Finance Committee on Sept. 29th, 2009

[Voices]

Oh, oh!

[The Chair, Conservative, James Rajotte]

We'll now go to Monsieur Laforest.

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

Good morning, everyone. It is a pleasure for me to be here with you in Edmonton. I am a member of the Bloc Québécois. I have a few questions, and like all the others, I do not have a lot of time.

Ms. Lynch, you talked about a program and increased funding for volunteers. Are there volunteer structures that exist in Alberta? In Quebec, we have what is called the centres d'action bénévole, or the volunteer action centres, which are subsidized by the Government of Quebec. Do you have something similar in Alberta?

[Karen Lynch]

Yes. We have a network of 27 volunteer centres in Alberta. They are funded through a variety of different methods, some through the provincial government through social service funding, some by communities through their town councils, and then we have two of them who are completely independent.

Your movement in Quebec, which is 113 volunteer centres, is funded pretty uniformly all the way through. Ours depend a little bit more on entrepreneurial abilities.

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

Since you are calling for increased subsidies to volunteers, I would hope that it would go through the federal transfers to the provinces. It is as though this were an area of responsability.

Do you share this way of seeing things?

[Karen Lynch]

We've had two models. We had a federal volunteer program that supported capacity building. That one was an interesting one, because it focused on on-the-ground development of volunteers and, more importantly, provided opportunities to have national research and national best practice learning. All of that is still available, but only to people who have the time to go in and find it. One of the things that we're suggesting is to find a way to disseminate the information that already exists. That's number one.

Two, I understand that if you think about geographic locations, defining where volunteers should be, Canada as a whole benefits from a higher level of civic engagement. One of the things that sets us apart from the rest of the world is having a really strong voluntary sector.

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

I agree completely. Thank you.

Mr. Bulkowski, you stated that all parties are seeking to increase government spending. I would point out—as I did yesterday in Vancouver—that the Bloc Québécois has asked the government to reduce the size of the public service by filling only half of the positions left vacant by those entering retirement. This would free up considerable budgetary room, and bring down the debt.

You stated that there is no such thing as a free lunch; that the budget must be balanced; that there should not be a deficit. I agree with you, nothing comes free. You also stated that government expenditures must create wealth. Mr. Kolkman, Ms. Lynch, Ms. Fleming and even Mayor Mandel are all calling for increased investments for municipalities or early childhood development.

Do those types of expenditures create wealth? Must they generate a yield instantaneously, or can they bring in a return over the long term?

[Dr. Peter Bulkowski]

I believe that governments have to deal with things that are over longer periods of time. I appreciate the Bloc's recommendation of reducing the civil service by a third. Though that's not quite what you recommended, it's close.

There are programs that make sense in terms of social activism that are absolutely necessary, but we need to be sure that those programs actually give us some benefits. That holds for all government spending.

That was part of my second recommendation, that we need to see value for the spending. That means we need to look at things over a period of time. If we have a charity that claims to have had great success, what is the reality behind that? If we have a scientific research program that has a lot of good PR, what are the dollars that have really come from it? What are the successes? You can easily pick one or two great examples in a program, but if 99.9% is failed spending, then it's not the type of program we should be in.

Did that answer your question?

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

Yes, that is fine.

In your opening remarks, I understood you to say that the government introduces business tax credits to create jobs and grow wealth. Yet, the government can contribute in other ways, such as tax measures and municipal infrastructure. This is also important. This kind of involvement may not necessarily create wealth immediately, but the government has the responsibility to ensure that citizens receive services. It is not just a creator of wealth and jobs.

Thank you.

[The Chair, Conservative, James Rajotte]

Mr. Bulkowski, do you want a brief response to that?

[Dr. Peter Bulkowski]

Yes.

I agree that the government is not solely responsible for creating wealth. In my view, the government is a great wealth destroyer. If you're going to spend on new things or you're going to increase some programs, other things have to disappear. It's like a family's budget. You can't spend more than you earn always, consistently, and forever. Something crashes.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you.

Merci, monsieur Laforest.

I'm going to take the next seven-minute spot. I have a number of questions. I'll try to get through as many as I can.

I wanted to ask both Mr. Kolkman and Success By 6 a question with respect to their recommendations on the Canada child tax benefit. We certainly heard a lot about that in Vancouver yesterday, but the proposals, which are obviously on the same topic, are somewhat different.

Recommendation 2 from Success By 6 is a national $5,000 benefit per child, so it's different from what I see as increasing the amounts and the threshold, which the Edmonton Social Planning Council is recommending.

Can you explain why you're choosing this approach over the approach that Mr. Kolkman identified? I'll perhaps have Mr. Kolkman respond as well.

[Christopher Smith]

In terms of the Success By 6 recommendations for enhancement, we were looking at the work that was done by the Caledon Institute. In terms of that work, what we were looking at is essentially trying to simplify the benefit process. It's a non-stigmatizing benefit. Increasing the value to $5,000 essentially impacts immediately on those families with very low incomes and it actually simply raises them above the poverty level overnight.

In terms of our recommendation, also what we were recognizing is that this is a difficult financial situation, so to accommodate that, to accommodate that kind of social justice strategy, we would look to eliminate the universal child care benefit and the child tax credit and flow those moneys into what we consider to be a more progressive structure to address child and family poverty.

If you're hearing similar recommendations in Vancouver--and Mr. Kolkman and I have talked about ours--I think what's clear is that the child tax benefit is a very good federal structure to address the needs of low-income families. We would be willing to entertain different notions to strengthen it. This is one notion that's been researched and developed.

[The Chair, Conservative, James Rajotte]

The estimated cost is $4 billion annually, so this would be A-base funding each year of $4 billion?

[Christopher Smith]

Yes, of $4 billion, and to go back to the discussion that I think we've had here, this is an investment. It's not simply a cost; it's an investment. If you look at the money that these families receive, they all spend it in the economy.

[The Chair, Conservative, James Rajotte]

Okay.

Mr. Kolkman, you keep the universal child care benefit. In fact you index it, but you obviously add on a fair amount as well, so I just wondered if you could explain your approach.

[John Kolkman]

Thank you, Mr. Chairman.

The proposals are similar in the sense that we both recommend that the non-refundable child tax credit be eliminated and basically folded into the refundable child tax benefits, enhancing them. The reason is very simple. The only way you get benefit from the non-refundable portion is if you pay income tax. The amount of benefit you receive goes up the more income tax you pay. Therefore, it's very regressive.

Mr. Bulkowski talked about scarce resources. We need to better target those resources, and the way to do that is to fold the non-refundable portion into the overall refundable child tax benefit system.

On the question of the universal child care benefit, if you put aside the fact that it is a not a child care program--it's a parental support program that provides extra financial resources to parents, which they may or may not spend on child care--then is it such a bad program as a parental support program? I say that for a couple of reasons. One is that it provides extra benefits to families with very young children, under the age of six years. It's true that those families do tend to incur extra child care costs because their kids aren't in school yet. What's wrong with providing some additional support for very young children? Secondly, parents with young children tend to be starting out in their careers, and therefore it might also be fair to provide some additional assistance.

I guess the reason I came up with this concept was to try to invent a better mousetrap. There has been this constant debate over whether we favour parents who put their kids in child care versus parents who stay home. To some degree, this is an attempt to kind of bridge that divide. That's why I am suggesting that we look at perhaps retaining the universal child care benefit but basically changing it somewhat.

[The Chair, Conservative, James Rajotte]

Thank you. I appreciate that clarification.

I also appreciate your comments on the working income tax benefit.

I do want to turn to the mayor. I have about two minutes left.

With respect to process, you were fairly clear. Going forward, if there was a choice for the government in terms of doing any more infrastructure spending as a separate program or funding additional dollars through the gas tax transfer, your preference is clearly through the gas tax transfer. Is that correct?

[Stephen Mandel]

Yes.

The gas tax is a simple process. One of the challenges we face is that the government puts standards on things each time they decide to fund something. Then we have to come up with a program that fits into it. The gas tax already has all the terms and conditions in it, and it's a simple program. The province is the same thing. It just moves quicker. Money flows to citizens much faster.

So I think it's a much more economically driven way to do things. There's not a lot of bureaucracy.

[The Chair, Conservative, James Rajotte]

For other infrastructure programs, there has been funding, obviously, of recreational infrastructure in the city of Edmonton here. Do you want to comment on that program? Or if a program like that were to continue in the future....

I mean, these are upgrading some facilities that were not touched since 1967, as someone mentioned earlier. Is this something that should be rolled into a gas tax transfer, perhaps?

[Stephen Mandel]

Well, no, I think the government has to make a decision on how they want to fund the money, how they want to use it. From the city's point of view, it's wonderful that you want to fund various upgrades that you want to do, but from a municipal point of view, we need long-term sustainable funding.

If you decide that you want to give money to organization A, that's a decision that government makes. We don't want to interfere with that. Our concern is that, one, the money that is allocated to the cities goes to the cities and doesn't go to these other organizations. Then we have to match that money, which happens--

[The Chair, Conservative, James Rajotte]

Because they come to you after.

[Stephen Mandel]

That's right. You give them money and they call us. Well, then, you've allocated the money from us to them, and as a result of that, we're now short, so we have to put up our third.

From our point of view, funding the cities with the gas tax allows us to have long-term planning to deal with the challenges we face. Then you would do what you want to do on the other side of the ledger. If you want to fund program A, or fund Success By 6, however you want to do it, that's your choice. Our concern is having long-term sustainable funding, and the gas tax is a very good way to do it.

[The Chair, Conservative, James Rajotte]

Okay.

My time is up, and since I cut everybody else off....

I do want to say, though, that we did hear a proposal yesterday in Vancouver on heritage buildings. We can certainly provide it to you. It may be something that could jibe with what you're doing, especially with what's going on with the federal building here in Edmonton, which is very exciting.

I'll leave that as a statement.

I'll go to Ms. Duncan now, for seven minutes.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thanks, Mr. Chair.

I want to start by first of all thanking Mr. Bulkowski for taking the time to appear today. It's regrettable that these sessions are all held during the day, which precludes most workers, caregivers, and youths, who are in school, from presenting. I am recommending and encouraging this committee to consider having evening sessions in the future.

I don't agree with everything you say, Mr. Bulkowski, but I think your first point is absolutely laudatory and is the most important one. You're recommending documented, publicized, and publicly available reports on tax deductions, expenditures, federal transfers, crown corporations, and NGO benefits for accountability. I commend you for that. It is something that our party certainly supports.

I want to go to the architecture association and follow up on the chair's point. This summer in Edmonton, specifically on that point, I kick-started an initiative called Greening the Avenue. In Edmonton, we are very proud of our heritage buildings. I and many others worked for many years to preserve the last of the heritage buildings in the city, especially in Old Strathcona.

The problem now is energy costs. I'm happy to say that the Heritage Canada conference just a few weeks ago centred specifically on how to retrofit heritage buildings. In Britain, they've passed new building codes whereby they have to retrofit all their buildings, so if you can retrofit buildings built during the time of William the Conqueror, surely buildings from 1910 or the 1950s could be.

I would like to hear a little more from you about your proposal on the connections between heritage buildings. Are you equally proposing that there be support for energy retrofitting and energy efficiency, not just building new buildings?