Finance Committee on Oct. 24th, 2006

[Dr. Chris Ferns]

That's an issue that can be addressed, and it's under the Canadian Association of University Teachers' proposal for a Canada post-secondary education act. I think a lot of the problem is that the money goes to the provinces and does not get directed towards the universities. I think one has to ensure a much greater degree of provincial accountability to ensure that the money is actually spent on the purposes for which it's intended.

[Rick Dykstra, Conservative, St. Catharines, ON]

I agree with you.

[The Chair, Conservative, Brian Pallister]

Thank you very much.

We continue now with Madam Wasylycia-Leis.

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

Thank you, Mr. Chairperson.

My thanks to all of you for your great presentations.

Let's just carry on with Rick Dykstra's comments about where all the money has gone. What we need to do is look at the significant drop in federal funding over a number of years. In education, the share of federal dollars has dropped to under 10%. We're in single digits now. We've lost any kind of national housing program. We've lost the Canada Assistance Plan. Health care is still in disarray. And equalization is also part of this, because it's talking about a different approach to our whole nation.

All of you are generally talking about an approach that is anathema to what the present administration wants and what we've seen over the last couple of years. So to each one of you, how do we demonstrate that addressing education, poverty, housing, women's equality, preventative health care, holistic health care, and equalization across regions is important to make us a competitive nation, and not the opposite?

Anyone can jump in. I don't want to lose all my time, so if you can each go quickly, that would be great.

[Paul O'Hara]

I think the research is out, and the fact of the matter is that everything you say is true and everybody knows it. It's a question of ideology and political will. When leaders in government are ready to say it's not just for us to have 10% of Nova Scotians living in absolute poverty, then something will happen. I think it's the way we vote, and we really need to demonstrate to our politicians that these issues have priority.

[Gayle McIntyre]

If I can, I just refer to even some of our recommendations.

I come from an immigrant family. We come from Scotland, and one of the things that was instilled as I was growing up in Canada was capitalism. Part of capitalism was talking about being efficient, but producing good quality at the same time. How do you balance that?

Keeping on that theme of where we have government efficiency through efficacy, we really believe we do have to take the time to be introspective, put ego to the side, and just ask where our weaknesses are. It's okay to recommend, acknowledge, and certainly appreciate what we have achieved, but we do have to look at these gaps in a meaningful way.

It sounds like we've regressed a little bit. In these recommendations, we're asking the government to put back a department for disabilities, put back a department for housing, because we recognize that we've had all these huge problems come out of the lack of having these departments there. Sometimes people see that as regression, whereas we're saying to go back to where it last worked or looked like it worked.

Of course, we're hoping that these separate departments would attract the properly trained individuals to implement the funds, because we agree that people who have more resources spend money more appropriately. So we would like to get back to having those departments in place to deal specifically with those issues, and there inevitably has to be a more efficient way of spending federal and provincial moneys. It has to be. It's inevitable.

[Donald Dennison]

Ms. Wasylycia-Leis, because we live in a federation and it's with us every day, we sometimes forget how our federal structure influences how we think about these things. If we were a unitary state, then the services you were speaking about would be provided by a central government and be funded by a central government. We wouldn't have disparities between parts of the country. It just wouldn't take place.

But because we're a federation and because certain responsibilities are assigned to the federal level and certain ones to the provincial level, we have this decentralization. Just because we have this decentralization, there's no reason why we should not still have roughly equivalent capacity to fund those services.

Do you see what I'm saying? We forget that we're a federation. We think there's something wrong or something we should worry about in terms of the transfer of resources, when it is in fact the normal thing that happens in our country. If you look at other modern federations, with the exception of the United States—they have their own ways of redistributing—whether it's Australia or Germany, Austria or Switzerland, they all have equalization programs. Frankly, most of them do a better job at equalizing than we do in Canada.

We don't equalize in Canada. All we do is bring the lower revenue up to a certain national average, or try to. In Australia and Germany, they equalize and it's not a problem. I don't know why we have such difficulty in Canada today, agonizing over something that is a normal function of a federation.

[The Chair, Conservative, Brian Pallister]

Thank you, Mr. Dennison and Madam Wasylycia-Leis.

We will continue now with the second round of questions. We'll go four minutes to allow everybody to get in.

We'll begin with Mr. McCallum.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

Mr. Dennison, I totally agree with you on equalization, but I want to ask you a question about regional development, because you're here representing New Brunswick business, and one of the things included in the recent cuts by the government was regional development.

From a New Brunswick business point of view, do you see that as an important instrument that ought not to be cut, or do you not object to the cuts?

[Donald Dennison]

We haven't really seen any significant cuts to what's normally referred to as regional development. I think there's an expectation that there could be some realigning of programs. The business council is in fact engaging in this process. They are looking at how the provincial government provides support to industry, particularly start-up industries, and they're looking at how ACOA provides support. Frankly, they're trying to find a way we can streamline this process so that the person who wants to start a business doesn't have to shop around in the confusing welter of agencies that we have at present.

I think we're in favour of some kind of streamlining, restructuring, but clearly, the kind of support that's provided to business in Atlantic Canada comes nowhere close to what is provided through Industry Canada to more prosperous areas of the country.

[John McCallum, Liberal, Markham—Unionville, ON]

Okay, thank you.

My second and probably final question is really for the other members of the panel, perhaps starting with Ms. Nasser, because I think you were left out the last time.

There are two areas in which I think our party differs philosophically from the Conservatives. One is that we tend to prefer direct expenditures rather than tax breaks. For example, if you want to favour a transit system, build it; don't give tax breaks to transit users. If you want to do social housing, build it; don't give tax breaks to people who likely can't use it for housing. And similarly for students. I wonder where you stand on that issue.

The second issue is these cuts. We regard these as being inimical to the most vulnerable Canadians, particularly in areas like literacy and other vulnerable groups.

I'd like to just ask your perspective on one or both of those issues, and then perhaps go to Mr. O'Hara and Ms. McIntyre, if we have time.

[Susan Nasser]

I think there is definitely a need for direct funding and not doing everything through the tax system.

I'm just sitting here thinking that last week the Halifax Coalition Against Poverty had an action in which one of their demands was that the social assistance rates here in Nova Scotia be doubled.

You might ask how we can possibly find enough money to double the social assistance rates, but I think the point is that after careful consideration, people are realizing that we have a large number of people who just can't survive on the moneys they're getting. I don't think that kind of problem will be fixed by doing something with the tax system. We actually do need to reorder our priorities and take a look at the funds that are available to the government and put more money directly into the kinds of programs that I think a whole array of people will probably tell you are going to be helpful in addressing some of the issues of poverty.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

I just want the others to have a chance. Paul is going to cut me off.

Mr. O'Hara.

[Paul O'Hara]

Well, absolutely, particularly social housing--build it. I think it's a good example. The private sector is doing very well in Halifax, particularly in the housing area. If you look around at the condominiums that are being built, there is no low-income housing being built--none, zero.

We need the federal government to provide leadership in creating a national housing policy and to support the development of not-for-profit housing. It has to happen, or Halifax will be like Calgary and we will have people who are in low-wage jobs living on the street.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

Ms. McIntyre.

[The Chair, Conservative, Brian Pallister]

Mr. Paquette, you have four minutes.

[Pierre Paquette, Bloc, Joliette, QC]

Thank you, Mr. Chair.

Mr. Dennison, I really liked your response to Mr. Dykstra's question. In fact, this is exactly how we talked about it this weekend at the Bloc Québécois' General Council. It isn't about making Quebec the gateway or the entry point to the Atlantic; it is about making it a component and making better use of the St. Lawrence River—in our case—which, in our opinion, is under-used, in particular regarding domestic cabotage. There is a lot of international shipping, but very little domestic cabotage. There is actually a perception that the St. Lawrence River is part of the Atlantic gateway.

Of course, the Bloc Québécois will not choose between Quebec, Montreal, Sept-Îles or other ports. As a result, your response was completely in keeping with this.

I wanted to ask you another question about equalization. After the promise he made to Quebec on December 19, Mr. Harper seems to be saying that until the provinces can come to an agreement on fiscal imbalance and equalization, he will not act.

He was in fact well aware, however, at the time of his promise, that there was dissension among the provinces. Do you think he is empowered to act on the issue of equalization, since it is a subject included in the Canadian Constitution and, as a result, is very clearly a federal responsibility?

I would like your opinion on this.

[Donald Dennison]

The government has two very substantial reports that recommend almost the same things. The in-depth research carried out shows that with our current resources, we have the capacity to implement one or the other of these things.

It doesn't represent a huge problem for Canada to maintain a robust equalization program. It's less than 1% of our GDP.

If we went with the ten provinces, with all the natural resources included, we would still not be putting the same amount of money into equalization that we put in back in the 1980s.

It's not a question of affordability. It's a question of whether we have the will and the understanding,

The will to continue along a path that has been well established since 1959.

[Pierre Paquette, Bloc, Joliette, QC]

Thank you.

Do I still have a little time, Mr. Chair, to address Mr. Ferns?

[The Chair, Conservative, Brian Pallister]

Yes, you have one minute.

[Pierre Paquette, Bloc, Joliette, QC]

To continue, it does not seem that the federal government intends on following the lines of the consensus—and I wanted to know whether you are part of it—that aims, in the short term, for the transfer for post-secondary education and social programs to be returned to the level it was at in 1994-1995. This represents an additional $4 billion per year.

I wanted to know whether your association is part of the pan-Canadian consensus: we heard this figure from the students, the teacher's federations, the university and college administrations from all over. I was wondering if you also agreed.

[Dr. Chris Ferns]

Absolutely, that is our position.

[Pierre Paquette, Bloc, Joliette, QC]

Okay.

Do you know how much that represents for Nova Scotia?

[Dr. Chris Ferns]

Well, I think we have a twofold problem in Nova Scotia that would certainly allow us to address the fact that we have the highest tuition fees by far in Canada.

I think there's also a problem in the actual mechanism of distribution. We have a lot of very good undergraduate universities that result in us being a net importer of students, but we're not funded on the basis of the number of students we educate. I think with the additional funding, there has to be some attention to the actual redistribution as well.

[The Chair, Conservative, Brian Pallister]

Thank you, sir.

We'll continue now with Madam Ablonczy.