Finance Committee on Sept. 27th, 2006

[Dr. Collin McMillan]

Thank you, sir.

We need the money, and we think that wait times are simply a symptom of a human resources problem. In terms of training doctors and nurses, we're looking at some options in the short and medium terms, such as increasing the number of qualified immigrant positions, which has been referred to, repatriating physicians who have left the country, and trying to find ways to get doctors from this country who are training outside of the country to come back.

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

I have one last question. Ms. Young, I enjoyed your remarks; some of them I've said myself. I certainly agree with you about more immigrants being necessary.

I think it's important to be able to spread the immigrants more equally across the country while still respecting the charter. Do you have a position or any thoughts on that?

[Wai Young]

We would certainly support that. In fact, there are several pilot projects happening throughout Canada looking at regionalization, which is the term we use. Certainly these pilot projects are very small. We would definitely support that.

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

Thank you.

[The Chair, Conservative, Brian Pallister]

Thank you all. We appreciate the time you've taken to be with us today, and also the time you invested in the preparation of the materials that we will be reviewing. Thank you again.

I invite our next panel to make their way as quickly as possible into the chairs presently occupied by our first panel.

[The Chair, Conservative, Brian Pallister]

We are going to recommence.

I invite those who wish to present to take their seats.

As you are aware, the House of Commons finance committee is mandated to consider and make reports on proposals regarding the policies of the government in the next budget. We are pleased that you are able to be here today and to submit materials to our committee.

You've been asked to limit your presentations to five minutes. I'll remind you that this will be the case and encourage you to make eye contact with me during your presentation. I'll give an indication that you have a minute remaining or less. I will ask you to conclude at the five-minute mark in order to allow time for our committee members to ask questions and for further dialogue.

We will begin with Makivik Corporation. Nancy Maloley, the treasurer, is here.

Yes, madame.

[Nancy Maloley, Treasurer, Makivik Corporation]

I'm sorry. Mr. Alaku, the vice-president of Makivik Corporation, will be doing the presentation.

[The Chair, Conservative, Brian Pallister]

Very good.

Mr. Alaku, welcome. You have five minutes, sir. Please proceed.

[Adamie Alaku, Vice-President, Economic Development, Makivik Corporation]

Thank you, Mr. Chairperson.

In the absence of time, I would like this brief to be given in its entirety.

My name is Adamie Alaku. I am an Innu person from northern Quebec. We are referred to as Inuit. I am here with my colleagues Nancy Maloley, the treasurer of the Kativik Regional Government, which is also an ethnic body in northern Quebec; and Eileen Klinkig, who heads the construction division and who also started the income tax project in the region, as we don't know how to fill out income tax forms and the like.

I'll provide some background on Makivik Corporation and the Kativik Regional Government. They were created in 1978 under the James Bay and Northern Quebec Agreement, the first modern treaty. It was signed in 1975 by the Inuit of Quebec, the James Bay Cree, the Government of Canada, the Government of Quebec, Hydro-Québec, and la Société d’énergie de la Baie James. We have used this as a pivotal tool for economic and social development for the last thirty years.

During the negotiations for this treaty, the Inuit opted to have it fall under federal-based governance as opposed to being on a reserve. So we are regular taxpaying citizens of Canada, paying to both the federal and the provincial governments, which causes a huge burden because of the high cost of living in the region.

The Makivik Corporation takes care of the interests and the rights of the Inuit of Nunavik--social, political or economic--with the help of the other ethnic institutions in our region, like the school board and the health board.

The corporation's board is composed of 21 members--16 elected locally by the respective communities, five elected by the Inuit of Nunavik. The head office is in Kuujjuaq, and we have offices in Montreal, Ottawa, Quebec City, and two Inuit communities of Kuujjuaraapik and Inukjuak. It employs close to 90 personnel.

The Kativik Regional Government is the municipal arm of the region. It is represented by 16 members, including the band council chief of Kawawachikamach. It employs close to 500 people, of which 300 are Inuit. They work in 11 departments , including municipal affairs, transportation, policing, child care services, and employment.

This causes quite a cost burden, since Nunavik is not road-connected. The 14 communities are not interconnected. The closest community is about 1,500 kilometres from Montreal. All the goods and services have to be provided by air transportation. We have a 12-week window in maritime shipping, which allows construction and bulk supplies to come in.

The income tax right to a northern residence deduction, which was brought into effect in 1990, hasn't been addressed since that time, so this has caused a burden also. The goods and services tax, which we know will not be abolished, is also a burden in our region.

[The Chair, Conservative, Brian Pallister]

Sorry, Mr. Alaku, I'll have to cut you off now because we have to hear from everybody, but there will be time for questions afterwards. Thank you for much for your presentation.

We will continue with a representative from the Northern Alberta Institute of Technology, William Shaw. You have five minutes, sir.

[Dr. William A. Shaw, President, Northern Alberta Institute of Technology]

Thank you so much. My message will be brief and succinct.

We have a crisis in Canada in terms of skills shortage. As you start looking at the sectors, there is no sector untouched by the skills shortage. In oil and gas, certainly in my home province of Alberta, it is severe, but so is it in the manufacturing sector, the forestry sector, and so forth. In fact, as concerns one of the papers that I write for, they can't deliver the paper because we also have an unskilled labour shortage in this country that is affecting the quality of life.

As you start looking at some of the data presented in our brief, you will see sector after sector reporting significant skills shortages. What we would ask the government to do in the upcoming budget is not to blink; stay the course. In the last budget in May 2006, there were some good measures, tools, if you will, in terms of supporting apprenticeship. Certainly on the employers' side there were some incentives, and for the apprentices there were some incentives. You had also indicated a billion-dollar fund, if a surplus was there, for infrastructure. I'm telling you, the infrastructure is crumbling across Canada.

You may say, well, you're from Alberta and you can afford it. I would say to you that in fact in Alberta we paid the cost in terms of the 21% cut in our budgets, and if you look at just the post-secondary side, there is a $1.5 billion to $2 billion deficit on infrastructure. So infrastructure is very important. As the government has created the demand, we have the challenge now of meeting that demand, for looking at the skilled labour shortage. How do we do that? We need the kind of infrastructure that will support that kind of training. It is not done simply over the Internet. You need the hands-on equipment and facilities to look at apprenticeship.

In terms of apprenticeship, the statistics are there to show you that, for Canada to be competitive, we must have a strong apprenticeship system, and I would say to you that you need to invest in the infrastructure program so that in the post-secondary sector we can benefit from that to supply the kind of skilled labour needed in this country.

Just to give you a couple of statistics, which I'm sure you have, 16% of the employment in Ontario is directly related to the oil and gas sector. Even at $60 a barrel, we have a skills shortage. We need to invest in turning out more. At NAIT, we will do 15,000 apprentices this year alone. There will be 65,000 apprentices registered in Alberta, and that message is translated in other provinces in terms of the need for trades, and so forth.

So I would humbly ask you to stay the course, invest in the infrastructure, a billion-dollar-plus program for infrastructure in post-secondary, and I will leave you this thought: NAIT was created in 1960 with the Technical and Vocational Training Assistance Act, which invested federal dollars into the bricks and mortar to make apprenticeship happen in this country.

Thank you so much.

[The Chair, Conservative, Brian Pallister]

Thank you very much, Mr. Shaw.

Continuing on, we will hear from Polytechnics Canada, with Sharon Maloney, who is the executive director.

Welcome. Five minutes is yours.

[Sharon Maloney, Executive Director, Polytechnics Canada]

Thank you, Mr. Chairman, and good afternoon, members of the committee.

Polytechnics Canada is the collective voice of Canada's eight public polytechnic institutions, nationally and internationally. Located in the regions that drive the Canadian economy and working in close collaboration with industry both in curriculum development and applied research, our members play a pivotal role in providing education, training, and research solutions to industry's problems.

We believe there are four fundamental actions that should be taken to strengthen the Canadian economy and secure the future prosperity of Canadians.

Number one, we should abandon attitudes that view some education sectors and types of learning as superior to others, and promote a full range of learning that is market responsive. The number of Canadians who think they need to go to university is out of proportion with the number of jobs that require a university education. As recently stated by Mr. Laurie Hawn, Conservative MP for Edmonton Centre and spokesperson for western economic diversification: “Without the availability of skilled workers, our economy won't be as strong as it should be.” We need workers who can transform new technologies and processes into improved productivity--water welders, radiologists, petroleum engineering technologists and technicians, palliative care nurses, and civil engineers--the very people who polytechnic institutions are training across Canada and internationally.

Number two, we should eradicate cross-jurisdictional barriers to student and worker mobility. Currently, Canada does not have a national credit transfer system, with the result that students have difficulty transferring from one region of the country or from one level of education to another. For example, in certain provinces, students who have applied degree programs at polytechnic institutions are often prevented from transferring into university bachelor programs, because their credits are not recognized. Similarly, graduates of polytechnics who want to pursue graduate studies are often forced to go outside of Canada, to universities in the United States and the United Kingdom, because Canadian university graduate programs will not accept their credentials.

In response to this, members of Polytechnics Canada have adopted protocols that will allow for the complete transferability of credits between members and are instituting their own graduate programs. We should maximize and leverage the ability of these institutions to provide cross-jurisdictional mobility training to apprentices, technicians, technologists, nurses, and other skilled workers, so that we can address local shortages and facilitate cross-jurisdictional mobility of the knowledge workers needed in crisis sectors across this country.

Number three, we must encourage private sector investment in workplace training by providing sufficient financial support to those institutions that are best positioned to provide market-responsive education and training. The recent announcement of a one-time $1 billion investment in post-secondary infrastructure is a positive step but will only enhance the capacity to provide market-responsive education and training if the funds are apportioned in a manner that adequately supports those institutions that are best positioned to provide comprehensive market responsive education and training. As governments do not have unlimited funds or the organizational structure to do it alone, we need to work in partnership with all levels of government, the private sector, and with those institutions that have the expertise to provide skilled workers nationally.

The recent announcement by a member of NAIT, Shell Canada, and the provincial government is an excellent example of what we need to be doing. It acknowledges the key role played by institutions like NAIT in providing the trades, technologists, and operators needed by industry and seeks to leverage that resource by the joint investment of government and the private sector. This is the model that should be mirrored across the country with all eight polytechnics, which have the proven track record of providing Canadian businesses, locally and nationally, with the trained workers they need.

Number four, we must produce more market-driven research by supporting those institutions that have the ability to work with industry and provide solutions to industry problems. While a solid foundation has been established for basic research, we have not invested enough in helping businesses, particularly SMEs, find solutions to their business problems. We have to adopt a different approach, one that is driven by industry problems rather than one that creates an idea and looks for a market. We need to invest more in applied research and development in terms of prototype development and commercial validation studies.

An excellent example of what I'm talking about is the Dr. Tong Louie Living Laboratory at our member BCIT. The living lab conducts research and training activities that aim to improve the relationship between people and their living and working environments. Its goal is to create products that facilitate independent living sensitive to the needs of older adults and the disabled.

Thank you.

[The Chair, Conservative, Brian Pallister]

Thank you very much, Madame Maloney.

We continue with the Canadian Association of University Teachers. James Turk, executive director, is with us. Welcome, sir, the floor is yours.

[James Turk, Executive Director, Canadian Association of University Teachers]

Thank you, Mr. Pallister.

I must begin by expressing our admiration for the stamina of this committee, given the number of witnesses you have to hear over many days, so we're grateful even for our five minutes.

I have one message for you, but before giving that message, I want to ask you this. How many of you have said to your constituents or in a speech that the future of Canada depends on how educated a population, how educated a workforce we have? Some have said it used to be that the resources were under our feet and now the resources are between our ears. This is expressed in a variety of ways, but it's a message that almost every elected parliamentarian in this country has expressed in one way or another.

My message for you today is that your desire and our desire will not be realized without a significant increase in federal funding leadership for post-secondary education. That's the key message. Before the early 1950s, funding was exclusively a provincial responsibility. The Massey commission was appointed and reported in 1951, and following that, the federal government began to play an increasingly significant role in funding post-secondary education. It was only after the federal government came to play that role that we began to have the national system of post-secondary education of which we're so proud today. It has put Canada on the map internationally for having one of the best post-secondary educational systems.

That system has come to be in increasing jeopardy as the federal government has cut back on its support for post-secondary education over the last decade or so. Measured in constant-dollar terms, per full-time equivalent student, federal funding for post-secondary education has fallen 20% between 1989 and 2004. It's not just an issue of the amount of funding, but how it's delivered. Right now there is no transparency in how federal funds for post-secondary education are spent, if they are spent at all in post-secondary education. Surely federal dollars intended for post-secondary education should end up supporting our universities and colleges and not be used to build roads, pay down provincial debt, or cut provincial corporate taxes. That's why we propose in our brief the creation of a separate funding envelope for post-secondary education, governed by a Canada post-secondary education act that would set out pan-Canadian guidelines and objectives.

We believe that a new federal post-secondary education fund should be based on gross domestic product--that is, the wealth created in our economy--rather than a fixed dollar amount. The target that we recommended, and it's a target that Canada achieved in the late seventies and early eighties, is one-half of 1% of GDP, or in other words, one-half of one penny for each dollar created by the Canadian economy. Surely as a society we can afford to spend one-half of one penny of every dollar created by our economy.

On reaching that target, a target we reached in the late seventies and early eighties would require an additional $4 billion in federal expenditures. That's a huge amount of money, but when we saw a few days ago that the federal government was able to write a cheque for $13 billion to reduce the debt and to spend billions on the military, given the economic, social, and cultural benefits that Canadians achieve and the importance that each of you has described in your own speeches to have an educated workforce, meeting that objective is clearly within our means.

We just want to raise two other issues with you relating to post-secondary education, and one is the issue of access. A growing problem with the reduction in federal support for post-secondary education has been skyrocketing tuition fees. Universities and colleges are left with the dilemma of how they're going to be able to afford to continue their operations, and they have had to shift more of the burden on to the students through increased tuition fees. The dilemma has been a dramatic increase in student debt. Canada now has one of the highest levels of student debt of any industrialized country, and that's having an effect on who goes to university and college. We believe that what determines who goes should be the ability of the student, not the wealth of the student's family. That can be dealt with by the federal government shifting its priorities to reduce those barriers by transferring money that it puts into the Canada millennium scholarship fund--and in the future, the registered education savings plan and the Canada learning bond--into needs-based grants so that ability, not family wealth, is the determinant.

The final issue is research. I think all of you would agree that there's a desperate need to build the research capacity in Canada. Most of the research that turns out to be commercially relevant doesn't begin as commercialized research, it begins as basic research. Anybody in any of the applied disciplines, in engineering, chemistry, mathematics, physics--if you talk with industrial people like Mike Lazaridis from Research in Motion--will tell you that most of what's been important for them commercially, and what pays off in the long run, comes out of basic research.

You've significantly increased research funding, but much of it has been pushed towards commercialized ventures that is starving basic research funding. The hardest hit, in fact, is the Social Sciences and Humanities Research Council. More than half of the students and faculty in this country teach in the social sciences and humanities, and the Social Sciences and Humanities Research Council receives a much smaller share of funding than does NSERC or CIHR.

So the larger issue of the total amount and its balance is a key priority as well.

Thank you very much.

[The Chair, Conservative, Brian Pallister]

Thank you very much for your presentation, sir.

We continue with the Association of Universities and Colleges of Canada. Claire Morris is here.

Welcome. Five minutes is yours.

[Claire Morris, President and Chief Executive Officer, Association of Universities and Colleges of Canada]

Thank you for the opportunity to speak to the committee, Mr. Chairman.

We're here today because we believe universities have a vital role to play in improving Canada's productivity and helping Canadians compete and prosper in a highly competitive world.

Over the past two decades, Canada has transformed itself from an economy that is heavily based on resource extraction and export to an increasingly knowledge-based economy. Today, many Canadians are employed in traditional industries that are using knowledge and technology to add value and increase productivity, while others are employed in newly emerging, knowledge-intensive industries that did not exist 20 years ago. Across the economy, Canadians are working with new knowledge and technologies to be more productive and competitive.

Investments in higher education and research will be a key driver for future productivity gains in Canada. Research generates the new knowledge that a highly skilled work force can transform into new products and processes.

Currently more than one third of the research conducted in Canada is done at Canadian universities. A thriving university research enterprise is a platform for other sectors, including the private sector, to launch research efforts. More than $5 billion worth of research was conducted in Canadian universities for the private sector in the last decade. It is clear that, given the structure of the Canadian economy, universities play a uniquely important role in this country's overall research effort.

University research also ensures that all regions of the country can experience the benefits of knowledge creation and application. Over the past decade, only the university sector increased its research performance in all provinces and regions, with federal investments in university research playing an important catalytic role in this regard.

University research now accounts for between 27 and 71 per cent of all research performed in each province.

The investments made in recent years by successive provincial and federal governments and universities themselves have turned Canada from a country at risk of experiencing a major brain drain to one that's benefiting from a brain gain. This success story is happening because these investments have been made in each of the four key areas that make excellent university research possible.

The first is ideas. The federal research granting councils fund research projects that generate new ideas, insights, understandings, and applications.

The second is people. The Canada research chairs program, the Canada graduate scholarships, and individual graduate support programs administered by the three federal research granting councils provide support to attract, retain, and develop highly qualified researchers.

The third is infrastructure, and you heard from CFI earlier. The Canada Foundation for Innovation, as well as Industry Canada through its support of CANARIE, funds state-of-the-art infrastructure--the buildings, the equipment, the networks--that is critical to conduct research.

Finally, there's institutional support, the indirect costs program that supports the institutions that provide researchers.

In the last federal budget the government made welcome investments in all of those four pillars--a $40 million increase to the granting councils, a $40 million increase for the indirect costs of research, a $20 million annual investment in the leader's opportunity fund through CFI, as well as an increase in the value of graduate scholarships by making those scholarships tax exempt.

The point I want to make, Mr. Chairman, is that Canada is among the world leaders in university research, but our position is fragile. Our competitors in the G8 and newly emerging competitors like China and India are investing in research in the global race to attract talent and high-paying jobs. Canada must produce more highly qualified graduates to meet labour market demands and to meet the need for replacing the retiring baby boom workers.

Universities are prepared to do their part, expanding their research efforts, producing the highly qualified graduates with the employment-related research skills and creating more networks that bring people together. Universities are also prepared to continue to account for the results of the research investments that have been made. These are key elements of increasing Canada's productivity that will ensure that all Canadians can continue to benefit from the high quality of life that we have in this country.

Thank you, Mr. Chair.

[The Chair, Conservative, Brian Pallister]

Thank you very much, Ms. Morris.

We will now hear from Ms. Tracy Ross, from the Canadian Association of Science Centres.

Welcome, Ms. Ross. You have the floor.

[Tracy Ross, Executive Director, Canadian Association of Science Centres]

Thank you very much for inviting us here today.

The future of Canada depends on our capacity for the ingenuity of our Canadians. You've heard here today much of that and very strong arguments for improving that at the technical and the university level.

Today I appear before you on behalf of Canada's network of science centres. We are more than 40 science centres in every region of the country. We are a powerful, on-the-ground grassroots resource that nurtures the curiosity, creativity, and ultimately the practical ideas that will lead to our prosperity in the future.

Seven million people a year visit Canada's science centres. They get a chance to ask their questions with face-to-face contact. They engage in exhibitions and programs designed to nurture their curiosity and allow them to ask whatever they want to. It is often a family experience, something that you don't often see in your members' communities. In Manitoba, in Ontario, and in Quebec these examples exist.

We spend most of our time outside of school, 80% of it, roughly. Science centres are a place where people can ask questions that they wouldn't normally get to ask in a formal, structured environment. We are part of the important fabric of what you might call a culture of science in this country. There are other ideas, other projects along the way that science centres engage in--science festivals, workshops. You'll be familiar with Quirks & Quarks, The Daily Planet, and shows like that. Science centres are an integral part of that culture in this country.

Science centres complement the formal education program with field trips, curriculum-linked programs, teacher professional development. Generally about 25% of the people who visit science centres are children in organized school groups. We are reaching a critical time in this country. We're planting the seeds for a flexible and nimble workforce of the future, and at the same time we need to deal with the implications of the technologies and biology and engineering that are coming online at an incredible pace. We need to use every tool we can to get people interested and motivated in science so that they can access the tools and skills and programs that my colleagues have talked about today.

Today, science centres are building a vision around what we can do that will engage the public in science and technology in this country. In three areas, at least, science centres know we share this vision with the government. We support a national science agenda. We know that Canadians want to learn more about the implications of current science, and science centres help bridge the gap between scientific research and everyday experience. For example, “The Geee! in Genome” project is on display in P.E.I. right now. It's a major exhibition on the role of genetics in our daily lives. That's one excellent example, and it is travelling across the country.

Science centres engage at-risk youth and underserved communities. Before they even have a chance to get to university, many people lose interest in science and lose motivation to even pursue it. Science centres can help attract some of those people back with programs that are out of school or complementary to school, with science clubs or even semi-work environments such as camp counsellors and volunteers, engaging them in projects along the way.

Finally, accountability. We've heard a lot about that. Science centres are definitely accountable. They have major private and public sector partnerships already. Yet our science centres constantly struggle to find the resources to do what they can in their local communities. In terms of funding, science centres are supported. Their funding models are often as diverse as the histories of their inception. Sometimes they receive core funding from their municipalities, sometimes they don't. They are definitely supported with significant gate admissions and private sector support, in addition to application to the few funding programs that do exist.

The situation facing us today is that we know several communities are changing. The Calgary Science Centre, for example, needs to change to meet rapid changes in their community. Quebec City, we know at this point, has a program, but they don't have a science centre. That is a major project that we know will be coming to the federal government with interest in the future.

At the moment, there is no coherent strategy to deal with what's happening with science centres at a federal level. We know that internationally other countries are much further ahead than we are--Sweden, the U.K., Finland. All those that performed well in those competitive rankings that were released yesterday have plans for science awareness. They're usually linked to their science and technology strategy. We don't have such a case in this country.

There is no plan, nor is any financial support provided for the Canadian Science Centres strategy.

Meanwhile, Australia, as part of their 2004 strategy, has committed more than $37 million over the next seven years. We seek a framework under the science and technology strategy to engage science centres across this country--$200 million over five years. Considering that $2.7 billion is given to science and technology at universities across the country, we suspect that a $200 million investment over five years is a reasonable ask for science centres.

Science centres are evolving. We're home to one of the first in the world with the Ontario Science Centre. We are changing to attract new audiences and new target markets. We hope that you will support us in our bid for a common strategy.

Thank you.

[The Chair, Conservative, Brian Pallister]

Thank you very much, Ms. Ross.

And thank you all for your informative and sincere presentations.

We'll move to questions now with Mr. McKay, for five minutes.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Shaw, you say in your presentation, on page 12 :

A financial commitment was made by the former Liberal government in November 2005 for the NCAT project, which is presently under review by the Conservative government.

We know what “under review” means around here.

Canada is suffering from a chronic skills shortage. The NCAT project presents a solid, sustainable solution to this dilemma.

Can you give me an update on where the NCAT project is? Did you survive yesterday's round of cuts?

[Dr. William A. Shaw]

Certainly in your terminology, “review” means there is no answer yet. I agree with you, there is no answer.

We certainly were not in any funding envelope when that was earmarked for the $15 million, so we're still hopeful. And we're hopeful that the billion-dollar infrastructure fund will come to fruition.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Okay, thank you.

Mr. Alaku, in your second recommendation, you say that the basic goods and services tax credit for adults should be doubled, or at least upped by 40%, and that the threshold should be upped by 40%. This is a solid idea. If you actually want to benefit poor people, you up the credits rather than cut the GST, which is just a dumb economic thing to do.

Can you give me any kind of costing as to how much that would be for the folks you represent? Is it for everyone in Nunavut, or everyone north of 60? Is that the way you would calculate it?

[Adamie Alaku]

I will ask Eileen to answer that.

[Eileen Klinkig, Construction Division, Special Projects Manager, Makivik Corporation]

We don't have an exact calculation. If we're talking Nunavik itself, there are 11,000 people; it's not a big population.