Finance Committee on Oct. 17th, 2006

[The Chair, Conservative, Brian Pallister]

We are offering a welcome to all of our guests this morning, our witnesses. Thank you for being here; we appreciate you taking the time. Thank you also for your briefs, which you submitted earlier.

We will keep you to five minutes on your presentations to allow for exchange with the committee members. I'll give you a visual indication when you have a minute remaining or less and then I will cut you off at the five-minute mark as politely as I possibly can.

We will start immediately with the presentation from the National Council of Welfare, John Murphy, chair. Welcome, and proceed.

[John Murphy, Chair, National Council of Welfare]

Thank you very much, Mr. Chairman. Thank you for the opportunity to meet. I hope the committee will also refer to our written brief.

The National Council of Welfare agrees with the goal of prosperity for all Canadians. In order to achieve this goal, however, it is not enough to examine the health of Canada's businesses; it requires that everyone can participate in our economy and society.

Most people do not require incentives to work. Many women and men in fact work very hard for little or no pay. People need an opportunity, supports, and decent compensation for their efforts: 4.8 million Canadians live below the poverty line in spite of a period of prosperity; 17.6% of children live in poverty; 48.9% of female lone-parents live in poverty. Recent immigrants, visible minorities, aboriginal peoples, and people with disabilities face poverty rates much higher than the Canadian average.

The majority of people in poverty are employed or struggling on fixed pensions. For the 1.8 million women, men, and children who are on welfare, the situation is truly bleak. Welfare rates across Canada are far below the poverty line and many have declined dramatically since 1986.

The one overall policy measure that we think is crucial, therefore, is a national anti-poverty strategy. Countries such as the United Kingdom and Ireland have adopted such strategies. Here in our own country of Canada, Quebec and Newfoundland and Labrador have done so as well.

The council just yesterday launched an online questionnaire to find out what Canadians think about an anti-poverty strategy. This is not a partisan issue. Existing strategies have been developed by governments with widely differing political views.

What is common to all the strategies is the setting of goals and timetables for poverty reduction and accountability mechanisms to track those results. Governments then develop the best policy mix to get on with the results. We think the federal government needs such a strategy to reach the goal of a prosperous Canada for all.

What is the alternative? Leaving almost 5 million Canadians behind, when we are facing labour shortages and an aging population? Leaving 1.2 million children with a very limited future?

How can Canada compete with so many of its own team on the sidelines? Investments today to reduce poverty would soon do wonders for the economy and increase our tax base. Lower costs for programs for social assistance, health care, and criminal justice would follow.

I want to share some examples of strategies that have clear goals and timetables. Canada, through the United Nations, is committed to reducing global poverty by half by 2015, but we have no domestic objectives. Quebec has set out to become, by 2013, a nation having fewer people in poverty. Newfoundland and Labrador over ten years intends to transform from a province with the most poverty to one with the least. The U.K. aims to eliminate child poverty by 2020.

In Canada, the council believes the federal government must play a leadership role. First, we need a minister and a cabinet committee to take charge. We need to analyze the root causes of poverty and coordinate programs within and across all orders of government to avoid giving with one hand and taking away with the other. We need a process that involves Canadians to set goals, targets, and priorities.

We need to restore valuable social infrastructure programs that are mere shadows of their former selves. And we need to develop innovative programs to meet the new demands of the 21st century. Using Canada's social transfer to improve social assistance is one way of doing this. Other ways are increasing employment insurance rates; increasing child benefit up to $5,000; creating child care spaces across the country; affordable housing; establishing a $10-per-hour federal minimum wage; and also creating an aboriginal poverty strategy.

In closing, ladies and gentlemen, I want to stress that true prosperity in our great, diverse society means investing wisely so that everyone can contribute and benefit. Poverty is costly and it is not inevitable. It is the result of policy decisions. We must do better.

Thank you very much, Mr. Chair.

[The Chair, Conservative, Brian Pallister]

Thank you very much, Mr. Murphy.

Our next witness is Mr. Michel Rouleau from the Conseil canadien de la coopération.

[Michel Rouleau, President, Conseil canadien de la coopération]

Thank you, Mr. Chairman.

The Conseil canadien de la coopération represents a network of francophone cooperatives across Canada and more than 8 million francophone cooperative members in over 3,300 cooperatives, whose consolidated assets now exceed $125 billion.

As part of these pre-budget consultations, Mr. Chairman, the Conseil canadien de la coopération would hereby like to share with the committee a number of suggestions and proposals. My submission will focus on four axes, the first of which is the capitalization of cooperatives, or the introduction of a cooperative investment plan.

The Cooperative Investment Plan, an investment plan designed to meet the identified needs of cooperatives, promotes and enhances the growth and capitalization of eligible cooperative enterprises, because this is the primary tool that allows cooperatives to grow and develop across Canada.The plan primarily targets worker cooperatives, producers and the agricultural sector in general.

The CCC testified before the committee in 2004. In the 2005 budget, the Canadian government made a commitment to continue studying the idea of creating a cooperative investment plan. It should be remembered that this plan grants a tax benefit to members who acquire eligible preferred shares, thereby making capitalization possible. Such a plan was first established in Quebec over 20 years ago. Currently, over $200 million has been invested in cooperatives to allow for their development and sustained growth.

Therefore, Mr. Chairman, we call upon the Minister of Finance to introduce a nation-wide cooperative investment plan for agricultural cooperatives and worker cooperatives in its 2007 budget. I would point out that these are long-awaited initiatives.

Axis 2 , Mr. Chairman, is the cooperative development initiative, a five-year program instituted in 2003. The purpose of the CDI is to help groups develop the cooperative model, to assist with research and to test innovative applications of the cooperative model.

Our submission notes the lack of available financial resources to the advisory service component. This became clear last year following an exercise conducted with the Cooperatives Secretariat.

Mr. Chairman, we ask the Canadian government to confirm the renewal of the existing partnership agreement with the Conseil canadien de la coopération and with the Canadian Co-operative Association with a view to extending the program until the Co-operative Development Initiative comes to an end. We would like the government to make a commitment in its next budget to renew the program for the 2008-2013 period before the current phase of the initiative expires.

Axis 3, Mr. Chairman, is the social economy sector. In 2004, the Canadian government committed to a social economy development program to promote businesses involved in the health care, home care and community care sectors.

Recently, as part of its cost-cutting exercise, the Canadian government eliminated certain program components. We are asking the Canadian government to reinstate in its 2007 budget a development incentive program for cooperatives and social economy enterprises.

The final axis, Mr. Chairman, is the funding of the Conseil canadien de la coopération. The CCC represents all provincial councils and we ask for greater, ongoing support from the Canadian government, so that we may promote the development of francophone cooperatives across Canada.

In conclusion, we ask that the Canadian government acknowledge more forcefully the cooperative movement as a partner in social and economic development across Canada. The cooperative formula was first developed over a century ago and provides the community with an opportunity to take charge of its own affairs and in the process, ensure its survival. The population of Canada is concentrated in some densely populated areas, while certain other regions are threatened. We want to be perceived as the government's partner in social and economic development.

Thank you.

[The Chair, Conservative, Brian Pallister]

Thank you very much, Mr. Rouleau.

We'll now go to the Canadian Worker Cooperative Federation. Representative Mark Goldblatt is here.

Welcome, Mark. You have five minutes.

[Mark Goldblatt, President, Canadian Worker Co-operative Federation]

Hi. My name is Mark Goldblatt, and I am the president of the Canadian Worker Cooperative Federation.

I am going to divide my short remarks into three areas--what a worker co-op is, how the model can be applied in enterprise situations, and then our specific budget requests.

First, what are worker co-ops? Quite specifically, they are employee-owned businesses that are structured on a cooperative basis, on the basis of one member, one vote. Every employee of the cooperative is a member. Worker co-ops may have the same structure and division of labour as similar privately owned corporations; the difference is that they bring efficiencies and productivity gains because people are basically working for themselves.

In terms of areas where this worker co-op model can be applied, I think there are basically three. The first area is small business start-ups. As an example, here in Ottawa we have a worker co-op called La Siembra Co-operative, which imports and distributes fair trade products like cocoa sourced from cooperatives of small farmers in the developing world. That's a start-up worker cooperative, and in that case growing very rapidly.

The second area in which we have successfully applied the worker co-op model is when you have a small or medium-sized business and the owner is retiring. Statistics Canada is reporting that thousands of small businesses—I don't have the exact numbers—are facing a situation where the owner is retiring, has no children to take over the business, and is committed to trying to help retain the jobs for his employees.

One example of that model would be the Moncton Restaurant Equipment Co-operative in Moncton, New Brunswick. Mr. Gorman, the owner of the firm for many years, was retiring. He sold his business to his own employees, structured on a worker co-op basis.

There's a third example of where you'll find a lot of worker co-op applications, and that's in the area of employee buyouts of larger businesses structured as worker cooperatives. One well-known example in Canada would be the worker co-op buyout of Algoma Steel in Sault Ste. Marie quite some years ago. It saved the business and it saved the jobs until the point when there was an upturn in the steel market. That particular type of employee buyout was led by the trade union--in that specific instance, the United Steelworkers.

So there is a definite history of union-led employee buyouts structured as worker cooperatives.

In terms of our budget requests, I am going to repeat some of the remarks already made by my colleague from the CCC. They bear repeating, because these are budget requests that all the national cooperative organizations have worked out together.

As our first point, we recommend that in budget 2007 the federal government announce the creation of a federal cooperative investment plan designed to encourage investment in cooperatives. A CIP would provide a tax credit to those who invest in agricultural co-ops and in co-ops owned by employees. This would significantly assist the cooperatives in raising capital for their businesses. The resulting influx of capital would be used by cooperatives to expand employment, increase economic activity, and branch out into other value-added businesses.

As our second budget request, we're recommending that the 2007 federal budget reconsider the cuts to the social economy initiative announced by ministers Flaherty and Baird on September 25, 2006, and roll out the social economy in all parts of Canada.

My last point, also mentioned by my colleague from CCC, is that we are recommending that in the 2007 federal budget the government signal its intent to develop a new public-private partnership with the cooperative sector, designed to strengthen Canada's grassroots network of co-op enterprise and community entrepreneurs.

Essentially, we did have a five-year, $15 million co-op development initiative. There was a technical assistance component of $1 million a year. It was split up by 17 different francophone and anglophone associations across the country. The program has just been totally oversubscribed.

The other component of that co-op development initiative was to provide help for start-up cooperatives in the area of feasibility and business plan development. By the time we got to the end of the two years of the five-year program, we had already received requests for the entire amount of money.

So we're looking for a dramatic expansion of that program, based on the track record of what the additional existing program achieved.

Thank you very much.

[The Chair, Conservative, Brian Pallister]

Thank you very much, Mr. Goldblatt.

We'll continue with Judy Cutler, who's here from Canada's Association for the Fifty-Plus. Welcome. Five minutes to you.

[Judy Cutler, Director, Government and Media Relations, Canada's Association for the Fifty-Plus]

Thank you for the opportunity to participate this morning.

The Canadian Association of Retired Persons agrees that in order to sustain Canada's place in a competitive world, it's important that actions be taken to ensure that our citizens are healthy, that they have proper skills, and that they are presented with appropriate incentives to work and to save. We agree that it is imperative that our nation has the sound infrastructure that is required by citizens who are seeking a high quality of life. Older Canadians must be embraced in this process. Our population is living longer, healthier, and active lives. Seniors continue to have a lot to contribute, and society can benefit from what they--we--have to offer.

CARP's mandate is to promote and protect the rights and quality of life for mature Canadians. Our mission is to provide practical recommendations for the issues we raise. In conformity with this mission, and in order to sustain Canada's place in a competitive world, CARP's brief presents 46 recommendations, including the following: a House or a Senate standing committee to assess the impact of the demographic shift on our society and to identify and root out ageism and age discrimination wherever it exists; a national home care program that includes chronic and community continuing care, with transparency and accountability; a national mental health strategy, as outlined in the Kirby-Keon report, with the immediate set up of a commission; a national family caregivers' support strategy; pan-Canadian wait time guarantees; Canada assuming a leading role globally in creating and protecting safe, healthy, and sustainable clean air and water; long-term CMHC funding to the provinces and territories for subsidies and grants for affordable rental housing--please don't privatize CMHC, in fact, use the surplus to build more truly affordable housing; funding and tax credits to make continuing education, exercise, etc., available, accessible, and affordable for all seniors, using as a model the tax credit for children's sports activities; abolition of mandatory retirement where it exists under federal government jurisdiction; the federal government's proposed $3 billion CPP contribution to be put into OAS/GIS instead; increased OAS annual payments in order to meet the real cost of living--not excluding volatile items in the CPI--thus enabling seniors to purchase more, as well as to pay more taxes; GIS payments to the level of the low income cut-off line across the country; allowing all registered retirement pensions to be split; direct 100% access to LIF principal in federally regulated pensions, such as is now available to LIF holders over 90, we are told; the age of the conversion of RRSPs into RRIFs restored to age 71; and seniors to determine the annual amount they withdraw from their RRIF or LRIF.

We also would like to see the benefits of filing an income tax return clearly and broadly advertised to seniors, highlighting, for example, deductions, benefits, and GST rebates; continuation of the current five-year deadline for paying pension shortfalls and the retention of under-funded pensions as a legal liability on a company's books; and the taxable rate on U.S. social security received by Canadian residents restored to 50%.

Canada is on the cusp of a major demographic evolution, as is the rest of the world, and about one quarter of our population will be 65 by 2030. If society chooses to ignore them, everyone will suffer. In the brief moment I have, I just want to point out that quality of life has a strong correlation with the productivity of our country. I have to express CARP's shock and dismay that the federal government would arbitrarily determine value for money, without any public or stakeholder consultation, or presenting alternative policies. These cuts will adversely impact a lot of CARP's constituents, Status of Women volunteers, adult literacy, and more. We urge the government to rethink this proposal.

Thank you very much.

[The Chair, Conservative, Brian Pallister]

Thank you very much, Ms. Cutler.

We'll continue with Phil Upshall from the Canadian Alliance on Mental Illness and Mental Health. Welcome, sir. Over to you.

[Phil Upshall, National Executive Director, Canadian Alliance on Mental Illness and Mental Health]

Thank you, Mr. Chairman.

I'm here today representing the Canadian Alliance on Mental Illness and Mental Health.

Two of my colleagues, Dr. John Service, our past chair, and Connie McKnight, our current co-chair, are only available for questions.

The Canadian Alliance on Mental Illness and Mental Health has filed a brief that we hope is understandable, readable, and that sets out our targets without too much interspersion.

Judy has already mentioned the CARP support for the Canadian Mental Health Commission. Of course, that's the main thrust of our own request.

The Canadian Alliance on Mental Illness and Mental Health is the largest coalition or association of national not-for-profit NGOs, including consumer family organizations, service providers, and professional organizations. There is no other like it in Canada or in the world. We cover the entire spectrum of service delivery, including patients, and we pick up the Canadian Medical Association, the Canadian Psychological Association, and the Canadian Psychiatric Association, plus disability groups such as the National Network for Mental Health.

We have a broad voice. We have a tremendous grassroots capacity to get to our communities and understand what they want. And I'll tell you exactly what they want. They want you to recommend to the federal government—to Mr. Flaherty and whoever else you have to go to—to fund the establishment of the Canadian Mental Health Commission, as recommended by the Senate standing committee.

The Senate standing committee, as I'm sure you know—and I'm sure you've all seen this “Out of the Shadows at Last” document—recommended that the Canadian Mental Health Commission be established and become operational by September 1, 2006. We're a bit late, but we're ready to move forward as quickly as possible. We have great hopes that you will do that. The funding required is $17 million a year, which is not significant, in our opinion, compared to the other funds paid on health care activities.

The other aspect that we'd ask you to fund is the research component, again as recommended by the Senate standing committee, which is a $25-million-a-year fund that would go to the Institute of Neurosciences, Mental Health and Addiction, one of the Canadian institutes of health research, and would be managed similar to the AIDS fund, which you already fund on a regular basis.

The third funding aspect that we want you to look at very carefully is the funding of the Public Health Agency and Health Canada to fund surveillance and data-gathering aspects. As much as we'd like to, we can't rely on the Canadian Institute for Health Information and others, because hospital records show only about 15% of the actual mental illnesses in Canada. The vast majority of mental illnesses are treated in the community by psychological services, EAP providers, and others. It's absolutely essential that we acquire that data in order to provide us with comparative information, so that we can deal with the real aspects of the cost of mental illness in Canada.

The brief sets out in significant detail the cost of mental illness in Canada. I'm sure you all know the business issues; it costs $33 billion a year. Health care costs are about $14 billion. Suicides are incredible. We have an unconscionably high rate of suicide for a country that calls itself advanced. We have issues in our aboriginal mental health that are beyond belief and need to be dealt with. Poverty issues are more often than not associated with mental health issues.

Within its own jurisdiction, the federal government has the capacity to move forward on a number of issues, particularly federal correctional issues. As Judge Ted Ormston will tell you, the courts are now the largest warehousers or keepers of people with mental illnesses. It's a national disgrace as well, and something that should be attended to.

And as I'm sure you know, Howard Sapers issued his report yesterday and made it available to all MPs.

The second issue is the Department of National Defence and the mental health issues of our armed forces. Post-traumatic stress syndrome is incredible. Again it's something that needs to be addressed, and it can be addressed through the Mental Health Commission.

Those are just some of the issues.

Quickly, one of the questions that was asked of me was to compare mental health with other groups.The prevalence of mental illness in Canada is 10.4%. The one-time federal allocation for mental illness research is 1.5%. The ongoing federal allocation for mental illness research is 1.3%. Diabetes has an impact rate of 4.8%. It gets 30% of federal funding.

I'll stop there, but I'd be happy to answer any questions, as would Dr. Service or Connie McKnight.

Thank you very much for the opportunity.

[The Chair, Conservative, Brian Pallister]

Thank you very much for your presentation, sir.

We will continue with Lu Ann Hill from the Aboriginal Institutes' Consortium. Welcome, and proceed.

[Lu Ann Hill, Executive Director, Aboriginal Institutes' Consortium]

Thank you.

[Witness speaks in her native language]

I am here with Aboriginal Institutes' Consortium, which was established in 1994 to address the collective needs of aboriginal-owned and -controlled post-secondary education and training institutions.

Recognition and resources continue to be the key issues impacting the institutes today. The membership of the consortium, which is located in Ontario, consists of eight institutions in aboriginal communities from Akwesasne, which is near Cornwall, all the way to Fort Frances in northwestern Ontario.

Aboriginal institutions were established by first nations communities to address the lifelong learning needs and the development capacity of first nations communities. They fill a unique need that cannot be duplicated by mainstream institutions.

The bulk of the students who enrol are adult learners who would not necessarily compete for space in mainstream post-secondary institutions. And believe me, there are a lot of them, because secondary schools have not been able to address the needs of aboriginal learners.

Aboriginal institutions are student-focused; they provide culturally relevant, community-based programs in culturally enriched learning environments that address the learning styles of aboriginal people.

The types of programs we deliver include literacy, secondary and alternative secondary programs, adult education, trades, pre-apprenticeship, apprenticeship, and provincially recognized certificate, diploma, and degree programs.

Areas of programming we deliver include automotive, aviation, media, human services, nursing, paramedic, computer, language, renewable energy, welding, pipefitting, and much more.

Aboriginal institutions support all levels of education in our communities through the delivery of teacher education and curriculum development; they host youth science and technology camps and career fairs and conduct school evaluations, and more.

Aboriginal institutions demonstrate great success in attracting students and in increasing the educational attainment level of aboriginal students.

Our institutions in Ontario have educated more than 27,000 learners over 11 years. We've experienced an increase in enrolment of over 92% in five years. We can demonstrate success rates of up to 98% and we provide more than 400 jobs in aboriginal communities. Throughout Canada, more than 60 aboriginal institutions can demonstrate similar success.

Aboriginal institutions are key drivers of economic success in aboriginal communities, much like colleges and universities in mainstream society.

The challenge is that aboriginal institutions lack formal recognition by the federal government and as such are not eligible for secure and adequate funding from any source for operations, infrastructure, facilities maintenance, or research. In addition, student credentials do not have the same currency as those from provincially or federally recognized institutions.

Aboriginal institutions get caught up in the jurisdictional debate between the federal and provincial governments. The federal government supports aboriginal post-secondary education as a matter of social policy. The provincial governments say it's a federal responsibility.

We're seeking federal recognition to build upon the success achieved by aboriginal institutions. We need access to secure and stable funding and we need to provide aboriginal institutions with recognized authority to grant certificates, diplomas, and degrees.

The Consortium is also seeking an immediate infusion into the national allocation of the federal post-secondary student support program to address the level of funding required in each province to support the stability and development of aboriginal institutions, and to support students.

One of our institutions, First Nations Technical Institute, received 549 registrations this fall, but 271 of those students were not able to enroll because they weren't able to get support through the federal post-secondary student support program.

I have with me the president of First Nations Technical Institute, Tim Thompson, as well as the chair of the National Association of Indigenous Institutes of Higher Learning, Trevor Lewis.

Thank you.

[The Chair, Conservative, Brian Pallister]

Thank you very much for your presentation.

We continue with Gilles Séguin, from the Ontario Museum Association. Welcome, sir. Five minutes to you.

[Gilles Séguin, Board Member, Ontario Museum Association]

Good day.

The Ontario Museum Association, or OMA, represents some 600 museums, art galleries, and historic sites, both large and small, in every corner of Ontario. We appreciate this opportunity to present the views of Ontario museums to the direction of the federal 2007 budget.

We fully support the Canadian Museums Association's call for the implementation of the new Canadian museums policy, and appreciate that Canadian Heritage Minister Bev Oda recently signalled the urgency of this matter. We are working with Minister Oda and her Ontario counterpart, Minister Caroline Di Cocco, to ensure that museums in Ontario contribute to the vitality and prosperity of our citizens and communities.

The key to long-term business planning and growth for museums all across Canada is predictability in revenue. The OMA urges the government to implement a robust policy framework that allows that predictable, sustainable public support. An appropriately funded federal program, in concert with more adequate provincial and municipal support, will give Canadians the opportunity to enjoy the full potential that museums can offer.

I assure you museums do make a difference. Museums are integral to the quality of community life and the appeal of a community. Museums provide unique services to communities all across Canada by preserving our collective memory, telling our stories, and passing on a rich legacy to future generations. Museums reach out to all demographics, including children, youth, and new Canadians. Canadian parents view museums as one of the most important places for educating their children, along with schools and libraries.

Museums also provide opportunities for civic engagement and volunteerism. Museum volunteers contribute work valued at more than $40 million per year across Canada. Museums also contribute to Canada's cultural infrastructure. Ontario museums contributed $355 million to the provincial GDP in 2001, and obviously the full economic impact is much higher through service industries. Museums help to create a well-educated, creative, and competitive labour force. They provide employment to 11,700 workers across Ontario. Canadians and visitors from abroad value our museums. Total attendance at Ontario museums is almost 19 million a year, which is a 12% increase over the past 10 years.

The Ontario Museum Association joins with its partners like the Canadian Museums Association in calling on the federal government to implement a new museums policy that adequately and appropriately supports museums in Ontario and throughout the country. Investments in Canada's cultural infrastructure are as important as those made to support public infrastructure in areas such as transportation, schools, and hospitals. Attractive and vibrant cities and communities are places where people want to live, invest, and work.

Support of our heritage organizations like museums is the responsibility of all levels of government. No level of government can do it alone. It is incumbent on the federal government to assume the leadership at the national level in the implementation of a museums policy that will work in concert with other governments across the country.

It is important that the federal government's role extend beyond federal museums to include the viability and growth of locally run museums, which are essential to local economies and to preserving the history of local communities across Canada. Each museum tells an important part of the Canadian story.

We ask the Standing Committee on Finance to endorse our recommendations calling for new and predictable, sustainable funding to allow museums greater ability to contribute to Canada's social, economic, and cultural economy.

Merci.

[The Chair, Conservative, Brian Pallister]

Merci.

Thank you to all of you for your presentations. They are much appreciated.

We'll move to questions now and we'll begin with Mr. Savage. Six minutes, Mr. Savage.

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

Thank you, Chair.

And thank you to all of our panellists for your presentations.

I'd like to talk a bit about poverty.

It's nice to see John Murphy. I know that you're no stranger to Ottawa, and it's good to see you again.

I'd like to just chat a bit, because it seems to me that one of the big issues facing Canada in the next little while is whether we are even going to make an attempt to bridge the gap between the rich and the poor. I would argue that successive governments of different stripes have at least claimed that was their goal, although we've fallen short in a lot of cases. But some of the measures that were introduced in this past budget, such as the GST cut and the proposed continuation of that to go to 5%, have actually been trumpeted as being good for lowest-income Canadians because personal income tax may not affect them but GST does.

I wonder if you have a view on whether reducing the GST is of benefit to the lowest-income Canadians.

[John Murphy]

Yes, thank you.

In our view, lowering the GST and the child benefit and so on are band-aid approach material. What needs to be done is a much broader approach to the reduction of poverty, because the GST, really, does not affect poor people. They don't buy the big items, so it's just of no benefit. If you were making huge sums of money, it might make a difference.

What we need, Mr. Savage, is a pan-Canadian reduction strategy that allows the federal government to take leadership, with its partners in the provinces and the territories, to take a look at how you can bring those departments together, in fact, instituting a new department with a leader. You need to look at how you can best bring together all of those departments that affect people's lives, and begin to look at targets that you need to set--around housing, around social assistance, around a number of issues that need to be worked on with the provincial and territorial governments--and then evaluate. Have amounts of dollars in your budgets to go after that reduction strategy, and then evaluate what's happening to see if we have arrived where we wanted to be.

It's not a dream at all. I mean, Newfoundland and Labrador are doing it. Quebec is doing it.

In Ireland, for instance, they started a reduction strategy. They were at 15% of their population living below the poverty line, and they brought that down to 5%. Now, there's a real indication that this can be done. And if we can do it in some of our provincial territories like Quebec and Newfoundland and Labrador, we certainly can do it at the federal level and begin to give that leadership and vision that's required for this country.

We have a morally disgraceful situation with 4.9 million people, 1.2 million children, living in poverty, and for a country as wealthy as Canada that is not satisfactory.

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

I agree with that.

Specifically on the GST, I appreciate your answer. People are loath to say they don't want lower GST, but at the end of the day, it's about choices. There's a certain number of dollars in the federal treasury, and if you're taking billions out to give it to those who disproportionately need it less, then you're actually doing less for those who need it the most. And there are ways other than personal income tax. According to the Caledon Institute, the child tax benefit, introduced, I think, in 1997, has actually had an impact on child poverty.

One of the proposals that has been made regarding the universal child care benefit to $1,200—and again, there have been studies indicating it actually helps those who need it the least because of the way it's taxed—is that if you're going to that, then you should perhaps do it through the young-child supplement of the child tax benefit.

Have you a thought on that?

[John Murphy]

Well, I think that makes sense.

But people basically want to get back to work, and one of the elements that's going to allow that to happen is that people have affordable child care that's consistent. The $100 a month on the child care supplement is some help, in terms of income, for people, but it's not what's required. Again, in my view it's a band-aid approach, and we need a wider picture of all of this to make sure we have the spaces for people to use and be able to get back to work.

It's not just child care. There are many elements that are required to make this happen, but certainly child care is one of them, and a very important one.

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

Okay. I'm running out of time, but I'm just going to go back one more time to Mr. Murphy.

You've talked about the CST and that we need to separate out the part of the CST that goes for social assistance. We've heard a lot from people on the post-secondary side that we need to separate out the post-secondary. So it may make sense that we just separate everything out again, and then dedicate it.

I'm assuming you would have some specific ideas that you would want the provinces to agree on with the feds if that were to happen.

[John Murphy]

Yes.

What we have recommended on a number of occasions is that the fund be split for social assistance contributions. Previous governments have cut it badly. I'm not talking about just splitting it, I'm talking about enhancing it.

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

Thank you.

[The Chair, Conservative, Brian Pallister]

I must interrupt you, Sir.

The time is used up, so we continue.

You have six minutes, Mr. St-Cyr.

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

Thank you, Mr. Chairman.

Thank you everyone for joining us here today.

My first question is for Mr. Murphy. I've read your recommendations. In Point 2, you mention employment insurance. Interestingly, you reminded us that currently, only four out of every ten unemployed workers receive EI benefits when they need them. I submit to you and to committee members that any insurance plan that offers benefits to only four out of every ten insured members in need would be perceived as scandalous, and rightly so.

Furthermore, the benefit rate is quite low because for several years now, the government has been reducing benefits and restricting program eligibility, while at the same time maintaining employer and employee premium levels for the most part. As a result, the EI fund has amassed an enormous surplus.

The Bloc Québécois has called for—and in the past the Conservatives have agreed with us—for an independent employment insurance fund and has demanded that employee premiums be used solely to provide benefits to people who are out of work.

Do you agree with our position, or do you think any surplus funds should be deemed to be part of the government's Consolidated Revenue Fund?

[John Murphy]

Thank you. I did miss a bit of the interpretation because this machine wasn't working very well.

As you're aware, back in the mid-1990s about 80% of unemployed Canadians were availing themselves of the EI fund. That's now under 40% in Canada; in my own province of Nova Scotia, it's less than 40%.

We need to ratchet that up. We need to have criteria that will allow people to be able to use that fund, because not only does the fund not access those numerous people out there, but those people also can't access training and they can't access a number of benefits that come through the EI fund.

I believe that this fund belongs to the workers.