Finance Committee on Oct. 4th, 2006

[Bernie Blais]

I agree with Mayor Blake. The big issue for us is the same thing. We are working well together in the public sectors here locally, and we are working with the oil industry as well. We're trying to make sure that we're all at the same table. What's lacking is the government is not at our table.

So we don't derive any benefits in help. All of our funding and infrastructure comes from one source. In the last five years, I can tell you we haven't received any funding for capital infrastructure.

In essence, we've proposed different formats on how we might be able to address these issues collectively. We're at the National Energy Board hearings right now, making our case for the first time ever, because it's the only place we have to be heard—and hopefully here.

The federal government, with the provincial government, could have a major role to play in looking at infrastructure and targeting areas of growth, such as this one—it's unusual. As I said, I've worked all over Canada, from Montreal right through to Vancouver, but I have never seen this kind of exponential situation. It's not just regular growth, but also the construction growth and all of these things that are inflating our capacity.

So I think there could be a common approach, and the federal government should be playing a role. I notice that recently they announced some money for roads. Maybe they could do the same thing for areas like this that generate a significant amount of revenues for both the federal and provincial governments across Canada, with jobs numbering in the thousands. If we don't invest here, then what becomes of us? I think in the end that could be an opportunity.

The area of human resources is incredible. How can we allow the situation to deteriorate, not just here in Fort McMurray but across Canada? We need to begin to look at health and human resources as a critical support structure. Personally, I think health is an economic engine of Canada.

I just signed a contract for international recruitment. I have to invest millions of dollars to recruit out of country in order to survive.

The investments to produce health professionals should be made here in Canada. And when you look at the length of time it takes—four years to train a nurse, seven years for a nurse practitioner and for a doctor, and fourteen years for a specialist—we know that even if we started to solve this problem today, we won't see any benefits for the next five to ten years. So our only hope right now is to recruit internationally, and I think this is a sad day for Fort McMurray.

Right now, regarding our out-of-region volume activity, 28% of our patients are leaving Fort McMurray to go somewhere else. This is increasing; it's an exponential number. That doesn't happen in most places I've worked, where it would be less than half that.

Unless we address the capacity issue, and more importantly the human resource issue, northern regions of Canada—and more so, Fort McMurray because of the growth and the cost of housing, and so on—will not be able to compete or provide services to the degree they should. Personally, I think it's a crisis in the making, and it's unforgiveable that we would not address this issue collectively.

That's my personal point of view, but I feel very strongly about this. On the human resource front, and regarding infrastructure for both the municipality and for health, the federal government could make a difference here.

Thank you.

[The Chair, Conservative, Brian Pallister]

Thank you.

There are just a few seconds left, Ms. Wasylycia-Leis.

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

I should hear from the colleges about the skills shortages.

[The Chair, Conservative, Brian Pallister]

I'm sorry, your time is up.

I'll just insert a quick question, if I may, and then we'll continue with the second round of questions.

Recently, I believe it was in Policy Options magazine that former Premier Lougheed referred to the situation here as “a mess” and suggested in essence that it was sort of a “killing the goose to get the golden egg” situation, that development had proceeded far too rapidly. And you are describing some of the consequences of that today.

You talked about employee shortages, worker shortages, and so on. For any of us who can remember back to our high school years, it must seem almost unbelievable that someone with very few skills can go out and make $50,000 to $80,000. It must be having an incredible effect on dropout rates.

I'll ask you, Mr. Shaw--and I have to react a bit when you suggest that lower tuitions might be an assist. It seems counterintuitive, when people can go out and make $70,000 and drop out of high school, that lower tuitions are going to bring more people into university and training.

So please reference that, and give us a bit of insight.

[Sam Shaw]

I didn't say lower tuitions. I basically said tuitions are increasing and scholarships are an important vehicle. Certainly, the biggest part of education is not tuition; it actually is living costs. As you start seeing the cost of living going up in communities, the cost of going to school goes up, and it's exponential.

The other key element that I think you're raising is that in fact one of the key issues with that significant growth is what is the game plan. Certainly we've launched here in Alberta a game plan with human resources, but it is not tied together on the federal and provincial jurisdictions of dealing with growth. It's not one department. It cannot be just education, but it has to involve how we look at municipalities, how we look at infrastructure, and so forth, so that you pull that string and we have a combined strategy across Canada.

As you start looking at the significant projects, whether it's in the east or in the west, again some of the referencing around the tremendous growth is really looking at how do we handle that growth in some areas. Certainly in other areas we're seeing massive layoffs of 300 and 400 people. Again, I think we need to have a strategy of looking at Canada as a whole and not just individual components.

The last thing I'd say in terms of looking at education is that our completion rates at the high school level are dropping, and that's what you're really referring to. We're trying to encourage business and industry to ensure that they're looking at students completing school before they go into the work environment. Apprenticeship is a great model, in that you can start apprenticeship work right away but still come back to post-secondary. As a reference, the completion rate again is an issue for us. We need to have a combined strategy, and it cannot be just one department versus another, HRSD versus Industry Canada. I think we need a strategy in the budget that looks at issues, and then from that, there will be certain areas that will be segregated out to the other departments.

Thank you.

[The Chair, Conservative, Brian Pallister]

Thank you, sir.

Mr. Pacetti, five minutes.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you, Mr. Chairman.

I am following along the same train of questioning. That's the reason we came here, to learn a little bit of what's going on here in Fort McMurray. My perception would have been that everything is rosy; that you guys are floating in money like the federal government does; that you have no problems; and that you're just trying to figure out what to do with all that money. I'm beginning to see that the challenges you face are not dissimilar to other regions of this country. The federal government has to deliver on programs, or deliver programs, but they're normally general programs. They're then put into effect or administered by the provinces or the municipalities.

In particular, Ms. Blake, you seem to be having that problem. I'm trying to understand how we can solve it. The former Liberal government transferred some money with the gas tax, and that was supposed to go to municipalities. I'm not sure if that's enough. I understand that some of the agreements we have in terms of infrastructure are allocated by each province, and then the province decides where those infrastructure moneys should go. But there are challenges. I'm not sure, if we have to set up a program to allocate money to a region like this, how we do it as a government.

That's just on the infrastructure side. We're not speaking about education, training innovation, and the health sector. There are the same problems in cities like Montreal, where doctors are being trained and are being asked to go into the regions and they don't want to go because there is no incentive. Even when they do offer an incentive, it's perhaps a couple of dollars and it's not sufficient enough. You have to help us here.

By the Liberal government signing that health agreement and the provinces deciding where the money should be allocated and prioritized, doesn't that solve the problem? I understand that the federal government should be at the table, but at a certain point the decisions have to be made either regionally or locally. This is a problem that I have in understanding how we're going to make a recommendation to help you guys.

I'm going to close, because I usually don't make a preamble, but I'm amazed. How do we make this thing work? That's without touching on all the other matters that Judy Wasylycia-Leis brought up--housing, mental illness, and all those other things. I don't know.

Go ahead, Ms. Blake.

[Melissa Blake]

Thank you.

I appreciate the challenge that you face as government for a nation.

Everybody has similar requests. We see ours as a special case, and what we need to do is find a way so that Canada can also embrace it as a special case.

If you're looking at the opportunities the oil sands represent as far as continental energy supply, maybe there is a strategic priority that results from that. Then when you look at the kind of investment it takes to facilitate the outflow of that product, which again brings significant revenues at the federal level, it employs Canadians across the nation. When we look at our commuters, they're coming from across Canada to participate in the oil sands development opportunities here. If you look at it from more of a strategic level, in any of your thinking, when we put forward our request about having a tripartite-type agreement, where we embrace three levels of government that are working to solve the challenges of a municipality, it doesn't put the onus on any single particular area. We've done a significant amount of work as to what a memorandum might look like in that regard, and we're happy to share that. Again, it comes down to setting your national priority-type agenda and then working this into the picture.

I very much appreciate the efforts that have been undertaken up to this point. The federal gas tax is something that municipalities are very gratefully receiving. But if I can give you perspective, what that amounts to over a five-year period for Wood Buffalo is $12 million. A single project I have will wipe that out, and I have $814 million worth of those projects over the next five years. So for perspective, it is wonderful in stable situations, without growth, but it just doesn't work for the growth scenario we're facing.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

If there was money made available to the region, would you in turn decide to put some money towards the health sector and for housing, or would it just be for infrastructure? How would that money be allocated?

[Melissa Blake]

Again, it comes down to priority.

When anybody asks me about the biggest challenge we face, it is housing. As a response, the municipality went outside our area of responsibility and created a housing corporation to address the lower end of the market. We're very proud of that organization. They've been operating for six years, and they've increased 700 units in the community. That's great, but it's just not enough. On a go-forward basis, one of the plans I have is to engage them in development opportunities on any new properties we get so that we can find a sustainability model for them. It's one of our priorities, and we would look at that.

When we look at other areas in the municipality, we now have critical infrastructure, waste water treatment, addressed through a bridge financing loan from the province. We have a water treatment expansion. We have 64,000 people in Fort McMurray right now; our water treatment capacity is 70,000. It's $40 million to increase that capacity for a higher level. That's just one project.

I could go on in perpetuity about--

[The Chair, Conservative, Brian Pallister]

No, you can't. That's a lot to digest right there.

Thank you.

[Melissa Blake]

That's what I'm saying. There is so much, and it just can't be solved here.

[The Chair, Conservative, Brian Pallister]

We continue with Mr. St-Cyr.

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

Thank you very much.

I'll continue my discussion with Mr. Hardy. We were talking about the tax credit for sports activities and for children participating in fitness programs. Various cultural groups have asked us to extend this credit to cultural activities, which they believe are very important for the development of young people because they exercise their minds and make them appreciate arts and culture. At the end of the day, we'll have to make a choice and decide if the tax credit should be made available to everybody for their fitness activities or if it should also be extended to young people for their cultural activities.

What should our priority be, according to you?

[David Hardy]

I'm certainly not here to argue against the importance of the arts. I am a father of four children who have piano lessons and drama club. I'm certainly not here to argue against that. But we are facing a health care crisis, and I believe that physical activity and good nutrition are the cure. I think this is a targeted proposal with a benefit in terms of the cost savings for the government. That's why we think this is an initiative that is probably somewhat different from an arts funding proposal.

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

All right.

I would like to talk now about tax measures. I know that health problems and obesity are very often linked to poverty. I don't know what the situation is here but, in Montreal, that's very often the case. I believe that using tax credits to improve this situation would be inappropriate because most poor people simply do not pay any income tax. Furthermore, even when they do, they don't have enough money to pay for fitness programs.

I'm an excellent example. My MP's salary would certainly allow me to buy a membership in a fitness center, especially since the cost is only $100 a year at the parliament fitness center, a price which can't be beat. Despite that, I don't use the center.

Would it not be more useful to give some specific benefit to help poor people pay the cost of fitness programs instead of extending that benefit to everybody, whether they need the money or not?

[David Hardy]

Well, I guess if we had a solution for helping people who were poor, we would come forward with it. The reality is that when you're trying to make ends meet and you're on a very tight budget, oftentimes certain things get left out, and we find that it's physical activity. They're just trying to do everything they can to make ends meet and may not have the resources to do it. It may not always be a financial issue as well.

With respect to whether people are using the gyms on a go-forward basis, we believe that by allowing consumers, or empowering consumers, with fast credit, they may buy a membership one year and not use it, but they're not likely to do that twice. And we certainly see that, even with the $100 parliamentary membership. If you're not using it, you probably won't pay for it again.

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

No, I didn't pay.

This question is for Mr. Shaw, of the Alberta Association of Colleges and Technical Institutes. One heras a lot about the manpower needs of the oil and gas industry. Is there any involvement of the private sector as far as funding is concerned? If the need is so great and the present skills shortages jeopardize the plans of the companies, are they willing to provide financial help to your institutes?

[The Chair, Conservative, Brian Pallister]

You can give a very quick answer.

[Sam Shaw]

Read the Edmonton Journal, the front page. You'll see a million dollars from an individual who owns a construction company to NorQuest because of the great work it's doing, and that's exemplary of some of the business and industry in Alberta.

[The Chair, Conservative, Brian Pallister]

Thank you, sir.

This panel has generated a lot of interest among committee members. I'm going to move to four minutes now.

Mr. Del Mastro, you have four minutes.

[Dean Del Mastro, Conservative, Peterborough, ON]

It's discrimination, I'm telling you.

All right, Mayor Blake, I'm going to play devil's advocate with you for a moment.

Last year the Province of Alberta ran an enormous surplus. In fact, every resident of Alberta got a “Ralph buck” cheque. I'm sure that was very popular. The rest of the country was not so fortunate.

Why would the federal government pay towards a provincial jurisdiction for items here in Fort McMurray when your provincial government is swimming in cash?

[Melissa Blake]

It's a good question you ask. But again, when we talk about it as a national strategic priority, if this indeed is something that we want to realize as a nation, I think there is an opportunity for engagement. We're very appreciative of the $150 million that came from Infrastructure Canada for the twinning of Highway 63. It was recognized as a priority, again, for Canadians to utilize that amenity in the community.

I think there are other opportunities. I think there are agendas that we can collectively agree on and move forward on. This region--I didn't mention it--represents five first nations and a number of Métis locals as well. We have rural communities that are part of Wood Buffalo, and again, I haven't even scratched the surface of some of the challenges in those communities. And they too will be facing tremendous growth as we go forward with development in the south of the region.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you. I was going to ask Mr. Hardy a question, but Mr. St-Cyr covered most of it.

Mr. Shaw, yesterday we heard about a situation referred to as a "perfect storm"--a skill shortage and a labour shortage, both occurring at the same time. I have great concerns about the graduation rate here in Alberta, and I think there needs to be a little bit of marketing and talking about people's futures. Right now it's easy to get a job with no skill. It may not be in the future, and there may not be a future for those without those skills. How do we reverse this?

[Sam Shaw]

Well, clearly, again, I go back to a combined strategy. We have two issues. We have a skills shortage. We also have a people shortage. So what we do in terms of a combined strategy for the federal government is take a look at what we are doing on immigration.

Seventy-five percent of the immigration happens in three cities across Canada: Montreal, Toronto, and Vancouver. We only had 7.8% immigration here in Alberta. It's not acceptable. We need to do a better job on immigration.

The other element--looking at working with business and industry, and certainly on completion rates and so forth--is to work with business and industry to ensure that the skills they're requiring are skills that indeed will be preparing individuals for the long term, not the short term.

Thank you.