Finance Committee on Oct. 18th, 2010

[Sheri Strydhorst]

The federal government is spending more than 40% of their annual budget in agriculture on bailout programs. If we can invest in research to prevent that type of stuff, the savings would be astronomical.

[The Chair, Conservative, James Rajotte]

Thank you.

Rx&D.

[Wendy Zatylny]

There are two areas where we can help.

On the health care side, every dollar spent on pharmaceuticals saves seven dollars in downstream medical care costs, so anything that helps us along the lines of the clinical trials assistance or faster approvals on the Health Canada side helps generate savings further on.

On the economic development side of our intellectual property recommendations particularly, right of appeal costs nothing, but it will help us to stimulate the kind of research investment that will help grow the economy at this level.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you all for your interesting presentations and responses to our questions. It was a very interesting discussion.

Colleagues, we will suspend for a couple of minutes and we'll bring the next panel forward.

Thank you. Merci.

[The Chair, Conservative, James Rajotte]

Thank you, colleagues.

Ladies and gentlemen, thank you for turning over so quickly. I would request that our audience respect the witnesses.

We again have seven organizations for this panel: the Canadian Vehicle Manufacturers' Association, the Council of Ontario Universities, the Canadian Solar Industries Association, the Canadian Foundation for Climate and Atmospheric Sciences, the Canadian Automobile Dealers Association, the Recreation Vehicle Dealers Association of Canada, and the Canadian Teachers' Federation.

Welcome to all of you. You will each have a maximum of five minutes for an opening statement, and I will hold you to that time.

We'll start with Mr. Nantais for his opening statement.

[Mark Nantais, President, Canadian Vehicle Manufacturers' Association]

Thank you very much, Mr. Chairman.

Good evening, and thank you for inviting me here to speak to the 2011 federal budget priorities on behalf of the Canadian Vehicle Manufacturers' Association.

Throughout their significant Canadian operations, the auto industry directly and indirectly employs about half a million Canadians in a wide range of activities, including manufacturing, sales, and research and development. They directly and indirectly remit billions of dollars annually to the government.

Over the past several years there have been very dramatic changes in the global industry brought about by the global recession and its huge impact on overall sales volumes for vehicles and the related drop in vehicle production, as well as significant impacts related to changes in government policies and regulations. Canada was not alone in experiencing the impact of these realities. However, these changes are bringing new opportunities, on which the industry is now focused, and the CVMA believes that the government should similarly focus its priorities on these in order to strengthen and encourage the growth of Canada's auto industry.

The manufacturing industry is global in nature, and governments around the world recognize the economic importance and spinoff benefits that a strong automotive manufacturing sector provides to both local and national economies. Despite the automotive restructuring, significant global overcapacity continues to exist, and manufacturing facilities that are not globally competitive continue to be at risk.

As a result of consumer demand and changing vehicle technologies, auto assembly plants require continuous, high-capital investment to remain globally competitive and attract new model mandates for production. In order to maintain auto manufacturing and attract the essential new investments to keep these plants globally competitive, the overall business environment must be conducive to large-scale investments, including competitive incentives, and efficient taxation and regulatory regimes.

In recent years, changes to the taxation system in Canada, in particular the elimination and lowering of capital and large corporation taxes, have been helpful in continuing to attract investment. However, the recent increase in employment insurance rates, while lower than originally proposed, will substantially increase auto manufacturing operational costs in Canada. Based on the most recent auto sector wage data publicly available, CVMA estimates that the rate increases will cost auto manufacturers roughly $28 million and their employees an additional $20 million in 2011 alone. These are additional business costs that are difficult to absorb in a highly global competitive environment and difficult economic times.

At the same time, the U.S. is introducing a series of actions aimed at securing domestic manufacturing jobs. These include a variety of policy focuses, including a $25 billion loan package being offered to automakers by the Department of Energy for investment in the design and production of fuel-efficient, advanced technology vehicles. These supports were the result of U.S. EPA estimating that meeting the very aggressive new vehicle GHG emission standards will cost auto manufacturers in excess of $115 billion.

In Canada there have been no investment supports established to date. Previously, the federal government established a $400 million fund that successfully helped attract over $10 billion in new automotive manufacturing investment between 2002 and 2007. To ensure that Canada secures a portion of this ongoing investment in manufacturing and research and development, Canada needs a competitive national fund to provide effective incentives to attract automotive investments. As such, the CVMA recommends that the 2011 budget introduce a globally competitive federal investment incentive program that will signal Canada's strategic intention to be globally competitive in attracting new manufacturing investment.

While manufacturers are researching and introducing new vehicle technologies to the market aimed at reducing GHG emissions and improving fuel efficiency, it is critical to support consumers' adoption of these technologies as well. The federal government introduced the counter-productive ecoAuto/green levy program in 2007. While the rebate portion of the equation has been eliminated, the green levy remains and penalizes primarily domestic manufacturers by adding up to $4,000 on a new vehicle purchase price. This actually discourages consumers from purchasing new vehicles equipped with more advanced safety and environmental technologies.

Instead of taxing new vehicle purchases and discouraging fleet turnover, the government should consider programs aimed at encouraging consumer adoption of these technologies. As an example, the U.S. is currently offering consumers a tax rebate of up to $7,500 on a wide range of advanced technologies. The CVMA recommends the introduction of similar consumer incentives for the purchase of these technologies.

That concludes my remarks. I'll certainly be pleased to answer any questions the committee members may have.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Nantais.

We'll go to Ms. Patterson, please.

[Bonnie Patterson, President and Chief Executive Officer, Council of Ontario Universities]

Good afternoon, Mr. Chair, and thank you for having me here today on behalf of the Council of Ontario Universities.

Issues with respect to post-secondary education are integral to the future prosperity of this country, and I do look forward to your questions and our discussion.

Innovation, productivity, and technological savvy are key predictors to success in the new economy, and these things cannot be achieved without a solid investment in education and research. Ontario’s universities are well positioned as educators and researchers to help ensure that Canada remains a leading player in the global economy. We look forward to continuing our work with the Government of Canada in achieving this goal.

Representing Ontario's 21 universities with over 400,000 full-time students and graduating over 98,000 per year, we advance higher education through advocacy, research, and policy development. Our institutions are unified by a shared commitment to student success, research excellence, and community engagement, along with the belief that education and research matter.

We're proud of our contributions to Canada's economic, cultural, and social well-being. Of all research carried out in Canada, 43% happens in Ontario. We are also major magnets for talent. Over the last 10 years international enrolment in Ontario’s universities has risen by 59%. This year alone, Ontario universities are home to over 28,000 full-time international students.

Universities are where the rubber hits the road for research and innovation policy. Through the development of critical thinking and skills, universities grow talent, many different kinds of it: engineers, lawyers, doctors, physiotherapists, entrepreneurs, marketers, administrators, scientists, journalists, teachers, financial and accounting professionals, and historians, to name a few.

Students leave our labs and classrooms equipped with the expertise and know-how that is required to support Canada's ongoing social and economic prosperity. People are Canada's greatest natural resource, and the preparation and development of the next generation of innovators, entrepreneurs, and educators is critical to Canada's future. In addition to our role as educators of Canada's future talent, we train and retrain individuals whose work environments demand new skills and capabilities. That's in addition to our high engagement in the advancement of research excellence.

This research takes many forms, some of it driven by a passion for invention or fundamental research that ultimately pushes the boundaries of our thinking, experience, and understanding beyond our world today. Other research is driven by a desire to enable innovation that results in more immediate development of new practices and products, often done as contract research for companies, both domestic and international. No matter where research falls along that continuum, the contribution it makes is fundamental to the social and economic outcomes of our country and to regional economies.

In front of you today is our formal written submission to the Standing Committee on Finance in which we outline a number of important investments in a number of areas. Given the short time we have here today, I'll not take you through our full brief, many parts of which reflect our support for the recommendations that will be put forward to this committee at a later date by colleagues at the Association of Universities and Colleges of Canada. Rather, I'll take a few moments to speak to you about two elements of our brief that are of particular interest to Ontario universities: high performance computing and an Ontario innovation fund.

High performance computing, or HPC, as it's often called, is a supercomputing system that provides researchers and their students with the processing, storage, networking, and visualization power required to undertake complex research and analysis that exceed the capacities of normal high-end computing. It's an essential piece of research infrastructure that's required for work in a wide variety of areas. An example is the Ontario Cancer Biomarker Network to virtually connect and share resources and knowledge among protein labs across the province in the quest to better understand and diagnose cancer. There are many other examples. Canada is home to seven university-based high-performance computing consortia. Three of these, SHARCNET, SciNet, and HPCVL are housed in Ontario. Ontario networks are not only linked nationally but also globally to the United States, Shanghai, Rwanda, Brazil, and South Korea. Ontario's HPC system is currently facing significant operational and capital funding pressures, and we encourage the federal government's attention to the need to continue to invest in these areas.

We'd also like to see an expansion of an Ontario innovation fund coming out of the current ARC program, the applied research and commercialization initiative.

Thank you very much, Mr. Chair. I look forward to your questions.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Patterson.

We'll now hear from the Canadian Solar Industries Association. Go ahead, Ms. McDonald, please.

[Elizabeth McDonald, President, Canadian Solar Industries Association]

Good afternoon. My name is Elizabeth McDonald, and I'm the president of the Canadian Solar Industries Association, or CanSIA, as we're more commonly known.

CanSIA is the national trade association for the Canadian solar energy industry. We represent almost 600 corporate members, a diverse range of businesses active across the full breadth of solar electric and solar thermal technology value and supply chains present in every province of this country.

Since 1992, CanSIA has worked to develop a strong and efficient Canadian solar energy industry with capacity to provide innovative solar energy solutions while playing a major role in the global transition to a sustainable clean energy future. In 2010 the Canadian solar energy industry labour force has grown to almost 4,000 full-time jobs and has had, for the first time, a market value of over $1 billion Canadian.

The benefits of a solar energy industry to the economy are well understood. Germany, for instance, has industry sales of over €19 billion, export sales of over €6.5 billion, and a labour force of over 80,000 in 2009.

With me today is Dr. Phil Whiting, president and CEO of EnerWorks in Dorchester, Ontario, Canada's largest manufacturer of solar thermal systems. Dr. Whiting is chair of CanSIA's solar thermal committee. We are very appreciative of the opportunity to meet with your committee today, and we do understand that you're facing some difficult challenges in these pre-budget consultations, as you must balance the realities of attempting to address the deficit this country now faces against the need to encourage economic development and innovation.

Before I go any further, let me address the question, why solar energy? Solar energy is a valuable part of Canada's clean energy portfolio. It is, after all, the renewable energy resource that is more abundant and ubiquitous than any other natural resource native to Canada. Solar energy has the potential to contribute to Canada's economic growth, rising energy demands, greenhouse gas emissions reduction targets, and balance of trade, and to maintain Canada's global leadership role as an energy superpower. Up against all that, Canada actually ranks near the bottom in per capita generation and utilization of solar energy among its industrial trading partners.

Basically, there are two types of solar technology: solar electric and solar thermal. Both convert sunlight into clean electrical and thermal energy. Solar electric technologies have a long history in Canada for use in off-grid locations, and now, more and more, on-grid; however, today we are going to focus on solar thermal technologies.

I now turn it over to Dr. Whiting.

[Dr. Phil Whiting, Representative, Canadian Solar Industries Association]

Thank you.

Solar thermal is the most cost-effective renewable energy available to Canada. It's a fact that we are not all that aware of as Canadians. As a result of the program called ecoENERGY for renewable heat, over the last four or five years the solar thermal industry in Canada has grown by over 50% a year to create hundreds and hundreds of jobs across Canada. At the end of Q1 of this year, the ecoENERGY program was cancelled, and that industry, including my company, has seen serious effects, including revenues reduced by well over 50% just in the six months since the demise of the ecoENERGY program.

This industry is a fledgling industry and needs support in the early days to grow and achieve its potential. We're asking for $10 million a year to grow an industry that has the potential to produce thousands and thousands of jobs for Canada.

Canada right now has its own domestic solar thermal technology and industry, and right now Canadian companies are satisfying more than 50% of Canada's needs in solar thermal, but without support that industry is going to decline and eventually disappear. This is a time when Canada needs investment in renewable energy, and right now we need investment in solar thermal at this critical time.

Over the next five to ten years there will be the growth of a massive solar thermal industry across North America. The question we have to ask is, do we want a Canadian industry? If we want Canadian manufacturers for now, we need support from the federal government.

Thank you.

[The Chair, Conservative, James Rajotte]

You have about 30 seconds, Ms. McDonald.

[Elizabeth McDonald]

So Canada's solar energy industry has great potential, but the solar thermal industry is now at a crossroads, and we need the federal government to partner with us. Federal leadership will support Canada and its provincial governments to achieve our sustainable economic development goals.

CanSIA's most urgent recommendation is that the ecoENERGY programs for solar thermal technologies be reinstated. Jobs have already been lost, and capacity and momentum are diminishing. Each cycle of boom and bust makes investors more apprehensive and signals that Canada is not open for the solar business, while the rest of North America is poised to be wide open.

On behalf of Phil, myself, our members all across Canada, and all of the Canadians who are benefiting from and support the use of solar energy, we respectfully request that the federal government continue to invest in our industry so that we can continue to grow and benefit the Canadian economy, its environment, and its communities.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now hear from Ms. Conway, from the Canadian Foundation for Climate and Atmospheric Sciences.

[Dawn Conway, Executive Director, Canadian Foundation for Climate and Atmospheric Sciences]

Mr. Chairman and honourable members, thank you very much for the opportunity to present on behalf of the Canadian Foundation for Climate and Atmospheric Sciences.

As you've already heard, science and technology are of course vital to Canada. They are the backbone of our innovation economy, the drivers of the kinds of innovation we need to propel our economy to the future and to drive competitiveness.

Furthermore, this is certainly recognized by the government. It has invested regularly in its budgets in science and technology, and we certainly congratulate the government for that.

But there is still a gap. There is a gap in the S and T strategy in the area of the environment, in particular, in research on weather and climate. We need investments to close that gap.

Until recently that gap was filled by the Canadian Foundation for Climate and Atmospheric Sciences, the main funding body for university-government-industry partnerships that deal with areas as important as air quality; extreme weather or violent weather; marine predictions, including sea surges and the like; weather predictions; and climate sciences.

We need this for a host of areas. This work provides the strategic policy-relevant work needed both by the public and private sectors.

I might just mention that there are about 460 scientists across Canada in universities who have benefited from foundation funding and 140 government scientists from about seven federal departments. They are participating because they need this science, they don't have the in-house capacity, or it provides additional critical mass, including sharing of infrastructure and access to the intellectual resources of technicians, scientists, and students. Of every dollar the foundation has provided—and to date that's been over $117 million over 10 years—50¢ has gone to training of young people. That's a considerable investment.

But we have been unable to fund any new work for the last four and a half years. That means there's been no work on emerging Canadian priorities or the work that the industries you're hearing about today need to advance their businesses.

The foundation's coffers are bare, and unless there's renewed support for the foundation, its support will stop next year. I might just add that there is no alternative funding body.

I would also mention that we're supporting work on Arctic conditions; on ozone conditions; on drought; and on the speed of melting of our glaciers and the implications for the hydro industry; regional modelling; and on a whole host of areas relevant to the Canadian economy, including water security, and so on.

So an investment is necessary to meet today's and tomorrow's needs; for our public safety; for our investment decisions and economic development; and to meet our need for skilled young people.

What we're recommending is renewed support for this work through an established body such as the foundation.

We haven't put a dollar figure on it in our brief. I think that can be dealt with at a later time, but we really want a commitment to continued support for weather and climate work.

Why is it necessary? I would challenge you to think of a single sector in the Canadian economy that does not require information on weather. Weather-dependent industries account for about $300 billion of the Canadian economy every year. It's also needed to support federal policies for northern development and for international agreements. And our weather is changing; we need to be able to better predict events and to adapt. Also, we need to further our people advantage, the training of our people.

Finally, I'll just conclude by saying that the foundation, through focused research, its intersectoral research involving different partners on specific areas of national priority, is meeting policy and operational needs and training people. This will help us today and in the future, and we recommend a renewal of support for this vital sector.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Conway.

We'll now hear from the Canadian Automobile Dealers Association.

Mr. Gauthier, please.

[Richard Gauthier, President and Chief Executive Officer, Canadian Automobile Dealers Association]

Mr. Chairman, good evening.

Mesdames et messieurs, bonjour.

My organization is the national organization for franchised automobile dealerships that sell new cars and trucks. Our 3,300 dealers represent a vital sector of Canada's economy. They directly employ 140,000 Canadians in well-paying jobs from coast to coast and in every riding in the country. When you think of our members in your riding, visualize the Ford dealership or the local Honda store. Our members represent all 21 manufacturing brands available in Canada.

CADA acknowledges the extraordinary efforts made by governments of all levels in recent years to enact measures designed to stimulate a recessionary economy in general and to support the automotive industry in particular. Though these were very difficult steps to take at the time, the results we are now beginning to see demonstrate that it was necessary and the right thing to do.

In the context of an economic recovery that is still far from certain, particularly given our strong ties to the U.S. market, which still suffers from stubbornly high unemployment and a housing market still in chaos, our recommendations will focus on the need to restore economic growth that is both sustainable and self-fulfilling. Accordingly, our association has three recommendations to make to your committee today.

First, we recommend that the government establish fairness in the access to the small business deduction for automobile dealers. Most automobile dealers are small businesses run by entrepreneurs and family members. An automobile dealer begins to lose access to this deduction once his accumulated taxable capital exceeds $10 million, and it is completely eliminated at the $15 million threshold. We believe this is unfair to capital-intensive retail industries like automobile dealerships. Other less capital-intensive businesses of similar size and profits enjoy far greater access to the small business deduction. The technical aspects of this recommendation are addressed in our submission.

Second, we would recommend that the already announced corporate tax reductions be fully implemented in coming years. The best way for the federal government to spur investment in job creation is to allow businesses to reinvest more of their profits to fund self-sustaining private sector growth. Our members, and indeed all businesses, require a large degree of stability and certainty regarding tax policy in future years. To plan for one set of previously announced tax reductions while conducting medium- and long-term business planning only to learn down the road that they may not be implemented is the very opposite of the certainty businesses need to create self-sustaining economic recovery. In addition to the corporate tax cuts that have already been planned, we recommend that the government substantially reduce the federal corporate rate of income tax for all privately owned businesses with revenues under $50 million. Allowing thousands of small businesses to reinvest more money would be the one single most economically stimulative step the government could take.

Finally, it is of great importance to our members that there be a level playing field with regard to the application of sales taxes on all used vehicle transactions in Canada. At the current time, there is a significant inequity in this area. Currently, in non-harmonized provinces, dealers are required to charge GST on all vehicles sold, while private individuals can sell a used vehicle GST exempt. If a dealer buys a used car from an individual for resale, the full tax applies. If the individual, however, sells the car to another individual, no GST applies. Our recommendation here is simple: require that GST be applied on the sale of all used vehicles in non-harmonized provinces. In the harmonized provinces, this issue has already been addressed. In the rest of Canada, this would make level a playing field that has become seriously distorted in favour of private sellers of automobiles and at the expense of franchised new car dealers. In addition, we would highly recommend that the federal government work towards harmonization with all provinces currently not under an HST regime.

I thank you for your time, and I'll be happy to answer your questions later on. Thank you. Merci.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Gauthier.

We'll now hear from Mr. Devenish, please.

[Shane Devenish, Representative, Recreation Vehicle Dealers Association of Canada]

Good evening, and thank you, Mr. Chair.

We appreciate the invitation to be here today in the context of your 2010 pre-budget consultations and hereby take this opportunity to convey to your committee that the wholesale credit crisis continues for the Canadian RV industry today.

As in 2009, as was previously conveyed, RVDA of Canada's 420 dealer members reported difficulty adequately financing their retail operations throughout 2010. This has had a detrimental effect on RV sales and an undesirable adverse ripple effect on employment, tourism, and tax revenue for the provincial and federal governments. Without adequate floor plan financing, RV dealers have not been able to maintain an appropriate number of RVs in their inventories to maximize their retail sales and profits.

In 2008 inventory in Canada had an estimated value of between $650 million and $750 million. As a result of the credit crisis, inventory levels were reduced by 30% to 40% in 2009, as dealers were not able to adequately finance their products. While inventories have marginally increased in 2010, the limited number of wholesale finance sources in the industry has adversely impacted the average dealer's ability to meet consumer demand and business needs.

Our industry recognizes and appreciates recent attempts by the Government of Canada to help alleviate the financial crisis, such as the $12 billion CSCF in 2009 and the $500 million VEFP program announced by the federal government in 2010 as part of the federal budget. However, to benefit from the program, we would first need to find a suitable lender whose sole barrier is the required capital to use the securitization platform under the program. Unfortunately, we have not been able to bring forward such an institution, despite continued solicitation of asset-based lenders, Canadian banks, and insurance companies. It is unfortunate that the RV industry, along with marine, power sport, and so on, which require floor plan financing, do not have access to captive financial institutions to finance the resellers, as in the automobile example.

Given this distinct difference, the RVDA of Canada strongly feels that it requires a more targeted, focused approach than any program currently in effect. To this end, the RVDA of Canada has held discussions with the BDC and both Industry Canada and the Department of Finance regarding a proposal that outlines a mitigated secondary loss guarantee for potential institutions that are reviewing our industry. Unfortunately, as of this date, it has proved unsuccessful. It has become increasingly evident that the barrier to enticing new lenders into our industry is not the availability of capital via the CSCF or VEFP programs. Rather, among lending institutions that are looking at wholesale lending to recreational product dealerships, not only in Canada but also in the States, it is the perceived risk in today's economy.

We are hereby requesting implementation of a program in Canada similar to what the U.S. government has introduced through the small business administration. Loan guarantees have been made available to a wide variety of lenders to the recreational vehicle dealerships in the States. Under this scenario, the BDC or other federal means of support would guarantee a secondary loss position above an institution's normal risk model. If provided, we would then be in a position to successfully entice suitable specialized wholesale finance lenders to fill the current credit shortfall.

The recreational vehicle industry is vital to the industry and to tourism in Canada and makes generous contributions to the Canadian economy. Without additional wholesale finance sources, the credit void has led to lower inventory levels, decreased product availability for consumers, and, for RVDA members, lower reported income. We believe this trend will continue until we can find alternative financial lending sources for our industry.

We are eager to work collaboratively towards finding a credit solution that makes sense for all stakeholders and the Canadian public. The RV market has stability, profitability, and a long history of low-risk loans. We therefore take this opportunity to provide the following recommendation.

The RVDA of Canada hereby recommends that the Government of Canada establish a wholesale finance lending program, solely dedicated to and for the benefit of the RV industry, either by providing funding or via a mitigated loss program that would assist and entice new financial institutions to our industry.

The increased promotion of the RV industry would be an important component of Canada’s tourism policies, highlighting new and exciting ways for Canadians to see the country at its best.

We also recommend that the Government of Canada establish a national tourism strategy that provides dedicated funding for the RV industry to ensure that RVing in Canada is recognized as a prosperous tourism activity.

In conclusion, please consider the following: the retail RV sector is not simply a one-time retail sale; RVing and the RV lifestyle make critical economic contributions to ongoing tourism and recreational spending.

[The Chair, Conservative, James Rajotte]

Thank you very much.

We'll now go to the Canadian Teachers' Federation. Ms. Donnelly, please.

[Mary-Lou Donnelly, President, Canadian Teachers' Federation]

Thank you, Chair. I certainly appreciate the opportunity to appear before the committee.

My name is Mary-Lou Donnelly, and I'm president of the Canadian Teachers' Federation. The federation is the national voice for teachers in Canada on education and related social issues. We represent upwards of 200,000 teachers across the country, through 16 provincial and territorial teacher organizations.

Our presentation and brief will focus on an issue that Canadian teachers have pursued before this committee and other House of Commons and Senate committees for the past two or three years. It demands the immediate attention of the Canadian public and all levels of government, and it is child poverty.

Many of the recommendations contained in our short brief will be familiar to some of you.

Too little has changed over the past 20 years to positively address the issues that children in this country face on a daily basis.

On November 24, 2009, marking and mirroring the twentieth anniversary of a similar event, the House of Commons unanimously passed a motion resolving that the Government of Canada develop an immediate plan to eliminate poverty in Canada for all. We believe that was a commitment by Parliament to a federal plan for the elimination of poverty.

There were promising pieces of the poverty puzzle that were addressed in the report of the 2009-10 House of Commons Standing Committee on Finance entitled, “A Prosperous and Sustainable Future for Canada: Needed Federal Actions”.

One of the key problems for low-income families is the care of young children, both from the perspective of the parents' availability for employment and the opportunity for the child to have access to early educational development through quality programs. The committee recommended that the federal government implement a national child care plan providing high-quality, affordable, and inclusive child care services. Other recommendations included significant improvements to the employment insurance program and a recommendation that programs for aboriginal Canadians be designed to address, among other things, education, housing, and early childhood development and care. All of these support the proposals that CTF made last year, and that it continues to make this year.

We need consistent recommendations of this nature from the finance committee if Canadians are to realize, in the 2011 federal budget and subsequent budgets, the kind of federal programming and assistance that is necessary to address poverty reduction in a meaningful fashion.

We were extremely pleased that early in 2010 the Senate adopted the report “In From the Margins: A Call to Action on Poverty, Housing and Homelessness”. Among the 74 recommendations in the report are those that address increases to the minimum wage; significant improvement to the employment insurance program; increases to the national child benefit; affordable housing initiatives; assistance for first nations, immigrant, and refugee children, and their families; additional support for access to post-secondary education; and a national federal-provincial initiative on early childhood learning. Again, these are recommendations that are supported by the CTF brief.

While the government's response to the report does a good job of outlining what it was doing under programs that are directed toward poverty reduction, unfortunately it does not specifically address any of the recommendations in the Senate report. We believe this committee should carefully review the Senate report and incorporate elements that support a coordinated effort to reduce and eliminate child poverty in Canada into your suggestions for the 2011 federal budget.

The child poverty rate remains essentially at 1989 levels, just over 11%. Nearly one in every nine Canadian children lives in poverty. Child and family poverty rates are at double digits in five out of ten provinces. One out of every two children living in a family that recently immigrated to Canada lives in poverty. One in two aboriginal children under the age of six who are not living in first nations communities live in a low-income family. The use of food banks since the 1989 unanimous House of Commons resolution to end child poverty has increased by over 80%.

The Canadian Teachers' Federation has extensive policy on children and poverty. It is based on the fundamental premise that all children, regardless of circumstances or family income, have the right to the full benefits of publicly funded education. In supporting this, teachers and their organizations participate in the development of educational and public policies designed to reduce the incidence and impact of child poverty. Our policy stresses the importance of child care and early intervention and the role of government in addressing that concern.

Teachers, probably better than most, are able to see the evidence of poverty in their classrooms when students change schools frequently during the year because the family does not have enough money to pay rent, when they shrink from shame or lash out from anger because of the stigma of poverty, and when they can't afford to buy books at the book fair or go on school trips with the other kids.

We know what the problems are. We know what needs to be done. What we now need is to determine how the research and the recommendations fit in a national strategy, how they are connected, and how best we can focus our energies to make good things happen.

Finally, we believe that education and training must be protected from cutbacks that may be generated as a result of exit strategies from economic stimulus spending put in place during the recession. There is a well-established correlation between socio-economic status and children's academic performance, and there's also a direct relationship between economic prosperity and how children and youth fare in schools.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Donnelly.

We'll start members' questions with Mr. Szabo.

[Paul Szabo, Liberal, Mississauga South, ON]

Thank you. And thank you to the translators. I see the smoke is coming from their roof over there.

I want to address Ms. Conway and Mr. Aston.

This is an area that concerns many parliamentarians: the lack of discussion on climate change and environment policy issues. In your presentation, and let me quote it, you call for “immediate and sustained investment in the generation and analysis of new knowledge on climate and atmospheric processes and their impacts, on earth systems science, on developing the science support”, etc., but you conclude that the costs of inaction are simply too high.

Now, in that context, if I understand your presentation about the Arctic, and about the ozone and the glaciers, and about water security and its impact and the ripple effects--those are all good things--are you familiar with the PEARL research site in the North Pole?

[Dawn Conway]

Absolutely. We fund the research there.

[Paul Szabo, Liberal, Mississauga South, ON]

Okay, you know of them.