Finance Committee on Oct. 25th, 2006

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you.

I'm going to apologize up front, because five minutes isn't going to be enough time for me to get all my questions in, because I do have some for all of you.

I want to begin with Mr. Morency. The government, in Budget 2006, clearly outlined a timeframe for the reduction of corporate taxes and the elimination of corporate surtaxes. We've reduced personal income taxes for families, we've reduced the GST, and we've indicated that we are looking to further reduce taxes to create more incentive in the economy.

Are we moving in the right direction towards improving productivity in Canada?

[Yves Morency]

The message we want to send is that you should continue in this direction. That will improve productivity, which will enhance the wealth of businesses, individuals and the government, because tax revenues will increase. So we encourage you to continue along this path. You mustn't stop; you must go even further in order to achieve the competitiveness levels of our main neighbours, with which a fairly large policy gap is developing.

[Dean Del Mastro, Conservative, Peterborough, ON]

Your submission speaks also of the fiscal imbalance. You say,

To resolve this imbalance, we feel that it is essential that the Federal Government restrict its budget spending to its own fields of jurisdiction. The Federal Government must absolutely avoid draining its budget surpluses by increasing spending in every which way.

I agree with you 100%.

The Government of Canada recently announced some spending restraints that we are putting in place, on top of a significant paydown on the debt, which will save $660 million in interest payments per year.

What was Desjardins' position on the announcements for spending restraints that the government made--over $1 billion in savings--a couple of weeks ago?

[Yves Morency]

We said in our brief that we should be taking a critical look at all expenditures and questioning whether they will really be allocated to public goods and services.

In past years, we have defended a concept of subsidiarity, that is to say that the government in the best position to provide a service should provide it.

From an historical point of view, in my opinion, the Fathers of Confederation were wise enough when they determined what should be federal jurisdictions and what should be provincial jurisdictions. I think it's important to consider the situation from that standpoint.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you.

I'm going to make a statement because I don't have time to ask you a question, because I need to get to another one. I agree with you 100% that a dedicated transfer would be a good way of getting money to post-secondary education in all of the provinces and a good way of dealing with the fiscal imbalance. You don't have to work too hard on us. We keep our promises. I think you'll see an announcement forthcoming on that front.

With respect to agriculture, I agree with you with respect to the CAIS program. It's a bad program. It doesn't work for agriculture.

I'm passionate about the NISA program. I think it worked. I think we bailed out on it a couple of years before it would really have worked for Canadian farmers, through the BSE crisis, and so on.

Maybe you could just make a comment in that regard.

[Denis Bilodeau]

One need only look at the latest statistics on federal intervention in recent years. Previously, 40% of comprehensive interventions in respect of farm businesses in Quebec came from the federal government, and approximately 20% from the provincial government.

Today, it's the reverse. The most obvious situation in this regard involves the latest measures announced concerning the comprehensive action by the department, which are in the order of $2.2 billion. That's a large amount of money. That provides cash inflows equivalent to approximately 6.8% in Quebec, whereas our representative agricultural production, relative to Canada as a whole, should be in the order of 16 to 17%.

So there's a shortfall relative to that. We're talking about an amount of approximately $150 million, whereas the grain industry is experiencing a crisis right now.

[Dean Del Mastro, Conservative, Peterborough, ON]

I mean as it specifically pertains to CAIS, though.

[The Chair, Conservative, Brian Pallister]

Pardon me for interrupting you, sir, but your time is up.

[Dean Del Mastro, Conservative, Peterborough, ON]

And here I was, going so fast.

[The Chair, Conservative, Brian Pallister]

The next speaker will be Mr. McCallum.

You have five minutes, sir.

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

Thank you.

Perhaps I'll give the principal 45 seconds of my time to answer my colleague's question on the matter.

[Dr. Heather Munroe-Blum]

I believe he's incorrect.

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

Okay.

Mr. Boucher, your message was extremely strong and clear: the time has come to deliver the goods. I'm not here to defend the government.

However, this morning we heard a discussion about how the federal government could reduce Canadians' taxes, the GST or income taxes. In addition, the government could tell the provinces that it has created the room so that they can occupy it by increasing their taxes, if they wish. As a result, and since the federal government has cut its taxes, we could conclude that that's one way of correcting the fiscal imbalance, at least in part. However, that causes a problem: the government promised during the election campaign that it would cut taxes and the GST for citizens, not for the provincial governments.

From your viewpoint, would such an action be a good one in reducing the fiscal imbalance, or not?

[Gaétan Boucher]

I don't think so. When a party or someone who aspires to govern this country makes a commitment in writing, on January 12, 2006, in a letter sent to the President of the council of the Fédération des cégeps, to create a Canada education and training transfer, he has a duty to meet that commitment. From my standpoint, the solution you're suggesting would mean that the commitment the Conservative Party made during the election campaign would not be kept.

However, I entirely share your colleague's view. For the future, we must aim for a Canada education and training transfer that is clear, transparent and that enables us to monitor changes in funding and to ensure that that funding is indeed paid to our colleagues and to our universities.

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

Merci.

And to Ms. Munroe-Blum.... Sometimes it's good to be simple.

Is it possible for you to tell us if you had one top priority, what would that be, and why? And if it were adopted for all the universities, about how much would it cost?

[Dr. Heather Munroe-Blum]

That's good on the end point. For me it would be getting up to the full 40¢ per dollar on indirect costs because it affects fundamentally the quality of teaching and our capacity to be competitive on talent and research. That would be the number one priority, if I had to choose.

I need to get back to you on what the total costs would be today because they're different from what they were two years ago. Let me do that.

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

Okay. Thank you very much.

[The Chair, Conservative, Brian Pallister]

Thank you very much, sir.

We'll continue with Ms. Ablonczy.

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

Thank you, Mr. Chairman.

I apologize, I only speak a little French.

Madame Brouillé, is this the first time you've made a presentation before the finance committee?

[Colette Brouillé]

Yes.

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

This is your first presentation. It was very good and we really appreciate that.

[Colette Brouillé]

Thank you.

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

I understand the arts community has been asking for increased funding for some time. Is that correct? Do you know about that?

[Colette Brouillé]

Absolutely.

I know that submissions have been made by, among others, the Canada Council for the Arts. The voice of artists is often widely heard because they have the support of the media. The voice of people who work in the background—as we do, in presentation—often doesn't reach as far.

We emphasize that presentation programs should be maintained, but we would obviously like budgets to be indexed in accordance with needs.

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

So you must have been pleased to see the 50% increase in funding for the Canada Council, an extra $50 million. Was that something the arts community was happy about?