Finance Committee on Dec. 6th, 2007

[The Chair, Conservative, Rob Merrifield]

I'll call this part of the meeting to order.

I would like to welcome the panel for this session. We want to thank our witnesses for coming forward. We look forward to their presentations before the committee.

We ask for a five-minute presentation. We have a large panel, so I'll keep you on a fairly short and tight leash with regard to the time on your presentations. We'll then look forward to as much time as we possibly can for questions and answers.

I will give the floor to you individually and introduce you as we do that. I think that's the easiest way to do it.

We want to thank you for coming. We look forward to what you have to say to the committee as we deliberate on pre-budget consultations.

We'll start, first of all, with Richard Oram, of Accor Services. The floor is yours, for five minutes.

[Richard Oram, Accor Services]

Thank you, sir.

Mr. Chair and honourable committee members, my name is Richard Oram. I'm the founder of the Commuter Check company, which is owned by Accor Services, a Paris-based company.

In addition to similar programs worldwide, Accor provides public transport benefits—transit benefits, as we call them—or employer-based incentives for public transit use. We operate these for over 350,000 public transport users and 8,000 United States employers. Accor operates vouchers, online, and other transit benefit plans serving every significant transit market in the United States.

For the brief that we submitted to your committee in August, I'm here to propose that the federal government allow, first, employees to purchase transit passes, single tickets, or transit vouchers good for passage or tickets, as a pre-tax payroll deduction.

The second thing is to allow transit media—passes, tickets, or vouchers—to be provided by employers as a tax-free employee benefit. Such a policy would promote public transit, reduce traffic congestion, and reduce greenhouse gases by empowering and encouraging the business community to reduce its employees' automobile work trips. In essence, the proposal would allow employees to get transit passes and tickets with tax-free money. This saves them money and it saves employers money. It secures support from employers for the use of public transit and for the promotion of public transit use at the work site, where it is most effective.

This policy has proven very successful in the United States over the past 25 years. Federal government studies have shown that it builds transit use by approximately 25% at participating employers. The policy has been expanded eight times, and pending legislation would expand it further. This policy promoting public transport at the workplace was also recently begun in Great Britain.

In Canada, public transit accounts now for 11% of all work-related commuting trips. This leaves tremendous room for growth. It's an opportunity. After fifteen years in San Francisco, as one example, in San Francisco's largest transit system, the BART train system, over 60% of employed rush hour commuters are now getting transit benefits. This is a commonplace program in the United States. This data suggests that Canadian greenhouse gases could fall by 9 million tonnes by 2025 as a result of this policy, from 21 million fewer automobile trips. To make this understandable, this is the equivalent of planting 65 million trees.

Building transit use reduces traffic congestion, which improves business productivity. This is a business-based program. It also makes communities more liveable and improves air quality.

In sum, allowing tax-free employer-provided benefits would contribute to a more prosperous and sustainable future in Canada in the following ways: by growing the number of Canadians using public transit; by increasing transit revenues; by being a private-sector-driven solution having negligible costs in early years; and being highly visible to employees who would see their savings every time they buy their transit tickets or pass, and really every time they board the bus or train.

This would be a Canada-based environmental policy, and it would complement the 2006 budget's public transit tax credit with an employer-focused plan with proven effectiveness and proven cost-effectiveness.

Thank you very much.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We'll now move to the Association of Nova Scotia University Teachers, and we have Marc Lamoureux, president, here.

Before I yield you the floor, I understand you have an associate who will be here for questioning, and maybe you would introduce her to the committee as well.

[Marc Lamoureux, President, Association of Nova Scotia University Teachers]

We have a member right next to me who may be able to answer questions.

[The Chair, Conservative, Rob Merrifield]

Fair enough. Okay, now we'll hear your presentation.

[Marc Lamoureux]

Thank you, Mr. Chairman.

First, I'd like to say that when the question period is on, I'll be able to answer questions in both official languages. It's really up to the members to determine that, but I will be making my presentation in English at this point.

First, thank you for providing me with the opportunity to speak to the Standing Committee on Finance.

This year, the House of Commons Standing Committee on Finance is requesting submissions regarding the tax systems the country needs for a prosperous future, to maintain and increase Canada's future prosperity in a competitive world, and to ensure that its citizens are healthy, have proper skills, and are presented with appropriate incentives to work and save.

We, at the Association of Nova Scotia University Teachers, ANSUT, believe that to achieve these goals, we need to have a very high-quality post-secondary education system.

I'd like to also point out that our association, ANSUT, and the various groups representing students--for example, the Canadian Federation of Students--have a symbiotic relationship, so we are very much in tune with each other and we believe these two groups speak very much about what is needed for post-secondary education in Canada.

Our studies have repeatedly shown that those who complete post-secondary education have access to a greater variety of work opportunities, earn higher incomes and therefore pay more taxes, and enjoy better health than those who have not, particularly because of the nature of their employment, and all that is integral to our social and economic well-being.

I will list the recommendations we have put forward. ANSUT recommends the restoration of funding for the post-secondary sector under the provisions of a post-secondary education act, such as proposed by the Canadian Association of University Teachers, CAUT. Such a bill, a private bill, has been submitted to the House of Commons. That act would ensure accountability on the part of the provincial governments and make possible improvements in both the quality and affordability of post-secondary education for all eligible Canadians. This act would ensure that Canadian universities are financed at the level that will allow them to remain competitive in the world in both teaching and research.

Also, ANSUT recommends the education funding formula be modified to reflect the fact that Nova Scotia is educating a greater share of the Canadian student population—we're talking about the transfer payments. At the moment, that formula is based on the average population of every province. Nova Scotia is educating a far greater share than its weighted population.

ANSUT also recommends that the 21st century chairs for research excellence program and the administration of funding through the Canada Foundation for Innovation be reassessed to allow the problems of regional inequity to be addressed. For example, Nova Scotia has roughly 12% of all faculty in Canada, and yet we are receiving roughly 3.5% of those funds. So we have a lot of qualified faculty, yet very low dollars coming our way.

ANSUT concurs with the recommendation of the Canadian Association of University Teachers that the federal government should significantly increase the unrestricted funding available through the Social Sciences and Humanities Research Council, the Natural Sciences and Engineering Research Council, and the Canadian Institutes of Health Research.

ANSUT also recommends that the 2005 Atlantic accord be maintained as negotiated in 2005 by the federal and Nova Scotia governments. I understand that has been an ongoing issue. There's been discussion. When we submitted our brief, this was a very topical matter.

ANSUT recommends the taxation system be modified to provide an additional tax break to students who are entering the workforce with a student debt.

Finally, ANSUT recommends that the crisis created by the massive increase in student tuition fees over the past decade, which actually is a result of a large decrease in core funding to post-secondary education in the nineties, be addressed. We recommend that this be done both through a restoration of core funding to levels that would allow tuition fees to be reduced, and through the introduction of needs-based programs to provide students with the levels of financial support that will guarantee access to all qualified applicants, regardless of income level.

Thank you, Mr. Chairman.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We'll now move on to the Halifax Chamber of Commerce. We have the president, Valerie Payn.

The floor is yours for five minutes.

[Valerie Payn, President, Halifax Chamber of Commerce]

Thank you, Mr. Chairman and ladies and gentlemen. It's a pleasure to be here.

The Halifax Chamber of Commerce is a best practice organization that continuously strives to make Halifax an attractive place in which to live, work, and play. The 1,700 chamber members employ approximately 75,000 people in Halifax, over one-quarter of the labour force in our city. It is the first North American chamber to be certified to the ISO 9001:2000 international standard of quality and is the oldest chamber of commerce on the continent, with roots going back to 1750. Our membership is small business-based. Approximately 83% of our members are small businesses, which in our estimation is under 25 employees.

I would like to start by acknowledging that we've made great strides. Since 1995-96, for example, when it peaked at 68.4%, our debt-to-GDP ratio has been brought down to 32.3%, obviously something the chamber has long been advocating. More recently, especially with the latest economic statements from the federal government, we've seen moves to capitalize on our strong economic position and foster more growth with tax measures in the economic statement, such as the reduction of general corporate income tax and personal income tax measures, and this too is good news for business.

We must not forget that these are good times and we must not waste this opportunity of good times. We've seen a divergence recently in the U.S. and Canadian economies, and Canada is strong on its own. We must seek to maintain that position of strength, look ahead, and ask ourselves what it will take to keep us economically healthy. We must not see our surpluses as reasons to spend more, but rather to use this opportunity to examine rationally the programs that we have, to look at sunset clauses on new programs and spending, to ensure our tax regime is competitive to attract and keep the best businesses here.

This is an excellent time to look at our challenges--the high dollar, for example--and to respond to them. That high dollar is a double-edged sword that we love--good for some and not so good for others. It's a good time to look at our productivity, especially at this time, and consider measures to encourage investment in research and development to make sure our technology is the best it can be by ensuring the capital cost allowance rates match an asset's economic life. This is a good time to build competitiveness by reducing barriers to internal trade, and so on. This is the time to be looking at these opportunities while our federal government is in good shape financially.

While consecutive very large surpluses indicate there might be room to increase expenditures, it is really worthwhile to re-examine the mix between spending and tax cuts. It's also worth noting that recent increases in program spending have been outstripping trends in personal income. This suggests that it might be more appropriate to have a decrease in personal taxes rather than an increase in spending.

Furthermore, on the business side, as of 2006 Canada still had the sixth highest effective tax rate on capital among 36 industrialized and leading developing countries. Improvement to Canada's competitiveness and productivity would follow from an improved tax system. It is also important to recognize that in both cases--in the cases of spending increases and tax cuts--changes are very difficult to reverse. Once we start spending, it's difficult to cut back, and once we cut taxes, it's difficult to reinstate them.

There is much support among economists that those tax cuts with the greatest potential for our country to stimulate our economy and increase productivity and competitiveness are cuts to corporate taxes and personal income taxes. While the 2007 budget and the proposed economic statement in October of this year go some way towards a more competitive system, we are fiscally well positioned as a country even more to do things to make our country a more attractive place to do business.

Given this, we would recommend a mix of tax changes that address both personal and business taxes, including reducing personal income tax rates, introducing a tax-prepaid savings plan, continuing to review and adjust any capital cost allowance rates to line them up with the true economic life of the relevant asset, and reducing the general corporate income tax rate.

More specifically, we suggest the government consider raising the threshold at which the top marginal personal income rate kicks in to $150,000; introduce tax-prepaid savings plans--you may have heard that from other groups as well--alongside current savings vehicles and fully integrate these contributions to those of all existing tax-deferred savings plans; and continue to review and adjust any capital cost allowance rates that do not line up with the true economic life of the relevant assets.

While technically not a tax measure, EI is a major cost to employers. We recommend that the EI program be returned to its original goal of providing insurance against unintended unemployment. This will facilitate further reductions in premiums. We also recommend that employer EI premium rates be gradually reduced to a level equal to that of the employee premium level; that a system be implemented that allows for over-contributions for employers to be refunded; and that an experienced rating system be examined, to be gradually introduced for employers.

Generally speaking, the chamber supports broad-based tax cuts as opposed to very specific tax breaks. With respect to the relationship between levels of taxes and levels of services, again I would point to consecutive large surpluses as evidence that there is room for additional cuts.

Finally, taxes must not be considered in isolation. Continued adherence to a clear debt management plan and attention to spending are equally important elements of the fiscal and economic equation.

On a final note regarding taxation—because I know that's the primary mandate of your listening today—the chamber surveys its members periodically to get input on policy and advocacy directions and to identify our members' priorities, remembering that 83% are small business. While taxes are always high on the priority list, when it comes to detailed feedback this is hard to come by, particularly at the provincial and federal levels. When you're a business person and someone asks you what we can do with taxes, “Lower them” is a pretty good answer, and one that we hear a lot. Depending on the business size and the industry, business owners are looking for a specific tax mix, but it's important to keep in mind that they don't often do their own taxes.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

I remind the panel to try to keep it to five minutes.

[Valerie Payn]

My apologies for that. Thank you.

[The Chair, Conservative, Rob Merrifield]

We'll now move on to the Sport Matters Group. We have Ian Bird, a senior leader.

[Ian Bird, Senior Leader, Sport Matters Group]

Thank you, Mr. Chairman. I'll try to keep my remarks brief. Really, I'm just going to speak to the highlights of the brief, if I can.

We've been quite consistent. I think you heard from one of my colleagues in Calgary, Mr. Dale Henwood, on Tuesday about the role that we believe the federal government can be playing in the upcoming years as it relates to sport in Canada. There are two particular things that we have identified as being key activities for the federal government, and we'll be requesting that the committee bring forward as a favourable recommendation, in this year, at least the first of these two items.

It is our position that the federal government has played a leadership role in international sport, and has in particular played a leadership role in international development through sport. I believe Ms. McDonough would know of the good work of Dr. Bruce Kidd in creating a venue in which sport can be a tool for community and individual development.

There's also a role for the Government of Canada in international sport as it relates to how our athletes and the teams of Canada compete and excel and reflect the nation on the international stage. Again, I think the Government of Canada has done an increasingly strong job over the last six or seven years in terms of preparing our teams with a view to 2010, and particularly a strong job in preparing teams on the winter sport agenda. Where we have yet to complete the work is as it relates to athletes, coaches, teams, and young people who represent our country in terms of summer sport.

I think about the rowers in St. Catharines who are up at five o'clock in the morning and are preparing to represent the country, who are travelling to Victoria to take up residence through the winter months in order to continue their competitive training. I think as well of our divers in Montreal, our swimmers in Quebec City, and how effective a job we're doing in helping them to represent the country on the international stage. Of course, being here in Halifax, I think about the paddlers who are out on the lake, again looking for flat water and the opportunity to represent their country.

The work has been done to prepare the policy framework and the plan. In fact, we brought home Alex Baumann, whom I understand you'll see tomorrow, to lead the implementation of that plan on behalf of the nation.

The favourable recommendation that we're seeking is to increase the Government of Canada's budget, through Canadian Heritage and within Sport Canada, by an additional $30 million on an annual basis. This would allow the government to complete the development work in the public–private partnership called Podium Canada—where the corporate sector has become significantly engaged—and would allow us to move into a second stage of policy work that I'd now like to speak to.

I've framed that second stage here as looking at what we talk about as the new economics. This is moving beyond the government as spender and into what the enabling policy activities are at a fiscal level that the government can take on, that support the 34,000 local, non-profit, community sport organizations that really are the lifeblood of Canadian sport. They create those Saturday mornings in the hockey arenas. They create the opportunities for young people here in Dartmouth and at the north end of the city. They're the groundswell of Canadian sport.

What we have yet to do is create for them the fiscal tools to completely maximize their potential. We don't have a designated infrastructure program, nor do we have the kinds of charitable tax measures that would allow for capital fund development. We have yet to do the complete work in greening sport, yet we know that technologies made in Canada are available to us. We have yet to maximize what we can do to engage the corporate community through the kinds of incentives that we do see in European nations.

So our second recommendation is to strike a blue-ribbon panel or a committee of Parliament that could look more closely at the economic underpinnings of Canadian sport. Do so in advance of the games in 2010, so that post-Vancouver and post what we think will be a marvellous occasion for all Canadians, we'll have a new economic framework in which citizens, corporate Canada, government, and donors can be full partners in the Canadian sport enterprise.

Thank you very much.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We'll now move on to Gary Glauser, from the New Brunswick Non-Profit Housing Association.

The floor is yours, for five minutes.

[Gary Glauser, New Brunswick Non-Profit Housing Association]

Thank you, Mr. Chair and honourable members.

It's a pleasure to be here to follow up on the brief we submitted in September.

Our association in New Brunswick has 213 non-profit and co-op housing providers who are serving some 6,000 households in New Brunswick. Our members provide affordable housing to people with low incomes, whether they be families, seniors, or clients with special needs.

The needs are great. In New Brunswick there are 30,000 households in need of affordable housing. That compares with the total number in Canada of 1.7 million. So these numbers are huge, and there's obviously a lot of work to do there.

Many of our clientele deal with poverty issues. They have problems providing for the basic necessities of life, such as food, shelter, and clothing. We try to help address these issues by providing safe and affordable housing. But to be successful in this work, we need to have the support of all levels of government and the cooperation of the private sector, working in partnership in developing affordable housing strategies.

In our brief we state that we feel that the federal government must be the leader here in the development of a long-term affordable housing strategy that will serve all Canadians. This strategy would recognize that affordable housing is a major pillar in building a strong and competitive Canada. So we call on the present government to make a commitment for itself and for future governments to maintain an annual level of investment in housing at current levels and to work in partnership with the other levels of government, the private sector, and the non-profit community to effect these housing goals.

Last year, the federal government transferred some funding to the provinces and territories via housing trusts, and this money was to be spent by March 31, 2009. However, since the allocation of those funds, we haven't heard anything more from government regarding any longer-term plans. As well, we want to make it clear, as we did in our brief, that we're very concerned that federal investment in housing is in fact declining. I've passed out copies of a report from the Canadian Housing and Renewal Association where the analysis shows that federal expenditures in housing will be declining steadily from now until 2040, and over that time period, there will be $32 billion in federal dollars that we want to stay in place to ensure the viability of the affordable stock that has been built up over the last 40 or 50 years and to provide for new additions to the stock. This is not new money; this would just be keeping the current level of federal investment in housing in place, rather than letting it decline.

In terms of Canada's tax system, we feel that individuals and corporations should pay their fair share, but we agree with the Wellesley Institute in Toronto, which maintains that the system right now puts too much of an emphasis on individuals. So we would like the government to address the inequity there.

In terms of tax cuts, everybody is talking about tax cuts. We have an example of the cut to the GST. We would favour a more targeted use of tax resources to help those who are in need. The tax loss of the GST cut amounts to some $4.5 billion dollars, which equates to the rough estimate of the annual cost of homelessness to Canadian taxpayers. So we think appropriating that amount of money to homelessness makes more sense than giving an across-the-board cut to the GST.

In our work, we're trying to provide people with affordable housing and help them to become more productive and better able to pay income taxes than to be a draw on tax revenue. Homelessness and the lack of affordable housing results in costs to Canadian taxpayers. A recent Dalhousie University study showed that providing the support of housing is by far the cheapest way to address homelessness. It costs $40 a day to provide someone a supportive housing environment, while in comparison a hospital can run to anywhere from $200 to $650 per day, a shelter can be $50 to $60 a day, and a jail can be $120 a day. Housing is very low-cost and cost-effective for government.

[The Chair, Conservative, Rob Merrifield]

Thank you very much. We'll now move on.

We have the Nova Scotia Government and General Employees Union. We have Ian Johnson, policy analyst and researcher.

The floor is yours for five minutes.

[Ian Johnson, Policy Analyst and Researcher, Nova Scotia Government and General Employees Union]

Thank you very much, Mr. Chairman.

As you said, my name is Ian Johnson. I'm a policy analyst and researcher with NSGEU. I'm here on behalf of our president, who was unable to attend the meeting. Our president is Joan Jessome.

I also want to let you know that we're part of the Nova Scotia Post-secondary Education Coalition, of which my colleagues Marc Lamoureux and Kaley Kennedy are also part. There was initially a joint request to appear before you, and then we submitted separately from that.

As a bit of background, our union is the single largest union in the province, representing 24,000 public and private sector employees working in a wide range of workplaces, including education, of course, the provincial civil service, community agencies, correctional services, and liquor stores.

What I'd like to focus on, starting with the main focus of the work of the committee at this point, is that for us the key question is not whether we need taxation or how to reduce taxes, but rather how to ensure that all major public needs are being met and how to fairly distribute the moneys raised by taxes.

Unfortunately, governments seem interested in cutting taxes instead of looking at the needs we should be meeting. Quite seriously, how can we allow growing and unacceptable levels of poverty and income disparity and at the same time talk about cutting taxes? Surely this must be one of the most basic questions we need to address.

In addition, Mr. Chairman, we feel that having a high-quality publicly funded and publicly delivered health care system is vital to the health and well-being of our citizens. Similarly, there should be no doubt about the importance and even the centrality of post-secondary education.

In our view, no discussion of taxation of revenues for this region would be complete without reference to what has happened to the 2005 Atlantic accord. As the government here said—before October, anyway—the federal government had no right to unilaterally break that accord. It is still our view that the federal government must ensure that every dollar guaranteed to us is protected and flows to Nova Scotia as was originally intended.

Also, in September 2006 the Harper government announced that the government had found “a billion dollars in savings in unused funds, non-core programs, efficiency savings, and programs not providing value for money”. However, with those cuts, many important programs were eliminated.

Besides the need for urgent action to address the growing gap in income disparity, there are for us many pressing needs in health and post-secondary education. In health care we see a number of areas where federal leadership is sorely needed. That includes federal leadership on wait time solutions in the public system, using public solutions, Canada Health Act compliance and enforcement, a national pharmacare program, which is really important at this point, health human resources, and aboriginal health and northern needs.

While the value of post-secondary education is not disputed, public funding for post-secondary education has been severely compromised for at least the last decade, certainly in this province. In short, in post-secondary education we see a critical situation developing of limited affordability and accessibility, diminishing teaching and staff resources, and crumbling infrastructure, all leading to a reduced quality of education.

Before my time runs out, I want to highlight a few key recommendations that we've put forward. My colleague has already touched on key ones in post-secondary education, but we strongly urge, through the committee, that the federal government recognize the fundamental need and value of taxes for individual transfers and social programs; that it abandon plans for broad corporate and individual tax cuts in order to help implement and develop a comprehensive poverty-reduction strategy; that it honour the Atlantic accord and stop trying to break it; that it reverse the cuts that took place last year to many important programs, especially in this region; and that the federal government commit itself to taking a leadership role in developing wait time solutions in the public system instead of pursuing care guarantees, to ensure that the Canada Health Act is complied with and enforced, that there is a move to establish a national pharmacare program, a national health human resources strategy, and serious attention to aboriginal health and northern needs.

Mr. Chairman, I would conclude with that, because I know my time is close. I appreciate the chance to appear before you.

[The Chair, Conservative, Rob Merrifield]

Thank you.

The Sierra Club of Canada is next. We have Gretchen Fitzgerald, director of the Atlantic Canada chapter, for five minutes.

[Gretchen Fitzgerald, Director, Atlantic Canada Chapter, Sierra Club of Canada]

Thank you, Mr. Chair and members of the committee, and thank you to the support staff as well, who are diligently working behind the scenes, I notice.

It's a real pleasure to be here.

The Sierra Club, Atlantic Canada chapter, has a presence in four of the Atlantic Canadian provinces: Newfoundland, Prince Edward Island, Nova Scotia, and New Brunswick. We have over 1,000 members, friends, and supporters who are working at the grassroots level to promote the values of sustainability for the future.

One of the first recommendations we make to this committee is that we begin to put a cost on carbon. This is so important that I'm going to say it again: we have to start putting a price on carbon that we emit.

On Monday, environment minister Baird announced in the House of Commons that a rise of two degrees Celsius in the earth's temperature as a result of human activity contributing to global warning is, simply put, unacceptable. Mr. Baird has stated this, and international panels of scientists have indicated that we really need to make severe cuts in our emissions if we are going to not get beyond that two-degree increase in global temperatures.

What we are asking for is carbon pricing at $30 per tonne of carbon dioxide equivalent emitted. That's $30 per tonne. How the committee decides to put that value on carbon is a decision, I believe, that you will make as a group, either through carbon levies or through a cap-and-trade system or some combination of the two. But again, we need to put a price on the carbon we are emitting.

Of course, the impact on low-income Canadians of any price put on carbon needs to be taken into account if the prices are going to impact those Canadians. Ontario's Low-Income Energy Network is advocating a lifeline rate: targeted subsidies that will prevent low-income Canadians from paying above 6% of their income to utilities. This type of equality needs to be factored into any price put on carbon. Of course, any moneys raised should also be put into renewable energy sources. Currently we are only using between 0.7% and 3% of our renewable energy potential. We can do a lot better.

Second, we need to enhance our capacity to promote sustainable resource use that results in an equitable distribution of wealth and does not deprive future generations of their ability to meet their own needs. We need to incorporate the principles of sustainability.

There are lots of ways we need to get there, but what I'm going to emphasize today is that we have to make departments such as the Department of the Environment and the Department of Fisheries and Oceans a priority.

Cuts to grants and subsidies to communities that are doing on-the-ground sustainability work need to stop. From 2004 to 2007 we've had about a 50% cut in those grants and subsidies, and for the Atlantic region this is devastating.

We have here the Atlantic coastal action program, which works in coastal communities doing monitoring that Environment Canada estimates would cost 12 times more if the government itself carried it out. Between 1997 and 2001, $6 million was invested in these Atlantic coastal action programs, for which there are 14 organizations in Atlantic Canada. That would be $72 million, if the government had to carry out those same projects with the same results. In addition, these projects have resulted in hundreds of jobs and $22 million in direct and indirect feedback into these communities. These are really important projects. The cuts have to stop.

These cuts also do not, of course, reflect the priority that Canadians in general place on the environment. When it comes to Fisheries and Oceans, we need to stop subsidizing fisheries that are not sustainable. I need to highlight that right now we are undergoing a reassessment of the Fisheries Act that will, we fear, result in privatization of a publicly owned resource. This is a huge subsidy to certain parts of the fishing industry, and this committee needs to re-examine this.

There have also been studies showing that there are heavy subsidies that result in over-exploitation of fish stocks to the tune of $163 million per year. I would like the committee to re-examine these subsidies so that only fisheries that are sustainable are being encouraged by the government.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We'll now move on to Symphony Nova Scotia with Erika Beatty.

The floor is yours for five minutes.

[Erika Beatty, Chief Executive Officer, Symphony Nova Scotia]

Thank you very much.

Good afternoon and thank you, Mr. Chair and members of the committee.

It's a pleasure and honour to be here, not only as the CEO of Symphony Nova Scotia but as a representative for Orchestras Canada. You received a written submission earlier on behalf of the Canadian orchestral community, whose membership includes 40 professional orchestras across the country with memberships in all provinces, plus another 90 orchestral groups and training organizations.

The thoughts that came forward from my colleagues over the summer that had been included in the submission can be boiled down probably into two ideas. The primary one is our unanimous support for the work of the Canada Council for the Arts and our gratitude for the permanent $30 million increase that was recently made to the council's budget by the Government of Canada.

The second thing I'd like to cover briefly later is the encouragement of the continuation and enhancement or expansion of some of the programs that the Government of Canada has put in place that have been tremendously successful in helping the orchestral community develop private sources of funding, particularly ones that are sustainable and bring stability into this sector.

As a bit of background, Canadian orchestras engage more than 5,000 professional musicians each year, as well as many more staff and suppliers and volunteers. We're all involved in co-productions of choirs, dance and opera companies, and many more community collaborations with music schools and faculties, local festivals, presenters, classrooms, libraries, health care providers, charities, and many other opportunities to expand our reach and impact through community engagement.

Symphony Nova Scotia, for example, performs almost 100 times every year to more than 40,000 people, at least 8,000 of whom are young listeners. Our annual budget is just under $3 million, and 72% of our annual costs are directed on stage for artistic and production costs. While Halifax is our base, this year we'll also perform in Wolfville, Amherst, Pictou, Lunenburg, and Antigonish. This is a fairly familiar picture with orchestras all across Canada. Community engagement is of vital importance to us to expand our bases in the community, but also to ensure that we're there in the future as well. You'll find what Symphony Nova Scotia does is pretty well what all orchestras across the country are doing as well.

Already this season we've performed a week-long Brahms festival to sold-out audiences, a world premier of a new ballet, and partnered with the Department of Theatre of Dalhousie University to bring to life A Spider's Tale, a children's story written by Binnie Brennan, a member of the orchestra.

Orchestras across Canada served audiences totalling 2.3 million people in 2005 and 2006. A study recently published by Hill Strategies Research states that 10% of Canadians over the age of 15 attended a symphonic or classical music performance during 2005. This is up from 8% of the population in the last study in 1992.

Another study by ACOA, the Atlantic Canada Opportunities Agency, revealed that in 2005 the cultural sector generated approximately $2.1 billion for the economy of Atlantic Canada, and approximately $33 billion nationally, or 3% of the gross domestic product.

The Canada Council for the Arts refers to the cultural sector as “the creative engine of our community”. I love this phrase. This is something that they're bringing in as part of the strategic planning exercise they're doing right now. The Province of Nova Scotia recently recognized the importance of this sector last week when it announced in the Speech from the Throne that it would double the province's culture budget over the next three years.

To expand a little more on those two main points that I brought up earlier, first of all, thank you very much for your support of the Canada Council for the Arts. The work this organization does is extraordinary. That Symphony Nova Scotia is a vital connected part of our community today is in large part a credit to the vision behind that funding support.

Second, we recognize the Government of Canada's significant investment in the Canadian arts and heritage sustainability program provided through the Department of Canadian Heritage, which is due to expire in 2009-10. Programs made possible through this spending package with the greatest impact on us and our communities include an endowment incentives component. The matching gifts provided through this program have been an invaluable catalyst for many orchestras that embark on endowment campaigns to create, through their foundations, a stable source of future income. Symphony Nova Scotia's foundation, for example, has grown from just over $600,000 in 2001 to just over $3 million today. This security dramatically extends our planning horizon and allows us to embark on creative partnerships and collaborative education programs in the future.

The forms of financial support for you to consider perhaps expanding or developing upon, ones that will help us to increase private sector support and a wider base, include the development of a coherent national charity strategy, clarification of the taxation of charitable remainder trusts under the Income Tax Act, streamlining of the federal charitable donation tax credit, and reducing or eliminating capital gains on the gifts of shares in privately held companies to registered charities. We have all noticed a tremendous impact of the work you did in eliminating the capital gains on the publicly traded shares.

Thank you very much.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Just to let the committee know, if we split it up at six minutes each, everyone around the table will get a turn. Are we good with that? Okay.

Let's start with Mr. Pacetti.

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

Mr. Savage is first.

[The Chair, Conservative, Rob Merrifield]

Mr. Savage.

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

I'm going to move quickly. My first question is to Mr. Oram, just for clarification, really.

One of the criticisms of the Conservative public transit tax credit was that it basically helped people who were already using public transit, but it wouldn't bring in new users and wouldn't reduce greenhouse gas emissions. Am I understanding that your plan would do those things?

[Richard Oram]

The employer-based transit benefit really is wholly different from the existing tax credit. They are fundamentally different.

The employer-based program focuses on the work site and where people drive to work. There are tremendous numbers of infrequent riders. Most people don't understand that the body of transit ridership is, even more so than regular riders, composed of infrequent riders. Most people don't use monthly passes. The existing tax credit is limited to monthly passes. The employer-based programs tend to focus on infrequent riders, so the use of passes, tickets, and vouchers is very important at the work site. In fact, the vouchers are redeemable for either fare instruments, tickets, passes, smart cards, or anything else. So indeed, the focus is on infrequent riders.