Finance Committee on Oct. 26th, 2006

[Linda Korgemets]

Well, it sounds like I said the same thing about ten minutes ago, so yes, of course, I agree, but I want to temper that with the following.

Our surpluses have been absolutely astounding over the last seven years under both governments—just so you people on both sides of the table know that we've had this budgeting process that creates large surpluses. It's a little bit odd. You've got lots of different things built in there for prudence and conservatism. So I'm thinking that the budget process isn't necessarily as fine-tuned as it could be. And, yes, we need some squishy room in there to deal with things that we aren't expecting; if we got some sort of avian flu, or whatever, we'd have a real economic bounce.

But I think budgets should maybe be looked at again, because if we keep generating $10 billion and $13 billion surpluses, we will effectively have overtaxed everyone around this table and everybody out there.

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

Well, that's a good point, and that's why we cut taxes to individuals by $20 billion over the next two years, this year and next year. We also raised spending by 5%, by the way. So we're spending more on programs; we're returning some money to individuals--we think that's important. And of course, by debt paydown, we will have every single year forever $650 million a year to work with that we wouldn't have had otherwise. So that's how we're trying to be responsible on all levels.

But I wanted to ask something with respect to the airports, which has been a huge issue in front of the committee. Can you explain, not just to me but to regular Canadians, what would happen if airport rents were reduced as you're asking? How would that affect the air traveller, regular Canadians?

Sometimes people need it translated into personal terms.

[John Kaldeway]

Yes, thank you.

The total airport rents that Toronto Pearson pays this year equates, as I think I mentioned in my submission, to about 34% of our landing fees--roughly a third of the landing fees. The landing fee at Pearson is an impediment to certain airlines coming here and providing services. That's one possible impact, and one that I know is a strong one. Having airlines come in and provide services that you could take advantage of to various parts of the world that are not now well served would be a very positive result of my costs going down.

The other part of it that I have less control over is that we've committed that whatever rent reduction we'd get, we would pass on to the airlines and reduce their landing fees. I would hope that this would at some point result in some reduced airfares.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you.

Thank you, Ms. Albonczy. Thank you, Mr. Kaldeway.

Just quickly, Ms. Rossant, in terms of your research money, how do the hospitals and the universities work together? Is that being done?

[Janet Rossant]

How do the hospitals and research institutes work together?

[The Vice-Chair, Liberal, Massimo Pacetti]

When it comes to research.

[Janet Rossant]

All of the researchers like me who work within hospitals are also university professors. I'm a professor at the University of Toronto. We take graduate students, and we teach at the University of Toronto.

[The Vice-Chair, Liberal, Massimo Pacetti]

Is there a duplication, or is it controlled through CIHR?

[Janet Rossant]

We're not duplicating. We are doing different research; we're working in different areas. The children's research is at the Hospital for Sick Children.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you.

Mr. Nantais, on this pamphlet that you have here, the fourth item says that one cord of wood burned in your fireplace would generate more smog-causing emissions than ten vehicles over their useful life.

Who prepared this?

[Mark Nantais]

That's based on the emission regulations that are now in place--and these are mandatory, the most stringent in the world--as well as the performance of the vehicle. A calculation is derived from that.

[The Vice-Chair, Liberal, Massimo Pacetti]

There's a lot of wood being burned in my area. I think we have a major problem.

I want to thank the witnesses. It's been very interesting. It's a challenge for us. I don't get to say that we've saved the best for last--that's going to be for the next panel--but the members actually behaved themselves, so I appreciate that.

The meeting is suspended, and we'll be back in five minutes.

Thank you.

[The Vice-Chair, Liberal, Massimo Pacetti]

Colleagues, let's not all lose hope; we're at the end. As I just said, we've saved the best for last, so please do not disappoint—I speak to the panellists. Don't worry about the pressure; you're only witnesses number 400 to 410 or so.

The way it works is this. We're here pursuant to Standing Order 83.1 on the pre-budget consultations for 2006. I will allow you five minutes to make your presentation. I will interrupt you after five minutes, because the members are going to want to ask questions. Time is limited, and there's more than one of you, so if you can keep your presentations to five minutes, we'd appreciate it.

I'm going to go in the order I have here. The first group to go up is Opera.ca, Mr. Baile. Thank you.

[David Baile, Secretary-Treasurer, Opera.ca]

Good afternoon. My name is David Baile. I'm the general manager of Opera Atelier here in Toronto. I'm also the secretary treasurer of Opera.ca, a service organization; it's the national voice of opera in Canada.

I'm very pleased to be able to address the Standing Committee on Finance. Opera.ca believes that arts play a vital role in the prosperity of our country's economy, and we value the opportunity to engage with you in this dialogue.

In the budget presented last May, the federal government acknowledged the contribution of the arts to our economy. With this recognition, they addressed the urgent need for arts investment by providing the Canada Council for the Arts with $50 million over the next two years. This is an excellent first step and is welcomed by the opera sector, and indeed the entire arts community. We'd like to thank the government and all parties for this clear demonstration of support.

I'd also like to echo the recommendations of others and stress the importance of securing stable and predictable long-term funding for the arts through the Canada Council. It is critical to the stability and potential of this sector that this welcome infusion be made permanent.

Opera.ca also urges members of this committee to further invest in stable, long-term funding to the Canada Council. Specifically, we are calling for an additional investment of $100 million over time.

The reasons for stable public investment in the arts are twofold. First, a federal investment provides the foundation and leadership to lever other funding from the private sector, other levels of government, patrons, and foundations. It is a linchpin in effective business planning and management of our volunteer-driven, not-for-profit companies.

Second, it allows for the inherent risk of creating and showcasing new Canadian talent. Risk is essential to artistic innovation, much as it is in business or science. The need for working capital and research and development activity is key to the advancement of all industries.

As members consider these recommendations, I wish to stress that I and my colleagues across Canada appreciate and recognize that the federal investment in the arts is only part of a healthy mix of revenue sources. For my own company, for instance, federal contributions represent less than 8% of our gross revenues; earned and other contributed income are by far the most significant sources for us. However, the federal investment is critical, and as a result, for each production we engage in excess of 100 professional artists and technicians, including 10 principal singers, 12 dancers, 20 chorus members, 30 musicians, and another 40 people behind the scenes.

The committee has asked us to address very specific questions about the role we play in the economic health and prosperity of Canadian citizens and businesses. Art is essential to the vibrancy of a rich and engaging way of life. The arts are a key partner of creating vibrant communities that attract investment, business, and competition.

Canada's future rests in the hands of its children and youth—cliché, perhaps, but unquestionably true. With the erosion of arts education in schools, there's a huge demand on arts organizations to fill the gap. Communities that offer artistic opportunities, such as Opera Atelier's “Making of an Opera” for youth, enable them to learn discipline, good values, teamwork, and leadership, and in turn create healthy communities. With this program in particular, Opera Atelier is now in the position that we turn away literally hundreds of youths because of a lack of resources.

Training in the cultural sector also affects Canada's prosperity. Artists and other professionals working in the field aren't typical employees. Opportunities for professional development and training are sporadic and scattered at best. It is for this reason that Opera.ca urges the government to move forward on the implementation of the labour market partnership agreement, a Canada-Ontario initiative.

Another of the committee's questions asked about securing Canada's competitive place in the world. My position at Opera Atelier has provided a unique window for me to see firsthand how the arts can open doors to business opportunities in Canada. Opera Atelier has toured internationally for years now, and in the past few years primarily to Asia. Two years ago, performing at the Seoul Arts Center, Opera Atelier set a record for single ticket sales. We've been invited back this year but still do not have confirmation of support from the Canadian government.

It is a paradox that the Canadian government is contemplating cuts to our foreign cultural diplomacy programs, when recently the United States announced an infusion of resources, tripling their commitment to these initiatives. It is with this experience at hand that Opera.ca urges the Government of Canada to ensure that it continues to sustain its DFAIT investment in ensuring that organizations like Opera Atelier have the opportunity to hold Canada's flag high in other parts of the world.

In closing, I would like to thank the committee for allowing me to be here today. I look forward to discussing our recommendations with you in detail. Thank you.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you.

From Campaign 2000, we have Ms. Rothman.

[Laurel Rothman, Director of Social Reform & National Coordinator, Family Service Association of Toronto, Campaign 2000]

Thank you for the opportunity.

Campaign 2000 is a cross-Canada public education movement of more than 110 organizations. We're pleased to have the opportunity again.

Nearly a generation has passed since the House of Commons unanimously committed to end child poverty by the year 2000. Clearly, 2000 has come and gone, but family poverty is unfortunately with us. We remain committed to pressing for implementation of that commitment, and we join with our partners in Make Poverty History, who I know were here this morning, to press for poverty eradication in the developing world as well.

It's time for Canada to become a leader in overcoming child and family poverty, not remain a laggard. With almost 1.2 million children and their families living in poverty—almost one child in every six—Canada ranks 19th, worst, out of the 26 OECD nations. That's far from acceptable, I think many would agree. Let's join the U.K. and Ireland, who have set targets and taken a determined approach and have had some success in ratcheting down the numbers.

Quebec and Newfoundland here in Canada have demonstrated admirable leadership by committing themselves to a defined strategy to reduce poverty. Newfoundland is just beginning, but after several years, Quebec is having some evident success. The rate of child and family poverty is decreasing in Quebec more quickly and steadily than anywhere else in the country. By strange contrast, it's going up and is stubbornly high in B.C., of all places.

If we're going to seek a social inclusion agenda, which I submit we must, since we're relying on immigration to refill, if you will, and support our population growth and labour force development, we have to be an inclusive society. We have to also deal with growing inequality, whereby the incomes of the richest top quintile rose by 10% between 1990 and 2000, while those of the poorest 20% remained stagnant.

The poverty rate tells half the story. We also have the average low-income family living $7,200 below the poverty line, and a stubborn figure of more than 40% of food bank users are children.

We think Canada can and should adopt a comprehensive poverty reduction strategy. It's affordable; it's achievable. It will require significant investments, but we made some important decisions for seniors in the 1970s that have brought our rates down to the lowest in the OECD for seniors in this country, and we can do the same for children. Minister Flaherty recently spoke of the government's determination to make “practical progress on the crucial economic, geopolitical and social infrastructure priorities”. We think that includes a poverty reduction strategy.

I'll cut to the recommendations.

With regard to the tax measures, I guess we will make this strong statement and urge you to reject the blunt instrument of general tax reduction, either through income taxes or the GST reduction. We've had that. It certainly has benefited some, but not as significantly people in the lower 10% or 20%.

Instead, focus on the Canada child tax benefit; increase it to $5,000 a year. We're about two-thirds of the way there. If a lone parent in this country could earn $10 an hour, work full-time, and get a $5,000 child benefit—a balance of a labour market measure and a public investment measure—many or most of those families would be able to lift themselves out of poverty.

Along with that, these parents and other parents need high-quality early childhood education and care. You must return to it. We support the private member's bill introduced by the NDP, and supported, as I understand it, by all the opposition parties.

We need a national housing strategy. I just came from the release of a new blueprint for housing for the city of Toronto. They've calculated that if the federal and provincial housing programs had not been cancelled, we would have had 27,000 more units than we have now.

I know my time is running out here. Let me just say that we also, on an emergency basis, must continue the support of the communities partnership initiative and the residential rehabilitation assistance program. We're not going to have secure populations to fill our labour force or schools if we don't have housing.

We also have to improve EI, and we hope that as a federal government you will take on reinstituting the federal minimum wage and put it at $10 an hour as an important symbolic measure.

Thank you.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you. Good job. That was just five minutes exactly. We appreciate it.

Ms. Ecker, from the Toronto Financial Services Alliance.

[Janet Ecker, Executive Director, Toronto Financial Services Alliance]

Thank you very much, Mr. Chairman, and congratulations to the committee on your stamina.

You have a copy of our submission. I'd like to just hit a few points today, if I may, but first, quickly, here is a little about who we are.

The Toronto Financial Services Alliance is a public-private partnership between the City of Toronto and the financial services sector, dedicated to promoting the city and the region as a premier financial services centre in North America. We encourage initiatives to strengthen Toronto region's financial sector through competitive regulatory and taxation policies, strong post-secondary education and training opportunities, improved infrastructure, and quality of life investments in Canada's financial capital.

Our group includes the major players in the financial services sector: banks, insurance, securities, trade associations, as well as the professionals who support the sector, such as lawyers, accountants, information technology, etc. We also have the support of post-secondary institutions in our region.

With more than 250,000 people directly employed in the sector, and approximately that number again working in jobs that depend on the industry, Toronto's economic success depends on a strong financial sector. Canada, too, has a lot at stake, because the sector is Canada's largest industry and contributes more than 6% to our national gross domestic product.

The sector also tends to be generally more productive than other sectors, as we generate that 6% while employing 4% of the national workforce. Productivity and our concerns about lagging productivity in Canada are the main focus of our submission.

In terms of competitiveness, the World Economic Forum says we have slipped three spots on the global scale to number sixteen. Canada used to rank third among OECD countries; today we're seventeenth.

Our productivity growth has lagged behind our main trading partner, the United States, since the 1980s. Here in Ontario, our manufacturing heartland, we lag our peer states in the U.S. by a significant margin. Our GDP per capita is 12% below the median of our peers, 30% behind the leader. Quebec does even worse. In both cases, the primary cause of this prosperity gap is the difference in GDP per capita between Canadian and American jurisdictions.

The sector makes an extraordinary impact and contribution to the nation's economy and to the well-being of individual Canadians. The sector, especially the financial cluster that has developed here in Ontario, presents a unique opportunity to support the productivity agenda of the federal government. Many of our members are among Canada's strongest, most internationally competitive institutions, with great potential to be Canadian-based global enterprises that can generate significant benefits for Canadians and our economy. For that to be the case, these firms, however, must have a local economic environment that can support that growth through competitive tax and regulatory policies. We have mentioned several initiatives in our submission to deal with this.

We support the government's spending reduction and expenditure management approach in paying down debt and the fiscal flexibility that this will provide the government. If program spending had been limited to 4%, which would have covered inflation plus population growth, there would have been a $25 billion fiscal room picture for this year, and that could have helped finance any number of productive tax reductions across the board: personal income, corporate income tax rates, etc.

A major drag on our productivity is, of course, the capital tax. The C.D. Howe Institute, which you will be hearing from later today, has been very clear in its research about the negative impact of that on our productivity. I don't propose to go into more of that, because I suspect we'll hear more from the institute on that, but we hope the federal government will address these concerns and also use its influence with provinces to have them reform their tax systems as well.

Specifically, we mention reducing general corporate income tax on a faster scale, eliminating the corporate surtax, capital tax, and the part VI capital tax on financial institutions as quickly as is feasible.

We also support good, strong securities regulation, and we commend the committee for its work on this. Supporting a common regulator would encourage them to continue to do that, because we generally like the model put forward by the Crawford Panel.

As a final word, we also believe that a city agenda is extremely important, as our financial institutions tend to be headquartered here, where they gather in clusters and benefit, one from the other, from that proximity.

Making our cities work and making them attractive places to live will encourage retention of the skilled workforce. One of the major ways to do that is dealing with infrastructure and the problems of congestion. We strongly recommend that the federal government and the provinces use greater involvement of our private sector with public-private partnerships to do that.

In closing, Mr. Chair, let me stress that the issues we are discussing today need a long-term economic view that sets out a national economic plan encouraging productivity and economic growth, because we will all benefit from that.

Thank you very much, Mr. Chair.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Ms. Ecker.

From the Nishnawbe Aski Nation, we have Mr. Fiddler.

[Deputy Grand Chief Alvin Fiddler, Deputy Grand Chief, Nishnawbe Aski Nation]

Thank you, Mr. Chair.

Thank you to members of this committee for giving me this opportunity to make this presentation here this afternoon. My name is Alvin Fiddler and I'm one of the deputy grand chiefs from the Nishnawbe Aski Nation. I want to begin by telling you a little bit about the place I'm from, my home territory.

The Nishnawbe Aski Nation represents 49 first nations communities that signed Treaty 9 back in 1905-06 and again in 1929-30. It represents 45,000 people who reside in that territory and covers a wide geographic area. If you look at the map in your package, you can see that it covers two-thirds--or over 200,000 square miles--of northwestern and northeastern Ontario. We speak three distinct languages in that territory: Cree, Ojibway and Oji-Cree.

As I said earlier, this year marked the 100-year commemoration of the signing of Treaty 9. We did not call it a celebration, even though I know some government circles called it a celebration. We call it a commemoration, because we strongly feel that there is no reason to celebrate the 100-year anniversary of the treaty. I'll talk more about that in my presentation.

The message we sent out this summer during the commemoration events is that while we have kept our terms of the treaty, our bargain to live in peaceful harmony with the settlers who came into our territory 100 years ago, Canada and Ontario have failed, and failed miserably, to live up to the commitments they made to our forefathers when that treaty was signed 100 years ago. So I come to you today not as a stakeholder or as part of an interest group, but as a treaty partner.

As I said, if Ontario and Canada had made an attempt to fulfill even some of those terms of the treaty, our communities would probably be among the most prosperous in the country. Instead, if you look at our communities, if you visit our communities, you will find that many of our communities are caught in a poverty trap. We are one of the poorest regions in Canada.

If you look at the news last year involving Kashechewan and the other communities that declared emergencies with water and with other natural or health disasters, you will see that many of our communities mirror the third-world countries. Health conditions are among the worst in Canada. There's a lack of effective public education.

You will also see that we are one of the fastest growing demographics in Ontario, if not in the country, so this is adding to the economic strain in our communities and our territory. Our communities are a scar on the conscience of Canada.

We have said that the policies this government has created and has implemented in our communities are not working. There is little in the region's current dynamic that promotes an escape from this poverty I am speaking of. Current federal transfers simply maintain the basic necessities of life.

As I said, the rapid growth in our population is only compounding the problem. Out of our population of 45,000, 67% of the people are under the age of 27. Because 35 of the 49 first nations communities that I represent are fly-in communities and do not have roads or railways that connect them to their community, the cost of transportation is extremely high--travel, receiving goods.

The region carries a disease and a health burden that is unique in Canada in its severity. In recent years the most prominent issue in the region has been clean drinking water. Last year I think it was a good example when Kashechewan--

[The Vice-Chair, Liberal, Massimo Pacetti]

Mr. Fiddler, could you please conclude? Your five minutes are up.

[Deputy Grand Chief Alvin Fiddler]

I want to briefly mention the solutions that we think would work. The Kelowna Accord is a beginning. When we signed it last year and all parties agreed to it, we felt it was a good start. I think this government needs to implement that accord, along with other solutions that we think would work for us.

Revenue sharing--there is a vast wealth of resources in our territory. De Beers is opening up a new mine there this year, and other potential sites are being explored for gold and diamond mines. We need a share of those resources. We need to have a revenue-sharing arrangement that's going to work for us.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you.

We have to move on. From la Campagne contre la pauvreté des enfants, we have Ms. Di Giovanni.

[Caroline Di Giovanni, Director, Campaign Against Child Poverty]

Thank you.

My name is Caroline Di Giovanni. I'm a steering committee member of the Campaign Against Child Poverty, and since 1998 we have presented to this committee and to members of government at all levels--when we can get ourselves in the door--to focus on the issues of child and family poverty in Canada. Why does it continue, despite the fact that Canadians put a value on all citizens living out of poverty, and how can citizens and politicians of goodwill bring about a serious and meaningful reduction to child poverty over the next decade?

One of the main accomplishments of our little steering committee is to try to raise public awareness by putting ads in the papers that are distributed across the country. We also distribute them to all the MPPs and MPs across the country. You'll have a copy of our latest ad, which focuses on the effect of poverty on children in schools. We were partners in this particular ad with the teachers associations in Ontario, because this is a pressing issue and it affects our future. If children grow up in poverty or severe poverty, they will fail to become fully productive members of our citizenry twenty years from now.

We will keep at it. We'll continue to present to you reminders that the government has a leadership role to play in reducing the level of poverty.

I will go through the brief we sent you by highlighting certain sections. We recognize the committee's theme of Canada's place in a competitive world. In your material inviting us to speak, you state that our actions today must ensure that citizens and businesses must prosper, that citizens are healthy and skilled, and that businesses have a competitive tax regime. That will be helped incredibly if our children grow up in healthy environments, have stable homes to live in, and their parents are able to earn a decent living wage and receive the child tax benefit to the full extent, without clawbacks.

When members of CACP speak to cabinet ministers, we promote action and policies that enhance the well-being of our children, our community, and our future. The UNICEF report card number 6, “Child Poverty in Rich Countries 2005”, provides evidence that countries with the political will and an equity-based economic growth model can strengthen their social infrastructures, reduce child poverty, and at the same time enjoy a healthy GNP.

Several countries have reduced child poverty below 5% by setting targets and meeting their goals. Campaign 2000 referred to that in their brief, but Canada is not one of these countries. The incidence of child poverty in Canada still sits at a shameful 14.9%, and 23.3% of those children are living in deep poverty. This means we allow over one million of our children to grow up poor and disenfranchised. We feel this is really a disgrace.

Further, the section on Canada in the UNICEF report is entitled “Canada: children still waiting”, and it begins:

In 1990, an all party resolution committed the government of Canada to “seek to eliminate child poverty by the year 2000”. That promise has not been kept....

The good news is that we can keep the promise with political will, achievable targets, and an economic growth model built on equity and efficiency. Reducing child poverty and family poverty in Canada is very doable and it is the first duty of all governments. It is the fundamental responsibility of government to protect the vulnerable and protect the future. Children are both.

I will now refer to our action points, starting with a guaranteed income for all Canadians that ensures we all live out of poverty. Living wage rates and income security should be recognized as a key priority investment in a civil society. The second is to make early learning and child care facilities accessible, available, and affordable in every region of our country.

This is one of the critical factors known to contribute to the low child and family poverty rates in European countries that have reduced child poverty. The evidence is clear and is repeated in every major global and national report on poverty.

Third, include provisions for affordable housing in agreements with the provinces, territories, and municipalities. As you heard, there is action today to raise that issue because stability in housing is incredibly important to children who are growing up.

Our message, therefore, is simple. Set targets for significantly reducing child and family poverty in Canada from 14.9% to 9.9% by 2010 and direct significant and sufficient resources to the health, growth, education, care, and well-being of children and youth so that that happens.

Thank you very much for hearing from us again.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you. That's fine.

We'll go now to Mr. Wilson of the Canadian Children's Rights Council. You have five minutes.