Finance Committee on March 10th, 2008

[Claudette Carbonneau]

I fully agree. I think regional development is huge. I've seen studies on regions like the Saguenay—Lac-Saint-Jean. There's a population drain: the equivalent of one bus per week is leaving the region. It makes no sense in terms of vitality and the population base. When that exodus also involves young people, I find that really tragic. The problem is structural and related to the current economic situation, but it seems to me that there's no vision of the future when you fail to consolidate regional economic diversification and to maintain a population base, one that includes young people.

You also referred to people's behaviour and their reality. There are endless human dramas in these communities and a whole range of social problems. I don't want to get overly dramatic, but when the La Baie plant closed down, there were a number of suicides. Apart from the human cost, there are also health care and social services costs for communities.

What kind of bind does this put the oldest workers in? Obviously, they don't have the resources they need to live. They have to sell their house and whatever meagre assets they have. It doesn't make sense for things to be set up this way. I can guarantee you that ultimately, the most sought after and heavily subscribed programs are vocational training programs. That's the kind of program that anyone with any ability has been steered towards. That's what's currently most promising. When there are tens, hundreds, and sometimes thousands of layoffs in one region, let's at least try to offer the available jobs to those workers who are most able to specialize and deal with the new realities of the labour market. In terms of the current economic situation, an assistance program for older workers is urgently needed.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We'll now move on to Mr. Dykstra. You have five minutes.

[Rick Dykstra, Conservative, St. Catharines, ON]

Thank you, Chair.

Anne, I have a couple of questions. First of all, if you wouldn't mind, please pass on my regards to Bonnie Skene when you're....

[Anne Krassilowsky]

Oh, I will.

[Rick Dykstra, Conservative, St. Catharines, ON]

You're good friends, so I'd appreciate it if you could do that.

[Anne Krassilowsky]

I talked to her this morning. She's skiing as we speak.

[Rick Dykstra, Conservative, St. Catharines, ON]

Her husband dragged me out once in the truck into one of the fields they were foresting and threatened to leave me out there. Luckily, he took me back.

I have a question probably for both of you, in the sense that I can view my position as a federal member of Parliament and what my responsibilities are; I have a kind of understanding of those. I see the same as a former member of city council in St. Catharines; you have those same types of responsibilities with respect to your municipalities. I wouldn't expect you to come here doing anything other than representing and trying to work on behalf of both of your municipalities.

The difficulty I have is that I can't think of a municipal councillor or a municipal mayor who wouldn't come here making the same types of requests that you are making. I wonder whether you could add a note to both your comments, putting yourselves in our position as federal representatives versus municipal representatives.

Our ability to assist comes with a significant price. We've invested heavily, in all three of our budgets, with respect to infrastructure, with respect to education, with respect certainly to the component—in this budget, for example, of $250 million—for automotive R and D.

I'd ask you, in the light of that, to comment in that perspective rather than the one you come here with, given your responsibilities.

[The Chair, Conservative, Rob Merrifield]

Which one of you would like to start first?

[Phil Vinet]

Do you want to trade places? Is that the idea?

I guess our feet are on the ground. The only difference between a councillor and a mayor is that when you're mayor, the potholes are bigger and deeper and the dogs bark louder. That's the kind of connection we have with our constituents.

As far as this type of community development funding goes, they expect us to come here. We come with our tin cup, and they expect us to get it filled up and go back home. Well, we're one of several thousand communities in Canada, and to be honest, I wouldn't want to trade places with you. I don't know what to say about that part of it.

There are expectations by every Canadian, whether they're from Dryden or Red Lake or my friends here. They're relying on you folks.

[Anne Krassilowsky]

I guess our connection is that when you think about Dryden and how small we are in the picture, and then you look at how we are used to going to make an Ontario pitch and now are able to come here to make it on a Canadian level and talk with you, and when you see our people—I'll speak for northwestern Ontario and northern Ontario—always speaking with the province...this is an opportunity for the federal government.

If I were in your chair, I would see this as an opportunity to create these jobs, to be basically fundamental now in the regrowth and re-establishment of small communities that are so affected by the forest industry and by life itself in general in Canada right now. I think this is an excellent opportunity for the federal government to come face to face with the people in our small communities in Canada.

[Rick Dykstra, Conservative, St. Catharines, ON]

Thanks.

I don't have much time, Phil. I'm sorry.

I guess the only point I'd make is that I know if I went back to my municipality and let the mayor of St. Catharines know that you had had the opportunity to present today, he would wonder why he didn't get the chance. We have so many municipalities that are making those same requests.

I appreciate both of your answers.

I have a couple of seconds left. I'm sorry, Phil, but I want to ask Claudette one question, and then—

[The Chair, Conservative, Rob Merrifield]

Actually, it's 30 seconds.

[Rick Dykstra, Conservative, St. Catharines, ON]

Claudette, one comment you made after the budget was that we didn't invest in education, that we didn't raise the bar there. I want to comment that in our last budget, in 2007, we put $800 million specifically into universities and colleges, a 40% increase in the funding the federal government had contributed to provinces and territories.

I wanted to make sure you're aware of that and give you an opportunity to comment on it.

[The Chair, Conservative, Rob Merrifield]

Very quickly.

[Claudette Carbonneau]

Adequate funding for education is certainly the priority that holds the most promise for the future. I saw what was done in the budget. The federal government's cuts to transfer payments weren't done by the current government, but they are still a fact of life.

[Rick Dykstra, Conservative, St. Catharines, ON]

But you're talking about 1994-95.

[Claudette Carbonneau]

Yes. Still, there was an extremely broad consensus among all provinces and a number of the constituents of civil society to the effect that the funding should be restored, particularly for post-secondary education. Higher education needs support. Continuing education for adults also needs support.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Pacetti.

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

Thank you, Mr. Chairman.

I'd like to thank the witnesses for appearing here today. It has been interesting. I'd like to give you a chance to correct or clarify certain facts. Mr. Laneville, I'll start with you.

You said that a number of businesses haven't invested and aren't competitive. They haven't managed to be productive and now they need help. Is it too late? Why didn't they invest in the past, given that they were more competitive on account of the value of the US dollar? They may not have been productive, but they were competitive.

Now that the dollar is stronger, should companies invest in machinery and equipment? What has happened? Why should we subsidize these companies?

[Jean Laneville]

That's an excellent question. Last November, you invited us to talk about the strength of the dollar and the manufacturing sector. Mr. Roger Martin, from the Institute for Competitiveness and Prosperity in Ontario, an expert in competitiveness, said the same thing I did. Manufacturing companies, including those in Quebec, have not invested given the economic environment. The dollar is all over the place; it jumps, it fluctuates. That is not a healthy environment for planning and forecasting with a view to making investment decisions. No one knows where the dollar is heading. Seriously, if you put yourself in the shoes of a multinational corporation that wants to export most of its products to the United States, parity of the dollar makes you lose a significant competitive advantage.

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

The committee is studying direct assistance measures and the tax environment for the forestry and manufacturing industries. Another group of witnesses, last week, gave us concrete examples. One sector asked that the money invested in research and development be refundable. The unions, on the other hand, said we needed to invest directly in training workers, young or older. No one talked about direct assistance.

[Jean Laneville]

That's not what we're asking for. We know it exists. Direct assistance can be provided through tax credits. It's not direct assistance, it's not a blank cheque, but still, it's some support. Tax credits for research and development support the aerospace industry. It's thanks to things like that that we are competitive with Embraer. As for direct assistance, there's a whole range of tax measures that could help the manufacturing industry.

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

My definition of direct assistance is investment. It's a partnership. Even the committee has said that some of the money invested in research and development should be refundable.

Mr. Vinet and Ms. Krassilowsky, Roger Valley asked that you appear. He couldn't be here today.

I'm not sure I understand this aid for municipalities. Is it your feeling the money should go through the federal government directly and have it look at setting up a whole new bureaucracy to give the money through this bureaucracy to you, or should it not be done through the provinces, since they have already...? In Quebec we have development agencies and in northern Ontario you have a development agency as well. So we can get the money to you faster.

[Phil Vinet]

In previous programs--in the COMRIF initiative, for instance--I can tell you Red Lake has been zero for four, so that process does not work for us.

So to set up another level of bureaucracy, no, I don't think that's necessary. That's just another layer of onion we're wasting money on. But is there is a better, fairer, more meaningful method of distributing this to those who need it?

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

How's that?