Finance Committee on Sept. 28th, 2006

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

Okay. Thank you for that.

I want to talk to Mr. Riddell. I've had the pleasure of meeting with you and talking about the millennium scholarship. The millennium scholarship, in my view, is a tremendous program. It has been subject to criticism at times since its inception. One of the reasons is that provinces have actually clawed back money that has gone for the millennium scholarship. In my view, it's a very well-run organization and it's doing good work.

I was delighted by your comments about how do we really focus on putting needs-based grants in place. It seems to me that if we are going to reach our potential as a country, we have to get more low-income families, more aboriginal Canadians, more persons with disabilities--people who are marginalized--into university. As we hopefully will go forward and reinvest in the millennium scholarships, do you see that as the best way to do that?

[Norman Riddell]

Thank you.

I agree with you. We have two problems. We have to keep the participation of the middle class in higher education where it is, and it's already very high. The government recently introduced measures to allow them to borrow more, but there's a tipping point on borrowing. Our research shows that if a student is borrowing $10,000 a year, and some do, the chance of their getting a diploma for which they are borrowing drops to around 30%. You can borrow a certain amount of money and have a reasonable chance of completion, but annual accumulation of debt does have an effect on persistence. That's for the middle class.

For the people who aren't there, we're going to have to start targeting money to them. In Canada we've had a rather strange system for a very long time, whereby we provide interest free loans to middle class people as well as grants. We provide interest free loans to poor people, not grants. That's because we provide the grants to the people who have “the highest need”, which is the cost of the attendance minus the resources at your disposition. The poor aren't stupid. They minimize their cost by going to college, by continuing to work, by staying at home. Then they don't get the great big loans and as a result they don't get the grants. Grants in Canada have traditionally gone to people who got the biggest loans.

What the foundation has done recently is to start putting money in the hands of people on the basis of family income. What we find is that the needs level of the people who are getting the access bursaries--these are the low-income people--is $3,000 lower than the people who are getting the needs-based awards based on how much is borrowed. It shows there's a problem.

There are three ways by which we could proceed--

[The Vice-Chair, Liberal, Massimo Pacetti]

Quickly, Mr. Riddell, please, because the time is up. Just three quick ways, go ahead.

[Norman Riddell]

The first is that the federal government would do it alone. If that happens the students will benefit, but there will be a loss in provincial programming because the federal government has not been as effective at levering out provincial money as we have. It can go to the provinces, in which case it's not absolutely clear it would go to student financial assistance, or it can go to the foundation; you pass a law that tells me I have to pay it to students and I have no choice but to do it.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Mr. Riddell.

Mr. Paquette.

[Pierre Paquette, Bloc, Joliette, QC]

Thank you, Mr. Chairman.

My first question is for Mr. Spickler. My colleague Maka Kotto read your brief in the last few days and asked me to put certain questions to you.

First, you say that the physical fitness tax credit should also apply to artistic activities. In your second recommendation, you call for a minimum $30,000 exemption on revenue deriving from copyright and residual payments.

Here is the question Mr. Kotto wanted me to ask of you. Do you believe that these types of tax measures, such as tax credits and tax exemptions, represent genuine support by the Government of Canada for the development of the arts in Canada? That was the purpose of your two first recommendations. I imagine that they do not appear in order of priority, but it seems that for you, these are important tools.

[Robert Spickler]

Mr. Chairman, as the Director General of the Canadian Conference of the Arts, Mr. Pineau was also invited, and since he also worked on this file, would you allow him to answer the question? Thank you.

[Alain Pineau, National Director, Canadian Conference of the Arts]

: We would also like the tax credit to apply to artistic activities because, in our view, the reasoning which was applied to sporting activities also applies to artistic ones. Everyone recognizes the benefits of physical fitness in children. It comes back to many of the things which were said around the table with regard to population health. A little earlier, Ms. Wilson alluded to preventative measures.

It all makes sense. We feel that applying the tax credit to sporting activities only is discriminatory. That is one of the arguments underlying our suggestion that the tax credit be extended to the arts. Further, you ask whether tax credits are for us the best way to achieve our goals. It is one of the ways, and if it were applied, it should be applied equally for all Canadian families. Families make different choices as far as their children's development is concerned, some parents choose to give their children additional activities, and this should be recognized.

That being said, the government has other tools at its disposal, and they should also be applied, not only in the area of arts, but also in the area of arts and culture. I believe it is dangerous to only use tax credits, because it means that the federal government has less flexibility if it wants to take very specific measures and make investments. That concerns us.

So we are in a bit of an ambiguous situation in that regard. We are saying “we too”, but we advise caution because if this is what the government chooses to do, it could lead to problems.

[Pierre Paquette, Bloc, Joliette, QC]

I find the tax credit for children who engage in physical activity interesting. I was at a conference given by Raymond Cloutier, who said that a lot of money was being invested in artistic productions, but that not a lot of money was invested in creating demand. In certain areas, like dance, for instance, you often find very good creators, but no audience.

The other question dealt with our museum policy. One of your recommendations dealt with the problem of funding museums and heritage projects within the federal budget, and with the fact that we need to develop and implement as soon as possible a new federal museum policy. If I understood my colleague Maka Kotto, he said that there had been consultations on the issue and that the budget would contain something to that effect.

Can you tell us what is happening? Also, how can you explain the decision of the Conservative government to reduce by $4.5 million the museum budget, when everyone is asking for new investments? I would like to hear your opinion on this subject.

[Robert Spickler]

As far as the budget cutbacks are concerned, I believe that the Canadian Museum Association has done a very good job. I am a museum director, but I will not respond in that capacity. I will respond in my capacity as president of the Canadian Conference of the Arts, which has a mandate of non-partisan reflection and policy analysis in the area of culture or on issues which affect culture.

A little earlier, we were talking about the importance of education. Every single riding has a museum. Museums are places of education and knowledge-sharing, and of the protection of the heritage of all Canadians. When the minister, who is the voice of culture and heritage within Parliament and government, and who speaks on behalf of Canadians on issues of culture, says that the reason why there were cutbacks in the museums budget was because the money was not being well spent, I respectfully submit that he did not properly analyze our museums policy.

Under our museums policy, every museum institution in every riding of Canada must be accountable for the money it receives. So each institution spends its budget carefully, because it is accountable. But suddenly, after this program which has been in existence for nearly 30 years has made collections accessible to all Canadians through the Internet, thanks to technological development — the Museums' Assistance Program contributed greatly to this — we hear that the money has not been well spent. This is an attack on the integrity of museums and on every aspect of Canadian culture.

In my opinion, the Canadian Conference of the Arts can help. If the government feels that the accountability mechanisms in the area of culture are lacking, the Canadian Conference of the Arts is willing to work with the government to discuss these matters, but the fact that museums were publicly accused of misspending their budgets was an attack of the integrity of the cultural milieu, which undermines the credibility of culture throughout the country. The directors of Canada's museums were asked to reflect on museum policy. I believe that the current Minister of Canadian Heritage supported this approach in the past and I believe she still supports it, but she had to deal with budget cutbacks.

I have to admit that I do not quite understand why this happened, but we are willing to fully cooperate with the department to conduct analysis on the matter and to reflect on the situation.

[Pierre Paquette, Bloc, Joliette, QC]

It seems that the minister is speaking out of both sides of her mouth at the same time.

In the same vein, I have a question for Ms. Wilson. You talked about literacy. How do you explain the fact that this week the government announced cutbacks on the order of $17 million to the budget of the adult learning, literacy and essential skills program? Is this the right decision or does it create a problem?

[Dr. Elinor Wilson]

Absolutely, because one of the social determinants of health for individuals is literacy. CPHA has been working in the area of literacy for over nine years and right now is actually in the process of running a blue panel on health literacy in Canada.

So there's literacy and then there's the piece that is health literacy, which is going to help individuals deal with health and their health care system. We were disappointed to see that cut.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you.

Merci, Monsieur Paquette.

Mr. Turner, and then Ms. Wasylycia-Leis, for seven minutes.

[Garth Turner, Conservative, Halton, ON]

Thank you.

Mr. Spickler, you said it in English and you said it again in French that you're disappointed with the cuts. You felt there was a lack of transparency and accountability. You said it was not a good government decision for us to have put $13 billion against the debt. Can you tell the committee what our interest charges are on the $13 billion that will be retired?

[Robert Spickler]

We are aware that these charges are extremely important. No one in this country will ever challenge any government for being accountable and responsible in reimbursing its debt. Our suggestion is that while, at the same time, we reimburse the debt and cut programs without--and I submit this very respectively--making a thorough analysis of the meaning and reasons for cutting these programs, especially for the museums, as we just saw in the last few days, it makes us extremely worried about the lack of analysis of policies in relation to culture.

[Garth Turner, Conservative, Halton, ON]

Don't give me the speech again. You didn't answer the question. The answer to the question is that $650 million per year, every year, will be saved in interest charges. That's $650 million per year, every year, that we will have additionally for program spending. The point is that if a government had made that decision ten years ago we would have had $6.5 billion more to give to museums, to give to education, to give to health care. The point is, we're making that decision now, and you criticize us for it.

Don't you understand why we're doing it? It's in order to provide more funding for program spending going forward, because if no government ever has the guts to do what we've done, we don't end up with those dollars. Those go to bankers around the world and to bondholders.

[Robert Spickler]

I reiterate the fact that I think a government that reimburses its debt is a responsible government. What I'm trying to say in a non-partisan fashion is that when--

[Garth Turner, Conservative, Halton, ON]

That's not what you said in French a minute ago. That was not non-partisan, sir.

[Robert Spickler]

I even prefaced my response by saying I was going to be non-partisan.

[Garth Turner, Conservative, Halton, ON]

Well, you weren't.

[Robert Spickler]

I submitted very humbly that I felt there was a lack of analysis on the programs that have been cut, and an explanation given to Canadians that it is ill-spent by the cultural sector. That is what I said a few minutes ago in French. I submit that's an attack on the integrity of the cultural sector.

You're absolutely right that the federal government must pay back its debt, and I feel it is responsible to do so. But at the same time, the same government is making choices to cut the cultural sector and buy armoury.

[Garth Turner, Conservative, Halton, ON]

I like that sentence, but you should have ended at “responsible”. That was good up until then.

Thank you.

Mr. Lewis, we have a problem here with people not saving money, which is really at the heart of what you guys are trying to do: to work with the government in order to make sure education is funded in a private sector fashion. Why can't people save money?

[Peter Lewis]

It's an excellent question. In fact, the number one reason, when you ask them that, is because they don't have disposable income in order to save. That's the first reason. The second reason is that they might have other priorities.

[Garth Turner, Conservative, Halton, ON]

Right, but why don't they have enough disposable income? The average family income has gone up steadily over the years. Where's the money going?

[Peter Lewis]

It's an excellent question.

Our view is that it's a matter of prioritization. When you ask people why they're not saving, they'll say they don't have disposal income. We believe it is a matter of priorities. If the education of your children is a top priority for you, we think it's possible for many families who are not saving today to find some funds to set aside over a longer period of time.