Finance Committee on Sept. 19th, 2006

[The Chair, Conservative, Brian Pallister]

About 20 seconds.

[Dean Del Mastro, Conservative, Peterborough, ON]

About 20 seconds; well, that's not a great deal of time.

Mr. Laws, I was interested to hear you speak about the tax credit for kids in sports, and about extending it to older workers as well. It's an interesting notion, and one that I, as a gravitationally challenged member of Parliament, may well present to the finance minister.

Thank you.

[The Chair, Conservative, Brian Pallister]

Will I put that on the record, Mr. Del Mastro?

We'll move on to Madam Wasylycia-Leis. You have seven minutes, madam.

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

Thank you, Mr. Chairperson. I'd like to thank all the presenters for an excellent panel.

I'd like to begin with Gail Beck. I found this a wonderful contribution to our deliberations and very timely. You've identified clearly the need for investment in areas to ensure women achieve their fullest potential and have identified the need for gender analysis at all times, at a very time when in both those areas the present government seems to be basically abdicating complete responsibility.

In fact, as we speak, there are national women's organizations that are closing their doors because this government has refused to ensure proper stable funding for some capacity among the women's movement.

I wonder whether you have anything to add to your presentation that would help the government realize the importance of ensuring that you have a national organization to empower women to help themselves.

[Dr. Gail Beck]

I guess I would want to point back to one portion in the brief that responds to a question that was asked before which I didn't have time to answer. It speaks to the fact that gender equality, as it relates to income and influence, has been directly related to health, and in particular to health outcomes.

I pointed out that the inter-agency gender working group of the United States Agency for International Development took stock of some of the health programs that integrate gender. It did this first of all on behalf of the World Health Organization, and the programs they wanted to investigate were.... A lot of money was being invested in HIV/AIDS programs in Africa. They went through a number of studies that looked at where gender had been integrated and examined whether that had made a difference. In fact, that research did show that it makes a difference, at least in health.

I can't speak to some of the other areas—I'm a physician, a doctor, so it's not my area of interest. But certainly, as it applies to women's and men's health, integrating gender shows better health outcomes. I think that's what's important.

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

Fair enough, but I think it is important to point out that your organization, the Federation of Medical Women of Canada, is recommending that Status of Women Canada's funding for its women's programs be increased so that there is some stability in the whole field.

[Dr. Gail Beck]

Yes.

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

Let me go to Dr. Pekeles. You also have raised some important issues that are often dismissed as unimportant to the whole issue of the economy and competition and productivity, so I'd like you to have a chance to emphasize your point--I could pick any number of your points--particularly around mental health issues. Because it would seem to me that first of all, Canada does not have any kind of national mental health strategy, which we pay for dearly in terms of lost productive hours, and I would think that would have a direct impact on our ability to be competitive.

And then I'd like to hear from Mr. Myers, since none of these issues are mentioned in your report. What does it mean for you in terms of increasing productivity and being competitive when workers are not able to get access to mental health resources, or women are not able to get access to day care centres? How, in fact, do we build up the necessary skilled workforce in the absence of such investments?

Mr. Pekeles.

[Dr. Gary Pekeles]

I would have to agree with the general thrust of what you spoke about, which reflects my own--namely, looking at our children as our future and the importance of doing everything we can that has been demonstrated to be effective in increasing the likelihood of them growing up healthy and therefore able to lead productive adult lives.

That's almost a cliché, and I must say, as a pediatrician, I sometimes get worried about the cliché that children are our future. Children are also their own present and are an end in themselves and not a means to our end. But clearly, looked at globally, for us as a collectivity, we would be foolish not to invest, and I don't think anyone would argue against investing in those strategies that have been demonstrated to provide the greatest likelihood of the greatest proportion of them growing up healthy and able to contribute to our society. To me it's a no-brainer. We just have to be selective in deciding where to invest to get a maximum bang for our buck. That's why the few I selected here are ones where there is clear data to suggest that the dollar invested in health promotion will pay off manyfold down the line.

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

Thank you.

Mr. Myers.

[Dr. Jayson Myers]

I think you've identified a crucial issue for not only the broad issue of productivity but for competitiveness and what your committee is focusing on today.

Let me start off by asking: In a global economy, where you can buy goods and services and technology and labour services and knowledge from anywhere around the world, what will make a difference in any business? There are two things, I think: leadership and people. Business is just an organization of people, and unless you are able to mobilize those people to achieve successful outcomes, you're not going to have a successful business.

Given that, there are huge issues that companies are facing. We often talk about skill levels and training. I think the most pressing issue is how you mobilize the people in your organization and how you make sure they have the capabilities to work in a productive environment. So the issues about health, issues about education, issues about worker responsibility.... One of the biggest problems that many employers face is the lack of people who come to them with basic employability skills and who are willing to take responsibility for the health and safety of others in the workplace. This is one major reason why they're turned down for employment.

So we have a lot of work to do socially, but also within companies, I think, to respond to these issues.

[The Chair, Conservative, Brian Pallister]

Thank you, Mr. Myers.

Thank you, Madam.

We'll move on to the second round of questions.

Mr. McCallum, you have five minutes, please.

[John McCallum, Liberal, Markham—Unionville, ON]

Thanks, Mr. Chair.

I would like to congratulate all the witnesses. In view of my time limit, though, I'd like to focus on a few simple questions for Mr. Myers.

I understand that the manufacturing sector is going through great stresses because of the high dollar and for many other reasons, and that competitiveness is critical.

This is my first question. I would assume that neither the GST cut nor the $1,200 per child, which were the two major items in the last budget, had a major bearing on the competitiveness of your sector. Is that a fair statement?

[Dr. Jayson Myers]

I think that's a fair statement.

[John McCallum, Liberal, Markham—Unionville, ON]

Second, other than the business tax reductions and the CCA reductions in the last budget, which were already committed to under the previous government--correct me if I'm wrong--I can't see anything really major in last year's budget that would have had a positive bearing on the competitiveness of your sector or the challenges you face. Is that correct?

[Dr. Jayson Myers]

I certainly think the commitment to those tax measures in the budget were important. But yes, we do a good job in our tax system of distributing wealth, and we haven't spent much time looking at how to create wealth in--

[John McCallum, Liberal, Markham—Unionville, ON]

So that's a yes, because I said other than those business tax measures. Can I take that as a yes?

[Dr. Jayson Myers]

Well, yes.

[John McCallum, Liberal, Markham—Unionville, ON]

Okay. So that means that there is nothing in that budget, other than the predetermined measures of the business tax and CCA reductions, that really had any significant positive effect on the competitiveness of your industry. And that budget did spend $15 billion a year, leaving--according to people like Don Drummond--only $2 billion per year for the rest of the decade, before we even pay a penny to the provinces on fiscal imbalance.

So let's take one of your measures, which I think is a very attractive one and could have a big effect on manufacturing, and many jobs depend on that. You want to have a two-year writeoff for all investments in manufacturing and associated information and communication technologies. Do you have any idea of what that would cost per year, approximately? You're an economist, like me. Just give round numbers.

[Dr. Jayson Myers]

In the first year it would probably be around $3 billion. But over a period of eight years, because this is a cashflow issue and an issue of shifting deferred taxes.... Of course, in the long term it will be revenue neutral.

[John McCallum, Liberal, Markham—Unionville, ON]

Well, in the long run we'll all be dead.

[Dr. Jayson Myers]

Especially companies if they can't compete.

[John McCallum, Liberal, Markham—Unionville, ON]

To summarize, you're saying that the $15 billion budget of last year did nothing for your sector, other than the measures that had been pre-committed to by the Liberals. The new budget would appear to have a maximum $2 billion a year before anything is given to the provinces, and the single measure that would be important to your industry would cost $3 billion a year. Is that a fair statement?

[Dr. Jayson Myers]

First of all, I think the last budget helped by actually providing some long-term certainty in terms of investors. As you know, that's important.

Looking forward, if your point is whether these tax recommendations are more expensive than we can afford, given some of the tax changes that were introduced in the last budget, I'd argue two things. First, the amount of these tax changes is less than the amount by which we've underestimated the fiscal surplus. Second, if we don't make some of these changes we're not going to have the type of investment we need to continue to distribute the wealth in the future.

[John McCallum, Liberal, Markham—Unionville, ON]

I totally agree. My only point is that they've spent all the money on things that are unproductive, and they have no more money left to do these important things.