Finance Committee on Sept. 15th, 2009

[Hassan Yussuff]

Again, obviously, I'll leave it to the opposition to continue to insist that the government needs to make some fundamental changes to the program, because far too many workers, through no fault of their own, are being denied benefits despite the fact that they've paid premiums for many, many years.

I'd also like to remind the committee members here that the program had a surplus of almost $54 billion, which the government, through the most recent budget, has now legally taken out of the system, as there were more premiums paid into the system than were taken out of the system. So we're simply saying that at the end of the day there's no question that there needs to be improvement. To a large extent, our position is that on the resources that should have been there, and that the government has taken out, that is wrong.

More importantly, without doing this, we're not going to solve the crisis in giving workers access to the EI system despite the fact that they continue to pay into it. It's my hope that the opposition would continue to challenge the government, in that they have not really reformed the system despite the announcement yesterday. It will help some workers, without a doubt, but far too many of the members we're trying to address are not going to be taken care of, based on what the government announced yesterday. You have to fundamentally reform the system to allow workers to get better access to EI.

[John McKay, Liberal, Scarborough—Guildwood, ON]

What is your costing request? Is it closer to the Parliamentary Budget Officer's or is it closer to the government's?

[Hassan Yussuff]

I'll get my colleague Andrew Jackson to respond.

[The Chair, Conservative, James Rajotte]

Mr. Jackson.

[Andrew Jackson, Chief Economist and National Director, Social and Economic Policy, Canadian Labour Congress]

I thought the TD Bank gave a very accurate sort of costing. It's probably in the range of a billion dollars to drop the entrance requirement to 360 hours, probably because of the fact that a lot of people who would get in with a lower number of hours wouldn't qualify for very high benefits or for very long under the existing system. So it's not a huge cost item.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Thank you.

Turning now to the Chamber of Commerce, I have sat on this committee for six or seven years now, and each and every year the chamber comes before the committee and says that the government should reduce taxes and deal with the debt. There's a standard sort of litany, and each and every year, the chamber's members come in with worse productivity numbers than they came in with the year before, to the extent now that it's actually advantageous on a productivity standpoint for foreign companies to own Canadian companies.

So I'd be interested in knowing what the chamber is doing specifically to improve the productivity of Canadian companies and make them more competitive, given that all governments, both Conservative and Liberal, have pretty well done everything that the chamber has asked over the last number of years and still the productivity of these companies is very dismal. I'd be interested in that. You're here to represent the interests of the business community of Canada, and the business community of Canada has not been serving the people of Canada very well on that specific area, the area of productivity.

I'd be interested in your response to that.

[Tina Kremmidas]

The question of productivity has always been an interesting question and has always been asked. Unfortunately, economic analysis or any kind of analysis has not provided an accurate assessment as to what is causing Canada's productivity woes.

A lot of theories have been put forward, whether they be that Canadian companies may not be investing enough in machinery and equipment, for example, or that maybe we're not doing enough research and development in Canada compared to other countries. There are theories with respect to personal income taxes being so high, particularly at the low income levels, such that individuals simply have very little incentive to work because a lot of what they end up making gets clawed back incrementally. So the incentives to work are not there.

The reasons are numerous. There are so many possibilities as to why productivity in Canada has been lagging. We cannot put our finger on it.

[John McKay, Liberal, Scarborough—Guildwood, ON]

The response you've just made is very curious, very curious indeed, because the area of responsibility that you as a chamber have is to encourage your members and in fact to insist that your members be the most competitive that they can possibly be in the marketplace. Yet there seems to be sort of a diffusion of blame: well, it's the workers' fault, or it's the thresholds of income tax, etc.

Why is it that Canadian companies don't invest in R and D and don't invest in enhancement of productivity and yet their foreign competitors in exactly the same situation, competing side by side with them in this country, do?

[The Chair, Conservative, James Rajotte]

There are about 45 seconds left for a response.

[Tina Kremmidas]

Part of it has to do with being a so-called branch plant economy. A lot of the R and D is not necessarily being done in Canada; it may be done at the head office. Part of it has to do with our industrial makeup. We are a service-based economy, to a large extent; about 70% of our GDP is service oriented. A lot of research is not being done in that particular segment of the economy.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Not very comforting answers.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. McKay.

We'll go to Monsieur Laforest.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you, Mr. Chairman.

Good day to all of the witnesses. My first question will be addressed to the representative of the Canadian Chamber of Commerce.

Ms. Kremmidas, in your presentation, you say that it is important that the Canadian government balance the budget as quickly as possible. You also say that it would be preferable to avoid raising taxes. However, I heard nothing about the matter of transfers to provinces.

You know that there are several places where there are links and connections within the financial structure. Just as your members have to pay... are represented both in Canada and the different provinces, can you tell me whether the federal government should avoid reducing transfers to provinces? In any case, if the federal government downloads costs to the provinces as it has done in the past, someone will have to pay somewhere.

[Shirley-Ann George]

You raise a very important point about how we are going to pay for all of this. As we come out of the recession, there will be a large number of requests. Everybody who comes to you is going to be asking for additional contributions. We've basically emptied the piggy bank throughout this recession with the stimulus spending and other measures, so how do we pay for it?

We believe the government has made a commitment to the provinces to maintain their level of transfers, and it's going to be a challenge for them to meet that, but we would expect that the first place the government is going to have to look is in their program spending, not in their transfer to the provinces. There are going to have to be some difficult decisions made, just as there were ten-plus years ago.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

That answers my question well. Thank you.

Mr. Facette, with regard to your proposal concerning the total elimination of the rent paid by airports to the Government of Canada, according to your estimates, is it certain that the users and airline companies would be the ones to benefit from such measures?

[Jim Facette]

Mr. Laforest, that is a good question and one that is often put to us. The simple answer is yes. Several of our members told government representatives that the elimination of rent would reduce the airline companies' costs, which would allow them to reduce the cost of tickets for passengers. Another possibility would be to reduce the direct costs that are billed to passengers. So there are two possibilities.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you.

I would like to put a question to Ms. Carleton.

We know that there are small orchestras in small cities. They aren't necessarily symphony orchestras. Musical instruments are very expensive. Do you have access to federal government subsidies for the purchase of musical instruments?

[Katherine Carleton]

Thank you very much for your question. I apologize for the fact that my response will be in English.

That is very unfortunate.

On the matter of financing for small and medium-sized orchestras, by and large, when we analyze the data that comes to us from those small and medium-sized groups, we see that the focus on fundraising for those groups is very much a higher proportion of budget. They are raising money in the community doing pretty much anything they can.

A number of them that are not eligible for direct federal support currently are eligible for provincial and municipal grants. Many, particularly for the issue of purchase of musical instruments, have accessed lottery funds in their respective provinces to help pay for those kinds of acquisitions.

Principally, that has not been a federal role. It seems to be something where the provinces have played a very active role.

[The Chair, Conservative, James Rajotte]

You have one minute left, Mr. Laforest.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

I would like to put a question to Ms. Groetzinger. I apologize for my pronunciation.

In your proposal to support persons living with multiple sclerosis, you suggest that the federal government put in place measures to allow these people to obtain income and that it make some modest changes to the Income Tax Act and the act governing employment insurance. I think that people living with multiple sclerosis as well as many other people suffering from other physical or even mental disabilities could benefit from these measures. And so I would like to know, in this regard, whether you are in contact with other associations.

[Deanna Groetzinger]

Thank you very much for the question.

Yes, we work very closely together, in coalitions, with a number of other organizations that are equally concerned about these, especially in terms of the episodic disabilities part of the issue. That is probably the most problematic, given the current programs. We work with other organizations, representing people with HIV/AIDS, lupus, arthritis, mental health.

So it's a broad concern, not just that of the Multiple Sclerosis Society.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you.

[The Chair, Conservative, James Rajotte]

We'll go to Mr. Wallace, please.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair.

I want to thank our guests for coming. I won't be able to get to you all, but I do appreciate all the presentations.

I want to start with Orchestras Canada.

First of all, I want to thank you, as someone who's actually very supportive of the arts. We're building a new performing arts centre in Burlington, which has federal support of $4 million. I'm a member of Theatre Aquarius. I go to the Hamilton orchestra often. I went to TIFF this past week; I didn't like the movie.

You do point out that we have provided as a government, since 2006, funding of $50 million over two years, and then $30 million made permanently in 2007, which I appreciate. That's about a 17% or 18% increase. If I read your submission correctly, you're asking for an additional $40 million over the next three years, which is 22% a year, or 60% over the next three years. Don't you find that a little steep compared to the economic situation that we have today? Others will be asking, obviously, not just your organization. How would I justify a 22% increase?

If you could help me with that, I'd appreciate it.

[Katherine Carleton]

One of the reasons I brought along a copy of the Canada Council's plan was that on page 15 they talk about what still remains to get done--very appreciative of the significant commitment that has been made to date, yet there remain gaps in what the council can do through the artists and arts organizations of the country.

I may be betraying myself and my people at this point, but I think if I were to say that I believe there is.... If there's a favourable understanding of the direction that council could go in with additional funding, the numbers are subject to discussion. However, they have laid out a pretty concrete plan for what remains to get done, and that's something that very much has the support of our members and other arts organizations across the country.