Finance Committee on Oct. 21st, 2010

[Paul Szabo, Liberal, Mississauga South, ON]

Thank you. There is no question that everybody understands that changes to the EI plan that have been talked about are very substantial cost items, and it's probably not appropriate to even consider them at this time, given the overall environment that we're in. But the key is whether or not the program is meeting its core goal first. I'm not so sure on that one either.

So I think you'll see that we will probably continue to look at EI. As people float ideas, don't assume that they are dyed-in-the wool, committed to them, and that they're going to be in somebody's election platform. I think you have to carry on the dialogue.

Thank you, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Szabo.

We have a few minutes left. Mr. Paillé senior has a couple of minutes for I think the last comments for some discussion.

[Daniel Paillé, Bloc, Hochelaga, QC]

Yes. I am sorry that I missed your presentation. However, it is impossible to be in two places and make two speeches at the same time. But I am sure that my replacement did very well.

We have heard a cry from the heart from the Canadian Federation of Independent Business. This is a lobby group that has the right to exist. However, do you not think that, if both the Liberal and Conservative governments have not cleaned out the till—$57 billion of employment insurance money was used for other purposes, and the current government is preparing to do exactly the same thing—if that money that belongs to entrepreneurs and employees had been available—I have spent my career among entrepreneurs and I know how much the premiums were—we could have increased, as the Bloc Québécois has suggested, employment insurance benefits and services without necessarily having to increase premiums? Do you agree?

[Dan Kelly]

I think we can certainly agree with the first half of your comment—

[Daniel Paillé, Bloc, Hochelaga, QC]

Thank you.

[Dan Kelly]

—that it would have been far preferable had EI dollars not been taken out of the fund and transferred into general revenue for many years, and the problems that we're experiencing with employment insurance today would be far fewer if that had not been allowed to happen. There would have been a reserve built into the employment insurance fund that would have allowed us to ride out the recession very easily, had that not occurred. I think the decisions of the past have exacerbated the problem.

I will say that the current government took some very courageous and very strong, positive decisions when it separated out the EI fund and created it in a separate fund, protecting it from the general revenue of the Government of Canada. That was the right decision the government made; unfortunately the timing sucked. The problem is that it happened right before a recession, and therefore the fund was in great peril.

I will say that for a variety of reasons our members do not favour an expansion of employment insurance benefits, even quite apart from the premium issue. As we come out of the recession we're going to be facing a shortage of labour. We don't want to contribute to a problem wherein employees find it better to stay on unemployment than to get back to work.

[Daniel Paillé, Bloc, Hochelaga, QC]

I would, however, invite you to consult the tables in the budget speech given by the Minister of Finance. Even though the government has created a new employment insurance bank, there is no doubt that it will have both hands in the coffers. I think that your position is clear and that you are saying that you do not believe that workers should benefit from improved services from the Employment Insurance Fund. We disagree on that. It makes for an interesting discussion.

[Dan Kelly]

Actually, on that front you're quite right. The employment insurance numbers do factor into the overall books of the Government of Canada, but we have strong assurance that the government is not taking those dollars and transferring them into general revenue. Of that part, we're very confident. Your larger point, though, about the appropriateness of the past actions is one that we raise as a concern.

But to your point, we have called on the government to reinvest those dollars that were taken from the past and put them back into the EI fund for the future.

[Daniel Paillé, Bloc, Hochelaga, QC]

As Captain Bonhomme, the hero of a Quebec children's television show, used to say, "The skeptics will be proved wrong!." Thank you.

[The Chair, Conservative, James Rajotte]

Thank you. Merci.

I suspect that will be a very interesting discussion in our next election campaign, whenever that is.

In finishing up, I want to raise the issue that was raised by the Professional Institute of the Public Service with respect to Canada's losing its capacity to conduct science for the public good.

You state that since the 1990s, a disproportionate amount of federal government spending on S and T has gone to higher education. Government funding to higher education R and D as a share of GDP grew faster in Canada than in any other G-7 country between 1997 and 2005, but you're arguing that the funding has gone to our research universities rather than to the public service or to federal laboratories.

As you know, this is a very lively debate. In a decision taken some time back, prior to our government, perhaps some people took the view that the federal laboratories were not up to the standards of the universities and made a very conscious decision to fund research, especially basic research, through universities, rather than by increasing funding to federal laboratories or federal scientists.

It's a very active debate. I take your point on that. I believe AUCC will be here later on and will certainly present their view, and so will the G-13 universities.

I would like you to expand on this point and present your view on whether the government ought to prioritize federal funding for, say, federal laboratories as opposed to universities.

[Gary Corbett]

I've been speaking about this for the last 10 years, ever since the program reviews of the 1990s.

It's a matter of balance. It goes back to a matter of balance, and having the right balance in terms of those three legs of the stool you've probably heard me talking about in the press. You need the universities, you need the private sector, and you certainly need the government.

That government leg is growing shorter in terms of intramural research. It's out of balance. I think you have to bring some semblance back into that and make sure the departments and agencies have the A-base funding to continue--not B-base or C-base, relying on partnerships with corporations--to spur the innovation system. That's what we're talking about.

I could talk to you about a laboratory I just visited two days ago in Val-d'Or, which had been at 20-some staff and now is down to something like 11 staff. These are real. These are things that are happening across the country in federal government laboratories and right across departments and agencies. I see it all the time.

[The Chair, Conservative, James Rajotte]

What's your view of partnerships such as, say, the University of Alberta and the National Institute of Nanotechnology? You have NRC, you have the University of Alberta, you have granting councils. What's your view of a partnership like that?

[Gary Corbett]

That specific partnership I can't speak to. Improvement in partnerships is a good thing. It's good to have all parties at the table, but from our perspective, the amount that's placed into intramural departments and agencies has been lacking. It doesn't allow for scientific innovation at the departmental level. It relies too much on industry.

[The Chair, Conservative, James Rajotte]

When I was chairing the industry committee, I asked for an explanation of federal funding for S and T, and someone came in and put a chart on the wall about as big as that wall. It would take a Master's degree to explain to someone how we fund R and D in Canada. Do you think that's part of the problem? Is that part of the challenge?

[Gary Corbett]

Yes, it's an extremely complex question. You can look at it from a Master's or PhD point of view. You can basically boil it down. If you visit the laboratories and talk to the federal public servants, who are some of the best and brightest on the planet, it's how they're functioning, working with corporations and working with universities. We believe that you need more A-base resources in the intramural system itself.

[The Chair, Conservative, James Rajotte]

Well, we did that on our tour with both Manitoba and Saskatchewan, but they both took credit for creating canola. I'm not sure if you have an official position on that--

[Gary Corbett]

Maybe they were both involved.

[The Chair, Conservative, James Rajotte]

My time is up.

I want to thank all of you for being with us here today. In particular I want to mention that your recommendations in this panel were very specific, and we appreciate that as committee members. It helps us when we debate recommendations going forward.

If you have anything further to submit to the committee, please do so through the clerk. Thank you all for your time today.

The meeting is adjourned.