Finance Committee on Sept. 25th, 2006

[The Chair, Conservative, Brian Pallister]

No, sir, you won't. Your time has elapsed. You may, in response to a question, certainly. I invite you to do that, but we'll continue. Thank you.

We will continue with a representative from the Canadian Dental Hygienists Association, Bonnie Blank, president.

Welcome. You have five minutes.

[Bonnie Blank, President, Canadian Dental Hygienists Association]

Thank you for affording us the opportunity to address you today.

Currently oral health is not recognized for its profound effect on overall health of Canadians. Periodontal disease, historically considered a localized infection, is now considered a potential risk for a number of serious health problems, such as cardiovascular and respiratory disease, diabetes, and pre-term, low-birthweight babies. These links between oral health and general health underscore the need for a health system that reintegrates the mouth with the rest of the body.

Good oral health is an important aspect of a healthy workforce. We must recognize oral health services as essential.

I will walk you through an analysis of who pays for what in the area of oral health.

In the area of public oral health spending, Canada has the second lowest per capita public oral health expenditures in all of the OECD countries. In addition, Australia, New Zealand, Denmark, and the United Kingdom all have universal national publicly funded programs for children's oral health care. However, Canada lags behind these leaders with provincial-territorial programs that vary in level of coverage, with two provinces having no children's programs at all. Furthermore, only three areas in Canada, including Alberta, Prince Edward Island, and the Northwest Territories, have oral health programs for seniors. In the area of private spending, the private insurance industry carries the lion's share; however, only 58% of individuals have private oral health insurance.

This analysis paints a picture of two large groups of citizens who have no safety net: the poor and those without oral health insurance. Canadian children with low socio-economic status suffer twice as much tooth decay as their more affluent peers. Aboriginal children have two to five times the rate of tooth decay as non-aboriginal children.

To demonstrate the consequences of limited access to oral health services, I would like to show you some examples of oral health disease that can affect individuals' overall health. The photos depict first nations people from Duncan in the Cowichan Valley of British Columbia, and the oral health issues depicted in these photos are seen in many aboriginal communities throughout Canada.

This is a middle-aged man who presents with a fistula on his gum, resulting from severe decay.

This man is in his mid-thirties and presents with severe periodontal disease. He must have a very high pain threshold to endure this.

This 20-year-old man presents with broken teeth and caries.

And this is the most severe of all for a 24-year-old.

What does the federal government need to do to improve oral health of Canadians? First, we need an investment in oral health. We are not suggesting the creation of an oral sick care system that treats disease after it arises, but an oral health promotion and disease prevention system. There is strong evidence for the effectiveness of this approach.

Second, the federal government must support the payment of dental hygienists directly. Two federal dental plans, the Canadian Public Service dental plan and the Veterans Affairs Canada dental plan, restrict access to oral hygiene services by refusing to pay dental hygienists directly. The federal government can allow competition to flourish by following the lead of two other government dental plans, the Canadian Public Service pensioners' dental plan and the Ontario children in need of treatment program. Both plans pay dental hygienists directly.

Finally, the federal government needs to strengthen human capital. Continuing education is of paramount importance in allowing health professionals to keep abreast of constantly changing research, education, and technology. It assures quality standards--standards that Canadians have learned to depend on.

In conclusion, you can make four critical changes to the federal budget to improve the oral health of Canadians: provide financial support for oral health promotion and disease prevention services; increase funding to the FNIHB non-insured health benefits program; support the direct payment of dental hygienists; and provide tax incentives for continuing education programs.

Details of our recommendations are available in our brief, which we've submitted to the committee.

Thank you. We are pleased to answer any questions.

[The Chair, Conservative, Brian Pallister]

Thank you very much, Madam Blank. I appreciate that.

We'll move to the first round of questions with Mr. McCallum.

Six minutes, Mr. McCallum.

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

Thank you, Mr. Chair. Thank you to all of the presenters.

In a sense, it's an embarrassment of riches because one doesn't have time to deal with them all.

I would first like to ask Ms. Russell a question. I've used the phrase myself before about the fiscal cupboard being bare. My question to you is whether there really is room for further tax cuts, or indeed for anything, given the numbers you just presented. If you look at the projected surpluses, they are not more than $2 billion a year for the rest of the decade, and that's before the government gets into anything for fiscal imbalance to the provinces and before the government spends anything on its new environment policy or the Afghanistan mission extension. Then when you go forward a few years to the second point of the GST cut, that's around $6 billion year. We have to qualify all of this because later today the new budget numbers are coming out and those could significantly change the situation.

Based on those numbers, I would ask you whether you really think there is scope for further tax cuts or further expenditure increases or whether there isn't much room for anything given the expenditures that have already taken place. In other words, the fiscal cupboard really is bare.

[Ellen Russell]

Certainly, with the information we have at the moment, there isn't a lot of fiscal flexibility. There's definitely the opportunity to do some tax fairness work. We could do a lot to rejig the tax system so that, in my view, it would be fairer, and that could accomplish a lot, but we can't do these great GST cuts or corporate tax cuts.

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

Okay. You're saying you don't think there is the fiscal room to do significant action on either the tax side or the expenditure side. Is that what I hear you say?

[Ellen Russell]

Based on the assessment that we have as of this moment, there isn't very much room.

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

Okay. Thank you.

I'll then ask a question to Mr. deGroot-Maggetti, because these two issues are related.

I agree with you 100% that poverty reduction is of major importance, but it takes a lot of money, and as this witness has just confirmed, there isn't much money. Unless one raises taxes or some money materializes in some way or another, right now it appears there isn't very much.

One measure that I find quite appealing, which I didn't hear you mention, is the working income tax benefit that the previous government proposed and the current government is talking about, I believe. It helps those who are working poor, and it also helps get people out of the so-called welfare trap because it counteracts the high tax rates and the clawback rates that low-income wage earners often face. In an environment where there isn't a huge amount of money available, I guess I'd ask you, would you favour such a plan as I just described, or what do you think would be the most important areas in which to make a start?

[Greg deGroot-Maggetti]

Thank you for the question.

I think something like a working income tax benefit will have its place in a strategy to try to address low wages and low skills, but it's only part of the component. Really, poverty reduction needs to be seen as an integrated part of economic development as well as social development.

Let me give you an example. What needs to happen is not just to raise the incomes of low-wage working poor but also to raise the skill content of the work they do and the actual pay they get. In fact, you build the right kinds of incentives for Canadian business so that they will pursue a high-scale, high-productivity track that provides good jobs for folks. So things like ongoing training and stuff like that would be an important part of that.

I say the working income tax benefit has a place because if that becomes the only tool we have, it can, in effect, subsidize a low-wage, low-cost strategy.

A recent study by the Canadian Policy Research Network points out that one of the most troubling aspects of Canada's economy is that the competitive human resource strategy of too many Canadian firms is based on a low-cost, low-value-added approach and that this approach perpetuates a low-skill, low-wage equilibrium in which neither employees nor employers demand higher levels of skills. What I'm suggesting is that we need a mix to raise the wages of low-skilled workers, and we don't want to just keep them in low-skill jobs.

An example is among hotel workers in Toronto. The Unite Here union and the Royal York Hotel have teamed up and negotiated an agreement where the chambermaids, the janitors, etc., can receive training from local community colleges to upgrade their skills and actually move up the career scale. We're not just supplementing their wages but actually increasing the skill and productivity of their jobs so that they can sustain higher wages. Some of that can be funded using EI funds for training and things like that. It will cost money, but there may be some less costly ways to implement that.

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

If you want to take twenty seconds to make the point that you were unable to make in your opening statement, be my guest.

[Greg deGroot-Maggetti]

This is where I wanted to go. In a recent issue of the International Productivity Monitor there were two articles, one by Pierre Fortin, a Quebec economist, and one by Andrew Jackson, from the Canadian Labour Congress, that make this point: that part of the strategy Canada needs is to boost productivity and wages at the bottom end, and that's where we're going to see a lot of gains in productivity.

That's why I say the poverty reduction strategy has to be an integral part of our economic strategy as well. In a nutshell, that's the point I wanted to make.

[The Chair, Conservative, Brian Pallister]

Thank you, sir.

The next questioner will be Mr. Paquette.

[Pierre Paquette, Bloc, Joliette, QC]

Thank you, Mr. Chairman.

Thank you for your presentations. Unfortunately, it simply isn't possible to put questions to each and every one of you; it's a shame.

Ms. Russell, we are used to seeing the Canadian Centre for Policy Alternatives produce its own estimates with respect to government finances. I am not entirely convinced that Mr. Drummond's are accurate, because I have noted in the past that he was often a conduit for the views of the then Minister of Finance, Mr. Martin.

To begin with, I'd like to know if you intend to do your own analysis. Although I agree with the general approach set out in your brief, to the effect that the Conservatives are reducing the tax base and that we will eventually be short of money, the fact is that between April and June, the recorded surplus was $5.5 billion, which is much higher than forecasted. Still, the GST had not yet gone down at that point; it went down starting on July 1. So, I want to know whether you intend to carry out this analysis and, if so, whether you could pass on your conclusions to the Committee.

Second, I fully agree with you as regards tax competitiveness. People always talk only about the different taxes, but never about the services and programs that go along with them. In Quebec, for example, we have opted for more public services and more social programs; as a result, we pay more taxes. So, if we're only talking about the level of taxation, there is clearly no comparison between Quebec and Alberta, or even Ontario. However, we have studies showing that a middle class family with two children realizes a net gain of about $2,000 or $3,000 compared to Ontario. And compared to the northeastern United States, that gain rises to $6,000 or $7,000, because university tuition is lower, we have a $7-a-day daycare system, and so.

Would it not be a good idea to do this analysis in order to show that even though the tax rate is higher in Canada, we deliver a whole host of more important social programs that have repercussions -- you're right about that -- in terms of our competitiveness?

The Bridgestone/Firestone company invested some $50 million in Joliette. According to the company's president for North America, there are two reasons for that. First of all, our public medicare system means that the cost of insurance is more competitive in Canada and Quebec. Second, labour relations are very good with employees, who are unionized members of the CNTU.

Could you comment on that?

[Ellen Russell]

On your first point, we will be delighted to do our own forecast. Because the committee hasn't been doing the independent forecasting exercises, we don't have one ready at the moment, but we intend to.

Secondly, absolutely, we're very interested in studying the question of the benefits in terms of competitiveness that flow from a well-targeted spending that the government can do to invest in the various things that support competitiveness. We are thinking about pursuing exactly such a study.

[Pierre Paquette, Bloc, Joliette, QC]

Thank you.

My next question is for the representative of Community Foundations of Canada. What you are proposing, in essence, is that for every dollar collected by foundations in their communities, the federal government contribute one dollar, up to about $200 million, which means $100 million each.

Of course, no one can be against doing the right thing. However, I am concerned that richer communities will have an easier time collecting that money and that they will benefit more from government investments, even though they already have an advantage.

So, how can you ensure that this initiative is equitable, in terms of its financial benefits?

[Monica Patten]

That's a question we have asked ourselves as we've been developing the program. We have support for this program from our members right across the country, and part of that support is based on an agreement that we will develop a formula that will determine the way those funds will be allocated. The formula will include quite a bit of emphasis on not only the capacity to raise the money--we realize that varies from community to community--but it will also take into consideration the kind of need that exists in communities. So what's the capacity to deliver the programs and services and what kinds of needs are there in that community.

We've been able to do this before. We ran a program a few years ago where the Government of Ontario put some money on the table, which we matched. One of our greatest learnings from that was precisely how to address and tackle the issue that you have raised. I'm very confident that we'll be able to do that.

[Pierre Paquette, Bloc, Joliette, QC]

Thank you.

Mr. deGroot-Maggetti, you are suggesting splitting the Canada Social Transfer between post-secondary education and income support programs, including social assistance.

As regards the CST, should you not be suggesting that rather than being prorated based on population, as is currently the case, these programs should be based on need? For instance, about 30 per cent of the different poverty levels in Canada are in Quebec, but it only receives 23 per cent of the CST, given that the transfer is based on population.

Should we not go back to the system that prevailed when the Canada Assistance Plan was in effect? There the federal government contributed one dollar for every dollar invested by a province.

[The Chair, Conservative, Brian Pallister]

I'm sorry, but I'm afraid I will have to interrupt.

[Pierre Paquette, Bloc, Joliette, QC]

You can send me your answer in writing.

[The Chair, Conservative, Brian Pallister]

Our committee members do occasionally use all their time in preamble.

Again, Greg, it seems I'm having to cut you off more than the others, but fit your response into the next question if you will.

We'll proceed now with Mr. Turner for a round, sir, of six minutes.

[Garth Turner, Conservative, Halton, ON]

Thank you.

I have a question for a few witnesses. Obviously we're in pre-budget deliberations, and it's important for us to get a handle on exactly what the witnesses and groups are asking for.

I'll start with Trevor Lewis. Basically, the question is, what will your recommendations cost? And if you don't know, tell us that.

[Trevor Lewis]

Thanks for the question.

The recommendation for increased PSE funding is somewhere in the neighbourhood of $50 million. Under the PSE program, there's a program called ISSP, which can funnel to our institutes. About $15 million of that $50 million would be an infusion of funding for that program.

[Garth Turner, Conservative, Halton, ON]

All right.

Greg deGroot-Maggetti, I have the same question to you. What is it going to cost the Government of Canada to implement the recommendations you put forward?

[Greg deGroot-Maggetti]

Some of the recommendations, in fact the largest one--to lay out a poverty reduction strategy--won't cost very much, but it will set the agenda for future budget decisions. Some of the specific items have been known for quite some time. For example, with respect to the needs around affordable housing, we need to spend about $2 billion a year over a number of years to actually build up the stock of affordable housing. The kinds of needs are not insignificant.

Raising the Canada child tax benefit will partly depend on how the design of that program is maintained and whether we've put most of that funding into the national child benefit supplement or we try to spread that out to more families. So some of those costs would be spread out.

[Garth Turner, Conservative, Halton, ON]

All right. Yes or no, have you done a cost-benefit analysis of raising the minimum wage to $10 and indexing it?