Finance Committee on Oct. 3rd, 2006

[Dr. Alan Winter]

I think there's a number of ways, actually, to measure that. You can measure it at a scientific level, and then you can measure it really at an industry level.

On the scientific side, Canada ranks around sixth or seventh in the world in the area of generating genomics or proteomics papers, which are then ranked, as you know, on a peer review system and cited. Since we started to concentrate in this area over the past several years, we've moved from about seventh to about fourth in the world--

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

That's good progress.

[Dr. Alan Winter]

--which is, I think, good progress. The next stage, though--that is, in science and technology, if you like, generating the information--is critical. The issue, to some extent, is then making sure this information translates both for social good, in terms of how we change the health system, etc., and also in terms of industrial good or commercial opportunities.

There, in terms of, say, the biotech sectors, we're doing reasonably well. In terms of the number of companies in Canada, we're again at about fourth or fifth in the world. The problem is that we don't have very many large ones. So we have a lot of very small biotech companies in Canada, and I think the challenge we have around competitiveness is making sure that we have the intellectual property and the business environment to allow that to grow.

So we have good investment, if you like, in terms of the science, and I think we can show progress there. We have good investment in terms of the number of companies. I think to move those companies up to the level of a Genentech, as I mentioned, is something that would really be very exciting for us in Canada, if we could.

[The Chair, Conservative, Brian Pallister]

Thank you, Dr. Winter.

We'll continue with Madam Wasylycia-Leis, for seven minutes.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Thank you, Mr. Chairperson.

It seems to me what I'm hearing most of the panellists say—and I don't want to put words in your mouth, and I don't want to try to bias the discussion, which the chair will accuse me of—what you seem to be saying is that it's more important at this point to be looking at investing on a strategic basis in various sectors of the Canadian social fabric and economy, as opposed to tax cuts.

I think, Rita, you said it in your answer to John McCallum that tax cuts at this point are not a very positive public policy in the face of the dire needs we're facing.

I'd like some of you to comment on that, because I don't think the question is the GST cut versus the personal income tax cut at this point. It is really investing in areas where we can see some growth and positive changes.

Maybe I'll start with Tenants.

[Martha Lewis]

The thing with what's being proposed is that it doesn't require money on an indefinite basis. We're at a point of crisis at the moment. We don't go on building social housing forever. It has a long life and can be privatized when the need for social housing drops, which is happening all over Europe now. So it's worth putting the money up now for long-term benefits.

These include the fact that children who grow up in stable housing are proven to do better in school, and are more likely to join the workforce and be “productive members of society” rather than being so damaged as children that they're dependent on assistance for much of their lives.

I think it's short-sighted not to go into social programs now, just because it's cheaper this year.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

I think on the environment we have a similar kind of issue.

Mr. Tak.

[John Tak]

Canada is an exporting nation. Our wealth comes from exporting, and in terms of our sector for hydrogen and fuel cells, we are going to be exporting and generating revenue that comes into Canada. So we're looking for an even playing field with the major markets.

Obviously the U.S. is Canada's largest export market. In the United States, they actually have a hydrogen and fuel cell strategy in which they have allocated $4 billion over the next five years for R and D, demonstration programs, and tax incentives—credits on early procurement.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

What you're talking about is strategic investment and maybe some tax changes or credits based on a very targeted basis, as opposed to blanket corporate tax cuts, as we heard the Vancouver Board of Trade and the Chamber of Commerce suggest this morning.

I want to ask Rita, because one thing the Vancouver Board of Trade didn't mention is that Canada has the lowest expenditure on early childhood education and care of all 14 OECD countries. I think it's only 0.25% of GDP.

I think it would be important for you to put this whole scenario in context—the wisdom of investing in early childhood education programs.

[Rita Chudnovsky]

I want to repeat that we are well aware that many families are struggling financially and that there are a range of supports those families need. The point I was making before was that the evidence and the experience is very clear. Generally a tax cut—and Michael can speak way better than I can to the effectiveness of various tax cuts—will not create the child care system that children, their families, the economy, and the community benefit from.

We think the evidence is indisputable, and it is indisputable among our trading partners. Actually, just this morning I received the chart from the latest OECD report that shows public expenditures on early childhood education and care services in selected OECD countries, and Canada is spending less than 0.5% of GDP—the lowest of the 14.

This is not a wise way to think about both our current and future social and economic health, and clearly we are in a position where we can afford to do way better.

I'm not sure if that answers your particular question, but again we don't think this is a choice between a series of measures that ensure families have a decent enough income to put a roof over their head and food on the table, and investing in a range of quality early childhood services to promote healthy development.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

I know Mr. Lazar would like to answer this question, and I also want to ask Results Canada this. It's an excellent paper, but how do you deal now with the complete elimination of the whole social economy initiative as announced by the government on September 26, part of the $1 billion cuts? In terms of this whole idea of trying to bolster local economies to overcome great problems around poverty and unemployment, we seem to be cutting off our nose to spite our face.

[Blaise Salmon]

I'd have to agree. I think in economic terms when you look at the cost of addressing global poverty, when you work in the cost of disease, the cost of terrorism and fighting violence that comes from poverty, and the lost trade and trading partners, and prosperity that is lost when you have extremely poor countries, I think it's a case that's overwhelming. When you're considering the small slice of our budget that we spend on aid, the costs are far worse.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

I would ask Mr. Lazar to comment on this, plus on the softwood lumber issue, just to change tactics a little bit.

[Avrim Lazar]

I'd like to comment on your first question, if I may.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

You could, and then pull in, if you would, the whole question of the 19% charge on companies that don't abide by the government's blackmail--

[Avrim Lazar]

Let me use my 30 seconds. It's a false dichotomy to say that we can have social values without having a competitive business climate. If you've ever gone to a mill town where we've shut the mill--

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

But no one's saying that. We're not saying not a competitive climate; that's not my question.

[Avrim Lazar]

Please, let me finish. I just want to make it clear for the whole committee that if you ever went to a town where we've shut the mills, you'd realize that investment in Canada has a social impact beyond anything any government program can do. And a second thing--

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

[Inaudible--Editor]...have that impact, then what?

[Avrim Lazar]

Let me finish, please.

[The Chair, Conservative, Brian Pallister]

I'm sorry, I hate to get in the way of a good wrestling match, but we are out of time.

[John Tak]

Mr. Chair, can we stick to the mandate of the committee? It seems to be a political debate rather than direct questions about what's being put into the budget. From everybody, if we could do that, I'd really appreciate it.

[The Chair, Conservative, Brian Pallister]

Thank you, Mr. Tak, for your input. Nonetheless, the members will decide how they question. Unless they threaten decorum to a degree that I determine is a threat to the relevance of the whole process, I'll let them go. But let's just use some discretion.

I'll use my prerogative to ask a couple of questions now.

Rita, you said tax cuts don't build a child care system. It would be implicit in that comment that tax increases do. You replied to Mr. McCallum that you agree with his sort of “leading the witness” questions about GST. So let me ask some straightforward questions.

What is it going to cost? What are you proposing? How much is it going to cost?

[Rita Chudnovsky]

There have been variety of projections. The one the committee would have available is a document called From Patchwork to Framework, which lays out a 15-year plan for building a child care system across Canada, and that--

[The Chair, Conservative, Brian Pallister]

How much is it going to cost, Rita?