Evidence of meeting #8 for Finance in the 39th Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was carbon.
A recording is available from Parliament.
Conservative
The Chair Conservative Rob Merrifield
I'd like to call the meeting to order. We want to thank our witnesses for coming forward. One of the first panellists, Amy Taylor from the Pembina Institute, is joining us by video conference.
Amy, I just want to do a sound check. Can you hear us all right?
Conservative
The Chair Conservative Rob Merrifield
That's fine. We can hear you as well. So I think we're ready to go.
First of all, we have a panel of seven. Most of them are at the table at the present time. We'll start with the Business Tax Reform Coalition. Roger L. Larson is the president of the Canadian Fertilizer Institute.
Mr. Larson, you have five minutes, and the floor is yours.
Roger Larson President, Canadian Fertilizer Institute, Business Tax Reform Coalition
Thank you, Mr. Chairman. As you mentioned, I represent the Canadian Fertilizer Institute, which is my employer. The Business Tax Reform Coalition, on behalf of which I am speaking today, includes the Canadian Chemical Producers' Association, the Canadian Plastics Industry Association, the Canadian Steel Producers Association, le Conseil du patronat du Québec, the Forest Products Association of Canada, the Information Technology Association of Canada, the Propane Gas Association of Canada, the Railway Association of Canada, the Rubber Association of Canada, the Mining Association of Canada, and the Canadian Petroleum Products Institute.
These industries represent over $266 billion of manufacturing production and over $206 billion of exports, as well as the direct employment of 1.6 million Canadians.
As industry associations, we are pleased to come before the finance committee to advocate a number of fiscal measures that we believe will help improve our broad competitiveness and our ability to employ Canadians into the 21st century to sustain our standard of living.
I'd first like to recognize--and I think applaud--something that we picked up on the website this morning. That was the first report of the Standing Committee on Finance. It endorses the tax measures and fiscal measures proposed by the industry committee last year.
Our priority was to talk to you today about a couple of those fiscal measures. Given the continued economic challenges faced by Canadian manufacturing and exporting sectors, we believe the committee's focus on taxation to ensure productivity and prosperity is very timely.
When we spoke to you last year, the industry committee was just starting their study on the manufacturing sector, and it identified three key challenges: the high Canadian dollar, sustained higher energy prices relative to the rest of the world, and intense competition from emerging economies in China and India.
As you know, these challenges persist, and not a day goes by without the mention of the deepening crisis in the manufacturing sector. While these factors are largely external, they challenge industry and government to focus internally on measures to adjust to these forces and allow Canadians to compete in the global marketplace.
Capital is mobile, and the production chains are global. Canada needs to compete for new investment to improve productivity and environmental performance.
When we submitted our brief this August, we identified two key priorities: extend by at least a further five years the new accelerated capital cost allowance for machinery and equipment, and, as a longer-term priority, schedule the federal corporate tax rate down to 15% to open up a clearer Canadian advantage.
The Government of Canada has already acted on the second item, so much has been done.
Federally, corporate taxation is becoming more competitive, and there is greater harmonization with provinces as they match or respond to the federal initiatives on capital tax and income taxes.
The federal government has delivered in the economic statement that was just released to the public. Looking back on the last budget, the federal leadership on capital tax limitation promoted the Ontario and Quebec governments to respond similarly.
The accelerated capital cost allowance measure is extremely important as it dramatically improves cashflow at the front end of a project. We commend the industry committee and the government for taking such a positive step last year to implement it on an interim two-year basis. It demonstrates that the importance of the manufacturing sector is recognized.
However, the point we need to make today is that the current timeframe is too limited to be of use. My colleague Fiona Cook with the Chemical Producers' Association has an example about the significance of the investment timeline to Canadian industry. She would be pleased to come and talk to the committee about it today, if questions permit. She is sitting behind me.
To be effective, this measure needs to be extended so that it aligns with the timeframe of large-scale projects, which can take up to five years from regulatory approval to actually putting machinery in place. I'm not just talking about mega-projects like the oil sands. I'm talking about plans that would take place in my industry and other manufacturing industries. The fact that many investments being contemplated today fall outside the current two-year timeframe means that many in the Canadian industry cannot take advantage of this.
In conclusion, the coalition firmly believes that an accelerated CCA, with a reasonable timeframe, will encourage new investment in the best available technologies, thereby improving productivity, global competitiveness, and environmental performance.
Federal leadership here will deliver additional benefits, as the provinces are likely to match any federal changes.
Thank you.
Conservative
The Chair Conservative Rob Merrifield
Thank you very much.
We will now move on to Canada's Research-Based Pharmaceutical Companies (Rx&D). We have Mark Ferdinand, vice-president, policy, research, regulatory and scientific affairs.
The floor is yours for five minutes.
Mark Ferdinand Vice-President, Policy, Research, Regulatory and Scientific Affairs, Canada's Research-Based Pharmaceutical Companies (Rx&D)
Thank you, Mr. Chairman.
First of all, I would like to thank the finance committee members for inviting our association to appear today. I understand you received over 100 requests for appearances. We are pleased to be here to share our recommendations for fiscal measures that can improve Canada's productivity.
As you know, Rx & D is the national organization representing more than 50 research-based pharmaceutical companies in Canada and the 20,000 men and women who work for them. Averaging more than $1 billion a year in R & D investments, we are one of the most R & D-intensive industries in Canada, second only to the telecommunications sector.
As identified in Budget 2007 and in Advantage Canada documents, it is important to highlight that we were encouraged that the current government, following in the steps of the previous governments, recognizes the vital importance of science and technology research and innovation to the long-term growth and prosperity of our country's economy.
In this spirit, Rx&D would like to present two recommendations to the finance committee today. The first would be improvements related to the scientific research and experimental design tax credit.
First, we believe that it is very important to modernize and improve the Scientific Research and Experimental Development (SRED) Tax Incentive Program.
This SR and ED tax credit is a vital component of the overall investment climate for business in Canada. With targeted modifications, it could enrich this climate and provide valuable advantages in the crucial effort to stay ahead of current and future international competitors.
To this end, we recommend that the government broaden the definition of eligible SR and ED tax credits to include “research in the social sciences” so that it is better harmonized with the OECD definition. The current definition fails to recognize the integral role played by social sciences research in the application of health research carried out in Canada.
In a practical sense, if you have something that is happening in the lab and you're not sure it's going to work at the community level, I think that's a problem. We would like to see the definition in Canada expanded so we can make sure that what we're doing in a clinical setting will have greater application at the community level.
We'd also like to make the full amount of the SR and ED tax credit refundable for all biopharmaceutical start-ups, whether they're Canadian-controlled private corporations or not.
I trust that the committee will also hear from other stakeholders who provide recommendations that follow in the same line.
We know that research and development, particularly in the life sciences, is a global enterprise and that a number of multinational companies located in Canada are spending the billion dollars they spend every year on health research and development.
So that we can encourage a greater amount of foreign direct investment to this country, we suggest that by expanding the eligibility of the SR and ED tax credit to both Canadian-controlled private corporations and non-Canadian-controlled private corporations we would actually see an increase in the level of R and D conducted in this country and therefore an increase in productivity in the economy.
We also want to increase the annual expenditure limit to $10 million, from the current limit of $2 million that was established over 20 years ago.
The incentive that gave Canada a global edge on the SR and ED program has become dated. We strongly believe that Canada can make immediate changes to the credit that will benefit all industries and make a major contribution to the goal of fostering a more innovative and productive economy.
Our second recommendation supports the recommendations made by the Auditor General in 2006 regarding Health Canada. We recommend that funding to Health Canada remain stable and predictable considering the ever-increasing pressures the department is experiencing and in the North American smart regulations context.
It should be noted that Health Canada has made improvements regarding drug approvals and it has helped the department move closer to internationally competitive performance targets. Without a sustainable, long-term funding model, however, Health Canada's ability to maintain high-quality, timely reviews will be compromised.
R and D in Canada, as in Europe, has stagnated in recent years, while emerging economies account for an increasing share of global R and D activity. While Canada's knowledge-based economy has a number of strengths to draw upon, our ability to translate these strengths into investments that bring tangible benefits to Canadians depends greatly on an efficient regulatory system and the business climate in which we operate.
As you develop your recommendations, we ask you to consider how they can support the policy objectives in the federal Science and Technology Framework and in Health Canada's Blueprint for Renewal.
We strongly believe that political leaders have made important strides in unleashing R and D in Canada, and we would like to see this continued with targeted fiscal measures that will help Canada increase its ability to attract the over $100 billion in life sciences investment that takes place in the world today.
We feel that what we are proposing with regard to the SR and ED tax credit will help businesses, large and small, and not only businesses within the innovative pharmaceutical industry but businesses that conduct intensive R and D activities, and it will also help Canada and Canadians become more healthy and prosperous, from both an economic and a social point of view. These recommendations are just one component of creating a stable and predictable operating environment for business in Canada and will also help attract more business to Canada.
Thank you.
Conservative
The Chair Conservative Rob Merrifield
Thank you very much.
We'll now move on to our third presenter. We have le Conseil national des cycles supérieurs, Frédéric Lalande.
The floor is yours for five minutes.
Frédéric Lalande President, Conseil national des cycles supérieurs
Thank you, Mr. Chairman.
We would like to thank honourable members for giving us an opportunity today to present the recommendations of the Conseil national des cycles supérieurs of the Fédération étudiante universitaire du Québec regarding the government's budget for 2008-2009.
First of all, the CNCS-FEUQ is a semi-autonomous component of the Fédération étudiante universitaire du Québec, which represents 30,000 graduate students in Quebec and defends and promotes their interests to government and universities.
We completely share the objective of the Standing Committee on Finance to guarantee and maintain Canada's prosperity and economic growth. That is why we have two main recommendations: first of all, we think the 2008-2009 budget should increase federal transfers for post-secondary education. We also think that funding for university research should be increased.
We would like to establish the fact that in our view the tax system is not a good way of guaranteeing Canadian growth and prosperity.
In our opinion, the current tax system is one of the most competitive in the world, and this is not where the Canadian government could take action to guarantee our future growth. For example, current surpluses show that we definitely have the resources required to invest in post-secondary education. And that is what we are recommending to you today.
Although efforts have been made in recent years in past budgets to correct the fiscal imbalance, which still exists, in our opinion, there is still a $3 billion shortfall required by the provinces to meet their post-secondary education needs. We think this investment should be made this year, as soon as possible, so that we do not lose our advantage compared to the other OECD countries.
We also recognize that some worthy efforts have been made in past budgets regarding our second priority—increasing funding for university research. However, there are still some less successful areas, such as funding for the overhead costs of research and funding for social sciences and humanities research.
Funding for social sciences and humanities research at the federal level is provided by the Social Sciences and Humanities Research Council. We think this council should get between 20% and 25% of the overall funding to the three federal granting councils.
The humanities and social sciences are traditionally underfunded in Canada and elsewhere. And, as my colleague mentioned earlier, this area is essential to the prosperity and well-being of Canadians.
As regards funding the overhead costs of research, all the stakeholders agree that 65% of funding is required in order to avoid a negative impact on the funding of research infrastructure. The Canadian Foundation for Innovation, among others, would be responsible for any negative impact of this type.
We think that our current growth level makes it possible to invest massively in education without increasing the tax burden borne by Canadians. And although this growth is a very good thing, it is based on factors that are quite fragile and unsustainable, including raw materials, in particular. We have everything to gain by investing more in post-secondary education, because it is the key to sustainable growth in Canada.
In fact, of the top ten countries on the world human development index—an index developed by the UN, I believe—half have opted to keep university education free. This provides maximum accessibility to universities. Of the ten countries, only Canada and the United States have done the opposite—have decided to keep tuition fees very high. We think that increasing federal transfers could be helpful in paving the way to greater accessibility to post-secondary education.
In conclusion, I would like to remind you of our recommendations. We would like the federal government to increase its transfers for post-secondary education by at least $3 billion in the 2008-2009 budget.
We would also like funding for 65% of the overhead costs, as are requesting all the people involved in research in Quebec. We would also like the federal government to increase the percentage of funding that goes to the Social Sciences and Humanities Research Council of Canada from 20% to 25% of the entire funding package received by the three granting councils.
Thank you. I look forward to your questions.
Conservative
The Chair Conservative Rob Merrifield
Thank you very much.
We'll move on to the Green Budget Coalition, Andrew Van Iterson. The floor is yours for five minutes.
Andrew Van Iterson Program Manager, Green Budget Coalition
Thank you.
Mr. Chairman, honourable committee members, thank you very much for inviting us to speak to you today.
The Green Budget Coalition brings together 19 of Canada's leading and most respected environmental and conservationist organizations, including groups such as Ducks Unlimited, Nature Canada, Pollution Probe, and the Pembina Institute.
Our primary role is to develop and promote strategic budgetary recommendations on behalf of the environmental community and to advance the integration of environmental values into federal fiscal policy.
We were very pleased that the 2007 budget made progress in all five of our priority recommendations and also on five of our nine ongoing recommendations, so we do want to thank each of you and your committee for the role you've played in helping make that happen.
I want to make four key points today. First is to emphasize the importance of harnessing the power of Canada's tax system to support Canada's environmental objective, and beyond that, to outline the Green Budget Coalition's three priority recommendations for the 2008 budget. One is on carbon pricing, one is on conserving Canada's treasured oceans and lands, and one is on renewing the Great Lakes and St. Lawrence River region, which is so important to us.
All of these are detailed in the document we sent to each of you a couple of weeks ago.
To answer the committee's question, the Green Budget Coalition believes the guiding criteria for designing Canada's tax system, beyond funding government programs, should be to harness the power of the incentives and disincentives created by the tax system to serve the federal government's environmental and human health objectives.
We have long depended upon environmental policy to clean up the environmental damage created by our economy, but this damage is exacerbated because market prices do not reflect the full costs of pollution and of depletion of our non-renewable resources.
To make both our economy and our tax system truly work for Canada and for Canadians, fiscal policy, such as taxes and other levies, should be progressively amended to ensure that market prices of goods and services tell the environmental truth. This should be done in two key ways: through greater levies on the extraction and production of non-renewable resources to reflect their true value; and through levies on pollution to reflect the damage caused to human and ecosystem health.
The first step in this direction, and the coalition's first recommendation for Budget 2008, would be to institute a carbon pricing system with a substantive and increasing price level, as Amy Taylor will be describing later.
The Green Budget Coalition also recommends the 2008 budget make two further key investments: take action to conserve Canada's treasured oceans and lands by implementing three existing strategies--establishing Canada's national system of marine protected areas by 2012 and implementing integrated oceans management plans for Canada's oceans; completing Canada's systems in national parks, national wildlife areas, and migratory bird sanctuaries, and ensuring their long-term protection; and improving incentives under the federal agricultural policy framework for protecting ecological goods and services and agricultural lands.
These plans together have been well developed and could collectively be implemented for about $1 billion over five years and $200 million a year after that.
We recommend building upon the government's efforts in the Great Lakes by investing in a comprehensive, long-term sustainability strategy to restore, protect, and enhance the Great Lakes and the St. Lawrence River region. This region includes one-quarter of Canada's population, creates one-third of Canada's economic output, and also releases 45% of Canada's air pollution.
Our priorities for investment include developing a shared basin-wide vision, upgrading water and waste water infrastructure, and cleaning up and delisting areas of concern and zone d'intervention prioritaire.
The federal funding for this could come substantially from the funding that has already been allocated to the Building Canada Fund and should be matched by provincial and municipal governments.
To conclude, I want to encourage you to focus your committee recommendations on shifting the tax system to provide further incentives to support Canada's environmental and human health objectives. And I urge you to recommend action on carbon pricing, on the conservation of oceans and lands, and in renewing the Great Lakes and St. Lawrence River region to build upon your actions in Budget 2007.
Thank you.
Conservative
The Chair Conservative Rob Merrifield
Thank you very much.
We'll now move on to the Investment Funds Institute of Canada. We have Jamie Golombek, chair, taxation working group.
Jamie Golombek Chair, Taxation Working Group, Investment Funds Institute of Canada
Thank you, Mr. Chair and honourable committee members. I work for AIM Trimark Investments, in the private sector, but I am here as a volunteer on behalf of the Investment Funds Institute of Canada, as chair of their tax working group. We represent approximately $700 billion of Canadians' investments, which they use for a variety of reasons, primarily retirement, and I am here today to spend a few minutes illustrating some of the issues that we feel should be a priority for the government when it comes to retirement planning. Given the enormous number of Canadians who will soon be reaching retirement age, we believe that retirement and planning for retirement is a huge priority for Canadians and should be for the government as well.
As you saw in our submission, we had a number of ideas. I really wanted to spend just a couple of minutes today highlighting four of those specific ideas and proposals that the government might wish to look at when preparing for its 2008 budget. I'll address very briefly the original promise by the Conservatives to eliminate the capital gains tax on a reinvestment within six months. I'll address the long-going discussion of the tax prepaid savings plans. I'll address the effect of GIS, guaranteed income supplement, clawbacks and a couple of ideas there, and finally, I'll just spend a moment on the recent pension splitting, which we are very happy to have, with a slight recommendation that we would make.
Very quickly, on the first one, as we all know, the government promised in January, in the run-up to the election, that if they were elected they would eliminate the capital gains tax on a reinvestment within six months. We've done a lot of work on that. We've worked with other groups like the C.D. Howe Institute on a number of ways that could be accomplished, minimizing tax costs to the government while still achieving the policy objective. There seems to be a myth that capital gains are only for the wealthy. We pulled some statistics, and they are sourced in our brief, that in fact over 55% of people claiming capital gains in Canada actually have income of under $50,000 a year. So this is not just for the wealthy; this is for widespread Canadians. What we're suggesting is, as opposed to putting in a specific program, maybe you'd like to revisit something like a lifetime gains exemption or an annual gains exemption that would achieve the objective of allowing Canadians to diversify their portfolios to achieve a better way of saving for retirement while minimizing the ultimate cost to the government.
The second area to touch on briefly is the GIS clawbacks. As you know, for low-income Canadians who receive the guaranteed income supplement, there is a disincentive to save, because when money is taken out of registered plans they are clawed back 50¢ on the dollar. There was a study a number of years ago that showed that low-income Canadians should not invest in RRSPs because they'd be better off collecting government benefits. The same problem is also escalated with the new dividend rules where you gross dividends up by 45%, enhancing a clawback. What we're recommending is that when it comes to dividends you only use actual dividends and that RRSP and RRIF withdrawals will not be included in the calculation of clawbacks, to encourage all Canadians to be able to save for retirement.
Finally, on the pension splitting, we're certainly very pleased with the legislation that was passed in June of this year to allow Canadians to income split, pension split, and that's a big move by the government in terms of policy. We would make one additional comment. Most Canadians do not have a registered pension plan. They save through RRSPs and RRIFs, and the problem is that of course with an RRSP or RRIF, the way the legislation is right now, to be able to split with a spouse or with a partner you've got to be at least 65 years old, whereas of course if you were part of a pension plan and you chose to take early retirement, let's say at age 55, you'd immediately be able to split that pension.
We've got a lot of concerns. People have written to us from all across Canada saying this is unfair and it is discriminatory, and it really favours people in defined benefit pension plans who could retire early and take advantage of the splitting and the pension credit. We would recommend that the government look into the possibility of perhaps lowering the age for all Canadians to age 55 to allow them to both pension split and get the pension credit, and not discriminate against people who don't have a defined benefit pension plan.
Those are just four of the ideas that are highlighted in our paper, ideas to consider for the upcoming 2008 federal budget. Thanks again.
Conservative
The Chair Conservative Rob Merrifield
Thank you for those very interesting ideas. We'll move on to our teleconference. Amy Taylor is here from the Pembina Institute. She is the program director.
Amy, if you can hear us, the floor is yours for five minutes.
Amy Taylor Program Director, Pembina Institute
Thank you, Mr. Chairman and members of the panel.
My name is Amy Taylor, and I'm a program director with the Pembina Institute. The Pembina Institute is pleased to have the opportunity to appear before you today, and I appreciate you accommodating my lack of presence in Ottawa in allowing me to join you via video conference.
I'm here to take the opportunity to recommend that the Government of Canada establish a price for greenhouse gas emissions of at least $30 per tonne of emissions in 2009 and at least $50 per tonne of emissions by the year 2020. This price should be applied broadly in the Canadian economy through either a tax or a cap and trade system, or some combination of the two.
The revenue raised from a tax or auctioning of permits at least initially should be directed mainly to achieve further reductions in greenhouse gas emissions. Some revenue should also be used to offset disproportionate impacts on low-income Canadians.
In early 2007, a report of the world's most authoritative climate science body, the Intergovernmental Panel on Climate Change, concluded that the warming of the climate system is unequivocal. It is mainly due to human activities. A second IPCC report projected catastrophic consequences if GHG emissions are allowed to continue unchecked, while a third report concluded that deep reductions in greenhouse gas emissions are technically feasible, affordable, and urgent.
As a developed country with one of the highest per capita greenhouse gas emission rates in the world, Canada must be a leader in reducing greenhouse gas emissions, both quickly and deeply. Pembina believes that to play a responsible part in the global effort to prevent dangerous climate change, the Government of Canada must put a price on carbon. Fiscal instruments and market-based mechanisms such as taxes and emissions trading help meet environmental objectives at the lowest overall cost to the economy. They provide flexibility and create economic incentives to change consumer and industry behaviour and choices.
The government could choose to put a price on carbon through either a cap and trade system, a carbon tax, or some combination of these two. From an environmental perspective, the most appealing feature of a cap and trade system is that it can provide certainty of the environmental outcome it will produce. The system starts by placing a limit on greenhouse gas emissions, and companies are forced to deliver those reductions, whether through improved performance on-site, by purchasing credits, or by purchasing credits in the market.
A carbon tax cannot offer certainty about the volume of reductions it will achieve, but unlike a cap and trade system, a carbon price or a carbon tax does provide price certainty. A carbon tax of $30 per tonne, for example, would create a strong economic incentive for companies to undertake emission reductions that cost less than $30 per tonne, because by doing so, they avoid paying the tax. If a carbon tax is stringent enough, it can in fact deliver greenhouse gas reductions just as effectively as a cap and trade system.
Whatever the policy mechanism, there is growing support for carbon pricing in Canada. The Province of Quebec recently introduced a carbon tax on energy producers, distributors, and refiners. As of July 2007, heavy industry in Alberta is subject to a greenhouse gas regulation that allows companies to meet their targets by paying a $15-per-tonne fee. The federal government has also announced plans for a regulation on heavy industry nationwide that would take effect in 2010, again with a $15-per-tonne compliance option.
A well-designed carbon pricing scheme would offer a number of benefits to Canadians. These benefits include producing significant, sustained greenhouse gas emission reductions to help protect Canadians from dangerous climate change and to fulfill Canada's international treaty obligations; creating a competitive advantage for clean industrial production, with associated job and export potential; raising substantial revenue that could be used to fund further emission reductions, protect vulnerable Canadians, and potentially reduce existing taxes; and finally, improving our air quality and reducing risk to human health.
Thank you very much for your time and consideration.
Conservative
The Chair Conservative Rob Merrifield
Thank you for the presentation.
We'll now move to the question and answer part, starting with Mr. Pacetti for seven minutes.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Thank you, Mr. Chairman.
I might as well ask the question of the last presenter. I want to thank all the presenters for coming forward. It's tough for us to ask questions of everybody.
Ms. Taylor, this carbon tax, again, is something that was suggested years ago, and recently the Liberal Party came out with something new, which is a carbon investment type of an idea. This carbon tax just doesn't flow. It's an idea of two or three years ago. Basically, what's happening is we're not necessarily penalizing people who are polluting, but we're actually encouraging them, saying, “Go ahead, keep polluting and just pay your taxes”, or pay a fee, or pay, in this case, the carbon tax. How is this going to solve our problem with the people or industries that are polluting?
Program Director, Pembina Institute
I think that speaks to the level of taxes required to change behaviour. Our recommendation is that the price be no less than $30 per tonne by 2009 and then up to at least $50 a tonne in 2020.
Quite a body of research now demonstrates that at those kinds of price levels, we would see quite a significant shift in behaviour.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
But that's not what we're seeing; what we're seeing is.... Industry is asking for the ability to make investments so they can become greener and more efficient. And that's where the problem seems to be.
If we made these funds available to industry so we get them to clean up their act, is that not the solution?
Program Director, Pembina Institute
We need to achieve the polluter-pays principle. We need to have them paying for a good chunk of the cost they're incurring on the environment right now. Then we could use some of that revenue too. Of course, one option would be to incent additional emission reductions through some kind of technology fund. That is a possibility.
But at the very beginning, we need to internalize some of those environmental costs and get the price signals, the incentives, right.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Good. Thank you.
How about you, Mr. Van Iterson? You spoke about a carbon tax. If the money were dedicated to the specific industries that paid it, wouldn't there be more of an incentive for them to stop polluting?
Program Manager, Green Budget Coalition
As Amy mentioned, I think the first goal is to internalize the damage being done through the pollution, so there's no obligation to return the money.
Once the money has been generated, I think it would make sense for the government to allocate a portion of that to stimulate industry to further improve the efficiency of their operations and to reduce their pollution.
I don't think the government has an obligation to return all that money.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
I don't think it's a question of the government having an obligation; it's trying to get these polluters to stop polluting.
I'm not sure imposing a tax is the solution. That's why I'm asking you.
Program Manager, Green Budget Coalition
The tax should be high enough that it's worth their while not to do it. If you speed on your way home tonight and you get a $250 fine, I bet that's worthwhile; you're not going to speed tomorrow. The fee that's assessed on polluting should be high enough that it's worth businesses--
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Then they'll just increase their prices. That's what I'm scared of. They'll just increase their prices and continue to pollute. And I'm not sure that's the solution. I'm not saying that....
We've got to encourage these guys to solve the problem.
I'm limited in time.
I have a brief question for you, Mr. Lalande.
In Quebec, tuition fees are the lowest in the country, but there are nevertheless access problems. Some people do not enrol in the universities, at the postsecondary level.
What is the solution? Is it to reduce tuition fees, or to increase them for people who can afford to pay them, or perhaps we should find other ways of increasing access? What point is there in having a $3 billion transfer without having any concrete solutions?
President, Conseil national des cycles supérieurs
We are well aware that there are reasons other than purely financial reasons that may prevent people from signing up for postsecondary education.
However, we are virtually convinced that the low cost of tuition or the perception that tuition is low compared to the benefits a person derives, is a fairly strong incentive for people to undertake postsecondary education.
Increasing federal funding would cover the current funding shortfall in Quebec, that we estimate to be between $375 million and $400 million for universities alone. It is not a problem of accessibility; it is more a problem regarding the quality of universities at this time.