Finance Committee on Nov. 29th, 2007

[Lynda Gunn]

Yes. What we recommended is that there be a trust fund set up with a board of trustees managing the revenues and that these revenues be shaved off from the territorial government's stream of revenues once resource royalty revenues are negotiated and devolution has occurred.

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

Thank you, Ms. Gunn.

Mr. Cousins, just quickly, with respect to the northern deduction, what's the amount right now, and what are you looking to increase it to? It's only a couple of thousand dollars. Correct?

[Glenn Cousins]

That's correct. Well, it's $5,475 maximum for the basic part of the deduction, and it has been like that since 1987.

So I guess there are a couple of different decisions you could make about what it should be increased to.

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

We're not going to make any decision. You're going to have to tell us.

[Glenn Cousins]

Well, the very basis of it would be to increase it based on the cumulative effect of inflation since 1987, which would be approximately 64%, or from $15 a day to $24.50 a day.

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

Thank you.

[The Chair, Conservative, Rob Merrifield]

Thank you.

Monsieur Crête.

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

Thank you, Mr. Chairman.

My question is for Mr. Johnson. In your brief, you say:

Best of all, OECD data has also found that no matter where you live in Canada, no matter their economic status, the Canadian public system ensures that your child will receive an education that is ranked among the best in the world.There are few countries in the world that can make that boast.

Is there anyone in Canada, outside of Quebec, who is asking that school boards be abolished?

[Rick Johnson]

That hasn't happened yet, but it is a discussion we hear on occasion. The school boards represent one of the earliest forms of democracy, and we have to do a better job of making sure people understand the value of school boards in this country. It is incumbent upon all of us to make sure that happens.

School boards do an incredible amount of work in ensuring that communities and the children in those communities across the country receive the education that is their right. It is one of the primary and most local forms of democracy in this country.

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

I agree with you, Mr. Johnson. I also believe that in Quebec, school boards are doing their job well, which is to connect people in smaller communities and to make sure that schools in smaller communities can survive, even when there are few students, among other things.

If we can find ways to help you, we will try to study the issue more seriously.

I have a question for the people who have joined us via teleconference or who are with us by phone. Can you hear the interpretation?

[The Chair, Conservative, Rob Merrifield]

Can you hear the interpreter's voice in the north, Geoff, Lynda, and Glenn?

I think we might have lost them.

Yes? Okay.

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

Pardon my ignorance, but has an overall assessment of the tax measure that would best apply to your type of jurisdiction already been carried out?

It is possible to introduce specific tax deductions, as you are suggesting in some of your submissions, but it is also possible to undertake an overall assessment of the additional investment that we are willing to make in the north, or even hand over to the Nunavut government or local governments.

Has an in-depth study been done? Can you tell us about it? In your opinion, what would be the best solution?

[The Chair, Conservative, Rob Merrifield]

Who would you like that addressed to?

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

The question is for any one of the three witnesses, Mr. Ryan, Ms. Gunn or Mr. Cousins.

[The Chair, Conservative, Rob Merrifield]

Any one of you can answer.

Geoff Ryan, are you there?

[Geoff Ryan]

Yes.

This was more a topic of the NAM presentation, but right now, without devolution in place, there's no ability for the territorial government to get revenues from resource extraction, because the lands are federal crown lands. There's a need for the devolution process to go forward for those revenue streams to be realized.

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

Thank you.

My last question is to Ms. Vandenberg. In reference to the 0.7% target of the GDP, and given the level of growth we are currently registering, one can say that the government is not producing expected results not because of failure to allocate funds overall, but because wealth is expanding at such a rate that the amount should be much higher.

Can you suggest a way for us to meet the 0.7% target with certainty? If we are indeed becoming more affluent, an extra effort should be made accordingly. Is there a way to prevent the Prime Minister from serving us the excuse that Canada is unable to meet the target because of heightened growth? Do you have any solution to suggest? If not, do you think all we need to do is make an extra effort?

[Elly Vandenberg]

Thank you for your question.

Through the Canadian Council for International Co-operation, an umbrella coalition of international development organizations, we've been calling for some time for a timetable to be put forward to look at that very issue. There are clear recommendations about how to get to 0.7% by 2017. It keeps getting pushed, but there is a clear way to get there.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Now we'll move to Mr. Dykstra. I believe you're splitting your time with Mr. Menzies.

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

We are splitting our time, Chair, but Mr. Menzies is going to go first.

[The Chair, Conservative, Rob Merrifield]

Fair enough.

Mr. Menzies.

[Ted Menzies, Conservative, Macleod, AB]

Thank you, Mr. Chair.

Thank you to our presenters.

There were some interesting comments that I'd like to pick up on.

Ms. Ecker, you were talking about market access as being a very important item for the industries you represent. You talked about lowering taxes, and I think that's where this government is obviously heading. One thing that I would ask of you is that your association representatives would push the members of Parliament to pass this budget bill that we're debating in the House right now, because we're not going to get these tax cuts in that people need and that Canadians are expecting if we don't get this done by the end of the year. So I ask that of you.

I also would ask you this. Going back to the market access issue, what role have you played in WTO negotiations? Market access with financial instruments in the international market is critical. We've hit an impasse at the WTO. Have you played a role in that?

[Janet Ecker]

Thank you very much for the question, Mr. Menzies.

First of all, on the tax question you asked, we're not shy about expressing our views to all members of Parliament, or the provincial parliament in Ontario, or to city council. We do tend to do that quite persistently.

In terms of the WTO negotiations, our organization has not been involved in those discussions. They are the national organizations that represent financial services, and some, I know, that have been presenting to this committee are more involved in that.

It is unfortunate that there has been an impasse. I think when you look at some of the things that have contributed to, for example, London's financial centre, their success, and the access, the fewer the barriers and restrictions sometimes can be the best. Those organizations would encourage your government to do what you could do to break the impasse.

[Ted Menzies, Conservative, Macleod, AB]

One other comment that I'll pick up on is capital taxes. We've given incentives to provinces to get going on reducing their capital taxes. I'm sure you would agree that's very necessary.

[Janet Ecker]

Yes, absolutely. We make the point, as many organizations have, about the negative impacts of a tax on capital. I think the other challenge for Canada is that it has stood out like a sore thumb, in the words of one CEO to me. When other companies are coming here looking at investing they see that. It's a potential barrier.

We're very encouraged by the progress that has been made. Ontario, for example, has put a legislated end to it. I think the federal government's moves have been very good as well. We always would like more, faster, but we appreciate that it has to be a balance, and we continue to encourage governments to remove any barriers to capital.