Finance Committee on May 7th, 2008

[The Chair, Conservative, Rob Merrifield]

I will call the meeting to order. We have quorum.

I want to thank the witnesses for coming forward.

I also want to remind the committee that we have extended our panel somewhat. We had originally had five, and now we have seven. We've asked each one to limit their comments to seven minutes maximum; please don't feel compelled to use all seven minutes. Nonetheless, we'll try to move it along as quickly as possible.

I would also remind the committee that bells will start at 5:15 for a 5:30 vote. That's going to cut our time a little bit. I also want to leave five or ten minutes at the end for discussion with regard to our last meeting and the dialogue I had with the chair of the immigration committee with regard to Bill C-50.

With that, we will move right along. We want to first of all focus our attention on Bill C-50. That's what our witnesses are here to discuss with us.

First up is David Stewart-Patterson of the Canadian Council of Chief Executives. I'll introduce the others as we yield them the floor.

Mr. Stewart-Patterson, the floor is yours for seven minutes.

[David Stewart-Patterson, Executive Vice-President, Canadian Council of Chief Executives]

Thank you, Mr. Chair, and thank you to the members of the committee for the opportunity to appear.

I think the views of the Canadian Council of Chief Executives on budget 2008 as a whole are a matter of record, and I'm not going to go into them in great detail here. I believe that the budget as a whole did build on the October economic statement by adding some important measures that will have a positive impact on Canada's competitiveness at relatively low cost to the treasury.

I've just returned from Calgary, where we had a meeting of our members with all four of Canada's western premiers in turn, the premiers of Manitoba, Saskatchewan, Alberta, and British Columbia. We also had a round table discussion on the state of the economy. Clearly the outlook in western Canada is pretty robust. In Ontario, Quebec, and parts of Atlantic Canada, it's considerably more troubling. I think the subprime mortgage crisis in the United States is clearly spilling into real estate prices, making it harder for businesses and consumers to borrow in that country, and it's clearly going to spill over into our country to some extent. All of that is simply to say it reinforces the need for a prudent approach to fiscal policy and to the management of public spending.

If I may, let me address three specific provisions in Bill C-50 that I think support the broad thrust of the budget: employment insurance, student aid, and immigration.

On the first, we strongly support the creation of the proposed Canada Employment Insurance Financing Board. I think the business community has argued for many years that employment insurance premiums should be set by an arm's-length body on a break-even basis, and that the funds collected through these premiums should be managed in a segregated fund. We do have a continuing concern about the tendency to use the employment insurance system to provide benefits that might better be characterized as social programs. Over the longer term, we believe that money raised through employment insurance premiums should be focused more precisely on its core mandate of providing insurance against temporary job loss, and that other programs should be funded through general revenue. However, that said, the creation of the new board marks a critical step in the right direction.

Next let me speak to the issue of student aid. In an increasingly knowledge-based economy, we must ensure that every single Canadian is both able and motivated to participate and succeed in post-secondary education. Now, when I say post-secondary, that may be through university or college, it may be through apprenticeships, it may be through training and lifelong learning both within and beyond the workplace. The Canada Millennium Scholarship Foundation got off to a rocky start, but over time it found ways to work constructively with provincial governments, and I believe it became a catalyst for innovation in improving access to post-secondary education in this country. The government has opted to dissolve the foundation and replace its scholarships with a new and hopefully more robust approach to student aid. The design of the new rules is going to be critical in ensuring that the federal resources allocated to student aid are as effective as possible in overcoming the financial barriers to success in post-secondary education.

I also believe that government should move to preserve and build upon the research capacity developed through the foundation. Here, I would suggest passing its research mandate and funding to the Canadian Council on Learning, which I believe has become an important credible source of information about how Canada is doing in the field of education and what policies work best in enabling every Canadian to achieve his or her full potential.

Finally, Mr. Chairman, let me speak to the provisions of Bill C-50 that affect immigration. Canada is facing serious and growing shortages of skilled labour. These shortages are most acute in the resource sector, but they are affecting businesses of all sizes in every industry and in every region of this country. These shortages are only going to get worse as our population ages. Both Canadian employers and potential immigrants today face a huge frustration, a backlog of some 900,000 applications that under current rules have to be processed in the order they're received. The result is that a skilled worker ready to contribute to Canada's economy faces a wait of up to six years before even having his or her application processed. My understanding is that delay could grow to 10 years as early as 2012.

This legislation would give the Minister of Citizenship and Immigration some discretion to set priorities within the system. It would help in particular to speed the flow of immigrants with skills that are urgently needed in our economy. While any legislative provision for ministerial discretion may cause concern, the process outlined in this bill for issuing ministerial instructions does provide both transparency and accountability. The fact is that the current system is not working. It's not working for immigrants and it's not working for Canada. We need improvements now, and we cannot waste years more in pursuit of perfection. Whatever flaws anyone may see with the process proposed here, it does represent a clear improvement that will start to make a difference right away.

On all three of these issues, employment insurance, student aid, and immigration, Bill C-50 moves public policy toward better solutions. In each case there is more work to be done, but we support the intentions of the bill and we are prepared to work with the government to ensure that the resulting new programs and institutions achieve the best results possible for Canadians.

Mr. Chairman, thank you.

[The Chair, Conservative, Rob Merrifield]

Thank you very much. You led by great example; your timing was bang on. I appreciate that very much. Thank you.

We'll now move on to the Chinese Canadian National Council. We have Victor Wong.

The floor is yours. Seven minutes, please.

[Victor Wong, Executive Director, Chinese Canadian National Council]

Thank you, Mr. Chair.

The Chinese Canadian National Council is a community leader for Chinese Canadians in promoting a more just, respectful, and inclusive society. Founded 28 years ago, CCNC is a national non-profit organization, with 27 chapters across Canada. Our mandate is to promote the equality rights and full participation of our community members in all aspects of Canadian society. As a national anti-racism and human rights organization, we believe that legislation and public policies must reflect the democratic, humanitarian, and social justice values that are commonly shared by Canadians and that such policies should enhance the ability of everyone, including newcomers, to make an important contribution to the future of this country.

According to the 2006 census, there are more than 1.3 million Chinese Canadians living in Canada. We are the second largest racialized community in Canada. The Chinese Canadian community is a diverse community, with a rich though sometimes tragic history spanning 150 years in this country. Our community was subjected to racist immigration legislation in the form of the Chinese head tax, Newfoundland head tax, and Chinese exclusion act. It was also subjected to various exclusionary policies and programs and practices at the local level. It is this direct experience with exclusionary immigration legislation that guides us in formulating the following analysis and constructive suggestions for your consideration.

I'd like to speak specifically to the proposed immigration changes in Bill C-50. First of all, we must recognize that immigration is integral to nation-building. Prime Minister Stephen Harper recently stated that the government favours an aggressive immigration policy, yet the government's approach to immigration has been less than inspiring. We need to be visionary as opposed to applying a just-in-time business model. Immigration is not about filling regional labour market shortages with just-in-time labour, and CIC is not a temp agency.

There are three key words I would propose that could guide us in our strategic vision on immigration: nation, dignity, and choices. We should be building a nation of active citizens.

Our first recommendation is that we need a comprehensive immigration plan, one that offers a clear path to legal status and citizenship. We know Canada's population is aging. More and more workers are retiring as the baby boomers turn 65 years of age, beginning in the year 2011. The birth rate is low. With the right vision, we can develop the proper plan based on an aggressive immigration policy.

The proposed immigration changes in Bill C-50 are not the answer. When these proposed changes were first introduced back in March, Immigration Minister Finley said they were needed to address the backlog in applications. However, when we carefully read the proposed changes, we found that they apply to applications received on or after February 27, 2008. In other words, these proposed changes do not apply to the existing backlog of applications. Therefore, these changes shouldn't even be in the budget implementation bill.

The government has suggested that these changes will help process applications more quickly, yet over the last three years Canada has by and large met its immigration target range. We've received an average of 250,000 immigrants every year for the last three years: 237,000 in 2007, 252,000 in 2006, and 262,000 in 2005. These applications were processed with the existing complement of staff resources. In other words, we're already at or near our capacity. Even if we are more productive and process our yearly target of 250,000 immigrants, let's say, within nine months of the year, we would have to stop processing applications because we would be at the limit of our target range.

We cannot reduce the backlog unless we increase the immigration target range. Our recommendation is that we increase the immigration target range, which is 240,000 to 265,000, to be 300,000 to 330,000, which is around 1% of the Canadian population.

In conclusion, there's a lack of transparency around Bill C-50. This fosters the current climate of mistrust. The immigration department has had weeks to table a revised immigration plan so that we can track the impact of these changes.

Our recommendation to the finance committee is that you recommend or you make an amendment that these proposed immigration changes in Bill C-50 be withdrawn, and that the government instead issue a proper discussion paper and organize national consultations before drafting legislation.

Thank you, Mr. Chairman.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We will now move on to Pierre Céré from CNC. The floor is yours for seven minutes.

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

Good day.

First of all, on behalf of our organization, the Conseil national des chômeurs et chômeuses, I would like to thank you, Mr. Chairman, as well as all the MPs from the various parties represented on the Standing Committee on Finance.

Our organization represents various groups of unemployed persons, some of whom have been working for about thirty years informing people and defending their rights. We have been on the front lines of many public opinion campaigns criticizing the misappropriation of the employment insurance fund and above all, demanding a better employment insurance system.

I am here today to share our views on the upcoming establishment of the Employment Insurance Financing Board, as set out in Part 7 of Bill C-50.

We have done our homework and examined this bill very thoroughly. We have also compared it with the current Employment Insurance Act.

In our opinion, most of the provisions in Part 7 of Bill C-50 respecting the Financing Board mean very little in the way of changes to the current employment insurance legislation. I will give you a few examples and I urge you to check for yourself in the bill over the next few days. Section 66(1) of the current act provides for the following:

[...] the premium rate should generate just enough premium revenue to cover the payments that will be made [...]

Balancing expenditures and revenues is the aim behind the establishment of the Financing Board.

According to section 66(2) of the current EI Act, the premium rate for a year may not be increased or decreased by more than 0.15%. The Financing Board will also abide by this provision.

Section 66.3 of the Act provides that:

the Governor in Council may substitute a premium rate if it considers it to be in the public interest [...]

Bill C-50 also contains a similar provision, even though this is covered in the existing legislation.

There is, however, one difference between the current situation and the planned establishment of the Employment Insurance Financing Board: the creation of an independent account would mean that workers' contributions remain in the fund and can no longer be used for other purposes. This is a significant difference.

As everyone here well knows, it was estimated that between 1995 and March 31, 2007, the government confiscated $54.1 billion from the fund and used it for other purposes. Appearing recently—I believe it was last week—before the human resources committee, the Minister of Human Resources and Social Development, Monte Solberg, acknowledged the surpluses and the fact that they had been confiscated and misappropriated. He stated that this must not happen again and we agree with him.

The establishment of the new Crown corporation for the sole purpose of managing the fund and setting premium rates is welcome news. However, as we stated before, very little has changed. Most of the provisions of the bill were already in effect and under the Commission's responsibility. Putting it another way, it would even be possible to envisage the establishment of an independent account under the control of the Employment Insurance Commission, which would carry out the mandate of the announced Employment Insurance Financing Board. Nothing then would change.

In either case, with or without the Financing Board, under the Commission's responsibility or not, the creation of this board does not mean that all problems would be resolved. Some problems are in fact not addressed at all by this initiative. In our opinion, creating the Employment Insurance Financing Board does not resolve the issue of the confiscation of the accumulated $54 billion surplus. Nor does it address the improvements needed to the employment insurance system in order to provide better financial protection for workers when they are between jobs.

On the first point, we propose that section 80 found on page 121 of Bill C-50 be amended so that basically, when the EI fund is in a deficit situation, the Governor in Council and the Consolidated Revenue Fund may authorize an advance to the account. However, the advance to the EI fund shall be repaid to the Consolidated Revenue Fund, with interest.

This is already covered in the current act and this is the intent behind the establishment of the Financing Board. We are proposing that these would not be reimbursable advances, but rather non-reimbursable payments drawn from the accumulated surplus.

As such, we are proposing that Bill C-50 be amended to provide for the keeping of records on this accumulated $54 billion surplus with interest until it is fully reimbursed, and that this surplus be regarded as a debt. It works both ways.

Our institutions, laws and people must never forget what can be described as one of the biggest financial scandals in Canada in the 20th century: the misappropriation of billions of dollars in employment insurance contributions that were intended to better protect Canadians.

Let me explain what I means Mr. Chairman. Global political events can sometimes be instructive.The great politician Nelson Mandela taught us that reconciliation has a price, namely truth, and that reconciliation can only take place once the truth has been established. In other words, we are not showing your our fist, but rather extending to you our hand, in the hope that the truth will emerge about the amounts stolen from the EI fund.

Moreover, the addition proposed with clause 70.1 on p. 119 of Bill C-50 provides for a $2 billion reserve fund. This reserve fund is insufficient. According to the Canadian Institute of Actuaries, it should be $15 billion. We propose, therefore, that this reserve be increased or that provision be made to add future annual surpluses to this reserve without affecting the balance of accounts.

Still with regard to Bill C-50, we propose that the appointment process for the Board of Directors and for the Chairperson of the Board—clauses 9 to 13 of the bill—be subject to the approval of the Standing Committee on Human Resources. This would make the process more transparent and more democratic.

Finally, the main message we wish to send to the members of this committee is that the creation of the Employment Insurance Financing Board does not address the real problem. It means that over 50% of unemployed workers are not eligible for employment insurance benefits, according to figures just released by the department. This is the most important issue to us, the key issue and the only one that we truly should be fighting for.

Whether or not the Employment Insurance Financing Board is created, the employment insurance system must be improved. Sometimes in the course of history, we must all work together, even if only for a very short time, to make progress on a social issue such as the employment insurance plan which is designed to protect workers in Canada. This is a highly political issue.

Mindful of our responsibilities, we are appealing to parliamentarians and to the various political parties represented in the Parliament of Canada.

Thank you, Mr. Chairman.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

I allowed you to go a little bit over time, but please try to keep it down. You'll have another chance when we get into questions and answers, but I don't want to rob time from committee members.

We'll turn now to John Dirks and Sheila Robinson from the Gairdner Foundation. The floor is yours.

[Dr. John Dirks, President, Gairdner Foundation]

Thank you, Mr. Chairman.

I'm here with my colleague Sheila Robinson, representing the Gairdner Foundation.

ln its February 26 budget, the Government of Canada announced an allocation of $20 million to endow the Gairdner International Awards. Beginning in 2009 the awards will be renamed the Canada Gairdner International Awards. An agreement was signed between the foundation and the Canadian Institutes of Health Research.

The purpose of the allocation is twofold.

The first purpose is to increase the value of the Gairdner awards to $100,000 each in keeping with their stature and with international competition. They have fallen behind, and awards are always recognized and identified with their country of origin, as are the Gairdners. The last time the prizes received an increase was in 1984, at $30,000, which is about the $100,000 value today.

Second, we are going to establish for the first time an individual award for global health, the Canada Gairdner Global Health Award, which will be the most prestigious in the world in this field. It will be directed at international scientists for discoveries or major advances in preventing and treating diseases in the developing world.

The Gairdner awards are a national asset. They're Canada's only globally known and respected international prize of any kind. Gairdner is the only national organization that consistently brings the world's best biomedical researchers to Canada to share their ideas and work with scientists across the country. It epitomizes the knowledge advantage. Canada has built a strong research foundation. Industry Canada wants to put in place programs that will inspire Canadians to perform at world-class levels of scientific excellence. The Gairdners are a perfect example of such a program.

Let me give you two discoveries that have led to enormous economic impact, both by honourees of the Gairdner Foundation. The whole current biotech industry rests on discoveries, from the double helix through current discoveries like the microRNAs being honoured this year. Dr. Bruce Chown of Winnipeg in the sixties developed a treatment for Rh-negative disease, which killed babies born with life-threatening anemia. A spin-off is that Calgene is now Canada's most profitable biotech company.

Advantage Canada is committed to world-leading basic and applied research. Gairdner recognizes, encourages, and celebrates such research, and in doing so fosters a culture of innovation in Canada. Who else in Canada provides a realistic and unbiased benchmark for Canada's leading scientists in comparison with the world's leading biomedical scientists? Bringing the best international scientists to meet and share their work with Canadians is what we do every year. Because biomedical research is international and global, it's important that we have such a set of awards. Gairdner does this through its national program and by its prestigious medical advisory board. Gairdner winners have also become involved every year in the scientific community, bringing the most recent knowledge to the fingertips of our scientists and graduate students.

The experience of the Gairdner Foundation could also act as a model to the development of other international science awards synergistic with Canada's overall science and technology strategies and priorities, using similar arm's-length adjudication procedures.

James Arthur Gairdner started the foundation 48 years ago to reward international scientists for discoveries. An external measure of that stature is that of the 293 individuals from 13 countries, including 42 Canadians, who have received Gairdner awards, 70 have later won the Nobel Prize. Even more remarkable is that in the past six years, 11 of the 14 Nobel prizes in medicine have gone to former Gairdner awardees. Paul Nurse, the president of Rockefeller University, a Gairdner-Nobel laureate, said, “The Gairdner [award] is one of the world's greatest biomedical research prizes.... Where it leads others follow, including the Nobel committees in Stockholm.”

The core mandate of the foundation is to select annual Gairdner international awardees. It has a respected two-stage jury system, which involves a Canadian medical review panel with members from coast to coast. The second stage involves the medical advisory board, which is half international, half Canadian, and has on it five Nobel laureates and prestigious representatives from international institutions.

We not only give the prizes, but we have a national program that extends from Vancouver to St. John's every year in October. We have student outreach programs to senior high school students in order to inspire them into science and professional careers. We speak to the public so that there's a major interaction at all levels with Canadian citizenry.

We are now also on the verge of introducing a global health prize. Canada has a significant international reputation in the global health field. No individual prize exists, and this allows a platform to be built within Canada and, we believe, within this city that will platform and highlight global health advances in communicable diseases and population health and in the environmental health issue.

Recently our board has changed from a family to a public board and has representatives on it from Quebec, Ontario, Manitoba, Alberta, and British Columbia, and we are developing many new partnerships.

The future. The awards will continue the successful rigorous selection process, and we will not alter that value, which has served us well. Second, we will embark on a fundraising campaign from the provinces and from the private sector to add to the costs related to our foundation. The government grant provides the endowment for the prizes, but we need to carry out our programs or events and our professional activities. We are glad to say that the Government of Alberta has already contributed $2 million in this direction, and we hope other provinces will follow. Every year $700,000 is raised from corporations and institutions across the land.

Finally, we believe the Global Health Award will be a new platform for Canada in the international health field. So we look forward to a future, especially next year when we will celebrate our 50th anniversary with major events across the country dealing with cancer, with commercialization, with innovation, with childhood diseases, and other aspects. It may be the most spectacular year in health sciences that this country has ever had.

We believe strongly that the support of the Gairdner Foundation is of value to every Canadian in terms of development of science culture, science literacy in Canada, and the development of skilled personnel in the life sciences and health research and professions. We believe that we'll increase public awareness and stimulate the highest levels of international excellence in research.

Thank you, Mr. Chairman.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We'll now move on. We have with us from Status Now! Campaign in Defense of Undocumented Immigrants, Ms. Zerehi.

The floor is yours for seven minutes.

[Sima Sahar Zerehi, Coordinator, Status Now! - Campaign in Defense of Undocumented Immigrants]

Thank you.

I'm here on behalf of the Status Now! Campaign in Defense of Undocumented Immigrants. Our campaign includes various national, regional, and local immigrant refugee organizations, community organizations, trade unions, and agencies. We're extremely concerned about the proposed amendments to the Immigration and Refugee Protection Act as part of the bill for the federal budget, Bill C-50.

Throughout the past month, community groups have united across linguistic, cultural, and ethnic lines, with the Portuguese, South Asian, Arab, Hispanic, and Chinese communities working in partnership with trade unions and lawyers associations in a united campaign in opposition to the proposed immigration amendments. Our communities are extremely disturbed to see that such important changes to IRPA are being pushed through as part of the federal budget and are being reviewed by the Standing Committee on Finance rather than the Standing Committee on Citizenship and Immigration. Specifically, we're concerned about the lack of transparency and the failure on the part of the government to conduct thorough community consultations prior to the introduction of these amendments.

Our recommendation is to separate the immigration amendments from the budget implementation bill, and to recommence the process by conducting in-depth nationwide community and immigration sector consultations, under the guidance of the Standing Committee on Citizenship and Immigration.

I won't go into the issue of the backlog of over 925,000 cases, as my colleague Victor Wong has already addressed that. I'll just say that these changes will not speed up the processing of applications. In fact, giving the minister the power to discard applications that meet all immigration requirements is unfair, arbitrary, and open to abuse. We believe that if the minister wants to speed up the application process, she should hire more people to review the applications, and not simply refuse to look at the applications. People who have been waiting for years in the system deserve to have their applications looked at.

Our recommendation is to gear the budget allocations for the Department of Citizenship and Immigration towards strengthening the capacity within the department to effectively eliminate the backlog in processing family reunification requests and permanent resident applications.

Although the backlog is a justification used to push through these damaging changes, upon closer examination of the facts, it becomes evident that the real issue at stake is not the application processing times, but the low annual targets we have set for permanent residents entering the country. My colleague Mr. Wong has already addressed the numbers. Once again, to address this backlog, I'd like to reiterate the recommendation to increase the annual immigration target from the current range of 240,000 to 265,000, to 300,000 to 330,000, which is about 1% of the Canadian population.

The proposed changes will give the Minister of Citizenship and Immigration unfettered power to decide what category of immigrants will be allowed to enter the country each year. The minister has again and again assured immigrant communities that there will be no discrimination, as the Charter of Rights and Freedoms will be respected. However, without an open and transparent democratic process in place to oversee the minister's decision, certain groups of immigrants could easily be overlooked. Unfortunately, the charter does not help potential immigrants trying to come to Canada. If the minister's instruction is to fast-track temporary foreign worker applicants from Thailand, as opposed to parents coming from India or Iran, the charter cannot prevent her from doing so.

We have been told that the minister's instructions will not allow the minister to intervene in individual cases. However, by changing just one word in the act, from “shall” to “may”, applicants can meet all requirements, receive sufficient points, and still be rejected. This simple change in wording renders the entire point system and its objective, non-discriminatory criteria meaningless. New immigrants will never have an assurance that if they meet the necessary criteria to come to Canada as permanent residents, they will be granted entry. These new powers are dangerous. With no set criteria, there is far too much room for arbitrary or discriminatory decision-making.

Our recommendation is to implement an immigration strategy that is open, transparent, and accountable, with criteria for permanent residency that are clear and that do not grant unfettered power to a single minister.

We have tremendous concerns about the lack of transparency within these proposed amendments. Under this new system, annual immigration priorities and categories will not be reviewed and debated within the Standing Committee on Citizenship and Immigration, but will be made solely by the minister and her office and then be published in the Canada Gazette. The publication may occur after the instructions come into effect, which would prevent consultation.

The minister will have the authority to develop instructions that are not subjected to debate or approval in Parliament. In this scenario, elected members of Parliament and the House of Commons will have no say over these instructions. For many members of immigrant communities who have come to Canada to escape oppressive regimes that reject democratic involvement, it is very concerning to see that here in Canada we're debating measures that will serve to discard the democratic procedures and concentrate the power in the hands of a single elected official.

We have been told that the proposed immigration amendments will not affect families from being able to unite under humanitarian and compassionate grounds. However, even a cursory glance at the legislation demonstrates that the minister and her officials no longer have to consider applications under the humanitarian and compassionate grounds if the family member is outside of Canada. This will mean that the humanitarian and compassionate application, which is the only course for many refugees' families to reunite, will no longer be a viable option.

In addition, we're concerned about the current policy shift of the immigration ministry whereby immigrants are increasingly being understood and treated as cheap and exploitable labour to be brought here through temporary visas. In fact, the most prevalent argument made in favour of these amendments is that they will give flexibility to visa officers to bring in skilled workers to meet labour needs.

Employers claim labour shortages of both high-skilled and low-skilled workers. Much of this perceived labour shortage is occurring in the lower-skill sector. Under the existing point system, low-skilled workers will never have enough points to stay in Canada as permanent residents and never qualify as citizens or be able to bring their families to Canada.

Our recommendation is that the government needs to reform the requirements under the Immigration and Refugee Protection Act and bring workers to Canada permanently rather than rushing in these potential immigrants as temporary cheap labourers.

I have a couple more points, a couple of recommendations.

We need to implement a full, inclusive, and accessible regularization program to address the issue of undocumented workers, because we already have workers in this country providing the labour for many of these industries.

I'll conclude by saying that it is true that our current immigration system is broken, but if these amendment go through, the immigration system will no longer be broken but shattered beyond repair.

[The Chair, Conservative, Rob Merrifield]

Thank you. We will get your presentation distributed in both official languages so that the committee will be able to follow it in detail.

We now have, from the Canadian Federation of Students, Amanda Aziz. The floor is yours.

[Amanda Aziz, National Chairperson, Canadian Federation of Students]

Good afternoon, and thanks very much for the opportunity to speak here today.

We're obviously here to speak today about Bill C-50's implications on Canadian student financial assistance.

The Canadian Federation of Students is Canada's largest student organization. We represent undergraduate and graduate students at Canada's public universities and colleges, both small and large. Altogether, we unite over half a million students on campaigns for affordable, high-quality, post-secondary education.

One of our longest-standing campaigns is for a national system of student grants. The up-front financial barriers to post-secondary education play a major role in explaining the unacceptable participation gap between families in the lowest and highest income quartiles. Grants are a vital tool for giving students and their families the help they need to afford post-secondary education in the face of skyrocketing tuition fees and other costs. Perhaps more importantly, grants, unlike loans, provide that help without mortgaging the future of Canada's young educated workers.

Student debt owed to the federal government through the Canada student loans program is increasing at $18 per second, more than $1.5 million a day. In July this year, student loans owing to the federal government will surpass $13 billion. That doesn't include student loan debt owed to provincial governments, which could add at least $7 billion more to the debt, nor does it include debt from private sources such as banks.

In provinces where tuition fees are the highest, average student debt is more than $28,000, according to the Maritime Provinces Higher Education Commission. This is an embarrassment for a country as rich as Canada.

Ten years ago the federal government created the Canada Millennium Scholarship Foundation and endowed it with $2.5 billion. The size and scope of this investment should be recognized as a substantial and well-meaning attempt at reducing student debt and improving access to post-secondary education. Sadly, the foundation was a flawed mechanism for social programming and, by most accounts, failed to deliver much relief to Canadian students.

Provincial governments widely abused the funding from the millennium foundation, seeing it as a slush fund for their own experiments or tangential priorities. As an arm's-length and private organization, the foundation was never accountable or transparent, and it used this untouchable status for deeply political ends that in most cases ran contrary to its mandate to improve access to post-secondary education. It provided political cover for increased tuition fees, and it enriched former employees with lucrative contracts. It also paid out nearly $250,000 in subsidies to organizations that supported its renewal.

We could argue for hours about whether or not the government should have seen this coming, but I'm here today to suggest that the best intentions led to a failed experiment. This government was right to listen to expert advice and go in a different direction. The proposed Canada student grant program will avoid so many of the pitfalls of its predecessor and will serve as a predictable and stable funding source for Canada's students.

Students need non-repayable grants, and that's not the issue. As the government has recognized in budget 2008, the issue is how grants are administered by this government, and the record is clear. The Millennium Scholarship Foundation has failed in doing so, and there is a more effective way.

In the coming months and years we look forward to providing feedback about how to maximize the new grants' effectiveness and reach, but in the meantime I encourage all parties to implement budget legislation to wind down the Millennium Scholarship Foundation. I assure you, with an HRSDC-administered program in its place, students will not miss it.

In the last few minutes I have, I want to talk about something that this bill doesn't specifically address, but that should be among the top priorities in the debate on post-secondary education policy, and that's the need for this government to invest in education for aboriginal people.

The gap that exists between low- and high-income Canadians participating in post-secondary education is even more pronounced between aboriginal and non-aboriginal Canadians. Completion rates for high school, university, and to a lesser extent, college for aboriginal people lag far behind those for non-aboriginal Canadians. And while this gap continues to widen, the population growth of aboriginal people in Canada is skyrocketing. A study commissioned in 2006 found that over 30% of the aboriginal population is under 24 years old. Despite these demographics, funding for aboriginal students has not increased. In fact, funding for the post-secondary program at the Department of Indian and Northern Affairs has remained virtually stagnant since 1996, with an inadequate 2% annual increase cap.

The Assembly of First Nations estimates that more than 13,000 eligible students in the last six years alone have been denied funding to participate in post-secondary studies. Despite the recommendations in the sixth report of the Standing Committee on Aboriginal Affairs and Northern Development last June, budget 2008 delivered no new funding for aboriginal learners and continued the cap on funding increases in INAC's post-secondary program.

We recommend the federal government immediately remove the funding cap on the post-secondary student support program and explore opportunities to provide support for non-status and Métis students, who are currently not eligible for support under INAC's post-secondary education program.

In closing, I want to thank the committee again for the chance to speak today, and I'll introduce Ian Boyko, who is the government relations officer. Obviously there are many issues in the budget that the time limit didn't allow us to discuss, but I look forward to your questions.

Thanks.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We'll now move to our last presenter, the Canadian Labour Congress. We have Andrew Jackson.

The floor is yours for seven minutes, and then we'll move to questions and answers.

[Andrew Jackson, National Director, Social and Economic Policy, Canadian Labour Congress]

Thank you, Chair. I'm glad you have your water back and that we can appear.

For the record, I would state that the CLC would support removing the immigration provisions of this bill for separate consideration and consultation.

I probably won't have time to speak to it, but we'd also be very critical of the introduction of a tax-free savings account, which we'd see as a major step over the long term towards freeing investment income from taxation. It's potentially a very costly long-term measure.

That said, I will focus my remarks on the EI Financing Board. I agree with much of what has been said. I think the key change and objective in the bill is to ensure that future surpluses in the EI account, moving forward, could be used to reduce premiums, or for that matter, to enhance benefits. I think that in itself, in isolation, is probably a very modest improvement over the status quo, but it's really turning a page on history that I think can't be turned at this point. We have to come to grips with the legacy of the past decade.

As members probably know, in the Supreme Court next week they have agreed to hear a case on the legality of collecting a $54 billion accumulated surplus in the EI account. The federal government's case is that it was constitutional to levy a payroll tax, as indeed is the case. The question is this: if the previous federal government had levied a tax to reduce the deficit and debt, would they have chosen the EI premium to do so? I think not.

Considered in isolation, it's a very regressive tax. Its regressivity is justified in the EI context by the fact that benefits are proportional to premiums paid and income covered.

The second key point is that for several years, from the mid- to late 1990s when ministers were questioned about the accumulating surplus in the EI account.... Let's not forget that it was produced by the fact that we had a freeze on the level of the maximum benefit for 10 years. So the level of the maximum benefit was reduced by 30%. We had a shift to an hours-based system, so there was a lot less eligibility for the program. The justification for building up that surplus was that the accumulated EI surplus would remain in place to backstop the EI account itself, so that if we went into a recession or we went into a downturn, we wouldn't be having to increase premiums or reduce benefits.

So if we're just turning the page, where are we? We sit with a $54 billion surplus still sitting in an EI account, completely integrated with the public accounts. And we're creating a whole new account--which, by the way, is also completely integrated with the public accounts--that manages a reserve fund, with the reserve to be set not by the new board but by the government, by regulation.

So what has really changed? As far as I can see, the only thing that has really changed is that if that account accumulates a surplus moving forward, indeed, that surplus will be retained.

I guess, for our part, we say that we're not really prepared to just wave goodbye to that $54 billion and forget the history of how it was collected. At an absolute minimum, the reserve in the new account should be sufficient to fully backstop the EI fund in the event of a recession. Now, that doesn't cost you $54 billion, but it costs probably in the range of $10 billion to $15 billion, according to expert calculations.

I think the intent of the legislation, and quite rightly so, is to ensure that the new EI Financing Board has no role at all in setting the basic parameters of the EI program. It will have nothing to say about how the program is delivered; it's only about premium setting. I think that is the right approach, and the intention is correct. However, in our submission we do suggest specific wording to clarify that the new board should not do analysis on the program and its impact and delivery; that should remain the property of Human Resources and Social Development Canada. Nor should it be making any suggestions as to how the premiums should be divided; that's between workers and employers.

Some people might have noticed quite an active employer constituency asking to reduce the employer premium and shift it onto workers. I think it's essential to make sure this remains a political decision and is not within the purview of the new board.

I think those are the most important points: we need a reserve fund that does allow employment insurance to act in a counter-cyclical fashion if and perhaps when we hit a recession, and to ensure that the new board plays an extremely narrowly defined and limited role. I think it is also important to ensure there is still full ministerial accountability for the employment insurance program and how it operates, and that separating the fund doesn't remove the minister from responsibility and accountability to the House for the program.

If I have a minute to speak to--

[The Chair, Conservative, Rob Merrifield]

One minute.

[Andrew Jackson]

I'll get it off my chest.

On the tax-free savings accounts, the key point here is that this is the thin edge of the wedge, and if you allow a $5,000 contribution to those accounts to ramp up year after year after year, you're potentially introducing over time a savings vehicle that could begin to match RRSPs in its size and importance.

The very affluent in our society, the only ones who have maxed out their RRSP savings, are really the only ones who would take advantage of this new fund, at least above a certain limited low threshold.

I do think there are arguments for having some element of savings income free of tax. The fact that older Canadians who are in a low-income situation would qualify for the guaranteed income supplement and would therefore penalize themselves if they saved is a problem that should be addressed. The people on social assistance, I think, should be allowed to have modest amounts of savings. Having a modest amount of savings tax-free is one thing, but to have something that ramps up year after year after year to where it becomes a significant tax shelter isn't up.

Thank you.

[The Chair, Conservative, Rob Merrifield]

Thank you. You have made your point.

We are going to be a little tight on time. I want to ask the committee members if you want a seven-minute first round, or do you want to go five minutes and allow more?

[Some hon. members]

Seven.

[The Chair, Conservative, Rob Merrifield]

Seven. I'm looking for consensus.

Okay. Mr. McCallum, start for seven minutes.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you very much, Mr. Chair, and thank you to all the witnesses.

I will use my time on two issues, the immigration question and the EI.

On immigration, I say to Victor Wong and Ms. Zerehi that I basically agree with the thrust of what you are saying. Mr. Wong, you represent the Chinese Canadian National Council, and my riding is 38% Chinese people, so what you say is what I'm hearing, and I definitely agree. I've used the term “it treats immigrants like commodities rather than people” and you've used the term “temp agency”. I think it is the same thrust.

I'd like to ask one question. I don't think I heard either of you mention it, but the government is no longer obliged to accept applications from outside Canada on humanitarian and compassionate grounds. Could either or both of you give your view on that, concisely?

[Sima Sahar Zerehi]

It is very simple. I did briefly address it, but I addressed a lot of points. The point is that the humanitarian grounds outside of Canada application is the only application that is available for many categories of immigrants to be reunited with their families, including people who are here as refugees and need to be reunited with siblings who were not included in the initial refugee claims because of certain conditions. A lot of families in Canada will be unable to finally be reunited with their siblings, with their children, with their spouses, because we will no longer have the minister required to review humanitarian and compassionate applications if they're outside the country.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

Mr. Wong.

[Victor Wong]

For some separated refugee children, the agency is about the only option they have to reunite their families. If you close off applications from outside the country, you are closing off that family reunification. We're a community that has gone through family separation by legislation, and that was the Chinese exclusion act. There is no reason for the government to be introducing this, because from the statistics, we're talking about maybe 1,000 cases. Again, any time we restrict immigration, we find a lot of people simply fall through the cracks.

[John McCallum, Liberal, Markham—Unionville, ON]

I think you mentioned this. If you put very few resources into the system, you're not going to get a big improvement in the backlog. You need to put in significant resources. If you put in very few and you fast-track one group, you're going to slow-track another group. In this case, it's families.

Let me now move to a particular aspect of EI. In a sense, we have big business sitting across the table from big labour over there. Perhaps I could focus on these two gentlemen and see the degree to which you may agree or disagree.

My concern with the new EI arrangement is not quite what I heard either of you say. It is that the system could become what economists call pro-cyclical. The actuaries agree with this, so it must be right. The actuaries say that the EI account should be balanced over the business cycle. This way, when you have a recession, whether it's due to poor Conservative policy or any other reason, you don't immediately have to jack up the premiums in order to keep it in balance. You would run EI deficits during recessions, surpluses during good times, and you would balance over the cycle. The problem with this government proposal is that they force premiums to react almost immediately to past or future deficits. Under this new system, you're going to have a big jack-up in premiums during the worst recessionary times. This leads to bad economic policy. It's not just me saying this; the actuaries are saying the same thing.

Could I ask both of you if you have a view on that point.

[Andrew Jackson]

I agree. We should have a fund with a reserve sufficient to go through recessions. We don't need to build up that reserve now, because we already have more than enough for it.

My understanding of the bill, though, is that the parameters for premium changes from year to year are exactly the same as they were under your government. There's no real difference, other than the $2 billion that's there to backstop it.