Evidence of meeting #52 for Finance in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was spending.
A recording is available from Parliament.
10:55 a.m.
Senior Research Economist, Canadian Centre for Policy Alternatives
You're basically spraying money on everybody, hoping that some drops fall on the low-income people, by cutting the GST.
10:55 a.m.
Liberal
Michael Savage Liberal Dartmouth—Cole Harbour, NS
Or the low-income supplement of the child tax benefit, or many other ways that we could assist. Thank you for that.
I want to ask about education. Mr. Drummond, I had the pleasure of being at a conference you spoke at maybe a year and half ago in Halifax--the AAU. You made some very good points about the competition from emerging economies and the fact that Canada has to move up in the value chain. We have to invest in education, in R and D. Tuitions have gone up. The student-to-faculty ratio is a lot worse than it was 15 to 20 years ago. We need more money. What we've seen in research and development and on education from the government has been pretty skimpy.
The focus has been on tax credits that will do nothing to get Canadians into university or community college, upgrading their skills, but it will help those who are already there.
I wonder if any of you would have a comment. How do we educate more Canadians? Should the focus be on low-income grants? Do we need more research or should we continue tinkering with the tax system, which helps people who are already going to university and/or community college?
10:55 a.m.
Senior Vice-President and Chief Economist, TD Bank Financial Group
Let me start.
First of all, to the credit of the current government and the previous government and the provinces, Canada has started to reinvest in post-secondary education. We just about killed the beast off in the 1980s and early 1990s, but we have fresh wind with that. We have a couple of weaknesses in graduate programs and the like, but we're fairly strong.
I don't think student tuition fees themselves are the problem, but you absolutely can't allow financing to be a restraint to somebody going. I would urge you to look at a proposal that was kicked around previously in Canada, but we never went with it, and that was income-contingent repayable loans. The student gets the money up front and pays it back according to income. That will get rid of the financial burden at the beginning of it. That does need to be complemented with low-income grants, but the government has moved in that direction, as most of the provinces have as well.
10:55 a.m.
Liberal
Michael Savage Liberal Dartmouth—Cole Harbour, NS
The previous government moved a lot; this government hasn't moved. What does this have to do—
10:55 a.m.
Senior Vice-President and Chief Economist, TD Bank Financial Group
It's interesting. If you look at the participation in post-secondary education, while it's obviously still much higher for higher income levels, the biggest increase in participation in post-secondary education has been at lower incomes.
10:55 a.m.
Senior Vice-President and Chief Economist, TD Bank Financial Group
Well, that's the Statistics Canada statistic.
10:55 a.m.
Conservative
The Chair Conservative Brian Pallister
Mr. Savage, we have an argument. You two can conclude in the hall later.
We'll continue with Mr. Dykstra now.
November 23rd, 2006 / 10:55 a.m.
Conservative
Rick Dykstra Conservative St. Catharines, ON
It was great. That was actually an interesting debate to watch.
I'm certainly not going to rebut my good friend across the way, other than to say it was interesting to hear him say that the cut in the GST was a mean and dumb move. He represents a party that actually wanted to eliminate it entirely. I guess it would have been seven times as dumb and seven times as mean if you had actually done that.
In any event, since January, approximately 260,000 full-time jobs have been created. Mr. Orr, you made a really good point about the.... I think all of us enjoy travelling across the country and learning a lot about individual provinces, and seeing the bounty, if you will, with respect to Alberta.
On the transfer, I was wondering if you could comment on two things: one, why you think there are an additional 260,000 people working in this country today who weren't working in January of this year; and further, how we would accommodate the transfer of those 300,000 jobs you spoke about, in terms of making sure they have the opportunity to be dispersed throughout the country.
10:55 a.m.
Senior Vice-President and Chief Economist, TD Bank Financial Group
I guess the starting point is where the jobs are coming from. They're disproportionately coming from the west. Quebec and Ontario have been particularly weak. We have an important manufacturing sector, and we've seen a tremendous shedding of jobs in that area.
As I noted before, the national statistics right now are completely meaningless, for a whole host of variables. For example, with inflation, we have a bizarre situation. Every single province other than Alberta is below the national average. The real gross domestic product in Alberta increased this year by about 7%; the nominal income growth there is probably more like 14%.
Looking at the impact does somewhat mask the weakness we've had in the manufacturing sectors. That's really a story of some ongoing struggles in adapting to the stronger value of the Canadian dollar and, now, some additional pressures from the weaker demand from the United States.
11 a.m.
Managing Director, Canadian Macroeconomic Services, Global Insight Inc.
Sure.
The main reason job creation has been so strong is the strength in the energy sector. A lot of that job creation has been in Alberta--in vast disproportion. Also, there are the interest rates. Even though they were moving up, they're still relatively low by historic standards and they are helping the construction industry.
What can we do to increase interprovincial mobility? I mentioned EI, but I want to emphasize that the perversities in EI are only a part, maybe even a small part, of why interprovincial mobility is as weak as it is.
One thing I would like to see is a program, in HRSDC, for example, specifically focused on interprovincial mobility and looking at the family as a family. It's a big decision to make that move, find the job, help the family move, counselling, and all that. It's a social program, to help that mobility. I think that's something the federal government could do. I harp on EI, because we've been talking about it for 15 years. It's within your grasp to make those changes. But it is only a small part.
At the same time, I should say that what has happened in the province of Saskatchewan is amazing. Job creation has been weaker in Saskatchewan over the last decade than in most of the eastern provinces, yet the unemployment rate is always one of the lowest. People move from Saskatchewan when job prospects are weak; they don't move from the east.
So you can't just blame our EI system. It's a very complex issue as to why there are all those jobs out there and we have 300,000 people in the east who are unemployed.
11 a.m.
Conservative
The Chair Conservative Brian Pallister
Thank you very much to all our witnesses. It's always stimulating to have you here. We very much appreciate your sharing your time with us. We look forward to seeing you again.
We're adjourned until this afternoon at 3:20.