Finance Committee on Sept. 16th, 2009

[The Chair, Conservative, James Rajotte]

You have 30 seconds remaining, Mr. Roy.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

You are restricting me, Mr. Chair.

The Quebec program you referred to still exists. There is a cap of $5,000 per year and it includes a 50% tax credit. The cooperative invests just as much in small enterprises as it does in medium-size enterprises. It is perhaps slightly different from what you are suggesting, but it would be worthwhile to further examine the Quebec program.

[The Chair, Conservative, James Rajotte]

Okay, very briefly, Mr. Anderson, please.

[John Anderson]

We've just done a study on the co-operative investment plan in Quebec, which is available in French and English on our website. I'd be very happy to send you a copy of it. It is a detailed study.

Effectively, that plan produces about $30 million of new investment each year in Quebec among co-operatives.

[The Chair, Conservative, James Rajotte]

Thank you.

The final questioner for today will be Ms. Block.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you very much, Mr. Chair.

Thank you to all of the presenters as well. As a new member of Parliament, I'm finding this process very interesting, and I appreciated reading all of your submissions.

Considering all of the hard work and dedication it takes to become an Olympic athlete, could I ask for the unanimous consent of this committee to thank our winter Olympic athletes and wish them the best of luck in the winter Olympics to be held next year in Vancouver?

[Some hon. members]

Hear, hear!

[The Chair, Conservative, James Rajotte]

All right, seeing there's unanimous consent....

Thank you, Ms. Block.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

I do have a question for Mr. Sanger.

I was very interested in reading your submission last night and the suggestion of a $500 million fund to create 50,000 green jobs. I thought that was very interesting, and you expanded on it in your written presentation but not in your oral presentation here today.

But my question for you has to do with a letter by CUPE to the minister on October 11, 2007, where it wrote:

...Canada's securities and financial market regulators have a dismal record. ...Canadians have been embarrassed...that regulation and enforcement of securities crime in Canada is so weak....

I also note that the Canadian Labour Congress has called for a national securities regulator.

As you know, the Conservative government is moving in this direction. Is this still the position of CUPE? Would you agree that a Canadian securities regulator is essential in guaranteeing the investment and retirement security of Canadians?

[Toby Sanger]

I'm so happy that you read that letter.

[Some hon. members]

Oh, oh!

[Toby Sanger]

I was wondering, as we had written to the Minister of Finance on a couple of occasions about strengthening our securities regulation but we hadn't received any response. And I was very glad to see there may be some moves in that area. I hope they don't just go after the little people—or the relatively little people.

On a national securities regulator, our position is that it needs to be effective. You can have a national organization that isn't effective, but if we are to have one, it needs be effective in different ways. So I can't just say yes on that, but hopefully if it has stronger enforcement in a number of areas....

Somebody you may have heard of is Diane Urquhart, who has stood up for the rights of small investors and workers. Most workers have most of their savings in pension funds and things like that. She has told me that when she does cases, she first looks to see if there is a U.S. connection; she doesn't go to Canada, but looks to see if she can win the case in the United States. That's embarrassing. I am embarrassed as a Canadian to see white collar criminals being prosecuted first in the United States and not in Canada. I think we should be doing much more of that. There have been some steps announced on that so far, but many more things need to be done on this.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much, Ms. Block.

I want to thank all of the witnesses for their testimony here today and their responses to our questions. It's certainly been a very interesting session.

I do want to say that we do continue the tradition of Mr. Williams and Mr. Mulcair of having friendly hockey games. We play the Liberals every year.

Ms. Brisson, the Liberals actually bring in ringers every year.

[Some hon. members]

Oh, oh!

[The Chair, Conservative, James Rajotte]

So you know they can't be competitive on an even level, and we would certainly welcome you on our team any time.

Thank you very much.

[The Chair, Conservative, James Rajotte]

I call the second part of the meeting to order, continuing our pre-budget consultations. We have with us another six organizations that are here for an hour and a half. We have first the Canadian Alliance of Student Associations. We have the Canadian Healthcare Association, the Canadian Teachers' Federation, the Canadian Energy Pipeline Association, the Directors Guild of Canada, and we have the Grain Growers of Canada.

I want to welcome you all here. You have up to five minutes for an opening statement, and then we will go to questions from the members of Parliament.

We'll start with the Canadian Alliance of Student Associations and work our way down.

[Arati Sharma, National Director, Canadian Alliance of Student Associations]

Thank you, Mr. Chair. We would like to thank you and the members of the committee for inviting the Canadian Alliance of Student Associations here today. We're an alliance of 24 student associations representing 400,000 university and college students across Canada.

Today we want to highlight why education spending in a time of austerity is a crucial investment. To begin, I'd like to provide some context by discussing the OECD's annual education report, which was issued last week. Canadian university attainment has grown for 25- to 34-year-olds, but much more slowly than our peers. That places us 12th in the OECD and at the bottom of the G-7 countries. Canada's key education investments were made nearly a generation ago, and we can't continue to coast if we really want to continue our country's knowledge advantage. Furthermore, our demographic changes are generating new challenges to Canada's economic growth. This makes advancements in innovation and productivity even more important than they are today. By 2025, the number of persons who will be retiring from the workforce will exceed newcomers by over 34%.

What CASA believes is that education investment is the best way to combat this. It provides technical abilities and develops critical thinking skills crucial to the development and adoption of new ideas and technologies.

The federal government chose to cut investment in education in the mid-1990s to reduce the deficit. Due to these cuts, Canada faced a brain drain, where essentially our graduates and our highly indebted researchers left to find opportunities elsewhere. What CASA believes is that we can't afford to take the easy road out of a deficit by cutting education spending now. Investing in education is an opportunity to build human infrastructure and essentially strengthen Canada's economic position.

Spencer will be going through the specifics of our pre-budget submission, but these are the considerations that went into our submission today.

[Spencer Keys, Policy and Research Officer, Canadian Alliance of Student Associations]

I'll just be highlighting some of the key points. The first is about the Canada social transfer. The federal government announced in Budget 2007 an $800 million envelope within the Canada social transfer for post-secondary education, but we continue to have what we estimate to be about a $3 billion funding gap from cuts that were made in 1995, in real terms, not accounting for increased numbers of students in that time. We estimate the actual gap to be closer to about $3.5 billion.

Additionally, there is no mandated federal reporting structure coupled to the Canada social transfer. Whether money is earmarked for PSE or not, the federal government is unable to inform taxpayers about how much funding is actually spent on colleges and universities, as opposed to other provincial and territorial initiatives. That is why we are asking for an increase of $800 million per year for the next five years, governed by agreements with the provinces to not reduce their post-secondary education spending. This dollar amount is to address both the funding gap that has accrued over the past 14 years and to place us in a better position to face the demographic crisis that Arati was referring to.

Secondly is the post-secondary student support program. We believe that aboriginal funding should be a critical area for future investment because they hold so much potential for increased participation. About one third of aboriginals are under 14 and will soon be at college and university age. Currently only 3% of the first nations population will earn bachelor's degrees or higher, compared with 13% of the general population.

In 2005, 23,000 first nations and Inuit students were funded from the post-secondary student support program, but that's down from 27,000 in 1996, when a 2% cap on program spending increases was put in place, forcing a small pot of funds to be spread among an increasing number of students. Furthermore, the structure of PSSSP prevents bands from being able to effectively run the program. INAC considers paying program coordinators to be a misuse of funds. Reserves with PSE coordinators can help young first nations and Inuit navigate PSSSP and other programs such as the Canada student loans program and increase the use of existing funds. CASA believes the 2% cap on increased spending for PSSSP should be removed and that program funding should increase by 10% to 15% to allow band councils to legally hire and fund on-reserve program coordinators.

Finally, I briefly want to highlight the student interest in funding the indirect cost of research. Every dollar that goes to funding the indirect cost of research is a dollar that need not be taken from the teaching and learning component of a university. The U.K. and European Union fund indirect costs in the range of 50% to 60%. Canada currently funds less than 25% of these costs, with the remainder carried by students through their tuition. Essentially, we believe the amount that students subsidize research in Canada should be reduced.

In closing, our thanks again to the committee for allowing us to present for you today. We look forward to answering any questions you may have.

[The Chair, Conservative, James Rajotte]

Thank you very much.

We'll now go to the Canadian Healthcare Association, please.

[Pamela Fralick, President and Chief Executive Officer, Canadian Healthcare Association]

Thank you, Mr. Chair.

Thank you very much, committee.

The Canadian Healthcare Association has been a champion of publicly funded health systems and the health system in general for almost 80 years. We're the only federation of provincial and territorial health associations and organizations in the country that represents the breadth of the health system and therefore, we feel, brings a uniquely important perspective to any discussion that concerns the health of the nation, financial or otherwise.

I would, however, like to reassure the committee that we do appreciate the complex and delicate decisions facing you concerning the next federal budget—we get it. We're here today to suggest concrete and doable ways to address fiscal pressures on Canadians and the health system. There are solutions.

I have five key premises, not all of which I will speak to—they are in the documentation—but I must mention health and the economy.

Illness and poor health have a negative impact on tax revenue, corporate profits, and wage-based productivity, which in turn causes less money to be available to fund government initiatives such as health, education, housing, and other programs. This, too, we get. In fact, we are committed to the understanding that the health of the nation is driven by far more than the provision of medical services and must be nurtured through equal attention to other determinants of health, such as poverty, education, and employment.

The second premise is on health system funding.

We know the days of large surpluses are gone, but funds for new health and social programs and broad tax reductions that will both reduce poverty and improve the health and social well-being of Canadians are needed even more during this recessionary period, and the 6% escalator must be protected.

Third, on tax credits, CHA believes that recent non-refundable tax credits have not been effective in meeting the needs of Canadians who need tax relief and government programs the most. Using tax credits or tax expenditures as instruments of social policy is not appropriate. It marginalizes Canadians who do not have the financial ability to save or make use of these very credits.

We do have solutions, two of which I will speak to during this brief presentation: care for the caregivers and infrastructure.

Twenty-three per cent of Canadians provided informal care to a family member or close friend with serious health problems and 41% had to use personal savings to survive during this time. If replaced by a paid caregiver, the economic value is estimated to be between $5.7 billion and $26 billion.

We have two options to recommend to you. One is a provision in the Canada and Quebec Pension Plans similar to the provisions that currently exist for those who have taken time off from the workforce to raise children. A second option is to transfer the compassionate care program from employment insurance so that individuals who are not eligible for EI, such as contract workers and part-time workers, still have the ability to draw on the fund.

Our second recommendation for today has to do with infrastructure. We solicit your support for investment in this health infrastructure piece. Many health facilities are in serious need of renovation or replacement. Modern designs will inhibit spread of infectious disease and facilitate patient recovery. This isn't just about bricks and mortar.

Access to infrastructure stimulus funds, the green infrastructure funds, and eco-energy funds would allow facilities--community, acute care, all of the facilities--to build or retrofit to green standards, providing a sustainable and safe environmental future.

If we really want to improve the quality, the efficiency, and effectiveness of health care for the patients as well as enhance collaboration among health professionals, we need to support the Canada Health Infoway in its mandate for electronic health records. It's absolutely essential.

I haven't even touched on health human resources, but I can, and I would welcome the opportunity if we have questions.

We've also focused on long-term care. We have a special policy brief that will be launched next Tuesday on facility-based long-term care, with good recommendations that might assist you in your work.

A healthy economy is created, sustained, and grown by healthy Canadians. These are turbulent and financially challenging times, but there are many effective ways to address fiscal pressures on Canadians and the health system. We welcome that opportunity to work with you to develop and implement these solutions.

Thank you. Merci.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We will now go to the Canadian Teachers' Federation.

[Mary-Lou Donnelly, President, Canadian Teachers' Federation]

Thank you, Mr. Chair.

Thank you, everyone.

My name is Mary-Lou Donnelly and I am the president of the Canadian Teachers' Federation. I have here beside me John Staple, who is the deputy secretary general of the CTF.

The federation is a national voice for teachers in Canada on education and related social issues. We represent upwards of 200,000 teachers across the country through 16 provincial and territorial teacher organizations.

Our presentation and brief will focus on an issue that demands the immediate attention of the Canadian public and all levels of government, and that is child poverty. Over the past two years we have taken on child poverty as our main focus on social justice issues at the Canadian Teachers' Federation.

In 1989, the House of Commons unanimously passed a resolution setting the goal to eliminate poverty among Canadian children by 2000. Here we are 20 years later and the child poverty rate remains essentially at 1989 levels. Canada's after-tax child poverty rate appears stalled at just over 11%. Nearly one of every nine Canadian children lives in poverty. Child and family poverty rates are at double digits in five out of ten provinces in our country. One out of every two children living in a family that recently immigrated to Canada lives in poverty, and one in two aboriginal children under the age of six, not living in a first nations community, lives in a low-income family.

There has been an 86% increase in the use of food banks since the 1989 unanimous House of Commons resolution to end child poverty, but what we see happening is that we have actually regressed in this area. In the same year, CTF issued a report that examined the impact of poverty on children, specifically how it affected the success of children in elementary and secondary school. The report concluded that children living in low-income conditions experienced reduced motivation to learn, delayed cognitive development, lower achievement, less participation in extracurricular activities, lower career aspirations, interrupted school attendance, lower university attendance, increased risk of illiteracy, and of course higher high school drop-out rates. There is a well-established correlation between socio-economic status and children's academic performance, and our brief makes reference to research supporting that contention.

CTF has an extensive policy on children and poverty. It is based on the fundamental premise that all children, regardless of circumstances or family income, have the right to the full benefits of publicly funded education. In supporting this, teachers and their organizations participate in the development of educational and public policies designed to reduce the incidence and impact of child poverty. Our policy stresses the importance of child care and early intervention, and the role of government in addressing that concern. Governments at all levels must undertake coordinated social and economic policies designed to eliminate child poverty and to assist those currently living in poverty.

We know that teachers see the evidence of poverty in their classrooms year after year. They see it when students move and change schools frequently during the school year because the family does not have enough money to pay rent. They see it when students shrink from shame or lash out from anger because of the stigma of poverty. And they see it when students can't afford to buy books, go to the book fair, or go on school trips with the other kids because of poverty.

We have called for a greater political will and commitment to a national poverty reduction strategy for Canada. Several provinces have taken or are planning to take coordinated action to address poverty. Newfoundland and Labrador and Quebec have implemented poverty reduction strategies. The federal government needs to build on these initiatives and create a national strategy that complements and supports provincial and territorial programs.

In our brief we make the following specific recommendations, among others, to the federal government: to raise the minimum wage; to expand the eligibility for employment insurance; and to put in place a universal child care system.

I spent the day at the Conference Board of Canada, and they're actually coming out with a report on child poverty tomorrow, so it'll be interesting to see that. It's very timely, and they rate Canada at one of the lowest rates in the world on child poverty.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll now go to the Canadian Energy Pipeline Association.

[Brenda Kenny, President and Chief Executive Officer, Canadian Energy Pipeline Association]

Thank you.

My name is Brenda Kenny. I'm the president of the Canadian Energy Pipeline Association, and I very much appreciate the opportunity to present to the committee today. You have a more detailed brief from us, but I will look forward to answering any of your questions following this brief introduction.

I'll begin by setting the context. The Canadian Energy Pipeline Association represents companies that transport over 97% of all the oil and natural gas produced and used in Canada. We operate over 100,000 kilometres of pipelines in North America. Over the next 15 years, to meet the needs of Canadians, we plan to double our collective assets by investing $43 billion in the construction of new pipelines and other facilities. That number could grow to $85 billion if you include the Mackenzie and Alaska pipeline proposals. CEPA members will play a key role in implementing large-scale carbon capture and storage projects, or CCS, as well.

I am making this presentation today because I know our industry can be an active partner in stimulating the economy, provided the government takes the necessary actions to ensure private sector investment in pipeline infrastructure in the short term. I'll make three suggestions that should result in significant capital investment. This will happen in a way that produces spending on manufactured goods, job creation, and an expanded network of pipelines, all at no cost to taxpayers.

In brief, we need regulatory reform to facilitate the flow of stimulus spending, we need an industry-funded technology fund that would support downstream energy efficiency programs, and we need a tax-efficient mechanism to set aside moneys needed to ensure that pipeline assets are retired in an environmentally and economically sound manner.

With respect to economic stimulus, we at CEPA are concerned that the regulatory framework in Canada today is bogging down the private sector's ability to inject financial stimulus and investments in the Canadian economy. The federal regulatory framework for pipelines in Canada has evolved over many years. It has been a layering on of new laws and regulations atop existing ones, resulting in needless complexity. A simpler, more timely assessment and regulatory process would reduce costs, focus government resources on issues and outcomes, and make timelines more predictable, thereby encouraging investment, job creation, and spending on materials at a time when the demand is low and prices are favourable.

The task of regulatory reform has already begun through the Major Projects Management Office, an initiative we wholeheartedly support. We applaud the government for implementing the office and backing it up with senior-level leadership. This budget cycle marks year three of five in a $30 billion spending commitment to the MPMO and key agencies in government. It's imperative that we not lose sight of the strategic importance of regulatory reform and ensure the government, industry, and other stakeholders have a line of sight toward 2012, when the funding expires.

We have been encouraged by small steps toward regulatory renewal. Earlier this year I spoke to the Senate energy, environment and natural resources committee on changes being made to the Navigable Waters Protection Act. Change is occurring, but we believe we must continue to partner with government to build a robust, credible, clear, modern, and results-oriented regulatory system that promotes environmental best practice in Canada.

I turn now to the issue of pipeline abandonment. As an industry, pipeline companies have a long history of positive results on environmental protection. Effective financial planning and regulation spans the full life of a project, right through to the end of its use, and the pipeline industry has advocated for several years a tax-efficient environmental trust option that would afford a variety of opportunities to save better and sooner. This now I turn to in response to a recent decision by the National Energy Board, asking us to begin to implement these sorts of measures. We look to you for your assistance.

Finally--and this is in more detail in the brief, and I would be happy to respond to questions--we are asking for an industry-funded technology fund as part of Canada's climate change strategy, the money of which would go toward energy efficiency programs downstream and thereby, on a full value-chain level, actually achieve emission reductions for all of us.

Thank you.