Finance Committee on Oct. 8th, 2009

[John McCallum, Liberal, Markham—Unionville, ON]

I'm starting to run out of time, but I understand those constraints.

Would a three-year extension, rather than a five-year extension, do the job or not?

[David Podruzny]

We suggest that a five-year extension is the only one that would do the job. A three-year extension would not do the job.

We also suggest that the cost of this has already been paid for because we're past the hump in terms of accelerated capital cost. Projects later will be making more money.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

My next question is to Mr. Paul Jones of the Canadian Consortium for Research.

I was surprised that your request was so modest, when you asked for a 5% increase in funding for granting councils and Genome Canada. I imagine the government cut about that amount, so you're just asking to get back to where they were. The previous witness we had this morning asked for a doubling of the funds for the granting councils. The 5%, in the light of the cuts this year, seems such a modest amount. Is that really enough?

We don't usually ask questions like that. We usually ask why you want so much.

[Paul Vincett, Chair in the Management of Technology Enterprises, Wilfrid Laurier University, Canadian Consortium for Research]

I think there was an important point that may have slipped through. There have been increases to the granting councils' funding in the last two or three years and there have been cuts. Of course, there was considerable concern about the cuts last year in the context of what's going on in the United States.

However, I think the key problem we see is not so much even the absolute level of funding. Certainly we'd like to see more, but the concern we have particularly is that in the last three years, if not more, virtually all the increases, small as they may have been, through the granting councils have gone to targeted programs and virtually none to the more basic areas.

[John McCallum, Liberal, Markham—Unionville, ON]

I have to cut you off, because I have one last question, but I certainly agree with you on the anti-targeted, as a former academic.

I want to ask one last question to Campaign 2000.

In the last election campaign, which we lost, we had a very ambitious anti-poverty program. The money might be in shorter supply now, but if you had $1 billion to spend as a down-payment on anti-poverty, what would be your priority use of that money?

[Helen Saravanamuttoo]

We have three of them here, but $1 billion is not going to cover the cost.

I would say it would be the increase in the child tax benefit and the supplements. I think that's very important because it is very effective. Not only is it increasing the stimulus in the economy, but it's also effective in relieving the poverty, with all the benefits from relieving poverty included there. I think that's probably the most important. I would very much like to see a bit in EI too and the ECEC.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. McCallum.

We'll go to Mr. Mulcair next.

[Thomas Mulcair, NDP, Outremont, QC]

I would like to thank my colleagues for their selflessness and caring, both of which allowed us to prepare a presentation, which we will give a little later. I also want to thank everyone for their presentations this afternoon. What you have done is extremely important. After hearing from the petrochemical industry, social groups and students, we are in a better position to prepare and analyze the government's budget choices. A budget is a reflection of choices, and those choices will speak volumes about the government's priorities, which are not always the same as ours.

I want to start with Mr. Podruzny. I would like him to discuss the tax cuts that he has just advocated. He knows that our party does not agree with him: we believe that the money that could be saved by not granting your members those tax cuts could be used for social spending.

I want to ask you something very specific. Even before the global economic crisis, 450,000 jobs were lost in Canada's manufacturing sector, namely in Quebec and Ontario. We have always favoured a targeted economic approach. Having a manufacturing sector in a country such as ours requires the government to make certain choices. In order to achieve $60 billion in corporate tax cuts—the total amount of the tax cuts—the government created tax room by looting the employment insurance fund.

The equation works out almost perfectly: $57 billion taken out of the EI fund and $60 billion invested in tax cuts. Do you find it fair that those cuts came out of the employment insurance fund, while all of your members in the manufacturing sector, who, despite losing money and not making any, could not take advantage of those cuts? Let us be clear, a company that does not make money never pays taxes. But, all of these companies, even though they were losing money, paid into the employment insurance fund for all their employees.

Are you telling me that you agree with a tax policy that takes money away from your members, who duly paid into the system even though they were losing money, and gives that money to the most wealthy companies, those that made profits, such as in the oil and petrochemical industries, but also to the banks, which had absolutely no need for it? Does your association consider that a good tax decision by the government?

[David Podruzny]

I'm going to qualify my comments here.

First of all, the principal benefits were not specifically the corporate tax rate cuts so much as the fixed taxes--the capital taxes--that were being applied. The result of the harmonized sales tax....

[Thomas Mulcair, NDP, Outremont, QC]

I was talking about corporate tax cuts. I would ask that you give me a specific answer to my question.

[David Podruzny]

Okay.

The corporate tax cuts that were made and did affect our competitiveness and our ability to attract new investments were a factor in attracting new investments to and new jobs for this country. We would contend that lowering that tax rate to a level that put us on a competing basis with our international competitors was a necessary step. At the top of the business cycle--

[Thomas Mulcair, NDP, Outremont, QC]

I am running very low on time. Thank you for your viewpoint.

Now I have a question for Ms. Giroux-Bougard, from the Canadian Federation of Students.

How did the cuts to the Canada Summer Jobs program affect you?

[Katherine Giroux-Bougard]

This summer, we saw near-record student unemployment: 19.2%. One in five students could not find a job this summer. One of the programs we supported was Canada Summer Jobs, but it was cut by half in 2006. In 2007, most of the funding was restored. So 40% of the funding was reinjected into the program, but the rules had changed. Despite those changes, 10% of the funding was cut, which represents approximately 2,000 jobs.

In the last 2009 budget, the government announced a 10% increase, but only for two years, which takes us back to 2006 levels, before the cuts, which is not enough given this summer's unemployment rate.

[Thomas Mulcair, NDP, Outremont, QC]

Now can you comment on student debt? How much money does a student need to get an undergraduate university degree? What about a master's? A Ph.D.?

[Katherine Giroux-Bougard]

It varies a lot depending on the province and program of study. Some professional programs cost a lot more. But, on average, a four-year undergraduate degree costs somewhere between $21,000 and $28,000. I think it costs just over $30,000, on average, for a master's degree.

[Thomas Mulcair, NDP, Outremont, QC]

Which province is the cheapest, and which is the most expensive?

[Katherine Giroux-Bougard]

Quebec has the lowest tuition fees, at around $13,000. But the programs are also shorter because of CEGEP, where there are no tuition fees. It is not surprising that Nova Scotia has the highest tuition fees, with an average of nearly $30,000.

[Thomas Mulcair, NDP, Outremont, QC]

Thank you very much.

That is all, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Mulcair.

Mr. Laforest, you have the floor.

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

Thank you, Mr. Chair.

I want to welcome all of our witnesses.

I would like to start with you, Mr. Chair. It has to do with the translation of the documents for the notice of meeting. I see that this is not the first time that “Business Tax Reform Coalition” has been translated as “Business Tax Reform Coalition” in French. But representatives of the organization submitted a brief that lists the name in French as “Coalition d'entreprises sur la réforme de la fiscalité des sociétés”. It would be nice to receive all the meeting notices with the full translation.

Now I would like to ask Ms. Walters a question. Ms. Walters, you are the director of a group that works to advance the independence of people with disabilities. Last summer, I was told that some people with disabilities work. Not all of them are able to work, but when they do, they have to give up certain benefits that they receive because they have a disability. Is that something you are familiar with? If so, does it happen a lot?

[Traci Walters]

Yes, it's very common. Many people with disabilities work in this country, and many can and want to, but there are disincentives throughout many of the provinces, in that your supports or your medical or drug payments are attached to you being on social assistance.

Let's say you get a job for $20,000 or $40,000; it doesn't matter. As soon as you move, you lose that coverage. Many people cannot take the chance of losing even attendant supports. Even some attendant services will be cut if you try to get a job. Not too many people can afford to work and then pay another $15 an hour on top of that for attendant services.

This is a huge problem in this country. It would be wonderful to have leadership from the federal government, if it would provide a leadership role at solving this problem, because this is probably one of the biggest barriers for people to access the labour market.

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

Thank you. That is exactly what I was told.

When people with disabilities make the effort to take training in order to find a job and then lose some of the benefits they receive because they have a disability, they lose their desire to continue participating in the workforce and independent living.

Thank you for that answer. I think this is an important issue that the committee should study and make recommendations on. I will support that position when the time comes.

My second question is for Ms. Giroux-Bougard.

You had three recommendations. The second was that the federal government should discontinue education tax credits and instead use the funding to increase student grants.

Would that not create problems in terms of accessing education? Does the tax credit not cover everyone, whereas the grants target only certain people? Would that not have a restrictive effect?

[Katherine Giroux-Bougard]

In our recommendation, we recognize that the federal government has to make monetary choices when making its decisions. In many cases, the tax credits do not necessarily go to the families and students who need them the most to pursue post-secondary education. We believe that the money would be much better spent if it was given to students in the form of grants, when students really need the money, specifically, when paying their tuition, buying books and covering other expenses. It is often at these times when families struggle the most and need the most help. Tax credits do not necessarily address the need to improve access to post-secondary education.

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

Thank you.

Ms. Saravanamuttoo, in your brief, you recommend that the federal government create a new fund and transfer money to the provinces in order to provide early childhood education and care services, all in an effort to combat child poverty, of course.

Last week, pre-budget consultations were held in western Canada, specifically, in Vancouver, Edmonton and Yellowknife. Many people who were asking for the same thing as you spoke very highly of the program that was put in place by the Quebec government.

In your request and recommendation, do you mention the quality and success rate of Quebec's program?

[Helen Saravanamuttoo]

They are not specifically referring to the quality in Québec, although we admire it. But we believe very strongly in high-quality child care; the children progress so much faster, and they are so much better looked after. And these benefits last through life. They show up in savings through services later. A child who has done well in the first years usually continues to do well. They have a sort of momentum that keeps on. The research in the United States—this is old research, but later research has confirmed it—shows that for every $1 spent, the country saves $7 in services later.

So we very much admire the services in Québec, but I think the same thing should be all over. Other provinces say the same thing, I think.