Finance Committee on Sept. 19th, 2006

[Richard Jock]

Our understanding is that there is an overall 3% cap on proposed federal funding. As well, our understanding is that INAC currently remains at the 2% cap.

As mentioned, we also understand that part of what's going on is that there are budget reductions in terms of contributions to potential funds. We understand that both Indian Affairs and Health Canada are going through a process of examining those cuts. There may not only be constriction on the amount of growth, but there will also be reductions at the other end, which will further compound the potential funding problems.

As I mentioned, there are 33 other federal departments with some responsibility for first nations issues, and those agencies are not exempted from the cap. Further, one of our concerns is that in terms of these reductions, first nations or aboriginal programs may be targeted and reduced most. So we see that it's not only the go-forward position, but the whole issue of cuts may actually make this entire situation even more dramatic.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Thank you.

May I ask Ian a short, final question?

[The Chair, Conservative, Brian Pallister]

There's a brief amount of time available.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Again, regarding youth, I hear what you're saying. Given the fact that the physical fitness credit for children is going to be about $40 million this year and another $160 million next year—that's what it's going to cost us—wouldn't it have made more sense to take that money and put it into programs and facilities to meet the objectives you're talking about, so that our young people can be truly engaged in physical fitness without restrictions due to economic barriers?

[Ian Bird]

It's true that the current tax credit will cover only a certain part of the population. As you know, your party supported what amounted to a multi-billion-dollar infrastructure investment recommendation through the last election. We're talking about two degrees here: one is a relatively modest investment in a certain part of the population to get their kids into sport programs, and the other is the sort of Canadian endeavour that was taken up around the centennial year in 1967 through 1972, during which we had a substantial community infrastructure fund, so that your local community centre was not 40 years old and at risk in the winter snow load.

I agree with you that a comprehensive approach is required. There are both the kinds of fiscal tax measures that have been proposed and the kinds of essential infrastructure programs, which frankly link up with the child welfare agenda that we heard about from my colleagues here. So it's the comprehensive approach that's essential.

[The Chair, Conservative, Brian Pallister]

We'll continue with Mr. Savage for five minutes, sir.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Thank you, Chair, and thank you to all the panellists. I thought the presentations were very good.

I want to follow up with Mr. Bird. The place I want to go puts me in agreement with Ms. Wasylycia-Leis, which causes me a mild level of concern, but not too much. I do want to talk about fitness, particularly for children. It's an area that I've spent some of my life working in. I joined the health committee last year in hopes that we would have some impact on getting a national wellness agenda put through following the creation of the Public Health Agency of Canada, which I think is a good initiative, both for public health but also for population health, chronic disease. I come from Atlantic Canada. We have the highest levels of chronic disease: diabetes is out of control, cancer, heart disease, and all the risk factors for poor health.

I've talked recently with Dean Hartman, who owns Nubody's Fitness in Nova Scotia, and Kevin Cameron. They are people involved in trying to put together a health promotion agenda in Nova Scotia. We're fortunate in Nova Scotia that we have Canada's first health promotion department, ably led by Scott Logan, and we have Jamie Ferguson, who you may have met somewhere along the way. They've done some good work.

I'm pleased with your recommendations. One of them mentions including tax measures. The others are sort of more involved in volunteerism and infrastructure. It seems to me that we have to go that way. The kids who are most unable to access measures that will keep them fit are at the lowest level of income in society.

I just registered my son for hockey for the first time. He's seven years old. It was $350 to register. It was another some hundreds of dollars to buy the equipment. There's travel. Getting a tax credit at the end of the year would incent nobody to do it. It will help me and it will help other people who already register their kids in hockey, but it doesn't provide any kind of direct incentive for kids who otherwise might not be able to register for hockey.

We have the Commonwealth Games coming up in Halifax, which I strongly support, mainly because I think it will provide some infrastructure afterwards for kids and adults and others in the community.

I have two questions after that lengthy regional preamble. Do you agree that direct investment in infrastructure and in programs mainly for kids who can't afford it otherwise is more important than tax measures, or do you think the tax measure is better? I'm not condemning it. I think it's a worthwhile initiative. In my view, it's not the priority. I would be interested in your view.

The second question is, whatever we do for hockey and baseball, should we not do for dance and other forms of physical fitness?

[Ian Bird]

Yes. You can become a spokesperson for the issue, Mr. Savage, in the sense that we're talking about a crisis. We're talking about a generation of youth that is going to face something that none of us have and that Canadians have not faced. So everyone putting their oar in the water is the key thing.

By the current estimate, we have a $14 billion infrastructure deficit that we've just let aggregate since 1972, when the last infrastructure programs were shut down. We will create new demand by raising awareness and through some of the current tax measures, but where will these young kids go? So I think infrastructure has to be a key part of this.

I also think, though, that we don't want to overlook the fact that there is a human infrastructure component to this, and this is the part that Nova Scotia has really led on. They've created a whole leadership agenda around the concept of health promotion. The people you've mentioned have spearheaded this, and as a result they've been the ones to describe the link between tax measures, infrastructure, and the kinds of community investment programs that will actually get us out of this crisis.

Can we collectively take on all three things at the same time? I think we're pretty mature folks. It happens. Perhaps it's not surprising that you don't bump up against the NDP position and others, in that it's a relatively non-partisan issue. We're talking about community sport, kids being active, and the kinds of basic ingredients to help that happen.

My guess is that we can pursue this, and this next budget is a good time to do so.

[The Chair, Conservative, Brian Pallister]

Thank you.

Mr. St-Cyr, you have five minutes.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Thank you, Mr. Chairman.

I too would like to thank you for your presence here today. It must sometimes be frustrating for you to only have a few minutes to tell us everything you would like to tell us.

I would like to hear the opinion of the representatives of the railway industry. Reference has been made to investments to improve the profitability of the industry. That is quite understandable, but I would also like to hear the opinion of industry representatives as to the investments required to help many Quebeckers who live in ridings like my own, where there is a lot of railway activity, and where people have to live with many inconveniences caused by the operation of railways.

In the opinion of many Quebeckers, and in my opinion, large investments should be made to allay these irritants. I will name four of them, briefly, the first one being noise. Often, for historical reasons, railways run right through the middle of residential neighbourhoods. People have to live with the noise.

It would be reasonable to think that the more industries invest, the more prosperous they will be and that there will be, a corresponding increase in railway activity through residential neighbourhoods. This will add to the problems that already exist. People are concerned about that. Throughout the world, people are attempting to find technological solutions to reduce noise, and new routes will eventually be built to bypass those neighbourhoods. I presume that considerable investments will be needed to solve the problems caused by increased railway activity.

The second irritant that is raised fairly frequently is the storage of dangerous substances on railways. I presume that is because railway transport companies have nowhere else to keep these substances, but when they are stored in railway cars, that often happens in residential neighbourhoods. People are concerned by that.

Thirdly, I would like to talk about infrastructures in areas where people live, about lands that member companies of your association own, that are often in an advanced state of deterioration. At the corner of the street where I live, there is an overpass, and I am scared to pass under it because I am always afraid that cement chunks are going to fall on my head. As for the land, there is ragweed growing rampant all over it. It would seem that railway companies do not have any money to invest to ensure some kind of basic maintenance.

And finally, there is the whole matter of soil contamination, which we could discuss in greater detail.

Here is my question: If the government were to bring in some type of tax incentive, subsidies, or some other measure to encourage you to do your part to do something about these problems, do you think the industry would be willing, in term, to invest money as well to settle these matters?

[Bruce Burrows]

Absolument. The answer to an earlier question from your colleague is a good answer to your question about infrastructure.

We are very supportive of the federal and Quebec governments' conclusion of an arrangement to spend up to $100 million on infrastructure in Quebec, where I think we can make some real improvements to the quality of the track and various facilities that can help take some trucks off the road and help alleviate some environmental congestion pressures.

On the issues of noise and the handling of dangerous goods, one of the proposals I spoke about today was the establishment of a new rail technology development fund. By putting the excise fuel tax into that fund we can look at new technologies that can help with noise evasion and minimization. There are some ideas out there in which we would be very interested in investing. If we had a better CCA regime we would also be better able to invest in those things. Our members are very keen to make some of those investments.

There's a lot of work going on in the area of handling dangerous goods. We're looking at ways to move those cars more quickly so that they don't sit on a siding close to residences for a very long time, and so that they keep moving. That minimizes the risk and helps keep residents more comfortable.

We have a major agreement with the Federation of Canadian Municipalities to address noise issues. We're working very closely with Westmount and a number of other municipalities in Quebec, which are very keen and supportive of that initiative, by the way, and which are helping to lead that initiative, which I think will help on the proximity front as well.

[The Chair, Conservative, Brian Pallister]

Thank you, Mr. St-Cyr.

We will conclude, Mr. Turner, with your round. You have five minutes, sir.

[Garth Turner, Conservative, Halton, ON]

Thank you.

I'd like to direct a question or two to Mr. Frost, somewhat in response to Mr. McCallum's throw-away line about your request, which I gather was for pension splitting, as costing $2 billion or some such ridiculous amount that the government doesn't have. I'd just like to explore this issue for a minute. You brought it up in your presentation about pension splitting among your members and among seniors in general. Do you have a realistic estimate of the cost of that particular change in the tax code?

[Jack Frost]

Can I just take a second?

[Garth Turner, Conservative, Halton, ON]

Sure.

[Pierre Allard, Director, National Service Bureau, Royal Canadian Legion]

Could I answer that?

[Garth Turner, Conservative, Halton, ON]

Please.

[Pierre Allard]

We don't have an estimate of the cost, but the reality is that in the year 2040, one in four of your people who are going to be buying goods will be seniors. Surely you have to preserve a way to allow them to compete in Canadian society and purchase these goods, and this is probably one way that would cost a very small amount of money to the government and would allow Canada to remain competitive.

[Garth Turner, Conservative, Halton, ON]

Thank you.

Well, I have good news for you: I do have a cost. Actually, this is an interesting issue. I think it's an issue of tax fairness, where we have a lot of Canadian seniors who are in a higher tax bracket because the income of the family flows into that family in the hands of one individual and not two. I actually asked the Library of Parliament if they would research this issue and come up with a cost estimate. I'd like to share that with you.

The total cost to the treasury of allowing income splitting for couples with at least one spouse over 65 years of age, which would allow all taxable income flowing into that household to be shared between the two individuals in that household, is $301.9 million. A significant portion of the benefits would flow to seniors in the income bracket of $40,000 to $60,000.

So perhaps we might be able to develop that and you might be able to make the case as to whether that is an affordable issue or not. I think it is.

Also, Mr. Frost, I'd like you to respond to a comment. I did write about this the other day in my infamous blog, and I made the case for pension splitting. I'd like to read to you a response that was typical of those I got from a number of people:

I refuse to pay higher taxes so that the greedy 50- to 65-year-olds can get optimal health care and drive their Mercedes. They had every opportunity to prepare for retirement and fund it on their own...a no more affluent time in history. If they have it all tied up in their houses and cars, tough luck.

How do you respond, sir?

[Jack Frost]

It's rather difficult to respond to that. It's an unfair statement. I think if you look at a dual-income family today, you do see more affluence out there, but the people who are in need today stem mostly from single wage earners. The spouse traditionally stayed home and took care of the family, which was encouraged by the government of the day and private industry. In the 1960s and 1970s, we started to see more spouses come into the labour market. It has only been since, I believe, probably 1986 or in that range of time that the wage of the female of the household drew proportionally in line to what it should have been with the male. So we're looking today at a more affluent younger society, but as for traditional senior society, I disagree with that statement. You're not seeing that today.

[Garth Turner, Conservative, Halton, ON]

Mr. Frost, are you aware of a conference we're having here in Ottawa on October 3 to speak about pension splitting? Your colleague, I believe, indicated you are. I'm wondering if you'll be able to be in attendance.

[Jack Frost]

We are certainly supportive of the conference. We're trying to see if it will fit within our schedule.

[Garth Turner, Conservative, Halton, ON]

All right. I might just remind members who are interested in educating themselves more on this issue--and I might address this particularly to Mr. McCallum--that we are having a conference here on Tuesday, October 3, at 10 o'clock, and you're most welcome to come by. We're going to be discussing this issue, the costs and whether in fact it is an affordable change to the tax code and whether it's something in fact that should be brought forward by the government as an issue of tax fairness.

Thank you.

[The Chair, Conservative, Brian Pallister]

Thank you, members, for your participation and intervention, and to all the panellists, thank you very much for your presentations. We appreciate your time.

We will take a brief recess to give committee members and staff the opportunity to eat, and we will ask the next panel to make their way to their seats, please.

Thank you.

[The Chair, Conservative, Brian Pallister]

I invite witnesses to get comfortable and I encourage committee members to return to their seats.

The Standing Committee on Finance will continue its deliberations on the pre-budget consultation process.

We welcome and thank our witnesses for being here. I'll apologize on behalf of committee members as we continue to partake of our lunch while the process continues. But understand that we can multi-task, so we will be listening.

We will begin this round with a representative from the Canadian Trucking Alliance, Mr. Bradley, if you'd like to proceed.

You have no more than five minutes, ladies and gentlemen.