Finance Committee on Sept. 17th, 2009

[Mike Wallace, Conservative, Burlington, ON]

Yes, okay, I appreciate it. And I appreciate the work that everybody does in that field.

We also heard about the adding to the production side. We heard that yesterday, and I had some questions on it.

To Mr. Pineau, we also heard from Orchestras Canada yesterday about more money for the Canada Council for the Arts. We're at $180 million now. We added $20 million a couple of years ago, and then $30 million became permanent last year, I believe it was. You're asking for $40 million over, I think, the next four years--not just for one year, not one shot--to get you to $300 million.

Try to help me justify to my constituents why your organization gets a 22% increase in a very tough year. How am I, as an individual of this committee, supposed to recommend a 22% increase, not just this year but every year? It's like a 60% increase over the next number of years. That's a pretty tough number to swallow.

I want to know why you came up with such a large number in this particular budget.

[Alain Pineau]

Well, I'll address only the $40 million that we're talking about in developing foreign markets. I would tell your constituency that this is a government priority, and if you need arguments to support that, that's what we're here for. I'm not going to do that in the three seconds I have here, but I can provide you with all the information.

The information to justify this is sometimes available on government websites, which show evaluations, for example, that when Canada sends its artists and creators and troupes abroad, the people who are most enthusiastic about that are not the cultural attachés--we don't have any of those left--but the people who work in commerce, the people who are trying to sell our wares abroad, because arts and culture attract people at those embassies in those locations. That's an investment in developing a market.

My first step is to convince you that arts and culture is an important part of the creative economy and that while I understand the rationale for pouring zillions of dollars into industries that were more yesterday's industries and maybe should be reshaped in some manner--I don't know--the future of this country, according to many, is in the creative economy. Our natural resources will eventually run out, and our industries are very dependent on the outside world. Our creativity is the one thing that global warming doesn't get to.

[Mike Wallace, Conservative, Burlington, ON]

Thank you.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Mr. Wallace.

Perhaps Mr. Mulcair would like to donate his time.

Mr. Mulcair, you have seven minutes, please.

[Thomas Mulcair, NDP, Outremont, QC]

Thank you, Mr. Chair. As always, it is a pleasure to meet with all of the witnesses.

Our time is quite limited. Therefore, I will begin with a comment directed to the Canadian Paediatric Society. Thank you for your presentation, Dr. Pekeles. You work in the medical field and you have focused on early childhood education needs, emphasizing that quality, well-funded programs are needed. You also spoke of the long-term effects. We often speak of sustainable development strictly in terms of the environment, but you have reminded us that it is important to invest in our children to ensure the well-being of future generations. Thank you for your clearly worded message.

I would also like to thank Mr. Pineau for providing such a sound answer to Mr. Wallace. Kudos to you.

It is always a pleasure to see you, Ms. Reed, Dr. Bose. To my mind, Option consommateurs is the most important consumer watchdog group in Canada, as your presentation has once again demonstrated.

Recently, our party has identified a number of areas on which the government should focus and work in the public interest. One such area is employment insurance. There has been some movement on that front. Two other areas are better pension protection and the credit card system. The former does not concern you, while the later does.

I want to be certain that I understood your message clearly. You say that the government needs to act now on the credit card issue, not only in terms of educating and informing the public, but also in terms of directly informing them of abusive interest rates that are currently charged. Is that correct?

[Geneviève Reed]

Thank you for that excellent question, Mr. Mulcair. Last year, we did some extensive research on certain business practices of institutions that issue credit cards. A number of these current practices need to be re-examined and regulated. We believe a policy must be adopted to impose a ceiling on interest rates. The Bank of Canada's prime rate must be taken into consideration, because right now, that's not the case. However, this isn't the only action that needs to be taken. A series of measures are need to regulate the system.

[Thomas Mulcair, NDP, Outremont, QC]

Thank you very much.

Since the clock is running, I want to thank Ms. Downey and Mr. Waddell from ACTRA for their excellent presentation.

In your presentation, Mr. Waddell, you mentioned the need to eliminate the provincial grind. Could you give us a bit more information about what's involved there?

[Stephen Waddell]

Sure. Thank you for the question.

Eliminating the grind means that under the federal tax credit system they take into account what has already been paid in terms of the provincial tax credits and then deduct it from the federal tax credit, so there is a grind-down effect. If that grind-down effect were eliminated, it would actually be equivalent to raising the percentage by 4%. So that would be a significant change and a significant benefit without any substantial impact on the revenues.

[Thomas Mulcair, NDP, Outremont, QC]

You mentioned the need for income averaging as well. Are there any provinces right now that have a practice of income averaging, and have you been able to measure the results?

[Stephen Waddell]

Yes. Quebec currently has income averaging. They've reinstated income averaging. It's been extremely beneficial to performers and other independent contractors in Quebec, a significant benefit. Quebec also provides a tax benefit to artists, as other countries such as Ireland do, to encourage artists in Quebec. They allow $15,000 worth of income from royalties earned from copyright royalties to be tax exempt, a terrific benefit for artists and others who are earning royalty income in the province of Quebec.

[Thomas Mulcair, NDP, Outremont, QC]

These are broad-stroke committee hearings with a view to preparing the budget, as you know. There are also a lot of issues that come to the fore in your field that are on the horizon and are not yet there in terms of the new media. What are some of the issues that we as legislators have to be looking at to make sure we're well prepared for the future? In other words, not just reacting as the problems arrive, but what can we be doing to be looking a little bit to the future to make sure that what we have in place legislatively meets those challenges?

[Stephen Waddell]

We're going through a tremendous transition right now from the analog system to the digital system, and the business models have not yet been developed, they're not yet formed. Companies, whether they're advertisers or producers, have not yet been able to figure out how to make money out of the digital economy in this area.

We're very much in transition. We're facing some significant challenges at the regulatory level. There are real needs to put more money into the system and for broadcasters to get increased funding.

The ISPs, the Internet service providers, are making tonnes of money and yet not putting money back into the system. Our view is that they have to contribute significantly to production in this country. They're making significant revenues out of broadcasting in Canada, they should be putting more money back into the system, particularly with respect to levies similar to what are currently in place with the Canada Media Fund.

[Thomas Mulcair, NDP, Outremont, QC]

Thank you very much.

I have nothing further, Mr. Chair.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Mr. Mulcair.

We're into the five-minute rounds, and the next round will start with Mr. McKay.

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

Thank you, Chair.

Thank you, witnesses.

My first question is to RESULTS Canada. I'm familiar with the good work of RESULTS Canada, and I agree completely with Mr. Orr's analysis that one of the programs most likely to be affected will be our contribution to foreign aid. But It's probably actually worse than that, because not only is it the quantity of aid, it's the quality of aid.

You were very helpful in the passage of Bill C-293, which has now been the law for well over a year, going on a year and a half. The idea of the bill was to make our aid better aid, more focused aid, focused on poverty alleviation.

In the year and a half that the bill has been the law of the land, have you seen any material difference in the way that CIDA or this government does business?

[Chris Dendys]

To get back to The Economist and Mr. Orr, I just want to say that because his analysis is about aid stagnating, it doesn't necessarily make it the right thing. I should have said in that my previous comment, which was that every party around the table has made a commitment to a timeline to 0.7%, that aid is important. It's interconnected in terms of our impact and our capacity to thrive in the world that we care about how the global economy actually does and how those who are the least among us are doing on this planet.

In terms of your direct question about Bill C-293, I have not seen a noticeable difference. I know there's a commitment on the part of CIDA to focus on thematic priorities. There are discussions and speeches about focusing on the poorest of the poor, which is what the bill lays out about having a poverty-focused aid agenda, which is absolutely crucial. So in terms of actually seeing it roll out into the ground and roll out into implementation, I haven't seen the results of that. I suppose that would require some more digging.

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

There is a reporting period that's supposed to be at the end of this month, and I must admit I'm somewhat skeptical.

There's a book out called Dead Aid by Moyo, and it's an interesting and sometimes critical book about aid. One of the things that it criticizes is the western intervention on bed nets, and particularly with respect to free bed nets being distributed by western NGOs and driving indigenous business out of business. I'd be interested in your comments on that since you do have a legitimate thrust in the areas of tuberculosis and malaria and things of that nature. I'd be interested in your comments on her observations.

[Chris Dendys]

I haven't read Dambisa Moyo's book, but I did hear her speak and I think she is an articulate person. In terms of her broader message, I should preface by saying I would actually agree with Paul Collier and others like Jeff Sachs in the field who kind of dispute her notion that aid to Africa doesn't work. Even she has said she's been misquoted on that fact.

In terms of the bed net analysis, we know what to do when it comes to malaria: bed nets, ACTs, and spraying huts. We know how to eradicate malaria on this planet, and the globe has come together on that. We are actually close to complete coverage in terms of bed nets. We've had a lot of successes on that front. That's an example of the cost-effective, tangible solutions where we can invest and have an impact.

Should there be more production of bed nets within the continent of Africa? Yes.

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

Mr. Pekeles, we had a witness here yesterday who essentially said, give every family $4,000 per child and let them look after their child care needs whichever way they want, whether it's in home, out of home, for profit, not for profit, and whether it has an education component or not. I hope I'm not characterizing incorrectly what the witness said, but I'd be interested in your observations with respect to whether that is an effective child care strategy.

[Dr. Gary Pekeles]

Thanks for that question.

Last year when I was here, I was probably sitting directly beside that woman, and we've had some active e-mail discussion since then.

I don't see the two as competing with each other. There is some benefit to providing financial support to families with small children, but what that doesn't cover are the opportunities inherent in child care for families in terms of setting standards.

One of the problems is that even if you increase the demand by increasing the financial capacity, the supply in terms of quality day care settings that meet some very basic criteria is not there. Again, this is clearly primarily a provincial jurisdiction, but we're talking to you about it because we see some opportunities for the federal government to serve as a catalyst in bringing national standards into place. Once that money is spent, there are tremendous opportunities being wasted and some safety considerations as well in making sure that the money is being spent for safe, high-quality day care centres with appropriately trained personnel. Giving the money just to the individuals as a sole approach to this problem is insufficient.

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

Thank you.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Mr. McKay.

You have five minutes, Mr. Roy.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

Thank you, Mr. Chair.

My question is for either Ms. Reed or Ms. Bose.

You stated in your presentation that according to an international survey, approximately 55% of Canadians aged 16 and over do not have level 1 or 2 numeracy and literacy skills. Since I haven't seen the survey, I don't know what levels 1 and 2 are. Does this mean that people cannot understand a credit card statement or read the rules on the back of the statement?

[Geneviève Reed]

Thank you for your question, Mr. Roy.

Level 1 is in fact the basic level of written comprehension.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

In that case, could we refer to this as functional illiteracy?