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.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Exactly. The issue remains the same, because we will transfer the $3 billion, and Quebec will transfer it to the universities.
What will they do with the money? They will invest in infrastructure, in quality of life programs at universities; but this will not increase accessibility and opportunities for students to go to school.
President, Conseil national des cycles supérieurs
If tuition fees are frozen, accessibility is pretty well guaranteed, particularly if there is an adequate financial assistance program. The additional transfer from the federal government...
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
There needs to be additional funding on the side?
President, Conseil national des cycles supérieurs
Yes, obviously. Even though tuition fees are low, people still have to pay their living costs while they are studying. We should not have to deal with $20,000 or $30,000 of debt, which will hinder post-education projects, whether to start up a business, establish a family or buy a home.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Parfait.
Mr. Ferdinand, one of your recommendations is the refundability of the SR and ED. Are you recommending this for past research and development credits that have been allocated to your accounts, or are we talking about future ones?
Vice-President, Policy, Research, Regulatory and Scientific Affairs, Canada's Research-Based Pharmaceutical Companies (Rx&D)
I'm trying to understand the question.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
In your first recommendation you're asking for refundability. Is that correct?
Vice-President, Policy, Research, Regulatory and Scientific Affairs, Canada's Research-Based Pharmaceutical Companies (Rx&D)
Right. I think under current rules there is a period that allows companies to carry forward unused amounts and also allows them to look back three years, I believe, if they haven't used that, so they can apply it both forward and backwards if necessary.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Exactly. So are you asking for refundability going backwards or going forward?
Vice-President, Policy, Research, Regulatory and Scientific Affairs, Canada's Research-Based Pharmaceutical Companies (Rx&D)
The current rules allow for both, and I think we'd want refundability--
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
But you don't have a cost related to those numbers, because we're getting different kinds of costs and there are different amounts going across the table, so if you can get us those costs, I think we'd appreciate it.
Vice-President, Policy, Research, Regulatory and Scientific Affairs, Canada's Research-Based Pharmaceutical Companies (Rx&D)
Tomorrow we're going to be submitting our submission to the Department of Finance. We've tried to cost out a few of the options that we're looking for recommendations on. One of the issues that we'll have to consider is that when the finance department conducted its consultations, they clearly said they do not do projections going forward based on the fact that the availability of data is quite scarce.
So what we try to do is estimate based on hypothetical situations.
Conservative
The Chair Conservative Rob Merrifield
That's it, but I do want to follow up. When you get that information, could you present it to the clerk and we'll get it distributed to the members?
Vice-President, Policy, Research, Regulatory and Scientific Affairs, Canada's Research-Based Pharmaceutical Companies (Rx&D)
We certainly will. As of tomorrow we'll be able to share that with the committee.
Conservative
The Chair Conservative Rob Merrifield
This is a problem we've had with other witnesses--getting some accurate information on that.
Monsieur St-Cyr, you have seven minutes.
Thierry St-Cyr Bloc Jeanne-Le Ber, QC
Thank you, Mr. Chair.
I thank you all for being here with us today.
My first question is for Mr. Lalande. I am pleased to see that, in your statement, you point out that the fiscal imbalance has not yet been settled, which is preventing provinces from adequately funding education.
From the outset, the Bloc Québécois does not think that the federal government should deal with education. We agree with you when you say that our universities are underfunded and that there needs to be a massive transfer of funds to the provinces for post-secondary education. At the least, transfers have to be brought back up to levels seen in 1995, when the Liberal government made its drastic cuts.
In our view, it is up to Quebeckers and their government to determine where they will invest that money.
Despite that, could you tell us how our universities will be affected by the underfunding and what the consequences will be on tuition fees, given that there are many people in Quebec who want to end the tuition freeze? What is the impact on all the related costs charged by universities?
President, Conseil national des cycles supérieurs
With regard to the quantitative measures taken as a result of the underfunding of our universities, I can tell you that the number of professors has remained unchanged since 1994, whereas the student population has increased by about one-third. For about the same number of professors, there are 33% more students.
There is also the issue of accumulated deferred maintenance. Universities are not adequately maintaining their buildings and are covering that up in their budgets, year after year. Accumulated deferred maintenance is estimated at approximately $400 million, an amount that is not included in the Government of Quebec's reporting environment. That shortfall or deficit is an added liability.
Because of those pressures, universities are increasingly inclined to overtax or overcharge their students and make them pay, in addition to tuition fees, what are called incidental fees, i.e., fees related to university campus life. In some institutions, incidental fees exceed even tuition fees. All those factors have a negative effect, especially because some institutions charge higher fees than others, which creates an imbalance among universities.
Bloc
Thierry St-Cyr Bloc Jeanne-Le Ber, QC
Very well, thank you.
My next question is for Mr. Van Iterson and Ms. Taylor.
I am very pleased that you could be here with us again this year. Your proposals are always interesting. At a meeting last week of the Standing Committee on Finance, during consultations on the manufacturing crisis and problems related to the rise in value of the Canadian dollar, we heard from the chief executive officer of the Cascades Group, Mr. Lemaire. He said that one of the solutions to help our businesses would be to establish a carbon exchange. He indicated it should be located in Montreal.
I was pleased to see a business leader who does not at all consider environmental concerns and economic development concerns as opposing issues. On the contrary, he found that there was an opportunity for development.
Could one of you explain to us how the creation of a carbon exchange could spur the economic development of our businesses?
Program Director, Pembina Institute
Unfortunately, I don't understand French, so I'm sorry, I'm going to have to leave that one for Andrew. It wasn't communicated to me in English, so I'm unable to answer.
Program Manager, Green Budget Coalition
Amy probably knows more about this than I do, but I'm sure he was talking about the carbon stock market that may be set up in Montreal.
The leader from le groupe Cascades was promoting it and he was encouraged that someone from industry was concerned about environmental issues and wondering about the benefits of a carbon stock market for the environment.
Program Director, Pembina Institute
Sure, I can speak to that.
As the market in Canada matures, as we get a price on carbon and we go down the path of developing systems that coordinate with other international schemes, we will want to have the ability to have a carbon exchange system in Canada.
Whether we have one or two or more of those will depend on how much demand there is for those kinds of trades, but it certainly is encouraging to see that that's being recognized as an important part of the process.
Bloc
Thierry St-Cyr Bloc Jeanne-Le Ber, QC
Amy, I will say it in English because I guess you don't have the translation on the video conference.
What is the interest in terms of economics? Why would someone who leads a big company think there is an interest in the stock market for carbon?
Program Director, Pembina Institute
Because once we get a price on carbon, then it becomes a tradeable commodity like any other commodity, and then there is a value associated with it. It's something that becomes sought after in an international market kind of scenario. There can be money to be made from having that kind of a tradeable commodity in an international trading scheme.
Bloc
Thierry St-Cyr Bloc Jeanne-Le Ber, QC
My last question is for Mr. Larson.
The committee often discusses the cost of measures. You spoke about a five-year extension of the new accelerated capital cost allowance. However, it seems to me that when you write off equipment faster, you are simply putting off paying taxes until a later date. That is what is meant by an accelerated capital cost allowance. The real cost is the difference between the two amounts. Simply put, the cost of inflation.
Do you think that this is a low-cost, long-term measure for the government, and that it will help industries by immediately freeing up some capital?