Proceedings of the Standing Senate Committee on
National Finance
Issue 30 - Evidence - November 29, 2012
OTTAWA, Thursday, November 29, 2012
The Standing Senate Committee on National Finance met this day at 2:30 p.m. to study the subject-matter of all of Bill C-45, A second Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures, introduced in the House of Commons on October 18, 2012.
Senator Joseph A. Day (Chair) in the chair.
[Translation]
The Chair: Honourable Senators, this afternoon we are continuing our study on the subject-matter of Bill C-45, A second Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures.
[English]
In our first hour this afternoon, we will look at two divisions of the bill and their impact on those intended to be served by the legislation. Division 15 of Part 4 in the English version is at page 272 of the bill and proposes amendments to the Employment Insurance Act. Division 22 of Part 4 is at page 336 of the English version of the bill and proposes the temporary suspension of the Canada Employment Insurance Financing Board Act and the dissolution of the board that was created a few years ago under that legislation. The board is known as the Canada Employment Insurance Financing Board.
To speak to the amendments proposed in Division 15, we welcome Ms. Corinne Pohlmann, Vice President of National Affairs at the Canadian Federation of Independent Business. To speak to the amendments proposed in Division 22, we welcome Ms. Angella MacEwen, Senior Economist in the Social and Economic Policy Department of the Canadian Labour Congress.
I understand that each of you has opening remarks. We have set aside one hour for your remarks to be followed by discussion. If either of you wishes to talk about the other division, please feel free to do so.
Ms. MacEwen, please proceed.
Angella MacEwen, Senior Economist, Social and Economic Policy Department, Canadian Labour Congress: I am here on behalf of the 3.3 million members of the Canadian Labour Congress. We want to thank you for the opportunity to present our views. The CLC brings together workers from virtually all sectors of the Canadian economy, in all occupations and in all parts of Canada.
Bill C-45, Part 22, proposes to temporarily suspend the Canada Employment Insurance Financing Board. We believe the suspension of the CEIFB makes sense, as it was constrained in setting rates by subsection 66(7) of the Employment Insurance Act, which limits rate increases or decreases to 0.5 per cent of insurable earnings. In fact, the CLC never agreed with the CEIFB as it was established because it failed to include input from the premium payers, who are the employees and employers.
In past submissions to the government, the CLC has called for a separate Employment Insurance account governed by an EI commission, or similar body, established at arm's length from the federal government. We argued that the EI account and any surplus funds placed in a reserve fund or premium stabilization fund should be used for EI purposes only.
The fact that the EI program is paid for by employer and worker premiums has not been reflected adequately in the governance of EI finances. If we consider the $57 billion taken from the account without the consent of premium payers, the account would actually be in a surplus position right now. The government would be less concerned about cutting back EI programming, and EI would be performing one of its key roles as an automatic economic stabilizer more effectively.
When the CEIFB is reinstated, the premium payers — employees and employers — should have closer input into the premium-setting process and effective joint control with the government over the management of any reserve funds and the use of any surplus. As well, the EI financing system in place is not operating in an appropriately counter- cyclical way.
Even though the federal government directly covered the cost of the EI measures in Canada's Economic Action Plan, which included the cost of the premium freeze during the recession, training benefits, work sharing and the temporary five-week extension of regular benefits, the Employment Insurance Operating Account went into deficit. That was because of the large increase in the cost of regular EI beneficiaries caused by the increase in the national unemployment rate from about 6 per cent before the recession to a high of 8.6 per cent in 2009 and the continuing high unemployment since the worst of the recession.
Premiums were frozen during the worst of the recession rather than reduced, which would have been a counter- cyclical response to reduce premiums during the recession, and now they are rising during a very weak recovery. While premium revenue is forecast to exceed EI expenditures for 2012, there was still a deficit of $9.2 billion in the EI Operating Account at the end of 2011.
The stage is set for continuing premium increases over several years to eliminate the accumulated deficit. Again, this is the case notwithstanding the huge EI surplus that had been accumulated before the recession. We believe the federal government should pay into the segregated EI Operating Account an amount equal to the deficits in the account incurred from 2009 until such time as the account is segregated and should cover any future deficits incurred in the account until such time as the national unemployment rate falls below 6.5 per cent.
The Chair: It is clear what your position is.
Ms. Pohlmann, we will hear from you now.
Corinne Pohlmann, Vice President of National Affairs, Canadian Federation of Independent Business: Thank you for the opportunity to be here today. CFIB is a not-for-profit, non-partisan organization that represents more than 109,000 small- and medium-sized business owners across Canada. They collectively employ about 1.25 million Canadians and represent about $75 billion in GDP. Our members represent all sectors of the economy and are found in every region of the country.
You should have a slide deck in front of you that I will walk you through over the next few minutes.
CFIB's most recent Business Barometer Index on slide 2 shows that following a slight rise in September, small business confidence posted a considerable gain in October. The CFIB's Business Barometer Index climbed to 65.6 for the month, about six points above the level in August. The gain is the biggest one-month improvement seen in two years and puts the index at its highest point since April.
These positive readings suggest that the economy is shaking off some of the sluggishness observed since the spring. Hiring plans also continue to be better than average for this time of the year. As you can see on slide 3, 19 per cent of business owners plan to hire full-time staff in the next three or four months compared to 12 per cent that plan to cut back. That is almost the same as it was for the last two months and is more positive than that seen in the fall of 2011 and 2010.
Having said that and with these signs that things may be improving, the economy remains fragile and uncertain as we wait to see the impacts of the U.S. fiscal cliff and the ongoing European debt issues. It is at times like these that smaller firms play a critical role in helping to stabilize the domestic economy. In fact, small- and medium-sized enterprises in Canada employ 64 per cent of all Canadians working in the private sector and produce about half of Canada's GDP. Measures that address barriers to small business growth are very important as that, more than anything, will help Canada's overall economy and job creation.
What are some of the barriers to that growth? As you can see on slide 4, payroll taxes have by far the greatest impact on growth when it comes to taxation. Why? It is a tax on jobs and must be paid regardless of any profit. That is why EI remains a key issue for us and why we continue to push for the extension and expansion of the Hiring Credit for Small Business as long as EI rates continue to go up as they did in 2012 and are set to do again in 2013.
Recently, we asked our members specifically about the EI hiring credit and found that almost two thirds said it was somewhat or very effective in helping to maintain or strengthen business performance, as you can see on slide 5. It does this by offsetting at least some of the EI premium increases when businesses grow their payroll. This is especially important for smaller firms that tend to be more sensitive to these kinds of cost increases.
To provide even further proof of the benefits of the EI hiring credit, in 2011 we did a survey asking our members how they got through the recession. In that report, we were able to identify a subset of our membership that grew and expanded their businesses during those previous three years, either by growing the number of employees and/or expanding into new markets. They were what we defined as ``growth-oriented enterprises,'' GOEs. When we asked what measures would help small business owners maintain or strengthen their businesses during more difficult economic times, freezing EI premiums was the most important for both the general small-and medium-sized business population and for growth-oriented enterprises. Also important, especially for those growth-oriented enterprises, was a payroll tax credit for hiring new employees, as you can see on slide 6.
While small businesses would prefer to see EI premium rates frozen, the EI hiring credit does provide necessary and welcome relief to the smallest firms. We also believe that it should be extended for as long as EI rates continue to go up and be expanded to include larger firms and firms that are growing.
However, there is another EI change in this budget that does concern us. It is a suspension of the Canada Employment Insurance Financing Act and the dissolution of the board. We understand and support the need to cut costs and it makes sense to suspend the board's operations while it really has essentially nothing to do. However, our interest has always been that there be an EI account independent of general government revenues so that surpluses that accumulated in the past to the tune of $57 billion could never again be spent on other government priorities. While we understand the practicality of suspending the board's operations, we insist that EI continue to be treated separately from general revenues.
Thank you for your attention. I would be happy to answer any questions.
The Chair: You understand the suspension of the board, but you would like to see it back as soon as possible?
Ms. Pohlmann: It does not have to be the board. The principle of having an account that is separate from general government revenues is the principle that we want to maintain, whether there is a board or some other way to do that. That is what we would support.
The Chair: I understand.
Senator Nancy Ruth: Could you tell me again your point that you wanted unemployment to be at the rate of 6.5 per cent before what happened?
Ms. MacEwen: We wanted the federal government to cover any deficits that might be in the EI account until unemployment is at 6.5 per cent.
Senator Nancy Ruth: My BlackBerry tells me it was December 2008 when unemployment was at 6.6 per cent.
Ms. MacEwen: Right.
Senator Nancy Ruth: That was the last time we were anywhere close to that number. Given that that was four years ago, have you any comments about how we should proceed into 2013, something that does not take us back to a number that is not a reality? That was 34,000 people at the time — 6.5 per cent — according to my schedule.
Ms. MacEwen: What we want to happen right now is for premium rates to be frozen. If we froze premium rates right now, we would be drawing in more. We would be in a surplus position, so there would not be any deficit. We are saying that if we go into a deficit situation, we would want the government to cover that.
[Translation]
Senator Bellemare: I would simply like to understand and follow what Senator Nancy Ruth has said. First, both of you agree that the employment insurance account should be kept at arm's length from the government. The union and management have an agreement on that.
Now, Ms. MacEwen, you said that the employment insurance account had a deficit of $9.2 billion in 2011. Have I misunderstood?
[English]
Ms. MacEwen: At the end of 2011, it was $9.2 billion.
[Translation]
Senator Bellemare: And you are also saying that, if the premiums were frozen right now, the account would have a surplus for 2012-13? Is that correct?
[English]
Ms. MacEwen: On an annual basis, we are bringing in more premiums than we are spending in benefits. We had a two-part request that the government repay some of that $57 billion and eliminate that deficit, and if we froze rates from that point on, we would be in a surplus position. On a year-to-year basis, we are in a surplus.
[Translation]
Senator Bellemare: That is all very interesting. Now I have a specific question for Ms. Pohlmann. At the Canadian Federation of Independent Business, is the average salary higher or lower than or the same as the average salary in general? I think it is lower, but I just wanted to see if I am right in saying that, on average, your members have employees whose salaries are lower than the overall average.
[English]
Ms. Pohlmann: To properly answer that question would be difficult because we have 109,000 members. In the sectors that they represent, they would likely have a lower salary on average than that entire sector because we have members who are manufacturing plants, law offices and professionals. They might have fairly high salaries, but within that sector they might be, on average, somewhat lower than the overall.
[Translation]
Senator Bellemare: Looking at your statistics, I assume that payroll taxes are a heavier burden for your members than for business at large, for example. If so, the reason is that the salaries of employees working for your members are, generally speaking, lower than those of large companies. You have a higher concentration, and, since employment insurance premiums have an insurable maximum, the proportion of premiums represents a higher percentage of the payroll for smaller companies.
[English]
Ms. Pohlmann: I think that would partly explain it, yes. Also, smaller companies tend to operate at smaller profit margins, and they do not tend to have as much extra cash lying around as a larger company does. Any increase or hit is a major impact in terms of how they operate their business. Any kind of cost increase hits them harder because they tend to be on much thinner margin.
[Translation]
Senator Bellemare: If you were to allocate the costs of employment-insurance to a fund kept at arm's length from the government and managed by you, what would you do if the unemployment went up? How would you organize yourselves? Employment insurance is in part an automatic stabilizer. So, how would you achieve this automatic stabilization? Would you come to an agreement among yourselves?
[English]
Ms. Pohlmann: There are a couple of things. Of course, there was a surplus that had accumulated in the fund, as Ms. MacEwen talked about. Ostensibly, that surplus was there to help to deal with those changes in the economic cycle. Building a surplus — not as big as the one that was in there — would be appropriate to help balance those shocks in the system when they come.
Another thing the government did was to set rates over a much longer period of time so there is more stability in those rates going forward. That is an important element to ensure. From a business owner's perspective, it is the stability in the rates that is important. The shocks of going up and down from year to year — going down does not matter as much — can make a difference in terms of planning. The stability in rates is the other piece. Being able to set rates over a much longer period of time is also an important way to stabilize it, from our perspective.
Ms. MacEwen: We would agree. Analyses have been done of how big a reserve or stabilization fund you would need. Around $10 billion is what we think would be a good reserve fund to have accumulated in economic boom times so that it is there in case unemployment spikes.
I would agree again with setting rates over a longer period of time so that they smooth that out for employers and employees, because both pay.
[Translation]
Senator Bellemare: If I understand correctly, you would like to manage the account. In your requests, do you include only part I of the employment insurance or also part II that you would like to finance through the account? Have you thought about that?
[English]
Ms. Pohlmann: When you talk about Part I, you are talking about the benefits?
[Translation]
Senator Bellemare: The benefits. Then part II has to do with the funding for all the workforce training managed by the provinces, and it falls under part II of the Employment Insurance Act.
[English]
Ms. Pohlmann: Is the question, ``Would we want to manage all aspects?''
[Translation]
Senator Bellemare: In my view, that would make more sense, because the government cannot be completely removed from revenue distribution. In fact, you would prefer tripartite management to avoid political debate, and that would basically be outside the budget. It would not be in the government's budget, but outside the budget, so it would not be in the total votes, and so on. Thank you.
Ms. MacEwen: We called for tripartite discussion — government, business and labour — to have everyone at the table so that all of those interests are represented.
[English]
Senator Mitchell: I am a visitor to this committee, so I am playing a little catch-up; please be patient with me.
I am interested, Ms. MacEwen, in the point you were making. You said that if you took out the $9.2 billion — and maybe you can clarify for me again what that is — then the payments that employees are making are more than is required to cover the benefit that they are buying. Is the $9.2 billion a part of the $57 billion?
Ms. MacEwen: No. The $9.2 billion is the deficit that has been accumulated from the most recent recession because of the increase in the unemployment rate and payments of regular benefits. That is the current deficit as of the end of 2011.
Senator Mitchell: The previous deficit was what?
Ms. MacEwen: The $57 billion is a surplus accumulated in the fund and stolen.
Senator Mitchell: Taken away. I got you.
I am interested in the question of the stability of rates. Are you saying that there is a policy to stabilize them over a long period of time, or that there is not and you would like to see one?
Ms. MacEwen: There is right now.
Senator Mitchell: Are you happy with that?
Ms. MacEwen: I think the stabilization of rates is a good thing in general, yes.
Senator Mitchell: This question is for Ms. Pohlmann, and it is not exactly on EI, but it is pretty close.
The Chair: I will watch closely.
Senator Mitchell: It has implications; let me put it that way. It is remotely related. It is about the economy.
I notice you have a list of measures that would help maintain or strengthen business. Believe me, I do not believe in higher taxes. You say ``reduce the federal corporate income tax rate and the federal general corporate income tax rate.''
In your estimation, as a small business organization, where is the trade-off between the value of reducing government deficits and debt and the value of lower and lower taxes? Our corporate tax rates are 25 per cent below the U.S. already. It looks like the current deficits being run by government are about commensurate to the amount they have reduced corporate taxes and GST. Where is the trade-off? What would you rather have?
Ms. Pohlmann: When we ask our members about high-priority issues, debt and deficit are climbing higher and higher. They are still lower than the total tax burden overall, but that would include all levels of government. The federal levels are not necessarily seen as dramatic perhaps as some of the provincial levels. Even the municipal levels can be a tough one for our members to absorb because it is profit-insensitive taxes — property taxes, for example. It depends on the type of tax, as well.
When it comes to the corporate rate, it is not the general rate we are talking about more but the small business rate. The difference is that the general rate, as you noted, has been coming down quite dramatically, and we supported that because we felt it was good for the Canadian economy and our ability to compete globally. At the same time, the small business rate has not really changed much; it went from 12 to 11 per cent as we watched the large rate go from 28 to 15. Therefore, we believe there has been an erosion of the small business rate.
There are good reasons why there is a rate for small business versus large business. There is a much higher cost to dealing with regulations. They generally do not have access to the same types of credits and other ways of looking at the tax system. We believe it is important to maintain a bit more of a differential between the small business and large business rates.
Therefore, while we are not necessarily pushing hard at this point because we understand the need to fight the deficit right now and to get our books balanced, we believe that down the road the differential needs to be addressed and expanded.
Senator Mitchell: You are saying that big companies have benefited more by tax relief than small businesses. Probably, on average, big companies' tax savings tend much more to be sent out of the country to foreign owners than small business tax. Is that what you are saying?
Second, who creates more jobs per dollar of tax reduced?
Ms. Pohlmann: The first question I cannot answer because we represent Canadian-owned-and-operated corporations.
Senator Mitchell: They are all owned here; they are not going out of the country.
Ms. Pohlmann: No, they are staying in Canada.
As for the second question, we would argue for sure that small businesses, generally speaking, tend to create the bulk of jobs. To be fair, it does fluctuate. It depends on the economic cycle. There are periods when the big businesses tend to create more jobs than small firms do. However, for consistency, the small firms tend to be the stabilizers of the economy. We like to say they are the ``first to hire and last to fire;'' they will hold on to their people as long as they can.
Senator Mitchell: It is personal.
I have one final question. If a big multinational company that was owned 70 per cent by Americans, for example, saves a dollar in taxes, give or take, 70 cents could go to the American owners; whereas if one of your members saves a dollar in tax, the whole dollar stays in Canada, probably gets invested in making more jobs and hiring more people in Ms. MacEwen's organization. It is far superior for our economy, is that not right? Am I leading you in that question?
Ms. Pohlmann: It is probably true, but at the same time you need to be open to expansion and growth. We want to watch those small firms grow into medium and large firms. That is ultimately the goal of growing an economy.
Senator Finley: How many of your small companies are subcontractors to large companies?
Ms. Pohlmann: It is a good question, but there are some linkages. It depends on the sector. In construction you would see a lot of the subcontracting to large companies. We do not even track that, so I could not tell you, but there is no doubt that there is synergy between small and large companies when it comes to growing the economy.
Senator Finley: Therefore, it would be a kind of unlikely economy that would get rid of all large businesses and just have small ones.
Ms. Pohlmann: We would never advocate for that.
Senator Mitchell: I am not advocating for that, either. I am just asking for fairness in taxation.
[Translation]
Senator Chaput: On page 6 of the French version of your document, you show two graphs. Graph 5 shows a survey from 2013 whereas graph 6 is based on a survey from September 2011. They are two separate surveys but they are similar.
If I go back to graph 5, the 2013 survey, you have 5,138 respondents. What is the difference between the bill before us and the priority identified by the respondents?
[English]
Ms. Pohlmann: The three above the EI hiring credit, which are freezing EI premiums, would be number one. That would be our number one ask, but we also understand it is costly.
Senator Chaput: It is not in the bill?
Ms. Pohlmann: No, it is not in the bill.
The second is reducing the federal small business corporate income tax rate. That is not in the bill, but we are pushing strongly for it.
The third is freezing CPP and QPP premiums, which is not in the bill but we want it. We want to be keep premiums where they are, and they are frozen at the moment.
[Translation]
Senator Chaput: Reintroducing the EI hiring credit.
[English]
Ms. Pohlmann: Yes. Reintroducing the EI hiring credit is definitely one area. The thing about this one is the percentage that did not say it was effective are likely not eligible; that is probably why. Only firms with under $10,000 in EI premiums are eligible for this. That is a large proportion of our members, but I suspect the folks who said it was not effective were primarily those who were not able to benefit from it.
Senator Chaput: What proportion of your members is in the $10,000?
Ms. Pohlmann: It would be a guess, but it is probably around 60 to 70 per cent of our members. It would be a good proportion. We equate the $10,000 in EI premiums to about $400,000 or $415,000 in payroll. Depending how much you pay, that could be eight to twelve employees.
Senator Chaput: Eight to twelve employees?
Ms. Pohlmann: Yes, it could be but it depends on how much you pay. It could be more or far less.
The Chair: The EI credit for small business is being extended for another year, but the base year is moving forward. If you happened to get it last year, that does not mean you will get it this year unless you have an increase of $1,000.
Ms. Pohlmann: No, but if you keep your payroll stable and the only impact is the increase in EI premiums, you will still get it.
The Chair: Yes. That is the question I wanted to get to. Do you believe this incentive is likely to increase employment?
Ms. Pohlmann: We believe that it will encourage people to hold on to their people. It will allow them to feel like this is a cost that they can perhaps absorb because they will get it back. I think it helps them make decisions around whether or not they should bring in that one extra person or increase the salary by so much the following year. We think it makes a difference in the very smallest of firms. We are not obviously talking about those that are a bit larger.
The Chair: Do you think it will result in more people being hired?
Ms. Pohlmann: Yes, I think it would potentially result in more people being employed.
The Chair: Yes. One is maintaining the number of people they have employed, which is an important aspect as well. We recognize that.
Ms. Pohlmann: It is difficult to know what drives people to hire. Our latest barometer shows there is an increased interest, yet our economy remains somewhat uncertain. Our barometer shows an increased appetite to perhaps start hiring again. I think that is a combination of what is going on in the economy and the growing confidence, and also measures that give them some confidence that they do not necessarily have to pay out certain taxes which they may think they have to in the future. There is some certainty that I have another year before I have to worry about this cost.
The Chair: In your table, you indicate that the payroll taxes have the highest disincentive effect of any type of tax that your members have to pay.
Ms. Pohlmann: Correct.
The Chair: Any initiative that would result in paying less would be welcome, presumably, as a result.
Ms. Pohlmann: Absolutely. We concur with Ms. MacEwen that freezing EI would be the most attractive option, but given that that is not on the table, this is something we believe is another way to get at least some relief when it comes to increasing EI.
The Chair: Refresh my memory in terms of EI. There is the limit that you mentioned in a section of the Employment Insurance Act, that 0.05 per cent increase we did through legislation, which took away the role of the board. Is there a built-in escalator now? Is there an increase in the Employment Insurance premiums for corporations and individuals coming into play?
Ms. MacEwen: Yes, until the deficit is eliminated it will continue to increase every year.
Ms. Pohlmann: At that same rate.
Ms. MacEwen: Yes, at that same rate. I think it might be more now.
Ms. Pohlmann: It is 5 cents per $100 in premiums for employees and 7 cents for employers.
The Chair: Thank you for clarifying that for me.
You talk about a surplus and a deficit. It is all in the same fictional account. Why do you not deduct the deficit from the surplus and talk about a $49 billion surplus instead of saying, ``There was a surplus and we want all that money back; someone stole it and we have a deficit, and, government, you should be paying that''?
Ms. MacEwen: I am sure my members would love it if I did that. However, that surplus has been written off officially. There is very little hope of getting it back. We bring it up to point out what can happen when the fund is not managed at arm's length from government. We pointed it out to illustrate how the account is meant to operate in a countercyclical way. In a good time, you accumulate a surplus so it is there to fund a deficit. During a recession, payroll taxes are not rising, making it harder for employers to keep people. That is the last thing you want to do in a recession or during a weak recovery. You need that surplus in order to fund this countercyclical response. That is why we bring it up, but it has been written off and we hold very little hope of getting it back. We feel that some small measure getting the current deficit paid off would go in some small way to making up for that.
The Chair: The $9 billion current deficit has accumulated since when?
Ms. MacEwen: Since the recession in 2008.
The Chair: Since 2008 we accumulated $9 billion. Has that included all the incentive programs that were charged to the account?
Ms. MacEwen: No. Some of those incentive programs were paid from the budget. They were parts of the Canada's Economic Action Plan and were funded through general revenue because they were a stimulus program delivered through EI rather than regular EI programs.
The Chair: I have an imperfect recollection but it seems there was $2 billion or $3 billion to be transferred from the federal government to this account when this board was created to give them a start. You said the stabilization fund should be $10 billion, but it was $2 billion. Was that ever transferred? Did that ever get done?
Ms. Pohlmann: No. It was $2 billion and it was never transferred. In fact, I think it has now been written off because of the change in the stabilization of the rates over a seven-year period. I think they felt that the surplus fund was no longer needed going forward. My understanding is that $2 billion was never transferred and there are no plans for it now to be transferred.
The Chair: We looked at this a number of years ago and these are memories of what was in existence at that time. I want Ms. MacEwen to answer and then I would like Ms. Pohlmann to tell me if she agrees as well, because she is from the industry point of view.
It seems to me what you are saying is that we are prepared to pay — ``we'' being employees — for the program to a certain extent. However, if you get above that and you get into difficult economic times, then it should be to the federal government to look after any deficit in the program. Is that what you are saying?
Ms. MacEwen: No.
The Chair: Okay. Can I take it that the opposite is true and that your ideal situation would be that it would be entirely funded by employers and employees with no government intervention and no government top-up for anything?
Ms. MacEwen: You are saying, for example, some of the stuff that was introduced during the Canada's Economic Action Plan?
The Chair: No.
Ms. MacEwen: That nothing like that would be allowed?
The Chair: I want to talk in general terms and then we can talk about the special things because maybe the government should not be charging an account for some of those special incentives.
In a normal Employment Insurance account you would like to see a separate fund that is funded by employees and employers with no government intervention or participation in it?
Ms. MacEwen: No government funding? No. HRSDC determines the programs, but the program we are looking at is to have it funded by employers and employees and then to have government, employers and employees sit around the table and determine how to allocate those funds.
The Chair: You do not want any government funds?
Ms. MacEwen: No.
The Chair: You do not think that is necessary.
Ms. MacEwen: That is not what EI is. It is an Employment Insurance program; it is not a social program like some others. It is funded by employers and employees. We believe that is what it should be.
The Chair: Ms. Pohlmann, do you share that point of view?
Ms. Pohlmann: Absolutely. Unfortunately, it has not been treated that way. Absolutely it should be 100 per cent funded by employers and employees. Obviously, the government plays a role in ensuring that the rates and so forth are being properly managed so the fund is being properly managed. Ultimately, it is employers and employees who fund the program and should pay the deficits and also benefit from the surpluses.
The Chair: That is clear. That is what I was looking for, and you both agree on that.
The supplementary question to that is this: Do you believe that if it is felt there should be special incentives, such as work training programs and maternity leave programs and programs for caregivers to take care of a spouse or a parent and still receive Employment Insurance — the programs that go on top of unemployment as we would normally understand — and if they are to be part of the Employment Insurance program, it should be agreed upon by the people that are funding it — the employees and the employers?
Ms. Pohlmann: Yes.
The Chair: If the government decides that they want to do it, then they can pay for it if you do not want to pay for it.
Ms. Pohlmann: I would agree.
The Chair: Is that the type of program you would like to see?
Ms. Pohlmann: Certainly, on the employer side we have questioned a lot of the growth of the more non-employment ``traditional employment benefit'' side of EI. Our members still support the inclusion of things like parental leave in EI. However, employers pay 60 per cent of the bill of EI and employees pay 40 per cent. That made sense when most of the benefits were related strictly to things that the employer controlled, such as laying people off. Currently, about one half of EI benefits are going to things over which the employer has no control, which are parental leave, sick leave and compassionate care leave. Therefore, we believe that perhaps there should be a 50-50 split in premiums between employers and employees today because the EI account is no longer just an EI benefit plan; it is more of a social plan as well.
The Chair: Yes. I wanted to get a sense of what each of your associations would think is ideal. We know what many of the problems are.
I will have a number of supplementaries arising out of the questions and answers that we have had.
Senator De Bané: How would you define the Canadian Federation of Independent Business? Is it research like the conference board? Is it a lobby group? Is it the spokesman for small businesses?
Ms. Pohlmann: We define ourselves as an advocacy organization for small- and medium-sized enterprises. We are 100 per cent funded by the membership of 109,000 small businesses.
Senator De Bané: At headquarters, I understand Ms. MacEwen is the principle economist. Do you have people doing research as she does?
Ms. Pohlmann: Yes. We have a chief economist, a VP of research and a research team. All of our policy direction is based on survey research that we do with our members. We do not have conferences or committees. It is all done through survey research. That is how the members, when we recruit them, understand how we set policy.
Senator De Bané: how many times during a year do you poll them?
Ms. Pohlmann: Anywhere between five and ten times, depending on the province. It can be as localized as a city or national in scope.
Senator De Bané: What is the percentage that responds to your market survey?
Ms. Pohlmann: It is generally between 10 per cent and 12 per cent.
Senator De Bané: Do you have occasion to make representations to the Department of Finance?
Ms. Pohlmann: Yes.
Senator De Bané: Good. They essentially do the same thing. They think about what could be done to help small businesses.
Do you see that you are in harmony with the kind of research that they do in Finance?
Ms. Pohlmann: Generally speaking, yes. We provide them with that input from a segment of the business population that can be more difficult to get to. We have been around for over 40 years so we have been able to perfect ways to draw information from the segment of the marketplace that has grown to become an important part of the economy of Canada. We know, for example, that the business barometer I shared in the research that I gave to you today is one of the indicators used by the Bank of Canada as part of its assessment of the Canadian economy. We know that some of our research is incorporated into some of the thinking that takes place in the Government of Canada.
Senator De Bané: Your total membership — those who pay their subscription — are how many?
Ms. Pohlmann: There are 109,000.
Senator De Bané: About 15,000 of them respond to your polling.
Ms. Pohlmann: It is more than that, but per survey it can change. It will be different people every survey. Generally, we get between 8,000 and 12,000 responses to a national survey.
Senator De Bané: Are some topics priorities for your membership? Do you and the people at Finance, who also do a lot of studies, see eye to eye on some topics? What would they be?
Ms. Pohlmann: The EI account would be one of them for sure. Certainly, there are many areas, such as succession; lifetime capital gains, which is an important area for small businesses and we would like to see expanded but they are not necessarily seeing as in need of expansion; and transferring businesses to owners' children can be difficult, but there is a lot of resistance to allowing that to happen without paying capital gains. There are a number of issues. We talk to Finance regularly about the ones that come to our attention from our members. We work through some of them; and some take a lot longer to try to work through.
Senator De Bané: Ms. MacEwen, do you do studies to see to what extent the tax that our small businesses might shoulder compares with the taxation policies in the United States?
Ms. MacEwen: For small business specifically, no.
Senator De Bané: Thank you.
The Chair: You got us talking about section 84 and 85 rollovers under the Income Tax Act for succession purposes.
Senator Finley: I was about to ask a question, but you effectively elicited some of the answers that I was looking for. I would like to go back to that, if I may. You seemed fairly copacetic with the idea of 50 per cent funded by employers and 50 per cent funded by employees. Do I assume as part of this arrangement that the delivery of the services would also be carried by the same fund? Would all of the employment centres, Service Canada payouts and the administrative burden that goes with Employment Insurance be covered by this fund and by this three-person committee that you are talking about?
Ms. Pohlmann: I believe that much of that is already funded by the EI account.
Senator Finley: I realize that. I am talking about under your somewhat nirvanic description of what this should be — a pure employer-employee relationship with all of the collection and everything else that needs to be maintained handled by the fund that you would generate from this. Not only the fund but also the responsibility for all the offices and everything else would be handled by the fund. Is that what I understand?
Ms. Pohlmann: My understanding is that it is currently handled by the fund. The administrative component of the EI revenues is something like $2.3 billion per year.
Senator Finley: That is not what I am asking you. I am asking what it would be under your thing. You would, in effect, suggest that the EI fund, such as it is, become a completely stand-alone, self-generating, self-administering everything with all of the employees and all of the things involved in that paid out of your fund. Is that what I am hearing?
Ms. MacEwen: Much as it is now.
Ms. Pohlmann: Yes.
The Chair: All you have to do is say yes or no.
Senator Finley: That is a very debatable question because there are a lot of issues that come into this, including shared services and other things. I just really wanted to understand that your stance is that the employer and the employee should be entirely responsible for the EI system. That is what I am asking.
Ms. MacEwen: I think I said tripartite, where there is some government responsibility for setting program direction and some government responsibility for administrative services or service sharing and wherever else it makes sense, from an efficiency perspective, in terms of delivering programs.
Senator Finley: Who determines that?
Ms. MacEwen: Its already exists.
Senator Finley: In what format?
Ms. MacEwen: HRSDC.
Senator Finley: I am talking about under this new thing you have, where it is 50-50, stand-alone.
Ms. MacEwen: For the record, I do not support 50-50. The position of the Canadian Labour Congress is that employers do continue to benefit and to —
Senator Finley: You said 50-50 earlier. I understood that Senator Day asked that question.
Ms. MacEwen: I did not; Ms. Pohlmann did. I did not have time to respond to that question.
Senator Finley: You both agreed to it.
Ms. MacEwen: I did not, sir. I did not agree to 50-50.
The Chair: 60-40?
Ms. MacEwen: 60-40.
Senator Finley: We are negotiating already and the thing has not even started yet.
Thank you for the answers, but we will go back to the transcript on this, to the question I had where you said that it would be an equal share between the employer and employee.
The Chair: From the point of view of the Canadian Labour Congress it is good that we have that sort of doubt. You would not want to leave here with a false impression, would you?
Senator Mitchell has a supplementary.
Senator Mitchell: I have three supplementaries, if that is okay.
The Chair: We have three minutes left.
Senator Mitchell: I have a supplementary to this. Notice that I did not interrupt, though I was tempted.
Senator Finley: I was surprised.
Senator Mitchell: He always provokes me.
Would one not have to be careful about the road that Senator Finley is going down because of what should be attributed to the administration of EI? Certainly, hiring programs. They used to be called manpower programs. Thankfully, they are not called that now. There are lots of things that HRSDC does that I am sure some governments would be happy to fold into a free-standing EI program. You are talking about just running the actual Employment Insurance itself and not this other part where they make an effort, as governments should, to get people jobs, to post jobs, to hire and to encourage and all of that stuff. I think that you would want to be careful with that.
Senator Finley: Very careful.
Ms. MacEwen: All we are asking is that the money be held separately. We are not asking for a change in how the program is administered or anything like that. We want the money to be held at arm's length and the rate setting to be determined by the tripartite board. That was our specific goal and request.
Senator Mitchell: Back to the $9.2 billion. There is this hiring credit for small business which subsidizes small business increases in rates. That is probably a very good thing. Is that credit added into the $9.2 billion as part of that expense?
Ms. Pohlmann: Yes, that would be part of the deficit. It cost $200 million the first year.
Senator Mitchell: This was partly answered in your response to Senator De Bané, but I am very interested in your Business Barometer Index. Is that now factored into some of the calculations, projections or thinking of the Bank of Canada?
Ms. Pohlmann: The Bank of Canada has told us they use that as one of their indicators, among many.
Senator Mitchell: Is it seen as a leading indicator? Generally, if it is going up, do you, in a certain number of months, get an increase in —
Ms. Pohlmann: No, we are careful to say that it is not a leading indicator. It is sort of a business confidence index. It has been shown to be fairly close to GDP, but we are careful to say that it is not a leading indicator at this point.
Senator Mitchell: That might or might not lead to greater activity.
Ms. Pohlmann: Correct. It has been shown to be fairly close to GDP, but we are careful not to say that it is a leading indicator at this point.
Senator Mitchell: Sometimes it is down and that does not lead to GDP going down or vice versa.
Ms. Pohlmann: That can happen, but it has tracked fairly closely to GDP. Once the GDP numbers come out, we check it against our index and find that sometimes it tends to follow GDP fairly closely, but we would not call it a lead indicator.
Senator Mitchell: In this case, it might just be that it is coincidental with Mr. Obama getting re-elected and people being hopeful that the U.S. economy will pick up and that our economy will also as a result.
Ms. Pohlmann: It could be that or many other factors. It could be that business is starting to spend some money, and we are benefiting from that. Who knows? If this continues for another two or three months, than we can start to feel more optimistic. It is only the second month that we have seen the index start to go up. We would like to see it happen for a few more months before we are confident that it really means that things are turning around.
[Translation]
Senator Bellemare: I would like to turn to Division 22, the suspension of the financing board, and I would also like to draw the link to the tripartite boards. In Canada, we have previously had tripartite organizations managing workforce programs with the government. And that is the way things work in a number of countries. We generally talk about a commission.
In Division 22, the government is suspending the board that sets the rate, but the Employment Insurance Commission still remains. I am not really familiar with the Employment Insurance Commission, but I know that it has played a rather significant role in the past.
In your view, what chance do labour market partners have to make their voices heard within the EI Commission in the future?
I would like to hear what you have to say about the EI Commission. Do you think that it would be an instrument that would enable you to gain a bit of control over funding and to initiate discussions with the government?
[English]
Ms. MacEwen: No. The CEIFB did not take any input from labour. You mean the EI Commission?
Senator Bellemare: Yes.
Ms. MacEwen: Oh, okay, with the Commissioner for Workers?
Senator Bellemare: Yes.
Ms. MacEwen: We have seen some benefit from that, and we do think that that is a good tripartite reflection. When we had the board of referees and the EI commissioner appointed referees, we thought that was very beneficial so that we had input from labour and a voice through her. We are seeing less of a role now. That role, that tripartite voice from labour and from employers, especially at the local level, seems to be diminishing, partly through the elimination of the board of referees and other factors. We think that that is a good institution and a model for how EI should behave.
Senator Bellemare: Ms. Pohlmann?
Ms. Pohlmann: We have always worked well with the EI Commission. There is also a Commissioner for Employers for EI, and that person has always reached out to employer communities to get feedback and input and has been a good advocate on the inside of HRSDC. We would agree that the board of referees was a system that worked quite well, but it is now being dismantled for this larger social security tribunal. That was part of the role of the EI commissioner. They would go and find these folks to work on the board of referees.
The EI Commission in the past, prior to the Canada Employment Insurance Financing Board, also helped to set the rates with the Chief Actuary. The issue, of course, is that they are within the department. While they are independent, the third member of that tripartite is the deputy minister of HRSDC. I think there was a perception that they were not arm's length enough to be properly managing the fund and seen as separate. However, I think, as a unit, it works well and could be something that could be explored further.
[Translation]
Senator Bellemare: As I understand it, to sum up, you would be in favour of a tripartite employment insurance board that would act more as an advisory board, advising the minister on program operations, financing and rate setting? Could this type of advisory board go as far as employment insurance programs?
[English]
Ms. MacEwen: Yes. The example we point to is CPP and CPP financing, where that money is no longer accessible to governments. We would look for the same type of thing.
The Chair: The record should show that the original intent of the Canada Employment Insurance Financing Board was to have the authority to fix the rates based on some principles of sustainability and balancing. It never really did get working because we got into the recession. Being disbanded now is really just confirming what happened: The government began to fix the increases in the rate as opposed to the board, which was supposed to have the independent authority to do that. That is my recollection.
Ms. MacEwen: Yes.
Ms. Pohlmann: We like to say it was the right idea at the wrong time.
The Chair: I suspect that is why it is just being disbanded now and the whole thing suspended as opposed to being totally done away with in that it gives us the opportunity to reconsider this initiative at another time.
Ms. MacEwen: Yes. When it is reconsidered, we would like for labour and employers to have a voice in that.
The Chair: We would like you to come back at that time, when we get over this recession.
Ms. MacEwen and Ms. Pohlmann, thank you. We appreciate you being here and helping us out.
[Translation]
Honourable Senators, we will continue our study on the subject-matter of Bill C-45, A second Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures.
[English]
Honourable senators will know that five other committees have been diligently working away on Bill C-45 at the same time as we have. As the primary committee charged with this bill, we will be required to do clause-by-clause consideration of the entire bill, including those parts that have been studied by other committees. For that reason, we felt it prudent to try to understand those portions of the bill that we did not study ourselves that were studied by other committees.
We have consulted with our colleagues and asked if representatives of the other committees involved in the subject matter study could, in an informal manner, come before us and tell us generally what was contained in the divisions of Bill C-45 that they studied.
To that end, we are very pleased to welcome the Chair and the Deputy Chair of the Standing Senate Committee on Transport and Communications, Senator Dawson, from Quebec City, and Senator Greene, from Nova Scotia. We will be dealing with the subject matter of the elements contained in all of Part 4, Division 5 at page 206, Division 12 at page 258, and Division 20 at page 331 — all in the English version of the bill.
I would ask Senators Dawson and Greene to give us an overview now and questions may arise out of that. I should point out that we have in front of us your seventh report, which outlines in brief form the work you have done in your committee.
[Translation]
Hon. Dennis Dawson, Chair, Standing Senate Committee on Transport and Communications, as an individual: As you have pointed out, the report that was introduced in the House of Commons this afternoon is very short. We will go over the report in more detail, but as you have also mentioned, the report has not been adopted by the committee; we are here as individuals to express our points of view.
I am first going to share with you the list of witnesses we have heard from; then, we will talk about three separate divisions of the report: division 5, which deals with the Windsor-Detroit bridge; division 12, dealing with the amendments to the Customs Act; and division 20, dealing with the Cape Town Convention.
I will talk about the Windsor bridge. Of course, we have heard from the Minister of Transport, Infrastructure and Communities, as well as Helena Borges, the Assistant Deputy Minister, for the Programs Group, from the same department, and Colin Stacey, Director of National Air Services Policy.
We have also heard from the Canada Border Services Agency. Witnesses included Anita Henderson, Counsel, Legal Services, and Sharon McKeen, Manager, Travallers Unit.
Finally, in terms of organizations, we have heard from the Canadian Trucking Alliance, Air Canada, and witnesses from the Office of the Privacy Commissioner of Canada.
[English]
I will start with Division 5, the Detroit-Windsor bridge, better known as the Ambassador Bridge issue, if I can use that term. Bill C-45 proposes the new bridge to strengthen the Trade Act. These changes are intended to facilitate the construction and operation of the proposed new international bridge linking the cities of Windsor, Ontario and Detroit, Michigan. Construction will probably start in about four years, according to the witnesses.
The issue raised basically was whether the new bridge is a necessity. The Windsor-Detroit corridor is by far Canada's busiest border crossing with the U.S.; it handles almost 30 per cent of all Canada's U.S. service trade and almost one third of Canada-U.S. truck traffic. Presently, 99 per cent of the Windsor-Detroit truck traffic crosses over an 83-year-old bridge that is four lanes and goes through the hearts of Windsor and Detroit.
It was a long process; this negotiation has been going on for 10 years. It was brought before our committee six or seven years ago. As you might know, a referendum was held during the American election. The opponents to building this bridge lost and that made our life as a committee that much easier.
Let me speak to the environmental review. This project has already undergone a rigorous and coordinated five-year environmental process on both sides of the border that met the requirements of the respective legislation in three jurisdictions: Canada, Ontario and the United States.
The environmental assessment decisions were upheld last year in Federal Court after it was challenged by the owner of the existing bridge. The decision was appealed and the Federal Court of Appeal confirmed that the project complied with all of the obligations under the Canadian Environmental Assessment Act. Legal challenges to this bill will shield the new bridge from existing and future legal challenges of permitting decisions and administrative approvals required under specified Canadian law.
I will ask my colleague Senator Greene to talk about amendments to the Customs Act.
Hon. Stephen Greene, Deputy Chair, Standing Senate Committee on Transport and Communications: Thank you very much. The amendments proposed to the Customs Act would specify the type of information that the Minister of Public Safety and Emergency Preparedness may require about any person who is, or is expected to be, on board a flight entering Canada. It makes some changes to that. It would also formalize procedures applying to legal entities wishing to obtain a carrier code. A legal entity means a trucking company, for example. A carrier code is required to do business with the Canada Border Services Agency.
One of the issues raised is that the Office of the Privacy Commissioner is concerned about privacy safeguards on advance passenger data. The CBSA has had a number of consultations and sessions with the Office of the Privacy Commissioner and has done a privacy impact assessment. At this point, the CBSA is doing a revision of the privacy impact assessment to reflect changes in the program over the past 10 years, since the program came into inception, and has also met with the Privacy Commissioner as recently as June and more meetings are planned.
With regard to carrier codes, if I can quote Mr. Bradley of the Canadian Trucking Alliance:
This is another one that from an industry perspective is a rather minor thing because we have been doing it. We are ready to go. It is part of the automated border environment that we want to move to; and we support it as well.
With regard to the Cape Town Convention, Division 20, this is an international treaty that was signed in 2001 by 55 countries, including Canada. We have not ratified it until now. This convention seeks to provide a legal framework to reduce transaction costs and mitigate risk in international aircraft financing. Although the convention came into force on March 2006 after eight countries ratified it, Division 20 would allow a ratification of the convention by Canada.
The convention has wide industry approval, including Air Canada, WestJet and Bombardier. Ratification has taken time because provincial participation was required for certain elements of the legal framework. All provinces except three now have the necessary legislation.
[Translation]
Mr. Chair, we are pleased to answer any questions you may have.
[English]
The Chair: Thank you. We appreciate your summary.
Senator Buth: Thank you for coming here today. Can you tell me which provinces have not ratified?
Senator Greene: British Columbia, New Brunswick and Prince Edward Island have not yet ratified.
Senator Buth: Is it their intent?
Senator Greene: It is their intent, as far as I know.
The Chair: You have no indication that they are resisting?
Senator Greene: I have no indication whatsoever that they are resisting.
Senator Mitchell: I am interested in the concept of the crossing authority. By the way, that was a great presentation. Thank you.
Senator Dawson: I will come back as a questioner, so be careful.
Senator Mitchell: I will be sitting there next week.
This is a really easy question. The crossing authority is being established to in turn establish, set and charge tolls for the use of this bridge. Given we are paying for this and the U.S. elements are not, is there any way that they could charge a toll for traffic one way or the other?
Senator Dawson: We are advancing the funds, not paying for it, because it is a toll bridge. It was a lot faster and easier with all the complications and the lobby against it in Michigan to have the Canadian government fund this ahead of time and all of it will be recuperated through tolls over the lifespan of the bridge. The existing bridge is a very good example. It has been a very profitable operation for the existing bridge owners.
Senator Finley: Being from Ontario's south coast, I can tell you that the bridge has to be profitable given the fact that I have bought it twice over.
Generally speaking, not on specifics, with the three divisions you covered in your committee, was anything raised by witnesses or committee members that could be a red flag to any part of this?
Senator Greene: That is a good question. I am trying to think back to all the testimony and I really cannot think of anything that jumps out at me.
Senator Dawson: In our report — and we stated this in the official report we tabled this afternoon — there is the access to privacy side of it that is a bit of a problem, the example being when you register to go on a plane, you will give them a lot of information. If you do not take that flight in the end, the information is still there, even though you did not take the plane. That information is collected and accumulated, and after a while they can have some kind of profiling. The Privacy Commissioner's position is clear that if that person is not getting on the plane, why should you collect the information?
Senator Greene: That is reasonable.
Senator Finley: Yes.
I was about to ask if you are concerned. Would this be something that on a different level or at a different time —
Senator Greene: We have not seen the regulations yet. A lot of those issues will be solved there. There are a lot of things yet to happen. This enables the regulations to proceed.
Senator L. Smith: In the back of your report, Division 5, Part 4 of Bill C-45 seems to have been well received. In Division 12 you outlined the privacy issue and Part 4 seems to have been well received.
I have a general question. Your reaction was that you said it is well received. Is there anything else you could share with us that you heard which gives you a degree of confidence?
Senator Dawson: We might not have the same opinion on this, but I still believe it would always be better studying bills if they were given in a separate segment — one from the other — and not in an ominous bill. Given the pressure of time, we probably would have had more witnesses if a lot of these issues were treated independently, one from the other. That is more the Liberal commenting than the chair of the committee.
Senator L. Smith: I would expect that.
How about the other side?
Senator Greene: This is a wonderful bill.
The Chair: That is very helpful.
Senator L. Smith: You have overwhelmed me with analytical information.
Senator Dawson: You have the short version. Do you want the long one?
The Chair: Senator Smith, do you have another penetrating question?
Senator L. Smith: I am overwhelmed with that answer, Mr. Chair.
The Chair: I can understand that.
Senator Greene, in terms of page 258 — I do not have the full bill, the Customs Act with me — I am seeing this new section (3.1). It says:
A regulation made under subsection (3) may, if it so provides, have retroactive effect and apply with respect to any pending action or judicial proceeding.
It refers to ``retroactive effect.''
Senator Greene: I wish I had that wording in front of me and the context of that. Unfortunately, I do not. The way you have expressed it is a little troublesome, I have to agree. However, I am commenting completely out of context and I do not know what you are actually referring to.
The Chair: It jumped out at me. You will see it at page 258. Perhaps we will ask our researchers to give us more context.
Senator Dawson: I do not believe that it was addressed by any of the witnesses.
Senator Greene: It is not a red flag that sparked any comment by any of our witnesses.
Senator De Bané: I understand that the proprietor of the bridge has been lobbying ferociously to oppose a new bridge. Can you tell me a little bit about that? How much were they charging for the toll to use the bridge? Did they have to go before a commission to approve their toll? Do you have an idea of the net income they made from their bridge? They were so opposed to a new modern bridge that I thought theirs must be like a licence to print money.
Senator Greene: I believe that is exactly what it was. It is very old bridge that was built at least 80 years ago. It has long been paid for. I believe it was a good business.
The problem with the bridge, of course, especially on the Canadian side, is that to get to it you have to go through very narrow streets in Windsor. With the trucking industry and all the trade that we do, it is the busiest border crossing in the world. It meant that it was not a very efficient place to have the bridge.
The bridge will still be there. The owner will still be able to make money off the bridge, but the bridge, I suspect, will be mainly for local traffic back and forth. The advantage is that we will have two bridges. If something should happen to one, there will be another one. That is quite important.
Senator Dawson: They will be operating in a competitive environment. Today, as you mentioned, there is no competition. It is a private bridge, so we do not have any knowledge of the revenues. In addition to the bridge, you might know that on both sides of the bridge there are gas stations, customs services, duty-free shops and all kinds of things that generate revenue for the people who operate the bridge; but we are not privy to that information as well.
Senator Mitchell: I am interested in some of the regulatory approvals. I understand that certain exemptions have been provided in this bill to obtain permits, approvals and authorizations. Some exemptions have been approved. At the same time, somehow the operation or construction of the bridge would require the builders to go directly to relevant departments to get certain approvals. How do you square those?
Senator Dawson: First, there are two sets of approvals on both sides. The bill aims to stop the abuse of legal challenges.
[Translation]
The bill seeks to put an end to all legal challenges and to any request that is made. Every time a rock gets moved, or a road is being planned, the current owner comes up with a whole set of legal procedures to delay the approval process.
There have been and there will continue to be environmental studies from both governments to make sure that the construction will be done within a reasonable framework. But in order to be able to build the bridge, this bill is preventing some legal proceedings that would needlessly delay the project.
[English]
Senator Finley: I wonder if anyone who appeared before your committee commented on how much this was causing delays to go across this bridge. I realize that the infrastructure of the bridge and the roads are not the only reasons for the thickening of the border, given the extra regulations, searches and other things. I read somewhere — and I am just asking if you can confirm this because it is a large sum of money — that the thickening in this area was likely going to cost Canada about $11 billion a year in trade loss, not necessarily as a gross number but with any delay in this thing going through and the expense of waiting. Did anyone in your committee work raise that macroeconomic data?
Senator Dawson: No.
Senator Greene: Not to our committee. I am sure that number is out there.
Senator Finley: I was interested in what the number might have been. There had to have been some interest in it.
The Chair: You probably had this letter from the Canadian Bar Association with respect to Division 20.
Senator Dawson: I received it just a few minutes ago, so I have not had the chance to go through it.
The Chair: It looks like they are supportive of the initiative, as I read it. When I read ``Canadian Bar Association,'' I was thinking of the provisions with respect to the Ambassador Bridge and removing any right of a citizen to bring a legal action. I wondered if the Canadian Bar Association had spoken to you with regard to those provisions, having in mind that you cannot help but draw a parallel to the airport in Toronto a good number of years ago — a similar attempt that was challenged heavily by the public and the Canadian Bar Association.
Senator Dawson: We had no witnesses or testimony or documents pertaining to that side of the subject.
The Chair: You had no resistance to this extraordinary removing of legal rights.
Senator Greene: There was none.
The Chair: I am looking at your material. The Privacy Commissioner has written on Division 12. You spoke earlier about privacy issues. I believe that she is talking about the information of the trucker being forwarded before the trucker ever gets to the border. The next-to-final paragraph, sometimes referred to as the penultimate paragraph, says:
We believe that the government should be more transparent about how it uses passenger information;
It sounds like she is a little concerned that the government is not quite open enough.
Senator Dawson: That is the testimony that the Privacy Commissioner made in front of the other chamber's committee. It is not pertaining to our committee. We were sent copies of it again today, but it is testimony that she delivered in the other chamber, not in front of us.
The Chair: You did not focus on this issue.
Senator Greene: Not in front of us, no.
The Chair: Seeing no other questions and having no other names on my list, it remains for me to thank both of you for coming and helping us out on this. Thank you very much.
(The committee adjourned.)