Finance Committee on Oct. 20th, 2010

[David Molenhuis]

Absolutely. There's certainly a wellspring of information to further develop on this, which I think I'll put on the table here today for members of the committee.

The Canadian Medical Association, as well as the Law Society of Upper Canada, has published reports previously about the impacts higher tuition fees have on the behaviour of students entering into programs. By costing out certain populations from being able to access that, in particular those on the lower end of the socio-economic spectrum, it certainly builds an elitist character within the country. It entrenches socio-economic differences between communities and it has a direct impact on the kind of people who get into, say, for example, medical studies or law, which tend to be the most expensive in the country.

It also places a value on those kinds of jobs. It also relegates different sections of the population to be able to access those jobs. This results in things like doctor shortages in remote communities. It also has other very real social impacts that can't be understated, hence the use of the term “elitist”.

[Thomas Mulcair, NDP, Outremont, QC]

One of the recent trends that we have seen is the one exemplified by McGill University which has shamefully decided to withdraw its MBA program from the normal government funding system. The university believes—although I think it is legally mistaken—that it is quite possible to ask $25,000 per year for an MBA and not ask anything to the government, even though it is generally funded by public dollars.

What do you think of that decision?

[David Molenhuis]

Absolutely. We obviously stood in opposition to that move. The fact that you are able to do that within our public post-secondary education system is just so telling as to why we need to have some kind of federal framework that legislates the public administration of our post-secondary system and ensures that we don't have privatization by stealth in the form of ever-increasing tuition fees that move our public system away from one of public administration into a realm where there's a heavy reliance on private sources of funding.

What's interesting about that measure by McGill University is that it has now priced statistically the cost of the MBA programs outside of Statistics Canada's calculation of the average tuition fees in this country. Those tuition fees are so absurdly high that they now represent a statistical outlier for the collection of data within Statistics Canada.

[Thomas Mulcair, NDP, Outremont, QC]

Thank you for your answer.

I have a final question for Mr. Jock of the Assembly of First Nations.

You said that there is a need for 88,000 housing units as well as 40 new schools. Those figures are mainly based on your estimation of population growth in the first nations communities.

Could you give us a brief outline of this growth and tell us what we can expect in the next few years?

[Richard Jock]

Thank you. That is a good question.

I would say that that rate of growth, unlike other portions of the population, is much in excess of the normal growth rate. We are seeing growth rates of at least 3% to 4% over the Canadian rate. Also, what's happening in particular provinces, most notably Saskatchewan and Manitoba, is that the percentage of population that is aboriginal is actually shifting higher and higher. It is estimated that it will be approximately 15% in the coming years.

These demographic trends really make it a requirement that there be a good investment in both education and other forms of infrastructure, which will make sure that those populations essentially will be able to contribute to upcoming and future economies.

[The Chair, Conservative, James Rajotte]

Thank you.

I want to thank you all for being with us here this afternoon. I want to thank you for your presentations and your responses. If there's anything further you would like the committee to review, please submit it to the clerk and I will ensure all members get it.

Colleagues, we will suspend for two minutes and bring the next panel forward.

[The Chair, Conservative, James Rajotte]

I will ask colleagues and witnesses to find their seats, please.

We have another panel of six organizations. First of all, we have the Canadian Labour Congress. We have the Canadian Union of Public Employees, the Independent Media Arts Alliance, the Association of Fundraising Professionals, the Clarington Board of Trade, and the Canadian Pharmacists Association.

Each of you will have five minutes maximum for an opening statement, and then we'll have questions from members.

We'll begin with Mr. Jackson.

[Andrew Jackson, Chief Economist, Canadian Labour Congress]

Apologies from our president, Ken Georgetti. We had a change of time.

Thank you for listening to us. I think our brief was circulated earlier. It was prepared some time ago, so I'll just provide a bit of updating.

There are really three key issues that we'd identify for action in this budget: first of all, pensions; second, employment insurance; and third, jobs.

As many members know, we were meeting with a number of MPs on the Hill yesterday, on the pensions issue. Probably people are familiar with our advocacy of an expansion of the Canada Pension Plan. I see Mr. Menzies shaking his head. I could provide all the details.

Basically, there's a general recognition that the private part of that pension system is in some considerable difficulties. People aren't saving enough, they're not getting decent enough returns on those, and there are a number of options in play. Our proposal is to have a fully pre-funded expansion of the Canada Pension Plan, which would take the benefit from 25% to 50% of pensionable earnings, with an affordable pension increase.

We're very pleased that the proposal is under serious consideration by the federal government and the provinces. Today we'd just confine ourselves to saying we'd hope that in the 2011 round of federal and provincial budgets there may be occasion to announce some agreement for moving forward on that and other pension issues.

On employment insurance, clearly this is a critically important program in tough economic times. Workers need adequate benefits to support themselves and their families, and improving EI is now viewed as an effective form of economic stimulus. There's no doubt that the EI program did respond in a significant way to the recent recession. Benefits expanded by something in the order of $5 billion over the two years of recession, as compared to the status quo. The improvements to the program and the action plan were certainly appreciated: the extra five weeks of benefits and the additional benefits for long-tenured older workers.

I would underline for you today that there is today a very serious issue in terms of workers running out of EI benefits. Just to throw one number at you, since June 2009, when the number of EI beneficiaries peaked, and last month, which was July 2010, the number of regular EI beneficiaries has fallen by almost 150,000—that's by 18%—even though the number of unemployed has actually only fallen by 6%. So the proportion of all unemployed workers collecting unemployment benefits has fallen from 51% to 45%. Certainly, in our view, a major priority should be a further extension of EI benefits. Given the very high level of unemployment we still have, the fact that there are over 1.5 million unemployed workers, 20% of whom have now been out of work for more than six months, there's a case for that.

What I would flag is that the government did just announce that there was an extra five weeks being reinstated under a pilot project. So in 21 regions there will be an additional five weeks still available, and that is certainly appreciated. But I would note to the committee that those 21 regions are the regions that had unemployment rates of over 10% five years ago. It doesn't really match the reality across Canada today. So if you look at Windsor, Oshawa, a number of hard-hit industrial communities in Ontario, they will not qualify for extended benefits.

Just a brief word around jobs. As stated in the economic update, we are now back to the level of employment we had before the recession, which is worthy of some celebration. However, we're still down 211,000 full-time permanent jobs, compared to before the recession. The real unemployment rate, counting involuntary part-timers and people who have dropped out of the labour force, is still over 10%. The youth unemployment rate is 15%.

In a nutshell, our pitch would be that there is a case for continuing investment in effective job creation programs in the next budget rather than a premature turn to fiscal austerity.

The Government of Canada today can borrow under 10-year bonds for well under 3%. There are a lot of public investment projects, from infrastructure to investment and training, to education, that could more than cover an interest rate of under 3% for long-term borrowing. So we'd urge that the budget make some investments in those long-term projects.

I'll wind up there, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Jackson.

We'll go to Mr. Sanger, please.

[Toby Sanger, Senior Economist, Canadian Union of Public Employees]

Thank you very much for inviting us again to discuss priorities for next year's budget. Our national president, Paul Moist, had really hoped to be with you today, but he's speaking at the opening of a national health care conference that we have today in Victoria.

CUPE is Canada's largest union. We represent over 600,000 members. Our members work on the front lines providing quality public services in health care, education, municipal-community social services, clean water, and electricity. Just yesterday we heard that two of our members--paramedics in British Columbia--died tragically when their ambulance plunged off a cliff into a lake on Vancouver Island. These are men and women who spend their lives saving the lives of others, so I hope you will join us in expressing condolences to their friends and families.

Our members don't just deliver public services, but they also depend on accessible, affordable, and quality public services. Forget about the myth of the overpaid public sector worker. The average salary for our members is below $40,000 a year. The value of public services that each Canadian receives is about half that--$17,000 a year. So when public services are cut, our members are hurt twice: first, through their own lost jobs and wages; and secondly, because the value of public services they receive is diminished as it is for all Canadians.

This is why we're such strong supporters of what Andrew just spoke about, taking this opportunity to improve our pension system so that all working Canadians can rely on a decent income in retirement. The best way of doing this is by increasing CPP benefits to 50% of the average wage over seven years. This could, of course, be pre-funded through a gradual increase in premiums, so this would have little direct fiscal impact on governments.

As part of this, the federal government should also increase the guaranteed income supplement benefits for seniors by 15%. This would help lift 200,000 seniors out of poverty.

We also agree that the extended benefits for employment insurance that expired on September 11 should be renewed for another year.

We also strongly recommend that the deadline for infrastructure stimulus be extended until at least next July. The need for these investments won't disappear at the end of this fiscal year, and it's detrimental to have an artificial deadline that could result in inappropriate haste, projects lapsing, and job losses.

We still have 1.5 million Canadians out of work. Recovery from this recession is slow at best. It's not time to turn off the taps; it's time to make sure that we continue to invest in public infrastructure, create jobs, and support the most vulnerable in our communities. We also need to move forward with new strategic infrastructure programs to build for the future. A key proposal that we have in our submission is for a national clean water fund that would help municipalities pay for the estimated $22 billion required to upgrade their wastewater facilities to new national standards that were announced earlier this year. These new standards are unfunded and could lead to the largest property tax increases in history for some mostly rural communities. So we're proposing a commitment of a billion dollars a year from the federal government, over 20 years, to be cost-matched by provincial and municipal governments. Additional direct support is also needed to improve water and wastewater facilities for first nations reserves and communities beyond 2012.

In the next two years, before a national agreement is concluded, the value of transfers to the provinces should also be protected. With the exception of Ontario, all equalization-receiving provinces are expected to face a reduction in these payments next fiscal year, with most of these provinces also likely to suffer an overall decline in their combined major federal transfers.

So how to pay for this? All of these measures, and much more, could be easily paid for through a combination of fairer taxation measures and better spending of federal dollars. This could include eliminating the $1 billion P3 fund that subsidizes privatization; equitable taxation so that stock options and income from capital gains are taxed at the same rate as employment income; cancelling further cuts to corporate income taxes and restoring rates to 2007 levels; and more equitable taxation of the financial sector, such as with the financial activities taxes that the International Monetary Fund just recently proposed.

I've included some charts as well--I gave them to the clerk--that help to illustrate some of the impacts here. You can see with this one that reductions in the corporate income tax rate have actually led to lower, not higher, investment by businesses. A reduction in the share that government revenues across Canada receive from the economy is equal to about $60 billion over the past 10 years.

I also have a chart here that shows the enormous shift in household debt and deficits that has occurred toward the household sector because of low wages; meanwhile corporations are amassing large surpluses that they're not investing back into the economy.

Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now hear from the Independent Media Arts Alliance, please.

[Timothy Dallett, Interim National Director, Independent Media Arts Alliance]

My name is Timothy Dallett. On behalf of the members of the Independent Media Arts Alliance, I would like to express our appreciation for this opportunity to appear before you today.

Our organization represents 80 non-profit, artist-run media arts producers, distributors, and film festivals across the country. Our members serve a community of 12,000 Canadian film and video makers and digital artists who are at the forefront of independent creative expression in today's media.

I'm here on their behalf to present for your consideration four recommendations that will contribute to a strong, vibrant, and sustainable future for the country's cultural sector. As art and culture transform with new technologies, we suggest it is appropriate for the government to make strategic investments that will enhance the potential of this transformation.

Our first recommendation for the 2011 federal budget is to support the work of the Canada Council for the Arts by increasing its annual funding by $30 million in 2011, with a plan to reach a base budget of $300 million by 2015. Second is to enable the creation of a national strategy to preserve and make accessible Canada's digital and media arts heritage. Third is to implement programs to support the development of markets for arts and cultural projects nationally and internationally for Canadian artists, cultural institutions, and industries. Fourth is to grant professional artists and creators a $30,000 annual tax exemption on income deriving from copyright and residual payments, and a complete tax exemptions on arts grants.

The Canada Council is seen by our community as an exceptionally effective way for the arts to be promoted in Canada. Research and development by artists is how new forms of expression are created. These innovations from the cultural sector renew and enrich the knowledge economy and contribute to Canada's profile around the world. Canada's ranks of artists and digital creators grow annually as new graduates enter the field. Changes in other federal funding programs for filmmaking and audiovisual production have increased the number of independent producers turning to the council for support of their films and digital productions. It is logical and strategic that the Canada Council's budget gradually increase to meet these needs.

Our recommendation is echoed by the country's cultural community and supported by the Canadian Conference for the Arts and the Canadian Arts Coalition.

The notion of digital heritage might sound like a contradiction in terms, yet has anyone tried to access information on a floppy disc or audio cassette lately? This is exactly the situation that Canada's arts and heritage community will increasingly confront as changing technology makes formats obsolete.

We submit that the way technology and culture are converging makes it critical to develop a national strategy to address how Canada's cultural heritage will move into the future in digital form. It is not only about preserving Canadian stories in legacy media like celluloid film or videotape; it's about proactive planning for the future so that the question of longevity is considered as new culture is created in new platforms. Canada's national institutions and agencies have a key role to play here, and we encourage you to give them the resources and mandates to carry out this work.

Canada's artists are ambassadors for their country, contributing good will and positive impressions in civil societies worldwide. Canadian culture is a powerful tool for building awareness around the world of this country as an innovative, creative, forward-looking society. Development of markets for Canadian arts and culture in other countries will help reinforce this positive image of Canada. Again, the federal government has a key role to play here.

We don't pretend to have detailed knowledge of how such programs could be best designed and administered or how federal departments might relate to such initiatives. But we respectfully submit that there are very good reasons to make this investment in Canada's profile abroad.

Finally, artists in Canada are significantly under-compensated for the work they do and the skills and training they have. As self-employed entrepreneurs, they fall between the cracks. We ask that government consider recommendations made repeatedly over the past four years by artists' advocates that tax relief be provided to help artists develop their careers. Providing an exemption on a portion of their income will help artists grow what in effect are their small businesses, as the sector works to develop markets and opportunities for their products.

I thank you for your time and consideration. I'd be pleased to answer any questions you may have.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll now hear from the Association of Fundraising Professionals.

[Amanda Gellman, Immediate Past Chair, Canadian Government Relations Committee, Association of Fundraising Professionals]

Good afternoon. I'm here on behalf of the Association of Fundraising Professionals, also known as AFP, a group I joined in 1984.

AFP is a professional association representing individuals responsible for generating philanthropic resources for charitable and public service organizations. AFP is the largest association of fundraisers around the world, representing more than 30,000 practitioners across the globe, including 3,100 members in 16 chapters across Canada. I sit on the Canada council of AFP.

AFP has presented comments before the Standing Committee on Finance every year since 2000, and today I'm going to be covering three topics: stretch charitable tax credits, capital gains tax, and a government-sponsored National Philanthropy Day.

The charitable sector in Canada has more than 161,000 organizations with over 1.2 million paid staff and 6.5 million volunteers. Unfortunately, the economy has taken its toll on this sector. According to Statistics Canada, Canadians donated $8.19 billion to charities in 2008, which was a 5.3% drop from the previous years. In other words, as the recession hit, people started giving less to their favourite charities. Initial indications also show us that in 2009 there was another drop.

Accordingly, AFP encourages the committee to examine and approve the following recommendations that will encourage more robust private giving to and support for the charitable sector.

Recommendation number 1. To further stimulate a national culture of giving, AFP supports the recommendation from Imagine Canada that proposes a stretch tax credit that would apply to amounts that exceed a donor's previous highest giving level, using 2009 as the baseline. This would add ten percentage points to the tax credit for the eligible portion of donations. In other words, a 15% tax credit would be boosted to 25% and a 29% credit to 39%, but only for the portion of donation that exceeded the previous year's giving. Once an individual has reached $10,000 in annual donations, no enhancement would be offered.

I would also like you to know that in our recommendation in our written brief submitted in August, we had suggested that the tax credit apply to donations over $200. After consulting with Imagine Canada and others following that submission, we now recommend applying the tax stretch credit to all donations to broaden the appeal of this new charitable giving initiative. If successful, this measure could contribute significantly to increasing a stronger base of financial support to meet the growing demand on non-profit organizations and charities for service and support.

Recommendation number 2. AFP believes that eliminating the capital gains tax on gifts of appreciated land and real estate to charities would strengthen the capacity of Canada’s voluntary sector to better serve Canadians and contribute to the country’s economy.

As you will recall, the federal government removed the capital gains tax on donations of securities to most charities in 2006, making these donations more attractive to potential donors than they had been previously. On a personal note, at that time I was vice-president of a university and the president of a hospital board, a foundation board, and the donations did increase significantly because of that change.

As was the case for gifts of securities, contributions of land and real estate are currently stymied by a tax system that makes such giving too burdensome and not attractive to donors. Eliminating the capital gains tax would remove a huge barrier to these types of gifts and make it far more likely and appealing for donors to give land and real estate to a charity.

Recommendation number 3. Last fall, the Minister of Canadian Heritage officially declared November 15, 2009, as National Philanthropy Day in Canada. Canada was the first country to officially recognize National Philanthropy Day since its inception in 1986.

To instill some added permanence to the minister’s declaration, Senator Terry Mercer, a Liberal senator from Northend Halifax in Nova Scotia and a certified fundraising executive, introduced Bill S-203 on March 4, 2010, that would permanently recognize National Philanthropy Day every November 15. The bill received a third reading in the Senate on June 10, 2010, and now awaits passage in the House. It is hoped that the House will pass the bill as well.

National Philanthropy Day was created with the intent of increasing awareness of giving at all levels.

Many organizations, such as AFP, already hold celebrations designed to encourage giving, raise awareness, and honour donors and volunteers. Last year, I believe there were actually 20 celebrations across Canada. The government’s involvement could help create partnerships with media sources and other organizations to further increase awareness of philanthropy and encourage Canadians to invest in the voluntary sector.

In conclusion, charitable organizations need the support of government to better serve all Canadians. These three recommended policy changes will go a long way towards strengthening the capacity of the charitable sector to provide critically needed programs and services and to enhance donors’ ability to fulfill their philanthropic aspirations.

Thank you very much for your time.

[The Chair, Conservative, James Rajotte]

Okay. Thank you, Ms. Gellman.

We'll hear from Ms. Hall now, please.

[Sheila Hall, Executive Director and Economic Development Officer, Clarington Board of Trade]

Good afternoon, Mr. Chair and committee members. I'd like to thank you for the opportunity to speak with your committee this afternoon as a representative of Clarington's business community.

Clarington is the proud home of the Darlington nuclear power station, which provides 30% of Ontario's electricity. Along with our dynamic agribusiness, including vegetable and fruit farms, cereal crops, and livestock, and a vibrant small manufacturing and service industry, Clarington is proud to be contributing to and exploring new opportunities for growing Canada's economy.

It is encouraging to see our governments take action in these challenging economic times with programs to keep our communities working and creating jobs through business support and infrastructure investment. Clarington is very grateful for the support we have received, totalling approximately $13 million since 2008. In addition, the municipality of Clarington has been very fortunate to have had significant infrastructure investment announcements, including the Highway 407 extension and the proposed Darlington new nuclear build. It is essential that action be taken on these announcements.

We strongly encourage the federal government to ensure that decisions with AECL be brought to the forefront in planning, while acknowledging and respecting that all levels of government need to demonstrate their due diligence and ensure they are making the right decisions for all the people of Canada. A new nuclear build in Ontario is a positive thing for all of Canada and will help support the lucrative nuclear industry across the country and confirm our place in a global nuclear market.

OPG has continued its work on the environmental assessment and licensing processes in support of the project, which has included extensive consultation and involvement in our community. We are ready for the government to take the next step.

All levels of government within our community—municipal, regional, provincial, and federal—plus community leaders and residents, support the Darlington new nuclear project. Not only is the project needed as an economic driver, but further delays in the decision may potentially result in increased costs for the overall project, which is not good for anyone, government or taxpayers. It is estimated that for every one nuclear job created, there will be six spinoff jobs created for Canadians. I don't have to tell you that this is hard to match.

The municipality of Clarington is on the eastern border of the GTA, and the extension of Highway 407 to the Highway 35/115 is essential to ensure the effective and timely movement of goods and people. A recent announcement by the Ontario government indicates that the extension of Highway 407 will stop at Simcoe Street in Oshawa. This makes absolutely no sense to us as a regional community, and we respectfully request that the federal government require that the Province of Ontario honour its previous agreements and build the extension of the 407 to the Highway 35/115 and ensure that economic growth is supported by all levels of government.

With all this excitement, we are also seeing an increase in investment interest in Clarington. As in many communities across Canada, the lack of serviced land adds complication in the development process. Our governments have been very active in supporting road infrastructure, community, and shovel-ready project support, which has been a great asset to communities in creating immediate short-term employment opportunities for communities that are ready to go.

In order to have sustainable and self-reliant economies across Canada, we need to explore funding opportunities to build communities that are ready for international and intranational investments, which will create long-term employment, build healthy community tax bases, and allow us to care for our own maintenance programs.

As our federal government prepares for Budget 2011, it is essential that a long-term, self-sustaining approach be considered. The Clarington Board of Trade recommends that action be taken to ensure that the Darlington new nuclear project move forward with no more delays, that the Highway 407 extension be completed to Highway 35/115—as all previous discussions indicated—and that programs be developed to support the servicing of employment lands in our communities.

I thank you for your consideration.

[The Chair, Conservative, James Rajotte]

Thank you very much, Ms. Hall, for your presentation.

The Canadian Pharmacists Association will make the final presentation.

[Dr. Jeff Poston, Executive Director, Canadian Pharmacists Association]

Thank you very much, Mr. Chairman.

The Canadian Pharmacists Association is very grateful for this opportunity to appear before the committee. For those of you who are not familiar with the organization, CPhA, as we refer to it, is the national organization that represents individual Canadian pharmacists.

I'd like to take this opportunity to highlight our recommendations in three areas we believe need further investment: drug safety, value, and quality; health care funding; and health human resources.

There's no issue more important to pharmacists than to ensure the safety and effectiveness of drugs and that they represent value and quality outcomes for patients. To do this, pharmacists need access to data, and we need better information on safety and efficacy to be able to put in programs to help address some of the problems.

It's estimated that some 25% of drugs are prescribed inappropriately, that 50% of patients fail to take their medications as they've been directed and often fail to complete their courses, and it's estimated that there are about 70,000 preventable hospital admissions in Canada each year as a result of adverse drug reactions and inappropriate drug use.

We require investment funding to develop better indicators of drug use. By indicators, I mean really defined statistics that measure quality and effectiveness. A national medication management centre is required to improve the safety and quality of drug therapy. We're recommending appropriate funding of such a centre to develop better indicators of drug use and make better use of the existing ones.

Canada also requires the establishment of seamless pan-Canadian electronic health records. A comprehensive e-health record for every Canadian would allow health professionals to access medically necessary information to work in a more collaborative manner, make better informed decisions, and improve the safety and outcomes for patients. Introduction of e-health records across Canada continues to be a priority.

Moving to health care funding, as we know, the current 10-year agreement on health care funding that was signed in 2004 is set to expire in 2014. The current agreement included an annual 6% escalator in the Canada health transfer and a commitment to meet a range of health-related objectives. One of those objectives was the introduction of a national pharmaceutical strategy, which included a catastrophic drug coverage program. In its most recent reports on the progress of the agreement in 2008, the House of Commons health committee identified a number of areas in which progress had been made, but also identified some areas where there had been lack of progress.

Governments need to revisit the 2004 agreement and address the unfinished business arising from the accord, including the commitment to a national pharmaceutical strategy.

As we know, discussions have begun regarding the structures and the future of health transfers after 2014. All governments, the health sector, and Canadians in general need to be consulted on the transfer arrangement post-2014. We're recommending that the federal government establish a broad consultation process as a part of the planning for 2014 or for what happens to health care funding post-2014.

An important part of the health care system is health human resources. In June the House of Commons Standing Committee on Health also released a key report on health human resources, which contained a number of recommendations for the federal government to improve health human resource forecasting, planning, integration, and supply. It recommended the establishment of a new national observatory on health human resources. An observatory can be thought of as an arm's-length organization whose mandate would be to monitor, track, and measure the supply of health human resources in Canada. The committee also recommended that the federal government provide a sustained funding mechanism to the provinces and territories to promote and develop interprofessional collaborative practice.

At CPhA we strongly support these two recommendations and would recommend appropriate funding be devoted to each.

Thank you once again for this opportunity to appear. I look forward to your questions.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We will begin members' questions with seven-minute rounds. Ms. Minna, please.

[Maria Minna, Liberal, Beaches—East York, ON]

Thank you very much, Mr. Chair.

First I want to give my condolences to Mr. Sanger and his membership on their loss. It's very sad.

I believe we are at a crossroads in facing some really tough choices in this country. There is money. Despite the fact that we have a deficit, there is money. If we look at some of the money that is available, there is $16 billion for jets, without any guarantees for Canadian jobs at this point. That contract doesn't give us any guarantees. There is $10 billion for prisons; the crime rate in this country is not going up.

There is $6 billion in corporate taxation cuts. Mr. Sanger, you just pointed out that tax cuts don't really create jobs. Canada's corporate taxes are the lowest in the world anyway, so we really don't have to go there. I'm not even going to mention the $1.3 billion that was spent on the G-20.

So we do have money, but we have to make some choices.

Mr. Jackson, my question to you would be on the choices. Pensions, which you've already mentioned, would be a choice. It would seem to be a major one that I would think we would need to look at.

Family care certainly includes looking after caregiving for families who have members of the family who are not well. But there is also child care. These families need those kinds of assistance to be able to be in the labour force and to stay in the labour force.

Learning is huge, in order to make sure we have the skills the economy needs.

And there is investing in jobs, investing in companies, to create the jobs of tomorrow: the green jobs, the retooling of companies.

These are areas that in my humble opinion are huge, and there are choices there that we have to make.

I'm looking to both of you to ask what your choices would be. What side of this ledger--and you may have others--would you choose? It seems to me that the issue is not that we don't have the funds; it's what choices we are making and where the will is to do it.

[Andrew Jackson]

Well, I agree with the general thrust of your comments.

On the pension issue, I'd point out that the CPP expansion proposal wouldn't in fact involve any expenditure of government funds since the contributions would come from workers and employers in return for benefits.

I guess the other pension proposal we'd make is an increase in the guaranteed income supplement to push all seniors above the poverty line in Canada. That would actually be a very modest cost of under $1 billion. I checked the numbers the other day--the total amount by which the incomes of seniors fall below the line.

In terms of continued stimulus spending in the economy to keep us through this very soft period of economic growth, in our budget brief we did call not just for an expansion of infrastructure funding, which I think creates jobs and makes a permanent investment in our future, but also for the expansion of caring services. That would be very high on our list of priorities. Certainly long-term care for the elderly in the context of a very rapidly aging population is a huge challenge that can't be avoided. And certainly putting in place that child care system, which so many of us have talked about for so long without getting there, would be very high on our priority list.

[Maria Minna, Liberal, Beaches—East York, ON]

Mr. Jackson, what is your reaction to the six months compassionate leave as part of our Liberal proposal? Is that adequate or--

[Andrew Jackson]

We haven't had a chance to review those proposals and details. I think we need to consider them.

[Maria Minna, Liberal, Beaches—East York, ON]

Mr. Sanger, with respect to corporate taxes, if I'm not mistaken, you indicated earlier that lower taxes really don't create jobs; investment doesn't go into employment.

[Toby Sanger]

Yes. As an economist, these results certainly surprise me. I have some theories for why it's happened, but it's interesting that when I've been on sessions with people from the Canadian manufacturers association, they generally don't support further corporate income tax cuts. What they have supported, and I think a number of us here have as well, are investment tax credits, because then not just the profitable corporations can benefit from those, but also companies who are going to invest in the economy in that way. That's what we really need in Canada.

I think you'd agree that the whole austerity agenda has been misguided. I think we've seen that six months after the spring budgets. I think the overriding concern that a lot of people have had is not so much the immediate deficits that we have now, but the deficits into the future and the potential cost of aging, because obviously when you are preparing an annual budget you are looking into the future as well. Even the IMF has done some calculations, and the cost of that aging for the pension systems and also for health care is not an enormous amount in comparison with the reduction we've had in terms of overall revenues.

The real economic problem that we have now isn't so much saving so that we can invest in the economy. Corporations now have a big surplus of savings, and they're driving that back into share buy-backs that help pump up their stock prices but don't do anything in terms of investment. The real problem we have is a lack of spending by individuals. That is why you need to support the vulnerable, help create jobs, and keep the economy going that way. There's been an incredible imbalance that's developed.