.

    But fundamentally our economy derives extraordinary value from the oil and gas sector. I'll focus on gas.

    To speak to the point about whether an ACCA rate is a subsidy, I wouldn't characterize it as a subsidy. I would characterize it as tax forgone in the interest of making sure that investment occurs here instead of in another country, to address your point, because capital moves from—

    Can I interject? We do the same thing with green energy, obviously: if you try to direct movement towards green energy, we subsidize.

    I guess what I'm trying to get around is the question whether we are going to be competitive. Will our economy grow if we substitute for a more expensive form of energy?

    Am I missing something?

    I've been to China, and I've watched them. I don't know whether they are still doing it, but they built a new coal plant every two weeks. The place is dark. We know that in Japan they have shut off the nuclear.

    If we boil it right down, there's nuclear, there's hydro, there's thermoelectric, and there's wind. And yet we know that wind is inconsistent, so unless we develop new batteries or something, gas and oil is still our major source of energy. Am I right?

    Janet, maybe you want to make a comment on that.

    Indeed.

    If you look at sources such as the International Energy Agency or other third party sources that look at global energy demand, it is growing dramatically, thanks to changes in the economies in India and China and some of the other populated nations. As those economies become more active and people move more into the middle class, most of the demand over the shorter term is going to continue to be met by oil and natural gas. There are huge opportunities for natural gas in particular. Oil grows as well.

    At the same time, it is an “all of the above” approach. We need renewables to essentially double between now and the year 2025 or 2030. The oil and gas industry knows that.

    It is having the right fuel in the right place at the right time. We have to be very conscious of the cost both to taxpayers in terms of subsidies as well as to industries, if you end up increasing their input costs for such things as electricity or other forms of power.

    You have 30 seconds.

    A small community that is hooked on to something such as heating oil could be much more competitive and could grow if it had access to natural gas.

    Yes. It puts money in the hands of the residential consumers, it frees up capital for commercial operations to increase employment, and it attracts investment when industry is looking at where to place its next plant. We're going to place our next plant where input costs are lower. One of the biggest input costs is energy.

    Thank you.

    Thank you, Mr. Van Kesteren.

    Ms. Liu, you have the floor for five minutes.

    Thanks to the committee for allowing me to sit today. As you know, I'm not a normal member of this committee.

    I'd like to direct my comments to the Canadian Intern Association, and particularly to Ms. Seaborn.

    Thank you for your outspoken advocacy in favour of unpaid interns. It's a voice that's sorely needed. We estimate that today there are up to 300,000 unpaid interns across Canada, which is a very large number.

    I'd like to concentrate on your recommendation concerning extending employment standards, such as occupational health and safety standards in the Canada Labour Code, to interns and students.

    As you're aware, I tabled Bill C-620, the intern protection act, earlier this year to this effect. Private member's Bill C-620 was largely inspired by the case of Andy Ferguson, whom you mentioned, an intern who was completing his practicum at a radio station and was asked to work unreasonable hours and fell asleep at the wheel.

    Could you elaborate on this case and tell us more precisely how his status as a student and as an intern impacted his rights in the workplace?

     Absolutely.

    Andy Ferguson died in November of 2011. As you said, he fell asleep at the wheel. He was working two positions at the same time. He was working, paid, for a radio station for some hours, and then for other hours he was working, unpaid, as part of a school program. The combination of both of these hours was well beyond any minimum requirements. But because one came from federal jurisdiction, and the other job, the school-regulated internship, was provincial jurisdiction, there was no regulation in terms of health and safety and the hours of work that he performed. He was extremely tired—he had had a long shift—fell asleep, and, unfortunately, got into an accident.

    The Alberta government has responded. They've done a comprehensive review of student internships as well as unpaid internships in general. Hopefully we'll see some results come from that.

    Aaron Murray is very similar story in Ontario. He was doing an unpaid internship as part of a school program. He worked an overnight shift and was killed the next day.

    The other two interns I mentioned quickly were Wayne Affleck, who was an apprentice electrician killed during a co-op, or an apprenticeship position, and Adam Keunen who was actually only in grade 12 when he was killed at a recycling facility during a co-op.

    These cases illustrate the grey area these interns fall under. As you mentioned, provinces are taking leadership roles in terms of extending workplace health and safety standards to these interns.

    Another case that's been in the media recently is that of Jainna Patel, who was an unpaid intern for Bell. Could you talk about her case, and could you talk about her asking to be remunerated, or paid for her work?

    Next week will be the beginning of Jainna's hearing before our Canada labour program adjudicator, who will determine whether Jainna was an employee and entitled to wages or whether, under the Canada Labour Code, she doesn't have to be paid. Hopefully we'll receive some clarity on that.

     Clearly, our position is that she was an employee and was entitled to all the same protections and wages as other employees were. That's really what the case is with Jainna. We're waiting for that decision, which should come out in the spring or summer.

    If Bill C-620 had been in place before these events, before Andy Ferguson's internship as well as before Jainna Patel's internship, would these interns have been protected under what would be contained in Bill C-620?

    You have one minute.

    If the Canada Labour Code were amended to provide some clarity and explain that interns are employees unless some sort of exemption applies, for example they're in a student program, then that would really provide a lot of clarity. In that case, Jainna probably wouldn't be considered an unpaid intern. She'd be an employee and entitled to wages.

    Andy Ferguson would have had more recourse, and there would have been more regulations to cover his hours of work. I can't say whether it would have prevented his death. But, absolutely, those regulations are important.

    Finally, the government recently announced that it would augment its blacklist of Canadian employers and potentially put businesses found to have violated provincial labour laws on a federal blacklist. Would that affect the issue of interns?

    If the Conservative government were adding to its blacklist of employers, absolutely, they should include those breaking provincial workplace laws with unpaid interns.

    Thank you very much.

    We'll go now to Mr. Adler, please, for five minutes.

    Thank you, Mr. Chair.

    I want to thank you all for being here today. It's really a very interesting discussion.

    I want to focus my questions, however, on Mr. Gill. How important is it for our government to balance the budget?

    It's of critical importance to our members. Our members overwhelmingly agree that deficits harm our economic attractiveness and global competitiveness.

     We applaud the government for the work it's done to reduce the federal deficit. After several years of admirable and disciplined restraint, the government is on track to balancing its budget.

     We just would ask that you stay the course, and ensure that when you do return to a surplus, you redirect revenues towards projects that encourage economic growth in urban centres.

    I was really interested in the comment you made—it's in your brief and also in your presentation—that business must lead to create jobs and growth. It's not government that creates jobs and growth. We can introduce policies that will be conducive and help businesses to create jobs and prosperity, but we, ourselves, don't create jobs.

    Let me just give you few rapid-fire questions, and then perhaps you could respond to them for me.

    You represent 12,000 members and 250,000 business professionals. So you're a pretty substantial organization. You're no fly-by-night group, are you?

     We were founded in 1845.

    That's right, so you have a long history. You speak for the majority of the business sector in the greater Toronto area, so you have a pretty good read on what business people are thinking and saying and what would help them with their businesses.

    Things like tax relief, putting a freeze on EI premiums, reducing EI premiums, lowering the corporate tax to 15% federally at any rate—how important are all of those initiatives to your members?

    They're important. Tax competitiveness is quite good as it stands. First and foremost, our members are telling us that governments of all levels should be investing in transportation infrastructure first, to drive productivity. Then a second tool of driving productivity is further supporting trade, reducing trade barriers, and helping businesses throughout the country expand their customer base abroad.

    So the 43 free trade agreements we have introduced since 2006 have been helpful to your members, have they not?

    Absolutely. The board is delighted by the new CETA, which will tear down barriers and encourage regulatory coordination. On regulatory coordination, we encourage you to help bring those barriers down interprovincially as well.

    I was going to get to that, actually, because, as you know, we're revisiting now the Agreement on Internal Trade, which we last negotiated in 1994. We're aggressively trying to break down those barriers so Canada will be not only one country but one single market also. Right now there are a lot of barriers between provinces, and sometimes it's more difficult to do business from one province to another than it is from Canada to another country, so I'm glad you agree on that.

    You have about one minute.

    Thank you.

    Making the gas tax permanent and tying it to the cost of living to cope with that was another good policy we had, was it not?

    Yes, it was a recommendation that the board and our other national chamber colleagues put forward. We're very pleased with that, and now that substantial money has been put on the table.

    Municipalities have very limited tools to raise revenue, so we have to look towards the other levels of government to be strategic with their investments, and as you're making investments in transportation—

    We've certainly done that—

     Yes, certainly.

    —with the Building Canada fund helping to refinance infrastructure and rebuilding infrastructure, and by making the gas tax permanent and tying it to the cost of living. We've been pretty aggressive and pretty favourable in terms of helping municipalities out on that front, have we not?

    Absolutely, the government has made some historical levels of infrastructure investments. We're very delighted that the fund has been renewed for another decade. As those decisions are made on new investments, look towards transportation infrastructure.

    Thank you.

    Thank you very much, Mr. Adler.

    I'm going to take the last round we have here today.

     I think in my limited time I'll direct my questions to Ms. Annesley and Mr. Egan.

    On the labour issue, coming from my riding I agree 100% with what you said, that it is certainly the number one economic challenge facing my province and my region. I do, though, want to focus on the capital cost allowance issue. As both of you probably know, the accelerated CCA was put in place for the manufacturing sector through the March 2007 budget largely, I think, as a result of the industry committee report, which came out in February of that year. The 2007 budget put it in place for manufacturing and processing, and actually started the phase-out of it for oil sands facilities, which I think concluded in 2012.

    It's important to note, though, because some people do consider it a subsidy, that it is the rate at which you can write off an asset over time. We call it accelerated CCA for the manufacturing sector because it's considered differently from the way Finance would normally consider it or the way Finance or CRA would value an asset.

    As the two of you are arguing here, in terms of a competitiveness basis, we're not on a cost-competitive basis with countries like the United States and Australia. I think that point needs to be made over and over again, because what you're looking for is some kind of fairness or equity with respect to countries that obviously we're directly competing with.

    In the CAPP presentation, to start, you talked about class 47 and class 43. I have just one specific question on that. You say it takes 27 years to substantially depreciate a class 47 asset—that's the current situation for Canada where you are, Ms. Annesley—whereas in the U.S. or Australia it takes 13 years. You want to move it into a class that would take seven years. Am I understanding that correctly? If so, the obvious question is whether you would be satisfied with the move to the 13-year depreciation?

    In our view, I think we have to look at the entire economic rent that's being paid by the industry, in terms of the royalties and upstream and the treatment at the provincial level, some of which we just saw in the announcement last week.

    In terms of finance, we need to compare apples to apples along that entire value chain to actually understand our competitive position vis-à-vis the United States and Australia. We would look to cooperate as needed with the Department of Finance to provide whatever access to information that would assist with that kind of calculation.

    Thank you.

    Mr. Egan, you might want to address your specific recommendation. Also, in general, essentially what you're looking for is almost a broad scale in Canada. Here are the CCA rates that apply to whatever you're doing, whether it's manufacturing, LNG facilities, whatever it may be, and here's U.S. and Australia, countries with which we directly compete for these types of global investments.

     That is exactly what you're looking for, is it not?

    That's exactly right.

     In the first instance, it's fairness, as my colleague indicated, with other fuel manufacturing sectors within the country. But ultimately, then, it's a competitive issue. I mean, what is happening on the back of affordable natural gas in the United States? Industry, to a significant degree, is creating a kind of an industrial renaissance. Why aren't we capitalizing on a similar situation in Canada where we also have an affordable product? I think it's because of a variety of policies or legislative provisions that are not the same. We need to make them the same in order to ensure we have that level competitive playing field that you're referencing.

    Okay. I appreciate that very much.

     I'm going to have to cut it there, unfortunately.

    Colleagues, we do have a motion to deal with as well, so our second panel will be shorted because of votes.

    On behalf of the entire committee, I want to thank all of you for coming in this afternoon for an excellent policy discussion. If you have anything further, please submit it to the clerk and we'll ensure that members get it.

    We'll switch over to the second panel.

    Colleagues, could I ask you to stay in your seats for one minute? You do have a motion in front of you, dealing with the pre-budget report. We are hoping to have this adopted.

    There is only one change.

    It is “2014” in the French version.

    It's “2014”; it's not supposed to be “2041”.

     Merci, monsieur Caron, for your good eyes.

     That would be a very long pre-budget consultation. I think we want to conclude it before then.

    Do I have a mover for this motion?

     Mr. Keddy.

    (Motion agreed to)

    The Chair: Thank you.

    Colleagues, we will suspend for two to five minutes and we will come back for the second panel.

     If I can ask colleagues, and our guests, to find their seats, please.

    We're back to meeting 53 of the Standing Committee on Finance dealing with pre-budget consultations.

     Colleagues, we have votes at 6 p.m., so those are going to cause a shortening of this meeting. I'll ask at the time for unanimous consent to sit until about 5:50 p.m. if that's okay.

    We want to thank our witnesses for coming. We have here in our second panel, first of all, Canada's Building Trades Unions. We have the senior advisor, Mr. Christopher Smillie. Welcome back.

    We also have Frédéric Julien from the Canadian Arts Coalition. Welcome.

    From Futurpreneur Canada, we have the CEO, Ms. Julia Deans, welcome. From Monster Canada, we have the manager, Mr. Scott Byrne, welcome.

    From Solidarité rurale du Québec, we have Christian Thivierge. Welcome.

    You will each have five minutes for your opening statement and then we will go to members' questions. We'll start with Mr. Smillie, please.