Bill C-10 (Historical)

Budget Implementation Act, 2009

An Act to implement certain provisions of the budget tabled in Parliament on January 27, 2009 and related fiscal measures

Part 1 implements income tax measures proposed in the January 27, 2009 Budget. In particular, it
(a) increases by 7.5% above their 2008 levels the basic personal amount and the upper limits for the two lowest personal income tax brackets, thereby also increasing the income levels at which income testing begins for the base benefit under the Canada Child Tax Credit and the National Child Benefit supplement;
(b) increases by $1,000 the amount on which the Age Credit is calculated;
(c) increases to $25,000 the maximum amount eligible for withdrawal under the Home Buyers’ Plan;
(d) introduces amendments to the rules related to Registered Retirement Savings Plans and Registered Retirement Income Funds to allow for recognition of losses in accounts between the time of the annuitant’s death and final distribution of property from the account;
(e) repeals the interest deductibility constraints in section 18.2 of the Income Tax Act;
(f) extends the mineral exploration tax credit for one year;
(g) increases to $500,000 the annual amount of active business income eligible for the 11% small business income tax rate and makes related amendments;
(h) clarifies rules relating to timing of acquisition of control of a corporation; and
(i) creates cost savings through electronic filing of tax information.
In addition, Part 1 implements income tax measures that were referenced in the January 27, 2009 Budget and that were originally proposed in the February 26, 2008 Budget but not included in the Budget Implementation Act, 2008. In particular, it
(a) clarifies the application of the excess corporate holdings rules for private foundations;
(b) increases the amount that corporations will be able to pay as “eligible dividends”;
(c) enacts several regulatory amendments that complement and complete measures enacted in the Budget Implementation Act, 2008;
(d) introduces minor adjustments to the Tax-Free Savings Account rules and the scientific research and experimental development investment tax credit rules included in the Budget Implementation Act, 2008;
(e) implements rules in respect of donations of medicines; and
(f) reduces the paper burden on businesses by allowing a larger number of government entities to share Business Number-related information in connection with government programs and services.
Part 1 also implements other income tax measures referred to in the January 27, 2009 Budget that either were themselves previously announced or flow directly from previously announced measures. In particular, it
(a) implements technical changes relating to specified investment flow-through trusts and partnerships and new tax rules to facilitate the conversion of these entities into corporations;
(b) contains amendments to take into account financial institution accounting changes;
(c) extends the general treatment of capital gains and losses on an acquisition of control of a corporation to gains and losses that result from fluctuations in foreign exchange rates in respect of debt denominated in foreign currency;
(d) enhances the carry-forward for investment tax credits;
(e) implements amendments relating to the computation of income, gains and losses of a foreign affiliate;
(f) implements amendments to the functional currency tax reporting rules;
(g) implements minor tax amendments relating to interprovincial allocation of corporate taxable income, the Wage Earner Protection Program and the Canada-United States tax treaty’s rules for cross-border pensions;
(h) provides for an extension of time for income tax assessments that are consequential to provincial reassessments;
(i) ensures the appropriate application of the Income Tax Act’s trust rules to certain arrangements and institutions under Quebec civil law;
(j) enacts regulatory amendments relating to prescribed amounts for automobile expenses and benefits, eligible medical expenses, and the tax treatment of foreign affiliate active business income earned in a jurisdiction with which Canada has concluded a tax information exchange agreement;
(k) introduces rules to reduce the required minimum amount that must be withdrawn from a Registered Retirement Income Fund or from a variable benefit money purchase pension plan by 25% for 2008, and allows related re-contributions;
(l) extends the deadline for Registered Disability Savings Plan contributions; and
(m) modifies the provisions relating to amateur athletic trusts.
Part 2 amends the Excise Act, 2001 and the Excise Tax Act to implement measures to reduce the paper burden on businesses by allowing a larger number of government entities to share Business Number-related information in connection with government programs and services.
Part 3 amends the Customs Tariff to implement measures announced in the January 27, 2009 Budget to
(a) reduce Most-Favoured-Nation rates of duty and, if applicable, rates of duty under other tariff treatments on a number of tariff items relating to machinery and equipment imported on or after January 28, 2009;
(b) divide tariff item 9801.10.00 into two separate tariff items pertaining to conveyances and containers, respectively, and make two technical corrections, effective January 28, 2009; and
(c) modify the tariff treatment of milk protein substances, effective September 8, 2008.
Part 4 amends the Employment Insurance Act until September 11, 2010 to extend regular benefit entitlements by five weeks. It also provides that a pilot project ceases to have effect. In addition, it amends that Act to provide that the cost of benefit enhancement measures under that Act, provided for in the budget tabled in Parliament on January 27, 2009, are not to be charged to the Employment Insurance Account. Finally, it sets the premium rate provided for under that Act for the years 2002, 2003, 2005 and 2010.
Division 1 of Part 5 amends the Financial Administration Act to authorize the Minister of Finance to take, subject to certain conditions, a number of measures intended to promote the stability or maintain the efficiency of the financial system, including financial markets, in Canada.
Division 2 of Part 5 amends the Canada Deposit Insurance Corporation Act to provide the Canada Deposit Insurance Corporation with greater flexibility to enhance its ability to safeguard financial stability in Canada. The Division also adds Tax-Free Saving Accounts as a distinct category for the purposes of deposit insurance. It also makes consequential amendments to other acts.
Division 3 of Part 5 amends the Export Development Act to, among other things, expand the Export Development Corporation’s mandate to include the support and development of domestic trade and business opportunities for a period of two years. The period may be extended by the Governor in Council. Division 3 also increases the Corporation’s authorized capital.
Division 4 of Part 5 amends the Business Development Bank of Canada Act to increase the maximum amount of the paid-in capital of the Business Development Bank of Canada.
Division 5 of Part 5 amends the Canada Small Business Financing Act to increase the maximum outstanding loan amount in relation to a borrower. It also increases individual lenders’ cap on claims. These amendments will apply to new loans made after March 31, 2009.
Division 6 of Part 5 amends a number of Acts governing federal financial institutions to improve access to credit and strengthen the financial system in Canada, including amendments that will
(a) provide new authority for further safeguards to promote the stability of the financial system;
(b) enhance consumer protection by establishing new measures to help consumers of financial products; and
(c) implement other technical measures to strengthen the financial sector framework in Canada.
Division 7 of Part 5 provides for payments to be made to provinces and territories, provides authority to the Minister of Finance to enter into agreements respecting securities regulation with provinces and territories and enacts the Canadian Securities Regulation Regime Transition Office Act.
Part 6 authorizes payments to be made out of the Consolidated Revenue Fund for various purposes, including infrastructure and housing.
Part 7 amends Part I of the Navigable Waters Protection Act to create a tiered approval process for works in order to streamline the approval process and to exclude certain classes of works and works on certain classes of navigable waters from the approval process. This Part further amends Part I of the Act to clarify the scope of the application of that Part to works owned or previously owned by the Crown, to provide for the application of the Act to bridges over the St. Lawrence River and to add certain regulation-making powers.
Part 7 also amends the Act to clarify the provisions related to obstacles and obstructions to navigation. The Act is also amended by adding administration and enforcement powers, consolidating all offence provisions, increasing fines and requiring a review of the Act within five years of the amendments coming into force.
Division 1 of Part 8 amends the Wage Earner Protection Program Act and the Wage Earner Protection Program Regulations to provide that unpaid wages for which an individual may receive payment under the Wage Earner Protection Program include unpaid severance pay and termination pay.
Division 2 of Part 8 amends the Canada Student Financial Assistance Act to, among other things,
(a) require the Chief Actuary of the Office of the Superintendent of Financial Institutions to report on financial assistance provided under that Act; and
(b) authorize the Minister of Human Resources and Skills Development to suspend or deny financial assistance to all those who are qualifying students in respect of a designated educational institution.
Division 2 of Part 8 also amends both the Canada Student Financial Assistance Act and the Canada Student Loans Act to, among other things,
(a) terminate all obligations of a borrower with respect to risk-shared loans and guaranteed loans if the borrower dies;
(b) authorize the Minister of Human Resources and Skills Development to require any person who has received financial assistance or a guaranteed student loan to provide that Minister with documents or information for the purpose of verifying compliance with those Acts; and
(c) authorize that Minister to terminate or deny financial assistance in certain circumstances.
Division 3 of Part 8 amends the Financial Administration Act to provide express authority for agent Crown corporations to lease their property, restrict the appointment of employees of a Crown corporation to its board of directors, require Crown corporations to hold annual public meetings, clarify Treasury Board’s duties to indemnify Crown corporation directors and officers, permit more flexibility in the frequency of special examinations of Crown corporations, and require the reports of special examinations to be submitted to the appropriate Minister and Treasury Board and made public. This Division also makes consequential amendments to other Acts.
Part 9 amends the Federal-Provincial Fiscal Arrangements Act to set out the amount of the fiscal equalization payments to the provinces for the fiscal year beginning on April 1, 2009 and amends the method by which fiscal equalization payments will be calculated for subsequent fiscal years. It also amends the method by which the Canada Health Transfer is calculated for each fiscal year in the period beginning on April 1, 2009 and ending on March 31, 2014.
Part 10 enacts the Expenditure Restraint Act. The purpose of that Act is to put in place a reasonable and an affordable approach to compensation across the federal public sector in support of responsible fiscal management in a difficult economic environment.
It sets out rules governing economic increases to the rates of pay of unionized and non-unionized employees for periods that begin during the period that begins on April 1, 2006 and ends on March 31, 2011. It also continues certain other terms and conditions at their current levels. It preserves the right of collective bargaining with regard to other matters and it does not affect the right to strike.
The Act does not preclude the continued development of workplace improvements by employers and employees’ bargaining agents through the National Joint Council or other bodies that they may agree on. It also permits bargaining agents and employers to agree to the amendment of certain terms and conditions of collective agreements or arbitral awards.
Part 11 enacts the Public Sector Equitable Compensation Act and makes consequential amendments to other Acts. The purpose of the Act is to ensure that proactive measures are taken to provide employees in female predominant job groups with equitable compensation.
It requires public sector employers that have non-unionized employees to determine periodically whether any equitable compensation matters exist in the workplace and, if so, to prepare a plan to resolve them. With respect to public sector employers that have unionized employees, the employers and the bargaining agents are to resolve those matters through the collective bargaining process.
It sets out the procedure for informing employees as to whether an equitable compensation assessment was required to be conducted and, if so, how it was conducted, and how any equitable compensation matters were resolved. It also establishes a recourse process for employees if the Act is not complied with.
Finally, since the Act puts in place a comprehensive equitable compensation scheme for public sector employees, this Part amends the Canadian Human Rights Act so that the provisions of that Act dealing with gender-based wage discrimination no longer apply to public sector employers. It extends the mandate of the Public Service Labour Relations Board to allow it to hear equitable compensation complaints and to provide other services related to equitable compensation in the public sector.
Part 12 amends the Competition Act. The amendments include
(a) introducing a dual-track approach to agreements between competitors, with a limited criminal anti-cartel provision and a civil provision to address other agreements that substantially lessen or prevent competition;
(b) providing that bid-rigging includes agreements or arrangements to withdraw bids or tenders;
(c) repealing the provisions dealing with price discrimination and predatory pricing, replacing the criminal resale price maintenance provision with a new civil provision to address price maintenance practices that have an adverse effect on competition, and repealing all provisions dealing specifically with the airline industry;
(d) introducing an administrative monetary penalty for cases of abuse of dominant position, increasing the maximum amount of administrative monetary penalties for deceptive marketing cases, and increasing the maximum fines or terms of imprisonment, or both, for agreements or arrangements between competitors, bid-rigging, criminal false or misleading representations, deceptive telemarketing, deceptive notice of winning a prize, obstruction of Competition Bureau investigations and failure to comply with prohibition orders or production orders;
(e) clarifying that, in proceedings under section 52, 74.01 or 74.02, it is not necessary to establish that false or misleading representations are made to the public in Canada or are made in a place to which the public has access, and clarifying that the “general impression test” applies to all deceptive marketing practices in sections 74.01 and 74.02;
(f) providing that the court may make an order in respect of cases of false or misleading representations to require the person who engaged in the conduct to compensate persons affected by the conduct, and may issue an interim injunction to freeze assets if the Commissioner of Competition intends to ask for such a compensation order; and
(g) introducing a two-stage merger review process for notifiable transactions, increased merger pre-notification thresholds and a reduced merger review limitation period.
Part 13 amends the Investment Canada Act so that the review of an investment will be applied only to the more significant investments. It also amends the Act to allow more information to be made public. This Part also provides for the review of foreign investments in Canada that could threaten national security and allows the Governor in Council to take any measures that the Governor in Council considers advisable to protect national security, such as prohibiting a non-Canadian from implementing an investment.
Part 14 amends the Canada Transportation Act to provide the Governor in Council with flexibility to increase the foreign ownership limit from the existing levels to a maximum of 49%.
Part 15 amends the Air Canada Public Participation Act in relation to the mandatory provisions in the articles of Air Canada regarding constraints imposed on the issue, transfer and ownership of shares. It provides for the repeal of the provisions requiring that the articles of Air Canada contain provisions imposing limits on non-resident share ownership and the repeal of the provisions requiring that the articles of Air Canada contain provisions respecting the enforcement of these constraints.

[Anu Bose, Head, Ottawa Office, Option consommateurs]

Good evening.

Thank you, Mr. Chair, members of the Standing Committee on Finance, Mr. Clerk of the Committee and the staff of the committee, for inviting me to appear before you this evening to discuss Part 12 of Bill C-10, that is the proposed amendments to the Competition Act.

My name is Anu Bose and I am in charge of the Ottawa office of Option consommateurs, an organization that is headquartered in Montreal. With me are Michael Janigan, Executive Director and General Counsel for the Public Interest Advocacy Centre in Ottawa.

For over three decades now, our two organizations have been working to represent the interests of consumers in the area of regulated trade. Mr. Janigan has already testified before the Industry Committee on connection with the former Bill C-19 tabled during the 38th Parliament. This bill to amend the Competition Act was never adopted.

We would first note that while the proposed amendments are quite comprehensive, they have certainly been the subject of considerable past discussion amongst stakeholders and, in our opinion, represent a fairly balanced approach to the necessary refinements to the act.

Take, for example, the issue of the amendments that complete the reform of misleading advertising or deceptive marketing that has been the consensus for over two decades. These amendments help the competition authorities address this abuse in an economic and administrative fashion.

In the view of Option consommateurs, this package of amendments places appropriate emphasis on the importance of deterring anti-competitive conduct, particularly in the current difficult economic and financial environment that all Canadians are experiencing.

I'm asking Michael Janigan to give some additional comments on the importance of these amendments.

[Patrick Jetté, President, Association of Justice Counsel]

Mr. Chairman, members of the committee,

The Association of Justice Counsel is pleased to have the opportunity to submit its views concerning Bill C-10.

In the next few minutes, I will briefly describe our concerns with this legislation, and then I will be pleased to answer your questions.

Our association represents over 2,500 lawyers across the country who are employed by the federal government in the Department of Justice, the Public Prosecution Service of Canada, and in federal agencies. They perform critical tasks in many areas, including prosecution, constitutional law, consumer and regulatory protection, national security, immigration, and commercial law.

In 2005 the Government of Canada extended the right of collective bargaining to the federal government lawyers, and in 2006 we began to negotiate our first collective agreement with the Treasury Board. Three years later, these negotiations have not led to a successful conclusion. As a result, federal lawyers have not had a salary increase since April 1, 2005, and our salaries have been substantially behind those of our provincial counterparts. Our comparative salary levels now rank seventh in the country, even though they used to be either first or second. We're now behind those of Ontario, British Columbia, Alberta, Saskatchewan, Manitoba, and Nova Scotia.

To provide just one example of the disparity, federal government lawyers today earn between 40% and 60% less than their Ontario provincial counterparts. The salary gap is even more pronounced in comparison with our private sector counterparts, with whom we regularly appear in court in representing the interests of the Government of Canada.

The ongoing failure to redress this profound and growing salary disparity created by Bill C-10, the Expenditure Restraint Act, has given rise to three very serious issues for the administration of justice in Canada.

First, the federal government is having an increasingly difficult time retaining its lawyers. Simply put, our lawyers are leaving their jobs and going elsewhere, that is to say they are either retiring as soon as they can, or going to work for one of the provincial governments, or are simply going into private practice. It's a simple matter for them to cross the street and go work for a provincial government and in the process, earn thousands more a year doing the exact same kind of work they were doing for the federal government.

Second, the disparity in salaries is thoroughly hampering the ability of the federal government to recruit top-notch legal talent to replace those who are leaving.

In some locations and fields of expertise, the lack of qualified lawyers has reached critical levels. For example, in the city of Calgary, which includes the Prime Minister's own riding, the Public Prosecution Service of Canada has lost more than half its lawyers, prosecutors, and has not been able to replace them. It is the same thing in British Columbia, in Ontario, and in other provinces.

Third, as a result of the long-standing salary disparity facing federal government lawyers, morale is at an all-time low.

All these challenges have been documented publicly in the recent annual reports of the Public Prosecution Service and the Department of Justice, and if Bill C-10 passes in its current form, none of these challenges will be addressed.

In addition, federal lawyers will be singled out not only as the only group deprived of the process for negotiating their first collective agreement, but also as the only group not to have a negotiated or arbitrated salary increase for 2006-07.

We must contrast treatment of the AJC with that of another employment group in a similar situation. I am talking here about the border guards who were granted a salary increase of 19.5% three days before.

Finally, we respectfully urge the members of this committee to seriously consider the constitutionality of Bill C-10, especially in its specific and disproportionate impact on lawyers.

Thank you.

[Thomas Mulcair, NDP, Outremont, QC]

I can only tell you that we will be fighting hard to have it decoupled from Bill C-10. It deserves another analysis.

Go ahead, Mr. Mattson.

[Krystyn Tully]

I think there were a lot of questions that day, and maybe it was my own failing in conveying the seriousness and the importance of navigation, but unfortunately, the proposed amendments we see in Bill C-10 don't seem to take into consideration any of the concerns I was trying to raise or did raise that day with the committee.

The environmental assessment process is gone. The transparency and decision-making is gone. Centralizing control and decision-making in Ottawa has been added to the act. The consultation, which we did talk about a great deal that day, never happened. We did talk about the possibility of reaching out to communities outside the Ontario region that don't have the ability to come to Ottawa on a moment's notice, and that consultation didn't happen.

Before coming tonight, I had an opportunity to speak to some other people in the community whom I know, and to my knowledge, there hasn't been any outreach to the first nations communities, to the provinces, so it concerns me that a year later a lot of the concerns we raised that day with the committee still stands.

[William Amos, Staff Counsel and Part-time Professor, Ecojustice Environmental Law Clinic, University of Ottawa]

I'll have to explain. In fact, I will be presenting on behalf of a number of different groups.

Thank you, Mr. Chair. Thank you, members, for having us here. My name is Will Amos. I'm staff counsel with the University of Ottawa and Ecojustice Environmental Law Clinic, so I'm an environmental lawyer by trade.

Today I will be representing a variety of ecotourism, paddling, environmental, and outfitter groups. Among the groups that I am speaking for today is Mountain Equipment Co-op, with its several million members; Sierra Club of Canada; the Canadian Environmental Law Association; the West Coast Environmental Law Association; Fondation Rivières; Nature Canada and some of its affiliates; and the Canadian Rivers Network, with 35 groups underneath it, which include a number of outfitters and ecotourism enterprises. Effectively, I'm speaking for a large number of groups here, and I wouldn't characterize my remarks as strictly coming from the “environmental community”.

To start, I'd simply like to point out a very important statistic, and it is that the Census of Canada report from 2003 indicated that 2.3 million Canadians paddle every year. This is a lot of Canadians. This is an act that actually impacts upon many interests. These are real people, real voters, real interests.

There are a number of issues that I'm going to try to raise. Some of them have been touched upon by my fellow presenters, and I do hope that we get to touch upon them in the question period. The main points I'd like to make are the following.

First, fundamental changes to the Navigable Waters Protection Act and to protection afforded to the public's navigation rights should not be bundled into a budget bill. They do require an adequate consultation process, and we would posit that the process of consultation was simply not adequate last spring. The dozens of groups that I'm representing were not contacted, not aware, and not able to make comments, and I would hazard a guess that if they had been consulted, the amendments proposed might have been better and a streamlined NWPA might have been improved.

Second, the amendments that are proposed would weaken the right of navigation, sacrifice outdoor recreation opportunities, and compromise the federal environmental assessment role through the use of non-transparent ministerial exemption provisions.

I'd also like to spend some time today, if time permits, exposing what we perceive to be the myth of environmental overlap and duplication with the provinces.

First of all, I'd like to say that many of the groups I represent would have loved to appear last spring. They weren't invited to the transport committee hearings. I understand that the transport committee did consider a cross-country tour. That would have been a fabulous idea, and I think there are a lot of paddling groups operating at the local level that would have greatly appreciated that. While I'm grateful for the opportunity to make last-minute representations on behalf of these organizations, this does not compensate in any way, shape, or form for the inadequate opportunities that there were last spring.

Thank you for the opportunity, but we would like to do this again, and our main ask at the end of the day is going to be that, as other groups have mentioned, the proposed amendments be removed from Bill C-10 and that they be discussed again in the context of a broader reform initiative of the Canadian Environmental Assessment Act.

We understand that the government is proposing reforms. The Navigable Waters Protection Act amendments speak directly to those reforms of environmental assessment. We believe they should be discussed in the same context, at the same time, and that this will yield a more effective series of changes.

I think that if the federal environmental role in protecting the public right of navigation is to be transformed, it does behoove the government to follow a normal legislative process such as a bill that's tabled, that can be examined by civil society, that can be discussed before committee, and not a process where no bill is in front of an incomplete group of civil society.

I think that in the context of discussing our request that these proposed amendments be taken off the table, it's worth noting that in 2005 there was a precedent for this kind of withdrawing of proposed amendments to environmental law. In 2005, the Liberal minority government proposed a number of changes to the Canadian Environmental Protection Act, and after discussion, they decided they would remove those because of the kerfuffle it caused. I think there is room to believe that this is a process that can be done again.

In terms of provincial overlap and duplication, I think we're getting a lot of rhetoric about red tape, a lot of rhetoric about what the provinces are able to do and what the federal government is able to do. I think it's really important to note that the federal government has constitutional jurisdiction over navigation and the provinces do not. No provincial environmental assessment process is going to look at navigation. By creating these exemption provisions, the federal government will allow the transport minister potentially to issue an order to take out certain works, take out certain kinds of waterways, from the approval process, which thereby removes them from the environmental assessment process, which therefore means the provinces will be left to do the EAs, and they won't be looking at navigation.

Thank you.

[Krystyn Tully, Vice-President, Lake Ontario Waterkeeper]

We are specifically concerned about four changes: the elimination of the environmental assessment trigger is one, exempting whole classes of waterways from scientific study or public review is another, exempting whole classes of projects as well as waterways is a third, and minimizing public notice and consultation when making decisions that affect navigation rights is a fourth. These changes mean reduced transparency in decision-making, they mean a loss of valuable scientific review, and they mean the elimination of parliamentary oversight from one of our most important laws.

We waterkeepers live our lives on the water from British Columbia to Ontario to Newfoundland and Labrador. We know the history behind this law because we live this history. First and foremost, navigation is a right enjoyed by every individual; it's not a privilege that's been given to us by government, and to date, no western democracy has ever taken this right away from its people.

The current act recognizes this and requires that government seek the public's consent and advice every time it infringes on our rights. The new act says we can't afford to do this, we don't have the resources, and we need regulatory efficiency in the name of economic development. That's not true.

The current act gives the minister and the Department of Transport all the authority they need to exempt small projects. It doesn't apply to waters that aren't navigable, and it doesn't apply to projects that don't interfere with navigation. Not only are the amendments overkill and unnecessary, but they won't even accomplish the goals they are supposed to. They eliminate the rights of the public, but at the same time they off-load oversight and accountability to politicians, to provincial governments, and to municipal governments. The work doesn't go away; it just gets passed to somebody else.

It centralizes decision-making in Ottawa, so bureaucrats here will tell people in Alberta and Quebec what will happen on their waterways, and the people who live in those communities and know the waterways better will not have an opportunity or a forum to be heard, to present science, or to help make decisions better. It creates piecemeal protections that will protect some communities at the expense of others. Some communities in Canada will have rights and privileges that others do not enjoy.

There is an attempt here to address some of the economic concerns, and we're well aware of what those are, but at the same time, it's granting opportunities to one group at the expense of another and it's going to hurt hunting and fishing, tourism, outfitters, first nations, and small businesses--the people who rely on these rivers for their livelihood.

We appreciate the opportunity and the privilege to speak to the committee today and we urge you to remember the thousands of people who can't be here tonight, the other waterkeepers, the first nations, the hunters, the paddlers. For the record, we do want to say we do not believe there has been adequate consultation. So many people still need to be consulted, including in your ridings at home, and we apologize that we're here at the eleventh hour pointing out major flaws in this important piece of legislation. We wish we'd had an opportunity to be part of a full consultation prior to tonight, but this is where we are. We're bringing forward the best available research to let you know that the Navigable Waters Protection Act amendments in Bill C-10 are going to pose a huge problem, create administrative burdens, and centralize decision-making in the future, and to ask that you consider them separately from the finance bill, maybe as part of the environmental assessment review that's coming up later this spring, and through the transport committee, and through the environment department.

[Greg Farrant, Manager, Government Relations and Communications, Ontario Federation of Anglers and Hunters]

Thank you, Mr. Chair.

Good evening, Mr. Chair and members of the committee. On behalf of the Ontario Federation of Anglers and Hunters, our 100,000 members and supporters, and 655 member clubs across the province of Ontario, I appreciate this opportunity to speak to you this evening on certain aspects of Bill C-10, the budget implementation bill.

Let me be clear that we understand that the recent budget and this bill in particular were born out of the necessity for the government to respond quickly and decisively to the current economic circumstances facing both the Canadian and global economies. In that respect, we commend the government for their actions and, in particular, for their attempt, through the budget, to remove impediments to moving forward with critical programs.

We do, however, have a number of concerns relating specifically to the clauses of Bill C-10 that deal with proposed amendments to the Navigable Waters Protection Act. In our view, some of the proposed amendments have the potential to dramatically alter the ability of Canadians to continue accessing and using thousands of miles of waterways currently protected under the act. These same amendments could impact negatively on fish habitat, fish passage, and recreational sport fishing in Canada, which contributes over $3.5 billion annually to the national economy.

In Canada, the use of rivers and streams for commerce and recreational purposes is a fundamental part of our economic and social fabric. The ability to use our waterways helped to build this nation. While the waterways may not today be the highways or lifelines of commerce they once were, they are nonetheless essential to a host of economic and social activities that are essential to the well-being of Canadian businesses, individuals, and communities.

In the process of trying to bolster some aspects of the economy and put people back to work, it is imperative that the government does not eliminate the critical checks and balances that protect other elements of the economy and the way of life of Canadians. It is essential that in fixing some problems we do not create unforeseen economic, social, and environmental problems that will live with us far beyond the current economic crisis. We believe that some of the proposed changes to the NWPA have this potential.

I won't bother with a great deal of history on the NWPA. Most of you are familiar with that, and we have limited time here.

Navigability in Canada is both a question of law and of fact. To be navigable in law, a watercourse in question must be navigable in fact. Navigability is, in fact, demonstrated if a waterway is used or is capable of being used by the public as a water highway, for lack of a better term. In essence, the test developed in Canada is one of public utility. If a waterway has real or potential practical value to the public as a means of travel or transport from one point of public access to another, it is considered navigable.

Equally, if it serves or is capable of serving a legitimate public interest in that it is or could be regularly and profitably used by the public for some socially beneficial activity--recreational fishing, for example--then it must be regarded as navigable land within the public domain and must continue to be protected as such.

To provide a balanced view of our proposed changes to the NWPA, I would be remiss if I did not point out that we do believe there are several positive proposed changes to the act. These include the proposal to strengthen enforcement and compliance provisions, including fines, appointments, and powers of officers. We also understand and support the government's efforts to remove some of the barriers to economic development by attempting to minimize red tape. In particular, we support the efforts to provide for a single approvals process for related projects.

Third, we support the concept of classifying works and, in the case of minor works, of developing standards of construction, placement, operation, safety, and removal, provided that there is a concerted effort to enforce those provisions. However, we have major concerns about, and must strongly oppose, proposed changes to the NWPA that would provide for the classification and potential declassification of navigable waters. In specific terms, proposed subsection 5.1(1), proposed subsection 12(1), proposed subsection 13(1), and proposed section 14.1 are all of concern, since they provide for the classification of navigable waters. We support the concept of classifying works and types of projects and providing for the development of standards for specific projects and works that are of a minor nature, such as, for instance, floating docks and diving platforms and what not. Both the Ontario Ministry of Natural Resources and the federal Department of Fisheries and Oceans have been working towards a system whereby it is possible to simplify approval for minor works. However, the classification of what constitutes a navigable water is extremely problematic, particularly if it provides the potential to declassify or diminish any existing or potential navigable waters.

Because the proposed amendments are not clear in this regard, the potential to declassify navigable waters exists. This is a major concern to us and to other users of Canada's waterways with regard to public access and the use and protection of the fishery.

Recognizing that we are under time limitations, we have the following two recommendations.

Given that the government will be reviewing both the Environmental Assessment Act and the Fisheries Act, we strongly recommend that the proposed amendments to the NWPA be decoupled from Bill C-10 and that they be considered in concert with a review of these other acts later this year; and that a more fulsome review and public consultation process, particularly regarding the classification of navigable waters, be included in that review.

Failing that, we recommend that amendments to the NWPA be generally approved with the exception that the reference to the concept of classifying navigable waters be completely removed from the proposed amendments. If this alternative is adopted, there should be a further clarification of the wording of the revised act confirming that nothing in the act is intended to reduce or abrogate the responsibility of the minister to ensure that the impacts of development on navigability, public use of waterways, and the environment are fully considered.

In closing, if I may say, Mr. Chair, in this context it is important that the government not only do the right thing but also be seen to be doing the right thing, and in our view, amendments to the NWPA, which may be long overdue, have no place in this bill.

I thank you for your time, sir.

[James Knight, President and Chief Executive Officer, Association of Canadian Community Colleges]

Thank you, Chair, and thank you, members of the committee, for this opportunity.

Last August we prepared a brief for you called “Canada's Crisis in Advanced Skills”. It's attached to your documents. It's a powerful statement about what, only a few months ago, was Canada's principal long-term economic challenge.

There will be a recovery, and this challenge will come to confront us again. My preoccupation is that the recovery does not stumble and fall on the crisis in advanced skills. So I'll offer a few words about our colleges and institutes of technology, where these skills are created.

Before the recession we had lineups of 6,000 students who were turned away from Algonquin College; 2,000 qualified students were turned away from Nova Scotia Community College; and there were four-year waiting lists at many programs in western Canada. What is the situation now? Well, it's a whole lot worse, because all sorts of people who have become unemployed in the past, and who perhaps will become unemployed in the future, will return to college or seek to upscale their current skills or reskill for a new profession, and they will be looking to colleges, who already have very long waiting lists.

In addition to that natural transition, you were kind enough to put $1.5 billion in the budget for retraining, over and above existing amounts, and that's terrific. Folks are also going to come to colleges for the retraining. If you're displaced from GM, you're probably not going to get a degree in English literature; you're probably going to go to a college, because they are the principal skill trainers in this economy. So we're faced with an enormous challenge to manage all of this retraining opportunity, on top of the existing demand for places in colleges.

Our institutions are going to have to exercise great creativity. They're potentially going to have to press their facilities into service around the clock and certainly work over weekends. They'll probably have to rent facilities. Unused industrial facilities may be pressed into action, and people with advanced skills who have been displaced from the workforce can also assist as instructors. So the sector is going to have to exercise a lot of creativity.

We had called for an investment in colleges. I'm happy to report that in the past budget $2 billion was allocated for universities and colleges, which will help our situation. We weren't thrilled with the 70-30 split--70% for universities, 30% for colleges--because the Canadian Federation of Independent Business is telling us that employers with skills shortages need six college grads for every university grad. But I'm not going to complain about this; the employer groups will do that for me. I know some of them have already started.

I was going to talk in my short presentation about Bill C-10 and the problem that it does not reflect the proposal in the budget speech for college and university infrastructure, which said those funds could be used for expansion. The bill says no, it's only for repair and maintenance. We think expansion is important, but with great assurance from the department and officials in the minister's office, I won't raise that.

That gives me a short time to talk about another opportunity for stimulating economic growth in the country, and that is to remind you that the principal employers in the country are small and medium enterprises; the majority of Canadians work for SMEs. We have 150 college institutions with 1,000 campuses, and the interface between SMEs and colleges is quite intense. We have been suggesting for some time that 5% of the federal investment in discovery research that takes place in universities should be used to stimulate the relationship between SMEs and colleges for product development, prototyping, and commercialization. This does happen without any support, but it could happen in a larger way that would support the SMEs, where most job creation will happen. We're all concerned about GM and we're all concerned about auto parts, but it's those small industries in small communities where most Canadians work. So there's a big opportunity to take advantage of this enormous penetration of 1,000 campuses and to build that relationship.

That's what we're going to be talking about for the future. You gave me an opportunity to talk about that. We'll be back on that issue.

Thank you, Mr. Chair.

[Pierre Céré, Spokeperson, Conseil national des chômeurs et chômeuses]

Mr. Chair, honourable members of the committee, on behalf of the Conseil national des chômeurs (CNC), I would like to thank you for inviting me here.

I have come here to share our viewpoint on Part 4 of BillC-10which deals with governmental proposals relative to employment insurance. These proposals are found on page 223. I have to tell you that we are not at all surprised to see clauses 227 and 228 on page 225 of the bill. These provisions deal with the retroactive setting of the contribution rate for years 2002, 2003 and 2005, further to the December 11, 2008 Supreme Court decision.

I will, however, say one thing: The planned measures designed to offer employment insurance assistance to workers who lose or will lose their jobs are, to all intents and purposes, insignificant in the current context of economic recession and completely out of touch with measures put in place by other countries. In a document made public on December 29, 2008 and entitled “Fiscal Policy for the Crisis“, the International Monetary Fund urged all governments in the industrialized world to make enhancements to employment insurance schemes in such as areas as length of benefit coverage, benefit eligibility and benefit rate, as these constitute key elements to weathering the economic crisis effectively.

As recently as last week, French President Sarkozy announced not only that the length of the benefit period would be extended, but also that the benefit rate would increase from 60% to 70% of the average salary. The Obama Plan in the United States clearly states that employment insurance eligibility must be improved. According to the Plan, extending employment insurance coverage is one of the most effective ways of fighting the global economic crisis. Each dollar invested in employment insurance benefits provides a return of $1.73 in economic terms.

Mr. Chair, what is the Canadian government doing in reaction to the net loss in a single month of 129,000 jobs? What has our government been doing while Canada's unemployment insurance rate has risen by 10% to stand at 7.2%? In Ontario, the unemployment rate stands at 8%, its highest level since 1976. What has our government been doing while the Toronto Dominion Bank is predicting that unemployment will reach 8.8% by the end of this year?

Well, our government has merely announced the renewal of a pre-existing pilot project, the difference being that this pilot project, labelled “number 10“, has been around since 2004. The program, which provides for an additional five weeks of benefits, will now be made available to all administrative regions of Canada. In a few rare cases, it will provide for up to 50 weeks of benefits. I invite you to take a look at the chart showing the added number of weeks of benefits appended to the bill. Mr. Chair, there really is no cause for celebration here.

Nothing has been done to come to the aid of the first victims of unemployment, namely people holding precarious jobs such as part-time workers. Many of these people will not qualify for employment insurance benefits. EI eligibility has been so severely restricted that according to figures for 2006—the last year for which official figures are available—the ratio of claimants to unemployed stood at 46.1%. This number is established by considering the ratio of recipients to unemployed persons. It represents the traditional way of assessing the coverage of the employment insurance scheme. On looking at this figure, we see that for every 1,000 unemployment persons, only 461 have access to employment insurance. This number comes from official data published by Human Resources and Skills Development Canada.

Apparently, the Minister of Human Resources, Ms. Diane Finley, disagrees with this data and prefers to use a new calculation method developed early in this decade. That method can be found on page 63 of the document. There is a reference to the eligibility rate for all unemployed individuals with a recent job separation that qualified under the EI Program. In fact, in 82% of cases, applicants who had qualified under the EI program were covered. The problem with this is that all those who did not meet the EI eligibility requirements were not covered.

In conclusion, Mr. Chair, this number twisting game must end. As we speak, individuals are losing their jobs and still more will experience the same fate. We must ensure their economic security and that is the role of the employment insurance program. Ensuring the well-being of its citizens is also the role of a responsible government.

Mr. Chair, there is a widespread consensus among members of society. If I have the chance, I will come back to this later. However, right now let me reiterate that society is united in calling upon government to relax EI eligibility rules. This is why we believe our government must amend Part 4 of the Budget 2009 implementation bill by adding provisions that allow for broader access to the EI program.

Thank you.

I think I deserve a medal for getting everything in in the five minutes allotted to me.

[The Chair, Conservative, James Rajotte]

Order, please.

We have six witnesses here to discussBill C-10, the budget bill. I'll ask them to present in the order I list them.

First of all, we have the Conseil national des chômeurs et chômeuses. We have Canada Health Infoway. We have the Canadian Labour Congress. We have the Canadian Urban Transit Association. We have the Association of Canadian Community Colleges. And we have the Conference Board of Canada.

We have an hour and a half for this session, so we ask that your presentations be no more than five minutes long, and then at the end of the presentations we'll go to questions by members.

I believe it's Monsieur Céré. We'll begin with his presentation.

Monsieur Céré.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Thank you, Mr. Chair.

Minister, thank you very much for your comments today and your description of the economic situation facing our country.

As you mentioned, Bill C-10 is a very lengthy bill of over 500 pages, and it includes many positive initiatives. We obviously spend most of our time as parliamentarians focusing on those initiatives with the biggest dollar amounts, the major infrastructure announcements. But I've noted that there are a number of other very important changes for people that are really quite worthy and deserve to be recognized. One in particular is the extension of the deadline for registered disability saving plan contributions. I know that in my riding, as I campaigned in the last election, I encountered many people who have children with disabilities or other family members who do, and this is something that's very important to our society.

RDSPs, as we know, are the new savings vehicle that our government has introduced to help parents and others set aside future funds to financially support children with severe disabilities. It's an important program with important changes that I'd like you to comment on, but I'd also like to underline how important this program really is by quoting someone who will actually benefit from the proposals that have been introduced.

Here is what Laura Mackenrot, a young woman from Vancouver who happens to be blind and is a strong disability advocate, had to say: “This is just going to be absolutely incredible for the disabled community nation-wide. This is really going to help improve people with disabilities, their lives and their quality of life. The rest of the world, the disabled communities of the world, are watching. They're watching Canada, so we're literally making history right now, and I'm very happy to be a part of it.”

I wonder, Minister, if you could comment on that.

[Jim Flaherty, Conservative, Minister of Finance]

Thank you, Mr. Chairman.

My opening remarks should be about 10 minutes. I hope they're not more than that.

I will keep my remarks brief so that there will be enough time for questions.

First of all, I would like to thank the chair and the members of the committee for recognizing the seriousness of the recession that is presently gripping every country's economy at the same time.

I am confident that all members understand the importance of expediting the passage of the important measures in Bill C-10, the first budget 2009 implementation bill, to stimulate and protect our economy. As we all recognize, in order for these measures to be most effective, they must be implemented in a timely manner. That is why we need parliamentarians to pass this bill without delay.

Last year, I note, the first budget bill took approximately three months, or more than one hundred days, to receive royal assent. We do not have that kind of luxury this year.

We will be going through a very difficult year, a year in which we will see a slowing of the economy, both in Canada and around the world, a drop in exports and more and more job losses.

Mr. Chairman, to delay our economic action plan for partisan or abstract debates would be reckless. We owe it to those Canadians who will be hardest hit by this difficult period to rise above politics as usual and act as quickly as possible.

To those who would engage in lengthy debates about our economic action plan, I remind them now that during December and January we held the most comprehensive pre-budget consultations in history, which were open to all parliamentarians. We asked for input then, input that helped to shape our plan. That time has now passed. It is now time for Parliament to act. I am heartened that the majority of this committee has understood that and has understood why we must expedite this bill, led by their able chair, the member for Edmonton—Leduc.

As I mentioned, the recession is hitting every country in the world simultaneously. It did not start in Canada.

As the Governor of the Bank of Canada said to this committee earlier this month, “The reality is that the financial crisis and subsequent recession originated beyond our borders and the necessary triggers for a sustainable recovery must be found there as well.” We need to acknowledge that reality. As an open exporting country, our prosperity is tied to a healthy, open global economy.

A recovery in the global economy, especially in the United States, will be a strong prerequisite for sustained economic growth in Canada. That's why we are taking a leading role in international forums to help facilitate that. We have been especially prominent on the regulatory leadership file. Canada is co-chairing a G20 group, known as Working Group 1, that is developing a blueprint to enhance regulation of financial services and improved transparency to help avoid another global banking crisis. That group and the others will be preparing their work for the G20 leaders meeting in London on April 2.

Recently I attended a meeting of the G7 finance ministers in Rome. In my discussions, two things quickly became evident. First of all, Canada has become a model for the world to follow in combatting the current global economic crisis, both in how we have managed our finances and how we have kept our financial system strong.

In the words of President Obama last week, “...in the midst of this enormous economic crisis, I think Canada has shown itself to be a pretty good manager of the financial system in the economy in ways that we haven't always been here in the United States. And I think that's important for us to take note of.”

Second, like other countries, we must immediately take measures that will fulfill Canada's international commitment, meaning that we must implement the economic recovery plan as quickly as possible.

For Canada, the first stage of that process is to pass this bill and allow the government to put Canada's Economic Action Plan into effect quickly.

But our expectations must be realistic. The plan in itself will not be able to protect every job or to solve every problem in the global economy. As I said, the recession did not start in Canada. Concerted international efforts will be needed to stamp it out.

What our plan will do is take real action to protect those hardest hit by the current recession, while helping create and maintain jobs. Briefly, let me outline a few select measures from our economic action plan being legislated in Bill C-10, measures vital to stimulating Canada's economy, and measures that should be passed quickly.

First of all, Bill C-10 implements various tax relief measures outlined in the recent budget. This represents important tax relief that will help stimulate the economy and also remove 265,000 low-income Canadians from the tax rolls completely.

Among the tax measures are these: raising the age credit amount by $1,000 to help seniors; increasing the amount that can be withdrawn under the home buyers' plan to $25,000 to help first-time home buyers; an extension of the temporary mineral exploration tax credit; raising the threshold from $400,000 to $500,000 to allow more job-creating businesses to qualify for the reduced 11% small business tax rate; increasing the basic personal amount that all Canadians can earn before paying federal income taxes; and allowing Canadians to keep more of their money before being subject to higher tax rates by increasing the two lowest personal income tax brackets.

I note that the Canadian Taxpayers Federation heralded many of these moves as important broad-based measures that will allow individuals and families to make the decisions that are necessary for them during these uncertain times.

Bill C-10 also helps Canadians hardest hit by the recession by extending all regular EI benefit entitlements by five extra weeks, increasing the maximum benefit duration from 45 weeks to 50 weeks for two years.

I emphasize that this sorely needed assistance cannot be provided before Parliament allows the bill to receive royal assent.

Bill C-10 also takes action to help improve access to financing and strengthens our financial system. We all recognize the impact the current economic downturn is having on access to credit.

To combat the recession, our plan contains a number of measures designed to ease access to credit for Canadians and for Canadian businesses. Many of those measures are in set out in Bill C-10.

The bill also allows EDC and BDC to extend additional financing to Canadian businesses, which is vitally important.

In addition, it also increases the maximum amount for loans made by the Canada Small Business Financing Program.

These and several other measures explain why organizations like the Alliance des manufacturiers et exportateurs du Québec have praised the merits of our plan. They want it to be put into effect quickly. I quote:

Budget 2009... includes a number of positive measures designed to help our businesses in this time of crisis. It is imperative that these measures be put into effect as quickly as possible.

Bill C-10 also authorizes nearly $6 billion for initiatives ranging from infrastructure to community adjustment, housing, and health care. This includes nearly $4 billion in investments to pave roads, improve our universities and colleges, fix sewers, and repair bridges. These are investments that would have been required regardless, but they will help create jobs now by being brought forward. As the Federation of Canadian Municipalities recently stated:

“Quality infrastructure will help Canada compete for talent and investment in the global economy.”

With all orders of government working around the same table, with the same goal, [budget 2009] will create tens of thousands of jobs, boost our flagging economy, and deliver value to Canadians for generations to come.

Our plan also includes over $1 billion in investments for social and low-income housing, seniors' housing, housing for persons with disabilities, and first nations' housing.

These represent only a few highlights of the vital measures included in Bill C-10.

Also included are initiatives to help transition toward a Canadian securities regulator with willing provinces and territories, to modernize the Investment Canada Act to encourage new investments and the jobs that new investments will produce, to protect consumers from anti-competitive and unscrupulous business practices by adding new provisions to the Competition Act, and more.

Colleagues, I can see that at 524 pages, this is a detailed and lengthy bill. We could, as parliamentarians, spend months engaging in debate, some of it abstract or philosophical, and sometimes partisan, I'm sure, about the measures within this large bill, but as I mentioned earlier, we do not have that luxury. The consequences of delay for Canadians are too high. Bill C-10 contains the right measures that we need to implement right now in order to help Canadian families now and to help our overall economy weather the current economic storm.

We must pass this bill as soon as we can.

At this point, I invite the committee to ask questions.

Thank you for the courtesy of permitting me to deliver that opening statement, Chairman. I look forward to the questions of the members of the committee.

[The Chair, Conservative, James Rajotte]

I call to order the seventh meeting of the Standing Committee on Finance.

Pursuant to the order of reference of Wednesday, December 2, we are discussing Bill C-10, An Act to implement certain provisions of the budget tabled in Parliament on January 27, 2009 and related fiscal measures. As a committee, we are very pleased to have before us the Honourable Jim Flaherty, Minister of Finance. We have the minister with us today from 3:30 to 4:30, as part of the discussion surrounding the budget implementation act.

Minister, welcome to the committee.

You have an opening statement of about 10 minutes, I understand. Then we will go to questions from members. You may begin at any time.

[Ian Boyko, Government Relations Coordinator, Canadian Federation of Students]

Thank you, Mr. Chair.

Thanks to the members of the committee for inviting the Canadian Federation of Students to appear today.

I will be addressing three facets of the budget: the infrastructure for universities and colleges; research funding; and the student loan crackdown.

The 2009 budget allocation of $1 billion in 2009 and $1 billion in 2010 for campus infrastructure is a significant commitment to our public institutions. But for reasons that have yet to be articulated, only a quarter of this funding will be distributed to colleges and technical institutes. This is a regrettable apportioning of this funding.

Beyond the college and university split, the government has decided that there should be at least two caveats to receiving this funding, both of which the Canadian Federation of Students opposes.

First, the infrastructure funding will be directed primarily to research facilities. This is unhelpful. Research facilities already have a significant amount of federal funds flowing to them, including from the Canada Foundation for Innovation. Many institutions, large and small, but perhaps especially the small, will not benefit from the infrastructure funding because their needs lie elsewhere: in classrooms, residences, and offices, to name a few.

The second caveat--that federal dollars for infrastructure be matched--is also unhelpful. Many institutions with urgent needs will likely have difficulty leveraging that funding from provincial governments or, worse, from a private sector already limping because of a recession.

We urge you to remove these two criteria from the campus infrastructure funding.

I'll move on now to address the research funding in January's budget. In our pre-budget submissions, we were vocal advocates for increased graduate scholarships for Canada. However, we were very disappointed to see the government's proposal to increase social and cultural research funding for only a very narrow range of disciplines, just as we were disappointed to see $150 million in cuts to the granting councils.

Having business-only scholarships is a short-sighted initiative that is totally divorced from the realities of graduate student enrollment in Canada, not to mention an unnecessary departure from the spirit of the program when it was introduced. Roughly 50% of student researchers in Canada work in the social sciences and humanities, a majority of which are women. Of these student researchers, roughly 7% are students in the graduate business programs eligible for the federal research grants, and the majority are men.

It is not the government's role to direct the granting agencies as to what research projects to fund. This is precisely why such bodies are independent from government. Each of the granting councils allocates funding based on a peer review of applications. As such, each proposal is judged according to its merits. There is no good reason to discontinue this practice.

In forcing the granting councils to fund only certain disciplines of its choosing, the government is intervening in an area in which it has no expertise. As with the strings attached to the CFI in the budget, the Minister of Industry is masquerading as an expert where he is not, and bureaucrats in Industry Canada are taking on responsibilities that they have no business taking on.

The government's interference is unwelcome and is contrary to proper science. We implore you to let the experts do their work and give research grants to those who deserve them, business students or otherwise.

I'll finish my remarks today by discussing the unanticipated student loan crackdown that crept into the budget's Bill C-10. It's not so much that we oppose measures that increase the integrity of the Canada student loans program or that we would counsel anyone to commit fraud on their applications; what is frustrating about the legislation, starting at about clause 358, is how the government is diagnosing problems.

If students and their families are actually desperate enough to tweak their student loan applications to go even deeper into debt than they technically should be, their real needs are not the problem. The problem is the government's underfunding of an unaffordable post-secondary education. The problem is a flawed application process that does not meet the need of average income earners.

The budget's unanticipated student loan changes could target those for whom Canada's student debt-based system has failed. We encourage the committee members to make sure that the budget legislation attacks the causes and not simply the symptoms of an underfunded public university and college sector.

In closing, the government has correctly identified several areas of need in post-secondary education and research. However, the level of interventionism associated with the spending is either misguided or simply detrimental to the budget's stated goals.

Thanks again for this opportunity to discuss the budget. I look forward to your questions.

[Pierre Patry, Treasurer, Confédération des syndicats nationaux]

Thank you very much, Mr. Chair.

I want to thank the Standing Committee on Finance for allowing the Confédération des syndicats nationaux, or the CSN, to express its opinion on Bill C-10. The CSN represents 300,000 members across Canada, the majority of whom are in Quebec, and in all sectors of activity.

During the current financial crisis and recession, the Conservative government finally resigned itself to tabling a budget that included an economic stimulus package. Although there is money in this stimulus package, the CSN feels that this budget remains unacceptable and unfair for the unemployed, older workers, women, and Quebec. Furthermore, attacking the right of public service employees to negotiate their wages is completely unacceptable.

The budget proposes no new approaches to basic issues such as equalization and federal transfers for social programs, support for the failing economic sector, employment insurance, the tax burden, climate change, in addition to attacking fundamental rights.

The changes announced to the equalization formula last fall, and then confirmed in the budget, are major and unacceptable for Quebec, which will lose a billion dollars this year and up to $2 billion next year. As a result of this unilateral amendment of the equalization formula, Quebec is losing the only good thing that really came out of the partial resolution of the fiscal imbalance in Budget 2007.

Still in relation to equalization, Ontario benefits from an amendment to the equalization program that should also apply to Quebec. Hydro One dividends would be considered as a source of revenue under the corporate tax base rather than the natural resource base. The CSN feels that such provisions under equalization should also apply to Hydro Quebec's transportation and distribution activities.

Furthermore, federal transfers under health, post-secondary education and social assistance have increased less rapidly in Quebec than elsewhere, in recent years, because they are no longer based on needs and cost sharing, but rather on the number of residents per province. Let us not forget that the Government of Quebec is still awaiting the additional $800 million that would restore federal funding to 1994-95 levels, in real terms, in post-secondary education.

Finally, there are clear signs in this budget of the very real continued existence of the fiscal imbalance. First, there is the federal government's desire to move forward with the implementation of a pan-Canadian securities commission, with complete disregard for constitutional jurisdictions of Quebec in that area. There is also the initiative to directly grant loans to municipalities going over the heads of the provinces.

The CSN notes that the budget is inequitable in its treatment of the various regions of Canada, not only with regard to federal transfers, but also with regard to support for the various economic sectors, without ensuring equity between the regions. The only major budget initiative related to manufacturing concerns the auto industry, and therefore, the economy of Ontario.

Although 129,000 jobs were lost in Canada in January, it is extremely disappointing to note that the employment insurance program contains almost no substantial improvements, particularly with regard to eligibility.

Following numerous negative changes to the EI program with the 1990s reforms, we are now experiencing a major economic crisis for the first time with a plan that is ill-equipped for the situation. The CSN is still asking that the two-week waiting period be abolished, that significant improvements be made to the eligibility rules and that there be a 60% income replacement rate based on the 12 best weeks for the reference period.

Furthermore, the CSN has long demanded a financial support program to allow older workers who have lost their jobs to make ends meet in the time between when their EI benefits run out and their retirement benefits kick in.

Despite the recession reducing federal revenue, the government has decided to go forward with new tax cuts that could impose budget cuts to get out of the recession. If the tax credit to support the construction industry seeks to play a role in the economic stimulus plan, the general tax cuts for individuals is instead an ideology seeking to reduce the role and size of the state.

The CSN has calculated that the new cumulative tax cuts introduced by the Conservatives in fiscal 2009-2010, including those in the most recent budget, total $82 billion. For 2009-2010 alone, this economic strategy will deprive the government of $29 billion.

The CSN condemns the fact that this budget, like its predecessors, is making it even more unlikely that Canada will reach the Kyoto Protocol targets. The Canadian government continues to grant financial assistance to the oil and gas industry when even the OECD suggests abolishing them. The recent budget continues this trend: the government is offering hundreds of millions of dollars to develop a carbon capture project, yet another initiative that will benefit the oil companies.

Lastly, I would have a few words to say about the fundamental rights that are being undermined by bill C-10.

First of all, there is the issue of federal public servants' pay increases that have been capped at 1.5%. In the case of the CSN and its affiliate, the Union of Canadian Correctional Officers, an agreement was reached for a 2% increase for 2009-2010. We are witnessing a denial of the right to negotiate, as recognized by international conventions.

As for pay equity, we believe that the bill is an affront to women's fundamental rights and the recognition of the value of their work. The government is even redefining the notion of “job class”, allowing it to limit the concept to “female predominant job group”. The government is making this right negotiable, rather than requiring the implementation of true pay equity programs.

We are calling on the government to remove the pay equity provisions from bill C-10 in order to adopt truly proactive legislation at a later date.