Evidence of meeting #21 for Finance in the 39th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was federal.
A recording is available from Parliament.
September 25th, 2006 / 4:25 p.m.
Senior Economist, Canadian Labour Congress
Thank you, but I don't know the answer to that.
Conservative
The Chair Conservative Brian Pallister
Madam Wasylycia-Leis, you have seven minutes. Please proceed.
NDP
Judy Wasylycia-Leis NDP Winnipeg North, MB
Thank you, Mr. Chairperson.
Thank you all for your presentations.
As we're meeting here with a very useful discussion, the Minister of Public Works and the Minister of Finance are busy announcing major cutbacks. We've just learned, in fact, that the full surplus of $13.2 billion for this past budget year is all going against the debt. There is not a penny to program spending or to meet any of the concerns we've been hearing about for years. Also, $2 billion in program cuts has been announced, covering just about every department. We're probably looking at hundreds of programs and hundreds of jobs.
Following Andrew Jackson's reminder that the government in the past had decried Liberals for daring to make these kinds of decisions without public consultation, were any of you consulted? Andrew, were you consulted? Was anyone consulted on these cuts?
No one was consulted. That's interesting. I remember sitting here and hearing nothing but outcry from members of the Conservatives, suggesting that these kinds of decisions should be brought to Parliament and that the people of Canada should have voice through their members of Parliament and that there should be some element of democracy when such dramatic decisions are made.
Let me start with you, Andrew. Although we're all interested in paying down the debt, what does this full allocation of the surplus of $13.2 billion to the debt mean in terms of some of the dire situations you have outlined, the concerns of workers, and our economy as a whole?
Senior Economist, Canadian Labour Congress
As you know, once you run a surplus, it does apply against the debt. It can't be spent retroactively. It underscores, I think, the need for careful fiscal planning. It prompts to me the question about the process from here on in.
I suspect, going into the next budget, that the books are much closer to being balanced than they were before the last budget, given the tax cuts that were announced on top of the previous Liberal tax cuts. I'm not sure we're going to see those kinds of surpluses again moving forward. I think we're probably much more into a world in which we're going to have to choose between tax cuts and social investments. I think we're pretty clear where we stand on that.
NDP
Judy Wasylycia-Leis NDP Winnipeg North, MB
Thank you. That's a valuable point.
Putting that in context, when the Conservatives were in opposition, they suggested that when there is a surplus, Parliament should have a role in deciding how it should be divvied up. There was a suggestion made that in fact we should have a balanced approach: that we should put some money against the debt, that we should make sure there's some money for some very important program needs, and that we should put some money against tax cuts--although I don't necessarily agree, given your comments and others about tax cuts. Do you think it's possible for Parliament to play that kind of role, the kind of role the Conservatives used to talk about and are failing to follow today?
Senior Economist, Canadian Labour Congress
I'm trying to recollect where the committee came down previously on this. I mean, there have been calls--which I would certainly share--for sources of fiscal information to go to the committee, rather than just having information from the Department of Finance. I guess the committee has been hearing directly from economists about the budget projections. I'm repeating myself, but it's my perception that those days of large structural surpluses are behind us and that we're going to have to face the--
NDP
Judy Wasylycia-Leis NDP Winnipeg North, MB
Right, but it points to the need for some sort of input into the budget process, especially when dollars are scarce.
Let me ask Debbie Frost, who has given a very compelling case about the depth of poverty in this country. I think by now folks around this table should see that as a national disgrace.
It must just gall you to hear how the government is making decisions, especially at a time when international studies put us at 14th out of 26 industrialized countries in terms of child poverty, and when a study has come out, just as it did this week from the Canadian Association of Social Workers, showing that poor Canadians die earlier than wealthy ones, and that poor women in Canada have only a 73% likelihood of reaching the age of 75, whereas rich Canadian women have almost an 80% chance of doing so.
What advice do you have you for us as we try to get this government to practise some sort of balance in its fiscal policies and budgeting practices?
President, National Anti-Poverty Organization
I'm not sure I can answer this as clearly as you would like.
I think my first piece of advice--I did have some recommendations, but I forgot to read them--would be to develop a national anti-poverty program.
If there were more funding put into social programs, for instance, if we took social programs and indexed them to the cost of living, it would decrease government costs in other ways. But the federal government also has to make the provincial governments more accountable for the transfer payments, because right now the provincial governments are not accountable enough as to what they're doing with these payments.
If funding is put into social programs and it's indexed to the cost of living, people are going to be able to meet their needs, they're going to have their necessities, and they're going to be able to cover their health care costs. Right now, health care costs are being covered by the provinces because people can't afford it. So that's going to cut costs in that area.
Poverty is a big issue, and until we develop a national strategy.... Quebec has an anti-poverty strategy, and Newfoundland has one. It's something the federal government could help push towards the other provinces, with Quebec possibly being used as a model. I've seen the Quebec model and it's very good. It has a child care program. It has child tax programs. It has programs that are suitable for other people. Their people are able to live and to meet their needs, whereas in the other provinces we're not.
That's where the federal government needs to take responsibility and start pushing the provinces to be a lot more accountable as to where these social dollars are going, how they're being put into programs, and how can they be put more effectively into programs. If we do this, it's also going to provide incentives and more people will come off the system. People on the system need the supports to get off the system. With the money they get in the system now, the supports just aren't there. If we start--
Conservative
The Chair Conservative Brian Pallister
That's okay. We appreciate your answer, but I have to be the referee here. I also occasionally get to ask a question, so I'll do that at this point.
Mr. Jackson, speaking of people on the system who need to be encouraged to get off the system, you spoke about--and your submission again this year talks about--fattening up employment insurance benefits, reducing the number of qualifying hours to 360, increasing the level of weekly benefits to two-thirds of the best 12 weeks, and extending the benefit period up to 50 weeks.
First of all, have you costed this? What are we talking about as a percentage increase in premiums if these benefits are made a reality?
Senior Economist, Canadian Labour Congress
I can get back to you with a more detailed answer.
I do know there were some estimates of those costs that were presented to the human resources committee.
Conservative
The Chair Conservative Brian Pallister
If you would do that, I know the committee would appreciate it.
Senior Economist, Canadian Labour Congress
I don't want to throw out a guess. It's difficult to estimate, because there's some sort of interaction between them. It depends on the unemployment rate as well, which is a variable.
I'll get back to you with a number. It's not as big as you would think.
Conservative
The Chair Conservative Brian Pallister
Okay, we'll be interested. I'll cut you off, because I don't want to use too much of the other committee members' time. I know there are many committee members who follow this inter-relationship between benefit programs, for example worker mobility, and who will be very interested in knowing what the data is.
The second part of that question is, given that worker mobility is one of the issues we're all wrestling with right now, have you examined--because it is pretty well understood, as OECD has done numerous studies on this issue--the perverse possibilities of employment insurance programs or the like, and their negative impact on worker mobility? Has your organization done any work on that? Do you have any research or any data that would educate us as far as how increasing employment insurance benefits in the way you have proposed might encourage or discourage worker mobility?
Senior Economist, Canadian Labour Congress
In the past, there has been a view that regionally extended benefits create an incentive for employees to stay in their own regions, even though they're not able to find full-year work. I would say that the rates of labour mobility out of Atlantic Canada are at such high levels as to suggest that this is not much of an issue at the present time.
Senior Economist, Canadian Labour Congress
My understanding--and actually I'm going to Newfoundland in a couple of weeks--is that Newfoundland is looking at some skill shortages now just because rates of mobility out of skilled work have been so high.
If you go too far the other way, what you run into--and I'll send you the reference, a recent research study that was done for Human Resources and Social Development Canada--is the fact that study pointed to, that if all you're giving a worker as a benefit is 55% of maximum insurable earnings of $38,000 or $39,000 a year, basically it's a poverty-line benefit. There is a question certainly for higher skilled workers, but really, do you run a danger of bludgeoning somebody into taking the first available job rather than taking the time to look around for better employment, to consider a move geographically?
I would suggest that we are in that situation now where--and I agree with colleagues down the table--at a time when presumably we want skill shortages in some parts of the country to be filled, in part, through labour mobility, how might we use the unemployment insurance program as a means of facilitating that movement? Really, the traditional approach has been all sticks and no carrots, if I could put it that way. We used to have mobility assistance directly under the unemployment insurance program. We used to have programs that took unemployed workers out so they could have a period of job search in another part of the country. It's worth revisiting.
Conservative
The Chair Conservative Brian Pallister
I'll cut you off there. We have another member who wishes to ask questions, but I do look forward to the data that you've assured us you will provide. We are interested in what leads to the recommendations our witnesses make.
Mr. Pacetti, you have five minutes.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Thank you, Mr. Chairman.
I have a few quick questions.
To Ms. Frost from the National Anti-Poverty Organization, all we have is a one-page brief, but your second recommendation is that we introduce, through the tax system, a new national refundable tax credit and working income supplement. Do you have any calculations or numbers you could provide us with? Do you have something you can submit to the committee?
President, National Anti-Poverty Organization
We can submit a copy of the recommendations. We have that at the office, so I can make sure that's submitted.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Thank you.
Further down you say you'd like to add a national pharmacare program and national basic dental care. What is your opinion, or your organization's opinion, as to those types of services? Do they not belong to a provincial jurisdiction? Should they not be part of medicare if the province chooses to include that as part of their services?
President, National Anti-Poverty Organization
I think the responsibility for them is provincial, but federal programs are needed that are sustainable for everybody, that are consistent for all provinces, all children, and all adults.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
That's fair enough. Thank you.
I have a quick question for Mr. Teneycke, for the Canadian Renewable Fuels Association. There is a lot of talk about the different types of fuels that are available out there. I think you mentioned, or your brief mentions, ethanol and biodiesel. I think Mr. McKay asked you a similar question, but what is the supply and demand, especially here in Canada? How much supply is there and how much demand is there? Is there really an industry for ethanol and biodiesel, or do we have to create it? You've talked about tax incentives or tax credits, but I'm not sure what comes first, the horse or the buggy.
Executive Director, Canadian Renewable Fuels Association
I guess it depends what outcome you want.
In terms of creating a market for the fuels, that's quite easy to do in terms of passing a regulation requiring renewable fuel content, as the government has proposed. We have more renewable fuel production today than we did a few years ago. By early 2007, we think we'll be at around 800 million litres of ethanol production. That's up from about 230 million litres a year ago. So we're seeing quite significant growth in renewable fuel production here. That's as a result of provincial requirements being brought in by three provinces--Ontario, Manitoba, and Saskatchewan. So I think we're seeing growth.
Worldwide, you're seeing massive growth in the industry. It's doubling about every two and a half years. That's as a result of increased demand--