Finance Committee on Feb. 23rd, 2009

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

Thank you, Mr. Chair.

Just very quickly, I want to touch on work-sharing arrangements, and I'll direct my comment to Mr. Georgetti.

In the weeks leading up to the budget, I and other members of this committee met with many groups across the country. In my area, Mississauga, the number one request from employers was assistance for extension of the work-sharing program and changes to make it easier to set up these arrangements. I've been trying to promote, in my area, to every employer the information they need to know to save jobs before they lose them. I wonder if you could comment on how important it is to implement these work-sharing measures as soon as possible.

[The Chair, Conservative, James Rajotte]

Thank you.

Mr. Georgetti.

[Ken Georgetti]

We would agree with you completely, with one caveat. One of the risks of work-sharing is you diminish your qualifying hours for unemployment. What usually happens is people go into work-sharing, they lose their hours, and when the work-sharing ends, they become unemployed and don't have enough hours to qualify. That's part of the problem with the system. Given the option, most of our people will take work-sharing than see their friends laid off over the short term, but there is a risk with that.

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

And employers want to keep their skilled workers. It's very important, and this is a great opportunity we have to save the jobs before they get laid off in the first place.

[Ken Georgetti]

Right on.

[The Chair, Conservative, James Rajotte]

Thank you.

Mr. McKay, final round.

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

Thank you, Chair. Thank you, witnesses.

I'll first of all address Mr. Antunes. Stimulus is all the rage these days. It seems as though we're jamming everything you could possibly imagine into stimulus. At times, however, it seems a little like taking a bucket from the deep end of the pool and putting it into the shallow end of the pool. You have to wonder at the end of the day what you have, other than one enormous debt.

I'm particularly concerned about the flow of fiscal stimulus, because even if we rush the budget through, as the ministers want us to do, and it starts to move, and we do all the rest of the stuff, it will really, to be realistic, be this time next year before you actually see projects even getting going—and that's with the best of intentions all the way around. By that time, your projections are that the recession will be, if not over, close to over. So what would we have accomplished?

[Pedro Antunes]

That's a good point; thank you for it.

I think we have to be aware that we don't want to be injecting extra stimulus at the time when the economy starts to recover and strengthen. And we are among the more optimistic forecasters about seeing a V-shaped recovery rather than perhaps a U-shaped—and the latest one I heard was a “bathtub-shaped”—recovery, so I think this is a good point. The idea in this budget is that we are trying to get money out as quickly as possible and then sustain the level. We're not adding necessarily as we get into 2011 and 2012. In those years, the stimulus should be coming off.

The other aspect is that we're going to be able, I think, to sustain a level we talked about earlier of a little bit of confidence in the economy: people feeling that something is being done, that we're looking at fiscal stimulus that is longer term. We have seen, for example, the impact of the tax credits in the U.S., which dissipated very quickly because they were one-time payments that weren't sustained. I think they are now trying to avoid that in the package that is occurring south of the border.

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

I can agree with you on the merits of doing a lot of this stuff. Infoway is an excellent example of things that should be done. The people here have suggested a number of projects—things that should be done. I just wonder at the end of the day whether you are in effect preparing the ground for an ongoing structural deficit from which our country will not be able to extract itself.

[Pedro Antunes]

That's one of the points I mentioned earlier. This is a big budget with big spending measures. If we look at the issues, over the last number of years government revenues have been stronger than expected, year in and year out. That's because this little thing called the income multiplier has been stronger than expected over those years. In other words, usually you have about 1% or 1.2% increase in revenues when income increases by 1%. Over the last number of years it's been much stronger than that because of income shift, if you like, and because of a lot of revenues coming into this country.

As we look longer term, I think this is going to go back to where it should be, back to its normal level of 1% to 1.2%. If this move occurs, you'll see a deficit that's sustained over the next four or five years.

[The Chair, Conservative, James Rajotte]

You have one minute.

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

Thank you.

I'll shift to Mr. Knight.

First of all, you're unhappy with the split and unhappy with the fact that you can't build new stuff. If you had the opportunity to rewrite and were duking it out with the universities and other claimants for this $2 billion, how would you rewrite it? And say hello to Anne Buller when you're rewriting it.

[James Knight]

Given the demands of the economy, we view it as a bad economic decision. Half of the college applicants are university grads who didn't get jobs and who come to college to be trained up so that they can be employed. Why in a time of economic stress would you make such a massive investment in institutions that, in many provinces, are losing students? Why would you do that? We thought it was a bad choice.

But let me say this, and this is really important: colleges haven't been recognized in a budget for a decade, and we were really happy that we were there. This is a shift in perception and an acknowledgment that colleges do play an important role in the economy. There was a positive reaction in that respect. Is it perfect? No, but it's a start, and we'll be back again explaining why we are so important.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. McKay.

Thank you to all of the witnesses for your presentations here today and your responses to our questions.

Members, we will adjourn the meeting and see you back here at seven o'clock. Thank you.

We're adjourned.