This transcript of Michele Beaton's response to the Speech from the Throne is copied from the official Hansard record of the Legislature.
To watch the video recording of this speech, go to www.assembly.pe.ca/video-archive, select "Spring 2021", click on the March 5th video and advance to the 2:10 mark.
It is a pleasure to rise to speak to the throne speech. I believe it’s a great honour to be in this House and to be a part of this type of proceeding and to get the opportunity to speak on behalf of your constituents and Islanders who have reached out with priorities, thoughts, concerns.
First of all, I’d like to recognize that I know a lot of work has gone into this throne speech. I know a lot of consultation and looking at what’s the best road to travel for this province, which I think is important.
I also look at how front-end loaded the throne speech is. We have some really interesting concepts and visions at the very beginning. I see something that’s really missing, and that is information from a finance perspective. I do know that there’s a couple of paragraphs focused on agriculture, but they’re jam-packed paragraphs. So, I’d just like to dig in a little bit.
I’d like to start with tourism and culture. Firstly, I’d like to say I’ve grown up in a tourism family, where we operated a golf course, we operated cottages, we operated a campground, and I recognize how devastating it is when you don’t get those reservations. That’s what our tourism sector is facing right now. We don’t have visitors coming. And this is the time where your phone’s ringing off the hook and your reservations are coming in and your deposits are coming in and this is how you open for the year.
So, I would like to recognize the Minister of Economic Growth, Tourism and Culture for putting out a program that will help tourism operators to open their doors because they’re not receiving those initial reservations that they would typically be getting at this time of year. But opening the doors is just the beginning and there’s a lot of work to be done. Our tourism industry is so crucial to this province.
I will add, and I’ve said this a number of times, I do find it sometimes hard to talk about my dad, but my dad was very instrumental in creating a tourism industry here on PEI in the ‘70s. We have built an Island around tourism, so we can never forget how important it is.
I’d also like to recognize how important agriculture is to our tourism industry. I think it’s important to recognize the contributions of agricultural industry to our Island’s tourism efforts. We could never pride ourselves on being a culinary destination if not for the great food we produce here on the Island and that our Island farmers work so hard to do. This great food, prepared by Island chefs in restaurants – we're renowned across the globe for it.
They have also preserved the beautiful landscape that is so prominent in our tourism materials: the pastoral vistas are a common good and a benefit to all Islanders. Island historian Ed MacDonald has written about this strong connection between agriculture and tourism, and how the increasing economic pressures on farmers is a threat to our tourism industry. The 2009 Thompson report talked about this, as well, and the importance of Island-wide land use planning for protecting these landscapes. It also recommended creating a community scenic viewscape program to help preserve and manage our viewscapes at the local level in both our incorporated municipalities and unincorporated areas.
We need a process that brings together farmers, tourism operators, and rural residents. Here we are, more than a decade later since the Thompson report, and two governments later, and we’ve still got no movement on this. It is important. I do recognize that it was identified as a priority in the throne speech and it is so critically important that we have a timeline in which the Land Matters PEI project continues, and that when we do get the final results of that program, that they’re implemented. We’ve reviewed this and we’ve studied this and it’s so incredibly important that we look at how land planning and land use impacts all Islanders.
Another area where we need better planning is in climate change, especially when we’re talking about agriculture. There needs to be a well laid-out plan that puts farmers right in the heart of reaching our carbon reduction targets. There has been some really great work completed by the Special Committee on Climate Change and I expect we’ll see some really clear recommendations on how agriculture is one of the most cost-effective and efficient ways to sequester carbon.
Farmers, because of the commodity price structure, are price taggers. This means that they don’t set the price; the market sets the price. And it’s often set by situations outside of our Island farmers’ control.
The perfect example of this is the most recent farm receipts. If we look at the livestock receipts, cow-calf and hog receipts are down 6% and 22% respectfully. This was caused by market volatility outside of our Island farmers’ control. We saw western provinces shut down their supply chains due to COVID. We didn’t experience that here on PEI, but our farmers are still experiencing those impacts. The local impact is being felt by our livestock producers and I don’t see nearly enough action from our government to support these farmers. We have to find a way to support them in this way.
This House voted unanimously in favour of the livestock strategy motion my colleague from O’Leary-Inverness put forward. I hear from farmers constantly, especially in livestock, but especially in cow-calf. Their concerns about getting paid less for the livestock they produce, which is less than what our Island meat plant pays for off-province cattle. When we think about the transportation costs and the impact to our environment, we need to find a way to include pricing in a much-needed livestock strategy and we need to figure out how to pay our farmers for producing the exceptional beef and other food products that they produce here in this province.
The Standing Committee on Natural Resources and Environmental Sustainability invited the Department of Agriculture and Land to share their livestock strategy with the committee. We heard about all the programs that the department does offer, but it’s status quo. What we heard was PEI essentially doesn’t have a livestock strategy: a plan that sews all those programs together. And what we’re missing is the new programs – the new supports that sets this out.
This starts at the top, led by the minister and senior officials. A plan identified as a priority. A plan that sets out targets and measures benchmarks. A plan that reflects the voices of our farmers to support our Island farmers.
My colleague from Summerside-Wilmot was correct when she said talking points aren’t going to cut it. You absolutely have to do better and here’s the thing: you can. Let’s focus on the actions immediately that can be put forward and put in place to assist our Island farmers right here, right where they are. My colleague spoke, in her response, about the capacity to draw down huge amounts of carbon through our soils. Pay farmers to do that. Pay farmers to do it.
Our farmers need our minister of environment and our minister of agriculture to work together to make sure that our farmers are not just a major part of our climate change action but they are paid fairly for their part that they’re going to play in ensuring that we achieve our target emissions.
In some parts of the US, farmers are being paid to spread manure and compost on their land. It’s an additional revenue stream for doing what they are already doing. What will a farmer do next? They will increase their operations because farmers love to farm. They will pay workers more because farmers pay more than minimum wage. They have to in this competitive environment.
We should also look at promoting agrivoltaics. This approach sees land codeveloped to allow for agriculture and the generation of solar power. It’s an initiative that communities around the world have adopted, particularly those who want to increase their energy self-reliance who are faced with limitations with respect to the availability of land.
Not only would this allow farmers to produce renewable energy to power their farms or sell to a utility, given them a cost savings mechanism or even a new revenue stream, it could also provide agricultural benefits. For example, growing crops that are solar panels can help to retain moisture in our soil, reducing the need for irrigation. It can also protect crops from the harms of hail and frost. Farmers should be partners in our climate action and we should be paying them for that.
They say that one of the longest lead times is in farming. If we do not partner with farmers now, they will be one of the worst impacted over the next decade.
I’d like to look at the promoting of economic competitiveness through workers. A few of my colleagues have stressed the importance of building an economy that supports workers and I would like to echo these remarks. Our province is challenged with labour challenges everywhere and the throne speech expresses government’s desire to fill vacancies in the workforce. It is vital that government make PEI a province where skilled workers want to live.
There are so many dimensions to making this happen. We need a province that offers good and competitive wages to workers. We need to ensure that workers have access to affordable and appropriate housing. We need good health care, including timely access to physicians and professionals and we need to ensure access to high-quality child care and education. We need to ensure reliable access to high-speed internet across the province.
I think our failure to create a competitive environment for workers has hampered our ability to attract trained professionals. Health care is a great example and, while I’m pleased to see reference to a few general initiatives to address recruitment, there is still much work to do.
We hear from health professionals, as I’m sure everyone in this House has, that the conditions in the workplace are not terribly desirable. Facilities may be understaffed, placing greater responsibility and stress on workers. We hear that some workers feel unsafe with reports of violence towards health care staff or a lack of security. Some professionals have left for this very reason. We hear that the hours can be unreasonable, with part-time staff basically becoming full-time staff.
I heard this in a gathering – not a large gathering, in a very small gathering shortly before Christmas and I’ll just share, it was with a number of frontline health care workers. One of the women that were in attendance had just returned from maternity leave and within her first couple of weeks, she was already called on to do extra 12- hour shifts when she’s got a small child at home. That was because of there not being coverage.
We know that our frontline care workers don’t want to see Islanders go without care. It’s important to them, so they stay the extra-long hours and take on the extra shifts in order to be able to make up for the time that somebody else may not be able to take their shift. It will take a tangible commitment from government and collaboration, communication with our valued health care workers to address and resolve these working conditions.
I’d like to talk a little bit on small business. I’d like to talk about how we support small business. One of our main approaches has been a gradual reduction in the small business tax rate over time. I talk a lot about the importance of performance measurement and I think it’s worth having a discussion about how successful this is. There is nothing wrong with looking at what we’re doing to see if there’s ways that we can improve it. There’s nothing wrong with looking at data and statistics and evidence to see if what we’re doing is truly a really good way to do it. There’s nothing wrong with changing.
I think it’s worth having the discussion about how successful this particular policy has been. Jeffrey S. Turner, professor of business taxation at Osgoode Hall Law School, has described the small business tax deduction as having been developed in the 1970s, a time where small businesses struggled to access capital. He notes that, in the present day, other, more plentiful sources of capital are now available to startups and other private Canadian businesses.
There is no question that access to capital has improved here on PEI. We have special grants and loans available to small businesses, for government agencies and we have an excellent Startup Zone in Charlottetown that provides office space, mentorship and learning opportunities to support blossoming businesses.
Taxes, as we know, generate revenue that we have used to pay for services. The gradual reduction of the small business tax rate is not cheap. Going from 4.5% of tax rate we had a few years ago down to the proposed 1% by this government in their platform would create nearly a $10 million annual decrease in tax revenue. To put that into perspective, it’s more than we spend on the Department of Economic Growth, Tourism and Culture. It’s more than what we spend on the Employment Development Agency and it’s more than double what we spend on our Chief Public Health Office.
We have no control over what small businesses choose to do with their reduced tax rate. Maybe that was the policy intent of government but we know that trickledown tax policies don’t work. It often leads to larger corporate profits, which primarily benefits business owners and not workers.
I’m sceptical that the decreases in the tax rate will have any significant impact on employment. At most, a 1% reduction in the tax rate would save businesses $5,000 a year. That’s not enough to hire one person for a year. But they would have to be at the small business deduction cap of – sorry, I’m going to start again.
At most, a 1% reduction in the tax rate would save a business $5,000, but they would have to be at the small business deduction cap of $500,000 in revenue to save that much. I repeat, that doesn’t even pay for one extra salary a year. It would be enough to hire a worker for 10 weeks at the current minimum wage. Are these the economic opportunities we strive to create when we talk about creating new employment?
We also talk about lowering the tax rate in terms of improving our Island competitiveness. This might also be overstated. Small businesses, in many cases, are businesses that serve the local community, or mom-and-pop shops. They’re not necessarily suppling goods or services outside the province, nor are they necessarily competing with out-of-province businesses. And I doubt the Province is working to attract businesses with $500,000 or less in revenue to PEI. I imagine it is pursuing much bigger companies to bring to PEI. Lowering the tax rate might make businesses more profitable, but it does not necessarily improve the competitiveness relative to other jurisdictions.
I’m not saying that we should not take steps to support small businesses; quite the opposite. I think government needs to be clear about what outcomes it’s seeking and whether lowering the small business tax rate is the best and most efficient way to achieve those outcomes. It is okay to look at what is currently being done to see if that is the most effective and beneficial way to do it.
Are we looking to increase employment? If so, perhaps we could use small business tax revenue to fund employment and experiential learning opportunities or training initiatives.
Are we looking to make businesses more competitive? Maybe funding mentorship programs, expanding export development and readiness initiatives, or helping to shift Island businesses to the online market would be more effective and would give greater predictability to the outcomes arising from government policy.
The Speech From the Throne makes reference to the future of carbon pricing on PEI and this is another issue I’d like to touch on.
I’m happy to see a commitment from government to return carbon pricing revenues back to Islanders. Some people in the House might know that the Green Party platform commitment was to return the carbon pricing revenues back to Islanders. Most Islanders would come out better under this plan, unlike the current plan, where just everyone is penalized.
The Climate Leadership Act expects the carbon pricing regime to be revenue neutral and it spells out a narrow list of permitted uses for the revenues. My caucus has expressed concerns before about whether the revenue currently being collected has been returned to Islanders in accordance with the act. I expect the Auditor General’s upcoming report will have more information on that matter and I look forward to reading that report from the Auditor General.
I know some people have been wanting to know: How will be pay for the spending during COVID? And I don’t want to dwell on this very long because I don’t want to distract from or downplay the very urgent and important need to support Islanders and businesses today. Instead of asking how we will pay for it, I would like to ask: Who will be paying for it?
Prince Edward Island has one of the most generous tax regimes for high-income earners in this country. Our top tax bracket starts at 63,000. That’s the lowest across the country. We have thousands of income earners above $150,000, as an example. Why do they have the same tax rate as people with half of their income? Is it unreasonable to say that our wealthiest Islanders – those the least likely to have lost their jobs or employment during the pandemic, those whose material circumstances are so very different from our most vulnerable Islanders – is it unreasonable to say that they should be picking up a larger share of the bill?
Are lower tax revenues over the past five years, despite tax relief, a sign that our fiscal plan is working?
I worry that our province does not actually have a plan or vision when it comes to the taxation policy of this province other than to cut them aimlessly, even when it might not be the best approach to deliver relief.
Graham Steele, a former minister of finance in Nova Scotia, describes the equations succinctly: Taxes are services.
Taxes are how we pay for our mental health care. They are how we pay for our children’s education. We should absolutely scrutinize any statement from government that suggests we cannot afford something because where there’s a will, there’s a way. We have the means and tools to generate revenue, whether we want to use them or not, but rather than upholding a status quo that isn’t really working for everyday Islanders, we can be thoughtful about how we generate revenue.
We can and should ask whether the wealthiest Islanders should be paying more. We should question why we see statements in the Public Accounts suggesting that provincial revenues have increased because of the strong housing market. Is this why government has refused to take decisive action to address housing in our province – because the government is profiting from this?
We see Islanders struggling to afford their homes or to buy their first home while speculators and commercial Airbnb operators are getting wealthier. I can speak to two stories that I’ve heard in the last month: one from a frontline health care giver who is trying to find housing within the 15-minute radius of the hospital because this person works on call and they need to own housing that’s within 15 minutes. And they can’t find it.
Another Islander – she’s a single mother – she’s looking for housing within her child’s school district so that she doesn’t disrupt her child’s life. She’s had no luck in finding any kind of housing within the school district that she’s in, in order to accommodate for not disrupting her child’s life more than it’s already been disrupted.
It’s the same lesson we’ve learned from the online casino. For this government, it’s not about people, it’s about profit. There is so much our province can be doing to generate revenue ethically and sustainably without placing a burden on the backs of working-class Islanders. And likewise, there is so much more our province could be doing to support our Island farmers.
In closing, I just wish our throne speech had greater vision for doing both of those.
Thank you, Mr. Speaker.