Finance Committee on Nov. 2nd, 2009

[Michael Conway]

Our organization has a capital markets committee that has supported transparency and worked with the Ontario Securities Commission on the executive compensation disclosure requirements. The public has the right to know. The recommendations we put forward for the recovery spending and the government spending to be transparent is the same standard we hold the corporate issuers to, and should be transparent as well.

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

Thank you, Mr. Conway.

Mr. Cooney, is it your view that the folks who created this financial debacle in the first place have actually learned their lessons?

[Patrick Cooney]

I can answer that in two ways.

First, on the people who created the debacle, it's kind of like you and I starting a fire and leaving the room and then showing up in half an hour in firemen suits and getting paid to put it out. Clearly, compensation and greed has caused the problem. We should eliminate stock options. The people who created the problem are extending the problem.

I alluded earlier to the article in the Financial Times, and Nouriel Roubini is in there again saying that what they're doing today is worse than what they were doing before the credit crunch. So they haven't learned their lesson. Clearly, Goldman hasn't, because the average American citizen is going through a tough time and they're taking out huge bonuses again.

The cause of the whole problem is the moral hazard that would have existed in the Roaring Twenties, and that's the greed in the compensation. I think the brokerage firms and the banks have forgotten about ratios to the normal Canadian citizen. We can't have 30-year-old guys trading bonds and making $30 million a year, because everybody around the table is paying a piece for that. So clearly, the compensation at the top has to be restricted.

Reducing or eliminating stock options would go a long way to causing the executives and leaders of these organizations to look longer term, and not quarterly enhancing profits and earnings so that their stock options become more valuable and they all enrich themselves at the expense of the average investor, citizen, and shareholder.

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

Thank you for that. I'd dearly love to pursue that line of questioning, but I have a couple of others as well.

Monsieur Duguay, in your recommendation you say, “Reduce the corporate tax burden, even if this means increasing the consumption tax”. Are you advocating an increase in the goods and services tax?

[Stéphane Duguay]

Our message is that you must not sacrifice business competitiveness and innovation in order to return to a balanced budget. If there has to be a revenue increase, you should favour consumption taxes rather than corporate taxes, which could undermine competitiveness, productivity and, ultimately, wealth creation and greater long-term economic stability.

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

Thank you.

Finally, to the physicians, I was struck by the fact that it's four years for an undergraduate, four years for a medical degree, and then effectively five years of exploitation in residence, where you're run off your feet.

You and your successors will continue to appear before this committee and its successor committees until the physicians, in particular, and the medical system fixes itself.

[The Chair, Conservative, James Rajotte]

Is there a question?

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

Thirteen years of education is some level of absurdity. You could educate a rocket scientist in a lot less time than it takes for a physician. How are you going to address this issue?

[The Chair, Conservative, James Rajotte]

Just a very brief response, please, Mr. Johnston.

[Tyler Johnston]

I think we have to look at a couple of things. One is getting people into medical school earlier, and the other is looking at competencies, as opposed to time limit--look at training in terms of what you're able to do, rather than at the time limit we've set for you to be in school before you meet a certain criterion or standard for certification.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. McKay.

Monsieur Laforest, s'il vous plaît.

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

Thank you, Mr. Chairman.

Good afternoon to all the witnesses.

Ms. Leblanc, in your second recommendation, you say the federal government should pay urgent attention to Canada's museums and galleries. You refer, in particular, to the dissemination of artwork in the regions. In my riding, in Shawinigan, there is a place for the dissemination of touring exhibits, and I know that, despite great initial success, they are having a great deal of difficulty securing recurring funding. It's consistent with what you say.

You say that funding is available only for one year and that it is often deferred as a result of the administrative structure. What are the problems related to the administrative structure?

[Lise Leblanc]

I'm going to ask my expert on that question, Mr. Labossière, to answer you.

[Robert Labossière, Member and Director of Canadian Art Museum Directors' Organization, Visual Arts Alliance]

I'm sorry, I'm going to respond in English.

My understanding of the museum assistance program is that it's a one-year program. It has suffered reductions, so it really hasn't even kept up with inflation. The problem is also complicated by the fact that there are more applicants now. We have approximately 2,500 museums in Canada, a remarkable infrastructure, which is in a way being starved. My members basically report that it's almost a random process now because of the number of applicants there are and the limited amount of money available for things like touring exhibitions. Those aren't the only kinds of projects that are eligible for funding, but they cannot any longer rely on developing a very strong exhibition, even having interests across the country in taking that exhibition, and then getting the project funding that they need.

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

Thank you, Mr. Labossière.

Mr. Duguay, in your recommendations, you talk about developing a tax credit for businesses' sales and marketing expenses outside Canada. I've also heard business representatives complain about appearing in other countries when they attended a fair in the United States or Europe.

There are some fairly large pleasure boat producers in my riding. When they attend fairs in Europe—that's where the U.S. buyers often are—they get no federal government assistance. They've looked through various programs and there's absolutely nothing to help them, unlike what other countries like the United States, France or Germany offer. These producers even sell in Russia, but they have no assistance to go and sell even more. They could do it if they had more help because they could take part in more marketing activities outside the country.

Is that the gist of your recommendation?

[Stéphane Duguay]

Absolutely. The purpose of that recommendation is to further diversify the markets. One of the lessons of the recession is that, when you have a single partner whose economy is not doing that well, you're harder hit. This is one of the measures we favour to encourage greater market diversification, to go international and to ensure that our economy is ultimately more diversified and in a better position to respond to economic shocks, as we have recently experienced.

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

At least I can speak out in favour of this kind of measure. You can be sure that I will support it because I'm in a position to observe that this business could produce a lot more, employ a lot more people and stop laying them off, if it were supported in its foreign marketing efforts. For a business like that, the market is located more outside Quebec and Canada than strictly in Quebec. And I'm convinced that's the case of a number of other businesses.

[Stéphane Duguay]

Absolutely.

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

I have a question for the representative of the Assembly of First Nations. I'm naming you this way because it's harder to say your name. I'm nevertheless going to try: Shawn A-in-chut Atleo.

You talked about the 2% ceiling on essential services. Can you tell us what that limit is with regard to essential services and how long it has been in place? Every year, there is a maximum 2% limit on budgets allocated to the first nations for certain services. Is that correct?

[Chief Shawn A-in-chut Atleo]

Yes, that cap was implemented externally and arbitrarily back in 1996, and that's a cap on spending increases on all core services. As I mentioned, that 2% figure has been either equal to or below the average inflation rate, but at the same time, our community has been the fastest-growing population among the Canadian demographic. Since 1996 our population has grown 21%. It's just an incredibly booming population. So when adjusted for inflation and population increases, the total budget for INAC is shown to have decreased by 7.4% since 1995-96.

Now, when I share these figures, I connected to the commitment in Canada's economic action plan, where there was $200 million over two years to build 20 schools, but I also said that we need over 60 schools. I finished with that notion of striking a joint senior officials task force, because we have to move away from this external and arbitrary manner of determining funding levels, and also to bring in not only the sustainable funding notion, but the shared and mutual accountability aspect as well.

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

When we talk about essential services for aboriginal people, these are really health and education services that, unlike in the provinces, have devolved upon each of the first nations in the aboriginal communities.

Is that in fact what we're talking about?

[Chief Shawn A-in-chut Atleo]

Absolutely, and it's across the full, complete, broad policy spectrum that this 2% cap applies. I'm focused in on one area—education—which has a lot to do with potential for economic development. Economic development, because of the 2% cap, is completely stifled right now.

If I can just add one other piece, if we were to close that gap, the contribution to the Canadian economy up to 2026, so just over 15 years, would be $160 billion contribution of first nations' participation in the mainstream economy, if we were able to eliminate that gap. So it's significant that we consider this as an investment and a stimulus to the national economy.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Mr. Wallace, please.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair.

I'm going to share my time with Ms. Block, so at three minutes and 30 seconds left, yell at me, would you? I'd appreciate that.

I have just a few questions. I can't get to everybody, of course.

My first question is for the Canadian Construction Association. I appreciate your presentation, and I would be surprised if the accelerated issue isn't looked at during this piece in terms of what this committee comes up with.

We've heard from a number of organizations that are in similar business as you, who are looking for funding for the National Round Table on Sustainable Infrastructure. Are you aware of that, and does your organization have a position on that?

[Bill Ferreira]

Thank you for the question.

We were with a number of other national organizations in the infrastructure round table, but that exercise at this point is a little bit dormant, in part because there are a number of other projects that are ongoing with the department of Infrastructure Canada, which is looking at this whole question. So to my knowledge at this point, there is no real mandate for the round table.