Finance Committee on Sept. 21st, 2006

[Nathalie Bourque]

Yes.

[Pierre Paquette, Bloc, Joliette, QC]

Is Mr. Brown the CEO of CAE?

[Nathalie Bourque]

Yes, Mr. Brown is still the CEO of CAE. We are very involved in that respect. We work with Nortel, Bombardier and companies such as Abitibi Consolidated and Tembec. There are a number of us. At the present time, there are 20 or more companies that are involved, both private and public corporations. Just in our group, we are already over the $1 billion mark, according to our estimates.

[Pierre Paquette, Bloc, Joliette, QC]

If you have additional documentation, perhaps you could send it to us through the clerk. We would be very interested in looking into this further.

[Nathalie Bourque]

We will be very pleased to send that to you, Mr. Paquette.

[Pierre Paquette, Bloc, Joliette, QC]

My second question is for Ms. Went.

As you know, a committee in Quebec is currently looking at the future of defined benefit plans. This is one of the concerns you raised. One idea that has been proposed is to require that 10% of the plan's assets be funded as a cushion against interest rate or stock market fluctuations.

Do you see that as an attractive idea? If you have any other ideas, we would be very interested in hearing them.

[Pam Went]

Thank you.

Just as a clarification, we don't suggest that the reserve fund should be 10%. The 10% is a limit that's put on right now in the Income Tax Act. What we like about the Quebec legislation--and the pension fund I represent is regulated federally, so it doesn't apply to us---is that we feel the Province of Quebec has taken real leadership in proposing a pension regime that balances the requirements of the sponsors and the pensioners. So the sponsors don't want to have huge surpluses that they cannot utilize; the pensioners don't want deficits.

So what the Quebec plan is proposing is this reserve fund concept, where the money is set aside and will be available; however, in the short-term it can be on the books as an asset for the company. They can't use it but at least they can declare it as an asset. We think that really balances the needs of both sides.

If you look at the Quebec legislation, in almost everything they're proposing that's the case. For example, up until the most recent budget, under the federal law, the PBSA, a company that went into deficit on a solvency basis was given five years to repay that or to make it up. Temporary regulations have been proposed that will allow sponsors ten years. In Quebec they flirted with the ten-year rule, but in the legislation they're now proposing it's back to five. They've recognized that ten is too long. So we again applaud them for saying that's not the way to go, you want fewer years.

So they are, I think, of all the provinces...the only other province that is looking at their pension legislation in a very responsible way is the Province of Alberta. They are also playing a leadership role. It's sad to say the Province of Ontario is not. They're going the wrong way, as far as we're concerned.

[The Chair, Conservative, Brian Pallister]

Mr. Del Mastro, you have five minutes, sir.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you, Mr. Chair.

Thank you, everyone, for your presentations this morning.

I want to start with Mr. Brown from the Writers' Union. You proposed two particular proposals that I think run in violation of, or certainly would represent a fairly significant change in direction for, one, Canada's tax laws, and two, our EI program. I just wanted to ask you, first of all, how would you fundamentally determine if a writer is unemployed?

[Deborah Windsor]

The question is not whether or not the writer is unemployed. The writer will always write. Our concern is when a writer takes on a secondary job in order to generate revenue for sustenance, basically buying time to write, and they're working at that job and they lose that job. The job is terminated for whatever reason for which normally an employee would be entitled to receive EI. They will have paid into it. They will have participated like any other Canadian. However, because of the fact that they write on their form that they are a writer, they are therefore designated as self-employed and denied the benefits.

[Dean Del Mastro, Conservative, Peterborough, ON]

Right, but there's a number of people in small business right across the country, for example, who that law would have to apply to. If you're in small business of any description and work outside of it, if that outside or secondary income were to cease, they would not qualify for unemployment based on that. I think there's a much larger picture that you're talking about. We certainly couldn't just apply it to that. The notion of carry-back taxes, I think that's also very dangerous, because you're looking at somebody saying, I've been working on this for five years. But if they really only worked on it for six months they're getting the benefit of being able to write that income off over five years. There's no way to police it.

[Deborah Windsor]

No, there is no way to police it. However, the industry is one based on trust. The writers have to trust the publishers that their royalty statements are adequate. The publishers have to trust the bookstores that they are going to buy the books they want when they order their print run.

[Dean Del Mastro, Conservative, Peterborough, ON]

Okay, I appreciate that. Thank you.

I have a question for Ms. Sheutiapik. I attended a conference with ITK just this past winter, and one of the things they really highlighted, which I really feel is the future for the north, is the need to develop the Internet, to make the Internet broadly available in the north. A lot of people talk about that as being the best educational tool, and I think that really would benefit the north.

Perhaps you might have some comments on that, how we could help in that area.

[Elisapee Sheutiapik]

We have broadband. I think it's a matter of yet again the educated resource to follow through with that. I know that has been one of the challenges in the smaller communities.

I know Lynda knows the lady involved with the broadband, so maybe she would like to add to that.

[Lynda Gunn]

There's the Nunavut Broadband Development Corporation. They received Industry Canada funds, and high-speed Internet is up and running across Nunavut, and has been now for a year.

[Dean Del Mastro, Conservative, Peterborough, ON]

Oh, that's great. I think these are the types of things that will lead to future prosperity and the sharing of the wealth of the land.

Mr. Kelsall, I was very encouraged to hear of the work that your group is doing. I've actually volunteered with a group called Friends of Honduran Children. I don't think a lot of people well understand the contributions that our pharmaceutical corporations make. You might want to highlight that a little bit. I was really surprised by the amount of donations that we receive.

[John Kelsall]

Well, I can tell you, for instance, last year Health Partners International shipped over $39 million, in Canadian dollars, of wholesale value of needed medical aid to 116 countries of the world. In total, we have shipped in excess of $200 million of medical aid to 116 countries. It's all donated, not purchased--donated.

I would simply highlight the fact that our Canadian companies are at a tax disadvantage compared to their U.S. counterparts. A company--no names--that gave us $5 million of product last year donated $500 million U.S. south of the border. You see, there the government encourages private-public partnership and engages their private citizenry, their companies, their people, in helping provide aid overseas. In Canada, we have no such incentive.

[The Chair, Conservative, Brian Pallister]

Mr. Del Mastro, your time has elapsed.

You cite these numbers: $5 million, and so on. Is this over-the-counter retail value you're basing it on?

[John Kelsall]

This is based on wholesale value, average selling price. In Canada, it's controlled at the provincial formulary level. So the prices are all known; they're all publicized. That's what they're paid.

[The Chair, Conservative, Brian Pallister]

Right.

Mr. Savage, to bring up the rear.

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

Thank you very much.

I want to thank all the presenters. As members, we all feel somewhat constrained by time. You don't have much time, but you spend a lot of time putting together your presentations and you are dedicated to the work you do. We appreciate that. I appreciate them all.

I want to talk with Ms. Windsor, if I could, for a second. You've made some very good recommendations about all cultural industries. I'd like to talk specifically about writers. Writers are, I would suspect, one of the most appreciated but least rewarded segments of society in Canada.

[Deborah Windsor]

I have to agree.

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

I'm sure you would.

The writers I know and have had a chance to know are among the most passionate and dedicated of people, but many of them make a subsistence living. The work that writers have done in our community....

A gentleman from Dartmouth by the name of Paul Robinson, who's a former member of the Canada Council for the Arts, has done an awful lot. He's a writer. He loves writing.

I don't know if you know Jane Buss, who is the executive director--

[Deborah Windsor]

Very well.

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

Jane Buss has one of the sharpest minds and loudest voices of anybody I've ever met.

These are impressive people, and we don't really do very much to thank our writers. Ms. Ablonczy mentioned that she reads. We all read. We appreciate writers when we read, but we really don't do that much legislatively or even individually. We go looking in the bargain basements to buy a five-dollar book instead of buying it at full price. That's how it is.

But the writers have made such an impact. My father was a premier of Nova Scotia and a mayor. If you were to ask him at the end of his life, as we did, what were among his favourite accomplishments, one of the ones he was most proud of was starting the Atlantic book and writing awards and getting to work with writers, understanding the passion they have for what they do, the passion they have for their country and their province, and how they put it into words.

We don't do very much for writers, so I take these very seriously. I think there are some very good points.

Having given that preamble--the chair will tell me it took four minutes--I have three quick questions. First, what is the average income of the writers in your union? Second, do you have a specific level of funding you would recommend for the Canada Council for the Arts?

Following up on Ms. Ablonczy's question, I'm not sure I heard exactly how many writers--not the other workers, though they are important--were affected by bankruptcies in the publishing industry. Did you get those?