Finance Committee on Oct. 29th, 2009

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now go to the Canadian Bar Association, please.

[Tamra Thomson, Director, Legislation and Law Reform, Canadian Bar Association]

Thank you, Mr. Chair and honourable members.

The Canadian Bar Association is pleased to appear before the committee today. We are here representing the charities and not-for-profit law section of the CBA, and since most of you are familiar with the Canadian Bar Association from our frequent appearances before this and other committees, I will just tell you a bit about the charities law section.

Its members comprise lawyers who advise charitable and not-for-profit organizations of all sizes from across the country, and they bring that perspective to their views on that area of law.

I will ask Elena Hoffstein to comment on the proposals that have been circulated to you.

[Elena Hoffstein, Executive Member, National Charities and Not-for-Profit Law Section, Canadian Bar Association]

Thank you very much for allowing me to address you today.

We are advocating abandoning the current approach to monitoring and supervising charities in favour of one that strikes a more effective balance between public accountability, on the one side, and allowing donors and charities the freedom and flexibility to effectively advance their charitable purposes, on the other.

A concept paper was created by the working group of the Canadian Bar Association, which I had the honour of chairing. It was submitted to the chair of this committee and to Finance Canada. It provides more detailed information about the presentation I am making.

We are asking for the replacement of the disbursement quota regime that charities currently have to work with, in favour of a more simplified approach that gives the flexibility both the charities and their advisors are looking for. The disbursement quota contains two major elements, one of which is that charities are required to expend 80% of donations for which they have given receipts in a prior year. There are some exceptions, the major one being that donors can make gifts requiring the charity to hold the capital for up to ten years without spending it. There is also a second component that requires charities to expend 3.5% of the value of assets that are not used in charitable activities.

The objectives of this disbursement quota are to ensure that charities use the bulk of their funds for charitable purposes, limit administrative and fundraising expenses, and prevent charities from having excessive accumulations of funds.

Both the charities sector and the Canadian Bar Association charity section support the need for supervision and accountability of charities. This isn't about fighting that; it is intended to demonstrate that the current rules do not achieve the desired results. We would like to urge an immediate change to those rules, because charities have been struggling with them for many years.

The current rules are too rigid, complicated, and arbitrary. They do not recognize the programming needs of charities. Most charities want to expend money, and they are being hampered from doing it in a way that cannot be good for anybody. Programming needs of charities are not being met, especially in these difficult economic times. Charities are suffering from this economy just like all businesses. What they are being forced to do because of this disbursement quota requirement reaches them in many levels. They are precluded from investing their funds in a positive, strategic manner because they're being forced to invest in ways that allow them to meet programming needs while dealing with economic losses. Small and rural charities in particular are being very hard-hit by both the economic downturn and the disbursement quota rigidity.

The government has a new fundraising policy that provides certain controls on overspending on fundraising by charities. That deals with one of the cornerstones of the disbursement quota. Second, the disbursement quota should allow donors and charities a certain amount of flexibility, while encouraging charities to expend in an appropriate way having regard for their programming needs.

We are recommending that the disbursement quota be abandoned in favour of a simpler approach of a percentage of funds to be spent every year by charities, and that the government work with the charities sector to develop a regulatory scheme that is more flexible.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much, Ms. Hoffstein.

We'll now go to the Union of Canadian Transportation Employees.

[Christine Collins, National President, Union of Canadian Transportation Employees]

Thank you, Mr. Chair. We welcome the opportunity to be here today.

The Union of Canadian Transportation Employees, UCTE, is the national union for most government transportation employees. With its foundations in Transport Canada, we represent government transportation workers at Transport Canada, the Canadian Coast Guard, the Transportation Safety Board, the Canadian Transportation Agency, airport workers, Nav Canada and many others. We represent government workers who we believe are foundational to the important and critical role the federal government plays in ensuring the safety and security of Canadians. UCTE members are proud of these roles and legitimately feel that it is in the public interest for government to support and nurture these critical federal jobs.

We are here today to address budgetary issues related to two issues: aviation safety and aviation inspectors, and the Canadian Coast Guard capital budgets and the Canadian Coast Guard workers.

On aviation safety and aviation inspectors, for over four years now, Transport Canada has been implementing a nationwide safety management system, known as SMS, for aviation safety. The foundation of SMS is reasonably solid insofar as it is designed to expect more safety responsibility from aviation company management and workers. If implemented properly, SMS should produce safer skies. Unfortunately, the Transport Canada SMS has become a poorly understood methodology for reducing inspector jobs and safety budgets.

Today, in a total aviation inspector complement of approximately 871 positions, there are 130 vacancies. Today, when program review wants budget cuts from Transport Canada, they're offering up aviation safety. According to the estimates, Transport Canada plans to reduce safety and security budgets by 12.5% this fiscal year and by 6.3% next fiscal year. SMS has become a code word for inspector shortages and drastically reduced safety budgets.

Budget and staffing problems are compounded by serious pay inequities between bargaining groups and by union–management confusion about the path forward for collective bargaining. Pilot inspectors, known as AOs, and non-pilot inspectors, which are TIs, do the same job, and yet there can be a 25% pay differential between the AOs and TIs in favour of the AOs. This situation is seriously compounded when transport management chooses a TI to be a team leader supervising the AOs, who make considerably more money.

We recommend a bargaining subgroup for aviation technical inspectors, immediate staffing of the vacant inspectorate positions, and an increase to the safety and security budgets by 10%. There should be no new costs associated with filling the inspector positions. These positions are already funded. A bargaining subgroup would only produce new costs if the bargaining table produced new costs.

The 10% increase in safety budgets would require additional funding of approximately $60 million annually. In recent days, senior managers at transport have communicated the need to reform Transport Canada's SMS and to realign funding priorities to ensure safety of the travelling public. It's early days, but we are hopeful that transport is choosing a new path forward. There's a long way to go, and much communication needs to take place between the management and union leadership.

Support from Canada's parliamentarians is critical if Transport Canada is going to refocus its efforts in line with the safety mission and priorities. We encourage you today to openly and publicly express support for the recommendations we are proposing.

On the coast guard, we're pleased that the government is working with the shipbuilding industry to create long-term, sustainable capital investment for naval and coast guard vessels. Under the Canada First defence strategy, the navy has achieved a long-term 30-year capital commitment. Unfortunately, this is not the case for the coast guard. Only five of the 29 vessels are funded.

With Arctic sovereignty a priority, and with an increasing security and safety role for the coast guard and its workers, a modernized and capable fleet is essential. To ensure a modernized and capable coast guard, we're asking for a long-term capital commitment for the Canadian Coast Guard. A long-term commitment is not a one-time balloon payment that could put debt and deficit reduction plans at risk.

Long-term capital investment is simply making the commitment now instead of making the commitment later and possibly when it's too late, when our increasingly aging fleet is beyond its useful life.

Capital budgets of the coast guard are already projected to rise over $5 million in 2011-12. By making a $500-million annual capital commitment now until the fleet requirements are met, the coast guard and shipbuilding industry will be able to plan, invest, and prepare for the next generation of mariners and other skilled workers.

We look forward to your questions and your support for our recommendations.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much, Ms. Collins.

We will now go to the Canadian Cancer Society.

[Daniel Demers, Director, National Public Issues Office, Canadian Cancer Society]

Good morning. Thank you very much for allowing us to come and make our recommendations to this committee.

At the Canadian Cancer Society our mission is to fight cancer and improve the quality of life for people living with cancer. We are the largest charity in Canada, with over 170,000 volunteers. We are also the largest funder of basic health research outside the government.

As you know, cancer impacts the lives of virtually every person in this country, and next year will become the single greatest cause of premature death in Canada. Fully 40% to 45% of all Canadians, and I would say including everyone in this room, will develop some form of cancer in their life. That is half of all Canadians.

So why are we here? Why are we at a finance committee? What concerns us today, and it's at the foundation of our recommendations, is the financial reality facing cancer patients today and the long-term sustainability of our health care system.

This past summer we celebrated the 25th anniversary of the Canada Health Act, and at the heart of our system is the ideal of universal access and the promise, as Tommy Douglas said, that people should be able to get whatever health services they require, irrespective of their individual capacity to pay.

Last year Canada spent $172 billion on health care, and for the last three years health care expenditures have been rising steadily, at an average of over 6.3% per year. At this rate, in eight years the cost of our health care system will be double what it is today.

But increasing costs are only part of the pressure on our health care system. As you know, we have an aging society. People are living longer because of steady improvements in drugs and treatments, and in many ways in fact we're winning the fight against cancer.

The five-year cancer survival rate is now 62%. In the 1960s it was only 30%. As a result, we are now seeing more people with more needs than ever before needing the health care system, and this will continue to put increased pressure on that health care system.

How can this committee help address the realities facing cancer patients and the sustainability of the health care system? We are here to make three recommendations that we believe will provide immediate and long-term support to patients and some financial relief to governments, as well as helping to prevent cancer.

First of all, establish a national catastrophic drug insurance program. Cancer patients are spending less time in hospitals. Almost three-quarters of new cancer drugs are taken at home, and often these drugs are not paid for by the public system. Therefore, cancer patients and their families must bear these costs. This means that some cancer patients may not be able to take the drugs prescribed by their oncologists, and even those Canadians who do have insurance, co-payments and lifetime caps on coverage create huge financial stress. Cancer patients should not be worried about how they will pay for their drugs.

Furthermore, a cancer patient in British Columbia should not have better health care than their sister in New Brunswick. This is not universal health care.

Secondly, enhance the compassionate care benefit under the employment insurance program. As I said earlier, the number of cancer patients is on the rise, and many of these people are receiving treatment at home. This leaves an enormous responsibility on family members to provide care and medical support for loved ones.

The economic input the family caregivers contribute to our health care system is estimated to be $26 billion a year. These caregivers are not paid medical staff. They have families to look after, they have jobs to maintain, and 77% of all caregivers are women.

As our society ages, we'll have more people taking time off work to help a loved one fight cancer or other illnesses. In fact, studies show that three-quarters of us will be a caregiver for a loved one at some time in our lifetime. We need to provide financial support to these family members.

Our last recommendation is focused on saving future costs to the health care system. As you know, tobacco is the leading preventable cause of death and disease in Canada, and therefore we recommend that the government strengthen its strategy against tobacco contraband. We know that cheap, illegal cigarettes encourage teens to smoke and discourage adults from quitting, and if we don't act now, illegal cigarettes may well undo many of the gains we've made in tobacco control.

This is not just an issue of public health, this is also an issue of public revenue. The federal government is losing more than $1 billion a year in forgone taxes. Provinces are losing even more.

I know we all share concerns about the sustainability of our health care system. I also know we all want to make sure that cancer patients receive the treatments they need, regardless of how much money they have or where they live. The question is, will the government take the steps now to ensure that our health care system is there for its next 25th anniversary?

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now go to Enbridge Incorporated.

[David Teichroeb, Manager, Alternative and Emerging Technologies, Fuel Cells, Enbridge Inc.]

Thank you for the opportunity to present a proposal we believe will drive clean tech investment in Canada.

If nothing else, I'd like to leave you with an example of how Canadian innovation can take root in our domestic markets, deliver environmental benefits, and create jobs to serve local energy needs and create export opportunities.

Enbridge is Canada's largest liquid pipelines distributor and largest natural gas distributor, but we're also an investor in renewable energy, such as wind, solar, and low-carbon technologies like fuel cells.

Today I'd like to highlight a global first. We call it our hybrid fuel cell technology. It's a Toronto pilot project that makes ultra-clean electricity in the cities without burning fuel or creating harmful air pollutants.

While I'll explain the technology shortly, our point is that to take this innovation to the next level, like more mainstream wind, we must remove barriers to investment. By removing barriers, first, we need to do an expanded focus on a wider portfolio of technologies if Canada is to reach its potential for sustainable energy. This portfolio would include both renewable and low-carbon sources of clean tech. For many years, Canada successfully stimulated investment in a select group of renewables like wind. We need to build on that success and stimulate investment in other low-carbon, clean tech if we're to meet our environmental commitments.

Second, we have a need—and one might say an obligation—to ensure Canada tracks investment to these next-generation low-carbon technologies. Unlike more established renewables, which in many cases are imported, we can establish a leadership position in the development and deployment of these emerging technologies. We learn by doing and using these technologies so that Canada can strengthen its ability to innovate, improve upon, and advance research and development for subsequent breakthroughs.

Enbridge believes both issues are addressed through our ask today: that is, that Canada establish an investment tax credit for eligible clean technologies. Fuel cells are only one such technology. We need look no further than the United States to understand the competitive investment climate for clean tech. The U.S. energy bill of November 2008 enshrined long-term commitments for solar photovoltaic and fuel cells with an investment tax credit of 30% or $3,000 a kilowatt, whichever is less. A Canadian investment tax credit would make us competitive with policies in the U.S. and in other jurisdictions like Germany, as well as the United Kingdom. It would create an attractive investment environment for these technologies.

I'll talk a little bit about our hybrid plant that combines fuel cells with a second low-carbon technology. The combined system captures waste pressure energy off our pipeline and turns it into electricity without incremental emissions. Simply put, natural gas is travelling a great distance across Canada. The first thing we do, as a utility, is we squeeze that gas through a valve to reduce its pressure. By using technologies like this, we can reduce that pressure but generate useful electricity that's sent to the grid like a wind turbine. In essence, gas goes in, gas goes out at a lower pressure, and electricity is available to the homes and businesses in that neighbourhood.

Fuel cells are like a continuous battery; they don't burn fuel, so they don't emit harmful air pollutants. Their very high efficiency means less carbon dioxide is generated per kilowatt of electricity. We built this plant on 22 parking spaces within 10 metres of a public sidewalk. It's quiet, clean, and has a low profile. If you have the package before you, you'll see I've provided a picture. This plant produces enough electricity for 1,700 homes. We could not have built one of our wind turbines in this type of urban environment.

Our ask of the federal government is to provide incentives to low-carbon, clean technologies to level the playing field alongside renewables. Since these technologies are relatively early in commercialization, it would be helpful to use policy tools that establish a competitive investment climate with the U.S. For fuel cells, that investment tax credit is 30% or $3,000 per kilowatt, whichever is less, but as industry demonstrates its commitment to invest in these technologies, a more predictable growth curve exists. At that time, government and industry can establish specific program support such as the ecoENERGY renewable power program. Until that time, we can learn by doing through a relatively simple amendment to the tax code.

Here is a final thought. This hybrid fuel cell is just one example of Canadian innovation attracting attention in the U.S., Europe, and Asia. Unlike other investments Enbridge has made in renewable technologies, which are generally imported, we've involved many Canadian partners in the development. These include companies like Satcon Power Systems in Burlington, Bristol Canada, a supplier in the greater Toronto area, and Schneider Canada in Mississauga.

Our partners and Enbridge have a vision: building a domestic market that strengthens Canada's potential for selling energy innovation abroad.

Thank you for your time. I hope this was informative.

[The Chair, Conservative, James Rajotte]

Thank you very much for that presentation.

We'll now go to the Aerospace Industries Association of Canada.

[Claude Lajeunesse, President and Chief Executive Officer, Aerospace Industries Association of Canada]

Thank you, Mr. Chair and honourable members.

Thank you in advance for your attention.

I know that you received our submission.

Our recommendations are clearly stated in our submission, and here today I will only provide you with key highlights and updates.

My message is very clear. The worldwide future for aerospace is very bright, and it is our collective duty--industry, universities, governments, and the whole community--to ensure we are part of that extraordinary future.

Let's remember that in 2008 Canadian aerospace directly employed 83,000 people in high-value-added, high-paid jobs in every region of the country. It is truly a national industry whose impact is important in all regions and all communities. In my view, this has been demonstrated by the creation this year of a non-partisan parliamentary committee chaired by a true Canadian hero, Marc Garneau, and co-chaired by members from all parties. This is again a confirmation of the importance of aerospace across our country. In 2008 we produced $23.6 billion worth of goods, 83% of which were exported.

Looking at the future, let's keep in mind the rapid expansion of the middle class in China, India, eastern Europe, and Latin America. The demand for travel and movement of goods across oceans will require, according to the best estimates, over the next 20 years the addition of 22,000 to 25,000 planes at a cost of over $3 trillion. That's $3,000 billion over the next 20 years. We in Canada need to be part of that exceptional opportunity to create high-value-added jobs.

I'd like to provide some updates to our brief.

Minister Clement announced a $200-million investment in SADI over the next four years. He announced this last August. We are very grateful for this Government of Canada support to aerospace, and we thank the minister and his colleagues, since they were able to move this decision along. And this was referred to in our brief. Of course, we will continue to seek further SADI partnerships to build on our successes.

The federal government has also announced a review of defence procurement policies. We welcome this initiative and have submitted a comprehensive document outlining the position of the industry. The objective of the review is to optimize the impact of aerospace military spending on the creation of long-term value-added jobs across the country. Note that this has little impact on government spending. It is simply a matter of spending smarter. In this regard, it should be noted that the revisions to the industrial and regional benefits policy--the first revisions in 23 years, since 1986--announced a month ago, again by Minister Clement, are very welcome and represent, again, ways to spend smarter rather than more. Once more we congratulate the minister for having tackled this issue.

In conclusion, aerospace is an industry of the future. Its impact is felt across the whole country. We need to work together to have Canada share in that future.

I invite my colleague Maryse Harvey to add a few remarks.

[Maryse Harvey, Vice-President, Public Affairs, Aerospace Industries Association of Canada]

I will quickly conclude in French by simply reiterating the remarks made by Mr. Lajeunesse.

Undoubtedly, the aerospace industry provides Canada with an opportunity to create more wealth. It is an industry that makes a clear contribution to the economy and the balance of payments. It is evident, however, that global competition is becoming increasingly fierce. Other nations obviously see the potential for growth of this industry and our market share is threatened.

We are here to ask you to not make the mistake of taking this industry for granted because it is an industry that promotes innovation and productivity and has a great deal to offer all of Canada.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We will now have the Canadian Electricity Association.

[Francis Bradley, Vice-President, Canadian Electricity Association]

Thank you, Chair.

Founded in 1891, the Canadian Electricity Association is the voice of the electricity business in Canada. It is comprised of public and private enterprises and represents the entire electricity value chain, from production to delivery to clients, from coast to coast.

Canada's electricity system is the envy of the world. It is over 75% non-emitting, thanks to hydro and nuclear generation. Only 24% of Canada's electricity is generated from fossil fuels like coal, oil, and gas.

Respecting the committee's request to focus on a single issue, my remarks today will focus on corporate tax policy, specifically on a suite of recommended changes to the federal tax system that can be applied to carbon capture and storage, or CCS.

Canadian consumers expect the electricity industry to continue to provide them with safe, reliable, sustainable, and competitively priced electricity that enhances their quality of life and responds to the shift away from carbon. Increasing demand, the transformation to a smart grid future, plug-in electric cars, and the electrification of mass transit in our urban centres will require the electricity system to grow and adapt.

These objectives pose a number of challenges given the industry's ageing infrastructure and escalating costs, not to mention the increasing rigour of regulatory requirements.

CCS technology has the potential to provide remedies to some of these challenges and Canada has an opportunity to be a world leader in this area. However, since CCS is not yet economically viable, it is essential to make changes to federal tax regulations to encourage the commercial development of projects using a variety of new CCS technologies.

CCS involves the removal of carbon dioxide from thermal generation. It requires a wide range of processes and equipment from pre- and post-combustion capture, oxy-fuel combustion, to pipelines that transport carbon dioxide from the capture plant facilities to the sequestration site. The requirements to implement CCS are great.

CEA recommends that budget 2010 make changes to the capital cost allowance rates of the Income Tax Act through the addition of two new provisions to schedule II of the regulations with respect to subparagraph (d) of class 43.1. The exact wording of our proposals can be found in our submission, and I encourage the committee members to reference the suggested changes as well as our recommended changes to investment tax credits. We recommend that ITCs be made available for CCS projects in a manner analogous to scientific research and experimental development projects, the SR&ED projects.

In addition to these necessary changes to the Income Tax Act, if Canada is to lead on CCS and clean energy, we must remain competitive. It's important to note the extent to which the U.S. already uses ITCs to promote CCS technology. Examples of U.S. action and incentives in this area include a credit of $20 U.S. per metric ton of carbon dioxide captured and disposed of in secure geological storage, and a credit of $10 per metric ton of carbon dioxide captured and used in enhanced oil or natural gas recovery and disposed of in secure geological storage.

In terms of investments in smart grid and clean energy initiatives, the United States, for example, spends millions on matching grants for smart grid technology as well as on loan guarantees for renewable energy systems. It also spends more than $3 billion on energy research, including CCS.

While the focus of our submission this year is on CCS, we do not wish to lose sight of what we feel are other critical tax issues. Principal among them is the need to address CCA rates for overall transmission and distribution assets, and CCA rates for smart grid initiatives, including smart meters.

The emerging focus on smart grid is revolutionizing the energy sector, and electricity is going to be at the centre of it all. The electricity system is the backbone of the Canadian economy, and its competitiveness and ability to attract capital should be supported.

Thank you. I look forward to your questions.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

Our final presentation will be Ms. Watts with REAL Women of Canada, please.

[Dianne Watts, Representative, REAL Women of Canada]

Thank you, Mr. Chairman.

REAL Women of Canada is a national organization of women from all walks of life and from differing economic, social, cultural, and religious backgrounds. We are united in our concern for the family, the basic unit of society.

Since our incorporation in 1983, REAL Women of Canada has promoted the equality, advancement, and well-being of women, recognizing them as interdependent members of society, whether they are in the family, workplace, or community.

We commend the government for eliminating some forms of discrimination against the family, which had not been addressed by previous governments--namely, pension splitting for retired Canadians and making the spousal tax deduction equal to that of the principal earner. Other welcome family taxation measures were the $2,000 tax credit for parents with children under 18 years of age, and raising the basic personal deduction in personal income tax. Details of our policy recommendations can be found on our website at realwomenca.com.

“Tax Fairness for Families” is the title of our brief. It is only fair that government policy should remain neutral on the issue of career choice for women, including the option of remaining at home as full-time homemakers. Public policy should treat women at home and women in the labour force equally. In order to achieve a balanced and equitable tax system, we believe that the following recommendations should be implemented: one, end tax discrimination against the single-income family; two, the universal child care benefit should be increased; three, end funding to special interest groups.

First, on ending tax discrimination against the single-income family, federal tax policy discriminates against the career choice made by women who choose the career of full-time homemaker. This injustice is evident in tax policies that discriminate against the single-income family, which pays higher personal income tax than the double-income family earning the same family income. The family that does not place its children in substitute care is already the victim of discrimination regarding the child care expense deduction, which is only available to two-income families.

Public policy should equally assist and not discriminate against parents if they choose to care for their own children in the home environment. The fairest way to correct inequality in family policy is to recognize the family unit rather than the individual for tax purposes. Inequities between single-income and dual-income families can be eliminated by allowing the single-income family to split the family income to file separate income tax returns or by allowing joint tax filing.

Secondly, the universal child care benefit should be increased.

Canadian families appreciate the popular universal child care benefit, which we believe sends an important message to all Canadian parents that the work they do and the sacrifices they make to provide Canada with a future generation is valued.

Difficult economic times call for our government to consider all segments of society in redistributing tax dollars. We believe this is an appropriate time to confirm Canada's support for family expansion and provide an increased universal child care benefit to all Canadian families without discrimination. The amount of this redistribution would be comparatively minor when considering transfers that are made for other causes. Moneys for redistribution could be taken from funds given to outdated special interest groups.

Our third recommendation is to end funding for special interest groups.

The federal government gives grants and contributions estimated at $26 billion annually to numerous special interest groups, including businesses, labour unions, sport and lobby groups, such as day care advocacy groups and radical feminist organizations.

Status of Women Canada handed out grants worth $15 million in the last fiscal year, an increase of 40% since 2005. In the last decade, $225 million in tax dollars has been provided to Status of Women Canada. Our organization has always opposed such funding because it discriminates against Canadian women who do not conform to the feminist world view. Their objective of equality and full participation of women in the economic, social, and democratic life of Canada is interpreted to exclude the contribution made by family-oriented women. Their assumption that Canadian women are not fully participating in society is not acceptable to all women.

Women are not all the same. We are individuals, extremely different in our needs and interests. No single government agency or ideology can represent the views of all Canadian women, just as no single agency or ideology can represent all Canadian men. Government funding for feminist women's groups only is unacceptable and unfair. The future of our country depends on the strength of its families.

The family, which is the foundation of a nation, should be central to the formation of all public policy. Government decisions, especially tax and social policy, must be fair and equally beneficial to all Canadians. Economic circumstances have changed since the 1960s. Rather than remain fossilized in the 1960s mindset, it is time to move on and give attention to time-honoured institutions such as the family.

Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

Thank you all for your presentations here this afternoon.

We'll start with Mr. McKay, please.

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

Thank you, Chair.

Thank you, witnesses. They were all good presentations, and I apologize in advance if I'm not able to ask questions to each and every one of you.

Let me start with the Canadian Electricity Association. You're asking for amended CCA rates, presumably that's accelerated capital cost, not decelerated capital cost. This committee had the good fortune of an interesting visit to Weyburn, Saskatchewan, to watch the process there of putting carbon into the ground and enhancing the life of the oil wells in Weyburn. It struck me, and I'm sure it struck other members of the committee, that this was very good for the environment and also very good for the company. They were doing very well, thank you very much. They're enhancing the quality of their wells and improving their life.

The obvious question is this. Why would you need an accelerated capital cost allowance when in fact that particular process appeared to be quite profitable?

[Francis Bradley]

In certain circumstances that may indeed be the case, but if we're looking at trying to develop something that will be large-scale, we are not yet at a point where the technology is commercially viable. If that were the case, we certainly wouldn't be looking for this kind of treatment.

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

So you're looking, in effect, to go to the more leading-edge use. This was, if you will, a unique set of factual circumstances--a readily available, pure supply of carbon, and a bunch of wells up here. Okay, so that's your point, then. It is for those companies, but presumably, if those companies in fact use it, so also would highly profitable companies.

[Francis Bradley]

Well, if we look at the example of some of the specific areas where this would apply, we're talking about regions of the country that rely heavily on thermal resources for their electricity generation. We are talking about investments already in existing plants that are running and have been running for quite some time. In a number of those regions we don't have alternatives to the thermal generation that is currently there. The technology to be able to convert electricity generation to something that does, on a large scale, capture carbon is not yet economic. We do not yet have demonstration projects that are doing it on that scale. We are attempting to do so, but we're not yet at that point.

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

Thank you.

This question is to the folks from Enbridge. You also have a carbon dioxide transportation and storage model here. Are you in a similar position to the folks from the electricity association, in that most of your programs don't have a readily available nexus between pure carbon and oil wells?

[David Teichroeb]

Certainly the presentation I spoke of was our fuel cells, but on the same alternative energy theme, the carbon capture and storage is something that is emerging. I would not put it as mainstream technology. There will be significant risks to overcome, and the early adopters of that technology are going to have to be encouraged to invest that capital in such a way that this technology evolves to become mainstream.

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

Where is your carbon storage facility?

[David Teichroeb]

Enbridge would look at two opportunities around carbon capture and storage. One opportunity would be the mainline transportation of purified carbon dioxide through pipelines to a storage area, and a lot of them are saline aquifers that would be in and around some of the basins in Alberta and Saskatchewan.