Finance Committee on Oct. 21st, 2009

[David Adams]

I think what we're saying is that it makes sense that if you were going to be eliminating one half of a program you would also eliminate the other half of the program. And I think the other aspect to that is if that excise tax is actually visible to the consumer so that they know they're paying more for that particular product, then that maybe speaks to your issue.

[Mike Wallace, Conservative, Burlington, ON]

I have a very quick question.

The clunker program ended in the United States. Have sales dropped since that clunker program discontinued?

[David Adams]

Yes.

[Mike Wallace, Conservative, Burlington, ON]

Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Wallace.

I just want to clarify something with Mr. Ryan.

When I was first elected in the year 2000, there was discussion of a Canadian neutron facility. Is that what you're recommending, or is there a difference?

[Prof. Dominic Ryan]

The Canadian neutron centre is a revamped version of essentially that project. We have a better conceptual design for it, but it's essentially the same concept. It's a multi-purpose reactor that would service all of the stakeholders in the current NRU facility.

[The Chair, Conservative, James Rajotte]

You said the formal design and costing is about $5 million, but what was the cost of the Canadian neutron facility expected to be at that time?

[Prof. Dominic Ryan]

Our best guess for the Canadian neutron centre would be somewhere in the $800 million to a billion dollars, but we can't give you a hard number without actually doing a proper design study, which is the first responsible step. It's goes back to that MAPLE thing, where the number was decided and then the project was built. What we want to do is do this right, have a proper engineering study and consultation with all the stakeholders so we make sure we build a facility that addresses everybody's issues, cost it properly, and then come to you and say what it's going to cost, and we will deliver it under budget rather than nickel-and-diming you all the time. We don't want to do that.

[The Chair, Conservative, James Rajotte]

I appreciate that clarification.

[Prof. Dominic Ryan]

The Australians did it, by the way. They brought theirs in under budget and on time.

[The Chair, Conservative, James Rajotte]

Thank you.

I want to thank all of you for being with us here this morning, for your presentations and responses to our questions.

Colleagues, I think we have less than an hour for lunch. We're to be back here for our next panel at 1:30.

I declare our meeting suspended. Thank you very much.

[The Chair, Conservative, James Rajotte]

I call the third panel to order in the 53rd meeting of the Standing Committee on Finance, here continuing our pre-budget consultations in Toronto.

We have with us for the next panel, for an hour and half, a number of organizations here to present to us. I'll list them in order of their presenting to the committee. We have first of all the Mohawk College of Applied Arts and Technology, the Writers' Union of Canada, March of Dimes Canada, the Police Association of Ontario, the Ontario Federation of Labour, the Canadian Business Press, and the Ontario Municipal Social Services Association.

I want to welcome you all before the committee this afternoon. You each have up to five minutes for an opening statement, and then we'll have questions from members from all parties.

We'll start with Mr. Holgerson, please.

[Ronald Holgerson, Vice-President, Advancement and Public Affairs, Mohawk College of Applied Arts and Technology]

Thank you very much, Mr. Chair.

I thank the members on the committee for giving me the opportunity to make a presentation today.

Mohawk College is well known in Ontario as the gateway to southwestern Ontario, but it is simultaneously at the outer urban edge of the greater Toronto and Hamilton area. In the brief we presented to you in the summer, we have to correct a few numbers. We're pleased to say that we had a 14% growth in enrolment this past fall, 7% from general enrolment and 7% due to international and second career students, who are workers who have been laid off and are looking for new opportunities. So actually, we now serve 11,500 full-time students, 4,000 apprenticeship students, and 375 international students.

What is unique, perhaps, about the marketplace we serve is the lack of access to post-secondary education, not in Burlington but in Hamilton and in Brantford. In Hamilton roughly 54% of the population and in Brantford 55% of the population have not accessed post-secondary education, and as many studies have revealed, 70% of the future jobs in our economy will demand post-secondary education. So we suggested to the committee in our brief that there were three things we thought were fairly important.

The first was that we're building a new centre for entrepreneurship learning and innovation. The new centre, thanks to a $20 million investment from the Government of Ontario, will allow us to imbue our graduates with the capacity to start their own businesses and help small businesses grow. As part of our research into achieving this goal, we started to look at all the opportunities there were in the Government of Canada to help entrepreneurial young people. We discovered that there were the Business Development Bank of Canada, the Canadian small business financing program, the Small Business Finance Centre, and the Canadian Youth Business Foundation.

All of these had very impressive websites, but there was not a coordinated approach to marketing the services of those organizations, and we believe that by and large our students are not aware of them. We think it would be a great idea if these organizations were encouraged to consolidate a marketing effort and to present themselves to graduates of universities and colleges, from NAIT or SIAST or wherever, who would like to start their own businesses and help small businesses grow.

So it's our suggestion that perhaps the standing committee might suggest to these organizations, which I gather are in some cases at arm's length, that there are other opportunities that they could take advantage of in order to encourage greater economic development in the country.

The second proposal has to do with continuing the knowledge infrastructure program. In the past round of funding, Mohawk either was too ambitious or perhaps didn't have quite the right angle, and we were declined funding. We accept that. However, we're looking forward to where we're going next and are saying that with the growth we're experiencing, we believe there should be ongoing rounds.

One of the challenges is unique to Ontario. The Ontario government funds all the colleges out of one pot, and the number of students you have establishes a percentage that is your market share of the total volume of that pot. If all the colleges around us are growing with new facilities and we're challenged to grow without new facilities, our market share will go down and our annual operating grant will actually go down. So there would be not only the disadvantage of not having a beautiful new building—although we will have one—there will be the disadvantage of losing market share and thereby operational funding.

In Brantford, we have a lot of encouragement from the city to relocate our industrial zone campus to downtown Brantford. So we're proposing that perhaps the Government of Canada, in renewing the program, might consider $20 million for Mohawk.

Finally, on behalf of President Rob MacIsaac and the whole college, we'd like to say that we support totally the objectives of the Government of Canada in trying to achieve Advantage Canada: Building a Strong Economy for Canadians.

Thank you. If you have questions, I am ready to answer in either official language.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We will now have the Writers' Union of Canada, please.

[Deborah Windsor, Executive Director, Writers' Union of Canada]

Thank you for this opportunity. The Writers' Union of Canada appreciates this opportunity to participate in pre-budget consultations.

The union was founded by writers for writers in 1973 and has evolved into the national voice for over 1,800 writers of books in all genres. Our mandate is to promote and defend the interests of creator members and of Canada's freedom to write and publish.

The union has an extremely important role to play in shaping the application of your objectives. First, to support the creative work that is the heart of the Canadian cultural economy, the Writers' Union of Canada urges the Government of Canada in its next budget to introduce a copyright income deduction for creators modelled on that used successfully in the province of Quebec; second, to exempt from taxation subsistence grants for creators that are administered by the Canada Council for the Arts; and third, to increase the Public Lending Right Commission's budget to bring it to the same hit rate as when it was established 18 years ago.

Let me expand a little on those three items. The income copyright deduction has been used in Quebec for several years. This deduction not only corrects a tax penalty but also works to encourage, rather than penalize, those who try to make a living from their creations.

In Quebec the provision applies to writers, artists, filmmakers, and composers; that is, it applies to any artist who produces copyrighted material that generates income. This provision would be easy to administer, and its effect would be to encourage self-employed creators to concentrate on creating new works instead of taking non-creative jobs to provide the necessary income to buy time to create.

The second issue that I raise is subsistence grants. This is one of the most confusing inequities that I am aware of in policies. These grants are created and delivered to artists to provide a minimal stipend to artists to live for several months while they create their cultural product--hence the word “subsistence”--yet by the time the grants are released and income tax comes in, the creator has to then pay back an extremely large portion in taxes.

The third item I mentioned is the Public Lending Right Commission. Canada is very pleased and proud to be one of the handful of progressive countries in the world to have a public lending right commission. The call to create a commission was spearheaded by the Writers' Union of Canada. This small organization provides a modest annual income to Canadian authors whose works are available in public libraries for lending. I don't think I need to explain that there is a royalty earned when a writer sells a book, but when a book goes into a library, it's read repeatedly. Unfortunately, the amount of money that's been invested into the Public Lending Right Commission since its inception has decreased, so we're asking that the government reinvest in the Public Lending Right Commission and in its culture to make sure that the values of the Public Lending Right Commission are at least at a par with what they were 18 years ago.

In conclusion, the cultural sector is large and it's growing. Depending on how you calculate it, it embraces different people. It counts between 5% and 8% of the Canadian labour force. At the heart of this enormous productive, vital part of the economy is a very small core of self-employed creators who earn incomes that are 25% to 50% less than those for comparable jobs in other sectors.

In summary, we are urging the government to remove the tax inequity currently carried by creators with fluctuating incomes through a targeted copyright income deduction and by introducing an exemption from taxation on creator subsistence grants that are administered by the Canada Council for the Arts. We further seek this government's support in ensuring that the Public Lending Right Commission is adequately funded in the next budget.

Thank you very much for this opportunity. I look forward to your questions.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We will now have March of Dimes Canada.

[Steven Christianson, Manager, Government Relations and Advocacy, March of Dimes Canada]

Good afternoon, Mr. Chair and honourable members. My name is Steven Christianson and I run government relations and advocacy for the March of Dimes. With me today are my colleagues Janet MacMaster and Dr. Robert Meynell.

I'll try to be as quick as I can. I'll briefly describe what March of Dimes is and then I'll move into our recommendations.

Since 1951, March of Dimes has worked to identify, eliminate, and prevent barriers to the full participation of Canadians with disabilities in all aspects of our society and economy. Today we are one of Canada's largest service providers to Canadians with disabilities and to their families, caregivers, employers, and communities.

We're all about inclusion and participation. Consistently, the one thing that stands in the way of participation in the economy and society is a barrier. For someone who uses a motorized wheelchair, for example, a barrier can be as simple as one step--just one step that prevents entry into an establishment and participation in the economy, the workplace, educational institutions, and government itself. Barriers have the effect of blocking those with a disability.

What do we achieve when we eliminate these barriers? We achieve accessibility and we bring forward a degree of inclusion that we did not previously have.

Many things are helping to eliminate barriers, including government programs and services, of which there are many good examples; we can talk about that later. Some are federal, some are provincial, and some are co-managed. All are critical, and all need greater attention, especially in the areas of affordable and accessible housing.

Today we are going to take a different approach. We're going to take this opportunity to focus on something probably not so conventional, coming from a charity: taxation. In fact, we're going to recommend consideration of tax incentives to help the small businesses of Canada and our communities and villages from coast to coast to provide a stimulus that will eliminate the barriers right there in their communities, helping to facilitate inclusion and participation of Canadians with disabilities and beginning to deliver immediate measurable improvements in accessibility at the grassroots level. Along a theme similar to the recently introduced and much-used home renovation tax credit, we recommend the introduction of a tax credit, a tax deduction, and the consideration of an accessibility bond.

Many of us are aware that small businesses are critical pillars in our communities. They offer service provision, employment, entertainment, dining, social experiences, shopping--you name it. However, many are situated in structures that were designed long before many of us gave due consideration to the valuable contribution of Canadians with disabilities. There are steps that prohibit entry, washrooms that are inaccessible, and doors that are too narrow. However, if there were some form of tax recognition for small business owners to proceed with installing ramps, for example, or electronic door openers, or washroom retrofits, the cost of achieving greater accessibility is more doable, the economy gets that added stimulus through the retrofits and renovations, and Canadians with disabilities can participate and contribute economically in even greater numbers to our local economies and, most importantly, live in a more inclusive society.

The tax incentives we're talking about should not replace or take precedence over the critical role that government has in the direct funding of programs and services, but should be implemented alongside existing measures.

The world is changing. We all know that. Canadians with disabilities and Canadians who are seniors are a growing force in this country. Businesses are beginning to recognize this fact. In our experience, throughout the country many would avail themselves of an opportunity such as the measures we are recommending. If it's acceptable to you, I'll take another 60 seconds and briefly describe the measures we're talking about.

The first is an accessibility tax credit. The credit would be available to small businesses, and there are various definitions we can talk about. An accessibility tax credit would cover a range of pre-approved accessibility expenditures, such as the purchase of adaptive equipment, removal of architectural barriers in facilities or vehicles, or the production of printed materials in accessible formats.

For comparative purposes, we could take a look at the U.S. application of such a credit. The amount of the tax credit under the American system is equal to 50% of the eligible accessibility expenditures in a year, up to a maximum of just a little more than $10,000. Under their regime, there's no credit for the first $250 of expenditures, and the maximum credit is $5,000.

The second recommendation is an accessibility tax deduction that would reduce a business’ payable taxes, recognize the expenses incurred in making it accessible, stimulate economic activity, and help enhance accessibility. Again, we're talking about the small businesses in our neighbourhoods and on our main streets.

The deduction would apply to the removal of architectural or transportation barriers and adaptations to a building or information system. We can talk about how the American system is using that, with their accompanying legislation.

Finally, we recommend an accessibility bond. The Government of Canada could provide for the public issuance of an unspecified amount of general obligation bonds, the proceeds of which would be used for the purpose of funding various improvements to accessibility initiatives nationwide, generate competitive investment yields to the buying public, and be subject to attractive tax-reducing measures similar to other government-issued bonds.

In closing, achieving accessibility on a go-forward basis is less complicated, but retrofitting today's world represents a considerable challenge, as we're finding out with legislation in Ontario and increasingly in Manitoba and Quebec.

[The Chair, Conservative, James Rajotte]

Thank you.

[Steven Christianson]

Thank you for this opportunity to share our recommendations.

[The Chair, Conservative, James Rajotte]

Thank you very much.

We will now go to the Police Association of Ontario.

[Larry Molyneaux, President, Police Association of Ontario]

Thank you, Mr. Chair.

My name is Larry Molyneaux. I am president of the Police Association of Ontario. With me today is our chief administrative officer, Ron Middel. Both Ron and I were front-line police officers for over 25 years prior to taking on our current responsibilities. Karl Walsh, president of the OPP Association, and Mike McCormack, president of the Toronto Police Association, had hoped to attend this presentation with us. We offer our regrets that they could not attend.

The Police Association of Ontario is a professional organization representing over 33,000 police and civilian members from every municipal police association and from the Ontario Provincial Police Association. The PAO has a history of working with government and community partners to ensure safe communities. Safe communities are a key to ensuring Canada's place in a competitive world. Canadians have a right to feel safe in their homes, on their streets, while at play, and in their schools. Safe communities create trust and comfort, attract investment, and can only lead to a stronger Canada.

The Government of Canada's tackling crime agenda consists of significant legislative changes as well as policies and programs designed to address community safety issues. The government has taken much-needed steps to ensure an effective justice system; however, this addresses only half of the community safety equation. A comprehensive justice and community safety program is dependent upon an effective judicial system coupled with adequate levels of professionally trained and resourced police personnel to ensure and enforce the rule of law.

Recently passed legislative changes have resulted in a consequential requirement to invest in additional front-line officers. Therefore, the PAO urges the government to fulfill their campaign promise and provide sufficient long-term funding to put at least 2,500 more police officers on the beat in our provinces, cities, and communities. Based on a projected cost of $100,000 in salary and benefits per officer, the PAO estimates that this initiative could cost approximately $250 million per year.

We acknowledge that partial funding has been provided for the 2,500-officer commitment. Under the community development trust, Ontario received $156 million to partially fund 329 officers over five years. The five-year funding arrangement, however, has a detrimental impact on municipal participation in the program. Investing in a new police officer is a long-term financial commitment. Unfortunately, due to this initiative's short-term nature, many municipalities are reluctant to participate in it, as they are now concerned about the future fiscal pressure they will be facing once the program's funding runs out.

Labour costs currently account for approximately 9% of the operating expenditures in police service budgets across the province. For many reasons, municipalities are consistently pressed to reduce their expenditures on police services, but high-quality professional policing is significantly compromised by budget restraints and cutbacks. We simply cannot continue to provide the level of policing that taxpayers demand within the current staff complement.

Crime is becoming more sophisticated, organized, and technically complex. Criminals are using cutting-edge technology, and the police are hard pressed to keep pace. Often investigations into these matters consume a great deal of time and resources. Criminal organizations do not face budgetary restrictions that prohibit the acquisition of equipment or personnel; it is the police charged with protecting citizens and taxpayers who face the budget restrictions. We are playing catch-up with the criminals in many instances.

The Mayerthorpe incident in 2005, in which four RCMP officers were killed during a raid on an Alberta farm, serves as an example of what can happen when a police force lacks adequate staffing levels, proper equipment, and appropriate supervision.

The threat of terrorism also has had a significant impact on law enforcement resources. The events of 9/11 and other tragedies have reinforced the need for police services to have adequate staffing levels and resources. Recent high-profile arrests, such as those of the Toronto 18, claim shares of policing budgets to provide trial security and prisoner transfers. Our capacity to respond to terrorist threats must be addressed as an immediate priority.

Ongoing fiscal pressures appear to have the greatest impact on general patrol officers. As the specialization of police tasks increases, resources are drawn from the patrol units. This places increased pressure on the remaining front-line personnel, contributing to stress and morale issues.

With the range of duties expanding, the increase in the number of officers has not kept pace with the rate of population growth over the past decade. Statistics Canada recently reported that the number of Canadian police officers per 100,000 citizens peaked at 206 police officers per 100,000 in 1975. Between 1975 and 1991, the number of police officers grew at about the same pace as the Canadian population, maintaining an average of around 200 police officers per 100,000 citizens. The latest figures show that the number has dropped to 195. There are fewer police officers on the beat now than there were 35 years ago, and the population and challenges have changed enormously.

In conclusion, budget 2010 is an excellent opportunity to demonstrate the government's commitment to policing and community safety. Safe communities attract businesses, promote growth, and improve the overall quality of life of Canadians.

Also, 2,500 new police officers will improve the overall effectiveness of a tackling crime agenda. Therefore, the PAO urges the government to invest in community safety and provide provinces with the necessary long-term sustainable funding for an additional 2,500 police officers on the street.

We appreciate the opportunity to participate in this important process and we thank you for your support and interest in community safety.

We would be pleased to answer any questions.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll now go to the Ontario Federation of Labour.

Mr. Samuelson, you have five minutes for an opening statement.

[Wayne Samuelson, President, Ontario Federation of Labour]

Thank you very much.

Let me begin by, of course, thanking you for this opportunity. In the short time allocated to me, I am going to try to talk about three complex issues: jobs, employment insurance, and pensions.

As you all know, this province was the economic engine of our country at one point. We are going through an economic crisis like I've certainly never seen in my lifetime, and I suspect you haven't. Unlike the recessions we saw in 1982 and 1992, there aren't massive layoffs; there are massive plant closures. In effect, those jobs are gone. They haven't laid people off to have them come back in the near future.

If you've had the opportunity to travel in northern Ontario to Kenora, Marathon, Thunder Bay, and Dryden, as I often do, you'll find communities with 40% and 50% unemployment, where the mill in the town is gone. It has closed. In many cases, it was the single employer. In one town I was in, the actual scrap metal for the mill was worth more than the mill, and that's not to say what the impact is on those families. If you travel down the 401 corridor to Kitchener, London, and Windsor, you'll see unprecedented impacts on communities.

I went through the recessions in 1982 and 1992. I had to collect unemployment insurance. Many people today can't collect it. There's something wrong with that. I'm sure you talk to people who are suffering. I'm less sure about how you face them when you know that there's a surplus of more than $50 billion in that fund and they can't get coverage in a plan that they paid into.

This issue also connects into....

Do you think that's funny? Excuse me. Did I say something funny?

[The Chair, Conservative, James Rajotte]

[Inaudible--Editor]...Mr. Samuelson.

[Wayne Samuelson]

No, he was laughing. I thought he...I missed something.

As for pensions, I went to work in a tire factory when I was a teenager. My neighbours worked in a tire factory. Their parents worked in a tire factory. Today, if you go to that community of Kitchener, you'll find whole neighbourhoods where people have decent pensions because they belonged to a defined benefit pension plan. I don't know what it's going to look like in 20 or 30 years from now, because the plant I worked in is gone. It's in Mexico. Many of those plants in Kitchener that built tires and made automotive parts are closed now.

Sixty-two per cent of people don't have a workplace pension, and more and more people are going to be in that situation. I'm sure you're well aware of the proposals put forward by the Canadian Labour Congress and others around increases to the CPP and the OAS. I would ask you to seriously consider this. I'm going to be quite frank. We need to think about this today for the people who are going to be impacted tomorrow. Every day that we don't act, the more pain people will face down the road.

Finally, I don't have to tell you about the need for us to put a major focus on creating good jobs that pay decent wages. As the president of the Ontario Federation of Labour, I can tell you that I am shocked at how little focus there has been on this for the last two years. Sure, I've spoken to many groups of politicians over the years, and I've spoken to business leaders, but I am at a loss to figure out why somebody in government doesn't say that this is something we've never seen before.

Put some people in a room and try to deal with this crisis, because it is going to change our province. It's going to change our country. I think it deserves attention like we've never seen before.

I'm sorry, but I have a document for you that is not here yet. I know you'll all be holding your breath waiting to read it.