Finance Committee on Oct. 3rd, 2006

[The Chair, Conservative, Brian Pallister]

I call the meeting to order. We are now in session.

We welcome our guests today, and we very much look forward to your presentations. Thank you in advance for the briefs you've submitted to us. We appreciate them.

I'll just briefly explain that we are preparing recommendations to the finance minister for the upcoming federal budget. Our responsibilities involve hearing presentations across Canada. We're very pleased to be here in Vancouver and to get the perspectives of British Columbians on issues.

As you know, we allow five minutes for each presentation. I will give you an indication when you have a minute remaining, if you choose to make eye contact. At the five-minute mark, I will cut you off, and then of course, after your presentations, we'll move to questions from the committee members. I look forward to that exchange.

Welcome.

We'll get started now with a presentation from the Early Learning and Child Care Research Unit, Paul Kershaw.

Welcome, sir. You have five minutes.

[Dr. Paul Kershaw, Human Early Learning Partnership]

Thank you very much.

My name is Dr. Kershaw. I'm here today on behalf of the Human Early Learning Partnership at UBC. For the last two years, HELP has been selected by the World Health Organization to be the international knowledge hub on research about the social determinants of health in the early years.

I've come to ask you today to help us apply some of our research here at home, and our message is pretty straightforward. The federal government can and should invest more in family policy, and specifically in a set of systems of universally accessible quality child care services that are available across the province, all the while respecting the unique status and headstart that Quebec already has.

There were three reasons to do this. This first is that when you look in the international arena, Canada is an international laggard. You may have already heard in previous meetings that the OECD once again found Canada ranked last out of a series of rich countries when it comes to investing in the early years, and early child care and education in particular. At HELP we try to say maybe Canada is not being treated charitably enough. What if we looked at the Canada child tax benefit and the national child benefit system? What if we looked at comparable tax initiatives at the provincial level? What if we also looked at maternity and parental leave, or our child care expense deduction, and our spousal credit that helps one-earner families? What if we added to that health care savings that we provide families with kids, pharmacare and dental care for poor families, and income assistance as well? What if we were that generous to Canada's ranking?

Sadly, even when we are that generous, we still find that Canada ranks 14 out of 16 countries when we look at our total package of family benefit policies. Our package has less than one-quarter of the value of Austria's, not even half the value of the U.K.'s and Australia's, and even below that of the United States, which is well recognized in the literature as an international laggard on its own.

Two other things are important when thinking about our family benefit package. One-earner families continue to receive a benefit--a modest one, but that is something the new universal child care benefit will address. Families who rely on regulated child care services consistently have the most substantial penalty when it comes to incurring the cost of raising our next generation of citizens. That penalty is found across the social grain using an income threshold, and in particular among lower-income families.

If we want to fill that lacuna and create a child care system that respects provincial jurisdiction and works in partnership with provinces, it will nonetheless promote a couple of important goals relating to Canadian competitiveness. Human capital scholars across the country are regularly telling us we need to focus on the early years to start our human capital acquisition from the very first days. That is because research about early development shows that in the very first years of life, human biology is so sensitive to optimizing environments that can elevate development throughout life, and that timed optimized development remarkably dissipates once kids pass ages three through seven.

We have a tall order ahead of us. In the province where you're sitting, 25% of kids reach the formal school system at age six vulnerable in at least one domain of development. There's no reason to think it's not the same across the country.

Similarly, your own budgetary documents talk about the importance of labour supply in the competitive economy. In that budget it's important to recognize that today our family policy is putting in place a couple of worrisome disincentives to attracting both earners and couples to the labour market. For example, for a one-earner couple where the second earner is thinking about going into the labour market to earn half average earnings, about $22,000 here in British Columbia, the nominal pay would be about $11. After you subtract taxes, child care expenses, and the lost-income-contingent benefits that our family policy makes available, that person would take home just over $5, not even 50% of the nominal take-home pay. That's bad for labour supply, which means it's bad for our competitive economy, and it's also not good for gender equality.

My last point is that we can afford to do it. The last data we had about hard surpluses at the federal level had a surplus of over $13 billion. The province where we are currently sitting is projecting a $1.2 billion surplus. It means we can afford a quality system of universally accessible services across each province and territory without even raising taxes. I know some in the room will think that we're already doing that with the universal child care benefit, but I'm here to tell you that in terms of promoting gender equality, in terms of promoting labour supply, and in terms of promoting human capital acquisition, it cannot match and will not compensate for the absence of a system of regulated child care services.

We are not an international laggard when it comes to health care. We are not an international laggard when it comes to early school investments for school-aged children. We are leading in debt-to-GDP ratio, and we are competitive when it comes to our tax-to-GDP ratio. Where we are not leading is in the early years and investment in a regulated system of quality child care services across the country.

[The Chair, Conservative, Brian Pallister]

Thank you, Mr. Kershaw.

We continue with a representative from the Alma Mater Society of the University of British Columbia, Ian Patillo.

Welcome. Five minutes is yours, sir.

[Ian Patillo, Vice-President, External, Alma Mater Society of the University of British Columbia]

Thank you.

I will hold throughout my presentation that investments made in post-secondary education produce all-round benefits to society and democracy, and that global competition is an incredibly narrow view of what investments in post-secondary education can do for Canada. But I can respond within this frame, because it is remarkably evident that universities are drivers of economic growth. These are points that I touch on in my submission.

Competitiveness comes from the citizenry's ability to understand and benefit from an increasingly complex global marketplace. When you think about it, what else could you spend money on to enhance competitiveness, aside from investing in Canadians themselves through the post-secondary education system?

Investments in education are essential. You cannot expect any competition gains arising from the corporate sector alone to be of wide benefit to Canadians. Corporate philosophy holds that competitiveness can be commoditized, and competition becomes an end in itself. This I take to be a rather shallow presentation of the purposes and benefits of competition.

The university, on the other hand, engages a more societal and holistic debate, arming people with the ability to go forth into the private sector and utilize the innovation and knowledge attained in school to pursue not just lower bottom lines, but real social growth in their communities and businesses. This is the underlying framework of competition that cannot go overlooked.

If you take away the ability for all Canadians to have access to these analytical skills and knowledge bases, you risk creating an unbalanced competitiveness--political, social, and economic inequality. Competitiveness for Canada's 21st century does not require a low-wage workforce to produce commodities for a global trade. It requires a highly educated citizenry to produce innovation and spur growth. This is why ensuring access to high-quality post-secondary education systems must be a top priority of this government.

This is why all student groups across the country, including the AMS of UBC, are calling on the federal government to join with the provinces to create a vision for our post-secondary education system. That vision would ensure that higher-education institutions are helping young Canadians acquire the skills they need to be competitive, but also to educate them so they may better serve their communities and more effectively participate as citizens. This vision will hopefully include more funding to provinces for post-secondary education, and more targeted grants for underrepresented students to participate in post-secondary education.

Thank you.

[The Chair, Conservative, Brian Pallister]

Thank you very much, sir.

We will continue now with the British Columbia Alliance for Accountable Mental Health and Addictions Services, Michael Clague.

Welcome, sir. Five minutes to you.

[Michael Clague, Executive Coordinator, British Columbia Alliance for Accountable Mental Health and Addictions Services]

Thank you, Mr. Pallister, and thanks to the members of the committee for this opportunity to contribute to the work of budget formulation.

The B.C. Alliance for Accountable Mental Health and Addictions is composed of eleven organizations; the names are attached to our brief. We're connected to people and organizations throughout the province and across Canada who share our goal, which is to ensure that every citizen with a mental health or addictions problem has timely access to services that provide the best opportunity for recovery.

As I move into my presentation, I should mention that the chair of the alliance, Dr. Jean Moore, is here as well. She'll be available to answer questions at the conclusion of my presentation.

Looking at your mandate, which is the formulation of the next federal budget, we want to submit that a case for action that is timely with respect to mental health and addictions is an integral part of helping to build not just a competitive economy but also a society that is qualitatively better for all of those people who suffer from these conditions.

Too, we're delighted to be here because it's very timely, since senators Kirby and Keon, from the Standing Senate Committee on Social Affairs, Science and Technology, just released their report in May. Entitled “Out of the Shadows at Last: Transforming Mental Health, Mental Illness and Addiction Services in Canada”, the report cites five key facts that are germane to the federal budget. For example, one in five Canadians will experience an episode of mental illness over the course of their lifetime; 3% of Canadians live with a serious, persistent mental illness; and two-thirds of those who experience mental illness do not receive treatment.

The meaning of this for the economy is that mental illness and addictions cost the Canadian economy some $33 billion each year in lost productivity. Similarly, people living with mental illness use more hospital days in a year than heart disease and cancer patients combined.

You now have the Kirby and Keon report, which we believe sets out a very clear blueprint for both the federal and provincial governments on how to proceed to address the issue of mental health and addictions and to recognize the fact that mental health isn't just an absenteeism from work; it's also low productivity and low participation during the workday itself.

As I said earlier, these are immense challenges that have serious implications for the economy and also, more significantly, for those who are affected by these conditions.

There was a strong consensus among those who testified before Kirby and Keon that the workplace is a critical environment for the promotion of mental health and its early detection. Therefore, we need to speak directly to the issue, creating a healthy workplace--also an employer responsibility.

With the Kirby and Keon report in mind, and the federal budget's four framing questions, here's what we present to you--as a program, as a policy, and as a financial role for the federal government.

First, establish a mental health transition fund of just over $5 billion over a 10-year period, a transition fund that would enable the provinces to begin to put in place the additional supports that are needed: $224 million annually on a mental health housing initiative, $215 million per year for a basket of community services, and $97 million per year for other strategic investments in this field.

Therefore, with respect to the federal budget, we are recommending allocation this year of $224 million for the mental health housing initiative, $215 million for the basket of services, and $97 million for other strategic investments.

The financial implications of what Kirby and Keon created are quite imaginative. They argued a cost-neutral approach to the federal government of a nickel a drink. That is, there'd be an increase in the excise tax, which has not taken place since 1968. According to their report, that could comfortably cover the increased costs in terms of what's being recommended here.

The point is that this is a transition fund. The nickel a drink is one way to go. Not everyone may support it, but it promotes thinking around how we can do this in a cost-neutral way.

So with that, I want to thank you very much for this opportunity to present.

[The Chair, Conservative, Brian Pallister]

Thank you, sir.

We will continue now with Jon Garson, from the British Columbia Chamber of Commerce. Welcome.

[Jon Garson, Director, Policy Development and Communication, British Columbia Chamber of Commerce]

I should like to begin with a bit of background on the organization. The B.C. Chamber of Commerce represents 130 local chambers of commerce and boards of trade, encompassing 31,000 businesses of every size, sector and region within the province. We are the widest and broadest-based business organization in British Columbia.

In answer to the four questions now before us, we have four areas of focus we'd like to touch on: the need for enhancing the labour force, taxation, investment in transportation infrastructure, and fiscal policy.

As a framework, it's worth mentioning that Canada is facing some significant economic challenges. The slowdown in the U.S. and the impact it will have on our economy is still to be seen. The value of the Canadian dollar, global competitive pressures, ongoing trade issues with the U.S.—all these make the case for fiscal prudence in budget preparations. In our submission, we focused on productivity and competitiveness as the key watchwords for budget 2007.

The fact that we're experiencing a skills shortage across Canada is a widely accepted reality. What is perhaps not so well acknowledged is that this issue is now being significantly exacerbated by a coming demographic time bomb. In short, we're facing a perfect storm of a labour shortage feeding an existing skills shortage.

For this reason, while we largely agree with the C.D. Howe Institute that increased immigration is not a panacea, we believe it is the single most proactive tool in the hands of the federal government. We have a number of recommendations about how the immigration system can be improved. But for the purposes of the budget, we'd like to focus on two areas: the need to allocate resources to officers overseas to enhance their ability to process immigration applications more efficiently, and the need for a structure and the timeframe for the creation of a national centre for foreign credential recognition. We realize that budget money has already been put aside for this, but we need to time the issue to move this forward.

With respect to taxation in recent years, we commend both the Liberal and the current governments for their measures on reducing personal and corporate income tax rates, and for the measures taken to eliminate capital taxes and the corporate surtax. However...[Technical difficulty--Editor]...much still needs to be done.

We recommend that the federal government allocate most of the planning surplus to tax reduction to make Canada more competitive internationally and, within this framework, focus on reducing personal income tax rates across all tax brackets—but particularly for low- and modest-income families, who face the highest margin rates of all as a result of clawbacks of multiple benefits. We also ask that, where fiscal conditions permit, the government move forward all of the already-announced tax measures that are coming through up to 2010 as quickly and expeditiously as possible.

We would also ask the government to look at developing, in cooperation with provincial, territorial, and municipal governments, an index of overall tax burden. This would be an easy way for both the taxpayer and the government to measure and chart the overall tax burden on Canadians, with a view to making the taxation system more competitive.

Transportation infrastructure is a significant issue for British Columbia. As the gateway to Asia-Pacific, much of Canada's future economic prosperity will depend on how well we are able to enhance Asia-Pacific opportunities. Indeed, Canada's social and economic development has always been achieved in tandem with its transportation system. This will continue to be true, but future development will focus on the dominant economic opportunity of the 21st century, which is the Asia-Pacific.

With this in mind, we would recommend that the federal government work with the provinces and territories to develop a visionary transportation statement for Canada that links all modes and includes the Pacific Gateway strategy as one of its pillars.

With regard to ports, air, and road, we have generally applauded the federal government's partnership role with the province in the effort to enhance our transportation infrastructure. We would like to touch on three areas in which the only department not at the table is the federal government.

The first is the development of a common break bulk terminal facility in Kitimat. Break bulk is a significant growth opportunity, but all our efforts so far have been directed at containers. The second area is South Fraser Perimeter Road. The last is the enhancement of a new siting on the Colebrook to allow a second train to go from north to south.

In respect of fiscal policy, we strongly commend the federal government for the action taken recently with the release of the annual financial reports. This is the first time in nine years that we have seen a reduction in public spending. The commitment of $13.2 billion to the debt is something that the chamber wholly recommends. We think the fact that the federal government is in the ninth consecutive year without recording a surplus indicates that there is overtaxation at the federal level. The tax cuts that we have announced will help to address this.

We think that with respect to fiscal capacity governments should restrict themselves to fiscal spending increases of no more than 3% a year to keep in line with growth in the economy and in the population.

There are further recommendations in our submission, but we thank you for allowing us this time.

[The Chair, Conservative, Brian Pallister]

Janet Cunningham is here, from the British Columbia Real Estate Association.

Welcome. You have five minutes.

[Janet Cunningham, British Columbia Real Estate Association]

Thank you, Mr. Chair and members of the committee, for this opportunity to present the British Columbia Real Estate Association's recommendations to the 2007 federal budget.

My name is Janet Cunningham. I'm a Lower Mainland realtor and I am chair of the BCREA's government relations committee. BCREA is the third largest professional trade association in B.C., representing the 12 real estate boards and their approximately 16,500 realtors. We are here today to offer a provincial perspective on the importance of the budget recommendations presented by the Canadian Real Estate Association, which is our national association.

The real estate sector's contribution to the economic health of our province and to the country overall is well documented. Here in B.C., housing is a key economic driver and a measure of the quality of life across the province. We are confident that the recommendations noted in our submission will provide housing opportunities for people in British Columbia and across Canada.

Our national association will examine several of these recommendations in detail when they appear before you later this month, but today I would like to draw your attention to three in particular: assistance for owners of leaky condos, an inflation adjustment to the home buyers' plan, and assistance for aboriginal housing.

The Government of Canada's commitment to work with the Government of British Columbia in pursuit of a fair program of relief for owners of leaky condos is critically important. It offers hope to thousands of people who have lost their homes and their investments. The Prime Minister has specified that the program will include a review of the handling of construction regulations and the role of Canada Mortgage and Housing in the leaky-condo situation. Recently, the Prime Minister and the federal minister responsible for housing stated that leaky-condo-related cases currently before the courts do not impede the government's ability to proceed on this commitment.

Therefore, BCREA recommends that the Government of Canada honour their commitment and work without further delay with the Government of B.C. in pursuit of a fair program of relief for owners of leaky condos.

Next are inflationary adjustments to the home buyers' plan. The home buyers' plan is a Canadian success story. Through this plan, since 1992 nearly 1.4 million people aged 25 to 64 have borrowed up to $20,000 from their RRSPs to purchase a first home. In dollar terms, approximately $14.2 billion has been withdrawn to help finance home purchases. Since that time, prices for all types of housing in B.C. have increased, due to market demand and inflationary forces. Unfortunately, the plan's withdrawal limit has not been adjusted to reflect these values, these factors. As a result, the plan accounts for a shrinking portion of the down payment required to purchase a home and forces users to finance larger mortgages, causing their debt burden to rise even while interest rates remain low.

The Canadian Real Estate Association's presentation to this committee will demonstrate that the maximum loan available under the plan has been losing ground as a percentage of rising average resale home prices for more than a decade. The average home price rose 51% nationally between 1992 and 2004. During the same period, the consumer price index climbed by 25%. If the maximum loan available under the plan were adjusted to account for inflation, it would stand at $25,000 today. In B.C. the real estate market continues to perform well in most areas. Although year-to-year dollar volumes are up more than 12% from this time last year, the number of homes sold is down by almost 5%. We feel that the erosion in housing affordability is one of the factors at the heart of this.

Therefore, we recommend that the Government of Canada update the home buyers' plan by raising the maximum withdrawal possible to $25,000, and adjust this amount every five years to account for consumer price inflation.

Next is assistance for aboriginal housing. In B.C. and across the country, aboriginal housing is in need of immediate remedial action. It is seriously deficient, both on and off reserve. Deteriorating housing units, the infestation of mould, and the absence of consistent and effective housing administration are just some of the issues.

In June 2006, CREA presented a paper at the World Urban Forum that provided an overview and explanation of current aboriginal housing conditions. It became clear that while aboriginal housing as a sector is in bad shape, models exist within aboriginal communities that can serve to turn it around and make good housing the norm rather than the exception. Measures to help address this situation in B.C. may be forthcoming, in part by our provincial government's new housing strategy, portions of which are being announced today in Victoria.

However, provincial efforts must be supported through actions undertaken by our federal government. Therefore, BCREA recommends that the Government of Canada commit increased funding to assist aboriginal housing, both on and off reserve; develop a plan to address the problem of mould in aboriginal housing; support a results-oriented conference to help improve first nations housing; demonstrate and expand the private sector's role in assisting the effort; and initiate consultations leading to the development and introduction of legislation to provide a modern alternative to the Indian Act for land ownership and management.

This concludes our presentation. I am happy to answer any questions you may have later.

Thank you.

[The Chair, Conservative, Brian Pallister]

Thanks very much, Ms. Cunningham.

We'll continue with New Media BC, Lynda Brown, president.

Welcome. You have five minutes to speak.

[Lynda Brown, President, New Media BC]

Thank you, and good morning. I'm here today representing the digital media associations from across the western provinces. We are delighted to speak to you regarding our goal of shared building and a new kind of infrastructure that will help Canadians prosper now and well into the future.

We firmly believe that economic prosperity requires the networks and backbone on which traditional goods have travelled. We've built railroads, highways, and ports on which the goods of this country are traded. But how do we advance our new economy? How do we move digital products for the new industries that will increasingly make up Canada's competitive advantage at home and abroad?

I'm here today to give you an overview of one of the world's fastest-growing sectors, and I'm here today to invite your partnership in a new type of infrastructure investment that will yield returns for decades to come.

In the next few minutes you'll hear about digital media and my thoughts on how we can position Canada as a global leader in the sector. I hope to leave you with some new ideas for economic policy and a national strategy and with the desire to partner with us in achieving one very key goal.

Digital media are the products and services that millions of Canadians use every day to educate themselves and to keep abreast of world events. They are the predominant choice for how we spend our entertainment time and dollars, outstripping movies and television, and they represent one of the fastest-growing sectors in the world.

What exactly is digital media? It's e-learning. It's the physics 12 course your son is taking on the computer, as opposed to in the classroom. It's mobile content, perhaps the solitaire game you play on your BlackBerry or the photos you keep on your iPod, and it's digital entertainment. It's the hockey fix you get during the off-season by playing EA Sports NHL on your Xbox or PlayStation.

Digital media is also big business. It's currently a $25 billion industry worldwide, with projections that it will be a $65 billion industry by 2010. It's also an industry in which Canada has a time-limited opportunity to grab the brass ring and solidify a market leadership position.

Digital media in Canada represents over 52,000 employees in 3,200 companies generating over $5 billion of revenue per year in Canada right now. It's an industry that's paying its way, contributing hundreds of millions of dollars to federal and provincial revenues and creating new knowledge-based jobs for Canadian youth.

You might not know that just down the street from where we are today is Electronic Arts Canada. It's home to over 2,000 employees and is the largest game development studio in the world. Another great success story is BioWare, from Edmonton, a company that originally formed to create digital medical imaging technology, but which has grown to be the largest developer of story-driven games in the world.

But there is much more here than games to play. Canadian digital media companies are developing ground-breaking products, medical simulations, defence applications, and lifelong learning.

While large companies such as Electronic Arts and BioWare employ thousands of people in Canada and contribute billions of dollars respectively to our economy, the digital media sector is still relatively new and emerging, and it's composed mostly of small to mid-sized enterprises, companies that are facing growing competition from around the world for brain power, investment, and markets.

China, India, Korea, France, Ireland, and Australia have all increased government support for digital media infrastructure, commercialization, and capacity-building to ensure that their people and companies can compete on the global stage. Sheer numbers alone tell us that these competitors pose a real threat to Canadians' competitive advantage. Still, we remain ahead of the game right now, and with strategic infrastructure and collaboration, we could be a world leader.

In order to stake our claim as a world leader in digital media, we must build a national strategy and a knowledge hub that can serve as the focal point for the sector, and we must make some strategic investments. We're here today to ask government to be our partner in creating a world centre for digital media that can serve as that hub, a physical and intellectual meeting place where the best digital media minds and ideas in the world will come to take their work to the next level.

We come to the table with a lot of the work already done. We have plans and deliverables, timelines, and budgets. We have a sizable commitment from industry and support from the Province of B.C. But we simply can't achieve our goal, which is national in scale, on our own, and we believe that the federal government has a critical role to play.

We're here to ask the federal government to leverage the investments raised through these industry commitments with federal capital, to complete the necessary financing to accelerate the development of the world centre. In joining us in partnership you'll be joining partners and thousands of companies that believe in this vision and have put their support behind it.

The centre will establish the first concrete step forward in a national strategy to advance Canada's new media sector in the face of growing global competition. In a study conducted by PricewaterhouseCoopers, growth of an additional 5% in the new media sector will result as a direct consequence of the world centre activity. In return, PWC also estimates the industry will generate more than $43.8 million in additional federal tax revenue in B.C. alone in the first three years.

[The Chair, Conservative, Brian Pallister]

Your time is up.

[Lynda Brown]

Thank you very much.

We've provided an additional brief. We obviously have a lot to say about this. We'd be happy to answer any questions you have.

[The Chair, Conservative, Brian Pallister]

Thank you very much, Ms. Brown.

We will continue with the Planned Lifetime Advocacy Network, Susan Whitaker, chair.

Welcome.

[Susan Whittaker, Chair, Planned Lifetime Advocacy Network]

Good morning, and thank you for this opportunity.

We represent the families of Planned Lifetime Advocacy Network, known as PLAN. It was established 18 years ago to help families answer this question: What will happen to my child with a disability when I die? PLAN offers practical advice to families who want to assure the safety, security, and well-being of relatives with disabilities.

We have submitted a written brief that makes four recommendations to assist the hundreds of thousands of family members across Canada who are concerned about the future and the well-being of their relatives with disabilities.

The first recommendation is for a registered disability savings plan to enable families to plan for the future for their relatives. I'll speak to that recommendation.

I'd like to thank the Minister of Finance, who in his May 2 budget recognized a family's desire to secure a relative's long-term financial security when the family is no longer able to provide support. He appointed a panel to examine the options and to report back by November 9.

One of the options is the registered disability savings plan. There are a number of reasons why we ask you to support this. One, it will provide an easy-to-use mechanism that will enable families to provide for the financial and social well-being, and long-term security, of our relatives with disabilities. Two, it will provide a mechanism for the federal government to recognize family contributions, to promote more resilient families, and to encourage greater self-sufficiency. And three, it will enable persons with disabilities to improve their social and economic well-being beyond that permitted by government-funded programs.

Our research indicates that a registered disability savings plan would open the door for 400,000 families who would contribute more than $230 million annually towards assuring the safety and security of their relatives with disabilities. This would be at a cost of only $47 million to the federal government.

Perhaps more importantly, we think the introduction of a registered disability savings plan would act like a domino, beginning a chain of policy changes in Canada, a sea change that would shift our present welfare-based approach to disability to an investment-based approach. The welfare-based approach makes social assistance a ceiling above which families and persons with disabilities are deterred from rising. It makes persons with disabilities, and their families, cheaters.

An example of what the welfare approach looks like came last week, when we had a senior couple in our office. They have a 48-year-old son who sustained a head injury as a child. He's always managed, but barely. He now also has diabetes. His $310 rent cheque doesn't cover his rent in a market where a decent one-bedroom apartment goes for over $700 per month.

When Terry met with a provincial bureaucrat, he was told that his parents couldn't give him $400 a month, even if it was necessary to cover the difference in his rent bill. If they did, Terry would have to declare it as income, and it would be deducted dollar for dollar. Instead, the worker suggested that his parents give him varying amounts at different times of the month. That way, it would be less likely to raise suspicion; it wouldn't look like income when they reviewed his bank account records.

A shift towards an investment-based approach would look differently. In an investment-based approach, social assistance would represent the floor of Terry's economic well-being. He would be encouraged to improve his quality of life beyond what social assistance could provide. His family would receive a tax deduction for contributing to their son's registered disability savings plan, and he would be able to live with dignity, in decent accommodation, without cheating the system.

If he were to withdraw funds from the plan each month to supplement his rent, he would not have to hide his family's contributions. Instead, he would pay taxes. Terry would be encouraged to be self-sufficient. His family's contributions would be recognized. No one would have to worry about what would happen if they got caught.

A registered disability savings plan will represent one of the most significant national disability initiatives in the last 20 years. As families, we've been pulling our weight, with 75% of the day-to-day supports required by persons with disabilities being provided by us.

My husband, Ron, and I know that the well-being of our daughter Stephanie is too precious to leave exposed to the winds of political change. We want a partnership among persons with disabilities, families, and our government. The disability savings plan would represent that partnership, and it would be the first domino leading to changes that would bring families peace of mind and a good life to all people living with disabilities.

Thank you.

[The Chair, Conservative, Brian Pallister]

Thank you very much, Ms. Whitaker.

From the Greater Vancouver Transportation Authority, we have Robert Paddon. You have five minutes, sir.

[Robert Paddon, Vice-President, Corporate and Public Affairs, Greater Vancouver Transportation Authority]

Good morning, Chair Pallister and members of the committee. Thank you for the opportunity to speak to you today.

I am going to pick up on a point made by the B.C. Chamber of Commerce, but first let me just explain what TransLink is.

The Greater Vancouver Transportation Authority, as we are known here, is TransLink. We are a unique entity that was created in 1999 by the B.C. legislature. We plan, we finance, and we manage the assets of one of the largest public transportation authorities in Canada. In addition to the traditional transit services and commuter services, we also manage the major road network in Greater Vancouver, and we are also responsible for the management of our air emissions testing.

Greater Vancouver is a federation of 21 municipalities; it has a population of 2.2 million people. It is the third largest urban region in Canada.

We believe that strategic investments in public transportation are critical to maintaining Canada's competitive edge in the global economy, and we applaud the federal government for the initiative that has been shown and the programs that have been put forward in recent years.

To give you a sense of the support we're receiving here, over the next five years we will see the investment of $1 billion from the Government of Canada through our agency alone. That has made the critical difference in our being able to proceed with a rapid transit project, Canada Line, that will connect Richmond, the airport, and downtown Vancouver. That project had been on our books for more than 20 years in this region, and it's now being made possible through this contribution.

In addition to that, we're moving forward to purchase new buses. We have 225 new buses that are going to be purchased through the gas tax transfer program. The new public transit agreement is going to assist us further with more assets.

We're very excited about the public transit capital trust program. We're still waiting to work through the specific details of that here in British Columbia, but we believe it will also make a contribution.

Strengthening and expanding public transportation networks reduces traffic congestion; improves the movement of goods, people and services; and provides direct and indirect economic returns for us.

Greater Vancouver in particular is strategically located at the Pacific gateway to Canada's Asian trading partners; investing in transportation in B.C.'s Lower Mainland will be crucial to the long-term economic success of the whole country.

It is estimated that by 2031 the population of this region will be at least three million. Those are modest estimates. In that same timeframe we anticipate growth in the ports will triple, but we also recognize that the population of this region will be aging. We'll have a lot more seniors who will become much more dependent on public transportation.

We support the call that the Federation of Canadian Municipalities, the Canadian Urban Transit Association, and others have made to see a permanent national program to provide long-term funding for public transportation initiatives.

While the need for transportation infrastructure is critical, we would also ask you to give some consideration to the operating and maintenance costs. Every new bus we acquire needs people to service it, and there are fuel costs that go with it. I know one of the challenges across our country is finding the revenues to keep the system running. Municipal transportation agencies need access to sustainable tax revenues that are commensurate with their increasing responsibilities as the economy and the population continue to grow.

Finally, I just want to again compliment and congratulate the government for putting forward an initiative to encourage people to use public transportation. Concerning the tax credit, while we're just coming off the end of the first quarter in which the tax credit has been in place and haven't finalized our books yet, we're also recognizing that we've seen a lift in the purchase of monthly passes; we believe there certainly may be links to this. I can't report numbers today, but we're encouraged by it.

We would also call on the government to think about going a step further. We have other programs--employer pass programs--in which the company can work with their employees to provide passes. We have 15,000 people in this region who are part of that program. We would hope the government would consider extending some tax exemptions to that program.

In conclusion, we are very grateful for the role the Government of Canada is playing in the development of public transportation in Greater Vancouver. We hope we can make this a permanent partnership.

Thank you very much.

[The Chair, Conservative, Brian Pallister]

Thank you very much, Mr. Paddon.

Thank you all for your excellent presentations.

We'll move now to questions. Mr. McCallum, you'll begin with seven minutes, sir.

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

Thank you, Mr. Chair.

First of all, let me say on behalf of my Liberal colleagues and myself how pleased we are to be back in Vancouver. We were here, I think in this very room, maybe six weeks ago for our caucus and had a great time. And at a personal level, having taught for four years at Simon Fraser and with many family members here, I'm always pleased to have a chance to be back.

As many of you know, in the last budget the federal government decided to reduce the GST, partly financing that through higher income tax on the lowest level and a reduction in the basic personal amount. In the news today, the finance minister is saying that in the next budget he might want to reduce personal income tax, possibly to the level where we started out in 2005.

So my question to Mr. Garson is, does your association have a preference between income tax cuts and GST cuts, and more specifically, do you think a GST cut does anything to improve Canada's competitiveness?

[Jon Garson]

We do actually support the Canadian Chamber position on tax cuts.

Just as an aside, for the B.C. Chamber of Commerce, in terms of its taxation policy, the single largest request we have at the provincial government level is to cut the PST. While we do understand there's a significant degree of debate amongst economists as to whether or not GST or sales tax cuts are the most effective taxation measures that can be introduced, it is something that our membership supports in terms of the provincial sales tax.

As I say, we do support the Canadian Chamber, which does talk about the first issue being reducing the lowest personal income tax rates to 15% in 2007. But our membership does recognize that sales tax is an issue it would also like to see come down as well.

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

So if you had a choice--the government's committed to go from 6% to 5% GST, and that costs a huge amount of money, $6 billion per year--would you think that money was better directed to income tax cuts?

[Jon Garson]

At the federal level, yes. At the provincial level, our membership has told us it would like to see PST addressed because that's the single biggest disparity between British Columbia and Alberta. But at the federal level, we would look to income tax.

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

Thank you.

I was particularly struck by the presentation by Ms. Whitaker, who is not there now, on the subject of assistance for parents of children with disabilities and the idea of a registered fund. To me, it was a compelling presentation and it sounds like an excellent idea.

Have you figured out any idea of what that would look like, the cost or the parameters of such a registered fund or registered plan?

[Jack Styan, Executive Director, Planned Lifetime Advocacy Network]

We've done a significant amount of research. Actually a former Finance official, Keith Horner, did a research paper for us last fall, and it indicated that with a certain set of parameters that I won't go into, the benefits would, as Susan outlined, be about $230 million annually, contributed at a cost to the federal government of about $47 million. So in our estimation that's a good leverage of funds.