Finance Committee on Sept. 26th, 2006

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Mr. Dinsdale.

We now turn to Mr. Ouellette, from the Canadian Alliance of Student Associations.

Sir, you have five minutes.

[Phillippe Ouellette, National Director, Canadian Alliance of Student Associations]

Good afternoon. Thank you for this opportunity to appear today.

The Canadian Alliance of Student Associations represents approximately 300,000 students enrolled in Canadian universities and colleges.

One must not look too far to appreciate the importance of post-secondary education within Canadian society. It develops an active, engaged, and productive citizenry, and it provides important career and monetary benefits to those who can access it.

Higher learning also has a central role in developing a healthy and prosperous economy. The role of higher learning in the Canadian economy will become increasingly prominent when Canada faces the impending labour crisis. In twenty years, the government forecasts that retirees will outnumber new workers by four to three. Although you have heard a lot of groups comment on research funding today, in order for Canada to compete in the global knowledge economy, the emphasis must be placed on the need for more highly educated graduates and skilled workers.

CASA believes that the federal government can effectively deal with the coming labour crunch if it fulfils two important roles. Number one would be to demonstrate government leadership by increasing federal funding, with the emphasis on access. The federal government cannot solve Canada's post-secondary problems without the collaboration of the provinces. This is why CASA believes that the federal government should work with the provincial and territorial leaders to build a pan-Canadian accord on post-secondary education.

Now is the time to build such an accord, as provincial and territorial leaders appear keen to do so. At the completion of the Council of the Federation's stakeholders summit in Ottawa in February, premiers agreed that post-secondary education is a national issue that requires a national will to address it.

The federal government should also demonstrate leadership in working with provinces and territories to review Canada's student financial aid system. The current system is doing a poor job of making education more affordable and accessible. In order for Canada to have a highly educated and skilled workforce, we cannot simply rely on educating those who traditionally go on to post-secondary. Those from low-income families and aboriginal Canadians are significantly underrepresented in our colleges and universities. This must change.

CASA is calling on the government to develop a plan to improve the participation of underrepresented students, especially aboriginal peoples, in post-secondary education. We need a student financial aid system that helps those who need it most. The problem with our current system is that there's a serious lack of cohesion and vision. The biggest expenditure on student financial aid in Canada is not loans or grants but untargeted initiatives such as tax credits and savings programs that are available to anyone, regardless of income or need.

The second role the federal government must fulfil in order to improve Canada's post-secondary system is increasing its fiscal contributions to the system. Our post-secondary system has been suffering from underfunding for over a decade. The province has been forced to cut support to colleges and universities. In turn, institutions have had to raise tuition, increase class sizes, and hold off on urgent maintenance. Tuition is now at an average of nearly $5,000, and the average student debt is over $35,000 when accounting for interest.

The government should make good on its election promise to create a dedicated Canada education and training transfer. In order to restore funding to the levels they were before the major cuts in the mid-1990s, CASA believes that such a dedicated transfer should be set at a minimum of $4 billion.

The federal government must also invest in targeted assistance to students who are underrepresented in our universities and colleges. CASA is calling on the government to expand the Canada access grant for students from low-income families. The current grant should provide assistance for all years of study instead of only the first year, and it should cover the realistic cost of the total cost of education.

Finally, for the past eight years, the Canada Millennium Scholarship Foundation has played an important role in improving the accessibility and affordability of post-secondary education. As you will hear before the conclusion of these committee sessions, the diverging positions of the many groups testifying will make it clear that the foundation is not without some controversy. Rest assured that the over 90,000 bursaries and $350 million that the foundation provides to students in high need each year is desperately needed in the system. Students of Canada worry that this assistance will disappear when the mandate of the foundation expires in 2009. CASA is calling on the federal government to renew the mandate of the foundation.

Canadians expect and deserve a high-quality post-secondary education system that allows all to have the opportunity to realize their full potential.

The Canadian Alliance of Student Associations believes that our suggestions today for the federal budget are reasonable and will help make this a reality.

Thank you.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Mr. Ouellette.

From the Health Charities Coalition of Canada, Ms. Freiheit.

[Deirdre Freiheit, Executive Director, Health Charities Coalition of Canada]

Thank you, Mr. Chair, and good evening. Thank you for the opportunity to present to the committee tonight.

The HCCC represents the major health charities in Canada, in key areas that include research, information, surveillance, community and patient support, and public policy.

At some point in their lives, Canadians will bear extraordinary costs to maintain their health and well-being, usually as a result of what is commonly categorized as acute illness, chronic illness, and/or disability. The Income Tax Act needs to be reviewed in terms of its language with regard to how it delivers tax relief, to determine whether it is inclusive enough of those suffering from acute or chronic disease or disability. We have a number of recommendations for your consideration.

We first recommend that the qualifying expenses list within the disability supports deduction be replaced with a general statement of principle--namely, that eligible medical expenses would include all reasonable amounts paid for goods and services that are certified as medically necessary by a qualified medical practitioner. The narrow definition of disability supports devices in section 64 should be expanded. The current list is outdated. It can't keep up with new technologies, and some equipment on the current list is no longer being used, while new and more modern equipment is not on the list. We'd also like the committee to consider treating the medical expense tax credit as a deduction as opposed to a credit, to create fairness for those suffering from chronic illnesses.

Our second recommendation is that a taxpayer should be able to pay his or her spouse, common-law partner, or some other party who is not necessarily in the business of supplying attendant care. If the spouse leaves a paid position to care for his or her spouse, he or she should be given equal treatment under the act in order to provide that care. This change would enable Canadians to obtain help and assist them in being able to work and lead productive lives while coping with their diseases. Ultimately this would reduce the burden to the health system.

Third, we need more fairness in the administration of the credit for mental or physical impairment--formerly known as the disability tax credit--since current fairness provisions are extended only to certain types of assessments. We're asking to extend it so that taxpayers can informally challenge a ruling by a CRA assessor on their disability or the requirement for special devices. This would help taxpayers, or the charities that often assist them, make their case with an advisory committee. It would extend the fairness process to the disabled, who can be subject to arbitrary rulings under the current system.

We would also like the federal government to include national health charities in the federal indirect costs of research program. The current exclusion creates an unlevel playing field for the charities that invest in research. The program unfairly penalizes national health charities and the millions of Canadians who donate to them every year. It impedes charities' ability to fund research effectively by drawing an unfair distinction between funding from government and funding from national health charities. The charities rely on the prominent research and researchers that they fund to raise the charitable dollars needed to make health discoveries and generate cures. Donors rightfully expect that their donations will be put directly towards life-saving research, not to university indirect costs. Should the charities have to pay indirect costs from donor dollars, Canadians would effectively be double-taxed, once through their tax dollars and a second time through their donations to charities.

We'd like the government to also consider investing in a publicly accessible clinical trials registry. Registration of clinical trials promotes greater accountability, transparency, and research excellence. The cost to create a Canadian clinical trials registry would be prohibitive, but international registries currently do exist. We're recommending that all clinical trials be registered through an international registry that meets the WHO requirements.

We would like to recommend that the government implement the recommendations of the Senate Standing Committee on Banking, Trade and Commerce in their special study on charitable giving, completed in the 38th Parliament. Four areas have not been implemented. First, the requirement for charities to issue charitable receipts for donations of less than $250 should be unlimited, unless specifically requested by the donor. Second, eliminate the requirement for taxpayers to file charitable receipts if the charitable donations they are claiming do not exceed $250. Third, allow donors to make charitable contributions for 60 days beyond the end of the calendar year for inclusion in that year's income tax return. And fourth, allow donors to carry back unused charitable receipts for three years and to carry forward unused charitable receipts indefinitely.

We'd also like to recommend that the government institute a fair and equitable grants and contributions program for the voluntary sector. We supported Imagine Canada's submission to the blue ribbon panel, entitled “Investing in Citizens and Communities”, and we'd like you to consider the recommendations outlined in that submission.

Thank you for your time. We've submitted a full brief for your review. If you have any questions, we'd be happy to answer them.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Ms. Freiheit.

We'll now allow the members to ask some questions. We'll go around the table, starting with Mr. Savage, then Monsieur Crête, and then Mr. Turner.

Mr. Savage.

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

Thank you, Chair.

Thank you to all the witnesses.

I've got a few questions, so if it's at all possible to be brief, I would appreciate that.

Mr. White, I wasn't aware that the museum cuts were announced yesterday. Of course, there was quite a list of cuts, and I didn't get to all of them, I guess, but can you tell me how much notice you got of these cuts?

[Calvin White]

The cut to the museums assistance program was $4.6 million. The museums assistance program is an interesting program. There are dozens and dozens of projects across the country. Museums right across the country get assistance. It doesn't pay for everything, but it is assistance, and that ranges from a few thousand dollars to tens of thousands of dollars.

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

When did you find out about the cut?

[Calvin White]

Yesterday.

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

But you weren't involved in any discussions or—

[Calvin White]

There was no consultation.

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

That seems a little harsh.

[Calvin White]

It does.

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

So where do you go from here? What does that mean to you?

[Calvin White]

That's why we're here speaking with you.

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

Well, on the off chance that the government doesn't have a sudden attack of generosity or common sense—and I wouldn't hold my breath—what do you do? What does that mean to you?

[Calvin White]

I'll let Mr. McAvity talk about our strategy.

[John McAvity]

I just wanted to add a key point, Mr. Savage. The cuts came right out of the blue, as it were, to us. We had been under the impression right up until then that museums were being considered a priority, both by the party and by the minister, and given the recommendations that have come from two standing parliamentary committees. So we were completely at a loss to explain these cuts.

That's about the best I can do. We were expecting to see a new investment and a new policy to meet the needs of today's institutions, museums, and the Canadian public.

[Calvin White]

We will be requesting a meeting with the heritage minister to discuss where they're going with museums policy.

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

Okay, thank you. And good luck with that.

CASA gentlemen, it's nice to see you again. As usual, you've come well prepared, with some recommendations.

I recall meeting with you in my capacity as chair of our caucus on post-secondary education last year. I think the schedule was that CASA was meeting the week the economic update came down, and you came to see me with four recommendations. Two of them had really already been included in the economic update, and I think needs-based grants was one and a review of the student loans was another.

I want to go back, because the package that came in and was introduced in the fall, unfortunately, did not get adopted before the election. It was a pretty massive investment, specifically in students assisted in a needs-based system, for low-income Canadians, persons with disabilities, and aboriginal Canadians. It had followed on Bill C-48, which was much ballyhooed, but which in fact had a much lower investment in access, though it was specifically designed for access, as I recall. What has happened to that?

[Phillippe Ouellette]

Thank you, Mr. Savage.

From our understanding, all of these funds have been placed into an infrastructure trust, and the legislation on Bill C-48 read as follows:

for supporting training programs and enhancing access to post-secondary education, to benefit, among others, aboriginal Canadians

So absolutely, we're still waiting to see. You saw in our brief that one of the things we're looking for is the improvement of access for underrepresented students, including aboriginal students, on whom those funds don't appear to be spent. They're spent on infrastructure, which is still important for the system but not necessarily what the bill had recommended.

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

I think we all agree that infrastructure is important. The economic update had $1 billion for infrastructure, which was matched in the budget, but all the rest of it, which totalled some many billions of dollars, specifically for access for Canadians most in need, seems to be gone.

I've always been a fan of the dedicated transfer. You're asking for the dedicated transfer. You're also suggesting that the federal government does have a role in needs-based grants. My question on the transfer has become that it doesn't close the gap in my fiscal imbalance, which is between Alberta and Nova Scotia. I think that's the real fiscal imbalance in Canada. If the money goes out in a dedicated transfer, either on a per capita basis or even on a per student basis, which would help Nova Scotia.... I think Acadia and some other universities in Nova Scotia, where the tuition is close to $8,000 a year, are members of CASA. Isn't there a bigger role for the federal government to go directly to students, especially those most in need, so that we can, as an earlier panellist said, maximize the human potential of all Canadians?

[Phillippe Ouellette]

I think that's a really good question. I think there's a role for both. I believe this idea of trying to accomplish and solve the post-secondary education crisis without the collaboration of the provinces is obviously not the proper route. There needs to be an increased effort by government to come to the table with provincial government officials, to call a first ministers conference on post-secondary, and to go for it. These tax credits, for example, would be going directly to students.

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

How much is the tax credit itself?

[Phillippe Ouellette]

I think it's a total of $2.5 billion.