Finance Committee on Sept. 16th, 2009

[The Chair, Conservative, James Rajotte]

Thank you very much.

We'll go now to the Directors Guild of Canada, please.

[Brian Anthony, National Execuive Director and Chief Executive Officer, Directors Guild of Canada]

Mr. Chairman, honourable members of the Standing Committee on Finance, my name is Brian Anthony. I'm the national executive director and chief executive officer of the Directors Guild of Canada.

I wish to thank you for this greatly appreciated opportunity to appear before you as your committee undertakes prebudget consultations. Since you undoubtedly had the chance to review the submission we sent in August, my opening remarks will be brief. I would be happy to answer any questions you may have at the end of my statement.

As you know from our brief, the DGC is a national labour organization that represents over 3,800 key creative and logistical personnel in 47 occupational categories in the film, television, and new media industry. Our sector is one that annually contributes some $5 billion of economic activity and generates over 131,000 jobs. We have come a long way as an industry in recent decades, and this growth and development is due in great measure to the leadership manifested by successive federal governments and their commitment to encouraging a vibrant film, television, and digital media industry in Canada. We have reached a plateau, however, and if the federal government is to continue to build on its investment, and if we are to overcome our current problems and move forward, a renewed commitment is required.

People can be forgiven for believing that ours is a glamorous, even frivolous, industry, for that is how it is often portrayed in the media. I would refer you to the media coverage of all the social activities surrounding the current Toronto International Film Festival. But the reality of life on the set or in the studio lies a very long way from red carpets and black ties and ballgowns. Our members work in real jobs in an industry that manufactures real products, products that have cultural value to be sure, but have material, tangible, economic value as well. Working in our industry is difficult at the best of times, and these are by no means the best of times. When there is work, the hours are long and the work hard. All too often, however, our members are not working. As one of my colleagues says when he lectures young students in film studies programs, “This will probably be the best part-time job you'll ever have.”

Nationally speaking, about half the production activity that takes place in Canada is domestic and half service productions, by far and away most of which are American. Here in Ontario, the split is roughly 60% Canadian and 40% foreign. In British Columbia, by contrast, over 80% of activity there is U.S.-based. Given this, when American activity drops, we are vulnerable.

Last year was a terrible year. A rising Canadian dollar scared away many service productions, and I noticed it was trading at the end of the day just below 94¢. A protracted writers' strike in the U.S. drove down production activity; state tax credits and other incentives kept many U.S. productions at home; and later in the year, the global economy fell off the cliff. This economic downturn had a significant impact on Canadian film and television production as well, so we were hit with a real double whammy.

A slight improvement has been noted for this year, at least in certain regions of the country, but it remains slight. The situation must improve considerably before our industry will be able to operate at full capacity and make a significant contribution to the economy, employment, and culture.

This is where you and your important pre-budget deliberations come in. Our industry is a key part of the creative economy, the economy of the future. If our industry is to thrive, to flourish, we need the stability and predictability that a renewed and enhanced commitment on the part of the federal government would provide us. We have, therefore, placed three recommendations before you in our written submission, and we hope you will be able to endorse them and recommend them to the Minister of Finance for inclusion in the 2010 federal budget.

These are the three recommendations: that the Government of Canada enhance all federal programs of direct support to the film, television, and new media industry; that it enhance its indirect support by expanding the federal tax credit program, as Quebec and Ontario have recently done; and, recognizing that there should be a greater public sector and private sector partnership, that a powerful tax incentive be created to encourage significant private investment in film, television, and new media production.

If implemented, these measures would allow our industry to grow and develop, to play an even greater role in providing meaningful employment, and to contribute to the economy and the fisc and serve Canadian audiences.

We understand the current economic and fiscal constraints at play, but bad times are the best times to plan for good times. Our industry is a vital part of the creative economy, the economy of the future, as I've said, and your support for our recommendations today will help us contribute to the good times of tomorrow.

Mr. Chair, members of the committee, I wish to thank you for this opportunity to appear before you today, and I hope that you will be in favour of our recommendations.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Anthony.

We'll go to the final presentation, by the Grain Growers of Canada, please.

[Richard Phillips, Executive Director, Grain Growers of Canada]

Thank you, Mr. Chair, honourable members, and fellow guests.

I will be sharing my time with Sheri, who's sitting next to me.

My name is Richard Phillips. I am a farmer and I'm with the Grain Growers of Canada. With me today, from one of the member organizations of Grain Growers of Canada, is Sheri Strydhorst. She's also a farmer and is with the Alberta Pulse Growers.

If there is one thing that unites the 80,000 farmers of the Grain Growers of Canada from coast to coast, it's the issue of more funding for public research. In Canada, approximately three-quarters of the farmland is planted with crops developed by public sector plant breeders. The private sector does invest in corn, soybeans, and canola, but for five of Canada's six largest crops, 98% of the research is publicly funded.

In the last 15 years, federal contributions to Agriculture Canada's research branch have been largely stagnant, with no increases for inflation. In 2009 dollars, it means that funding has dropped from $458 million to $280 million today—nearly a 50% cut. The number of front-line scientists has dropped by more than 10% in just the last couple of years.

Our request to you today is twofold. First, we are asking for a doubling of A-base funding to Agriculture Canada. This would cost $280 million, phased in over 10 years—or approximately $28 million per year. This would allow Agriculture Canada to upgrade labs and equipment, to bring in new staff, and it would help to ensure proper succession plans for the continuity of corporate memory. For example, if a plant pathologist who's been studying crop diseases is retiring, it's really critical that there be some overlaps with the new person coming in, so there is a transfer of knowledge from what the former staff person has been working on.

Sheri.

[Sheri Strydhorst, Executive Director, Grain Growers of Canada]

I'd like to share with you two success stories from public breeding. Almost 100% of the small red, black, and great northern beans grown in southern Alberta were developed by Agriculture Canada's bean breeding program. These varieties have market demand. They incorporate disease resistance. They're high quality, but most importantly, these varieties have improved farmers' bottom lines.

Public research has also been integral to the success of Canadian farmers. There's the example of the wheat variety developed by Agriculture Canada scientists, AC Barrie, which has been planted on 50 million acres of Canadian farmland over the last 10 years. The gross value of this wheat is $1 billion and it has contributed over $540 million in incremental farm gate revenue because of its improved yield and disease resistance.

[Richard Phillips]

Looking ahead, there are a number of key areas in which Canadian farmers and consumers want work done, including traits such as drought tolerance on the southern prairies; cold tolerance in the northern prairies and the corn belts; and disease resistance. I'm sure some of you have heard of Ug99, a rust that's threatening the world's wheat supply, and fusarium, which affects a lot of wheat across Canada, primarily in Ontario and Atlantic Canada and the Red River Valley. We also want work done on insect resistance, whether flea beetles in canola or wheat midge in wheat, which would reduce the use of pesticides; and we want work done on improved utilization of nitrogen. I know you guys are aware there's a lot of concern in a lot of places about nitrogen fertilizers running off into water supplies. So if we can improve plant breeding, then we won't need as many fertilizers. We also want work done on healthier food, for example, the availability of iron in our diets through peas and beans.

There's tremendous potential to make our food healthier for consumers, for example, to reduce diabetes, cardiovascular disease, and obesity. I think some of you are probably aware of some of the canolas with the omega-3s, and things like that, and the removal of transfats from diets. So there are a lot of opportunities there.

Sheri.

[Sheri Strydhorst]

The second thing we're asking for is an incentive to spur the use of certified seed. The sale of certified seed is what provides royalties back to plant breeders, both in the public and the private sectors. Crops like peas, wheat, barley, and oats have traditionally seen very low use of certified seed, and therefore there's been very little interest in the private sector to invest in those, because their return on investment isn't there.

What we want to do is to increase the use of certified seed, and this will directly lead to increased private sector investments in plant breeding. We'd like to recommend that the next budget contain a tax credit to encourage farmers to buy certified seed on a regular basis.

To sum up our requests, we are looking for $280 million over the next 10 years to be invested in A-base funding at Agriculture Canada; and secondly, we are looking for a tax credit or another incentive program to be implemented to encourage the use of certified seed.

Thank you for this opportunity, and we look forward to any questions you may have.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll go to questions from members, starting with Mr. Pacetti, please.

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

Thank you, Mr. Chairman.

I thank the witnesses for appearing.

It seems easy for you guys, because you have only one subject and one thing to worry about. We just had six presentations and we have six briefs to go through, and it took 28 or 30 minutes for you guys to present. So bear with me; I have a whole bunch of questions that I'm going to try to get in.

Mr. Keys, your group is asking for $800 million, I think, over five years. I don't have a problem with the request, but one of the items that the group had been asking for in the past several years is that government separate the post-secondary amount in the social transfer payments. We don't seem to be able to get anywhere with that. It's kind of tough to ask for another $800 million when we don't know where the money is going presently. You just said yourself, of the $800 million that was invested last year, we're still not sure if the money was properly invested. Am I correct in my comments?

[Spencer Keys]

Yes, you are correct. There is no accountability framework right now.

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

So we should probably be asking that there be disclosure in the social transfer payments between post-secondary and other payments, correct?

[Spencer Keys]

Yes, and that's included in my remarks.

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

Okay, but that should be the first priority, before asking for money.

[Spencer Keys]

I think you would have to recognize that there have been substantial hits to endowments across the country. Some have gone down by 30% or more. I think you have to recognize that there are the oncoming demographic difficulties that we need to prepare for. So you'd have to be working on both at the same time. I don't think you can easily put one before the other.

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

The other point concerns how we account for how much money has been put towards post-secondary. There was money put towards research chairs, independent research councils, and things like that. There is always a dispute as to how much money was really cut in the earlier years. What is your comment on that? Should there be cuts in the other items?

[Spencer Keys]

I would not suggest that there should be cuts in the other areas, but I think it's important to increase money through this envelope, primarily because it is money that can go to operational spending. The importance of that is that when a university is essentially forced to go down a particular path because there's an envelope of money for that, say for research or building research infrastructure, etc., that limits the kinds of diverse education we can have.

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

It's because it's more direct. I like the money that goes into research. It's more direct and we can account for it a little better.

Ms. Fralick, your brief was quite detailed, but you spoke about the compassionate care benefits and that this should be funded through EI. Would that require any reform? It's not completely clear. You're saying you can achieve the availability through the EI fund. How would you see that? There already is an aspect in there, is there not?

[Pamela Fralick]

We're suggesting in fact that it be moved out of EI, because it gets lost. It's not long enough and it's not comprehensive enough. It should be a stand-alone program.

By the way, I was rude earlier in not introducing my colleague, Denise Desautels, who is our director of policy and communications.

[Denise Desautels, Director, Policy and Communications, Canadian Healthcare Association]

There are two aspects, in that we fund people to take care of individuals at the beginning of life, but we don't fund them to take care of people at the end of life. We're saying the compassionate care program is only eight weeks long, and it's not nearly long enough.

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

I agree, but what would your suggestion be?

[Denise Desautels]

Create a separate program. Move the funding that was allotted to the compassionate care program into a separate program so that individuals who might not be eligible for EI could participate in that program.

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

How would they be eligible if they're not paying into the program? That's the problem we're having with EI now. There aren't enough people qualifying. Are we just going to create another level of government or another department?

[Denise Desautels]

Create a separate program in much the same way that the European governments have done. You have to allow for the fact that a large number of individuals who are taking care of people at the end of life are either working part-time or on contract, or they're self-employed. So they don't have the ability to draw from that fund, yet they're suffering.

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

I'm not disputing the cause, because I agree with you, eight weeks is not enough. That's not what I'm disputing. It's just the mechanism on how we can deliver the service so it doesn't go into the hands of the bureaucracy but into the hands of people who need it. So if you can provide us with some details, I'd love to see them, and maybe we can recommend them.

Ms. Donnelly, we all visit schools. I visit schools regularly in my riding, and the biggest shame, especially in an urban riding, is that the teachers complain all the time that kids go to school hungry. Now there are a lot of programs trying to feed the kids. It's a huge problem. Anybody who's visited an urban school knows that there's a problem. I don't think there's any teacher I have spoken to who doesn't say that they actually take money out of their own pocket to provide kids with some type of food.

How do we fix that? I know you say in your statement that we should probably increase the amount of child tax allowances and other kinds of moneys, but the problem that I'm seeing is that the parents don't provide. They may have the money, but they use it for their own purposes and don't provide adequate care for those children going to school. That's what I've seen.

[Mary-Lou Donnelly]

It's not just about food, it's not just about feeding the children. What we're looking at is a whole national strategy on the reduction of poverty. Poverty is also a mindset, and with that comes values. We've done all kinds of things in the schools with social programs to try to feed the kids. We feed them in the morning, we feed them at lunch, and we feed them after school. You're absolutely right, responsibility does fall on the parents at some point, but it's that whole education to the parents that would be encompassed in that national strategy on the reduction of poverty. So it's not just about food; it's much broader than that.