Finance Committee on Oct. 20th, 2009

[Catherine Kloepfer]

I don't agree that it's fair to tie it to revenue, because the revenue formula as it's written is not revenue as the rest of us would calculate revenue.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Then maybe just reduce the amount, but it should be tied into something. In the past we've had arguments that its being based on square footage or whatever was negotiated wasn't fair. If it's linked to revenues, then perhaps the amount is too high, but I think there should be an amount levied for rent. The question is, what is the right amount?

In regard to your argument that you're competing against other airports, do people in Winnipeg have choices other than going to Winnipeg airport to take a flight?

[Catherine Kloepfer]

Across the country, including Winnipeg, we estimate we've lost 2.5 million passengers this past year to cross-border traffic. They will drive to North Dakota from here to save money.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Pacetti.

As chair, I just want to clarify three issues.

First of all, for the Association of Manitoba Municipalities, you talked about not having a seat at the table. I believe you mentioned that a number of times. In my province of Alberta, the municipalities very much did have a seat at the table in terms of determining where the funding would go, so can you clarify? Did the federal government not provide a seat at the table? Or was it the provincial government that did not allow the municipalities a seat at the table?

[Doug Dobrowolski]

Well, Mr. Chairman, I think we were the only province that didn't have a seat at the table. I talk to my counterparts in Alberta and Saskatchewan constantly, but we don't know. We go to the federal government and they say it's the province. We go to the province and they say it's the federal government.

We kind of got the runaround on that one, and that's why we were very disappointed, because being a one-third partner in past infrastructure programs, we sat at the table, we saw the applications, and we made the decisions. As an association, we took a lot of heat for making those decisions--which we should because we made the decisions--and we're more than willing to sit at the table to help make those decisions.

[The Chair, Conservative, James Rajotte]

Okay. But you're not clear as to why you didn't have a seat?

[Doug Dobrowolski]

No.

[The Chair, Conservative, James Rajotte]

But in every other province, it seems, the municipalities did.

[Doug Dobrowolski]

Yes.

[The Chair, Conservative, James Rajotte]

Secondly, for the University of Manitoba, I certainly appreciate your recommendations, and I also appreciate your comments about the knowledge infrastructure program, the Canada excellence research chairs, and the Vanier Canada graduate scholarships. I'm glad the universities are getting that message out, because I think these are very good programs that we should be very proud of, and we should be very proud of the people across this country who are receiving these awards, and not only receiving them but competing for them.

I wondered if you would like to talk about the knowledge infrastructure program in terms of what it has done at your institution. We had the privilege of visiting there with the last committee last time, which was appreciated, but could you highlight some of the initiatives for us?

[Dr. David Barnard]

We very much appreciate support for that program. We've had $32 million in funding and we have seven projects that were approved. Five of them are already under way and two of them will be under way shortly.

They range from projects on the Bannatyne campus downtown, where we are providing some space and infrastructure for advanced medical research, through to a range of things on the campus that you visited when you were here last time at Fort Garry. That includes investment in continued expansion of the research and development park called Smartpark, which leverages the investment to continue collaboration between the university and the community.

I know we're running out of time. Mr. Alho and I would be happy to speak at length about all of the projects, but we appreciate the range of them and the leverage they'll have.

[The Chair, Conservative, James Rajotte]

Thank you very much.

Dr. Naimark, I hesitate to question your recommendations since you're such a distinguished Canadian, but I have to follow up on this recommendation for western economic diversification, because when we're funding research, if we look at the whole spectrum of research from idea to implementation, which you know very well, we're funding certainly on the human resource side through the granting councils and the Canada research chairs. Also, we fund infrastructure through CFI and the knowledge infrastructure program.

On commercialization, I'll just take the University of Alberta as an example. The University of Alberta asked for federal and provincial funding for TEC Edmonton, which is located at the downtown facility.

Then we have the SR and ED tax credit and programs like IRAP, which received increased funding.

But it seems that this is just sort of another thing we're going to fund. My concern, I guess, is that we're diluting it too much and funding in too many places, and we'll lose our effectiveness. It's just an honest, genuine concern. I have great respect for WD, but since the University of Alberta itself asked for funding of that commercialization institute, it just seems to make more sense to fund something like that rather than funding through WD, or to fund Genome Prairie directly rather than funding WD.

[Dr. Arnold Naimark]

I don't dispute anything you've said; it's absolutely correct. As I said earlier, the kind of funding we're talking about needs to come for the projects and the heavy lifting. But the role for existing federal entities is to help with this interaction, convening and bringing groups together.

In our report you'll see four examples of really important networks that have been developed among the western provinces, with some support from western economic diversification. That's a layer that helps us with part of the interaction. It's not the biggest thing, but it brings people together.

There are many examples where existing structures, as you've described, have been set up and are doing excellent work. I think our thrust nationally should be to make sure we don't create ever newer structures to do bits and pieces. We need to ask how we can adapt the programs we have to allow them to deal with new challenges and opportunities. That means streamlining our intellectual property regime. That means looking at our incentive programs like SR and ED and asking whether making some changes there would have a positive effect and attract more investment from the private sector.

Our thrust is really to say that we in Genome Prairie have seen the benefit of making the existing programs work together as a really important way to go.

[The Chair, Conservative, James Rajotte]

Thank you. I appreciate that.

I'd love to continue these discussions, but unfortunately we are out of time for this panel.

Thank you all for your presentations here this morning and for your responses to our questions.

We will suspend for a few minutes.

[The Chair, Conservative, James Rajotte]

Let's find our seats, please, and begin with the second panel.

With us here are six organizations for the second hour-and-a-half panel, and I'll read them in order of presentation: the Canadian Meteorological and Oceanographic Society, the Manitoba Child Care Association, the City of Selkirk, the Athabasca University, the Canadian Federation of Students (Manitoba), and the University College of the North.

Each organization will have up to five minutes to make an opening presentation, and then we'll go to questions from members.

We'll start, Mr. Crawford, with your presentation, please.

[William Crawford, President, Canadian Meteorological and Oceanographic Society]

Good morning, Mr. Chair.

I represent the Canadian Meteorological and Oceanographic Society. It's an independent society of scientists in these two disciplines.

Canada and other G8 nations, in their accountability report this year, recognized the broad scientific view that global warming should not exceed two degrees Celsius. Evidence from the Intergovernmental Panel on Climate Change, and from recent research, suggests that any delays in reducing greenhouse gas emissions will bring us uncomfortably, or even dangerously, close to this two-degree increase. So our society recommends the introduction of measures to reduce greenhouse gas emissions rapidly, to ensure prosperity for Canadians of future generations. These measurements will complement present plans to reduce emissions by target years of 2020 and 2050, and we hope will accelerate these reductions.

Canada has opportunities at the United Nations Climate Change Conference in Copenhagen in December to coordinate these measures with other nations, so that we are not acting alone and our industries and businesses are not subject to undue and unfair competition from other nations. Many of these projects are cost efficient and will allow Canadian industry to compete globally.

We also recommend that the federal government invest funds in science-based climate information. Everyone, from farmers to fishers to the oil and gas industries, and workers in this hotel, need this type of information. Climate covers everything from the next season to the next century. What will happen to permafrost in the north? Will it affect communities and operations? Will we see more or fewer floods on the Red River? What will be the future water supply for Manitoba Hydro? Will tropical diseases spread into Canada? These are the types of issues we already know, and there are many surprises that will develop.

This type of information requires the federal government to maintain funding for the climate-, ocean-, and weather-observing network, and especially to expand it into the north where impacts will hit the hardest. It requires research and development to coordinate federal labs and universities; government climate programs and forecast models can be linked to university research. It requires communication to give public and business the information they need on climate issues. Examples of provincial programs are Ouranos in Quebec and the Pacific Institute for Climate Solutions in British Columbia. A federal program can unify and expand these efforts all across the country and into the north.

Previous economic crises have demonstrated that companies and nations that maintain and increase their investments in research and development during bad times emerge stronger and more competitive when the recovery begins. We recommend renewed funds to independent granting councils that can assess air, water, and climate research proposals on their scientific merit. Proposals are ranked by relevance, excellence, and innovation, to balance the curiosity and relevance. Other nations and Canada have all found this is the most effective way for scientific discovery and ways to cash in on these discoveries.

The Natural Sciences and Engineering Research Council of Canada provides such funding across all subjects. The Canadian Foundation for Climate and Atmospheric Sciences awards funding through the same processes with a specific mandate in climate and atmospheric studies, and impacts on air, ocean, water, and ice. This foundation requires renewed funding in its next budget to continue its research. Its funds for new research proposals have recently run out, and this funding ended as the International Polar Year also completed, ending many arctic programs and leaving a big hole in Canada's research, as well as the danger of a brain-drain of scientists engaged in this field. About half the funding for the Canadian Foundation for Climate and Atmospheric Sciences goes directly to students and post-doctoral fellows, to support them while they are doing their research.

We recommend renewal of financial support for these types of funding agencies to engage in oceanography, meteorology, climate, and ice science. These are the Natural Sciences and Engineering Research Council of Canada and the Canadian Foundation for Climate and Atmospheric Sciences.

Thank you, Mr. Chairman.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll go now to the Manitoba Child Care Association, please.

[Michele Henderson, President, Manitoba Child Care Association]

Good morning, Mr. Chairman.

Canadian parents need early learning and child care services to work. Child care yields high social and economic returns by promoting economic stimulus through job creation, facilitating Canada's labour force participation, and increasing government revenues from employment taxes. It's the most healthy child development, and it ensures fathers and mothers can participate in education, job training, and can enter and stay in the workforce. It moves families out of poverty and it builds strong local economies.

In 2006 the House of Commons Standing Committee on Finance recommended that the government, in conjunction with the provincial and territorial governments, fund a national, accessible, affordable, high-quality, publicly regulated child care system. This system should respect any provincial-territorial child care programs already in effect, recognizing the leadership of the Province of Quebec.

That same year, the Government of Canada terminated the funding agreements on early learning and child care and flipped most of the money intended to build a national child care program into a universal child care benefit, a monthly taxable allowance of up to $100 given to parents of each child under age six. A review of the federal government's own website boasts that the flipped money is used by some parents to subsidize child care expenses but is used by others for vacations, RESPs, clothing, diapers, and recreational activities.

The majority of the $5.9 billion Canada currently spends on early learning and child care is primarily tax measures and unaccountable transfers, not the creation of new and desperately needed services. The consequence? In 2007 there were 3.1 million children aged zero to 12 years of age with a mother in the paid labour force in Canada but barely 857,194 regulated child care spaces. To Canada's shame, the United Nations education fund published a study in December 2008 that rated Canada's provision of early childhood education and child care at the very bottom of 25 developed countries.

UNICEF, the Canadian Paediatric Society, the Organization for Economic Cooperation and Development, and the Canadian Labour Congress are just some of the many well-established organizations currently calling on government to take strong leadership in creating a national child care strategy to build accessible, affordable, quality early learning and child care services. In April 2009 the Senate Standing Committee on Social Affairs, Science and Technology released a report called “Early Childhood Education and Care: Next Steps” that calls upon Canada to be a champion for the families of the 21st century and makes four recommendations to make that happen, all of which are supported by the Manitoba Child Care Association.

In addition, the Manitoba Child Care Association recommends that the Government of Canada use its constitutional powers to get back on track and lead the provinces and territories in the development of a system of high-quality, not-for-profit, accessible, affordable, and inclusive early learning and child care services. By 2020, federal support for early learning and child care services should reach 1% of GDP through scheduled increases in annual increments to provinces. Funds should be sustainable, increased annually, and targeted to the provinces and territories that are committed to the development of high-quality early learning and child care services.

The Government of Canada should transfer funds to the provinces and territories that are earmarked for early learning and child care and attach conditions to ensure quality and accountability. In return the provinces must agree to establish high-quality standards, provide direct operating grant funding to not-for-profit services, provide a level of funding that supports competitive wages to the child care workforce, and provide a level of funding that keeps parents' fees affordable. For example, the OECD recommends a 40-40-20 cost sharing: the federal and provincial governments should provide at least 40% each, with a maximum overall contribution from parents of 20%.

Quality early learning and child care programs have been recognized by countries around the world as essential services to support the ongoing learning and healthy development of children and to ensure access to training and labour force attachment of parents. Educated and employed parents can enjoy a stable income, economic security, and the potential for a positive future.

Canada's stagnant birth rate, combined with an aging population, is a land mine that no responsible government should ignore. Business struggles about labour shortages in many sectors now are not likely getting better as long as Canadian birth rates remain below that required for a country to support itself.

In good and bad economic times, Canada needs child care to work. Child care yields high social and economic returns by promoting economic stimulus through job creation, facilitating parents' labour force participation, and increasing government revenues from employment taxes. It promotes healthy child development. It moves families out of poverty. It builds strong local economies. Canada can't work without quality child care.

Thank you, Mr. Chairman.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now go to the City of Selkirk, please.

Mr. Bell.

[David Bell, Mayor, City of Selkirk]

Good morning, Mr. Chairman and members of the panel.

The City of Selkirk is pleased to have the opportunity to make a presentation to the committee. I wish to thank the government for allowing us this input into the 2010 budget considerations.

While there are many items of importance in this great country, the City of Selkirk wishes to focus on three main topics: public transportation, the municipal infrastructure deficit, and affordable housing and homelessness. All of these topics form the foundation of a municipal government's responsibility of creating a quality of place within its community. Therefore, it is important that all levels of government work together to ensure that Canada's economic engines retain their competitive edge through the proper investments in transportation, infrastructure, and housing.

Although there are many other opportunities to invest in the quality of life of every Canadian, these three components will touch all. As stated by FCM past president Jean Perrault, “Every day, as mayors and councillors, we see what needs to be done in our communities, but too often we do not have the resources to do it. We also know this is not just a problem for our individual community; it is a national problem.”

Municipalities receive only 8¢ from each tax dollar collected. With this, each municipality must deal with responsibilities--for example, roads, water and waste water infrastructures, solid waste management, recreation, and protective services, both police and fire--and are faced with affordable housing issues. Municipalities are depended upon to deliver the basic services that our communities rely on every day. They provide the public infrastructure that supports economic activity and job creation, and they deliver front-line services to meet continuous new and growing challenges.

Due to receiving just 8¢ out of every tax dollar collected, municipalities struggle to supply these services because they lack the resources needed to succeed, therefore forcing them to rely on the property taxpayer for the new responsibilities and our ever-growing needs.

In addition to supplying these services, municipalities have taken the lead role in the federal government's stimulus plan. As municipalities are required to balance their budgets each year, unlike federal and provincial governments, the cost of participating in the stimulus program must be paid immediately, either by raising taxes, cutting spending or services, or borrowing.

To that end, the City of Selkirk is requesting your government to take action on the following priority items.

Number one is public transportation. Safe and reliable public transportation is the only universally acceptable form of transport that provides economic, social, and environmental benefits. Canadian transit riders pay a higher percentage of total costs required to build, maintain, and operate transit than do riders in almost all other western countries.

Almost every transit system in the world requires financial support to offset the shortfall of expenses and revenues raised from fares. Canada's transit systems require more than $40 billion in investment to cover the next five years of operation alone, which will cause rehabilitation, replacement, and expansion projects, thus increasing numbers of riders.

Local governments, which already make up the majority of Canada's transit investments, do not have the revenue source to meet the current and future demands. Canada needs a long-term federally funded national transit strategy. As a first step, the federal government must review and extend dedicated transit funding set to expire in the year 2009.

The next item is the municipal infrastructure deficit. Given the estimated $123 billion municipal infrastructure deficit and a very limited source of revenues, municipal governments need help to deliver services that the nation's economy, quality of life, and environmental sustainability rely on. Recent federal government initiatives for municipal infrastructure funding are very important, very much appreciated, and must be sustained, but we need to concentrate on longer-term predictable commitments from all levels of government.

With the cooperation of all three levels of government, the federal government has to produce a plan of action to reduce or eliminate the infrastructure deficit within 20 years. As well, the federal gas tax fund should be indexed to protect its purchasing power against inflation, population growth, and economic expansion.

Finally, on housing and homelessness, with thousands of Canadians struggling to find affordable places to live, the federal government needs a renewed funding commitment and a national housing plan. In this age, too many Canadians are forced to decide between food or rent, necessities for their children or making the mortgage payment. A well-housed population with affordable shelter costs enables individuals to participate more productively in the economy.

This comes from the FCM 2008 national action plan on housing and homelessness:

The CREA has estimated that every existing home sold stimulates on average $32,000 in spending and income. This includes transaction fees...moving costs and spending on new furnishings and renovations. This spending is recycled into the economy and subject to taxation. This impact may be somewhat moderated in the recommended assisted ownership option as this targets lower priced homes. However, it will still likely generate at least half ($16,000 per unit) of this estimated impact.

The federal government should immediately adopt the recommendations of the FCM 2008 national plan on homelessness and housing--

[The Chair, Conservative, James Rajotte]

We're pretty much out of time, so perhaps you can just quickly conclude.

[David Bell]

Yes, sure.

The City of Selkirk recognizes the efforts of the federal government and supports its commitment to maintain the federal program spending during this global economic crisis.

The City of Selkirk recommends that the Government of Canada support the Federation of Canadian Municipalities to restore recently expired federal transit investments, lead a national strategy in cooperation with provinces, territories, and municipalities in terms of the $123 billion infrastructure deficit, and put existing investments into affordable housing on a long-term track with partners, with provinces, territories, and municipalities.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you.

I will now go to Athabasca University, please.

[Lori Van Rooijen, Vice-President, Advancement, Athabasca University]

Good morning, Mr. Chairman and committee members. Thank you very much for the opportunity to speak to you today about what we think is an important component of Canadian culture, and that is the importance of a national information technology or an ICT vision.

I also want to thank you--and it is relevant to our discussion today--for the knowledge infrastructure program and the funding we received as a university, which actually for the first time, we think, recognized technology as capital. That is an important step in really seeing the ICT vision happen.

Canada’s national English language open and distance university, Athabasca University, is uniquely placed to address the key elements of our nation’s future financial and social success, which is our e-economy. This distinct perspective has evolved as a result of our mandate to remove barriers that restrict access to and success in the university-level studies by providing the opportunity for interested adults to take university courses and programs anywhere and at any time of the day or year. Our perspective has also been informed by 81% of our students who work while they study, who engage directly in lifelong learning while immersed in the emergent knowledge economy. Currently we have 38,000 students who are doing this across the country, enrolled in our courses and programs.

As outlined in our briefing to you today, we believe strongly that Canada needs a national information and communication technology vision and that the federal government has a significant role to play in both the development and implementation of the ICT vision.

The most developed progressive and economically stable countries in the world are those that are technologically advanced. While recent technological advances have brought major social and economic shifts in Canada that have helped shape our nation's economic and social visions and some of our decision processes, more needs to be done.

Consider this. One-half of the current jobs are in the knowledge sector, and this is growing. Companies spend more on tangible assets--that is, people, software, and design--than on tangible resources such as building and equipment. The vast majority of the workforce, now 90%, request formal job qualifications, which is up from 40% in 1970. In short, ICT is changing the face of the economy in much the same way as the Industrial Revolution did several centuries ago. To put it simply, Canada is not keeping up.

Previous governments and this government have introduced the idea of a national ICT plan. We believe, as a university, this is the right direction, and we're here to support the initiatives that we've heard in the past and also with this current government.

Our national challenge is to work together to develop a vision to make this happen. The federal government--for that matter all levels of government--needs to ensure that this vision is a priority when developing legislation, regulations, policies, and funding priorities. Post-secondary institutions, Athabasca University in particular, and industry are looking for Parliament for leadership.

We have three concrete recommendations that we make in the briefing as we move collectively towards our increasingly technologically based future.

First, as a country we need to develop and support research into the new knowledge economy, with a goal to increase Canada's potential for global strength and leadership. The impact of Canada's low investment in ICT research and development is clear: loss of opportunities, loss of revenue, and loss of the kind of people, quite frankly, who are attracted to innovative environments and who will go on to shape our own global future. If our national research and development spending is improved and if the needed infrastructure is strengthened, we believe we will be able to keep and attract knowledge workers and begin to realize the economic and social benefits that will bring.

There are three elements that we outline, and I won't go into detail because my colleagues from the University of Manitoba this morning actually went through some of them, but we need to grow Canada's R and D expenditures in a coordinated way. We need to create R and D incentives into all aspects of ICT, and we need to research learning in a virtual environment.

The area that I really want to focus on is the second recommendation in our proposal, and that is that we need to ensure that all Canadians can engage in the digital environment, and in doing so we need to develop and support a framework for engagement in the emergent e-world in ways that will benefit them personally, socially, and economically.

It's a different world out there, and we have to really change the way we think about education if we're going to create the new knowledge economy.

So there are three things. We need to address the digital divide--that is one of the biggest things. We need to improve digital infrastructure, increase comfort with the learning of new technologies, and improve access, most importantly for underrepresented groups, indigenous groups, rural areas, and for those who maybe do not have access to the Internet for whatever reason. We need to encourage lifelong learning, and we need to encourage a national virtual learning environment. New learning environments include wikis, blogs, podcasts, and three-dimensional simulations, and together they represent a significant shift from face-to face to text-based learning. They need to be accessible.

My final point is that the federal government, and in fact all levels of government, need to review and support stimulus measures and policy and regulatory environments that consistently advance both of the two objectives I've just mentioned. This government must have a vision and lead by example to ensure that Canada has consistently friendly policies toward the knowledge economy and a regulatory framework in these areas.

Thank you very much for your time today.