Finance Committee on Oct. 26th, 2006

[The Chair, Conservative, Brian Pallister]

Thank you very much, sir, for your presentation.

From the Anishinabek Nation, Mr. John Beaucage, grand council chief, is here.

Welcome, John. Five minutes are for you.

[John Beaucage, Grand Council Chief, Anishinabek Nation]

Good morning, ladies and gentlemen.

I am Grand Council Chief John Beaucage, elected from the 42-member first nations of the Anishinabek Nation. I am pleased to offer you this submission on behalf of the Union of Ontario Indians and the Assembly of First Nations.

I share the national portfolio for housing and infrastructure with National Chief Phil Fontaine and Yukon Regional Vice-Chief Rick O'Brien. This document builds on the pre-budget submission by the Assembly of First Nations and is the position of the first nations of Canada. I respectfully submit this brief for your review.

National Chief Phil Fontaine has met with the Hon. Jim Prentice, Minister of Indian and Northern Affairs Canada, and briefly with the Prime Minister on this plan. Both were quite receptive to these ideas, which move to establish creative financing for the purposes of a legitimate free market housing process on reserve. That being said, we cannot ignore the substantial needs for social housing and the right to shelter of those who are unable to access capital under this proposed market housing regime. The proposed comprehensive framework takes steps to provide creative financing for first nations to establish sustainable access to capital for both private market housing and public social housing through the same business case envelope.

The most innovative proposal in this comprehensive framework is the establishment of a first nations investment trust. The investment trust would consolidate federal funding for first nations housing. It will act as a sustainable revolving loan fund and an indemnity fund. It will provide delivery program funding through the members of a first nations housing authority and a first nations housing institute, which is also being proposed under this comprehensive initiative.

I can't stress enough that both first nations and the government need to make significant transformative change in the way we fund and administer our housing programs. Dollars currently being spent by Indian Affairs and CMHC housing programs are simply going out the government door and building houses dollar for dollar. We need to make those housing dollars go a lot further through investment options as well as public and private partnerships.

Our recommendation for first nations housing is a $1.2 billion investment in the 2007 federal budget—specifically, an allocation of $395 million the first year for development and startup costs, together with a $215 million annual allocation for the next four years to facilitate ongoing operation costs and capital investment in the first nations investment trust. We also recommend that the government consider annual investments in first nations infrastructures of $300 million over the next five years.

Without a doubt, there is tremendous need for government action for on-reserve first nations housing. Our estimates indicate a backlog of some 80,000 units. Those who have a home are living in deplorable conditions—overcrowding, mould contamination, and a lack of basic amenities. There is a significant lack of basic infrastructure to sustain our communities right across the country.

Ladies and gentlemen, these are not just catch phrases or embellishments. These circumstances are real. This is happening in my home community of Wasauksing. This is happening throughout the Anishinabek Nation. This is happening right here in Canada. We ask that you do your part in eliminating first nations poverty. We cannot afford to ignore these conditions any longer.

Kichi meegwetch. Thank you.

[The Chair, Conservative, Brian Pallister]

Thank you, sir.

We continue with Rick Miner, president, Seneca College of Applied Arts and Technology.

[Dr. Rick Miner, President, Seneca College of Applied Arts and Technology]

Thank you very much.

I appreciate the opportunity to speak before the committee. I am president of Seneca College.

As you would have noted from our September submission, Seneca is the largest Canadian college, with 10 campuses in the greater Toronto area. We service over 100,000 students annually. We are a comprehensive institution with over 150 programs ranging from and through apprenticeship, skilled trades, diplomas, certificates, and applied degrees. We deal with both skills upgrading and a host of professional areas.

Our brief, and my remarks today, support much of what you have already heard from representatives of the post-secondary education system in Canada, whether it be college or university presidents, associations of higher learning, or student groups. There is a convergence among all these voices that there needs to be a dedicated federal transfer mechanism for post-secondary education. Seneca clearly endorses that approach. For the record, we specifically endorse the recommendations you have heard from ACCC, ACAATO, NAIT, ACTI, and Polytechnics Canada.

However, I want to focus my short intervention today on two points where consensus is not always present but action and leadership is certainly needed. With respect to the committee's concern regarding Canada's competitiveness and productivity, there are two principal actions the committee could endorse.

First, given that skills shortage is a primary concern of this committee and that the solution is to fund those sectors that produce the skilled workers, Canadian colleges, institutes, and particularly the polytechnics are best positioned to produce the high-quality skilled workers the Canadian economy needs. This could be achieved through a range of programs--a one-year certificate, two and three-year diplomas--that provide fast returns. In this context, it's critical not to commit errors in our race to produce qualified workers. We recognize and understand that the Canadian economy needs all types of skilled workers. The recent focus by the new Government of Canada on apprenticeship and Red Seal trades is to be applauded.

But we must exercise some caution in that the vast majority of Canadian colleges deal with technologists and technicians. This in fact is the largest growing area of the labour needs, in the area of services such as information services, health services, financial services, manufacturing services, as well as in the area of technology, be it biotech, informatics, building technologies, or simply lab technicians. These are the skills we will need for the 21st century, and these are the skills that can be provided by colleges, institutes, and polytechnics in Canada.

Much has also been said about the underutilization of our immigrants and newcomers to Canada. As mentioned in our submission, Seneca College is in that part of Canada that receives the largest number of immigrants. We respond to those newcomers as best we can by providing language training, career counselling, workplace skills and upgrading, credential evaluation, and bridging-to-work programs. But the demand far, far exceeds our capacity to respond.

You will be receiving a written submission about an innovative GTA proposal that will address this need. Hopefully, you'll receive that shortly and you can take it under consideration.

My second point is that while there appears to be a consensus that Canada's poor rate of commercialization of research is a factor in our productivity lag, we continue to overlook the very sector that is best placed to commercialize the ideas and innovations of industry, that being our colleges, institutes, and polytechnics. Precisely because of their close ties with industry and the local community, as with Seneca, we are positioned to provide market-driven solutions for small and medium-sized enterprises. We have faculty who are tied to industry and students who are involved in research as part of their program.

Yet the stranglehold of the universities on the federal research funding continues. It has not yielded the returns on investment the government has sought. In many ways, we have turned dollars into knowledge, but we have not turned knowledge into productivity.

The time has come to level the playing field for publicly funded research. The 2007 budget should address the sectors of post-secondary education that have regrettably been ignored, undervalued, and that have suffered from underinvestment.

Many voices will argue for the status quo. Some will argue for increased funding of the status quo. We think there needs to be a bold action on behalf of the government to look at colleges, institutes, and polytechnics as a source for improving Canada's commercialization.

In addition, a suggestion for your consideration—

[The Chair, Conservative, Brian Pallister]

I'll have to ask you to stop there, but there will be time for questions afterwards, I assure you.

Thank you, Mr. Miner, for your presentation.

We'll conclude our presentations now with the Task Force on Modernizing Income Security for Working-Age Adults. I understand that John Stapleton and Jill Black will be splitting their time up somehow.

Welcome, and proceed.

[Jill Black, Project Director and Co-Chair, Task Force, Toronto City Summit Alliance, Modernizing Income Security for Working Age Adults]

Thank you.

I am Jill Black, and I was the co-chair of the working group for the task force for modernizing income security for working-age adults, sometimes called MISWAA. John Stapleton, the other co-chair, and I are sharing the presentation today, and we want to thank you for enabling us to be here.

The task force was formed in September 2004 by the Toronto City Summit Alliance, or TCSA, and St. Christopher House. The TCSA is a broadly based coalition of civic leaders that has launched a number of initiatives dealing with issues facing the Toronto region, ranging from accelerating immigration settlement to helping stimulate tourism post-SARS. Our 2003 action plan for the Toronto region, called “Enough Talk”, highlighted the issue of income security as being critical to major cities—not just Toronto, but cities across Canada. St. Christopher House, a multi-service neighbourhood centre in Toronto, was the ideal partner in forming the task force because it had extensive experience in involving the community in formulating policies and programs to help improve the situations of people living on low income.

The task force was made up of a steering group of about fifty leaders from business, labour, community organizations, advocacy groups, academia, policy institutes, foundations, and government. Working with St. Christopher House, we put together a community reference group of low-income people—who were directly involved in formulating the recommendations—as well as an extensive community consultation process with almost 300 low-income adults and a similar number of staff from community agencies. Finally, we had a working group that included policy analysts from the Conference Board of Canada, the C.D. Howe Institute, T.D., Scotia Economics, the Caledon Institute, CPRN, the Canadian Labour Congress, and a number of community and advocacy groups, including the Daily Bread Food Bank and the Workers' Action Centre.

We believe the task force was unprecedented in a number of respects: in getting leaders from all those sectors, including business, together at the same table to talk about income security; in having all of those think tanks involved in one working group; and in the extent of the involvement of people directly affected by the problems with the system. We didn't obtain consensus on all of the recommendations, but everyone agreed on the issues. Members are united in the belief that the system is broken and that all orders of government must come to the table to secure the needed reforms. Our submission sets out recommendations, and they may also be found in our report “Time for a Fair Deal”, at www.torontoalliance.ca.

Many members of the task force believe the federal government needs to be accountable and play a more prominent role in the income security for working-age adults, much as it does today with seniors and children.

I'll turn it over to John to elaborate.

[John Stapleton, Research Director and Co-Chair, Working Group, Toronto City Summit Alliance, Modernizing Income Security for Working Age Adults]

Thank you.

Turning to our senior citizens, a resident of Ontario who turns 65 with no savings, no Canada Pension, or no other income of any kind receives a base guarantee of $15,200 a year through old age security, the guaranteed income supplement, and provincial credits of various sorts. This base guarantee has been kept up to date for decades.

Benefits to seniors represent 49% of all income security expenditures in Canada, and this portion will soon rise to more than 50% and grow much larger post-2011, when those in the baby boom generation start turning 65 years old. Our ongoing support for seniors represents good policy. Our income security program should be kept up to date and we should ensure that benefits don't erode with inflation.

What is bad is that programs and policies for working-age adults are not similarly kept up to date, not even for those who are not capable of working. Consider the following facts.

Single welfare recipients can receive less than $6,500 a year, down 45% in real terms since 1993. The rates have now fallen to pre-Centennial levels, again in inflation-adjusted terms. Welfare costs now represent 5% of the overall expenditures in the income security system in Ontario. A single disabled recipient obtaining a disability allowance in Ontario now receives just under $11,500 a year, down more than 20% in real terms since the early 1990s, and now $3,700 a year less than the neediest senior.

Minimum wages, despite increases, are much lower in real terms than they were in the 1970s and less than they were in the 1990s. Single minimum wage earners net 18% less than the neediest single senior. If they redouble their efforts and earn the extra money, that will bring them up to the level of the neediest senior, but 36% of their gross pay is deducted from their paycheque in the form of EI and CPP deductions, income tax, and reduced tax credits. EI benefits have decreased in real terms for the 22% of the unemployed in Toronto who are eligible for them. At the same time, the EI fund has accumulated a significant surplus.

As a result, low-income wage earners increasingly cannot afford to live in our cities where the work is, and there is no sign of redress. Income security programs for seniors continue to be protected through indexation, while no benefits or policy measures for working-age adults are protected in any way. They just continue to erode.

[The Chair, Conservative, Brian Pallister]

I must cut you off right there, but I'm sure there'll be time for questions.

We'll begin our questions now.

Thank you all very much for your presentations. They were all well done.

We'll begin with five-minute rounds.

Mr. McCallum.

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

We have an embarrassment of riches here today, which I'm sure my colleagues will agree is not a surprise in Canada's world-class city, but I would like to begin—that was meant to be a joke.

[Voices]

Oh, oh!

[An hon. member]

You could have warned us, John.

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

I would like to begin with a macro issue on the budget, in terms of our overall availability of money to fund the kinds of tax cuts or expenditures all of you are talking about. The government is talking about a second GST reduction, from 6% to 5%, which would cost a huge amount of money, like $6 billion per year, which risks crowding out various other initiatives.

I've done this in other parts of the country, with other groups. I'd like to do a very quick poll and ask each of you, starting on my left. Either representing your organization or as a private citizen, would you wish to go ahead with this GST cut, or would you rather not and use the $6 billion a year for other priorities? So it's either, “No, don't go ahead with the GST”, or “Yes, do” or, if you prefer, “No comment”.

[Col Rick Williams]

Our organization would strongly support a retention of both the annualization of child care and the SCPI funding as critical components toward the future. If that competes with tax reduction, we would see the investment as a priority, as compared to tax reduction.

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

Okay.

[Dave Toycen]

Yes, I would take a similar position. We're convinced the move toward point 7 and the other initiatives in our brief are really critical. If lowering the GST is going to somehow undermine that, we wouldn't be in favour.

[The Chair, Conservative, Brian Pallister]

We've got to back up to Rainer, who was missed.

[Rainer Driemeyer]

Taxation is the cost of living in a civil society. We want to live in a civil society. We don't care about tax cuts.

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

Great.

Thank you very much, but I'd like to go quickly, or else I'll have no time. Just “yes” or “no”, please.

[Tanya Gulliver]

Yes, we would rather spend it than have a tax cut.

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

So you mean, no--no to going ahead with the GST.

[Cecil Bradley]

John, our brief gives you some particular advice on that. We're suggesting that any change in the GST be used in the renegotiation with the provinces and municipalities on redistributing the fiscal pie of Canada. I think there's an intelligent way to go about GST reduction and there's a less intelligent way. We're recommending the intelligent approach.

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

Which is to give the money to the provinces. Okay.

[Cecil Bradley]

To put it in the pot.

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

Yes.

Mr. Davis.

[Bruce Davis]

The board doesn't have a position, although the 1% reduction received to date has saved us about $1.5 million, for which I am very happy. I personally don't support it, but that is a clear reduction for our school board, I agree.