THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Thursday, May 28, 2026
The Standing Senate Committee on National Finance met this day at 1 p.m. [ET] to study the subject matter of Bill C-30, An Act to implement certain provisions of the spring economic update tabled in Parliament on April 28, 2026.
Senator Éric Forest (Deputy Chair) in the chair.
[Translation]
The Deputy Chair: I wish to welcome our senators as well as all the viewers across the country who are watching us on sencanada.ca.
My name is Éric Forest, senator from Quebec and deputy chair of the Standing Senate Committee on National Finance.
Now, I would like to ask my colleagues to introduce themselves.
Senator Hébert: Martine Hébert from Quebec.
[English]
Senator Robinson: Mary Robinson from Prince Edward Island.
Senator Ross: Good afternoon. Krista Ross from New Brunswick.
Senator MacAdam: Jane MacAdam, Prince Edward Island.
Senator Cardozo: Andrew Cardozo. I have to say that at the football stadium here, on the south side stands, we’re often in competition with the north side stands, and I feel like I’m holding up the south side stands today. My name is Andrew Cardozo, and I’m from Ontario.
[Translation]
The Deputy Chair: Thank you. Our colleagues will be joining us to fill the north side of the stadium.
Today, we will continue our study on the subject matter of Bill C-30, An Act to implement certain provisions of the spring economic update tabled in Parliament on April 28, 2026.
[English]
For our first panel today, we are pleased to welcome from the Canadian Centre for Policy Alternatives, David Macdonald, Senior Economist; and from Canada’s Building Trades Unions, Sean Strickland, Executive Director.
[Translation]
Welcome, gentlemen, and thank you for accepting our invitation to appear today.
We will now hear opening remarks from Mr. Macdonald. You have about four minutes. The floor is yours.
[English]
David Macdonald, Senior Economist, Canadian Centre for Policy Alternatives: Thank you very much. I would like to thank the committee for their invitation to speak today on Bill C-30.
I’d like to confine my remarks today to airport privatization, the gas tax cut and a proposed oil and gas excess surtax, as well as some of the impacts of the Comprehensive Expenditure Review, or CER.
Bill C-30 set out important precursors to possible airport privatization by instructing airport authorities to assess the value of those airports. Why do this unless the government is planning a sell-off? Privatizing airports is a dangerous road. It takes public, non-profit services and turns them into private monopolies designed to squeeze passengers for profit.
We should be encouraging markets but where they make sense. We have multiple airlines, and we should push them to compete more. That does help consumers. But you don’t have multiple major airports competing in a given city. Usually, there is just one. There is no market here. There are no market forces that can improve efficiency through competition.
A single airport is a natural monopoly. If it is a non-profit that is running it, then by design, it doesn’t chase monopoly profits, but if we sell it to a private company, that company will use its monopoly power to rake in monopoly profits for its investors.
To make matters worse, the spring economic update suggests the federal government might actually lower the rent it receives if it sells airports to new for-profit owners. That would be a direct handout to pad corporate bottom lines, with zero benefit to passengers.
I would encourage senators to reconsider selling off our public assets, likely at fire-sale prices, just so private businesses can cash in at flyers’ expense.
The gas tax cut that will run through September and is included in Bill C-30 will cost the federal government $2.4 billion over that period. While the Iran war is terrible news for consumers, they have already paid an extra $3.3 billion at the pump. It is great news for the oil and gas sector, with high oil prices fuelling outrageous profits there.
Our internal oil and gas profit model has been tracking these gains. Since the start of the Iran war in March, the oil and gas sector has already made $12 billion more in profits than they would have at pre-war prices. In fact, over the course of this very one-hour session, the oil and gas sector will have raked in an excess of $10 million in profits. At current price levels, the sector will make over $70 billion over the course of this year.
I would encourage this committee to consider an excess profits tax on that sector. We have had very recent experience with such a tax. It was called the Canada Recovery Dividend, and it taxed profits from the banking sector that they made during the pandemic reopening of 2021-22. If we were to apply a similarly designed excess profits tax on the oil and gas sector, it would raise a billion dollars a month for the federal government alone. Given the pain at the pump, we might consider something that is somewhat more severe, something like what we implemented during the Second World War in Canada, when excess profits were taxed at 75%. Such an approach would raise $4 billion a month for the federal government. These revenues could go to help more Canadians get off of gasoline and oil altogether, with better supports for heat pumps, charging stations and EV car subsidies.
I would like to conclude with some of the impacts of the Comprehensive Expenditure Review in two departments that I have examined in some detail: Immigration, Refugees and Citizenship Canada, or IRCC, as well as Global Affairs Canada.
As you will recall, the Comprehensive Expenditure Review was meant to find efficiencies at departments and close programs that weren’t being used. But this is anything but what happened at the two departments that I have examined in detail.
At IRCC, cuts weren’t about efficiencies at all. They were just good old-fashioned service cuts and cost downloading. The cost of a housing program for asylum seekers was downloaded to the cities. A quarter of a billion dollars a year in preventive health care was cut for refugees, and settlement services to help new Canadians get jobs and learn English or French were cut by a third of a billion dollars, even while we accept more economic migrants.
When it comes to Global Affairs Canada, it was Canadian Prime Minister Lester B. Pearson who famously challenged wealthy nations like Canada to commit 0.7% of their economic output to international aid. Unfortunately, funding cuts at Global Affairs Canada are about to plunge our development assistance spending back to 1964 levels. The CER cuts dismantle Pearson’s legacy. We need to remember that most of Canada’s international goals cannot be achieved through military means.
Thank you. I look forward to your questions.
The Deputy Chair: Thank you very much. Mr. Strickland, you have the floor.
Sean Strickland, Executive Director, Canada’s Building Trades Unions: Thank you very much, Mr. Chair and senators. I really appreciate the invitation to appear in front of the Standing Senate Committee on National Finance regarding Bill C-30, the spring economic update implementation act.
My name is Sean Strickland, and I am the executive director of Canada’s Building Trades Unions, or CBTU, an organization representing 14 international unions in the construction, maintenance and fabrication industries that collectively represent 500,000 skilled trades workers in Canada.
Canada is at a crossroads. As the Prime Minister said in Davos last January, we are witnessing “a rupture in the world order.” For Canada, that rupture means that our sovereignty and our prosperity are under threat. We must react. The current government has reacted by launching an era of nation-building projects the likes of which our nation has rarely, if ever, seen.
CBTU supports this ambitious agenda. Our members are willing and ready to build the infrastructure that Canada needs. At the same time, we recognize that building on such a scale, in a country as vast as ours, has some challenges. One of those challenges regards the availability of skilled trades workers. There has been a lot of discussion recently about the risks of labour shortages.
Our view is that Canada does not suffer from a significant, nationwide trades workers shortage. Rather, the shortages are episodic and regional in nature. People talk about trade shortages as if they were ever thus, and my message to the committee is that trade shortages are episodic. We do not have shortages of all trades in all regions at all times. Consequently, if we find a way to optimize the workforce that is presently available in Canada, the gap between the offer and the demand of workers will be significantly bridged.
This is why we welcome the measures announced in the Spring Economic Update that put skilled trades workers at the centre of the federal government’s agenda.
The measures announced in the spring economic update are far-reaching and comprehensive and will require more than five minutes to address them. I would, however, like to focus on one such measure included in Bill C-30: the increase of the labour mobility tax deduction from $4,000 to $10,000 a year, indexed annually. This is a measure that Canada’s Building Trades Unions has been advocating for for a long time. A report commissioned by CBTU in 2021, conducted by Hendry Warren, revealed that, on average, it costs a construction worker over $4,000 to temporarily relocate for work. This amount is an average, meaning that for several workers, costs were significantly higher. This was five years ago. We all know that the cost of living, including transportation, has increased since then. Therefore, this increase of the labour mobility tax deduction is particularly welcome, as it will unlock our members’ ability to travel large distances to wherever Canada’s infrastructure needs demand.
As one among many examples of the benefits of the labour mobility tax deduction, I would cite that, currently in Quebec, we have hundreds of workers who are from Newfoundland and Labrador. We don’t have a lot of work in Newfoundland and Labrador, but there is a lot of work in Quebec. Those workers are moving to Quebec to go to work, and their ability to travel and go to work in Quebec is aided by the labour mobility tax deduction.
We are really pleased that the government, in the bill, is advocating to increase it to $10,000. This will help our workers travel to major infrastructure projects right across the country, particularly when the Major Projects Office begins to approve more of these nation-building projects.
CBTU applauds the measures announced in the Spring Economic Update, but we must go further if we are to make better use of the workforce already available across the country. Right now, poor coordination routinely leads to project stacking, a phenomenon where workers face intense demand for a given period only to confront months of elevated unemployment once it passes. With the sheer volume of major projects set to proceed over the coming decade, this risk is a problem that will be compounded. Nationwide planning is essential.
CBTU is proposing the creation of a skilled labour supply coordination body that will bring the relevant stakeholders to the table. Such a body would ensure that projects are sequenced so that trades workers are available when and where they are needed. It would optimize our labour force and jobs for Canadians.
In closing, Canada has great ambitions for the future. The projects are taking shape. Canadians are supportive. Public and private actors are willing to invest. Our members are ready to work. Now comes the hardest part: execution. We need to make sure that, for every nation-building project, the skilled trades workers are on-site, on time and in sufficient numbers. If we get it right, Canada will emerge from this era as a more prosperous, more sovereign, fairer and greener nation to the lasting benefit of generations to come.
Thank you. I look forward to your questions.
The Deputy Chair: Thank you, Mr. Strickland.
[Translation]
We will now proceed to questions.
I would like to inform senators that they have a maximum of five minutes each for the first round. Please ask your questions directly. To the witnesses, please respond concisely, if possible.
[English]
Senator Cardozo: I have so many questions to ask you both, but I will try to limit them.
My first question is with regard to the Carney government’s approach to economic policy. What I sense is that there are a lot of large pieces that the government is looking at, restructuring or refocusing the economy in big ways.
Do you think it is sufficiently dealing with immediate problems?
Mr. Strickland, my sense is that you would probably say “yes,” because I think the issues in terms of expenditures on skilled trades are fairly immediate. But, Mr. Macdonald, I would ask you to talk about, for example, youth unemployment. I’m concerned we have 400,000 unemployed young people and nothing very major to deal with that. The hope is that these big changes in the economy will give them a lifeline. But that’s going to be a ways away. So do you have thoughts about what more we can be doing in terms of immediate solutions?
Might I just add congratulations to you, Mr. Strickland and CBTU, on the years of work you have done in terms of the labour mobility tax credit? You have been at it for many years. Congratulations to you and all your colleagues on that.
Mr. Strickland: Thank you.
I can start with youth unemployment. I said in my remarks that if we get this right — and I understand there are over 80 projects that have been submitted to the Major Projects Office, and these are large projects — there are going to be a lot of opportunities for young people to get into the trades. Part of the Spring Economic Update includes incentives for contractors to hire apprentices. It also includes incentives for a pre-apprenticeship program and dollars for learning disabilities to help young people overcome some of those learning disabilities to help them get into the trades.
This nation-building initiative, while at a macro level, does not directly address youth unemployment immediately; it does give youth hope for the future if they want a career in the skilled construction trades.
Senator Cardozo: Thank you.
Mr. Macdonald: In terms of the youth unemployment picture, it will have interesting to see this summer what some of the corporate decisions are. We are seeing some places, like Tim Hortons, for instance, ceasing to hire 10,000 temporary foreign workers, in essence. Those are jobs that could plausibly go to youth in Canada. We will see whether that’s what happens over the course of the summer.
If we think more broadly, there has certainly been a very concerted focus in this government on major projects and also on defence. As we examine the comprehensive expenditure review, we’re cuts across all departments, with some exceptions. That money isn’t being cut from government; it is being shifted to defence. So, we’re seeing a lot of expenditure in that area being paid for with money from other areas.
There are certainly plenty of areas that Canadians are very concerned about, which are less of a priority, I would say, for this government. Health care is one of them, as is child care. We have programs that were started by the Trudeau government that are not being cut — certainly, transfers to the provinces aren’t being cut — but they are also not being expanded.
These are absolutely other areas that are also critical for growth, but they are not receiving the same level of attention.
Senator Cardozo: In terms of youth, the Canada Summer Jobs program was initially created for young people to get 16 weeks of work. I understand, for the most part, they are going to divide those into two, so twice the number of young people will get 8 weeks of work only. Shouldn’t we be keeping it at 16, doubling the amount of work and, in effect, doubling the number of positions? Eight weeks does not really give room to make money, save money or to get experience.
Mr. Macdonald: You have the full four-month period. If we look at the unemployment statistics, which we will be able to see. The May numbers have a more expansive definition, so you start to see student unemployment in the first few months. Particularly for college and university students versus high school students, those are critical months, and you don’t want half of them at one job and trying to get half at the other job. If possible, you want to cover the entire period.
A lot of it is to pay for post-secondary education for a lot of Canadians. That sector is another that was really thrown into chaos as we withdrew international students from the mix. Provincial governments are simply unwilling to properly fund post-secondary education and have used international students as an outlet for that. Now that it’s no longer a source, we’re seeing a lot of chaos in the post-secondary sector, which may well yield — and, in some provinces, is going to yield — higher tuition for students that they will have to pay, presumably by working over the course of the summer to pay for it.
Senator Cardozo: Thanks.
Senator Ross: My question is for Mr. Macdonald.
What is your sense of the meaning of “unlock the full value of airports,” given that NAS airports and other NGO, privately owned or community-owned airports already have tenants, joint ventures, cargo businesses, hangars, flight schools, and defence and innovation businesses that value airport proximity? That’s my first question.
Second, what do you understand “modernization of governance” to mean, given that most airports are under very modern governance regimes?
Also, I was interested in your comment about updating the framework for airport rent, which you took to mean lowering the ground rents if it were taken over by a private enterprise. Could it also possibly — and hopefully — mean lowering those rents if they are maintained by ownership of the not-for-profits that already have them?
Mr. Macdonald: Those are great questions. Thanks so much.
In terms of unlocking value, you could certainly sell airports to a private company that would run them for profit. That would provide money to the federal government, not that the federal government can’t raise money on its own by selling bonds; you could sell these airports because they are monopolies. They are worth money, and someone who buys them, potentially in a fire sale, would, then, have the opportunity to raise costs across the board for flyers, whether that be to the airlines docking there, through improvement charges, et cetera. The federal government could make money on that, not that they would need it. I think what’s being suggested there is possible privatization.
The rent question is an interesting one because these airports pay rents to the federal government for the land the federal government owns that they are operating on. It is a major expense for those airports and a major revenue stream for the federal government. Certainly, reducing those rents could be passed on to flyers if that was agreed upon in advance. It could also be a means of padding the profits of companies to ensure that they make an adequate profit margin from an airport that they bought.
These airports are being run at present on a non-profit basis. There is no profit. If you need to make 15% or 20%, that money has to come from somewhere. There are retail outlets, and potentially you can charge more, maybe charge more for parking, but the most obvious place where you will make money is increasing the improvement costs and the charge on tickets, or improving the cost for airlines to dock. You have to get that extra 15% or 20% profit from somewhere.
One of the other places you could get it is that the government simply gives it to you by reducing their rents by 30%. In a non-profit environment, there you can make an agreement with the airport authority to say, we’re going to reduce rents by this much. We want you to reduce the piece you tack on to passenger tickets by the appropriate amount. That is potentially a way you could lower ticket prices.
Hopefully, that is what the government is considering. I don’t think that’s what was being implied here, in general, in the Spring Economic Update.
Senator Ross: My other question was about governance.
Mr. Macdonald: I’m not sure exactly what that means. It will be interesting to see what else the government wants in terms of power in airport authorities. If you were to sell the airport to a private business, you would have little to no governance over that. It is not yours anymore. Potentially, you own the land and can collect rent, but you do not govern that anymore because you sold it for money.
That’s not really a modernization of government. It is privatization of government where you have no impact anymore.
Senator Ross: The federal government does typically have appointees on each of those not-for-profit boards.
Mr. Macdonald: Yes.
Senator Ross: Thank you very much.
Senator MacAdam: Mr. Strickland, what are your views are on the federal government’s $250-million investment in skilled trades training through the Canadian Armed Forces that was announced in the Spring Economic Update, and how could it best be leveraged to strengthen existing pathways, including Helmets to Hardhats, which I know you are involved with?
Mr. Strickland: Thank you very much for the question, senator. A lot of people in Canada aren’t aware that the trades union construction industry is the largest private sector trainer of apprentices and journey-person upgrading in Canada. We operate over 200 different training centres through our various affiliates. The Union Training Innovation Program has been in place for a number of years. It has around $50 million allocated to it currently: $25 million for programming and $25 million for capital streams.
The Spring Economic Update had an additional $225 million for bricks and mortar, as we like to say, so expanding the footprint of our training centres. By being able to do that, we are going to be able to get more apprentices through. We will be able to give them more updated training, and we will also be able to provide introductions and opportunities for veterans who are retiring or leaving the Armed Forces through the Helmets to Hardhats program. We are very supportive of that $225 million.
We have been advocating for a long time for bricks-and-mortar funding. Some provinces have some version of bricks-and-mortar funding in place, but this has been very well received.
Since the Spring Economic Update and the announcement of this investment and training, the number-one inquiry I get from my affiliates is about this bricks-and-mortar funding for UTIP, this capital money, how will it roll out, how we can access it, and how quickly we can access it.
Senator MacAdam: Thank you. In your opening comments, you emphasized the labour mobility tax deduction as one measure that was important for trades unions. Are there any other measures in Bill C-30 that you think are particularly important to trades unions that you want to highlight today?
Mr. Strickland: Sure. It is an historic investment in skilled trades in Canada, without equal, I think, in the history of the legislative process in Canada. There is a labour mobility tax deduction. You talked about the UTIP and the capital stream. One of the challenges we have as an industry is that we attract a lot of apprentices. All of our union halls have stacks of resumes from people who want to get into the trades. We can get them into the trades, but then the challenge is how to retain them.
Part of the answer to that challenge is that we need to have work. If we don’t have work, we can’t put an apprentice out. Let’s say the work is going to be taken care of and all that work comes. How do we keep that apprentice engaged?
The system is structured in such a way that there are in-school portions of your training, where you are not working on the tools anymore, and your income is substantially reduced to Employment Insurance. That makes it very hard for some of our apprentices to fulfill that requirement for in-school training because now they have got to take a significant income cut, so they won’t do their in-school training or challenge the exam at the end of the day.
One of the most significant policy levers in the Spring Economic Update is that there is going to be a top-up of $400 a week to the apprentice when they are in their in-school portion of training. That will help keep the apprentices in the system. That will help them move through the system faster. At the end of their completion, there is a $5,000 completion incentive. So a total of $21,000 per apprentice, which shows some real thoughtfulness on the part of the government, ESDC and the minister on how skilled trades training works and the challenges that apprentices face.
Senator MacAdam: Thank you.
Senator Robinson: I want to speak about the Employment Insurance Act and the impact on it in Bill C-30. In particular, in agriculture, we know that the Canadian Agricultural Human Resource Council, CAHRC, has done some work to assess what the losses are to primary production in Canada because we have so many unfilled positions. We hear about staggering gaps in filling the labour needs of primary and processing in agriculture. I think the Canadian Ag HR Council said that shortages directly cost the sector $3.5 billion in lost sales in a single peak year, which is staggering when you see it. To me, that’s money we’re leaving on the table as an economy and as a country.
Looking at the Employment Insurance Act changes, do you see this having any impact on closing that gap? If not, do you think there are other measures the government should be investigating to address that?
We look at that $3.5 billion to primary production, and that’s not even taking into account a lot of what Dominic Barton told us back in 2017 about the real potential we are leaving on the table, which is the value add and the processing.
I will start with Mr. Macdonald.
Mr. Macdonald: Thank you very much for the question. As you point out, there are minor changes here to the extension of existing programs to Employment Insurance in Bill C-30, particularly around some seasonal work in 13 regions across the country. I’m not sure that’s going to have a tremendous influence on agriculture.
There is also the extension of the exclusion of separation payments. If you have severance coming from work, that’s not counted against you. You can still receive both your severance and Employment Insurance. This has been extended on and off for some time. Frankly, it should be permanent, but it is extended on a very temporary basis.
There are several big changes we should be making to Employment Insurance that would make it much easier for workers to access the program. This is one of the big issues. People can’t get in the door. We have historically low levels of folks who are unemployed and are not receiving Employment Insurance, largely because they don’t have enough hours to access the system.
What we need is a country-wide much lower threshold, 360 hours, to access the system in the first place. Ideally, we’d have a floor on benefits, as we did during the pandemic, because if you are not making very much, 55% of not very much is almost nothing. That’s one of the big challenges for folks who aren’t making a lot of money: There isn’t a floor on those benefits and there should be.
We should be targeting higher replacement rates for Employment Insurance. Right now, we target 55% of eligible earnings. We should push that up to 66% so that folks have more time and more money while they are unemployed to find the right next job. This was one of the lessons of the pandemic that we’d actually studied at the CCPA, that much higher benefit levels that are much more consistent over time allow for a proper job search. We saw a big sectorial shift during the pandemic, in large part, because of programs like CERB that allowed people the time to do a proper job search, to get better training and to bone up on credentials so they could get a better job that pays them more. We saw a big sectorial shift over that period.
To your point, which was more around agricultural workers, a large part of agricultural employment is temporary foreign workers. It’s one of the huge streams that funds agriculture. There’s been a big cutback in temporary foreign workers, as I’m sure you know. This will likely affect agriculture.
Unfortunately, what we’re not doing is a substitution for the cut in temporary foreign workers; temporary foreign workers do not have substantial labour rights. If you start to complain, you just get deported. What we need is workers who want to work in agriculture who have rights. If we need more workers in the agriculture sector, let’s accept more workers in the agriculture sector as new Canadians, not as temporary, disposable workers who don’t have access to basic programs like Employment Insurance.
At present, we have certainly closed off the tap for temporary foreign workers, but we haven’t opened up the tap to agricultural workers who want to do agricultural work but to keep them here as new Canadians that have labour rights but are still working and filling those gaps you’re noting in the agricultural sector.
Senator Robinson: I’m aware of several workers who come to us from Jamaica, for example, who have no interest in being here in February, so there’s definitely that component within the ag labour streams that we have to take into consideration.
Do you know of any countries that do a good job of supporting workers while they are unemployed yet effectively incentivize them to find work? Employers, we often hear, complain about people who don’t want to come to work because the supports they can get not working are significant enough; they don’t have to work.
Mr. Macdonald: The pandemic was a period in which many more people could get into the system. The requirements were much lower. The benefits were much higher, and we saw a big sectoral shift. A lot of folks came back to the labour market during the reopening in 2021 at higher wage levels, so you saw a big increase in wages as those folks returned to work, largely because they were shifting out of lower-wage professions, like hospitality and food, for instance, into higher-wage professions, legal work, for instance, or consulting.
This is something we should be encouraging. We should be encouraging folks if they need to get more training, if they need to get a better resumé, if they need to do a better job search; let’s give them the opportunity to do that.
I’m not sure working on 55% of your previous earnings is something people desire. It’s tough, right? It’s tough to be unemployed and live on a much lower salary.
We should be helping workers to get the retraining they need and to get the job search they need so they can get a better job at higher wages.
[Translation]
Senator Hébert: My first question will be for Mr. Strickland.
You clearly outlined the dynamics in the construction sector in your opening remarks. You also clearly explained the benefits of the measure included in Bill C-30 to improve mobility, but there is still a reality that some studies have noted, in my opinion.
Last week, I heard the president of the Commission de la construction du Québec, Ms. Murray, say that the construction sector is short 17,000 workers a year. I also looked at a study published by Deloitte Canada that discussed a shortage of workers that could range between 400,000 and 500,000 by 2030 in the construction sector if we carry out all the major projects that have been announced.
I’d like to hear what you have to say about that, because I think that, beyond mobility . . . . I understand that mobility is part of the solution, but is there another part of the solution elsewhere? If so, where?
[English]
Mr. Strickland: Thank you very much for the question, senator. You really hit on the core of the issue when it comes to the predictability of the construction labour market and how many tradespeople we need, when and where.
The one article that you cited, the 400,000 to 500,000, I don’t know where that number came from. On further research, it evolved I think out of a CMHC forecast that said if we hit the target — as you said in your own words — given certain situations. Many of these forecasts for labour shortages are based on a perfect scenario that we will build all this stuff in a certain time frame, and that’s not the reality of the marketplace.
When you look at our trade profiles, the average age of an apprentice in Canada is 27. People come to the trades later on in their careers, usually a second career. We are being able to move them through, but it’s creating still — not just because of the apprentices — but our demographic is fairly high. We will have to bring more people in. Our industry right now across Canada brings in approximately 100,000 apprentices every year.
The question is, when you look at trade shortages, what area are they talking about? What sector are they talking about? What geographical area? What trades are they talking about? Also are they talking about a certain amount of wages?
These are all the challenges that have to be considered when we look at these forecasts for labour market availability, and that’s why I’m a strong advocate for developing more sophisticated labour market data. We need to be more granular.
In Quebec, I can understand their concerns. Hydro-Québec has a massive capital expenditure program. The data centres in Quebec are booming right now. How does that impact all hospital construction and municipal construction? We don’t have a clear line of sight on that. Most labour shortage projections are based on best-case scenarios, our members and our training centres. And in my career, we have all had large proponents of construction projects come into the union hall and say, “Look, guys and gals, you need to bring in hundreds more apprentices because this big job is coming.”
Well, the big job doesn’t come, and now you have the apprentices you can’t put to work. Now you lose the apprentices, so we need to bring all of this together, senator. Thank you very much for your question.
[Translation]
Senator Hébert: To use a play on words, I’d say that it might take a major construction effort to address workforce issues in Canada’s construction sector. Thank you.
[English]
Senator Pupatello: Nice to have you both here. Sean, I see you’re doing the rounds today at various committees. You just came from the Banking Committee. These are going to be a little simpler, maybe, or easier.
Senator Hébert always tends to take my question away from me. But it really is about the mismatch of what we hear from the sector, the construction companies in my own hometown who all clamour to have more carpenters, more electricians, et cetera, and then the other side of it is when we hear that you need better planning as opposed to necessarily more tradespeople.
In meeting with your groups not that long ago, I understand that there is a history of really good planning when you have early engagement with the project and you time when you need the people on site. Maybe just give a little bit of that description of that kind of planning that has happened on very large projects, and hoping the big projects after Bill C-5, which you spoke to the Committee of the Whole of the Senate, how that could actually happen here.
Mr. Strickland: Thank you. There’s been many good, project-specific examples where the labour-market profile has been right.
For example, LNG Canada. LNG Canada had early engagement with the building trades — how many trades do we need, when and where — and there was a good dialogue. We’re experiencing shortages over here. We need these tradespeople to come and perform these kinds of tasks. That’s a good example.
In the oil patch, they have an active turnaround committee where the large major oil sands players get together and work through this separate, independent body, determining what their trade profiles are for their shutdowns.
When they have shutdowns in Fort McMurray, you need 5,000 to 10,000 workers, and they are coming from all over Canada. How do you coordinate that? How do you mix that with the Temporary Foreign Workers Program? So there is an example in Alberta where they bring in temporary foreign workers if we can’t meet their labour demands, but those temporary foreign workers are protected. They are not exploited. They are members of the union. They get paid a union wage, and they contribute to the Canadian economy.
What we need to do to leverage that from a policy perspective is to see how we can move those people from temporary foreign workers into immigration to become permanent residents.
Senator Pupatello: In this Spring Economic Update you would agree, though, that if we can hit that target of 100,000 with the funding embedded in this, that would mean 100,000 more tradespeople, given the age profile, for example, of your membership, you know this is required regardless of the ability to properly plan, you still need this going forward. You still need this.
Mr. Strickland: Our view, senator, is that we need sophisticated labour-market planning so we can optimize jobs for Canadians and minimize reliance on temporary foreign workers. Once we get that right, and we are optimizing jobs for Canadians, then we can look at temporary foreign workers and then we can look at immigration to help meet that demographic challenge that we have going forward.
We need to get the basis right first. We need to optimize the jobs. We need to match the workers in Canada. I have workers right now unemployed in Toronto. Who would have thought there were workers unemployed in Toronto? But the collapse of the multi-residential housing market and low-rise market leaves us with unemployed workers.
That worker sitting on the bench will not be too happy about a temporary foreign worker coming in to work at a project someplace else in Canada when they don’t have work right there in downtown Toronto. This is the public policy mismatch. It is the concern that workers will have when we look at alternatives to meeting labour force requirements rather than optimizing Canadian jobs first. We’re going to need the workers, but we need to put that formula in place right away.
Senator Pupatello: What is the age profile of the typical membership across your trades?
Mr. Strickland: It depends. In the harder trades, they are a little older because it’s harder to get younger people in them.
Senator Pupatello: Older? You’re speaking to a Senate committee here.
Mr. Strickland: The numbers change, but it depends. Like I said, there have been programs. Provincial governments have put programs in place. The industry as a whole of construction, union and non-union, brings in around 100,000 apprentices a year. That’s driving the average age down a little bit, but, in general, it’s around 50 years of age.
Senator Pupatello: It’s clear to say you need to get it right, but in 10 years, as these big projects could be finishing, we need workers coming in to replace people. There are tradespeople in my hometown in their 70s who are still on the job, and it’s shocking.
Mr. Strickland: Yes, I know; once a tradesperson, always a tradesperson.
That’s one of the reasons why one of the public policy levers we’re really encouraging government to adopt is mandatory minimum apprenticeship requirements on these major projects so we can build the next generation of workers. There are also incentives in the Spring Economic Update for contractors to hire first-year apprentices because the market dynamics are such that, if I’m a contractor and David is a contractor, I want David to hire that first-year apprentice because it’s going to cost him money. I’ll take the apprentice in year two because I have a better chance of making money off that apprentice. We have to find ways by which we can encourage the private sector and contractors to hire first-year apprentices as well.
There are many different things that need to happen to meet this profile going forward, and the Spring Economic Update has covered a lot of those elements. We’re very supportive.
The Deputy Chair: Thank you very much.
[Translation]
Senator Galvez: I want to apologize for being late.
[English]
Mr. Macdonald, we heard yesterday from Jim Stanford at Centre for Future Work. My question is about the danger of using privatization and monetization of our basic infrastructure in order to generate revenues to calm the fires of the several crises that we are experiencing right now: the affordability crisis, the energy crisis, the lack of manpower crisis and health crisis.
The government is saying we will do it differently but we will do it faster. One of the provisions is to ask for information from airports with the purpose of evaluating and assessing the potential for privatization.
What are the impacts of the privatization of these basic infrastructure that provide long-term revenues to the different government levels?
Mr. Macdonald: Thanks very much for the question. Certainly, the Canadian model is largely to have non-profits operate these airports. They are natural monopolies, in essence. You don’t have 5 or 10 airports in a big city competing for business. You have one airport, and that’s probably how you want it, given that you need to build the transportation there, you want to reduce disruption from flight paths, and so on. You don’t want 10 airports per city. You want one airport.
The trouble with one airport is that that’s a monopoly. If you have a non-profit running it, you tell the non-profit, look, don’t charge an extra 15 or 20% on top to pay off investors. You don’t need to do that. Run it on a non-profit basis. Don’t collect monopoly profits.
If you sell it to the private sector, they will collect monopoly profits, and they will do that because they need to operate the airport as before, except they need to make another 15% or 20% on top to pay investors whom they have borrowed the money from to buy this airport.
The real danger is that now you’ve got this pressure of a private company that has to pay their investors. They need 15% or 20% more. Where does that money come from? There are a variety of main revenue sources for the airport. One of them is the airport improvement charges that go on tickets for flyers. They charge the airlines to dock. One of the other big revenue sources is parking, and the final one is retail, selling food and goods in the airport.
There isn’t 15 or 20 extra per cent that you could get on the retail front, for instance, and not have it impact ticket prices. You read between the lines of the write-up in the spring update, and one possible thing the government may be considering is that these airports pay rent to the federal government because it’s federal land that they are on. The federal government could reduce the rents that they charge to the airport so that this private business makes enough money to pay off their investors and not affect ticket prices, for instance.
However, that’s just the federal government paying private investors. We could skip the whole charade of privatization and just pick some lucky company and give them a bunch of money from the federal government. We don’t have to go through the charade of selling the airport.
This is a very concerning path of selling off these public assets. Sure, the federal government could make money selling those assets, but if it needs money, it can also float bonds that banks and investors are happy to buy. We run a deficit every year. There’s nothing particularly wrong with that.
In my mind, this is a very dangerous path to go down that will almost certainly result in one of two things: much higher prices for flyers or less revenue for the federal government.
Senator Galvez: Can you give some examples where the government did this? I’m thinking in Europe, for example. What was the impact on the cost for consumers? Yesterday, my question was about credit ratings for airports.
Mr. Macdonald: It’s a different model in Canada than the U.S., for instance.
In the U.S. the airport improvement charges are much, much lower. There just isn’t as much money for capital, and so you see fewer airport improvements, particularly at some of the smaller airports in the U.S. One of the trade-offs is that in Canada we pay higher airport improvement charges so we have better infrastructure as a result, but it’s paid for by the people who are flying as opposed to someone else.
You could imagine a situation where the federal government wishes to change this arrangement. Maybe the federal government doesn’t privatize the airports, but it reduces the rent that it charges to those airports with the understanding, because it sits on the board of the airport, that money will just be passed on in lower ticket charges and not scooped by the airlines, who fill in that difference through their own higher fees. That’s one way to do it.
You could mandate lower airport improvement fees, which would mean less money for capital, less improvement at the airports, older infrastructure and so on, but that could, as well, save money for consumers. It would be more similar to what’s happening in the U.S.
Those are definitely options that don’t require privatization. A privatized airport is certainly not one that’s necessarily going to invest more in capital. It would probably invest less in capital because it needs to make money, and so it needs to extract more money from the budget to pay its investors.
Senator Galvez: Thank you.
[Translation]
The Deputy Chair: I have a question for you. Mr. Macdonald, you spoke earlier about the employment insurance system. This system has been under review since 2018. Year after year, we continue to renew temporary measures, and we see this again in Bill C-30. Were your organizations consulted? Are you taking any steps to ensure that we finally develop a system adapted to the reality of 2026?
[English]
Mr. Macdonald: Thanks very much for the question. As you say, we have been studying this on and off. It’s been a big focus of several governments post-pandemic. We completely shredded the Employment Insurance system and replaced it with something else over the course of weeks in 2020. It was an incredible event, and there are key parts of that we should have kept, although almost all of the lessons and changes that we had during CERB and the CRB have been eliminated now from the Employment Insurance system.
If we wanted much better access to the system, there are a couple fairly straightforward ways to do that. We could reduce the entrance requirements in terms of the number of hours, have a constant number of hours across the country at, say, 360 or 420 hours to access the system, no matter where you live, as opposed to the present system, where you have the individual regions. That would allow more people into the system.
We could have a higher replacement rate, raising it from 55% to 66%. Canada’s relatively unusual in that the government does not contribute to the Employment Insurance system. In most countries, the governments do contribute to the Employment Insurance system. Canada does, in a sense, in crises, but in a general mode of operations, it’s just employers and employees. That’s something that could change.
The other big challenge, of course, is gig work and how we ensure that gig workers that are not working in the formal economy still get access to the system. When we had the CRB or CERB, those folks could get into the system because they would have a minimum earnings requirement of $2,000 over the previous month. It’s relatively easy to let those workers into the system.
The big challenge is this: How do we get them to pay into the system when they are actually employed as opposed to simply collecting benefits? That’s one of the big challenges. Every year — we’re in the process of doing this right now — we develop an alternative federal budget where we go through a whole variety of different chapters and look at different issues, one of which is exactly on your point: Employment Insurance. We lay out a variety of different proposals, how much they might cost and who might be impacted. Potentially, that’s something you would be interested in, but it does examine what we could be doing to make the Employment Insurance much more accessible in Canada.
[Translation]
The Deputy Chair: Thank you.
[English]
Senator Cardozo: Quickly, Mr. Macdonald, I have a couple more things. In terms of the excess profit tax that you were suggesting in the energy sector, wouldn’t that be mostly in Alberta? Wouldn’t that be a little bit difficult to do at this time?
Mr. Macdonald: We had something like this already applied to the banking sector, which is mostly in Toronto and Ontario. The idea was you could take the exact same structure and instead of applying it to the banking sector, you apply it to the oil and gas sector. These companies will still see massive excess profits, even after an excess profits tax of that level.
Consumers are paying a lot more at the pump. That’s where this profit is coming from. Folks are paying more in gas prices, among other things.
Insofar as there’s this huge imbalance now in the economy, where consumers are doing very badly, and one sector of the economy is doing incredibly well, let’s let them keep much of those profits, just not all of those excess profits.
Senator Cardozo: Is there a way to do that excess tax profit and put it back, reducing the federal tax on gas, for example?
Mr. Macdonald: It’s presently zero. It’s zero until September.
Senator Cardozo: Right.
Mr. Macdonald: The cost of that program is about $2.4 billion. This excess profits tax, if you applied it right now over the past two months, would completely pay for that. That’s the kind of money we are talking about. It’s an incredible amount of excess money.
Senator Cardozo: That makes a bit more sense.
You mentioned in terms of development assistance we’re at 1964 levels. What is that percentage that we are at currently?
Mr. Macdonald: With the full implementation of the CER, we will reduce our ODA, or official development assistance, to the size of our economy to 0.17. Pearson’s goal was 0.7. We will reduce it to 0.17, and this is the impact of the cuts at Global Affairs, but big parts of IRCC and Finance also end up as development assistance because of some of the programs they run, and so the net impact will drop our ratio — 0.38 was the 2024 number — from 0.38 down to 0.17 over the next three years.
Senator Galvez: Mr. Macdonald, in the last budgets we have seen a suite of rollbacks of environmental regulations and cuts of programs and non-renewal of some programs.
The last one is this fuel excise tax. Have you assessed the distributional and environmental trade-off of cutting these measures, particularly with impact on the emissions reductions, affordability, public health and Indigenous Peoples?
Mr. Macdonald: You mean the cut of the excise tax on gasoline through September?
Senator Galvez: They are choosing to cut all these environmental measures. The last one is the excise.
Mr. Macdonald: You should ask my colleague Hadrian Mertins-Kirkwood, who follows this in great detail.
This, under his assessment, was the first net-negative climate budget that we’ve seen for some time. We had actually seen improving climate measures over the last several budgets, and as part of the comprehensive expenditure review, but also as part of some of the changes that allow for even more extensive use of the carbon capture and storage tax credit will mean that this tax credit, which is hypothetically meant to withdraw carbon from the atmosphere, will now actively be used to pump out more gas from the ground because it will replace it in the ground.
The much higher price of gasoline will cut consumption, so that might offset some of this impact, frankly. However, there continues to be a heavy focus on pipelines and raw resource extraction instead of other things that we could be doing, such as switching away from gasoline for cars, switching to EVs, switching away from oil and natural gas for home heating towards heat pumps, for instance. We continue to rely very heavily on the fossil fuel sector in Canada, and more so particularly after this last budget.
[Translation]
The Deputy Chair: Mr. Macdonald and Mr. Strickland, thank you very much for being with us today.
This brings us to the end of our first panel.
Honourable senators, for our next panel, we are pleased to welcome with us for our second panel today, from the Canadian Chamber of Commerce, David R. Pierce, Vice-President, Government Relations; and from the Canadian Meat Council, Kyle Larkin, President and Chief Executive Officer. Welcome and thank you for accepting our invitation to appear today.
We will now hear opening remarks from Mr. Pierce. You have about four minutes to share your thoughts.
David R. Pierce, Vice-President, Government Relations, Canadian Chamber of Commerce: Thank you.
[English]
Senators, thank you very much for the opportunity to appear before you today on Bill C-30, the spring economic update implementation act. I’m here on behalf of the Canadian Chamber of Commerce, our network of 400 chambers of commerce across the country, our combined almost 200,000 business members and 115 trade associations. We represent businesses of all sizes and from all sectors of the economy and virtually every region of the country.
Last week, I had the pleasure of joining over 50 companies in Calgary for our first Project Assessment Forum. This meeting brought together business leaders from across the Canadian and Western resource sector to meet with senior decision makers across the project assessment ecosystem.
At a time when the discussion was focused on the MOU and the “one project, one review” consultation, there was a message that we heard loud and clear that I’m eager to share with you today. The question is of Canadian competitiveness.
We see clear signals in the Spring Economic Update and last fall’s federal budget that the government sees the risk and understands the importance that Canada is a competitive business environment.
The opportunity is to now turn this new fiscal room into the conditions to invest, build, hire and grow in Canada.
We were pleased to see important measures for training and skilled trades in the economic update. If Canada is serious about building major infrastructure, housing and defence capabilities, it needs the skilled workforce to match.
That also means improving pathways for high- and low-skilled talent, ensuring immigration systems are tied to labour shortages and improving the transition of temporary workers to permanent, where economic integration and long-term workforce participation are present.
On tax, the business community was pleased to see a reduction on the employer side of CPP, the reduction of the excise tax and many others. Even with these changes, tax competitiveness remains a major challenge.
For Canadian businesses, tax competitiveness sits alongside tariffs in shaping whether Canada can attract investment, support growth and compete internationally. It is time for a big swing on tax reform.
We also can’t lose sight of the cost of tax compliance, particularly for large firms who have the option to leave Canada for other jurisdictions. Tax compliance costs are hidden taxes, costing firms millions of dollars.
In the United States, members have told me that the IRS will conduct an audit efficiently and with clear communication. In Canada, members indicate that it is the opposite. To quote a seasoned member of the Canadian Chamber’s Economic and Tax Committee:
Tax compliance in Canada [is] making a lot of money for audit and legal firms and not making a lot of cents for anyone else.
Housing is another area where implementation will matter. We welcome the commitments to address housing costs, including accelerated low-cost loans and extending the grace period for the Home Buyers’ Plan. We are also encouraged by the intention to review National Model Codes and reduce regulatory friction. For builders, this is a must.
The same principle applies to defence. The Canadian Chamber supports strengthening Canada’s defence industrial base and moving quickly on the Defence Investment Agency, or DIA. We will be launching a new defence committee this June, with members drawn from across the business sector, and they feel they have services and goods to offer.
We applaud the government for moving quickly on the DIA’s enabling legislation. The sooner, the better. But we desperately need procurement reform in Canada. If the government is serious about bringing in new suppliers to help provide services and goods for the Canadian Armed Forces, this is simply a must. Firms will spend weeks, if not months, preparing complex bids, with no certainty of success. Many will simply decide not to participate.
In closing, we are also very pleased to see continued support from the Government of Canada for the Business Data Lab in the Spring Economic Update. The Business Data Lab has become an important national platform for timely business intelligence and economic insights, supporting evidence-based policy-making when economic conditions are clearly uncertain.
We should use this movement to strengthen fiscal resilience, improve competitiveness and make Canada a place for businesses, from Canada and beyond, where they can invest with confidence.
Thank you. I look forward to your questions.
The Deputy Chair: Thank you, Mr. Pierce. Mr. Larkin, you have the floor now.
Kyle Larkin, President and Chief Executive Officer, Canadian Meat Council: Thank you, chair, and thank you to the members of the committee for inviting us.
My name is Kyle Larkin, and I am the president and CEO of the Canadian Meat Council, also known as the CMC. The CMC is the voice of Canada’s federally licensed meat industry and the largest component of the food processing sector, with annual sales exceeding $32 billion and supporting nearly 300,000 jobs across the country. Our members process over 90% of Canada’s meat, including beef, pork, veal, lamb and bison, supplying Canadian families and more than 90 export markets with safe, traceable and high-quality protein.
The Canadian red meat sector is diverse, encompassing large multinational operations as well as small- and medium-sized enterprises that form the backbone of rural Canada.
We appreciate the invitation to speak on the Spring Economic Update, which presented challenges and opportunities for Canada’s red meat processing sector.
Of particular relevance to our sector were the amendments to the Canadian Food Inspection Agency Act, which introduce food security and food affordability as factors to be considered by the agency. We were pleased to see these amendments included, as they reflect the evolution of the Canadian Food Inspection Agency’s approach over the past year and acknowledge the importance of considering the broader impacts of regulatory decisions on food affordability, food security and the competitiveness of Canadian businesses. While food safety remains the number one priority for the agency and our sector, the introduction of an economic lens to decision making has been seen as a positive for meat processors. A constructive partnership between regulators and the sector will help unlock greater production capacity, enhance Canada’s export competitiveness and support long-term economic growth.
Despite this progress, Canada’s meat-processing sector is facing a chronic labour shortage. Many companies across the country are unable to meet full operating capacity due to the lack of labour availability. This issue has slowed down or paused investment decisions, some of which are in the hundreds of millions of dollars.
While the introduction of the Team Canada Strong program through the Spring Economic Update would give 80,000 to 100,000 young Canadians a paid pathway into the skilled trades, we are concerned that the program is primarily targeted towards Red Seal trades. While meat cutting is recognized by several provinces as a skilled trade, it is not yet recognized as a Red Seal trade. This means that the financial provisions included under the Team Canada Strong program will be inaccessible to most of our sector who require labour today.
Unfortunately, the Spring Economic Update did not address several critical areas of importance to the meat processing sector. As you may know, most small- and medium-sized beef processors are facing the most severe financial crisis in over a decade. Low cattle supply has driven up costs by more than 80% since 2021, while revenues have not kept pace. The same is true in the United States, where American beef processors have required and received over $2 billion in federal and state support.
Unfortunately, without support from the Government of Canada, many Canadian facilities face closure, with devastating consequences for rural communities, animal welfare, local supply chains and Canada’s food sovereignty. As such, we continue to ask the government for a program that would be modelled on AgriStability to offset extreme margin compression.
In parallel, Canadian pork processors are facing the re-emergence of African swine fever, known as ASF, around the globe. ASF is a highly contagious viral disease fatal to pigs, with no commercially available vaccines. A single case in Canada would trigger immediate border closures, overwhelming domestic storage and processing capacity, forcing mass layoffs and severe animal welfare consequences.
Our economic impact study estimates the sector would require $2 billion in year one alone to maintain operational integrity. That is why we continue to call on the government to establish an African swine fever trade recovery program to provide financial assistance to the sector in the event of an outbreak, as well as prioritize the conclusion of ASF zoning agreements with our key trading partners of pork, namely, Japan, South Korea, China, Mexico and Taiwan.
As the government forms its national food security strategy and focuses more on food sovereignty, it is essential that we support our domestic meat-processing sector to remain globally competitive. By working together on labour challenges, high beef prices, foreign animal disease pressures and more, we can ensure that Canadians and global markets continue to be fed with high-quality Canadian meat.
Thank you again to the committee for inviting us. I would be happy to take any questions.
[Translation]
The Deputy Chair: Thank you. I’d like to remind you, honourable senators, that you have a maximum of five minutes each. Therefore, please ask your questions directly. To the witnesses, please respond concisely.
[English]
Senator Cardozo: Mr. Pierce, first I have a couple of quick questions. Well, actually, big, but I mean short answers.
Mr. Carney’s government is really focusing on what might be called a restructuring and refocusing of the economy in big ways. Do you see that having benefit in the short term, or will it be the long term before we see changes?
Second, in terms of procurement reform, could you provide a little more detail?
Mr. Larkin, in terms of inflation, why is inflation of meat so high these days? Why is there low cattle supply, and does it have anything to do with mega farms, a number of which are U.S. owned?
Mr. Pierce: Senator, if you don’t mind repeating your second question, as I was writing down your first question.
Senator Cardozo: It was about procurement reform.
Mr. Pierce: Absolutely. First, on reshaping the economy, I think it is in part being driven by the government but also being reshaped for us. That’s a market force that, really, every sector is grappling with across the country. So to say that there is a short-term opportunity or a risk, there is definitely both. There are opportunities that we’re seeing across our membership, but we are also really hearing about those risks in that short term.
On procurement, there may have been some broader public programs to try to modify the procurement system, but fundamentally, the concept remains the same and has for a long time. I wrote an op-ed in The Hill Times this week, where I was recounting that there was an RFP for 10 personnel under a contracting vehicle. The RFP was 85 pages. The responses to that would be over 100 pages each.
You simply can’t justify that for businesses that haven’t been in that sector before that don’t have capture teams or bid proposal teams that can manage it. If the government is serious — and I believe they are, especially with the pace that they are moving with the Defence Investment Agency — there would be a commensurate look at how procurement is done and really taking the old and almost setting it aside and looking for a more streamlined and efficient approach. Otherwise, we just don’t think you will find participants.
Senator Cardozo: But you are okay with the fact that in a procurement competition, there is one winner and other losers?
Mr. Pierce: Oh, very much. Funnily enough, it is getting to that decision quickly. In the case of a typical procurement, let’s just start the clock on January 1. The decision out of Public Works likely won’t come until June, at best, and then the project might not start until September. So that vendor who has done all that work to put the proposal forward to build the team won’t start work until September and won’t generate an invoice until October. That is just not feasible.
Finding out quicker with clear criteria would help right across the board.
Mr. Larkin: Thank you for the question, senator. Why is the cost of beef so high at the grocery store? It is a question we get almost every day. It very much goes to the root of the issue, which is the record-low cattle supply that we have seen over a few decades.
There are two reasons why we have a low cattle supply here in Canada and in the U.S. First, we have had drought conditions in our Prairies over the past few years that have lowered the amount of grasslands available for growing the herd, which we need to do.
Secondly, foreign animal disease pressures. At the U.S.-Mexico border, there used to be cattle trade there. The border has been closed for a few years now because of the discovery of New World screwworm in the Mexican cattle supply, which adds more pressure on the American-Canadian trade of cattle. Both our countries are unfortunately suffering, which is seen at the grocery shelves.
But, in fact, beef processors are losing about $200 to $300 a head. I have members in our association in places like Shawinigan, Quebec, or in Manitoba or in Charlottetown, P.E.I., who are cutting back on shifts and work because they can’t afford to process more cattle or even process the normal number of cattle that they have traditionally been doing. I have members who have cut back to three days a week versus five, six days a week, which is what they were doing before.
Senator Ross: Yesterday, the Parliamentary Budget Officer indicated to us that the CPP changes would put about an extra $50 million in the government’s pot, given the size of the federal civil service and the savings that they would have. Can you give me a sense of the overall impact on SMEs and their employees but more from a broad perspective?
Mr. Pierce: Absolutely. We were really pleased to see this initiative in the Spring Economic Update. It will certainly have a positive impact on business, and, in a fundamental sense, just lowering the cost of business is a challenge. I mentioned tax competitiveness in my opening remarks. This is one of those taxes. This is one of those pieces that an investor would look to Canada and other jurisdictions to evaluate whether or not we are cost-effective or not to deploy capital. We were pleased to see it.
I can’t speak to the public sector sense, but from a private sector sense, I talked to members — Kyle just mentioned it in his comment — and when businesses have to cut back, that impacts employees. But when there is a windfall and additional resources available, they can expand their business, they can expand their market and they can grow. That’s ultimately what we want to encourage, and so we were pleased to see it.
Senator Ross: Do you think the reduction was enough, too much or just right?
Mr. Pierce: We would always encourage more. We would always encourage lower costs for business. You will hear a theme, certainly, in my comments today around tax competitiveness: that I hope senators are attuned to the risk that we’re facing. We have businesses that we are super proud of in Canada. They have a CFO and a board of directors, and they are exploring other jurisdictions.
So we have a choice to make. Unfortunately, I don’t think we have 18 months. I think we have less than 12 months to keep them here, to incentivize new ones to come and for us to be competitive. It starts with the federal government, but it also falls to the provincial government and also falls to municipal costs. It is not just the corporate tax rate. It is the additional fees and costs that are on business.
If I were to say one thing about the past 10 years, it is almost like that growth of costs for business was really unchecked. We are pleased to see that it is starting to turn around a bit.
Senator Ross: Just to change the direction a little bit, I’m wondering about your perspective on some of the suggestions towards the potential privatization of airports. Do you see that as something that would be challenging for business in terms of potential increased costs due to privatization? What do you see there?
Mr. Pierce: Unfortunately, I don’t have much for you on that today only because we are still looking at that. We are working with our members and industry to understand both what the government is contemplating and what is possible and the impact that would have on business.
The government is looking at a lot of options, and so we are certainly pleased to see that they are exploring options. We are just not sure if this is the right one at the right time.
Senator Ross: Thank you.
[Translation]
Senator Hébert: Mr. Larkin, you mentioned in your opening remarks that your industry already exports to 90 international markets, if I recall correctly.
As we seek to diversify Canadian exports, I think your sector is important, whether for raw or processed products.
Could you explain what the main challenges are? I understand that there’s a major labour challenge; I’m pleased to hear you say that, by the way, because I’ve heard some experts say that there is no labour problem in Canada, but I quite agree with your observation.
Could you tell us what other challenges you face to make the most of the agreements that Canada has concluded internationally and to stimulate the industry for both raw and processed products?
[English]
Mr. Larkin: That is a great question. We export about 65% of the pork we produce in Canada right now and about 50% of the beef. Our industry is highly reliant on international trade and exports. Right before this meeting, I was on a call with The Globe and Mail talking about Mercosur. I can get into Mercosur if you would like because we have concerns there.
There are challenges globally: non-tariff barriers and tariffs. Our pork processors still have a 25%-tariff from China that has cost them $175 million since their imposition. In Indonesia, where we had nine establishments approved for exports for that country, three of which are beef, those three beef establishments are still facing non-tariff barriers in their halal certification. We haven’t been able to export anything there.
In Europe, we have decades-long non-tariff barriers on the pork side. It’s all around Trichinella testing and the European Union not recognizing the system we use here in Canada, despite us not having Trichinella for 50-plus years. On the beef side, it is all around hormone versus non-hormone beef to the European Union. I know the Prime Minister and the government have a big focus on Europe. There is a potential market for the meat sector there, but we have had these non-tariff barriers, as I said, for decades. If we get past them, that’s great news, but I think we have some major challenges there. The U.S., obviously, continues to be our largest customer.
Senator Hébert: Yes, I know. Are you aware if the government is doing something about this?
Mr. Larkin: On the European Union front, as it relates to Trichinella, there is potentially some good news coming that the government has been focusing on. So we worked fairly closely with John Hannaford over there. On the Indonesian piece, we are working with our Indo-Pacific agiculture and agri-food office in Manila. They are helping with the halal issue. The Chinese pork tariffs, we had good news in the reintroduction of beef access to China in January, but we still have 25% tariffs on pork.
There is a lot of work behind the scenes with our trade negotiators but these things, unfortunately, take a long time. That’s where we’re at.
Senator Hébert: Thank you.
Mr. Pierce, about the labour question, what do you hear from your members? What industries face the biggest challenges in terms of labour shortage?
Mr. Pierce: Thank you. From the perspective of labour shortage, the Canadian Chamber of Commerce just launched an immigration council this year, and the reason for that is we wanted to bring forward the views of the business community as we discuss labour shortages and skilled shortages to really support the government in that effort.
Fundamentally, we believe that a job in Canada should first go to an interested and qualified Canadian or permanent resident, but when that condition is not present, the Canadian business should be able to find workers to man their facilities. Working with the government, working with the IRCC and ESDC, we’re certainly hopeful that they will find a solution to some of the changes that were made pretty quickly over the past 18 months. We’d certainly like to see it. We know our members are very much in need of it.
In the case of the meat sector, just as one example, the meat-packing facility in southwestern Ontario struggles to find workers. They can’t find workers. The Canadian population has not shown a desire to be in that field. That Canadian business has two choices: They either bring labour from outside of Canada that are qualified to do that job or that business will leave Canada and we will import the food. That is really the policy question and where we hope the Canadian Chamber of Commerce to be most supportive.
Senator Galvez: Mr. Pierce, when we hear about discussions and debates around competitiveness, we focus primarily on overtaxation or overregulation. However, when we hear the experts — people in engineering, for example — we point more to the lack of skilled labour shortage and infrastructure capacity. These are the real limiting factors for a better, bigger and more sustainable economic growth, especially in the energy and defence industries. I want to give an example for energy.
We don’t have refining capacity, so we sell all our crude oil to one single client, and they have the refining capacity. Then it comes back, and we pay an extremely expensive price for jet fuel and diesel. It’s the same for the critical minerals. It’s an extractive economy, and we need to turn it into a knowledge economy and high-tech industry.
As we simultaneously want to expand energy systems, critical minerals, transportation, infrastructure, housing and defence production, are we at risk of creating competition between sectors for the same skilled workforce? Do we currently have a national workforce strategy capable of addressing that challenge? Do we have the robots or artificial intelligence that will be the other options in order to avoid bringing in workers? If we bring in the robots and the artificial intelligence, that will create a social problem too.
Mr. Pierce: If I can go back to something you said about we’re facing this risk, I don’t believe this is a risk any longer; this is actually happening. We are facing a shortage of skilled labour in many sectors across the country, and it is not even where you have the same skilled shortage in one part of the country to another. Unfortunately, most of the federal mechanisms for recruiting and bringing in skilled labour are very cross-country. They are not specific. One of the areas the chamber has really pushed towards is having more provincial involvement in that process so they can be more specific to the needs of provincial economies.
Candace Lang, our CEO, said almost exactly what you just said at events. We have talked about the fact that the government has incredible ambition and is moving at a pace that is so positive to see, but the question becomes this: Who will do all this work? Who will build these pipelines or this new defence infrastructure and be a part of these roles? Of course, we are very fortunate in Canada that the post-secondary sector is very advanced and can pivot, but they pivot to the needs of their local community, typically.
Where there are pockets of particular expertise, we’d love to see some coordination of that and step back and look at all of our workforce strategies and programs, the training programs we have already spoken about, and the review of some of the immigration programs we have as economic infrastructure, recognizing that they need to be coordinated with the labour markets of the country and the region where those new workers will come to. Thanks for the question.
Senator Robinson: Mr. Larkin, my question is for you. Division 7 of Part 3 of Bill C-30 would, amongst other things, allow the Governor-in-Council to make regulations to define the terms “economic security” and “food security” for the purposes of that act. I want to understand, from your perspective, what should not be missed when we talk about these two terms. We want to ensure we speak to industry and have collaboration in defining these terms. I would like to hear your perspective on those terms and what really shouldn’t be missed when we talk about them.
Mr. Larkin: Great question. Thank you, senator. Food security is such a broad term that has really only recently made it into the lexicon of Canadians. Americans have been using food security and national security for a long time. I’m happy to see that Canada has finally gotten there.
Food security is part of national security. It is part of a domestic processing sector. If we want to be sovereign and strong, we have to have a strong agri-food sector and be able to feed our population while exporting food internationally to gain economic benefits here in Canada.
For the Canadian Meat Council, food security means having a strong domestic processing sector and dealing with the issues that are currently impacting it. Some of those issues are, frankly, hollowing out the sector.
I mentioned Mercosur to your colleague earlier. If we don’t get that trade agreement right, it will have severe economic impacts on Canada’s beef sector, especially the small- and medium-sized beef processors in the country. I already mentioned the margin compression that the beef processors are undergoing. International trade turmoil has impacted some of the sector as well. The chronic labour challenges are real.
I have a plant in Neepawa, Manitoba, and one in Conestoga, Ontario, both of which would invest hundreds of millions of dollars in expanding their facilities, but they can’t find labour. That is the biggest detriment to them, and it’s keeping them from actually investing in Canada’s economy and hiring more Canadians. To us, that falls under the umbrella of food security and domestic food processing.
Senator Robinson: What do you hope the government will do when they sit down to come up with these definitions as far as collaboration with industry?
Mr. Larkin: There is a lot of conversation, and rightfully so, about food affordability. Canadians are facing a food affordability crisis, but if we hollow out our food processing sector, we won’t meet the objectives for food affordability. We have to ensure the conversations are balanced. On the food security and food sovereignty side, we need to ensure that we have a domestic industry that can process the food that Canadians enjoy and at a high quality.
I tell ministers and decision makers that we have two choices. We can either import cheap food from around the world and hollow out our entire agri-food sector, or we can have a strong agri-food sector, deal with the challenges that it’s facing right now and build on that growth.
The agri-food sector accounts for 7% of Canada’s GDP. That’s one in nine jobs. There’s a great story to tell here, but over the past 10 years, there hasn’t been a lot of focus on agriculture and agri-food. I’m happy to see the government use a bit of the language in their lexicon, and we can move forward from there.
Senator Robinson: Let’s quickly move on to regulatory competitiveness. I have heard our Canadian Meat Council folks, in particular, talking about how specified risk material, or SRM, is a great example and how our processors see different requirements that are quite costly compared to some of our competitors.
Can you speak to how Canada fares next to our global partners and explain what SRM is?
Mr. Larkin: If we want to be globally competitive with our main competitor, the United States of America, we need to ensure that our regulations are harmonized.
In the U.S., for over five years, they’ve updated regulations, since bovine spongiform encephalopathy, also called BSE, the foreign animal disease, was here in Canada and the U.S. over 20 years ago. Regulations were introduced at that point to restrict the amount you could extrapolate from the carcass of a cow. The U.S. updated their regulations about five years ago because they’d had zero cases of BSE for quite some time, same as here in Canada, so we are a step behind our American counterparts, which is costing us about $25 million a year.
There’s good news on the horizon regarding the specified risk material, which is also called the enhanced feed ban. We have heard from the Canadian Food Inspection Agency, or the CFIA, that the regulations should be updated by the end of the year. We have been waiting over 10 years to get there, so we are happy to see light at the end of the tunnel.
The other piece of regulations is defatted beef. In the U.S., over five years ago, they updated their regulations to allow defatted beef to be mixed with ground beef. We have companies here in Canada that also use this new, innovative process to extrapolate more ground beef from the cow, but they are not allowed to use it in ground beef in Canada. Instead, they export that product to the U.S. to use in their ground beef, which has reduced their ground beef costs by over 5%.
If we want to lower the cost of beef here in Canada, we need to ensure that our regulations are as harmonized and competitive as possible.
Senator Robinson: Thank you. I want to just very quickly get a straight answer from you. Do you think these mandate additions for CFIA and the new PRD will help with regulatory competitiveness?
Mr. Larkin: Yes, I think we’re on the right path, but the proof will be in the pudding.
Senator Robinson: Thank you.
[Translation]
Senator Gignac: Welcome to our witnesses. My first question is for the Canadian Chamber of Commerce representative, Mr. Pierce.
In your last quarterly report, you conducted a sectoral analysis of the challenges businesses face in terms of access to labour. In the construction sector, for example, you say that 63% of companies attribute the lack of candidates to a lack of interest among job seekers.
My question is this: Bill C-30 contains a Labour Mobility Deduction for tradespeople. Do you think that these deductions, which increase from $4,000 to $10,000, properly target the problem and could help address this lack of interest, if you will?
[English]
Is that something important that will have a material impact on you?
Mr. Pierce: Thank you very much. For labour mobility, if I could deviate for a moment, that was a big part of Bill C-5 last year. It was tied to tearing down interprovincial barriers. Certainly, at the beginning of last year, it had a lot of momentum. We saw that momentum go into last summer, and we’re starting to see it wane a little bit.
With regard to the specific measure on labour mobility, I don’t think we’ve looked at it from a research perspective to say for certain, but any effort to try to address labour mobility is welcome. From our perspective and from the perspective of members for whom there are those labour shortages, this is a measure to support it.
If I can also take another liberty, Mr. Chair, in the 2024 Fall Economic Statement, there was a measure included in that statement that would have tied federal transfers to progress on reducing internal trade barriers. Labour is, by far, one of the most prominent barriers to trade within Canada. We would certainly encourage you to look at that again to see if that measure is appropriate at this time to help reinvigorate and re-energize this effort to tear down those barriers.
The impact on the Canadian economy is enormous. Our business data lab has easily marked the value of the trade barriers to Canadian commerce to be equal to, if not greater than, the risk of tariffs. It deserves as much attention, and it’s something that the chamber and our chamber network have worked very hard on.
Senator Gignac: Thank you. We talked about the economic update. We studied what was in it, but I was curious to have your view on something that isn’t in the fiscal update. There is a lot of uncertainty with CUSMA. Companies are reluctant to invest.
At the time, in the U.S., you could invest and, in the first year, deduct 100% of your investment in many sectors. Is that something that the Canadian Chamber of Commerce would support in the next budget? I’m quite surprised that harmonizing our regulations with the U.S. was not announced in the last fiscal update to encourage Canadian companies to invest.
Mr. Pierce: It’s to encourage Canadian companies to invest, but the problem is a little different in Canada. The risk that we have is Canadian companies leaving Canada, or any country, for that matter, and going to the United States. The U.S. has created policies to soften the blow of the cost of that move.
That’s a problem we’re not struggling with in Canada. We’re trying to keep businesses here, and so having that deductibility is strong, but we need to look at other laws that are only on the books in Canada that are making us completely uncompetitive with the United States. For example, we have the excessive interest and financing expenses limitations, or EIFEL, rules and the global minimum tax. Those are two examples that cost Canadian businesses when they would not face the same risks if they were two hours south.
It’s just one thing on top of the other, and you just don’t know which straw will break the camel’s back, but we know these businesses are looking at the tax treatment that’s being put forward in the U.S.
I’ll put it in this perspective: Our Economics & Taxation Committee members were talking about this at our last committee meeting. The U.S. is viewed as a tax haven right now. Think about that. They are viewed as a tax haven, and so what risk does that present to Canada? Do we lose 5% of Canadian business as a result? It won’t be 5% equally across the economy. It will be very specific. It will be the companies we don’t want to lose. We need to look at EIFEL rules, global minimum tax, tax competitiveness overall, the fees and the time-to-return profit on a project.
We were out west last week and we heard story after story of resource companies with capital ready to spend, where if the decision was made today to build, at best, it would be approved in two years, which is a record time for approval, and I’m commending all levels of government for getting that to be even in the conversation. For years it’s been many more than that.
But two years to approve, four years to build. You’re not earning until year six or seven, at best. In other jurisdictions, it’s 18 to 24 months. That’s the question: Why would a company invest under those conditions in Canada? We have a great story to tell, but the economics and business case have to work, and right now the business case, in my opinion, doesn’t.
Senator Gignac: Thank you.
Senator Pupatello: I’m taking it from the Canadian Chamber of Commerce’s remarks that you’re wholly supportive of Bill C-30. You can’t find pieces in there that you disagree with, just that many of them are a really good first step, for example. Would that be a good summary for you?
Mr. Pierce: Absolutely. If there was one caution — and we made these comments when it was first released — it was that there was certainly more fiscal room, which was good to see, but spending obviously did increase as well. We’re going into potentially some very rocky times trade-wise, and having some kind of a buffer might be smart. It might be something to look at, and so we have raised that caution.
Otherwise — and I think this is a really important point — the country doesn’t need two foot-tall budgets a year. The budget should come once a year, and the update is to update projections and add other small things that might need to be added to it.
But to have an entire separate budget each spring and fall, we think this new approach, whenever it lands, is fine.
Senator Pupatello: You know that they have simply changed the timing of the budget and they have moved it into one that works better with their provincial counterparts, et cetera, right?
Mr. Pierce: That’s right.
Senator Pupatello: My question for Mr. Larkin. I appreciate your commentary on pricing, et cetera. I’ve met with beef cattle farmers, and they are not getting any more money for their beef than they got five years ago. The pricing has stayed the same.
When I go to the grocery store, like my friends and family, we are paying a huge amount. We will use ground beef as an example; in five years it’s gone up about 50%. That’s a lot of oats to add to your hamburger to make the same volume, let me tell you.
Given whom you represent, where’s the extra 50% going? It isn’t like in the oil and gas sector, as Senator Galvez mentioned, where oil companies are making more money because gas prices are so high. In that same vein, the end of where it starts, which is the beef cattle farmers, they are not getting the money. It’s somewhere in that chain. Could you just describe to me where that extra 50% is?
Mr. Larkin: Thanks for the question, senator. First of all, in 2025, we had cattle herd growth of 2.5%, which was good because the U.S. had a negative per cent, and we hadn’t grown the herd for quite some time.
Usually, what we see on the cattle side is a cyclical business where prices go higher for cattle, ranchers make more money and processors don’t make as much. Then we go down where the cattle price isn’t as high; processors make more money by selling to grocery stores and retailers.
What has happened over the past four years is the cycle has been broken, which is usually a two-year cycle. What we’ve seen is, since 2022 or even 2021, the price of cattle has been at record highs at auction, and so when ranchers bring their cattle to auction, where cattle feeders are the ones who purchase the cattle, and then cattle feeders are the ones who finish them, fatten them up and then sell them to processors, we have seen record levels of profit at auction.
We have seen that for the past four years. That has caused beef processors across the country — multinationals and small- and medium-sized ones — to lose about $200 to $300 a head. For example, I have a beef processor in Quebec that has cut from six to five days a week of shifts to three days of shifts because they just simply can’t afford to process more cattle.
Senator Pupatello: I didn’t understand. You’re telling me that the beef farmer is getting all of that extra money?
Mr. Larkin: Correct.
Senator Pupatello: I literally just had them in my office not that long ago, and they said they are not getting any more of this money, and it’s somewhere else in the chain.
Is there a meeting of the minds required here to figure out where all the money I’m paying for ground beef is going?
Mr. Larkin: We work really closely with our ranchers and farmers, but I can tell you, it’s public knowledge and public records at auctions of cattle that have been selling at record highs, and they have been doing that for the past four years.
The per-pound cost of cattle has been two to three times higher than the average we have had over the past 20 years. So there’s a lot of money involved here, but I can tell you on the processor side, our folks are losing money and cutting back on shifts, which is a really unfortunate situation we find ourselves in.
Senator Pupatello: Okay, thanks for your testimony.
[Translation]
The Deputy Chair: One of the big issues in your sector is the workforce, as in many other sectors, and a university education has been highly valued. On the other hand, we see that the youth unemployment rate is much higher than in recent years.
Are strategies being deployed to make these trades more attractive? Are there measures that could be put in place for all industrial sectors — where the workforce is a major and unavoidable issue — to convince young people that these are attractive career paths?
It’s great to have a bachelor’s degree, master’s degree or Ph.D., but some trades remain indispensable. When your toilet is clogged, a plumber is still very handy, even if you have a Ph.D. Is your organization currently implementing any strategies to address this?
Mr. Larkin: That’s a very good question, senator. Thank you.
[English]
Absolutely. If our sector could hire folks in their communities, they would do so. It costs every company about $10,000 to bring in an individual from other countries: the Philippines, Nigeria, et cetera. $10,000 per employee. It costs them zero dollars to hire someone from their community.
All of our companies go through their communities, go through their regions, and even go through their provinces trying to find labour talent, and unfortunately, over the past few decades, they just haven’t been able to find the talent to fill the demand they have from the consumer, from Canadians and from their global exports.
Understanding that we do have a very high, young Canadian unemployment rate, but I will tell you our companies do everything they can — job fairs, connecting with colleges — to get young Canadians or any Canadian involved in the sector. It’s also a well-paying sector. The average per-hour pay is $35 an hour plus, and you can really build a long-term career. Many have in the sector.
Unfortunately, I think there’s sometimes a cultural barrier. There are not a lot of Canadians who want to deal with raw meat on a day-to-day basis. It’s not the easiest job, but it’s a very fulfilling job. So our members would take Canadians tomorrow if they could to fill these jobs, but unfortunately, more and more, they are having to fill about 20% to 30% of their labour pool with immigrants, temporary workers, or what we refer to as permanent workers, folks who establish themselves in these communities.
Mr. Pierce: I have a quick comment just to double up on his comments there.
Thank you for making that point. The cost of bringing a skilled worker into the country is expensive. That’s not well known, and that is something that our immigration council and the businesses that we deal with scream at the top of rooftops trying to communicate that: that they are only doing that because they have to in most cases.
The way you make those trades and roles more attractive, frankly, is to start here. It starts in Parliament. It starts with politicians. It starts with the government. It starts with post-secondary and with schools, and really looking to the trades as a valuable contributor to our economy. I think there’s an opportunity for all of us to do that.
The Deputy Chair: Thank you.
Senator Robinson: Maybe we need to make meat cutters a Red Seal trade.
Mr. Larkin: That would be great.
Senator Robinson: That would be great.
I wanted to talk about Division 7. One of the mandate additions for CFA is to consider national economic security, regional economic security or national food security. We know later in the bill, when we talk about the extension of exemption orders, the Governor-in-Council can only do that on the basis of national security, regional economic security or national food security.
Honing in on that regional economic security, you have talked about your different plants that you have everywhere and the different pressures, challenges and opportunities they face. How does CMC view the term “regional economic security”? Do the needs related to economic security look different across Canada? Would they be treated differently?
Mr. Larkin: Let me zone in on the beautiful island of Prince Edward Island, where we have one federally licensed establishment for all of Atlantic Canada. Were that federal establishment to close tomorrow — and this is on the beef side, I should say — where are ranchers and beef farmers sending their cows? They would have to send it all the way to the middle of Quebec. Then we get into economic issues, animal welfare issues, et cetera.
We also just have one federally licensed beef plant in Quebec. We have one federally licensed beef plant in Manitoba. All three of these plants I speak about are small- and medium-sized enterprises that are under incredible pressure right now, cutting back on shifts and really losing a lot of money.
If they were to close tomorrow, for most of them, they are the bastions of their rural communities. That’s where ranchers and farmers send their cattle to get processed, and then, obviously, that gets delivered to Canadians.
So when I think of regional economics and regional food security, all of that really falls into that definition.
Senator Robinson: We certainly saw it during COVID. I know some pork folks who are keen to say, “A farrowing sow doesn’t stop for anything.” You spoke about animal health issues. We’ve got a life cycle here that doesn’t really stop when something causes a shutdown.
I was wondering if it would be within your area of expertise to briefly take the floor to talk about issues around animal health and vaccine access. We know these regulations fall within CFIA.
Mr. Larkin: It’s not under our mandate. It would be more under the Canadian Cattle Association and the ranchers and farmers that they represent. But, obviously, our industry works very closely with ranchers, and we understand, from their perspective, the availability of vaccines is an issue and the competitiveness of vaccines. Having come from the grain side, where we constantly had issues in being able to access pesticides or different herbicides that our competitors globally were already accessing, it is a similar story on the livestock side, where we need to be able to access the innovations that other countries are accessing that allow them to remain competitive.
Senator Robinson: Right.
Senator Cardozo: I have a comment on temporary foreign workers. What you’ve said today is more than I’ve heard from the business community in the last two years on this. As this debate roared, it seemed like employers left the room for a fresh air break and let the government handle it, and now you don’t have the employees. But it was a hot issue. I think our consensus in Canada in terms of immigration has taken a hit, and the employers who really need these people didn’t seem to be there when you needed to defend that turf.
It’s just a comment. I just think if you believe this, you’ve got to say it out loud. I look throughout the economic system, but I look at Uber drivers and food delivery drivers. I have rarely ever seen a White person doing that job. If I have, they are 16, and it’s their first job. White people don’t do those jobs. Canadian-born people don’t do those jobs. I have talked to a number of them. On Yonge Street in Toronto, there’s a line of young students between classes delivering food, sitting on their bicycles waiting to deliver food. They are all students from India. I talk to these folks.
I encourage you to make that point more consistently, not to us, but out there to the public because the public sentiment has turned on this issue.
Mr. Pierce: I can comment on that, senator, if you wish.
Mr. Larkin: I am happy to comment on that. Our members over the past few years have been forced to hire temporary foreign workers because meat processing, unfortunately or fortunately, isn’t a seasonal job. We need folks 365 days a year. But because there has not been any other immigration pathway for our members to touch into, they have been forced to use the Temporary Foreign Worker Program to bring folks in.
I have a facility in Ontario, for example, a member in Ontario who has about 200 temporary foreign workers on staff. About half of them, their LMIA is up this year, and the other half, their LMIA is up next year, and it’s a constant 12-month rotation. They would love to be able to transfer these temporary workers into permanent residents, but that pathway doesn’t exist.
We had the Agri-Food Pilot last spring, which, unfortunately, expired. We haven’t seen any follow-up from the government on creating something new like that on the agri-food side of things because our situation is very much unique in immigration — and not just on meat, but food processing in general — where we need that talent to come in. The Agri-Food Pilot was a great start, but we haven’t seen a permanent program come through.
Senator Cardozo: I’ve heard many stories of great inefficiency as a result of this cutback, great employees that people can’t keep, have to rehire or they have them go home and rehire, et cetera. Thank you.
Mr. Larkin: Thanks.
Mr. Pierce: The Canadian Chamber of Commerce was out. We made several public comments in support, and we’re working closely with our members trying to really get that message out.
Restoring the integrity of the system is top priority, and that’s dealing with some of those inefficiencies. We have heard of LMIAs taking 300 days to process, and that’s not going to help on either end.
At the same time, senator, I would ask you to ask those Uber drivers or taxi drivers what their credentials are, because I bet their credentials are not to be a taxi driver. I bet their credentials are something far more advanced that we could use in our economy elsewhere. That’s why we’re pushing, through the immigration council, that there be a skilled labour avenue, but then there’s also a low-skilled labour avenue for taxi drivers and those roles so that we can properly bring people into those labour shortages that we need.
Senator Galvez: A little bit of a taboo subject with respect to competitiveness in Canada is the existence of oligopolies. In telecommunications you have just three: Rogers, Bell and Telus. In banking, we have just six banks.
I would like to have your opinion on that. What is the role of oligopolies in competitiveness in Canada? Is it positive or negative?
Talking about the question of my colleague Senator Pupatello on grocery retail, we also have just two or three big players. When we ask who is getting the money, we know that young couples are paying very high prices for a kilo of meat. We know that part of it goes to the grocery. I would like to have your opinion on that.
Mr. Larkin: Unfortunately, Senator Galvez, I can’t speak to the grocers because our processors really sell the meat to the grocers and then the grocers take it away from there. I am really not sure how their pricing structure or whatnot works out, and I’m not at liberty to comment on that.
Mr. Pierce: At the chamber, we’re always in favour of more competition, but I would commend those companies that you mentioned for a lot of the innovations that they brought to the marketplace.
There are a number of government decisions, of course, that have limited that competition too. Not this government — the previous government.
I think there’s an opportunity to alleviate some of those rules, and I would love to meet you afterward, perhaps as a separate meeting, to walk you through some of our thinking.
Senator Robinson: I was wondering if either of you are familiar with the Canadian Agricultural Human Resource Council, or CAHRC, and the work that they have done. They have done the research, saying that every temporary foreign worker directly employs the continuation of three to four complementary domestic jobs. I just wonder if you know some of that. It’s great information if you didn’t. That’s it.
Mr. Pierce: I can’t speak to that stat specifically, but I’ve heard of similar stats like that, yes.
Mr. Larkin: I am definitely aware of the good work that CAHRC does, and that stat is definitely bang on. We see it in the meat processing sector, where a lot of our companies, as I said, have about 20% to 30% of foreign talent. The other 70% to 80% are Canadians, but without that foreign talent filling up those roles, we would also be sacrificing some of the Canadian talent there as well.
So all of it is balance, and all of it works together because you put different people into different roles. If we don’t have any meat cutters, we don’t need the finance people or the administrative people or people like me, right? It’s all a balance within these processing plants.
The Deputy Chair: Thank you very much, Mr. Larkin and Mr. Pierce.
[Translation]
Thank you for joining us today to share your insights on important issues. We’ve gone slightly over the time allotted for our meeting. Thank you very much to everyone, all my colleagues, the clerk and the analysts.
(The committee adjourned.)