Finance Committee on Nov. 29th, 2007

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

I thank you for your answer.

I suppose it is even more dramatic for businesses that are not very profitable, that will not necessarily benefit from general tax cuts, but that need to invest. That might not so much be the case in your sector.

Mr. Lalande, in your statement, you ask for an additional amount of approximately $4 billion to be re-invested, including about $1 billion for Quebec.

In your view, who can best manage that money? Is it the Government of Quebec? To whom should it be allocated?

[Frédéric Lalande]

Generally speaking, we believe that the provinces are in the best position to manage everything related to education, even though Mr. Charest has not really given us very serious guarantees as to being qualified in that regard.

Nevertheless, the principle remains. Provinces alone should manage that specific area.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Lalande.

My question is for Ms. Taylor.

We have heard the Prime Minister say that the Kyoto Protocol was a mistake. What would the world be like today if there had been no negotiations as part of the Kyoto process and if we had to start again from square one?

Some countries have made good progress, while Canada has fallen behind considerably. What kind of statement would you make today if we had to start again from square one?

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Would you tell me what would happen if we had to begin the question of Kyoto today, if, as the Prime Minister says, Kyoto was an error, and if we have done nothing for 10 years? What presentation would you have to make today if this were the reality? What do you think we must do to be sure to obtain some good results in the near future because my children have to live on a planet in good condition?

[Amy Taylor]

We consider the recommendation that we've put forward today to be very much a minimum start in terms of what has to happen to get us on the track we need to get on to, to avoid dangerous climate change impacts around the world. That includes a price on carbon, either through a tax or a trading scheme of no less than $30 by 2009 and no less than $50 by 2020. That would really be considered very much a minimum. We need to package that with other policies, regulations, and standards so that we shift the path we're on that will not get us to where we need to be to avoid the impacts of dangerous climate change.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Wallace, you have five minutes.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair, and I thank you, panellists, for coming this afternoon and talking to us.

I really want to focus my question on two individuals, and Mr. Lalande, you're first.

In our 2007 budget, we also agree with you that there needs to be a focus on graduate students. That has been discussed, not only in our budget but in our throne speech. Last year in the 2007 budget we added $35 million over two years to give to the granting councils for the Canadian graduate scholarships. I think it's about $17,000 for a master's student over three years, and for a PhD student it's about $35,000. Just so I'm clear, students in the fine province of Quebec--I know you're representing Quebec--are entitled to apply for those grants. Do you know if a lot of Quebec graduate students use that program?

[Frédéric Lalande]

Currently, the latest figures show that if you combine the funding given by Quebec and federal granting councils, approximately 30% of graduate students will be affected to varying degrees.

Therefore, yes, they are affected by those programs.

[Mike Wallace, Conservative, Burlington, ON]

We've added in the budget about 400 new scholarships--well, 800 through a couple of the programs--through the Canadian Institutes of Health Research and the Natural Sciences and Engineering Research. Then there are about 200 from the Social Sciences and Humanities Research Council. What is the breakdown in terms of graduate students in the province? Do you know how many are in the health area, how many are in the science area, or how many are in the humanities area? Do you have a sense of that?

I'm sorry, you may not get it in the translation.

[Frédéric Lalande]

What you need to know is how many students there are in each sector--sciences de la nature, sciences humaines.

I know that in Canada, approximately 54% of full-time graduate students are enrolled in social sciences and humanities programs. That gives you a sense of the breakdown. The remaining students are in natural sciences, engineering or health sciences.

[Mike Wallace, Conservative, Burlington, ON]

I want to know what the Quebec experience is. We've had other presentations from universities and so on. Universities put out an invitation, an acceptance, to an international student for a graduate program. They have difficulty coming here because there's an indication they might not go back if they get educated here. Is that a problem in Quebec from a graduate point of view? Are foreign students applying to graduate programs in Quebec? How would you feel as an organization if we looked at the immigration policies that would allow somebody who got a master's or doctorate degree here and there would be a way of identifying them so they would be able to apply for immigration in a more efficient manner than there is today?

[Frédéric Lalande]

In fact, our position with regard to that is fairly straightforward: we have to make it as easy as possible for graduate students to stay here if they so wish. That basically sums up our position.

However, at the same time, we cannot be too aggressive in that regard, because then people would feel that we are poaching the best and the brightest from the poorest countries.

[Mike Wallace, Conservative, Burlington, ON]

Thank you very much.

Mr. Golombek, I just want to be clear. Based on the conversation you had with one of the opposition members, let me just read you something here. It says that:

The capital gains tax deferral is a bad idea. Scrap it. • Wealthy investors love the idea. Voters and taxpayers have little enthusiasm or use for it. It is of most benefit to less than 1% of Canadians and the money could be better distributed elsewhere.

That's a quote that I have from a budget submission from Mr. Turner in a previous budget. Did you not say, from your perspective, that this is not accurate and that many Canadians could benefit from that tax deferral program?

[Jamie Golombek]

All we did in preparing for this submission we wrote in August is we went to the government's website, the Canada Revenue Agency's website, and looked at something called the CRA income statistics for the 2005 tax year, and specifically at interim table 2—universe data. We looked at and analyzed those data, which show every line on the tax return. If you've never done this, you should, because you'll learn a lot about how things work, because it goes though every single line of the tax return and tells you how many Canadians reported an amount on each line of the tax return.

So based on our research, we found that two million Canadians reported a capital gain. I'm not sure those two million are 2% out of the many millions of Canadians actually working and over the age of 18; I think it's higher than 2%, but the statistics break down by income bracket and show that 55% of those have a total income under $50,000. That's based on information from the CRA website, based on filed tax returns for the 2005 tax year.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Ms. Bennett, the floor is yours for five minutes.

[Carolyn Bennett, Liberal, St. Paul's, ON]

Thank you.

My question is for Mr. Lalande.

I'm actually quite shocked to see that your last recommendation would be to cease investing in the Canada Foundation for Innovation and instead invest those sums in its funding agencies. With this government, which seems to use research as a swear word, and particularly social science research, I don't quite understand why you would be stealing from your biomedical colleagues, instead of just asking for more money for social science research.

I guess as I go across the country and see the number of scientists who have come back to Canada because of the equipment and laboratories, and whatever they've been able to be obtain, through CFI, I wonder why you would sabotage a research colleague in a report to the finance committee. It makes no sense to me at all.

Are you doing this in consultation with the people who receive money from CIHR and NSERC? Just because it doesn't tend to work for social science research, why would you then be destroying this thing that has actually been a renaissance for scientific research in this country?

[Frédéric Lalande]

In fact, we are not asking that funding be reduced in other areas of study, on the contrary. To put it simply, we had to make a choice from the many things we want on our list.

In our opinion, the problem is basically that the Canadian Foundation for Innovation is a private foundation, that is all. We do not believe that there is enough accountability, and the foundation should be just as accountable as all other federal organizations. We are not asking that research infrastructure funding should be stopped, on the contrary. We are simply asking that the money in the Canadian Foundation for Innovation be reinjected in programs which already exist under the three federal granting organizations, programs which fund infrastructure.

[Carolyn Bennett, Liberal, St. Paul's, ON]

With your sister organizations, such as NSERC, the academies, and CIHR, I agree with you on this. My concern is the way this looks when you say, “cease funding investing in the Canadian Foundation for Innovation (CFI), and instead invest those sums in its funding agencies”. At the moment, most of the CFI money goes to NSERC and CIHR researchers.

This actually just looks like you think you would get some of their pie.

[Frédéric Lalande]

I understand that people might get the impression from our presentation that we want to take the money earmarked for research organizations and give it to the social sciences and humanities sector, but I can assure you that that is not at all the case. We simply want the money, which is in a private organization, to be transferred to existing programs under the three granting organizations.

It is also a fact that the natural sciences, health sciences and engineering have made up for more lost ground than the social sciences and humanities. That is why this year, we have focused more on the social sciences and humanities, that is the SSHRC.

[Carolyn Bennett, Liberal, St. Paul's, ON]

But are CIHR and NSERC d'accord avec this recommendation?

[Frédéric Lalande]

We do not consult with the other granting councils before we make our own recommendations.

[Carolyn Bennett, Liberal, St. Paul's, ON]

My advice to you would be for the research community to come together with one approach to this committee, and that picking one off against one another has never really worked.

I think it is really extraordinary for those of us who are trying to fight for more social science research, and actually very hard for me to do my job, when this government seems to think social science research is a swear word, and you come in attacking a program that is so important to other researchers in this country.

[Frédéric Lalande]

As I said, our goal is not to attack the funding of the research infrastructure, on the contrary. We are simply saying that we are not satisfied with this structure, namely the Canadian Foundation for Innovation, as it is currently organized.

One of the traditional demands of the Conseil national des cycles supérieurs is increased funding for all three granting councils. We find it would simply be more efficient to fund the three councils equally, based on need, rather than funding a private foundation for infrastructure, which indeed creates duplication of existing programs within the three granting councils.

[Carolyn Bennett, Liberal, St. Paul's, ON]

Even the first.... I'm sorry--

[The Chair, Conservative, Rob Merrifield]

No, that's actually it--