Finance Committee on Oct. 25th, 2006

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

Thank you.

[The Chair, Conservative, Brian Pallister]

Mr. Pacetti, the floor is yours.

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

Thank you.

Ms. Théberge, are you requesting money from the Canadian government? Two science centres, including one in Winnipeg, have requested money in their presentations. Are we talking about the same amount?

[Manon Théberge]

Some science centres are currently going ahead with renovation work. They want to expand their facilities, like those in Calgary and Winnipeg. The Canadian Association of Science Centres is seeking a pan-Canadian program and a strategy to take advantage of everything there already is. The top 20 cities all have their own science centre, except one, Quebec City. So this isn't the same amount. Earlier I mentioned the amount we're requesting.

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

Your amount isn't included in the amounts they're requesting?

[Manon Théberge]

No, that's for the pan-Canadian strategy being proposed.

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

So your request has two components: the centre's creation and necessary operating funding.

[Manon Théberge]

The federal contribution is already included in our request, but the pan-Canadian strategy is a vision we're proposing.

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

In your project, are there already commitments from the provincial and municipal governments?

[Manon Théberge]

The process has started for each of the commitments. Some are more advanced than others.

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

Are you dealing with a department at the federal level?

[Manon Théberge]

For the moment, we're trying to secure $500,000 from Economic Development Canada, which would be allocated to the staff of a project office.

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

That's what I was thinking. Thank you.

I'll be brief. My question is for Mr. Saillant and Ms. Brisseau.

Last year, the Liberal government, with the NDP's support, passed Bill C-48. Last month, the Conservatives said that they would transfer $1.6 billion to affordable housing. The Bloc did not support that bill. I don't know why it's always said that the Bloc supports this issue. A large amount was transferred as a result of the agreement with the NDP. I don't know whether it's already been done, but last month it was announced that this amount would be transferred to a foundation.

This is for Mr. Pigeon. We talked about transfers for postsecondary education. When we were in Winnipeg, the principal of the school...

Lloyd Axworthy was minister when funding for postsecondary education was cut. The universities apparently requested that certain amounts be transferred to the research councils...

[The Chair, Conservative, Brian Pallister]

Thank you very much, Mr. Pacetti.

The last speaker is Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you, Mr. Chair.

Mr. Tremblay, I actually was encouraged by some of your comments. I think you're on the right track. I think that we do need to provide more opportunity for families to build wealth. I know that in Quebec there was a furor created last week when Lucien Bouchard indicated that productivity isn't as high in Quebec as it is in some other areas.

Do you think high tax levels are serving as a disincentive to productivity and wealth?

[Dr. Marcel Tremblay]

Yes, most people who pay taxes are middle class, mainly in the cities. We really must support these cities where it's said that housing is unlivable. No one seems to stop at anything that's catastrophic here in Quebec City. Half the city should be rebuilt. In 1957, the Laplante Report stated that the “hovels should be regilded.”

Millions of dollars were allocated to Old Quebec, but a lot of parishes now have uninhabitable housing. Are we going to destroy them or are we really going to help renovate these houses? That's the question we have to ask ourselves. Are we going to reduce the people of the middle class to a state of homelessness? That's the problem now.

Rather than start from the bottom with homeless people, we should start at the top and tell those people who are able to do something, who have initiative, who show dedication and who are cultivated, to do their duty. You elected members should pay attention to that.

Our cities have now gotten to such a point—especially Quebec City—that half of each of them should be demolished. Are you going to demolish half of Quebec City? In 1957, the Laplante Report stated that 14 areas of Quebec City were really dealing with hovels. No one is talking about renovations. No one is talking about giving people a chance to be free, or to be constantly supervised by intervening parties. It is really time to do something.

In 1974, together with the Liberal and a Conservative, I visited the University of Moscow and a large part of Russia during the Brezhnev era. It had already gotten to the point where the dwellings we visited were hovels. But socialism creates hovels and poverty.

Today, we must start at the top—not at the level of the homeless—to really create something.

[An hon. member]

These days the hovels downtown belong to private owners.

[Dr. Marcel Tremblay]

Affordable housing currently...

[The Chair, Conservative, Brian Pallister]

Thanks to all of you for your presentations. On behalf of the committee, we are very grateful that you're here, for the time you have given us today and the work you have done in preparation for this meeting.

We'll now take a short break, no more than five minutes, so that the next witness can get settled.

[The Chair, Conservative, Brian Pallister]

Welcome. Order. Pardon my French, but I'm just starting.

I would like to welcome the witnesses and members of the Standing Committee on Finance.

The mandate of the House of Commons Standing Committee on Finance is to study and report on the budgetary policy proposals presented to the federal government. This year, the theme is Canada's place in a competitive world. We've asked you in advance to limit your presentations to five minutes, please, even though we know it is not easy to do so. We will nevertheless respect that limit. If you want to glance over at me, I'll give you a signal when you have a minute or less left. At the end of five minutes, I will ask you to wrap up, all in order to promote discussion with the members and so that you can answer their questions.

We'll begin immediately by turning the floor over to a representative of the Mouvement des caisses Desjardins, Mr. Yves Morency, Vice-President.

Welcome, Mr. Morency. You have five minutes.

[Yves Morency, Vice-President, Government Relations, Desjardins Group]

Perfect. Good afternoon, everyone.

With some 5.5 million owner-members, consumers and businesses alike, the Mouvement des caisses Desjardins is the leading financial institution in Quebec as well as the largest cooperative financial group in Canada. Because of its commitment to combining assets and values, Desjardins is involved in the community to an extent unmatched by any other financial institution, thereby contributing to the economic and social well-being of people and communities.

As a member of the Canadian cooperative community, Desjardins supports the joint recommendations of the Canadian cooperative sector, which you had a chance to look at last week and which we've also appended to our brief.

Canada is one of the richest countries in the world. However, to maintain this enviable position in an increasingly competitive world, Canada will face over the next few years a number of challenges. In addition to productivity is the challenge of an aging labour force. The federal government must therefore review its priorities and bring in practical measures that will help Canada maintain its enviable position on the world stage. It is important that our businesses enhance their competitiveness, that our labour force improve its skills and that our infrastructure meet present and future needs.

We feel that any views on tax and budgetary measures that the federal government could eventually put forward should first be broadened by challenging the roles of the federal government in the Canadian economy, as well as with the goods and services it provides. Since the federal government's expenditures and revenues account for close to 15% of real Canadian GDP, its impact on the overall economy is obviously major. It is essential that the government prioritize the production of goods and services in a manner more closely related to its mission: one need only think of defence, international treaties, security, diplomatic services and the environment.

We also think it important to give greater focus to private business in the production of public services, particularly through public-private partnerships, PPPs. These partnerships should of course be monitored and governed by strict rules to ensure that the quality of service will respect the standards that are currently in effect in the government.

As regards infrastructures, the federal government should establish a sinking fund not only to help ensure the funding of infrastructure replacement, but also to minimize its financial impact when needs become pressing. It is also important to adopt measures to improve the competitive position of Canadian businesses. We have observed a deterioration in our competitive position, particularly relative to the United States. This can be explained mainly by relatively low growth in the information technology sector since the beginning of the new millennium, by slower development of investments in machinery and equipment and by relatively slow economic growth in some regions of the country.

The federal government must take adequate measures to reverse this trend and in so doing help Canada be more competitive. More specifically, the government should favour tax measures that will encourage business investment. The tax burden of businesses should also be reduced in order to make it more competitive and thus facilitate investment.

In addition, the federal government could put forth tax measures that encourage innovation, which is a vital factor in improving competitiveness. Education and the development of human capital are also sectors that should be promoted.

We believe that Canada's prosperity depends on a fiscal rebalancing between the Government of Canada and those of the provinces. To do that, we feel that it is essential that the federal government restrict its budget spending to its own fields of jurisdiction. It must avoid draining its budget surpluses by increasing spending in every which way and find ways to transfer a good part of its financial leeway to the provinces.

The priorities and objectives of the federal government should also take into account the specific needs of the regions and their SMEs. We also feel that Canada must take even more advantage of its proximity with the United States in many fields, including that of venture capital.

We also believe in the need to encourage partnerships between Canadian and American universities. It would also be desirable for our young businesses, particularly those in the technology sector, to develop their business plans taking into account not only the dynamic of the Canadian market, but also that of the U.S. market.

Ultimately, efforts need to be made for the Canadian economy to increase significantly its productivity and enhance the competitiveness of its businesses and the quality of life of all Canadians.

Thank you.

[The Chair, Conservative, Brian Pallister]

Thank you.

We'll continue with Mr. Gaétan Boucher, Chief Executive Officer of the Fédération des cégeps.

Welcome, sir. You have five minutes.

[Gaétan Boucher, Chief Executive Officer, Fédération des cégeps]

Thank you, Mr. Chair.

Ladies and gentlemen, perhaps I could tell you at the outset that the Fédération des cégeps is a free and voluntary association of Quebec's 48 Cegeps. In fact, it is the Quebec counterpart of the community colleges in the rest of the country. Enrolment at our institutions totals 150,000 young men and women and approximately 50,000 adults.

It must be clearly understood that our concern is over the issue of transfer payments for postsecondary education. Committee members must know that, at this time, we estimate that the chronic underfunding of our colleges amounts to $305 million.

Let me cite some examples. Today, in Quebec City and Montreal, year in and year out, 5,000 men and women are unable to attend our colleges to take retraining or development courses. We are waiting to implement new programs, such as the technical electrical engineering program, which has been revised and should be introduced in all our cegeps. That costs $70 million.

So we feel that our financial difficulties are extremely significant at this time. Quebec's colleges are 86% funded by the Quebec government, compared to 53% for the universities. Unfortunately, we have virtually no federal funding at our disposal; funding for the universities is 13%. There are no tuition fees at Quebec's cegeps, whereas Quebec universities receive tuition fees.

Our message today is clear: in the next federal budget, we would like there to be a clear resolution of the fiscal imbalance and, consequently, transfers for postsecondary education.

I would like to remind committee members that it was in Quebec City, in December 2005, that Mr. Harper promised to correct the fiscal imbalance. On January 12 of this year, in a signed letter to the President of the Federation Council at the time, Mr. Klein, he made a commitment to create a Canada education and training transfer. In the federal Throne Speech, there was a formal commitment to solve the problem of fiscal imbalance. That commitment was also reiterated in Mr. Flaherty's first budget last April. And, lastly, Mr. Harper solemnly told Quebeckers, before the Board of Trade of Metropolitan Montreal, that his government would solve the fiscal imbalance problem. He also told the people of the colleges and universities that his government would solve the problem of transfers for postsecondary education.

As I said at the press conference this morning, it is clear in our minds that the time has come to deliver the goods. The government must genuinely shift from words into action and, in the next federal budget, restore the transfer to its 1994-1995 level, plus $2.2 billion current, $4.9 billion constant. We must correct, once and for all, for our colleges and universities, the problem of fiscal imbalance, the problem of transfers for postsecondary education. Let me repeat it before committee members: the goods must actually be delivered, and, in the coming days, weeks and months, we will be constantly watching the government so that the prime minister delivers the goods and meets the commitments he made in this city.

Thank you, Mr. Chair.

[The Chair, Conservative, Brian Pallister]

Thank you very much, sir.

We'll continue with Mr. Serge Brasset.

[Serge Brasset, Executive Director, Association of Canadian Community Colleges]

Thank you.

I'm also the Director General of Collège Édouard-Montpetit, the largest Francophone cegep in Quebec. I'm here today with Ms. Nicole Rouillier, Director General of Cégep Marie-Victorin. Both of us are members of the board of the Association of Canadian Community Colleges. I am chairman of the board.

Last February, the council held the Pancanadian Summit on Postsecondary Education and Skills Training. At the summit, the provincial premiers, ministers of education, postsecondary education stakeholders and the universities and colleges unanimously reaffirmed that it was important that the colleges and universities have resources enabling them to meet the training needs of youths and adults.

To that end, five priorities were established: promote greater access to postsecondary education—and the country needs that kind of measure; improve and guarantee quality of training and succession; update infrastructures, particularly technological infrastructures; improve access to the labour market for groups such as immigrants, Aboriginal people and persons with disabilities; improve the skills of persons already in the labour market and develop the research and innovation sectors.

The drop-out rate is high among high school students in Quebec and Canada. Many young people are not receiving postsecondary education or occupational training. And yet our country is oriented toward the knowledge economy. It is therefore clear that, as citizens, we must ensure that the largest possible number of young people and adults receive training that qualifies them and opens the doors of the labour market for them.

That said, as you will no doubt guess, we strongly support the Association of Colleges. It has already appeared before the Finance Committee, as have the Fédération des cégeps and all the provincial associations, which are asking the federal government to reinvest in postsecondary education and to ensure that those amounts enable Canadian colleges to provide training that meets the needs of young people and adults.

It is important that we move into action. To that end, the Association is making six recommendations. First, naturally, we must be able to develop a comprehensive pan-Canadian Work Force Development Agenda. We lack skilled labour in businesses. However, many young people are not receiving technical and occupational instruction. In that sense, we have a gap to fill and we must ensure that funding is available to provide this training. Furthermore, we must immediately reinvest in Canadian prosperity, that is to say guarantee the quality of postsecondary instruction and broaden access to it.

We also recommend that the federal government create, in the context of what is called the Canada Social Transfer, a transfer for postsecondary education at the 1992-1993-1994 level. The purpose here is to ensure that these amounts go to postsecondary education. We all know that the most meaningful investment that a country, developed or otherwise, can make is in its education.

We also recommend that there be a new Canadian system of financial assistance that responds more to the problem of student indebtedness. The Association recommends that a fund be created to improve technological infrastructure so as to ensure that our students are well trained and that that training meets the needs of the businesses that employ them. We need national funding to update our infrastructures and buildings.

We also recommend the creation of a research development and commercialization support fund. Colleges are increasingly conducting research. So it is important that we be able to update that research, which is in fact applied research. It enables businesses, particularly small and medium-size businesses, to gain access to research activities which they otherwise could not access.

Lastly, I would remind you that the Association of Canadian Community Colleges represents 150 colleges. I am sure that each of you has one in your riding. We are in more than 1,000 communities across the country. I am delivering this message on behalf of the 150 colleges that represent nearly one million students across the country so that, with the next budget, we can obtain funding reserved for college instruction. The objective is to better respond to the training needs of our youth and adults who need to retrain.

Thank you.