Finance Committee on Oct. 19th, 2006

[Bill Jeffery]

Absolutely. My impression is that one of the reasons we have a lot of these types of vending machines in schools now is because there were some cutbacks on funding to provincial education programs. But I think there is some evidence to indicate that even switching to vending machines that sell nutritious snacks, low-fat milk, apples, and so on, can actually be profit-making for schools. The trick is to have good, sound nutritional criteria for the types of foods that are made available in schools, and that's something that Health Canada could certainly engage in. Some provincial governments are starting to develop such criteria now. Health Canada is sort of leading health science and could help develop such criteria.

[The Chair, Conservative, Brian Pallister]

Thank you, Mr. Savage.

Mr. Jeffery, thank you.

Nous continuerons avec monsieur Paquette.

[Pierre Paquette, Bloc, Joliette, QC]

Thank you.

First I'm going to speak to Mr. Fournier. I'm very sensitive to this question, since the Festival international de Lanaudière, which is established in my riding, was also affected by the loss of the sponsorship program. We're talking about a loss of $50,000, which is not minor. In addition, as a result of the increased requests for funding being made to the private sector, it isn't easy to find sponsors to offset that loss.

I find your proposal well substantiated. I have a question for you.

When the former government abolished the sponsorship program, it announced that it would set up another one. Have there been any developments in that area? Does your proposal come from the work you did when the former government was in power? Have you heard that the Conservative government wanted to implement a transparent and acceptable assistance program for major cultural and sporting events?

[Luc Fournier]

Both the former Liberal government and the present Conservative government have said they were in favour of this initiative. They say everything is going very well. That's also the case of the people from the Bloc québécois and the NDP. But I don't know whether it's because of the sponsorship scandal, but no one wants to take responsibility for it. What's more, the money is available.

After the sponsorship program was abandoned, no festival received any funding. The only program that was already supporting these events and is still doing so is the Canadian Heritage program. It offered relatively modest support for artists. Apart from that contribution, there's nothing. And yet everyone agrees that this is a good idea.

[Pierre Paquette, Bloc, Joliette, QC]

Have you approached the new government?

[Luc Fournier]

Of course, sir, and we still are. We're told it's a good idea.

Who's going to take leadership?

[Pierre Paquette, Bloc, Joliette, QC]

Perhaps it would be enough to look at a dictionary of synonyms and replace the word “sponsorship” with another one.

[Luc Fournier]

Indeed.

[Pierre Paquette, Bloc, Joliette, QC]

I'm going to do it.

[Luc Fournier]

We could simply call it an event support program.

[Pierre Paquette, Bloc, Joliette, QC]

When the Grand Prix de Montréal nearly disappeared because the sponsorships were cancelled, we made every effort to prevent that from happening. We pressed the government to grant interim assistance for the event. Please be assured that we'll continue putting the pressure on.

[Luc Fournier]

Thank you.

[Pierre Paquette, Bloc, Joliette, QC]

All your briefs are very good. Unfortunately, we're already pressed for time. There was also this event that occurred earlier. My question is for the Association of Canadian Airport Duty-Free Operators. Good morning, sir.

In your brief, you refer to the cancellation of the GST visitor rebate program. The Conservative government recently announced this measure. Will the impact on duty-free stores be major? Even though we plan to deal with this question at a future meeting, I'm going to ask you to give us a few details on the subject, since you discuss it in your brief.

[Chuck Loewen]

Yes, it will have a direct impact on the duty-free shops as well as on the operations at the airports, where we actually are an authorized agent of the government to refund GST directly to the consumer. They then have and take the opportunity to spend that money in Canada, in our stores, before they leave the country. There will be a direct impact from the number of visitors who come into our store, as well as overall in the tourism industry from the number of visitors coming into Canada in general, from which we as a duty-free industry of course reap the benefit.

[Pierre Paquette, Bloc, Joliette, QC]

I invite you to testify before the committee. We should have a two-hour meeting on this question soon. You can contact our clerk. The more of you express your objections in this regard, the more likely we can reverse this announcement by the Conservative government.

Do I have a little time left?

[The Chair, Conservative, Brian Pallister]

No.

Thank you very much, sir.

I'm sorry, sir, there's no time for your response. We'll move on to the next questioner now, and that's Mr. Del Mastro.

You'll have five minutes, sir.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you.

I'll pick up where Mr. Paquette left off, to give you a little more opportunity to speak. I actually come at this from a little bit different angle.

The GST was reduced to 6%, and we know it's going to be reduced to 5%. It's a declining benefit, first of all, for tourism. We know that only 3% of eligible people are collecting it back. It's an inefficient way of processing taxes. It actually costs us ten times as much to provide a rebate as it does to actually collect the tax. The way it was working just doesn't make a lot of sense.

I would argue that it would be much smarter to reinvest those funds into promotion of tourism in Canada, rather than provide a giveaway for people who have already been here.

[Chuck Loewen]

First, you make some good points. Even though the GST will be reduced to 5%, that still would mean an additional 5% for tour operators for conventions that they would have to charge for their product packages coming into Canada. It still is 5% more than what the consumer would have to pay from a visitor standpoint.

[Dean Del Mastro, Conservative, Peterborough, ON]

Only 3% of eligible tourists are applying for it.

[Chuck Loewen]

Those particular statistics were based on all visitors to Canada. Countries that have a VAT rebate program base it on overnight visits, which take our percentage more toward 11% to 15%.

[Dean Del Mastro, Conservative, Peterborough, ON]

You mentioned the VAT. I'll just finish with a comment.

Great Britain rebates the VAT. However, the desks where you get your rebate are on the arrival side of the airport, not the departure side. They indicate you can get a rebate, but they sure don't make it easy.

Mr. Fournier, a couple of questions about your presentation. You're right about a couple of things. The sponsorship scandal affected how people view this type of government spending. In my riding, people were amazed that the Government of Canada would be spending this much money on this type of program.

Now we're talking about going back to that kind of program, and 95% of the spending from an event, you said, is spent outside the event. Why aren't the people who are benefiting from this coming forward and helping you throw these events? Why are you coming to the government for it?

[Luc Fournier]

It's to convince the government that when you invest dollars in the festivals, we promote Canadian culture, Canadian festivals. It's an iconic festival; more people come to your events, there's more tourism, and that creates economic activity for hotels and restaurants. That's why we said start with the government; we will collect the money and you will collect more than that. It's $8 or $10 per dollar you...close to that.

[Dean Del Mastro, Conservative, Peterborough, ON]

Okay, but the suggestion that up to 40% of the cost of an event could be funded by the government sure sounds like an awfully big chunk.

[Luc Fournier]

Forty percent?

[Dean Del Mastro, Conservative, Peterborough, ON]

I would like to think the fundraisers are working a little harder than that.