Finance Committee on Sept. 27th, 2006

[Pierre Paquette, Bloc, Joliette, QC]

You're talking about support for 40 per cent of the indirect costs of research.

[Claire Morris]

We're talking about increased support to cover 40 per cent of direct costs -- in other words, the grants provided by the different granting councils. Forty per cent of research cost support should be dedicated to indirect costs.

[Pierre Paquette, Bloc, Joliette, QC]

On what are you basing your assessment of 40 per cent? Earlier, we were told it should be 65 per cent, an amount set as a result of a study carried out by an interministerial committee in Quebec. We also asked for documentation in that regard.

[Claire Morris]

This is a calculation we made several years ago where we tried, to the greatest extent possible, to identify the costs incurred by universities to support the research performed there.

[Pierre Paquette, Bloc, Joliette, QC]

Would it be possible for you to provide documentation with respect to that method of calculation, so that the Committee can try to agree on what should be proposed? Thank you.

[The Chair, Conservative, Brian Pallister]

Thank you very much, Mr. Paquette.

We will conclude with Mr. Turner.

You have a chance to ask questions for four minutes, Mr. Turner.

[Garth Turner, Conservative, Halton, ON]

On a back-of-the-envelope calculation on this session, I think we have well over $1 billion that collectively you've asked for from the federal government here today. Obviously, our decisions are about priorities and where we're spending money.

I'll pick on you again, Mr. Turk, because you sounded a little preachy today about our spending priorities. In terms of the payment that was made on the debt yesterday, can you tell us, if you know it, what the benefit of this debt-down payment will be in terms of our cashflow?

[James Turk]

The figure I saw in the paper was $700 million a year.

[Garth Turner, Conservative, Halton, ON]

Yes, it's pretty close to $700 million. Do you not feel that is a legitimate thing for the Government of Canada to do now, so that each and every year going forward we will have $700 million more to entertain requests such as these?

[James Turk]

Your opening comments were absolutely correct, Mr. Turner, that what your committee has to deal with is the issue of priorities. Every group, and I am sure there are thousands of them that come before you, has a compelling case as to why its particular need is worthy of your attention.

We would suggest that there are some foundational needs in this country in terms of health, in terms of social housing, in terms of education. And yes, we have to deal with the economic side and manage the debt--we have actually done remarkably well on that--but at the moment, our post-secondary institutions are in fact suffering as a result of inadequate funding.

So you had to make choices. You made a choice. We're suggesting that there is the capacity within the economy to adequately fund post-secondary education.

[Garth Turner, Conservative, Halton, ON]

But I gather you're saying you do not agree with that choice.

[James Turk]

No, I used it as an example to say that you have the ability to provide the level of funding that your predecessor governments did in the late 1970s and early 1980s.

[Garth Turner, Conservative, Halton, ON]

Okay, why do we have a debt of $500 billion? Because we have predecessor governments that spent more than they took in. This is what we need to prevent so that going forward, we don't have a similar situation where we have to say, oh, I'm sorry, we're running a deficit so we have no money; in fact, we have to cut back.

[James Turk]

I don't think it's quite as black and white as that.

I was trying to suggest that investments in post-secondary education are indeed an investment. We know that graduates of colleges and universities earn substantially more income than people who don't graduate. As a result, they pay higher taxes. There are a variety of ways of generating future revenue to meet our needs. Paying down the debt is one of them, but investing in post-secondary education is another one.

And how do we balance that?

[Garth Turner, Conservative, Halton, ON]

But my point would be this. Is an investment of $13 billion that yields an annual saving of $700 million not an investment in our future, to fund our social programs?

I'm just trying to get some kind of glimmer of recognition here that what we're doing is not just being stingy Conservatives for the point of it, but we're trying to create an environment in which we have more cashflow going forward to satisfy these very worthy needs. Give me a point, come on.

[James Turk]

I don't think I accused the Conservative government of being stingy Conservatives. I think what I said was that you have to balance a variety of competing needs, and just as paying off the debt is one of the needs to allow us a stable future, so is investing in post-secondary education. How you balance that--whether you cut the debt by $9 billion and put $4 billion into post-secondary education, or cut it by $13 billion, or do something else--is a choice you have to make. I think these factors have to be weighed in.

It's not a simple matter of whether you did something good or bad.

[Garth Turner, Conservative, Halton, ON]

But don't we wish previous governments had done what we just did? In this case, we wouldn't even be having this conversation; we'd just write you a cheque.

[The Chair, Conservative, Brian Pallister]

On that particular note, order, please. Mr. Turk is not the only one who is a little preachy today, but of course, we all have our different philosophies here.

I thank you all for your presentations. As a committee, we very much appreciate your input and the time you've taken in being here today and in the work you've done to prepare your materials for us.

Committee members, we reconvene tomorrow at 10 a.m.

We are adjourned.