Finance Committee on Feb. 23rd, 2009

[David Bradley, Chief Executive Officer, Canadian Trucking Alliance]

Thank you very much, Mr. Chairman and members of the committee.

My name is David Bradley, and I'm CEO of the Canadian Trucking Alliance.

Trucking is the preferred mode of freight transportation in Canada. We haul about 90% of all consumer products and foodstuffs, as well as two-thirds by value of Canada's trade with the United States. In normal times the industry employs over 400,000 Canadians, who in turn hail from virtually every community in the country. Of all the transportation modes, trucking is the major contributor to GDP. Trucking isn't necessarily the cheapest way of moving freight, but it's the service that truckers provide--the door-to-door small shipments of time-sensitive freight--that sets the industry apart from its competition. It's been said that the just-in-time inventory system and time-definite logistics systems that are so much a part of our competitive situation today have been built around trucks.

CTA is a federation of the provincial trucking associations in Canada, representing over 4,500 trucking companies from all provinces, of all sizes, serving every industrial sector in the country. Our members are involved in all facets of the business, from short pickup and delivery, local pickups and deliveries, to long-distance, cross-border movements. The intermodal freight system relies upon trucks to start or complete every shipment. Therefore, trucking is perhaps the best leading indicator of economic activity there is. We're a drive-demand industry. As the economy goes, so goes trucking. My members feel every economic jolt. We are usually the first in and the first out of a slowdown, often by six months or more.

While perhaps no one could have foreseen the financial crisis that has rocked world markets in recent months, which has certainly exacerbated the economic situation in North America and beyond, the fact is that the trucking industry in many parts of the country, but starting particularly in central Canada, has been grappling with the freight recession for over 18 months now. The significant deterioration in freight volumes that our industry began experiencing a year and a half or more ago was clearly a harbinger of what was to come for the overall economy, a point we attempted to make in the pre-budget consultations in each of the previous two federal budgets.

Moreover, I can tell you there is virtually no indication that a recovery in freight volumes and therefore in overall economic activity is on the near-term horizon. This fact is reflected in reduced employment numbers in our industry. Last month alone, almost a fifth of the national decline in employment in Canada was attributed to reduced employment--almost 30,000 jobs--in trucking, especially in Ontario. In addition, the industry has witnessed a record number of bankruptcies in both 2007 and 2008 and a significant reduction in the number of trucks crossing the busiest Canada-U.S. border entry ports over each of the last two years. It's now reached the point where volumes are less than they were in the year of 9/11. It is no surprise to the trucking industry that Canada now finds itself in a trade-deficit situation.

The moderation in the price of diesel fuel and the depreciation in the value of the Canada dollar in recent months have come too late in the current business cycle to be of much benefit. Of course the fact is that our biggest customer--the United States--simply isn't buying. So it will come as no surprise that during the consultations on the 2009 budget, we felt that a package of initiatives aimed at stimulating economic activity in the short term was warranted, but we also believed that those measures should be in the long-term competitive interest of the Canadian economy. For example, we welcomed the announcement, on the part of the federal government in concert with the provinces, about accelerating the investment in infrastructure such as highways and bridges.

We believe, however, that infrastructure dollars should be invested strategically. When it comes to highways and bridges, it's important to us that most of the funding go to projects that are part of the country's key economic corridors. We were pleased that a number of the projects recommended by CTA and the provincial trucking associations were specifically mentioned in the budget. In addition to a strategic infrastructure program, we believe there also needs to be a meaningful program of measures introduced to get consumers, both the public and businesses, purchasing and investing again. We acknowledge that the budget contains some modest measures for business, such as the increase in the annual amount of active business income eligible for the reduced small-business federal corporate income tax rate and the 100% CCA writeoff for computers and software. We have also received early positive indications from our vehicle financing companies with regard to the creation of the $12 billion Canadian secured credit facility to support financing of vehicles and equipment for consumers and businesses.

You had to look deep into the notice of ways and means, but the budget also calls for a repeal of an arcane provision of the customs tariff, section 9801.10, which technically, at least, required Canadian trucking companies to pay duty and taxes on U.S. trailers in cross-border moves.

Whether this is enough, in combination with these and other budget measures, to provide short-term stimulus remains to be seen. I can only say that we hope so.

We recognize that there are and will continue to be many demands on the federal government from many sectors seeking inclusion in a stimulus package. I can only speak for trucking. We don't expect government to solve all of our problems, but there is a role for the federal government to facilitate positive long-term change in industries like ours. As I stated previously, the trucking industry is the major contributor to GDP of all the freight transportation modes and as such has a major potential role to play in the economic turnaround. The industry's ability to invest in new equipment, trucks, trailers, and other equipment, not for expansion in these times but to replace older, worn-out equipment with safer and more environmentally friendly equipment, has been severely impaired over the last two years.

We were disappointed by the absence of some other measures that we had been proposing, which we believe are not only justifiable in these difficult times but also justifiable in terms of sound and appropriate tax policy in the country's long-term economic, safety, and environmental goals--

[The Chair, Conservative, James Rajotte]

Mr. Bradley, could I ask you to conclude, please?

[David Bradley]

I'm moving.

Specifically, we talked to you during the budget consultations about a program to accelerate the penetration of smog-free trucks and fuel efficiency devices that will tackle GHG. We didn't see anything. We wanted to see the implementation of the two-cent-per-litre reduction in the federal excise tax on diesel fuel. We didn't see that. Not only does that make sense--and perhaps it's not all that it's cracked up to be in terms of a stimulus package, but it is sound economic and tax policy. That tax should have been woven in with the GST 20 years ago.

Finally, we asked for an acceleration of the capital cost allowances for trucks and tractors, nothing different from what you provided to the railways in 2008 and to other sectors of the economy but that didn't come to our industry. Again, that is fundamental, long-term, sound tax policy.

In closing, no industry feels the pain or understands the economy and that these are challenging times better than trucking. We believe in an appropriate response to the immediate challenges but also to long-term, sound tax policy for our sector to rid us of some of the issues we've been dealing with and labouring with for years.

Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you.

Monsieur Patry.

[Pierre Patry, Treasurer, Confédération des syndicats nationaux]

Thank you very much, Mr. Chair.

I want to thank the Standing Committee on Finance for allowing the Confédération des syndicats nationaux, or the CSN, to express its opinion on Bill C-10. The CSN represents 300,000 members across Canada, the majority of whom are in Quebec, and in all sectors of activity.

During the current financial crisis and recession, the Conservative government finally resigned itself to tabling a budget that included an economic stimulus package. Although there is money in this stimulus package, the CSN feels that this budget remains unacceptable and unfair for the unemployed, older workers, women, and Quebec. Furthermore, attacking the right of public service employees to negotiate their wages is completely unacceptable.

The budget proposes no new approaches to basic issues such as equalization and federal transfers for social programs, support for the failing economic sector, employment insurance, the tax burden, climate change, in addition to attacking fundamental rights.

The changes announced to the equalization formula last fall, and then confirmed in the budget, are major and unacceptable for Quebec, which will lose a billion dollars this year and up to $2 billion next year. As a result of this unilateral amendment of the equalization formula, Quebec is losing the only good thing that really came out of the partial resolution of the fiscal imbalance in Budget 2007.

Still in relation to equalization, Ontario benefits from an amendment to the equalization program that should also apply to Quebec. Hydro One dividends would be considered as a source of revenue under the corporate tax base rather than the natural resource base. The CSN feels that such provisions under equalization should also apply to Hydro Quebec's transportation and distribution activities.

Furthermore, federal transfers under health, post-secondary education and social assistance have increased less rapidly in Quebec than elsewhere, in recent years, because they are no longer based on needs and cost sharing, but rather on the number of residents per province. Let us not forget that the Government of Quebec is still awaiting the additional $800 million that would restore federal funding to 1994-95 levels, in real terms, in post-secondary education.

Finally, there are clear signs in this budget of the very real continued existence of the fiscal imbalance. First, there is the federal government's desire to move forward with the implementation of a pan-Canadian securities commission, with complete disregard for constitutional jurisdictions of Quebec in that area. There is also the initiative to directly grant loans to municipalities going over the heads of the provinces.

The CSN notes that the budget is inequitable in its treatment of the various regions of Canada, not only with regard to federal transfers, but also with regard to support for the various economic sectors, without ensuring equity between the regions. The only major budget initiative related to manufacturing concerns the auto industry, and therefore, the economy of Ontario.

Although 129,000 jobs were lost in Canada in January, it is extremely disappointing to note that the employment insurance program contains almost no substantial improvements, particularly with regard to eligibility.

Following numerous negative changes to the EI program with the 1990s reforms, we are now experiencing a major economic crisis for the first time with a plan that is ill-equipped for the situation. The CSN is still asking that the two-week waiting period be abolished, that significant improvements be made to the eligibility rules and that there be a 60% income replacement rate based on the 12 best weeks for the reference period.

Furthermore, the CSN has long demanded a financial support program to allow older workers who have lost their jobs to make ends meet in the time between when their EI benefits run out and their retirement benefits kick in.

Despite the recession reducing federal revenue, the government has decided to go forward with new tax cuts that could impose budget cuts to get out of the recession. If the tax credit to support the construction industry seeks to play a role in the economic stimulus plan, the general tax cuts for individuals is instead an ideology seeking to reduce the role and size of the state.

The CSN has calculated that the new cumulative tax cuts introduced by the Conservatives in fiscal 2009-2010, including those in the most recent budget, total $82 billion. For 2009-2010 alone, this economic strategy will deprive the government of $29 billion.

The CSN condemns the fact that this budget, like its predecessors, is making it even more unlikely that Canada will reach the Kyoto Protocol targets. The Canadian government continues to grant financial assistance to the oil and gas industry when even the OECD suggests abolishing them. The recent budget continues this trend: the government is offering hundreds of millions of dollars to develop a carbon capture project, yet another initiative that will benefit the oil companies.

Lastly, I would have a few words to say about the fundamental rights that are being undermined by bill C-10.

First of all, there is the issue of federal public servants' pay increases that have been capped at 1.5%. In the case of the CSN and its affiliate, the Union of Canadian Correctional Officers, an agreement was reached for a 2% increase for 2009-2010. We are witnessing a denial of the right to negotiate, as recognized by international conventions.

As for pay equity, we believe that the bill is an affront to women's fundamental rights and the recognition of the value of their work. The government is even redefining the notion of “job class”, allowing it to limit the concept to “female predominant job group”. The government is making this right negotiable, rather than requiring the implementation of true pay equity programs.

We are calling on the government to remove the pay equity provisions from bill C-10 in order to adopt truly proactive legislation at a later date.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Patry.

Mr. Chevrette, the floor is yours.

[Guy Chevrette, President and Chief Executive Officer, Quebec Forest Industry Council]

Thank you, Mr. Chair. To simplify things, I will take the two five-minute blocks, that is the one granted to my colleague Mr. Vincent and myself, for a total of 10 minutes.

The forest industry has been in a crisis since 2005. Some levels of government are only starting to understand that we are in a major crisis. That is surprising, given that some other groups took only six months to understand the situation.

At the outset, allow me to refute the argument of some politicians who say that there can be no support for the forest industry because of the softwood lumber agreement. I would ask you to refrain from making that case, because it is utterly false. It is intellectually dishonest to say that. Allow me to give you a piece of advice: I would suggest you read the arguments concerning the present dispute put forward by the American coalition. Their case plainly states that the matter does not revolve around a loan guarantee at a commercial rate. So please do not say it is impossible; it is extremely possible.

I am very happy for the 500,000 workers in the automobile sector, but extremely disappointed for the 825,000 workers in Canada's forest industry. In Quebec alone, there have been 42,000 job losses since April 2005. No one seems to want to provide us with assistance. Measures have been taken, but who will benefit from them if there is no loan guarantee program to allow for refinancing? This will be a good budget for those who have made it through dire straits, but it does not help businesses and the industry as a whole.

That is the crux of the problem. Some politicians are justifying their position and firmly maintaining that it is impossible within the framework of the softwood lumber agreement. I am asking them to show me the section of the NAFTA treaty or softwood lumber agreement that states otherwise, and they should reread the arguments of the American coalition. They will come to realize that they are out to lunch. What they are saying does not hold up and stand analysis. I would add that, under the circumstances, it is pernicious to make people believe that the industry cannot be helped because of an agreement that is in place. Let us put an end to that, it is simply not true.

We have written to all political leaders and have asked for loan guarantees. We thought that we would be treated fairly, but we were not. You may well have nice support programs in place, but they will only be for those still left standing. The crisis in the forest industry is not over; you and I both know that.

From 2,200,000 permits in the United States, we are now down to 466,000, as of last week. You can imagine how serious that is for our exports. It is obvious. I do not believe that there will be an economic turnaround before the end of 2009, or even the start of 2010. We need a refinancing program and a support program in order to be well positioned for the recovery. Some businesses have to carry out major repairs, but do not currently have access to credit. Others would like to profit from the crisis by innovating but cannot make any investment, for want of capital. Governments—including provincial governments—are putting money on the table, but we do not even have the additional money to invest in order to benefit from these advantages.

I am pleading with you. I ask you to think before stating that you are unable to help. If the situation is dramatic in the automobile sector, it is all the more so in ours. In Quebec, 150 small towns depend 100% on the forest, while another 100 are 80% dependent on it. Think about that. That is the situation in Quebec today.

I ask you to show a little sensitivity and not engage in partisan games. We need true support.

[The Chair, Conservative, James Rajotte]

Merci.

We'll go now to the Quebec Federation of University Students, please.

[David Paradis, President, Quebec Federation of University Students]

My name is David Paradis. I am the president of the Quebec Federation of University Students, the FEUQ. We represent 120,000 university students from across Quebec throughout the academic levels. We are also the only university student representative group recognized by the Quebec government.

I thank the committee for having invited us here today. However, I have to say that we are very concerned about the budget we were presented with on January 27. There is a serious lack of vision for post-secondary education. The budget is deplorable in three respects.

First, rather than dealing with the underfunding of post-secondary education, the budget interferes in areas of provincial jurisdiction. Second, it widens the funding gap between various university disciplines. Third, we deplore the budget because it reduces basic funding for granting agencies that support research.

In terms of funding—I heard some stakeholders speak to this—there is a consensus regarding the $3.5 billion shortfall in federal transfers for post-secondary education, that would be required to catch up to the 1994 level of funding. In our opinion, as is the case for all advocates for education in Quebec, restoring federal transfers to the 1994 level will provide the solution. It is quite simple, the provinces are responsible for expenditures and education, therefore it is simply an issue of common sense that the provinces should be given the means to exercise their jurisdiction in the field of education.

Rather than resolving the underfunding issue, the Harper government is infringing on the provinces' areas of jurisdiction. In fact, the budget provides for $2 billion over two years, managed by Industry Canada, and this is exclusively to speed up the repair and oversee the maintenance of university and college infrastructure, without any mention of the provinces. In short, this is $2 billion to repair the windows and mop the floors, but there is absolutely nothing with which to hire new professors. That is more or less what is in the budget. Let's say that this is a very narrow vision of universities because, we must not delude ourselves, improving infrastructure cannot be the solution to the problems that our colleges and universities are experiencing. We must hire professors, make studying accessible, and provide well-stocked libraries. These are critical elements in order for our universities to be quality establishments. And, let me remind you that our universities have an undeniable impact on the economy. It is therefore most unfortunate.

The provinces are in the best position to effectively respond to the reality of universities. It should therefore be their choice to decide in which way to use these resources, and not Industry Canada's, that much is clear. It is truly unfortunate.

Another deplorable aspect of this budget is that the government is temporarily topping up the Canada Graduate Scholarships Program by funnelling $87.5 million to it through the federal granting agencies. And yet, with the knowledge economy and competition from emerging countries, we simply cannot allow ourselves to take temporary or timid action. We will receive no gifts from the other countries of the world. We need long-term, strong and productive measures. This is not what we see. The government is indeed adding to the inequity between disciplines. The humanities are neglected. Not only are they neglected, the only sector being funded is the financial sector, which is somewhat problematic.

We see that the social sciences and humanities research council will receive $17.5 million in new bursaries, whereas the other two councils will each receive twice as much, that is to say $35 million. It makes us wonder whether the humanities, like economics, psychology, social work or public administration are of lesser interest. Is this to say that the disciplines of the social sciences and humanities that do not deal with business are without interest? This is, once again, a budget decision that reveals a very narrow vision and a disconnect, which we deplore.

Finally, we also lament the cutbacks to research granting agencies. We see that the budget provides for successive cutbacks of 17, 43 and $87 million over the next three years, without taking into account the suspension of funding for Genome Canada, which represents $100 million per year, 33 research projects and 2,000 jobs, and this at a time when the job market is shrinking.

Once again, in this global economic reality, with competition from emerging countries, and the realities of the knowledge economy, we will certainly not distinguish ourselves on the world scene by making massive reductions in research. Once again, this is most unfortunate.

As you have seen, we regret the lack of post-secondary education vision in this budget. We see some kind of very fuzzy idea of the knowledge economy in this budget, under which the government prefers to invest in concrete rather than in brains. We wonder if someone has mistaken one grey matter for another.

We thus encourage the members of Parliament to amend this bill to ensure that the reality of Quebec students is better taken into account, in accordance with the points we have just raised.

[The Chair, Conservative, James Rajotte]

Merci.

We'll go to the Canadian Federation of Students.

[Ian Boyko, Government Relations Coordinator, Canadian Federation of Students]

Thank you, Mr. Chair.

Thanks to the members of the committee for inviting the Canadian Federation of Students to appear today.

I will be addressing three facets of the budget: the infrastructure for universities and colleges; research funding; and the student loan crackdown.

The 2009 budget allocation of $1 billion in 2009 and $1 billion in 2010 for campus infrastructure is a significant commitment to our public institutions. But for reasons that have yet to be articulated, only a quarter of this funding will be distributed to colleges and technical institutes. This is a regrettable apportioning of this funding.

Beyond the college and university split, the government has decided that there should be at least two caveats to receiving this funding, both of which the Canadian Federation of Students opposes.

First, the infrastructure funding will be directed primarily to research facilities. This is unhelpful. Research facilities already have a significant amount of federal funds flowing to them, including from the Canada Foundation for Innovation. Many institutions, large and small, but perhaps especially the small, will not benefit from the infrastructure funding because their needs lie elsewhere: in classrooms, residences, and offices, to name a few.

The second caveat--that federal dollars for infrastructure be matched--is also unhelpful. Many institutions with urgent needs will likely have difficulty leveraging that funding from provincial governments or, worse, from a private sector already limping because of a recession.

We urge you to remove these two criteria from the campus infrastructure funding.

I'll move on now to address the research funding in January's budget. In our pre-budget submissions, we were vocal advocates for increased graduate scholarships for Canada. However, we were very disappointed to see the government's proposal to increase social and cultural research funding for only a very narrow range of disciplines, just as we were disappointed to see $150 million in cuts to the granting councils.

Having business-only scholarships is a short-sighted initiative that is totally divorced from the realities of graduate student enrollment in Canada, not to mention an unnecessary departure from the spirit of the program when it was introduced. Roughly 50% of student researchers in Canada work in the social sciences and humanities, a majority of which are women. Of these student researchers, roughly 7% are students in the graduate business programs eligible for the federal research grants, and the majority are men.

It is not the government's role to direct the granting agencies as to what research projects to fund. This is precisely why such bodies are independent from government. Each of the granting councils allocates funding based on a peer review of applications. As such, each proposal is judged according to its merits. There is no good reason to discontinue this practice.

In forcing the granting councils to fund only certain disciplines of its choosing, the government is intervening in an area in which it has no expertise. As with the strings attached to the CFI in the budget, the Minister of Industry is masquerading as an expert where he is not, and bureaucrats in Industry Canada are taking on responsibilities that they have no business taking on.

The government's interference is unwelcome and is contrary to proper science. We implore you to let the experts do their work and give research grants to those who deserve them, business students or otherwise.

I'll finish my remarks today by discussing the unanticipated student loan crackdown that crept into the budget's Bill C-10. It's not so much that we oppose measures that increase the integrity of the Canada student loans program or that we would counsel anyone to commit fraud on their applications; what is frustrating about the legislation, starting at about clause 358, is how the government is diagnosing problems.

If students and their families are actually desperate enough to tweak their student loan applications to go even deeper into debt than they technically should be, their real needs are not the problem. The problem is the government's underfunding of an unaffordable post-secondary education. The problem is a flawed application process that does not meet the need of average income earners.

The budget's unanticipated student loan changes could target those for whom Canada's student debt-based system has failed. We encourage the committee members to make sure that the budget legislation attacks the causes and not simply the symptoms of an underfunded public university and college sector.

In closing, the government has correctly identified several areas of need in post-secondary education and research. However, the level of interventionism associated with the spending is either misguided or simply detrimental to the budget's stated goals.

Thanks again for this opportunity to discuss the budget. I look forward to your questions.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go now to Ms. Morris, please.

[Claire Morris, President and Chief Executive Officer, Association of Universities and Colleges of Canada]

Thank you, Mr. Chairman.

Thank you for the opportunity to present AUCC's views regarding the budget implementation bill.

The acknowledged challenge for this 2009 federal budget was how to most effectively provide a stimulus to the Canadian economy during the most significant global economic downturn in decades.

Universities responded quickly to this downturn in an open letter to Canadians released last October that affirmed their commitment to maintaining and enhancing their role as key contributors to the country's economy and to supporting local industries and communities in their efforts to weather these challenging times.

Over the course of the following few months, AUCC, on behalf of Canadian universities, advocated to all parties in Parliament for a package of investments that would assist the country to attain both its short-term and longer-term objectives. Specifically, we proposed investments in university infrastructure in order to make an important contribution to job creation in many communities across Canada. We also asked that the federal government maintain it investment in university research to support Canada's longer-term knowledge and people advantages, which are essential to successfully emerge from this economic downturn.

We're here today to thank the government and parliamentarians for listening to our recommendations and to reiterate that we strongly support this budget's investments in universities. I'd like to briefly highlight the magnitude of the investment in post-secondary infrastructure contained in this budget.

As outlined in the budget documents, there will be $1 billion this year and $1 billion next year aimed at accelerating repairs, maintenance, and construction on university and college campuses. In addition, there's an immediate commitment in 2009-2010 of $150 million to existing Canada Foundation for Innovation competitions, as well as $600 million for future competitions. A further $87.5 million for a three-year expansion of Canada graduate scholarships and $3.5 million for internships in science and business were also announced.

AUCC has provided further advice on the implementation of the infrastructure investments, recommending that the $2 billion in post-secondary infrastructure funding build on existing provincial post-secondary infrastructure initiatives, be administratively efficient, and support infrastructure improvements across a broad range of research and teaching facilities. We anticipate that in the coming weeks, clear federal guidelines on the use of the funds and reporting requirements will be established.

We welcome these significant investments as part of a meaningful short-term stimulus package. We also recognize that they must be seen in the context of a multi-year strategy that supports the four foundational elements of the university research enterprise that work together to create the optimal environment for innovative research. Those four are the talent, the research funding, the infrastructure, and the institutional support.

We fully understand that not everything can be accomplished in one budget, and that the January budget investments represent only part of the multi-year plan the government has put forward in its science and technology strategy. We recognize that in the three budgets previous to this one, new investments in science and technology-related activities included increases in funding for the three federal granting councils to expand their core programming, building upon very substantive investments in R and D from previous governments.

However, we share the disappointment of our research community in the reductions of the granting council funds. We must keep pace with the international competition and the international context in which our research community operates. As part of their stimulus packages, countries around the world are now making significant investments in their research enterprises. In particular, the new U.S. administration has just approved an injection of billions over the next 18 months in its R and D enterprise, including large increases in the amounts of funding available to researchers.

Canada's investments through the multi-year S and T strategy will determine Canada's ability to compete on the world stage. Over the next few weeks and months our members will initiate the maintenance, repair, and construction projects that will be made possible by the significant investments in this budget, providing short-term stimulus to the Canadian economy and positioning universities to better contribute to Canada's future competitiveness. Moving forward, we're committed to working with the government to optimize these investments as a foundation for a vibrant university research enterprise that will continue to provide the highly skilled workers and innovation needed to create long-term social and economic prosperity.

Once again, Mr. Chairman, I thank you and the committee for your time and welcome any questions the committee members might have.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentations.

We'll now start with Mr. McCallum, for seven minutes, please.

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

Thank you, Mr. Chair, and thanks to all witnesses for being here today.

I would first like to make a general comment before asking more specific questions. Canada is in the midst of an economic crisis and that should be the priority of the government and of all political parties. Today, we learned that retail sales have plunged significantly. A few minutes ago, I received a message from someone whose employment insurance benefits will run out on April 4. This person wants to know whether the budget will be adopted so that he can take advantage of the 5-week extension of benefits.

I'm saying that although there is much in this budget that we think is bad, that we do not like, and that we think should be separated from the budget because it has nothing to do with the economy, nevertheless for us the economy is job one. The massive employment losses and a crisis we haven't seen in our lifetimes have to be addressed. The government should have acted many months ago, and it failed to do so. But now the government has billions that can go out the door, and we think our top priority is to make sure there is no further delay in that support to the economy, which will help many Canadians not lose their jobs.

That is our basic position, even if we do not agree with the government on many aspects of the budget.

I'd like to ask something principally to Claire Morris and perhaps to Mr. Ian Boyko.

One aspect of the budget that we don't like and that hasn't been discussed much recently is that it has no long-run vision for the Canadian economy in the 21st century.

Ms. Morris talked about infrastructure. Yes, the government is building bricks and mortar. At least they allege that they are. One of the things we will do is monitor them, because their record in getting money out the door on bricks and mortar has been deplorable. But we don't need just bricks and mortar. We need the brains that will drive the 21st-century economy. We saw in this budget very little or nothing for science. We saw Genome Canada cut off. We saw research grants cut. We've seen very little for education, which clearly has to be a priority if we're to build a smart economy going forward.

I'd like to ask Ms. Morris this. I know you like the infrastructure. Any university would like that. But where is the vision for an ideas-based knowledge economy, especially when you compare it with Barack Obama's vision? Barack Obama put billions into science and research. We've put in next to nothing or made cutbacks. Don't you think that might put Canada at a competitive disadvantage compared with the United States and other countries that seem to believe in science and technology in a way that this government does not?

[Claire Morris]

Thank you. In fact that is why we constantly refer to the four foundational elements of the research enterprise. Infrastructure is a very big piece of it. The talent is an absolutely huge piece of it--getting the right people there. The direct funding, the research funding available to those talented people to carry out their research is a piece of it. And then there is the institutional support that's required to support those researchers.

The focus of our AUCC pre-budget submission, as you well know, was clearly the university infrastructure. We recognized the $5.1 billion well-documented deficit in maintenance and repairs in the universities. We did that recognizing that this had to be an economic stimulus budget for all the reasons you outlined so well in your opening remarks.

We did, however, also include in that submission a plea that the government maintain its current investment in research, because in fact when we come out of the economic crisis, we want to be sure that we have the talent and the capacity to really make the economy strong going forward.

So we would argue that the balance isn't right yet, but we know that what was needed this year was the economic stimulus that will benefit communities across the country.

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

Thank you.

Mr. Boyko, I would have thought that a lot of people who are potential students might be losing jobs or finding it harder than usual to get jobs, or they might have less money than normal, so I'd like your view on some further support for students, even temporarily during the period of recession. I don't expect you to disagree with me on that, but I'd like to ask for your view.

[Ian Boyko]

To put a finer point on it, maybe, I think the comparison to the American stimulus package is very interesting in this context, because if Canada did it on the same scale, scaled down for our economy, and if the Canadian budget did what the American stimulus package proposes to do, it would result in doubling the budget for student grants in Canada. It would result in an increase of about $500 million to student grants. There was nothing pertaining to financial assistance in that budget, so that's certainly an unfortunate hole.

I agree. There are short-term strategies that involve stimulus and, then, as Claire said, there are things that will better prepare us when we're being propelled out of a recession. Access to high quality post-secondary education is one of those things.

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

I have one last quick question, if I may. I'm told I have 30 seconds.

Again, for Claire Morris, the record on getting money out for infrastructure has been lamentable in general. You talked about the $2 billion for university and college infrastructure and you say that in coming weeks they might get around to thinking about what the rules are. Should I be encouraged? This will certainly be part of our review process, but how confident should we be that this money will actually flow in the timeframe promised?

[Claire Morris]

Mr. Chair, I have to believe that everybody wants that money out the door so that employment can start as soon as the snow disappears. One of the pieces of advice that we've given to Industry Canada is that there's been an incredible amount of work done at the provincial level between the provinces and their post-secondary institutions. They have a list of priority projects that are ready to go, so finding a way to work effectively between Industry Canada and the provincial level will be part of the challenge.

But again, I think we all have to believe that the main objective is to get those jobs and projects moving this spring as soon as they can.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Morris.

We'll go to Monsieur Laforest.

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

Thank you, Mr. Chair.

Greetings to all witnesses, and thank you for being here.

I find it pathetic to hear my Liberal colleague Mr. McCallum talk about the scope of the crisis in order to justify the fact that the Liberals are voting for such a budget. They are supporting a Conservative budget that has no measure to solve the problem that you have raised. On the contrary, the Bloc Québécois feels that the lack of any such measure to solve these problems isn't enough to vote against such a budget.

Mr. Chevrette, I find your testimony even more pathetic. You spoke about the forestry industry in Quebec, which has been in dire straits since 2005. It's not a recent problem. You stated that under the softwood lumber agreement, there are no constraints on loan guarantees. Even the Quebec government offered loan guarantees through Investissement Québec, but the Conservative ministers Paradis and Lebel are telling us that if they did this, it would paralyze the entire forestry industry.

When Investissement Québec granted loan guarantees in Quebec, did this cause problems? Why isn't the Conservative government doing the same thing? Can you give us other reasons, aside from simply saying that it's not possible?

[Guy Chevrette]

Allow me to say at the outset that Quebec is the only place where the entire forest industry officially voted in favour of the softwood lumber agreement. There is even an action plan to protect this agreement, because we cannot afford to pay anti-dumping duties of 35% or 40%. In this context, when the Quebec government takes action, it consults the industry and says that it has U.S. and Canadian legal counsel and that it studies the entire issue before taking any action. We take this issue seriously, and I am meeting this very afternoon with Mr. Stockwell Day concerning the softwood lumber agreement, to ensure that it is respected.

I am a former politician and I have no intention of betraying my past. If I recall correctly, during the leaders' debate in Montreal in January 2006, Mr. Harper himself advocated loan guarantees for the forest industry because of the crisis that had been affecting this sector since 2005. Why is it that these guarantees were valid in 2006 but are no longer so today, whereas the crisis is only getting worse? I can't see any logic in this situation.

Look at NAFTA and tell us how loan guarantees at a commercial rate of return violate... Look at what is being done in the aeronautics and automotive industry. Look at the recent arguments of the U.S. coalition. The Americans are challenging certain elements of the agreement. They claim that it violates trade terms, because they know very well that a loan at a commercial rate of return is eligible under the agreement and under NAFTA. I think that that is just an excuse to simply fall back on the existence of a softwood lumber agreement.

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

In a newspaper article dated February 19, ministers Paradis and Lebel stated that the industry was satisfied with the amount of $170 million. Were you consulted on that initiative?

[Guy Chevrette]

They are confusing their associations. Mr. Lebel is referring to the FPCA, which has 14 members in Canada. It is a national association of paper manufacturers. My association has 300 members, and my mandate is to obtain loan guarantees. That is what I explained to Mr. Lebel on the phone. I do not understand why he persists in saying such things in letters when he knows that it is wrong. All they have to do is call the American lawyers who represent us before the U.S. coalition. I could even give them the names and phone numbers so they can check. It is a specious argument that they should not use because they are misleading the public.