Evidence of meeting #43 for Finance in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was federal.
2:45 p.m.
Conservative
The Chair Conservative Brian Pallister
Thank you very much.
Now we'll move on to Mr. Denis Bilodeau, Vice-President of the Union des producteurs agricoles du Québec.
Welcome, sir. You have five minutes.
October 25th, 2006 / 2:45 p.m.
Denis Bilodeau Vice-President, Union des producteurs agricoles du Québec
Good afternoon. I want to thank the House of Commons Standing Committee on Finance for receiving us this afternoon.
The union is still very much concerned by the issue of government intervention in the agricultural sector. It is therefore with renewed pleasure that I am tabling this brief today. In our view, the UPA's requests presented in this document come under the responsibilities attributable to the federal government with regard to maintaining prosperity in the agricultural sector of Quebec and Canada. Some of these obligations moreover fall to the Department of Finance Canada.
We therefore seek its financial support, but also its direct intervention to solve, quickly and effectively, the major problems facing producers across the country. As will be discussed in this brief, we ask the Department of Finance Canada to intervene in the following matters: among other things, the net income crisis in agriculture—you have tables that show this—incomes particularly in the pork and grain sectors, international trade, and the entire issue of taxation of agriculture and forestry, where we would like to see improvements that would ensure that agricultural businesses are less penalized, to ensure that they are maintained with the prospects we currently have.
I know that some of you know of the UPA. However, I'd like to remind you that we represent the some 43,000 Quebec farmers who work on 31 farms. Need it be recalled that agriculture in Quebec is the biggest primary sector activity, from an economic and employment standpoint. It essentially contributes to support for economic activity in a number of regions—I wouldn't say they're remote regions, but regions that are farther away from the major centres—and agricultural activity there means that those regions can support themselves.
The Government of Canada should therefore provide significant regulatory and budgetary support in order to maintain this type of agriculture and forestry operation in the country. In Canada, we work in human scale agricultural production structures. We want them to remain competitive and to meet consumers' expectations.
I am here today with Mr. Serge Lebeau, Senior International Trade Manager. Mr. Lebeau will make the summary presentation—a brief summary—of the brief that has been submitted to you. I will be available to answer questions later.
Thank you.
2:50 p.m.
Serge Lebeau Senior International Trade Manager, Union des producteurs agricoles du Québec
Thank you, Mr. Chair.
Members of the committee, first I'm going to provide an overview of the situation. You have a summary, which we've sent to you in both languages. I'll mostly stick to that summary. I hope to stay within the five minutes that are allotted us.
First, I'm going to talk to you about the income crisis. The net income crisis that farmers are currently experiencing is undeniably much more structural than circumstantial. The opening of markets and increased consumer demands create an economic movement favouring the concentration of agri-food players upstream and downstream from the farm. All these phenomena exercise downward pressure on profit margins of farm businesses.
Declining incomes have led to growing indebtedness of farms in Canada, resulting in a deterioration of their financial structure. Furthermore, as shown by Tables 1 and 2, which are presented in the summary, Canada's situation is deteriorating relative to that of the United States.
If you look at Figure 1, you'll see that the trend curve of net income has completely changed since 1996, whereas the Americans had a curve that was slightly below ours. Their net income growth has continued, whereas ours has completely declined. That has obviously had an impact on net assets.
Chart 2 shows that net assets have deteriorated in Canada relative to the United States. Obviously, poor income results and higher indebtedness; that's the explanation.
It's clear that energy costs, BSE and the exchange rate have impacted negatively on most farm sectors, particularly grain and hog production. The grain sector, for example, has been unable to recover from the prolonged period of low prices, particularly due to the subsidies paid to American farmers under the Farm Bill. As a consequence, the monetary balance of Quebec grain farms has fallen from a $20,000 surplus per farm in 1996 to a $6,200 deficit in 2005. According to the Canada Border Services Agency, the Farm Bill has an impact of about...
Am I going too quickly?
2:50 p.m.
Conservative
The Chair Conservative Brian Pallister
No, but the time allotted to you is up. We must now move on to another witness. However, time is reserved for questions later.
2:50 p.m.
Senior International Trade Manager, Union des producteurs agricoles du Québec
We didn't travel here...
2:50 p.m.
Conservative
The Chair Conservative Brian Pallister
Thank you very much. It's the same for everyone, sir.
The next witness will be Ms. Heather Munroe-Blum, Principal of McGill University.
Welcome, madam. You have five minutes.
2:50 p.m.
Dr. Heather Munroe-Blum Principal, McGill University
Thank you very much.
I'm very pleased to be here today, and I very much appreciate the opportunity to contribute to this discussion.
Let me say, having presented before the Standing Committee on Finance in two provinces regularly over the last decade, that each time I come I'm always encouraged by how passionate Canadians are about the quality of our society, and you hear it in the voices around the table here and in the prior panel. I want to thank the members of the standing committee for doing the work you do. I can imagine that it gets tough at times, but it's extremely important.
In my comments I will add to some of those you've heard already today and, as I understand, in some of the other presentations made to you as you've travelled across the country. Let me say that I speak as an individual citizen, as principal of McGill University, and also as chair of the Standing Advisory Committee on University Research for the Association of Universities and Colleges of Canada. In this regard we have a lot to be grateful for in Canada, having a deeply diversified and high-quality system of universities and colleges, notwithstanding the underfunding that you've no doubt heard plenty about.
Here in Quebec there have been, I think, very creative efforts over the last thirty years to build a very strong system of both education and post-secondary education. McGill is a university within the Quebec system that also ranks on the national and international stage. I believe profoundly as a Canadian that Canada needs and deserves to have at least a handful of universities that do spread the reputation of Canada worldwide, that attract students from around the world, and that have a strong and distinguished alumni group of networks around the world. McGill is also a national university: 57% of our students come from within Quebec and 25% from across Canada; the rest are international.
The federal government has a profound role to play in the research enterprise that is so strongly affiliated with universities in Canada. Canadian universities in the western world provide more R and D contribution to society than any other university sector. If we look south of the border, the differences are quite dramatic.
If you think about the various concerns you've no doubt heard about on this committee, from agriculture and farming, to health care, to nursing, to housing, to education, Canada must have systems that add value and are of high quality. If we don't have this level of quality and preparation of people who compete on the world stage, we won't have the investments, jobs, and activities at home on which we depend. The federal government has always had a role in university research, in graduate education, and in the preparation of highly qualified personnel, and I urge the government to stay the course in that regard.
Just ten years ago we were losing our very best talent. It wasn't a numbers game; it was literally that top talent, field by field, was being lost from Canada, because in the mid-1990s the federal government, along with provincial governments, took out their investments in post-secondary education, and at the federal level they dramatically cut the investment through the research granting councils.
It was only in the wake of understanding the dilemma that was being created--indeed, the crisis that was being created--in having the kind of talent on which we depend for success that reinvestments in the granting councils and new, innovative research programs were created. For the first time the federal level in Canada created the four pillars of investment upon which a great knowledge society depends; that is, research granting councils' support through the Canada research chairs program; graduate programs and the millennium scholarships for highly qualified personnel; and for the first time, indirect costs, meaning that the full costs of research funded by the federal government were beginning to be addressed--though we've not gone far enough in that--and major infrastructure support.
We've succeeded on the basis of that. We've recovered our lost ground. We've gained great advantage, but we now need to stay the course.
I'm happy to answer questions. Thank you.
2:55 p.m.
Conservative
The Chair Conservative Brian Pallister
Thank you very much, madam.
We will now complete the presentations with that of the Executive Director of RIDEAU, Ms. Collette Brouillé.
2:55 p.m.
Colette Brouillé Executive Director, RIDEAU
Good afternoon. Thank you for hearing us today.
When the Department of Canadian Heritage introduced the “Tomorrow Starts Today” program in 2001, the Arts Presentation Canada component embodied, for the first time among multidisciplinary performing arts presenters, recognition of the importance of the presentation link in the creation-production-presentation chain that conveys the works to the public.
We are conveyers. At RIDEAU, we know that the health of presenters guarantees the health of creators and artists, and that this synergy requires a political vision and resulting support.
The Réseau indépendant des diffuseurs d'événements artistiques unis, RIDEAU, was founded in 1978 and today has 138 members.
Over the years, RIDEAU has built bridges to realities outside Quebec. ARDAS, the Alliance des réseaux de diffusion en arts de la scène, links us to French Canada, while AREA, the Association des réseaux d'événements artistiques, permits productive exchanges with French-speaking Europe.
While the RIDEAU network has expanded for nearly 30 years now, the introduction of a presentation policy in Quebec, of which 2006 marked the tenth anniversary, was undoubtedly a decisive factor.
The presentation of performances is a quantifiable activity. The figures of the survey on performance attendance conducted by the Observatoire de la culture et des communications du Québec show that, in 2005, the 103 respondent organizations of the RIDEAU network presented 6,206 paying performances, attracting some 2,954,927 spectators and generating nearly $80 million in ticket revenues, which of course also generates revenue for our governments.
The investments of the Department of Canadian Heritage in our network also correspond to approximately $3 million, in 2005, out of $7 million invested in Quebec. If we exclude the major festivals and member networks, the figure is approximately $2 million. Since that amount has generated $80 million in box office revenue, we can undoubtedly state that it's an investment that has a significant leverage effect on the economic activity it generates.
We believe that, since the presentation of the performing arts is such a vital activity, we can conclude that it responds to a need in our society. The organizations that engage in it are unfortunately poorly equipped to prove this. We are recommending that we be able to encourage organizations that produce statistics to develop statistics on arts and culture, more specifically performing arts presentation.
RIDEAU is also about networking, and that networking is particularly well embodied in an annual event called the Bourse RIDEAU, which will celebrate its twentieth anniversary in 2007. Over the years, it has become the largest market for the Francophone performing arts in America. In 2006, 73 artists and companies from Quebec, the rest of Canada and from Francophone Europe showed their creations to more than 300 mainly Canadian presenters, but also presenters from France, Belgium and Switzerland, and 176 artist representatives who set up their stalls on what's called the Place du marché, which promotes business transactions.
Since the vitality of creation depends on presentation capability, we also hope that programs will be maintained promoting performing arts presentation, which is often the poor cousin of the creation-production-presentation chain, but which gives Canadians access to diversified and high-quality programming. Like the colleges, you probably have an auditorium in each of your communities as well, and that's an invaluable asset.
I'd also like to talk briefly about organization management. It is a well-known fact that the community suffers from a lack of resources, more particularly human resources. In addition, a number of structures rely on volunteer workers, which does not facilitate management. We therefore hope to emulate the Canadian Conference of the Arts in requesting a softening of administrative requirements.
On another topic, since the program was introduced, performing arts presenters have always recommended that a multi-year funding structure be put in place. While the horizon of the first years did not permit it, the announcement that the program would be renewed over five years opened up other prospects. However, the decision to move to this type of funding has recently been suspended.
We therefore recommend that consideration again be given to multi-year funding, which promotes long-term management and which, in our community, is intrinsic to our way of working on a number of seasons in advance.
Having regard to the cycles that govern our actions and the complex operation of matching financial arrangements, we would like organizations that show they are soundly managed to be entitled to a form of multi-year funding.
Lastly, the purpose of this presentation has been to show that the performing arts presentation community is extremely dynamic. We especially hope that one point in particular has emerged.
While the vital nature of creation is expressed across this country, at the end of the chain, one link makes it possible to transmit it to the public. That link is the presentation of the performing arts. Just as a library provides access to reading, as a broadcaster gives you access to your favourite television series, the presentation of dance, music, song, theatre, the circus arts and, increasingly, the interdisciplinary arts depends, in many cases across the country, on performing arts presentation organizations.
3 p.m.
Conservative
The Chair Conservative Brian Pallister
Thanks to all of you for your excellent presentations.
Before we continue, committee members, we will complete our task in this session by approximately five minutes to four, and we will then immediately move to the lobby. Our departure time is moved up, so we must be ready to go no more than ten minutes after we complete this session. Okay?
To continue, we will have seven minutes, twice, then five minutes.
Mr. McCallum, you have seven minutes.
3 p.m.
Liberal
John McCallum Liberal Markham—Unionville, ON
Thank you.
Thanks to all the witnesses.
I'd like to begin with Mr. Morency. I admit, like you, that Canada's competitiveness is crucial. I'd like to ask you a question about taxes.
Having regard to three classes of taxes: corporate taxes, personal income taxes and consumption taxes, such as the GST, what would be your priorities for tax reduction as regards competitiveness?
3:05 p.m.
Vice-President, Government Relations, Desjardins Group
That's a difficult choice. However, in the current context, our businesses must become increasingly competitive. So the tax system should be revised a little to reduce the tax burden of businesses.
Recent studies by the C.D. Howe Institute show that the effective marginal capital tax rate is among the highest in the world. Consequently, our level of competitiveness can't bear that rate. In fact, it's the return on an investment necessary to pay both one's taxes and to earn a sufficient return on invested capital. There's food for thought there.
3:05 p.m.
Liberal
John McCallum Liberal Markham—Unionville, ON
[Inaudible - Editor] ...the businesses, but what would you choose between income tax and the GST?
3:05 p.m.
Vice-President, Government Relations, Desjardins Group
The personal income tax is a measure that seems to me, perhaps in a selection, to be the one that should be examined, and the carrier effects on consumption, productivity and efficiency as a whole should be analyzed.
However, I would focus a great deal on business.
3:05 p.m.
Liberal
John McCallum Liberal Markham—Unionville, ON
I believe that the studies by the OECD, the IMF and economists all acknowledge that, in terms of competitiveness, it is more important to reduce income taxes than consumption taxes.
Do you agree with that?
3:05 p.m.
Vice-President, Government Relations, Desjardins Group
You also have to look at the taxation context. In Europe, all countries tend to favour taxation by means of the value-added tax. Here in North America, our neighbours, our main competitors, aren't very much in favour of that kind of tax.
The answer to your question is yes. In the world as a whole, it may be preferable to cut income taxes, but you also have to consider the context in which you find yourself.
3:05 p.m.
Liberal
John McCallum Liberal Markham—Unionville, ON
Okay. Merci beaucoup.
And now to Heather Munroe-Blum.... I said in the last session that I agreed with everything the Laval president said, as a former academic, but in the case of McGill, I'm not only a former academic but also a former student, the son of a student, the father of a student, and a former professor. So I might have a little bias in favour of McGill, which perhaps I should declare in advance.
My first question would be this. If one has the choice, better a greater emphasis—I don't think it's an all-or-nothing, zero or positive choice—between additional direct federal funding to universities for research and for research chairs and indirect costs, etc., on the one hand, versus a greater dedicated transfer from the federal government to the provinces, from McGill's point of view, which would you say would be the higher priority, even though I know you want both?
3:05 p.m.
Principal, McGill University
I appreciate you saying that I don't have to choose.
3:05 p.m.
Principal, McGill University
Yes.
Both are important, so it isn't all or nothing, one or the other.
3:05 p.m.
Principal, McGill University
I think it's very important that there be some redress on the federal transfer side, but without question, there is a powerful federal role. Canada's position in the world depends on a strong federal investment in the research, productivity, and innovation program.
3:05 p.m.
Liberal
John McCallum Liberal Markham—Unionville, ON
Another point that interested me is on commercialization. I think you're saying more emphasis should be given to that, and I agree with that, in the sense that I'm very proud of what our governments did to support research. It seems to me the next step would be to give more emphasis to bringing those ideas to market, but I know that's anathema for academics because they're not very keen on the commercial side of things.
So how do you square up public need, I believe, for greater commercialization, with an academic mindset that isn't particularly keen on that?
3:10 p.m.
Conservative
The Chair Conservative Brian Pallister
Thank you very much, madam.
Thank you, Mr. McCallum.
Mr. Wallace, you have seven minutes.