Finance Committee on Oct. 21st, 2009

[The Chair, Conservative, James Rajotte]

I declare the 53rd meeting of the Standing Committee on Finance in order.

It's wonderful to be here in Toronto. We have two days here. We have a total of eight panels over the next two days. This is our final city on our nine-day tour across Canada for pre-budget consultations.

In the first panel this morning, for an hour and a half, we have six organizations with us. I'll read their names in order of their presentations to the committee: the College Student Alliance, the Canadian Dance Assembly, the Residential and Civil Construction Alliance of Ontario, the Employer Coalition for Advanced Skills, Colleges Ontario, and the Professional Association of Canadian Theatres.

Thanks to all of you for being with us here this morning. You each have up to five minutes for an opening statement and then we will go to questions from members of all parties on the committee.

We'll start with the College Student Alliance, please.

[Tyler Charlebois, Director of Advocacy, College Student Alliance]

Good morning. Thank you for this opportunity to share with you the thoughts, concerns, and recommendations of Ontario's college and college/university students.

I am Tyler Charlebois and I am the director of advocacy for the College Student Alliance, which is an advocacy and services organization representing over 120,000 full-time college and college/university students across the province.

“Canada Rebranded: Stronger Investments for Greater Returns” is our submission to your pre-budget consultations. It focuses on three recommendations to lead Canada into the new economy.

The first recommendation is that the Government of Canada, in partnership with the provinces and territories, must develop a national education and training strategy.

The second recommendation is that the Government of Canada assist in alleviating the increasing burden of debt that learners are assuming. The Canada student loans program loan repayment policy should be changed to encompass interest relief and debt reduction components.

The third recommendation is that the Government of Canada should establish a separate research envelope for colleges to expand their applied research, commercialization, and innovation capabilities.

For today's presentation, I'm going to focus only on what we feel is the utmost important issue moving forward. As Canada, North America, and other countries around the globe face economic uncertainty, the CSA is urging the federal government to focus on rebuilding and retraining Canadians for the new economy. If Canada is to rebuild and sustain future prosperity, we must ensure that all Canadians, new and old, have access to an affordable, high-quality post-secondary education and training system. An educated and skilled citizenry will revive Canada’s struggling economy and place the country back on the road to recovery and competitiveness. The benefits to both the individual and the taxpayer are worth Canada’s increased investment in higher learning.

The taxpayer return on investment is some 15.9% for every dollar spent on Canadian colleges and institutes. With more than $123.3 billion in income being contributed to the Canadian economy annually by colleges, polytechnics, institutes, and their graduates, this is roughly 8% of a typical year’s economic growth in Canada. To that end, the College Student Alliance is calling for the federal government, in partnership with the provinces and territories, to develop a national education and training strategy.

For over the past decade and a half, Canada and Canadians in all provinces have seen an underfunding of our post-secondary education system. This underfunding has resulted in reduced quality and a downloading of costs onto students and their families.

A country as vast and diverse as Canada must be a leader in today's knowledge-based economy. We must be at the forefront of innovation, commercialization, and integration. We must work together to build a strategy that is clear and concise so that all Canadians understand that Canada is a place to live and learn.

A national strategy must look to increase our ability to collect and report data. Currently, Canada is ranked last amongst OECD countries in terms of data collection for quality measurement in PSE. Our lack of data is not only hurting our ability to compare ourselves to other countries, but also is hindering our ability to make sound decisions based on fact rather than pure assumption or speculation.

A national strategy must work to recognize all prior learning and pathways, with a focus on expanding pan-Canadian mobility for learners. Learners must be able to move between the system sectors and provincial and territorial boundaries without increased cost or duplication of their prior learning.

A national strategy must provide our provinces and territories with the appropriate funding: a dedicated transfer to provinces and territories of about $4 billion annually to restore Canada's investment in higher learning.

Within the framework of a national strategy and transfer, the responsibility would be placed on each provincial and territorial government to construct agreements with the post-secondary education institutions within their jurisdictions to ensure adequate funding to expand access, to increase affordability, and for accountability not only to the learner but also to all Canadians.

Our vision is for a Canada in which all citizens have an opportunity to build on their natural talents and abilities through post-secondary education and training in a system that is adequately supported by both provincial and federal governments and allows learners to move across the country to gain new skills and experiences. Students are united in this call for Canada to develop a national education and training strategy. The time is now.

Thank you for your time this morning.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll now go to the Canadian Dance Assembly, please.

[Shannon Litzenberger, Executive Director, Canadian Dance Assembly]

Thank you.

My name is Shannon Litzenberger and I'm a contemporary dance artist and the executive director of the Canadian Dance Assembly. We're the national association representing Canada's professional dance sector, and we're also a founding member of the Performing Arts Alliance and a member of the Canadian Arts Coalition.

In the 2009 economic action plan, the arts and culture sector was identified as a key sector—along with forestry, agriculture, the auto sector, and others—recognized as playing a significant role in stimulating the economy. The arts and culture sector contributes $46 billion directly to Canada's GDP and generates approximately $25 billion in taxes for all levels of government, which is more than three times higher than the $7.9 billion that is invested at all levels. Despite economic challenges faced by all sectors at this moment, the cultural sector remains a growth market with substantive potential for further expansion.

As the face of Canada's population evolves, so too does the richness and diversity of our cultural expression. The cultural work force has grown by over 30% in the last decade and now represents 7.1% of Canada's total employment. Cultural workers are typically self-employed, have relatively low earnings, are highly educated, and are exceptionally talented. Indeed, cultural workers are leading Canada into the new credo of knowledge-based economy. While the cultural sector plays a critical role in Canada's economic, social, and creative vitality, the Government of Canada also plays a critical role in ensuring that artists and arts organizations can create, produce, and disseminate their work for the benefit of all Canadians.

On behalf of my colleagues in dance and in the performing arts, I'd like to congratulate the government for recognizing this role and putting into action several investment measures that have assisted a number of dance and arts organizations to remain vital during the economic downturn.

Today there are three recommendations I wish to make that I believe will significantly improve the impact and effectiveness of overall federal investment in the arts. These recommendations are modest given our economic climate and represent about one-twentieth of 1% of federal spending, or less than $5 per Canadian.

The first is to increase investment to the Canada Council for the Arts to $300 million over three years. The work of artists and arts organizations contributes immensely to the economic, social, and creative vitality of communities in every riding. In 2008-09, the Canada Council invested $158 million in more than 4,400 artists and arts organizations whose work reached 689 communities across the country. The impact of the council's work is unmatched. It fuels the market with excellent artistic products by supporting artists and arts organizations in the creation, production, and dissemination of meaningful and engaging work.

New investment will enable it to give attention to critical priorities, including increasing artistic activity across regions, nurturing new generations of artists and arts organizations, and responding to the explosion of new forms of practice that have emerged from an evolving Canadian social and multicultural identity over the past two decades. Furthermore, increased investment will ensure that as our economy recovers, the arts remain a public good available not only to the rich but to all Canadians regardless of their socio-economic status.

The second recommendation is connecting Canada's outstanding cultural product to local and global markets by investing $25 million in a new market access and development fund. Today Canadians seek better access to exhibitions and productions from across the country and expect to see them at home in their own galleries, museums, theatres, and concert halls. With Canada's relatively small population base spread across vast territory, arts organizations require support to reach beyond their local markets, making their work accessible to markets from coast to coast to coast. The new market access and development fund will ensure that Canadian communities of all backgrounds will have the opportunities to participate in and benefit from the broadest possible range of artistic experiences.

Equally, Canada's cultural product is in high demand around the globe, a testament to the exceptional talent of Canadian artists. For many dance and arts organizations, international export is a vital component of a sound business strategy that ensures investment made in the creation and production of Canadian works will leverage revenue returns through business development in foreign markets.

My last recommendation is increasing the tax credit to 39% on gifts between $200 and $10,000 to stimulate the flow of charitable gifts from middle-income Canadians. In the performing arts sector, the economic slowdown has resulted in lost revenues from diminished corporate investments and endowments. A full 53% of Canadians report that they would give more to charitable causes if a better tax credit were in place.

The Government of Canada has already taken steps towards supporting a continuum of arts and cultural activities that includes the creation and production of art, public access to Canada’s artistic products, organizational health and sustainability, the development and preservation of physical infrastructure, and arts training. Together with existing investments, targeting arts spending in these three recommended areas will maximize the social and economic impact of public contributions to the arts and culture sector for the benefit of all Canadians. Canadian artists and arts organizations are playing an important role in Canadian society. They contribute significantly to Canada’s economic recovery. We are eager to do more in partnership with the Government of Canada.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now go to the Residential and Civil Construction Alliance of Ontario.

[Andy Manahan, Executive Director, Residential and Civil Construction Alliance of Ontario]

Thank you, Mr. Chair.

My name is Andy Manahan. I'm executive director with the RCCAO. Our group has been in existence for only four years. We are made up of both contractor associations and construction unions. We come to the table speaking on behalf of both labour and management, which I think lends credence to our comments.

You have my presentation that I provided in August, so I just want to provide some context. When we were all facing the prospects of a turning economy last year, we were pleased that many governments, not just in Canada but in the western world, were looking at infrastructure as a way to simulate the economy. Our labour-management alliance decided to come together in mid-January for a round table on providing advice on infrastructure stimulus funding to federal and provincial governments. We came out with a joint statement.

The partnership approach requires working together in difficult times. We recognized that we wanted to invest in the future. Our industry said that we were able and ready to meet the demand. Certainly there were some questions at the provincial government level about the capacity to deal with the major stimulus money that were going to be provided. We recognized, however, that there had been some under-investment over the decades. This isn't a partisan comment in any way. For the past 20 or 30 years, we have not kept up with the level of spending, based on a percentage of GDP, that occurred in the 1950s, the 1960s, and the 1970s. This is a way for us to build confidence through infrastructure and investment, build sustainable communities, do things in a more innovative way, and have some lasting impacts. That was in January.

At the end of that session, our group thought that they should have another session to monitor the impact of the infrastructure funding. We had that meeting on October 8. The group thought that there must be a coordinated strategy. A lot of the projects are very good, but because of the process, the applications and so forth, a lot of contractor members have not seen tendered documents coming out from municipalities. We understand that there has to be due diligence so that funds are spent properly but in our mind, the so-called exit strategy that was talked about in the summer is the wrong approach. We would like to look at a long-term, predictable source of funding. We recognize that this is a bit of an anomaly in light of the increase in investment, but we need to look at life-cycle costing of assets together with a long-term and predictable flow of funding.

In the brief I submitted in August, the first recommendation was to base future infrastructure funding programs on a more rigorous priority setting and to set in place clear programs for sustainable long-term funding of infrastructure.

The second recommendation I put forward in the brief flows from that in that we recommended that an infrastructure simulation platform be developed and supported financially by the federal government. Our organization has looked at what other jurisdictions have done, from Singapore to Finland and even the United States. We believe there is a more objective way of dealing with infrastructure funding. We recognize that under the current program there were constraints applied with respect to deadlines. This meant that some of the projects were not of a high priority. The municipality said that it would not put forward projects that could not be finished by March 2011.

It's not a great criticism, but what we're trying to say is that we should look to the future and build a program that's a bit better. I had a conference call yesterday with the co-chairs of the National Round Table on Sustainable Infrastructure. We think this would be the appropriate body to house this infrastructure simulation platform. We'd certainly like to have more dialogue with various agencies about that.

Recommendation three calls for streamlining the environmental assessment approvals process. There has been a lot of work in accelerating applications, but to plan long-term predictable funding, we need to ensure that there is certainty and predictability in the approval process. We were most heartened that there had been some discussion between the federal government and the Province of Ontario with respect to minimizing duplication in these processes. I understand that this matter has been the subject of a court challenge, but we'd like to see some more action on that front.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We're now going to Mr. Charette and Ms. Fralick.

[Paul Charette, Chairman, Bird Construction, Employers' Coalition for Advanced Skills]

Thank you, and good morning to the panel. My name is Paul Charette. I'm the current chair of Bird Construction Income Fund, the immediate past chair of the Canadian Construction Association, and the chair of the Employers' Coalition for Advanced Skills.

Before I ask Pamela to outline our concerns, let me just say that we're here today representing a very large association. We represent over 20 industry association leaders concerned with respect to the current state of our community colleges and technical institutions. Our coalition came together in 2008 to request leadership from the federal government in rebuilding our aging community colleges and institutions across Canada because of our growing concern over the declining state of these important facilities from which our respective industries draw their labour force.

With that brief introduction, I'd like now to turn it over to Pamela.

Actually, I apologize that I forgot to introduce Pamela. Pamela Fralick is the president and CEO of the Canadian Healthcare Association. We'll be sharing our time this morning.

[Pamela Fralick, President and Chief Executive Officer, Canadian Healthcare Association, Employers' Coalition for Advanced Skills]

Thanks very much, Paul, and monsieur le président et membres du comité.

As Paul indicated, our coalition is very concerned about this growing shortage of skilled workers in Canada and the challenge this presents for all of our industries in the years ahead. While the shortage may seem counterintuitive in a recession, the problem is not a new one, and it's only projected to increase as much of our existing labour force approaches retirement age—many of us around these tables, perhaps, in the next few years.

From a health sector perspective, these shortages are more than theoretical. While I am part....

I'm sorry. Was that an aspersion? I didn't mean....

[Voices]

Oh, oh!

[Pamela Fralick]

I'm including myself. I'm not talking about political retirements. I'm completely non-partisan. Do I get my 30 seconds back?

I am part of a larger coalition but have been asked to speak specifically to some of the health sector issues. I'd like to bring to your attention today five pieces of information, five data points.

The first is that in 2005 the average age of individuals in health occupations was 41.9 years. That's almost two and a half years older than the average age of the general Canadian workforce. One example: in the profession of nursing—I know you'll hear from some of them later on—approximately 38% of the nursing workforce is over 50 years of age and very close to retirement.

The third point, and this should be of particular interest to a finance committee, is that in 2006 just over one million people across Canada, or one in ten employed Canadians, worked in the health system/industry. This represents 6% of the total Canadian workforce and indicates that it is one of the major employment industries in Canada. It's not just a cost centre.

Fourth point: in 2007 Canada spent $160 billion on health care. We all know about that. It is estimated that between 60¢ and 80¢ of every health care dollar in Canada is spent on health human resources. In other words, of the $160 billion, $96 to $128 billion went towards health human resources. We really cannot afford to ignore this sector or assume that it's done and checked off our list.

The fifth point: Canada is not alone in having a shortage of health service providers. The World Health Organization estimates that worldwide there is a shortage of more than four million health care providers and there needs to be a 70% increase in the world's health workforce to address current and projected shortages. In other words, we can't rely on other markets; we can't look elsewhere. We must have homegrown solutions.

What does all of this mean? I have some data. I've shared with you some facts, but there is a huge challenge in truly understanding how to move forward. Today I'm wearing the hat representing community colleges and technical institutions. In these areas in particular there is a dearth of information.

One example is in a profession I've worked with closely: physiotherapy. We did a survey a few years ago and discovered that training can range from two weeks to two years. It's not competency based; there are no standards. We can't even come up with all of the data in an aggregate pan-Canadian level to determine where we go in terms of planning for the future.

So governments and health system stakeholders really do need to work to build the capacity to adequately anticipate and accommodate changes in the health system. But, Mr. Chairman and committee members, the skilled worker shortage is not limited to the health sector. Indeed, in almost every sector of the economy, skilled worker shortages are beginning to have a significant impact on the competitiveness and productivity of the Canadian economy. From manufacturing to construction, forestry to mining, aerospace to hospitality, skilled workers are the lifeblood of these sectors and integral to our future economic successes. While immigration is part of the solution—I've already referred to that—it is not a panacea, as new immigrants rely on Canada's community colleges for upscaling and retraining. Unless we significantly increase domestic training capacity, Canadian businesses will continue to struggle in the decades ahead.

I hope that's not the full five minutes.

[The Chair, Conservative, James Rajotte]

You have one minute left.

[Pamela Fralick]

We'd like to bring solutions to you, and my colleague will do that.

[Paul Charette]

Thank you.

I'm going to have to speak quickly, then.

Before I get to our recommendations, I want to underscore Pamela's point about the pervasiveness of the skilled trades shortage across the economy. In the construction section alone, a skilled work shortage of 316,000 workers is anticipated by 2017, and that's up from 250,000 last year. When you consider that the overall workforce today is 1.1 million, that means we will need to replace over 30% of our workforce in the next eight years.

I think I'm getting down to the last minute, so I'm going to skip right to my recommendations.

The coalition is very concerned about the declining state of Canadian community colleges and technical institutions. Our industries rely heavily on these facilities. Our recommendations are that we extend the current federal knowledge infrastructure program for an additional five years, at a funding level of $1 billion annually, and abandon the current 70-30 university/college funding apportionment formula in favour of a more equitable distribution; and to increase federal research funding by 5% to support applied research, product development, and research commercialization at colleges and institutes.

The leadership that the federal government showed in the 2009 budget helped kick-start a number of overdue modernization projects at campuses across this country, but much more needs to be done. In 2008, the Association of Canadian Community Colleges reported an estimated $7.4 billion investment required in investment.

I'd like to finish on a personal note, if I can, in 30 seconds.

I'm a college grad from 42 years ago. If it had not been for the vision of the federal government in the 1960s in creating the capacity, and for a caring community, I wouldn't be sitting here in front of you today. I think it's very important for us to provide the same opportunity for many Canadians across Canada.

With that, I will close. Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much.

We'll go next to Colleges Ontario.

[Linda Franklin, President and Chief Executive Officer, Colleges Ontario]

Thank you very much, Mr. Chair.

I'm Linda Franklin, and with me is Bill Summers, the vice-president of research and policy.

I should start by saying we agree entirely with everything Tyler and Paul and Pamela have said, so we really have nine recommendations for you today. We're not going to cover some of what they've done because they've done it better than we could, but we certainly agree with their points.

I'm happy to have the chance today to talk to you about the leading role our colleges have in bringing about economic recovery. In looking at coming out of the recession and building a stronger, more productive economy it's really important, and we think it's right, that the federal government has focused on post-secondary education and the training people need in the new economy.

And they're not alone. In the U.S., Barack Obama has just sent out $12 billion to stimulate activity at community colleges over the next 10 years. The Canadian community college movement is out in the world, in places like Africa and Asia, building community college systems there to try to mirror what we're already doing here.

That's really important, and the stimulus investment, as Paul said, was terribly helpful for us. We got out of the gate fast and we started spending money quickly because of the huge backlog of need we had in the community college system. We need new capacity because we are looking at an enrolment tsunami. Students are coming to the colleges in greater and greater numbers. We are overwhelmed by the numbers, and that makes sense in a recession because students see colleges as places to come to get job opportunities.

We've always been a leader in post-secondary education, but the world is trying to catch up. Seventy per cent of people in post-secondary education right now are in developing countries, not in Canada or in the United States, so it's critical that we keep moving forward. For us to be competitive in the new economy, we need greater numbers of students being prepared for the jobs of the 21st century and we need companies that are more innovative and are more able to create those jobs.

We have three recommendations for you today: first, as Paul and Pamela mentioned, focusing on expanded applied research; second, investing $500 million over five years to let us update our instructional equipment to industry standards, so students are training on the best of what's out there; and third, reforming employment insurance eligibility to include retraining, which is critical going forward.

To add some context to this, we agree the government has shown tremendous leadership in this area, and making the college and community innovation program permanent was a key factor in that leadership. This is a great investment, but many small and mid-size enterprises continue to struggle and face barriers conducting research in commercialization, and colleges are uniquely positioned to help solve that problem. If we can, the result will be more businesses becoming sustained innovators, which will lead to sustained job growth. It will improve the knowledge and training that students get, and colleges can work with small and mid-sized companies on innovative projects to get their ideas to market much faster.

We would propose an increased investment of 5%, because total federal research funding in Canada right now sits at about $2.9 billion. That investment of $145 million to college-based applied research directed at projects in small and mid-sized companies in particular would go a long way to solving this problem.

Let me turn your attention now to the $500 million investment in equipment. Recent funding constraints mean that colleges have been unable to keep up with the renewal of equipment across a wide range of college programs. Students in mechanical, manufacturing, chemical, and environmental engineering technology programs need to learn, as they all do, on the most up-to-date specialized equipment. That's particularly critical because we're finding that as our businesses are struggling, particularly in this recession, they are less and less able to take workers who aren't skilled and train them for the first few months of their employment. They need workers to hit the ground running, and if we're going to do that, the colleges need the most up-to-date equipment possible to train them for that.

Finally, we recommend that the employment insurance eligibility be reformed so that more Ontarians can access EI support programs, including retraining. We've certainly seen this in Ontario. Students are flocking into Ontario colleges from situations where they're laid off, and the first grads are finding employment in sectors where they will be permanently employed. But those who do qualify for EI in Ontario receive fewer benefits than their counterparts in other provinces, although they pay the same amount in premiums when they are working. If more unemployed workers in Ontario were able to access EI, more could take advantage of federal and provincial retraining programs and they'd be better prepared for the jobs of tomorrow.

We also think EI reform needs to allow recipients to attend academic upgrading and literacy programs. At the end of the day, we're finding students coming to colleges who've been laid off, who are in their forties and fifties, a lot of them lacking basic reading and math skills, and some have never worked on a computer before. Clearly, you can't succeed in post-secondary education unless those supports are there.

Those are our recommendations, Mr. Chair. We think investing in Canada's workers will really make a difference in economic recovery, and doing it through an investment in colleges will mean that we will come out of the last downturn in the economy better prepared to be a productive, fast-moving, innovative economy.

Thanks very much.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll now go to the Professional Association of Canadian Theatres.

[Lucy White, Executive Director, Professional Association of Canadian Theatres]

Good morning. My name is Lucy White. I'm the executive director of the Professional Association of Canadian Theatres. Thank you for inviting PACT to speak to you today.

We represent 140 professional not-for-profit and for-profit companies located across the country and working in numerous theatrical traditions from many cultures and languages. Although our membership is widely diverse, we share the belief that the arts have intrinsic value to Canadian citizens and our society. We share this belief in the value of the arts to Canadians with the Minister of Finance, who said in January that, “Day to day, Canadians experience the essence of this rich and diverse country through the imagery and worlds of its artists.”

In PACT's brief to this committee, which you have all seen, we made three recommendations. In the interest of time, I'll be focusing only on the first two.

First, PACT recommends that the government increase the base budget of the Canada Council for the Arts by $120 million over three years. Second, we recommend that the government invest in a $25 million market access and innovation program to help Canadian cultural products reach domestic and global marketplaces.

As the basis of Canada's economy shifts towards a knowledge-based foundation, the economy of tomorrow, all fields of endeavour that, like the arts, can tap into imagination, creativity, and innovation, will--again like the arts--generate a high return on investment and create prosperity for Canadians. For example, the federal government invests $3.4 billion in arts and culture annually. In return, 609,000 jobs are created, $5 billion in cultural exports are generated, and $25 billion in tax revenues are returned to all levels of government.

In the last decade, the arts and culture workforce grew by 31%, as compared to 20% for the workforce overall. In short, the arts and culture sector is a significant economic sector that is poised to contribute to Canada's economic recovery across the country.

Government has wisely invested in the development and production of arts through its arm's-length agency, the Canada Council for the Arts, and in 2007 bolstered its support for the council by adding $30 million to the base budget. That was the first and very welcome significant increase for the Canada Council in many years.

Increasing the base budget of the council will ensure access to the arts for all Canadians. It will allow the council to support newer, younger, and more diverse arts organizations, especially those located in smaller cities and communities across the country, and to address demand for an increasingly diverse range of artistic works. It will allow arts organizations to minimize the impact of inflation on pricing and maintain affordable access for all Canadians. Such an increase now to the council's base budget would raise the curtain on a new era of sustainable growth essential to the creative economy.

Our second recommendation is that the government invest in a $25 million access and innovation program. While the growth in arts organizations across the country has been extraordinary, many rural and remote communities don't have local theatre, dance, or music companies and must rely on touring companies to visit. In 2007 alone, Canadian theatres on tour played to more than one million audience members worldwide. Canadian arts organizations are committed to providing Canadian arts experience and engaging Canadian audiences, no matter where they reside, from Gaspé to fly-in communities in the Yukon. A new market access and innovation fund would invest in small and medium-sized organizations to help them penetrate existing domestic markets more fully and to explore and expand into new markets across the country.

Worldwide, Canadian art is in great demand, and the opportunity to showcase Canadian talent opens up foreign markets to sales of Canadian arts and cultural products and bolsters Canada's profile across the globe. Increasing the export of cultural products will also boost tourism in Canada by providing the foreign tourist market with exciting reasons to visit Canada.

Recently the government has been focused on short-term funding to stimulate the economy, and the arts and culture sector has benefited from stimulus spending, for which we are thankful. As government turns its attention to economic recovery, the arts and culture sector asks to be recognized as an economic sector poised to contribute to deficit reduction and economic recovery. As my colleague said, a permanent new investment of $145 million in the arts, which is about one-twentieth of 1% of federal spending, would generate a significant and sustained return on investment for Canadians.

I want to close by reading to you two statements. In 2006 this committee made the following recommendation to government: “That the federal government increase funds allocated to the arts and cultural sector. In particular...funding for the Canada Council for the Arts should reach $300 million over two years.” In June 2009, Parliament agreed, saying that “In the opinion of the House, the government should give direct assistance to artists by increasing the annual budget of the Canada Council for the Arts to $300 million.”

The performing arts are a collaborative practice, and it is in this spirit of collaboration that we ask government to respect the will of Parliament and respond in the upcoming budget to the specific recommendations made by the arts community and by you and your colleagues.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

I want to thank all of you for your presentations.

We will now go to questions from members of the committee, and we'll start with Mr. McKay for seven minutes.

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

Thank you.

Thank you all for your presentations. They were quite interesting; maybe we'll run out of time quite quickly.

I wanted first of all to deal with the dance and theatre folks and your recommendation with respect to the increase in the tax credit for charitable giving, given that your industry appears to be dependent more on charitable giving than government funding. You want to go from 29% to 39%, but you don't say anything about the initial 15%. Do you want to change that as well?

The other question I had on that issue is this. Can you come to any compelling good reason as to why a political tax credit is far superior to a charitable tax credit?

I can't, but I'd like to know if they can.

[Shannon Litzenberger]

The rationale behind this recommendation is to acknowledge the fact that the majority of arts organizations are small to mid-sized organizations. This tax credit was formerly 29%. We're asking for a 10% increase for a range of donations between $200 and $10,000. It's trying to address the typical kinds of giving from individuals that go to small and mid-sized arts organizations, which represent over 80% of the sector. There's a specific target in that way.

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

Have you costed that?

[Shannon Litzenberger]

No.

This recommendation also is part of a recommendation that came from an organization called Imagine Canada, which represents all charities across the social sector. It's not so specific to the arts; it's something that could have a much more significant impact.

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

Right, you couldn't isolate just for the arts; you would in effect improve religious giving and other charitable enterprises. It has always struck me as a huge anomaly that a $100 donation to a political party gets a very generous tax credit but $100 to a dance company gets not quite so much.

I'm going to have to keep on moving; I have two questions here.

The second question has to do with the commercialization of research as mentioned by three of the witnesses here. I think the number was $2.7 billion in research or something of that nature. What is not clear to me is whether the college community gets all of that money.

[Linda Franklin]

We get virtually none of that money right now.