Finance Committee on Oct. 4th, 2006

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

I'm going to hold my thoughts on the literacy issue for now.

I want to ask this to Dave Hardy. As I mentioned to you beforehand, or you mentioned to me, Dean Hartman is somebody in Atlantic Canada I have a lot of faith in. He owns a fitness chain. Do you own...?

[David Hardy]

Yes, I own five clubs in Edmonton called Club Fit.

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

I support what you're talking about. The federal government did commit 1% of total revenues towards physical fitness.

[David Hardy]

It's towards preventative--

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

Yes, health and wellness. What percentage would it take of that to extend the tax credits you recommended?

[David Hardy]

The cost of our initiative, based on the cost of a tax credit, we estimate to be about $150 million.

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

That's a pretty small amount.

[David Hardy]

In the big picture of the costs of the total health budget, and the fact that it's leading to prevention, I think a good case could be made that this would actually save the government money over time.

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

I agree with that. You also indicate in your brief that you represent more than two million Canadians who exercise at your clubs, but you also have the organizational ability and desire to move this campaign forward on behalf of all Canadians who participate in organized physical activity. I would think from that, that you would support not only extending it to adults but also to dance and other forms of activity.

[David Hardy]

With respect to the children's fitness tax credit, a committee was struck, and it went across Canada to determine what activities should be included. We think the same thing should be done if we were to have an adult fitness tax credit, so that it's not just limited to gyms, but it would be men's hockey, women's hockey, soccer, or other sports.

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

I know you're an industry group, so you represent your member businesses. I just wonder if you have any thoughts about what the government should do. There are a lot of people who can't afford fitness clubs, with or without tax credits. I think the tax credits would help, but there are a lot of people who simply can't afford to join the club.

Do you have a position as to what the government might do to encourage those Canadians who don't make as much money to be physically active?

[David Hardy]

If you look at twenty years ago, the cost of gym memberships, in particular, was typically $80 to $100 a month. We're $29 a month. It's relatively inexpensive to go to a gym today, and the number of people who are participating is one of the reasons. In the last five years, the number of people participating in gyms has gone from 10% to 15% of the population. By having these large numbers, it has enabled us as an industry to keep our costs down. I don't know if it's such a barrier at $29 a month for a lot of people; it's certainly a very small percentage of the population.

We think the tax credit itself just sends the right message to Canadians that the government realizes this is an important initiative and it's backing it.

[The Chair, Conservative, Brian Pallister]

Great. Thanks very much. The time for Mr. Savage's questions is over.

I should point out to committee members, though, that I'm pretty sure Mr. Hardy is not proposing that we extend running to the salad bar to that category of deductible.

There's a challenge for our committee. We spend a lot of time sitting. All of us appreciate the importance of exercise.

Mr. St-Cyr, you have seven minutes.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Thank you, Mr. Chairman.

I want to thank our witnesses. As I say at the beginning of each presentation, I understand your frustration in having to summarize your point of view in five minutes but you have to understand that it's also very frustrating for us to have only a few minutes for our questions.

My first question is for Mrs. Blake. You said in your brief that we should invest more in our infrastructures and that more money should be dedicated to that. This is a comment that we're hearing all over the country. One can see the state of our roads everywhere. In Montreal, we have problems with the sewer and water supply systems which are in need of major repairs. In the Yukon, we've seen unstable roadbed shoulders which could create major problems for people.

I read recently in L'Actualité--the French equivalent of Maclean's--that houses are very expensive in this area and that, consequently, property taxes are also very high.

Why you should our committee recommend that the government of Canada put money into infrastructure in your region rather than in Montreal, Whitehorse or anywhere else?

[Melissa Blake]

Thank you very much.

In my five minutes this morning what I wasn't able to tell you is the rate of population growth that we are also experiencing. There are problems that exist in all other municipalities across Canada with infrastructure deficits. We've been challenged to keep pace with the regular maintenance workers along with that. I know Montreal has old infrastructure as well; Fort McMurray has that too, and so does the rest of Alberta. What Fort McMurray has that's different is population. We've been growing at 8% for the last six years. That will continue for the next five. That just takes us to two million barrels of oil production. If we go to three million in 2015-2020 and five million in 2030, the population continues to increase. We have the same challenges as everybody else, but financing growth is where we just don't have an offsetting measure in the interim to be able to do that.

The oil sands will contribute more financially in five, seven, ten years, but right now we don't have money to do it. Our debt is at 85% of two times our revenue, which is more than any other Alberta municipality is allowed to do. It's three times higher than Edmonton and Calgary. If you go across Canada, I think we've got the highest debt already. We don't have enough room to take on more with what we have for confines in the budgeting process.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Thank you very much.

This question is for Mr. Budnarchuck and relates to the GST on books. The Bloc québécois has been asking for a long time that the GST on books be eliminated. In Quebec, there's no provincial sales tax on books. I remember a long discussion we had on this issue and there were opposite opinions.

Do you believe that books are a basic need? There's no GST on basic goods but there is on other goods. Do you believe that in a modern and civilized society books are just as essential as food or are they a luxury item? What is your position?

[Steve Budnarchuk]

That's a very good question, actually. Thank you for that.

I think we can see by the increased volumes and traffic into bookstores and into libraries across the country that the health of the mind is just as important as the health of the body. For instance, in Edmonton and Calgary, the major public libraries are reporting significant increases in visits to the library, and it's not to use the Internet cafés, specifically, or the Internet terminals, it is to borrow books; it is to read.

We consider reading to be essential to the development of good language skills and literacy. I think it's very obvious to us that access to books is fundamental. It's just as important as fitness and access to good health care.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

I have another brief question and I guess I"ll have enough time.

My question is for Mr. Hardy. In your presentation, you referred to your campaign for extending a tax credit to everybody and not only to children. You mentioned postcards that were distributed in your fitness centers. If I start receiving those postcards, I'll know that they all come from people who are already members of your centers.

How will that encourage new people to start fitness programs?

[David Hardy]

Thank you for the question.

In terms of preaching to the converted, or encouraging people who are already converted and are members of fitness organizations, certainly the postcards that we are sending out are on behalf of members of our facilities. And that's not just the commercial industries. YMCAs across Canada and municipal organizations have also signed up and are receiving and distributing these cards. Certainly they are converted, and they've seen the benefits of exercise. We believe that if the government sends a message, just as they're doing to Canadian families with the children's fitness tax credit, that they believe in this and they support it, this will also encourage others to get involved.

There's continual talk about putting a sin tax on food, or on bad foods, that our children are eating, or adults, to try to discourage it. We think it is a better idea to have positive reinforcement from the government and to reward people who do take care of their health, and we believe that's what this initiative will undertake.

[The Chair, Conservative, Brian Pallister]

Thank you, Mr. St-Cyr.

We continue now with Mr. Mike Wallace. Over to you for seven minutes.

[Mike Wallace, Conservative, Burlington, ON]

I thank you, Mr. Chairman, and I thank everyone for coming today.

I have a few questions, and I'm going to start with Mayor Blake, if that's okay.

I come from the municipal sector. I was just recently elected in January, and I'm from Ontario.

Could you give me a brief outline...? I don't understand the structure here because I just don't know it. The development that's happening here, do they pay development charges to help you pay for infrastructure? If you could give me a brief overview of that, it would be appreciated.

[Melissa Blake]

Thank you. What happens with the oil sands development and that $100 billion I'm talking about is they contribute through royalties to the Province of Alberta, who then takes the royalties and redistributes them across the province. What they will contribute at a municipal level is property taxation.

The point when they contribute more to our taxation base is the point at which they are producing oil. So if you have a company under development and that takes three, four, or five years, we don't see significant revenues back against that for a period of time.

[Mike Wallace, Conservative, Burlington, ON]

So there are no development charges for any development in Alberta. Is that correct?

[Melissa Blake]

None that I'm able to acquire, no.

[Mike Wallace, Conservative, Burlington, ON]

Okay. And that would not be done through the federal government; that would be done through provincial legislation. Is that correct?