Finance Committee on Oct. 24th, 2006

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Thank you, Mr. Chairman.

Thank you all for your presentations. It was very helpful to the committee.

I was really very much struck by Mr. Ferns' comment that there's in fact been no increase in full-time faculty hiring. As a former educator, I had no idea this was happening.

At the same time, you've indicated that the number of student bodies, the student population, has increased significantly and the amount students are paying for their education has increased significantly. At the same time, federal transfers for education alone are over $8 billion a year.

I'm mystified as to what the money is being used for. This is a lot of money. There's an increase in student population and the fees they're paying, and yet it's not going to faculty. Where is it going?

[Dr. Chris Ferns]

There is a twofold component to that. Yes, it's a lot of money, but in terms of percentage of GDP, it's probably the lowest level it has been for over thirty years. So we're trying to educate a much larger student body with the kind of funding levels that really were designed to cater to a much smaller university sector over thirty years ago.

What we're looking at is the amount of money that's required to add to that to actually restore it even to the levels of the early 1990s. So what we're actually having to do is educate more students with less money.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

But that begs the question, if it's not going to increase the teaching population, the number of educators, what's it being used for?

[Dr. Chris Ferns]

If you reduce funding, it means you're actually more heavily reliant on part-time instructors. You're unable to sustain the actual number of full-time faculty required to do the job.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

But it's not reduced funding, because you have more students paying more tuition.

[Dr. Chris Ferns]

We're obliging students to pay more tuition because of the reduced federal funding. The whole thrust of our brief, which I hope you familiarize yourself with, is the effects of that on the students, because they're not getting as good an education.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

I'm not saying they should pay it; I'm just wondering where the money is going.

[Dr. Chris Ferns]

I think I've already partially answered that with regard to Mr. Dykstra's question. The accountability of the provinces for the money they receive is simply not strictly enough monitored. What we need is an actual Canada post-secondary education act that will mandate the provinces to spend the money on the things they're supposed to spend it on.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

I know a number of groups have asked for a dedicated transfer, and that may be the way to go, because there certainly is a disconnect somewhere.

I want to move to this matter of how best to help low-income people. Our government thought we did a good thing by cutting the goods and services tax, because the National Anti-Poverty Organization, as Mr. Dykstra mentioned, pointed out that low-income people pay 8% of the GST collected, and they pay only 0.5% of the personal income tax collected. On the other hand, high-income people pay only 4% of the GST that's collected and 10% of the income taxes. Clearly, a GST reduction is more beneficial to low-income earners than to high-income earners. In fact, the NDP recognized this. In 1997 they campaigned on reductions to the GST for that very reason, because that was one way you could help people who paid the least income tax. Yet there have been criticisms of this tax measure to assist low-income people. I'm very puzzled by this, so maybe someone can explain it to me.

[The Chair, Conservative, Brian Pallister]

No, I'm sorry, they can't. I agree that it is difficult to explain, but we'll continue now with Mr. Pacetti.

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

Thank you, Mr. Chairman.

Thank you to the presenters. Those were interesting presentations.

I'm limited in time, so I may interrupt when I'm asking a question.

But in answer to Ms. Ablonczy, I'm not sure what article you're reading, but the economists are saying that the GST does not help low-income people.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

But the National Anti-Poverty Organization does.

[The Chair, Conservative, Brian Pallister]

Order.

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

I want to ask Mr. O'Hara a couple of questions. In your brief you talked a lot about problems and that we need more money for social housing and more money for education skills, employment strategies, and child care.

Except for the child care, because we know what happened there, some of these programs or what you're asking for already exist, do they not? You addressed on a few occasions the social housing aspect. The money has been transferred, from what I understand, and there is going to be more money being transferred out of Bill C-48.

What happens? Locally, the federal government does not get involved, from what I understand. If the housing market is booming in Halifax, that's great, but shouldn't there be something done at the local level for low-income housing?

I'm from Montreal, and I know the City of Montreal looks at low-income housing and they make sure there's a percentage of low-income housing. There are always problems with additional moneys coming in, but that's a negotiation that's being done at the local level, at the municipal level, and provincially and federally .

What's happening here? Make me understand, because I think I'm missing part of the puzzle.

[Paul O'Hara]

I think the province would argue that the federal government is downloading responsibility for the operation of social housing. It is not giving them an adequate budget to address the issues. A lot of the social housing is falling apart.

I had a call yesterday from somebody who told me that the unit next door to them was empty and their friend needed a place, and could I help get her friend get in there? We experience this all the time. If you take a ten-minute walk, you'll see boarded up public housing.

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

I'm not disputing the fact there is a need, but is it because there's much more demand here in this part of the country? Again, maybe I'm going to ask the same question. Is there a problem with the funding?

[Paul O'Hara]

We perhaps put in 10% of what we need in social housing; that's what the issue is. The province, like the federal government, does not put in significant amounts of money; it actually takes money out of the social housing budget. So if you look at what the province has been doing in the last few years, they've been decreasing their commitment to social housing, and that's why we've got full beds in our shelters.

For a homeless person in Halifax, there are times of the day when he has no place to be.

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

Okay.

How about the education part and the skill part? I think you said there's a link between—

[Paul O'Hara]

We need more collaboration. We may need more focus, more targeted...and more opportunity for all the players to come together and work with one another.

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

Again, is that a provincial matter, one where they're not coming to the table and trying to work on a strategy?

[Paul O'Hara]

I think that's part of it, but I believe strongly that this federal government needs to provide leadership in this area.

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

Okay.

Ms. Nasser, you have two or three recommendations on developing a comprehensive poverty reduction strategy, and I think there's another one further on, the third one, where you recommend that we assume a leadership role in implementing poverty reduction.

Again, is that a provincial or a federal matter? What are you expecting from the federal government?

[Susan Nasser]

Well, again, I think there's a blending...or there are different responsibilities for each level of government. We think the federal government actually does have jurisdiction over some of the areas that we need for poverty reduction. Also, we think any level of government, including the federal one, should be providing leadership in this area and setting standards that the country can follow. So I think it's important for the federal government to take a look at which areas fall within its jurisdiction and take action in those with a national poverty reduction strategy.

I think the provinces need to do the same thing. In fact, I'm sure most provinces have provincial groups who are going to the provincial government and telling them that.

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

Thank you.

[The Chair, Conservative, Brian Pallister]

We will continue with Mr. Del Mastro now.