Finance Committee on Oct. 28th, 2009

[Bernard Lord]

According to my information, our members did not participate in that program. There were similar programs elsewhere, in other provinces, in which some members were involved. There were programs in New Brunswick, when I was premier, to help increase access to high-speed Internet service and make it available to more people. A lot of progress is being made throughout Canada, but now, what people are looking for, is not just access to high-speed Internet at home and work, but everywhere else, too. People want high-speed Internet wherever they are. That is why service providers are currently investing huge amounts in network upgrades.

As I was saying, Smartphones use a lot more band than conventional telephones. It takes more infrastructure to serve the same population. In addition, the projected growth is 30% over the next five years.

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

Basically, my understanding is that broadband networks are very scarce in less populated areas. Because people are on the move a lot, it would be a huge benefit. At any givern time, there could be a lot of people in a place where there may or may not be any houses.

[Bernard Lord]

Exactly. In more populated areas, things can be easier. Those are the first places to be served. No one is being misled; it's a fact. Between those places, where people travel, there's also a need. I would also add that even in heavily populated areas, because demand is increasing exponentially, there is a definite need for more investment. Implementing a mechanism like the one we are proposing would generate more investment and make every region of Canada more competitive than the ret of the world.

It doesn't require more money from the federal government. The most important thing to take into account is that mobile service providers in Canada use approximately 1% of the spectrum licensed by the Government of Canada, yet they pay about 60% of the licensing fees, or approximately $140 million. That makes us contributors, and we are going to remain contributors. All we want is to be able to invest faster.

[The Chair, Conservative, James Rajotte]

Okay, merci.

I just want to clarify, because Mr. Laforest asked a question of SDTC. Just for his information, but also for committee members and witnesses, we have heard from Genome Canada. We will be hearing from the granting councils next week. We do hear from the Canada Foundation for Innovation. So we do hear from foundations that were set up, I think, all under the last government, but it is normal practice before committee. So if we were not to have one, obviously, we would have to not hear from all of them. It is part of normal practice at pre-budget, and we can discuss it as committee members.

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

Mr. Chair, we have no problem with the fact that Genome Canada or a foundation created by the government is here. However, they say here that "The SDTC is a policy instrument of the Government[...]". That is not at all the same thing as Genome Canada, which is not a policy instrument of hte government. That's the definition we are being given. It's all spelled out.

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

I believe there's a translation error, Mr. Chair.

[The Chair, Conservative, James Rajotte]

I can't find the same statement in the English version, so it may be....

Ms. Hall Findlay.

[Martha Hall Findlay, Liberal, Willowdale, ON]

I think it's a translation issue, because in the English version it refers to it being a policy instrument, and I think our colleagues read that as being a political instrument, hence the confusion.

[The Chair, Conservative, James Rajotte]

Okay.

I understand now. I'm sorry there was so much confusion.

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

It's like they were saying that the group represented by Mr. Thaker.

is a political instrument for the government.

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

Everything is a political instrument.

[The Chair, Conservative, James Rajotte]

They are very non-political, I can assure you, because they were set up by the last government, as Mr. McKay pointed out. I just wanted to clarify that for the benefit of the committee and witnesses.

We will now go to Mr. Dechert, please.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Thank you, Mr. Chair.

Good afternoon, ladies and gentlemen. I appreciate your presence here today and your thoughts and comments on what the government should be doing in the next year.

I would like to start with the Canadian Urban Transit Association, Mr. Roschlau. It's good to see you again.

I understand you were making a presentation this morning before Mississauga city council. I look forward to hearing more about that. As you know, the government has been supporting transit in Mississauga and the GTA with the $83 million for the bus rapid transit project, which is under construction now. Earlier this year we opened the Mississauga bus maintenance facility, which the federal government provided $80 million for. There's $500 million for GO Transit in the GTA and southern Ontario area, including quite a bit in Mississauga—about $75 million, I believe. There's the TTC subway extension, Union Station revitalization, and money for VIA Rail Canada. I hope all that's helpful and you see that as part of where we need to go as a government to support urban transit in Canada.

I have a couple of questions for you.

First of all, on your suggestion for making employer-provided transit benefits tax exempt, I think that's actually a very interesting suggestion. I can tell you from the perspective of a member of Parliament who represents Mississauga, where a lot of people take transit to work every day, that the transit pass tax writeoff has been hugely popular. There has been significant take-up from people who are both employees and students and others who use transit every day to get around, go to school, go to their appointments, or whatever. So something along those lines, I think, is certainly worth looking into.

Can you tell us what you think the cost of providing that kind of employer tax benefit would be across the country and what percentage of employers you think would take advantage of it if it were offered?

[Michael Roschlau]

The only experience we have is from other countries, obviously, but again, one of the beauties of this measure is that its cost is directly proportional to the uptake. So if it doesn't work, if nobody is taking you up on it, it doesn't cost the government anything.

We've done some estimates in terms of what we think the uptake might be over a period of time, and it's obviously something that would ramp up and would grow as it became more popular. Those estimates suggest that in the early years you're probably looking at somewhere between $10 million and $50 million per year, and it could then grow up to maybe about $100 million per year with very heavy take-up. That's based on experience that we've seen in the U.S. and other countries that have similar measures in place.

What I really like about it is that it's targeted and that it really has shown elsewhere that it works at the margin. In other words, it generates new demand and it encourages people to switch from driving alone in their cars to using public transit.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

What was your view on the transit pass tax credit? Is that a helpful measure as well?

[Michael Roschlau]

It has been very good at rewarding people for their existing behaviour, and the transit users who are taking advantage of it are getting, in a sense, a de facto break on their fares after the fact when they claim their tax credit, which is great. But it's important to see it as that, because it hasn't been, in my view, very effective at generating new ridership.

So it's a question of where we want to invest--

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

It certainly rewards good behaviour, though, doesn't it?

[Michael Roschlau]

--and who you want to reward.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

It rewards the right kind of behaviour.

[Michael Roschlau]

Exactly.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Let me ask you another question. You've made the case for more sustainable funding for transit across Canada. You've mentioned the gas tax fund, the Building Canada Fund. A number of groups have come before us over the last several weeks and asked for a national transit strategy. Are we talking about more than just money and allowing each municipality across the country to make their own decisions, or are we talking about the Government of Canada coming up with some grand vision for how urban transit should take place across the country?

[Michael Roschlau]

Yes, we are talking about an integrated approach. The money is an important part of it and the fact that the money be dedicated is an important part of it. But there are lots of other pieces. There's an R and D piece that is really important. There's the whole linkage between investment and land use and urban development.

In the national transit strategy, for example, that the big city mayors brought out a couple of years ago, there was a pledge in there that basically said that with such a strategy, we should make the federal funding contingent upon the municipality's having in place a council-approved commitment to any increases in transportation demand within their community being on transit.

So that kind of obligates them to put the development, the density, and the growth along where the transit investment is being made. That's something we haven't done in the past.

There is also a piece in there about the tax benefits. So there are five elements to this that make it a broadly based integrated strategy as opposed to just funding.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Thank you very much.

I'd like to ask a question of Ms. MacKenzie of Volunteer Canada.

A number of charitable organizations, arts organizations, have asked us to support the suggestion that was originally made by Imagine Canada to increase the charitable tax credit for stretch donations from 29% to 39%. Do you support that?

[Ruth MacKenzie]

Yes, we do, and we spoke with Imagine Canada in developing that. We're part of the committee that put together that recommendation so we absolutely support it.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Good. Thank you very much.

I'd like to ask a question of Mr. Thaker of Sustainable Development Technology Canada.

You mentioned in your brief that you want to support young entrepreneurs. How would your suggestion be structured to support young entrepreneurs?