Finance Committee on Dec. 6th, 2007

[The Chair, Conservative, Rob Merrifield]

First of all, I want to say how great it is to be in Halifax—how great it is that the plane landed all right and the snow stayed away and there was no problem. It's great to be here. It's great that you're here to testify before the committee.

Before we get started, though, I believe it was 90 years ago that the Halifax harbour explosion occurred. We've asked Gerald Keddy, and perhaps Mike Savage, because they're locals who know a little bit of the history, to share with us this historic moment.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Thank you, Mr. Chair.

Good morning to our witnesses and to our colleagues from the House of Commons. I think most of us are here.

Certainly, for those of you who are not aware of the Halifax explosion, at the time it was—and still is—the second largest man-made explosion ever occurring anywhere on earth. It was a tremendous explosion caused by the collision of two ships in the Halifax harbour, the Imo and the Mont Blanc, both loaded with munitions for World War I.

If you have the opportunity while you're here, you really should go down to the Maritime Museum of the Atlantic and look at their display, because it really is quite significant.

Of course, out of all tragedies, some good things happen, and a number of good things happened after the Halifax explosion. The Halifax School for the Blind was set up for the first time here in Halifax. Unfortunately, during the explosion, many school children were looking out the windows at the two ships burning in the harbour, and when they exploded, the windows blew in on them and of course caused a lot of blindness.

The other terrible thing that happened that evening was that an extreme northeast snowstorm blew in, which slowed down the rescue operations.

The other thing I believe you really need to know about it is the ongoing relationship between Nova Scotia and the City of Boston, because the City of Boston immediately sent a relief train to Halifax, which was the first relief train to actually reach us. Of course, it was loaded with medical supplies and blankets and food. For that, the Province of Nova Scotia has given the holiday Christmas tree to Boston on an annual basis in recognition of the help received when Halifax was in dire straits.

Mike or Alexa may want to add to that.

[The Chair, Conservative, Rob Merrifield]

Alexa is here as well, so if you would like to add to that....

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

I don't have much to say about it. I appreciate Gerald's comments.

It was a transformative event in the history of Halifax-Dartmouth, as most of our panellists here today would know.

I would add that there are many sites on the Dartmouth side as well that you can see to commemorate the Halifax explosion.

We're also commemorating the anniversary of the tragic deaths of women at École Polytechnique. That's a more recent, and equally sombre, reminder of what can happen in society, and I know we all take that seriously.

But the Halifax explosion was transformative for Halifax-Dartmouth—perhaps as much for our relationships with parts of the United States as anything else. It's taken very seriously in our schools and in our community.

[The Chair, Conservative, Rob Merrifield]

Ms. McDonough.

[Alexa McDonough, NDP, Halifax, NS]

Thank you, Mr. Chair.

I might say that it is because of the very sombre event of December 6 that I am substituting today for Thomas Mulcair, who is in his city of Montreal, where the horrors of the École Polytechnique murders are being commemorated.

Just by way of reference to the other event, I will say that I, as a member of Parliament and, I am sure, Haligonians, appreciate your opening with this commemoration, and with the relationship between Boston and Halifax, which has always been very, very strong. As it happens, my grandfather had closed his medical practice in Boston to move to Truro to start up the first hospital in Colchester County when the Halifax explosion occurred, and the opening of the hospital turned out to be very fortuitous. He took the train to Bedford, and, like everyone else, he walked into the inner city because it was inaccessible in any other way, and many patients were taken to hospital in Colchester County.

From both of these very sombre events, which we properly commemorate, we hope to learn lessons. That's why we have a great deal of public attention on the horror of the December 6 École Polytechnique murders, and hopefully are learning lessons in public policy from them.

Here in Halifax there are a great many people who hope that one of the lessons learned from the Halifax explosion is that we should make our harbour a nuclear-weapons-free zone. That's an ongoing struggle that many people are very much engaged in, not just in Halifax, but worldwide. So it's an appropriate time to commemorate those events.

Thank you.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

I think it is appropriate that we pause for a minute of reflection. At 9:05 in the morning 90 years ago, this tragic event happened here.

[A moment of silence observed]

With that, we will continue the meeting.

First of all, to our witnesses, you are allowed five minutes to present. Our wish is that you stay as close to five minutes as you possibly can as we go through this, and we encourage you to do so.

I'll introduce you and yield the floor to you in respective order.

We'll start with the Assembly of First Nations, with Daniel Wilson, special advisor, accountability.

The floor is yours for five minutes, please.

[Daniel Wilson, Special Advisor, Accountability, Assembly of First Nations]

Thank you very much, Mr. Chair and the committee, for the invitation to appear here today.

The AFN, as you may know, is the national first nations organization representing over 630 first nations governments and communities and some 800,000 citizens across the country.

The AFN has made a presentation to this committee every year for several years running, and as a result there is an archive of material that identifies and explains first nations needs. If you have questions with regard to any of those figures or any desire for additional information on the issues that have been raised in the past, please don't hesitate to ask. I'd be happy to provide those details.

What I'd like to talk about today during this short presentation reflects a slightly different approach on our part. I want to suggest two investments that could be made in the upcoming budgets, which we believe are of equal benefit to first nations and the broader Canadian economy as a whole. We like to think of these as win-win or mutually beneficial investments.

The first idea is designed to help Canada address its labour force replacement challenge. Canada's aging demographic and reducing birth rate means more workers leaving and fewer entering the workforce. Hundreds of thousands of workers will be leaving the workforce within the next several years, and the construction sector council estimates 62,000 workers will be needed to be replaced by 2015 in that industry alone.

The effect of the situation on productivity and competitiveness is significant and will only grow. Canada needs a labour force replacement strategy for the 21st century. The Canadian citizens with the highest birth rate are first nations. The Canadian average is 1.57 births per woman, compared to 2.6 births for a first nations woman. This is also Canada's youngest demographic, with 54% of first nations citizens under 30 years old. First nations also have the highest unemployment rate, at more than twice the Canadian average. There is a young and growing population of Canadians who want to work and a need for skilled workers in a variety of sectors in the economy.

It should be a simple and straightforward proposition to suggest that Canada invest in meeting both the labour force replacement that Canada needs and the needs of first nations youth by investing in a strategy that brings these interests together. That essentially is our first recommendation. It means investing in education and skills training for first nations youth and helping employers identify suitable recruits from first nations communities. It can easily fit within the upcoming budget, and it will provide benefits to the economy of the country as a whole.

Our second recommendation has to do with resource development and investor certainty. Business needs to know that the climate for investment is reliable and predictable. When it's not, money is spent too early or invested without return. This causes a decline in investor confidence that can be very damaging to the bottom line. In the resource sector in particular, first nations interests are seen as a stumbling block and as problems that erode investor confidence, because businesses cannot know how long a process will take and what kind of interest they will run into along the way before a resolution is found.

The reasons for this uncertainty are not as complicated as they may seem. The laws of Canada, based on the Constitution and Supreme Court cases, among other sources, require that government consult with and accommodate the interests and concerns of first nations. Where treaties exist, additional commitments may apply. Where aboriginal title exists without treaty, new court cases suggest an even higher duty. I would refer people to the recent decision of the B.C. Supreme Court in Tsilhqot'in v. B.C. from November 21 in that regard.

The essential message is that government must address the interests of first nations before authorizing resource development projects that may affect our rights or interests. This can be done by developing agreements for resource revenue sharing with first nations that will smooth the way, insert predictability and reliability into the process, increase certainty of outcomes, and enhance investor confidence. Both of these ideas are spelled out in greater detail in our submission, of which you have copies, and they were also presented to the Council of the Federation this summer to a very good reception from the provincial premiers. They are simple, achievable, and mutually beneficial recommendations that will help Canada's economy and help first nations take their rightful place within that economy.

The final matter I'd like to address is more fundamental and is not a recommendation for an investment at all. In fact, it costs nothing to fix but has enormous costs as long as it remains unaddressed, and it will provide support to investment. That is accountability.

The belief exists in some circles that investment in first nations is wasted, that money now invested is without outcomes, and that more money would be lost to incompetence or corruption. The position of the Department of Finance is that change must occur before investment can be made. First nations agree and eagerly want to engage in accomplishing such change with the government.

There are problems with the accountability framework that first nations governments share with the federal government. The AFN would like to change that. We have begun work in this area and would like to see it proceed. As of now, the federal government has not agreed to continue that work with us.

This does not just impede investment in redressing poverty; it prevents progress in improving the Canadian economy. The two recommendations I have made here today are prime examples. I ask if the committee can accept that the federal government both refuses to invest and prevents progress from happening.

I'll leave you with a simple question on this point. Is it fair that first nations continue to suffer while the Government of Canada simultaneously both insists on and impedes the structural change that needs to happen to benefit both Canadians and first nations?

Thank you very much.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We'll now move to the Association of Atlantic Universities. We have Colin Dodds, vice-chair.

The floor is yours for five minutes.

[Dr. Colin Dodds, Vice-Chair, Association of Atlantic Universities]

Thank you very much, Mr. Chair. I apologize for my croaky voice. I have a cold.

As mentioned, my name is Colin Dodds. I'm the president of St. Mary's University, but this morning I'm representing the Association of Atlantic Universities.

My brief has many similarities to what you've already received from AUCC, but there are some key regional differences. My remarks can be set in the context of two recent reports: Mobilizing Science and Technology to Canada's Advantage, in May of this year, and Advantage Canada--Building a Strong Economy for Canadians. In the end it comes down to people and education.

I think it's important to set a financial context for these remarks. I wish to acknowledge the success of the federal government's investment in the university sector. I don't think governments--the federal government in particular--get enough thanks over the years for their significant investment, particularly in research. But I feel a little like Oliver Twist, coming back and asking for more.

Continued investment in universities will maximize their contribution to a prosperous and competitive Canada and Atlantic Canada. But the challenge of having globally competitive taxes, in conjunction with the significant challenge of Atlantic Canada's rapidly aging and declining population, means that Atlantic Canada must grow its economy. I think you're aware that the demographics are now hitting us in this region, and at the same time we're having a net migration, particularly to the west.

This morning I intend to address five key recommendations that will make a significant difference in Atlantic Canada's--and therefore Canada's--future competitiveness and productivity, nationally and internationally. I think you're all aware that we face challenges in global competitiveness and innovation compared to our OECD partners. This will therefore focus very much on people and knowledge and will reference back to those two reports.

First, on continued and increased investment in university research, again I want to acknowledge the many initiatives the federal government has taken over the last few years.

Second, on increased investment in young researchers and graduate scholarships, I recognize that in Budget 2007 some important initiatives were made with respect to graduate scholarships and internships. We welcome them and would like them to be extended.

Third, increased investment in the marketing of Atlantic Canada as an education destination to international students will complement the current federal-provincial initiative to develop a Canada brand for international education.

Fourth is improving university participation rates and access to higher education for traditionally underrepresented groups, which touches very much on what Danny Wilson just referred to.

Fifth is investing in university infrastructure improvements.

The AAU strongly supports cooperation and collaboration between federal and provincial governments, universities, and the private sector--in other words, a partnership--to establish objectives for increased investment in the PSE sector, with the attendant accountability for results.

I have to state at the outset that Atlantic Canada has a wide range of excellent universities that are ranked highly, whether it's by the media, citation indices, etc. They're dynamic and changing; however, it is important for you to understand that the majority of our institutions are small to medium-sized liberal arts universities, with the majority specializing in undergraduate social science and humanities education. There are exceptions, and we can perhaps discuss those later on.

Let me elaborate on the five recommendations in the time I have.

First is ensuring national and international competitiveness in research and building research capacity. Atlantic Canada's universities annually attract more than $510 million in R and D investment and are responsible for 63% of R and D conducted in the region. So a robust university research environment is vital for the future of Atlantic Canada as well as Canada.

In 2005 the AAU, in partnership with ACOA, created an organization called Springboard, a regional university research commercialization network. It fosters greater collaboration between universities and the private sector in Atlantic Canada.

At the same time, I want to acknowledge the role that provincial governments, particularly here in Nova Scotia, have played in supporting research and development. The Government of Newfoundland recently announced significant investment in that area.

We recommend that the federal government continue to invest in national university research programs, but it should recognize that in this particular area sheer size does not count.

We have some handouts for you this morning, which you will receive later.

Second, increasing investment in graduate students is particularly important for master's and PhD students. We feel that is critical, and I think the AUCC brief developed that.

Third is the issue of coming east from other parts of Canada, and of course coming globally to Atlantic Canada as an education destination. We feel that's very important.

We also think that Canada could, following AUCC, develop a key scholarship program--an elite scholarship program similar to the Fulbright and Rhodes scholarships.

Am I finished?

[The Chair, Conservative, Rob Merrifield]

Yes, you are. You're over by quite a bit, but that's all right--well, it's not all right. We like to try to keep it as tight as we can to five minutes. It won't be your last shot at it. We'll have more time in questions and answers. It's just that we don't want to compromise the amount of questioning we can do.

Thank you very much for that.

Next, from the Canadian Electricity Association, we have Francis Bradley, vice-president.

[Francis Bradley, Vice-President, Corporate Resources, Canadian Electricity Association]

Thank you, Mr. Chairman.

The Canadian Electricity Association is the national voice of the electricity industry in Canada. Our members represent the whole value chain of the industry, from the production of electricity to the distribution to clients.

The electricity system is complex. Electricity is the most extreme example of just-in-time delivery. There's no widespread storage system for electricity, so the moment when a customer flips on a switch or turns on a machine, the power must be available from a generation station sometimes hundreds or even 1,000 kilometres away and delivered through a transmission and distribution grid, all of which are constantly balancing supply and demand.

A safe, secure, reliable, sustainable and competitively priced supply of electricity has been one of the key competitive advantages we have had to support our economy and our prosperity.

Canadians expect this performance to continue into the future, but to do so will require significant investment in electricity infrastructure in the years to come, estimated by the International Energy Agency to be in the order of $190 billion by 2030.

To address the challenges related to demand and to the distribution of electricity, significant investment will have to be made in the construction and upgrading of our infrastructure as well as in the development and distribution of new fuels, new energy services and new technologies.

These initiatives must be taken at the time of regulatory uncertainty, environmental pressures, capital mobility and unprecedented labour shortages in our industry.

The theme of this year's consultation is “the tax system the country needs for a prosperous future”. Accordingly, in the brief we sent to the committee in August, we proposed a series of recommendations that we feel will enable the electricity sector to contribute to a prosperous future for Canada.

Our recommendation relating to the corporate income tax rate has been overtaken by events and we were pleased to note the announcement in the latest Economic Statement that the rate we be reduced to 15% by 2012.

We made specific recommendations with respect to the scientific research and experimental development tax incentive programs, and since the submission of the brief, CEA has taken part in the SR and ED consultations that were recently launched by the Department of Finance and the Canada Revenue Agency. We welcome the opportunity to work with the Government of Canada to improve tax incentives and to streamline the program's administration.

In our brief, we also discuss the tax treatment for smart meters and advanced metering infrastructure, or AMI. Smart meter technology and AMI are essentially information technology. They comprise telecom, electronics, and software, but they're currently treated as part of the distribution plant when calculating capital cost allowance rates. CEA believes that these rates should be reclassified at a 45% CCA rate from their current 8% rate to better reflect the high-technology nature of their components.

In addition, CEA asks the committee to consider the following recommendations. First, increase the CCA rates from 8% to 12% for investments in transmission and distribution infrastructure to encourage modernization of the grid systems. The United States has brought the depreciable life of transmission infrastructure greater than 69 kV down to 15 years, reflecting a 12% CCA rate equivalent. Electricity grid linkages between Canada and the U.S. support commerce and reliability. We must ensure that both our systems are modernizing at similar rates and must recognize that we seek funding from the same capital markets.

Furthermore, we recommend the re-enactment of Class 24 for air and Class 27 for water for the capital cost allowance, or CCA, for a period of five years in order to encourage electric utilities to implement pollution control technologies and emissions abatement in thermal power plants.

Finally, we are calling for renewed efforts to support information distribution as well as programs and offers relating to energy efficiency.

In summary, we believe that these recommendations will move us closer to a tax system for a prosperous future by helping to make electricity the critical enabler of the economy and of Canadians' expectations for an enhanced quality of life.

I want to thank you, Mr. Chairman as well as the members and the staff of the committee, for this opportunity.

I'd be pleased to answer any questions you may have.

Thank you.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We'll now move on to Feed Nova Scotia.

Dianne Swinemar, executive director, the floor is yours.

[Dianne Swinemar, Executive Director, Feed Nova Scotia]

Good morning, and thank you for inviting me to present and represent Feed Nova Scotia here this morning.

Feed Nova Scotia is a central collection and distribution agency supplying over 150 food banks and meal programs in the province. While our immediate goal is to feed hungry people, our ultimate goal is to alleviate chronic hunger and eliminate poverty. My presentation this morning is based on keeping those two goals in mind.

In Nova Scotia, some households are making difficult choices every day about putting food on their tables for their children. This is happening when the federal government has been posting multi-year budget surpluses. It is my hope that at the end of my statement you will be convinced that, as elected representatives in Parliament, more can be done to help citizens living in low-income situations.

Using statistics from our 2007 hunger count survey, I can inform you that at least 18,417 Nova Scotians visited a food bank for support in March 2007; 9.4% of them reported that employment was their main source of income, which is up 2.2% from last year.

Visiting a food bank once a month used to be sufficient for most households that were in trouble. This year we've noticed a 4.8% increase in the number of households that used a food bank more than once in the same month. These are hard-working people who go to work every day, have children in school, and pay their taxes. You wouldn't suspect they seek help from their local food bank.

These people are typically referred to as the working poor. I am concerned that working people are finding themselves in a financial situation whereby they need to use food banks.

Until an integrated approach to reducing poverty can be implemented in the long term, I am proposing two things for the committee to consider in the short term. If time allowed, I probably could propose many more.

I would ask the committee to first consider changing the working income tax benefit to improve the quality of life for the working poor; 9.4% of our clients access this program. Many are part-time workers who want to work full-time hours, but these are just not available to them. Their ability to take a second or even a third job is limited by the variable hours created by their first job and whether they have access to affordable day care.

This tax benefit was created to help the working poor, and as you know, if a person earns more than $3,000 a year, they can qualify for amounts ranging from $500 to a maximum of $1,000 a year.

Research done in 2005 concerning the cost of food in Nova Scotia found an average family of four paid $617 a month to purchase nutritious food. This is in addition to other necessities such as housing, heat, a telephone, and transportation, some of which have increased substantially in price over the past 10 years, as we indicated in our August 2007 brief to the committee. These costs have had a huge impact on the ability of families to provide for other necessities and to allow their children to enjoy the activities all children should be able to enjoy.

If this program is intended to improve the quality of life for the working poor, it would appear that benefit amounts are too low relative to the cost of living. I urge you to consider raising these amounts.

One of my staff recently shared a story with me that I would like to share with you. She was talking with a woman who was trying to make a fresh start after leaving an abusive relationship. She was moving from a temporary shelter into a new apartment early this past summer. She found a job, but the pay was low. From her first month, she fell further and further behind in her bills. She fell short on her rent for September and October and was given a conditional eviction notice. If she doesn't pay her rent in full by January 1 this coming year, she will be evicted.

This person is frightened, and she turned to us for support. All her money goes toward bills, and then she has to rely on food banks and goodwill to feed her children. Even if she doesn't buy any food and pays all her bills for January of 2008, she will still be $250 short. Between working and raising her children, she has no time for a second job and cannot afford any more day care. This lady told us that if she had a little more money every month, it would go a long way to help her to provide for her children. But she does not know how to get that extra money.

We hear stories similar to this one every day. It seems to indicate that even a small increase, perhaps even $100 a month, in the benefit rate would improve a family's everyday living situation. This seems an affordable and reasonable way to improve the lives of the working poor given that the economic update of October 2007 announced $60 billion in future tax cuts.

The next item I would like to briefly---

[The Chair, Conservative, Rob Merrifield]

Actually your time has gone. We may be able to get to your other point in the questioning.

Let's move on. We have Mr. Dan English, the CAO of the Halifax Regional Municipality.

The floor is yours for five minutes.

[Dan English, Chief Administrative Officer, Halifax Regional Municipality]

Thank you, Mr. Chair, and good morning.

As mentioned, my name is Dan English and I'm chief administrative officer with the Halifax Regional Municipality.

Today I'm here on behalf of Mayor Peter Kelly, who's tied up with the Halifax explosion ceremonies that are taking place.

Thank you for the opportunity to discuss the priority issues facing Halifax and to highlight areas where collaboration with the federal government is needed. The four priority issues I wish to discuss today are fiscal imbalance, infrastructure funding support, environment, and public safety and crime prevention.

Under fiscal imbalance, I believe it would suffice to say that Halifax supports the position of the big city mayors' caucus and their recommendation that the federal government permanently share the equivalent of 1¢ of the GST annually with the cities. The rationale for this proposal is well documented. Most Canadian municipalities are highly dependent on property taxes. In fact, in HRM, property taxes make up approximately 76% of our total revenue.

With the recommendation of the big city mayors' caucus, along with continued federal investments such as the gas tax, GST rebate, infrastructure funding, and the development of a new national transit strategy, municipalities would be able to diversify their revenue base beyond just property taxes. This would be similar to initiatives under way in the U.S., Europe, and the U.K., where governments are providing their municipalities with new and innovative financial tools and revenue-sharing opportunities.

This topic leads right into the next issue, i.e. the ever-increasing infrastructure deficiency in Canadian municipalities. Halifax, like many Canadian municipalities, needs increased infrastructure funding support. As one of the older cities in Canada, Halifax faces significant pressures regarding the age of its infrastructure compared to much of the rest of the country.

We currently have an annual infrastructure funding gap of approximately $50 million. Continued federal funding programs for infrastructure are of paramount importance to us. The recently announced Building Canada plan is a positive step to assist municipalities.

I'll just note a couple of areas where Halifax requires federal support. The Atlantic gateway is positioned to become to Halifax what the Pacific gateway is to Vancouver, and it will establish Canada as the bridge between Asia, Europe, and the U.S. The four key modes of transportation represented on the Halifax Gateway Council, i.e. air, sea, road, and rail, account for over $1 billion in wages each year in Halifax and a total economic impact of $3.7 billion. Greater investment, integration, and partnership are needed to ensure the Atlantic gateway grows and is recognized and promoted as the east coast logistics hub for North America.

Under transit, another area, the HRM has implemented a metro link, a bus rapid-transit program that reduces hundreds of car trips per day. Building on this, the planned HarbourLink fast ferry project would have further environmental and economic benefits.

Halifax urges continuation of federal funding programs such as the urban transportation showcase and the public transit fund to continue to support strategic transit usage.

Under the environment, HRM is considered a Canadian leader in environmental sustainability. We were the first major urban area to reach the 50% waste diversion targets, and we are nearing completion of the harbour solutions project, which will be the largest cleanup of a saltwater body in Canada. Next week--a week from tomorrow, in fact--we'll be celebrating, along with our provincial and federal government partners, the opening of the first of three facilities in Halifax. Enabling funding from the federal government will help boost many projects that assist in reducing greenhouse gases and meet federal, provincial, and local goals.

Under public safety and crime prevention, the mayor's round table on violence is a process that is now just basically completing a strategy that has all levels of government working together to reduce crime and improve quality of life for our residents. HRM continues to look forward to federal funding aimed at adding law enforcement officers to municipal police agencies.

In closing, I would like to mention that Halifax is the fastest growing municipality in the Atlantic region, but we are not large enough to function without strong links to the federal and provincial governments. While other major cities benefit from diverse types of taxation and greater cost sharing from their provincial governments, the Nova Scotia fiscal reality does not enable the same level of investment. Greater federal investment is much needed and appreciated.

For our part, we take our role and contribution to finding solutions seriously. We continue to work through implementing our region's first economic strategy, an essential component in defining our future and ensuring that future will be within our grasp. As Gerald Keddy noted earlier, the irony of this morning is that 90 years ago today, our community was devastated by the Halifax explosion, but we did recover due to the generosity of individuals, other governments, and friends from abroad. Today is an opportune time for us to remember the importance of working together to achieve positive outcomes for the good of our community.

Thank you again for the opportunity to present today.

[The Chair, Conservative, Rob Merrifield]

Thank you for your presentation.

We'll now move on to the North End Community Health Centre. We have Counsellor Paul O'Hara. The floor is yours.

[Paul O'Hara, Counsellor, North End Community Health Centre]

Thank you.

Good morning, and thank you for the opportunity to speak to you this morning.

The health centre is a non-profit government organization with a mission to support north end Halifax to be a healthy community by offering leadership in primary health care, education, and advocacy. We operate within a collaborative health care model, which includes attention to the social determinants of health. Poverty is a key determinant of health. The evidence is clear that reducing poverty will help to contain provincial health care expenditures.

First and foremost, we recommend to the federal government that they play a critical role in ensuring that the tax system benefits all Canadians, and we recommend the establishment of a federal government poverty reduction strategy. Canada needs a long-term plan with clear goals to prevent and reduce poverty and inequality. To be effective, it must have indicators and targets so that governments and leaders can be held accountable for the distribution of resources.

Canada has a $1.3 trillion economy, which has doubled in real terms over the past 25 years, making it the ninth largest in the world. Despite this growth, we have forgotten those who are challenged in their ability to participate in our economy.

For reasons including racism, Nova Scotians of aboriginal and African descent are excluded in large numbers from the economy. Our business community is challenged in providing newcomers with work experience. People who are permanently disabled, single-parent mothers with young children, and other marginalized groups depend on social assistance rates that are lower today than they were 10 years ago. These individuals and families with small children are left to survive with incomes significantly below designated poverty lines.

The Organization for Economic Co-operation and Development suggests that the idea that “the best social policy is a job” does not necessarily apply in Canada, when wages don't cover the cost of shelter, child care, and basic necessities and when 60% of workers are ineligible for unemployment. Policy is needed that brings down the cost of housing and child care to a level that low-income parents can afford or brings up their incomes to a level that allows them to support their families.

There is lots of evidence suggested through organizations like the Canada Mortgage and Housing Corporation that rents in Halifax are not affordable.

We spoke this morning about the Halifax explosion. I think something that's not commonly understood is that the first social housing in Canada was a result of the Halifax explosion, the Hydrostone project. It's private housing at this time. However, it was a response to that crisis, and we are in a housing crisis in our community.

Mulgrave Park is another social housing development from the 1960s in the same area as the Halifax explosion. It is hurting hard today. It's not a place where people want to live and it's because it is a place where we throw the absolute homeless. It's not mixed housing, as social housing should be, and it's not an attractive place to live.

We have a large number of condos in the area of the Halifax explosion now. The value of people's property over the last 10 years or so has increased at least 50%, so it's not affordable for people with low income or low wages. We need our government to address this.

In 2006, the child poverty report card for Nova Scotia reported that the proportion of child poverty in Nova Scotian households where one adult has a full-time job is increasing. In 2004, 10.4% of children in families where one adult was working for a full year lived in poverty, up from 1998.

In 2004, the Government of Nova Scotia had a surplus of $165 million. The surplus all went to the debt. Like the federal government, we don't have a poverty reduction strategy in our province. The reality of people who are marginalized is not acknowledged. They're excluded. They're forgotten about.

In 2006, the Ontario-based task force on modernizing income security for working-age adults, which was an unprecedented coalition of business people, labour groups, academics, not-for-profit groups, and think tank leaders, released their report, “Time for a Fair Deal”. The report called for a fundamental reform of Canada’s income security programs for working-age adults, particularly for those with low incomes and the disabled.

These findings are similar to the observations made in 2006 by the United Nations covenant on economic, social and cultural rights on the status of Canada. This report reveals that the levels of food insecurity and food bank use, which are at an all-time high, point to the need for a national poverty reduction strategy in our country.

Health Canada's office of nutrition policy and promotion reported in 2004 that 2.7 million Canadians, or almost 9% of the population, lived in food-insecure households. The rate of household food insecurity in Nova Scotia at that time was almost 15%, the highest in our country.

In 2006 the majority of food bank recipients in Nova Scotia were single adults and single parents, mostly on social assistance. A large percentage of those people were either disabled or working in low-paying jobs.

Solutions to address food insecurity require public policy change. We need a poverty reduction strategy in both our province and our country.

Minimum wage must be increased to reflect a living wage. American economists, some of whom were recognized with the Nobel Peace Prize, have recommended gradual increases to the minimum wage. They concluded that, “While controversy about the precise employment effects of the minimum wage continues, research has shown that most of the beneficiaries are adults, most are female, and the vast majority are members of low-income working families.”

Tax reforms are needed to support low-income families. In March 2006 the Canadian Centre for Policy Alternatives released a report indicating that the present government's tax cuts disproportionately benefit high-income families. The analysis found that high-income families receive a disproportionate share of--

[The Chair, Conservative, Rob Merrifield]

Mr. O'Hara, your time has gone. How much material do you have left?

[Paul O'Hara]

No, I'm good. I'll finish there.

Thank you very much.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We'll now move on to SpeciaLink: the National Centre for Child Care Inclusion, with Sharon Hope Irwin, senior researcher.

The floor is yours for five minutes.

[Sharon Hope Irwin, Senior Researcher, SpeciaLink - The National Centre for Child Care Inclusion]

Thank you very much.

SpeciaLink's mission is to expand the quality and quantity of opportunities for inclusion in child care, recreation, and other community settings for young children with special support needs and their families. I think this is our third year presenting to the finance committee, and we thank you for giving us this time to speak.

When we talk about children with special needs, we're mainly talking about children with disabilities, children in rural and isolated communities, and children with ethnocultural challenges. But what I'm going to address today is children with special needs and the discrepancy between current government policy and what these children, other children, and their families need.

Research has said, people's values have said, and anecdotal information has said that children with special needs fare much better if they are in child care situations with typically developing kids. The research is really strong on that. When you speak with parents and people in the child care community, they say, “The law doesn't say so, but we know it's right”. The community itself has made heroic efforts to make sure that children with disabilities are included in child care, even though they need more support to do it well than they really have.

Research is also beginning to show the effects of what we call “inclusive child care” on typically developing kids. If you think about it, the opportunity to learn from kids who are differently abled—that's our expression this year—both as friends and as children who may need extra help, is a marvellous thing to start when children are very young. If it starts in the earliest years, in the preschool years, the difficulties of dealing with classroom situations haven't happened yet and kids go off to school as friends--both typically developing kids and kids with disabilities.

Finally, though—and I'm glad three of the other speakers have talked about it—we have a ghettoized workforce, or non-workforce really, of mothers, in particular, of children with special needs, who cannot work because child care simply isn't available, at any price, for their children with disabilities.

Back in 1993, when the social security reform parliamentary task force was making its way across the country, parents of kids with disabilities and a lot of caregivers spoke at every city that this committee was able to go to. And that committee was able to go to I think about 13 cities, from Whitehorse to St. John's. I still remember the mother who was a doctor, a physician, in the Yukon who said, “I used to be a physician, but neither money nor advocacy can get a space for my child in a child care centre in Whitehorse. So I'm no longer a practising physician, and I wish I could be one.”

There are workforce issues--you bet.

By the time the committee got to the Prairies, one of the parents who spoke there was a mother who appeared with her twin girls with cerebral palsy, in their wheelchairs. She talked about how she managed to be in the workforce, but only just. The child care was fragile, and so was the van that the rotary club in her community had bought so that the girls could be transported to child care. She had the job, but the fragility of the situation was very, very difficult for her.

One parent talked about feeling ghettoized. The social security reform initiatives from then until now have often been about encouraging people on social assistance to get back into the workforce, but they don't address the extra challenges of parents who have kids with special needs.

Each of you will get copies of these two books that SpeciaLink has produced, along with recommendations as to what finance and the other committees can address in terms of helping children with disabilities, the general community, and parents of kids with special needs in particular.

The six recommendations are on the first page of the executive summary, and I hope we'll address those later.

Thank you very much.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We'll now move to the question and answer portion of our meeting, and we'll start with Mike Savage.

The floor is yours. You have seven minutes.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Thank you, Chair.

It's a pleasure to see you all today. It's also a pleasure to be out of Ottawa on a Thursday and to be here in Halifax.

I used to sit on this committee. The last time this committee did its cross-country consultations, I travelled with Mr. Dykstra and Monsieur St-Cyr and the wonderful staff this committee has, and I'm pleased to be here again today.

I have questions for everybody, but I'm going to start with Dr. Dodds. I want to talk a little bit about the unique nature of the Atlantic Canadian university system.

You mentioned Springboard. There isn't any other place in Canada where the universities have actually gotten together in such a collegial way to partner with government and business. Can you just take a moment and talk about Springboard and how it's worked out through the universities?

[Dr. Colin Dodds]

Sure. Thanks very much for that.

Springboard, as you mentioned, is a partnership of universities, and it's been able to support industrial liaison offices on our campuses in terms of commercialization, because that's one of the key aspects. As I mentioned, it's funded through ACOA, so again, it has that regional assistance. It has been going for several years now. We have provided members of the committee with some material so you can see the exact details. We are working together, because as I mentioned, many of our universities are fairly small. On that basis, we have to work together, and we need that assistance. So this is very much a partnership with the federal government, with industry, and with the universities.