Finance Committee on Oct. 18th, 2010

[The Chair, Conservative, James Rajotte]

I call this meeting to order. This is the 34th meeting of the Standing Committee on Finance. We are continuing our pre-budget consultations 2010.

I want to welcome all of our witnesses this afternoon. Thank you all for coming in.

We have seven organizations in this session. We have, first of all, Canada's Research-Based Pharmaceutical Companies, the Alberta Pulse Growers Commission, and the Alliance of Canadian Cinema, Television and Radio Artists. We have the Canadian Festivals Coalition, the Canadian Caregiver Coalition, Fédération des communautés francophones et acadienne du Canada, and BIOTECanada.

Ladies and gentlemen, we have a lot of witnesses here today and a lot of members with questions, so we are going to ask you to stick very firmly to the five-minute opening statement round. I will indicate when you have one minute left.

We will start with Rx&D, Canada's Research-Based Pharmaceutical Companies.

[Wendy Zatylny, Vice-President, Government Affairs, Canada's Research-Based Pharmaceutical Companies (Rx & D)]

Thank you, Mr. Chairman, and good afternoon.

My name is Wendy Zatylny, and I'm vice-president of government affairs at Rx&D, Canada's Research-Based Pharmaceutical Companies.

With me today is Rob Livingston, director of government relations at Merck Frosst Canada Ltd.

We are very pleased to have the opportunity to be here today. You already have our written proposal, so I will use my time to tell you about our recommendations.

We are a national association representing 15,000 people who work in highly skilled positions for 50 innovative biopharmaceutical companies in Canada. Our objective is to develop new medicines and vaccines that are essential to Canadians so they can enjoy longer, healthier and more productive lives.

Rx&D companies are leading investors in private sector health science and technology-based R and D in Canada. In 2009, our members invested $1 billion in scientific research and development. Our network of partnerships and collaborations has represented tens of thousands of jobs and an investment of more than $20 billion in this country over the last two decades.

These are major achievements, and they create a uniquely Canadian platform for future success. But our industry's capacity to continue these investments and to maintain and build our presence here in Canada is under significant threat. Canada is facing increasing global, competitive pressures, because other countries have acted aggressively to capture the economic value created by our sector and to seize the health benefits that come with a strong research-based biopharmaceutical industry. The plain fact is that if Canada does not keep up with the advantages offered by other economies, we will fall behind, and indeed we are falling behind.

We would like to commend the government on its recently announced review of private sector research and development. Canada must equip itself with the policies and programs that allow it to compete on the global stage. I cannot overstate the need. Such policies are urgent.

In our brief we have proposed four key ways in which Canada can improve the policy environment for our sector.

First, Canada needs a more globally competitive intellectual property regime. This would involve implementation of an effective right of appeal for innovators within Canada's patent regulations. Canada needs a vigorous defence by the federal government of the current data protection regulations in the event of adverse court decisions. And we need the creation of a patent term restoration regime that is competitive with those of our G-7 competitors.

It is important to note that these proposals are aimed only at getting Canada back to parity with our key trading partners. For example, the European Community, with which Canada is negotiating a comprehensive trade agreement, already provides innovators with two years more data protection than Canada does. And Canada is the only G-7 country that does not have any form of patent term restoration, placing us at a distinct disadvantage relative to key competitors for jobs and investments.

Second, because Canada's former leadership in clinical research is being eroded, we propose expanding the SR&ED credit to better capture all aspects of clinical research and clinical trials.

Third, we are calling for more efficient Health Canada review processes for drugs and biologics. Submissions to Health Canada currently take 390 days, more than the 350 days in the United States and almost 100 days more than Europe's 275 days.

Fourth, since vaccines have saved more lives in Canada over the last 50 years than any other health intervention, we recommend the development of a more predictable funding mechanism for vaccines to be added to public immunization programs.

These four priorities we are advancing today can be summarized in two points: access to new medicines for patients, and growing the Canadian economy.

When development dollars and expertise flow to other countries because of Canada's weak intellectual property regime, innovative research focuses on the priorities of others instead of on the needs of Canadians. When clinical research is done elsewhere, Canadians have to wait longer to realize the benefits of new drugs and therapies.

Our country has a strong research base to build upon. We have many of the key ingredients for success in an increasingly competitive global research environment. This base includes multi-year investments by governments in public research enterprise, private investments by our members, averaging over $1 billion per year, and globally recognized clinical research capacity.

In conclusion, Canada cannot rest on its laurels. It must constantly strive to maintain its competitive edge if it wants to capitalize on the innovative potential of its own innovative companies.

Our industry is prepared to work with the federal government to create the kind of stable and predictable environment described, so that the research-based pharmaceutical sector can be competitive and contribute to Canada's economic development.

Thank you.

Thank you for your time.

[The Chair, Conservative, James Rajotte]

Merci beaucoup.

Now we'll go to the Alberta Pulse Growers Commission.

[Sheri Strydhorst, Executive Director, Alberta Pulse Growers Commission]

Mr. Chairperson, honourable members, and guests, my name is Sheri Strydhorst. I have a PhD in production research. My husband and I farm in northwestern Alberta, and I'm the executive director with the Alberta Pulse Growers Commission.

With me today, and sharing my time, is Richard Phillips.

The Alberta Pulse Growers Commission represents 4,700 pea, bean, lentil, and chickpea farmers in the province of Alberta. I've also been asked by the Saskatchewan Pulse Growers, who represent an additional 18,000 farmers, to let you know that these requests are relevant to all members of the pulse sector.

Last year we had the opportunity to present to the finance committee, and today, while we're talking about the same subject, our requests are more specific. More funds are needed for public research, but properly allocated funds are just as important. We sincerely thank the federal government for Growing Forward contributions to agriculture research; however, there are some critical gaps in the public research system that need to be addressed with future funding programs. Today I'm going to touch upon four of those.

The first is long-term federal funding for agriculture research. We are requesting 10-year funding allocations. Current funding programs are typically three years in length. This makes sense for some types of research, but it's unrealistic and creates burdensome paperwork for other areas of research. For example, to create a new crop variety or to study crop rotations requires a minimum of six to nine years of research to complete the data set. Forcing researchers to work in three-year funding blocks means they collect incomplete data sets or put projects on hold as they seek new funding. This creates inefficiencies and diverts scientific expertise away from research.

The second request is to provide adequate resources to young, leading-edge scientists. The number of Ag Canada scientists has dropped by 7% in the last three years. The majority of Ag Canada scientists will be of retirement age in less than 10 years. Ag Canada is suffering a corporate memory loss. As agriculture research expertise leaves Canada, it will be an impossible resource to replace. Agriculture's future economic prosperity is linked to our bright, young innovative workforce; Ag Canada needs to ensure that they attract these people to agriculture and provide sufficient funding to keep them there.

Our third request is to ensure flexibility in future funding programs. The Growing Forward programs have provided funding for agriculture research; however, some of the conditions make it difficult to take full advantage of that funding. For instance, in the pulse agri-science cluster, the plan had to be scaled back due to a lack of technical help at Ag Canada facilities. One of the program funding conditions prevents using the funds to hire full-time staff. You can hire summer staff and post-doctoral students, but there's simply a labour shortage that prevents the necessary research studies from being conducted. This funding restricts private investment in Ag Canada research stations, and private companies will not increase their contributions when they recognize there's insufficient staff to complete the work.

Finally, we respectfully request the return of Ag Canada A-base budget research funding to 1994 levels. This would require an investment of $28 million for 10 years. Recent studies have shown a 12-time return for investments in breeding research for Canadian farmers, and we're not asking the government to do this alone. Investments in pulse breeding and agronomic research by Alberta and Saskatchewan farmers exceeds $3 million per year. Investments in public research do pay off, which is why producers invest their own money into public research. APG's most important funding allocation is to research, and our refund rate of only 3% is a strong indication that Alberta pulse growers believe this too. It is the one issue everyone agrees on, and it's critical to the pulse sector, as pulse crop research is conducted almost exclusively in the public sector.

There are different funding models that need to be considered. For example, Australia is light years ahead of Canada. Starting years ago, they began taking larger check-offs and funnelling the money into research and encouraging public-private partnerships.

In summary, our requests are to provide long-term funding for agriculture research, to provide adequate resources to recruit young scientists, to ensure the flexibility of future funding, and to increase the A-base budget to 1994 levels of $28 million. There's tremendous value in public research. It will allow Canada to remain a strong leader in agricultural production and it will reduce government support payments to producers. Invest with us in public research so that we will remain competitive and remain an important contributor to the Canadian economy.

Thank you for this opportunity.

We look forward to your questions.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll now hear from the Alliance of Canadian Cinema, Television and Radio Artists, please.

[Tyrone Benskin, National Vice-President, Alliance of Canadian Cinema, Television and Radio Artists]

Good afternoon. My name is Tyrone Benskin. I am a professional performer and vice-president of ACTRA, the Alliance of Canadian Cinema, Television and Radio Artists. Joining me is Stephen Waddell, ACTRA's national executive director.

It is our honour to be here today as a voice for the 21,000 professional performers, members of ACTRA, whose work entertains, educates, and informs audiences in Canada and around the world.

As you prepare your recommendations for the 2011 federal budget, we are here to talk to you about something not often talked about in the arts and culture sector: job creation by building a mature and sustainable digital economy through smart investments in Canadian content. Content is a serious business. Many say that content is king, and they are right.

Canada's cultural industries contribute more than $85 billion, or 7.4%, to our GDP, and more than 1.1 million jobs to our economy, and at the heart of that is content. In addition to TV, film, and radio--much of which is now recorded digitally--we are now performing in video games and webisodes. For example, in 2009 Montreal members saw their collective earnings in video game motion capture and voicing surpass the $1 million mark, far outpacing the once dominant animation market.

What needs to be made clear is that the digital economy is about more than just hardware and delivery systems. The reason why we buy BlackBerrys and iPods isn't just because they look cool; it's because they deliver content. For this reason we believe that success for a strong and sustainable digital economy requires public policy designed to support content and content creators.

Today we are here to propose three pieces to a sustainable digital economic plan: public investment in content creation, incentives to encourage private investment in content, and ensuring shelf space for Canadian content by making sure control of Canadian communication companies remains in Canadians' hands.

The government must invest in Canada's cultural institutions. We urge this body to commit to renewed and increased long-term funding for the Canada Media Fund, Telefilm Canada, the Canadian Broadcasting Corporation, and the National Film Board. These institutions are key to maximizing the potential of digital technology in the creation, innovation, production, and distribution of compelling Canadian content.

These proven success stories are showing what Canada's creative communities are capable of in a digital economy, and they must be given the resources they need to flourish, create jobs, and make Canada a leader in the creation and production of digital content.

I'll turn now to Stephen Waddell.

[Stephen Waddell, National Executive Director, Alliance of Canadian Cinema, Television and Radio Artists]

Thank you, Tyrone.

Our second recommendation is greater incentives to trigger greater private investment in content creation. Tax credits are an efficient way to increase Canada's competitiveness, attract investment, and reward risk. We urge you to look at increasing the value of Canadian film or video production tax credits and the production services tax credits. The government should join the provinces in expanding these credits to include all spending, including post-production costs, and not just labour costs.

The government might also explore the possibility of investment funds, for example, setting up public funds to trigger private investment in companies working in screen-based media.

Creating great content isn't enough. In a world where access to content increasingly has no borders and the supply is seemingly endless, we must make sure audiences can find it. Canadian content must be given shelf space, and it must be marketable and accessible.

In our view, the CRTC should be regulating broadcasting on the Internet, which is just another platform for delivery of content. Until the CRTC sees the logic of this approach, we urge the government to provide incentives to private companies to feature Canadian digital content on their websites.

We propose that the government amend the Income Tax Act to give advertisers tax deductions for advertising on Canadian-owned websites featuring our content. This idea is based on the existing section 19.1 of the act, which provides incentives for broadcasters to advertise on Canadian television stations instead of U.S. border stations.

We urge the government not to use this federal budget to once again weaken Canadian sovereignty, but instead to use this opportunity to make us stronger by bolstering regulations and making smart investments in our cultural industries. We must continue to control our own telecommunications and broadcasting industries. Convergence in these industries means foreign ownership rules for telecommunications cannot be relaxed without affecting broadcasting and control over our content.

Given the right tools in today's digital economy, Canada's cultural industries will continue to be an engine of Canadian economic innovation and growth. We urge the government to harness the full economic potential of this important industry with a solid, long-term investment in the coming budget and the years ahead by implementing our recommendations.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We will now go to the Canadian Caregiver Coalition.

[Dr. Judith Shamian, Signatory, Canadian Caregiver Coalition]

Thank you.

Good afternoon. I'm Judy Shamian. I'm the president and CEO of VON Canada, and I am here to speak on behalf of the Canadian Caregiver Coalition.

The focus of this consultation deals with the best place for families and a strong and prosperous economy. My comments around family caregivers deal with both of these issues.

I want to say a word about the Canadian Caregiver Coalition. It's a national body representing and promoting the voice, needs, and interests of family caregivers, with all levels of government and community, through leadership, research, information, and communication.

I am here as one of the sustaining partners, including VON Canada; Canadian Home Care Association; CSSS Cavendish, in Montreal; Saint Elizabeth Health Care; and ComCare.

In addition to the sustaining partners, there are many other organizations that support our agenda, such as the Alzheimer Society; Caledon Institute; the Law Foundation of B.C.; federal commissions and committees, such as mental health commissions, the Special Senate Committee on Aging, the parliamentary committee on palliative and compassionate care, and others. As you can see, this is a broad agenda.

There are over three million Canadians in this country who are unpaid family caregivers and who provide extensive care. I'm sure if I were to go around the room, members of the House and others would have stories from either their constituents or family members that are heartbreaking. Families do it with great love, and they are asking for our support.

Research shows that if family caregivers were to go on strike today, it would cost us $25 billion a year, which is close to 20% of what we invest in our mainstream health care. Family caregivers provide an enormous contribution to this country, and we offer them very little in return.

There are four recommendations that I am putting in front of you, and I will go into each one as time permits.

The first recommendation is to announce a national caregiver strategy to demonstrate that the federal government is seriously committed to addressing the challenge facing Canadian families.

The second recommendation is the enhancement of financial tax credits for caregivers to help compensate for expenses incurred by families who must purchase services, equipment, and supplies that assist individuals requiring care to live independently at home. Some of you are probably getting bored of hearing this message; I gave you the same message last year.

Recommendation three is to modify the Canada Pension Plan, CPP, so that those with reduced income as a result of family caregiving are protected.

Recommendation four is to support cross-country consultations with families to enhance the general social survey, GSS, cycle 26, which is dedicated to family caregiving.

Let me cycle back to the recommendations.

Recommendation one is to establish a national caregiver strategy, and there are various tax benefits that can be considered. The caregiving strategy requires a group of experts who can work with the jurisdictions and communities--the for-profit corporate Canada and the not-for-profits across the country--to see how we are going to support our caregivers.

If we don't support our caregivers, we are also risking our workforce. Research clearly shows that those who are caregiving--and there are over 700,000 people, for example, who provide more than 10 hours of caregiving a week--are unable to accept promotions and they work less than they otherwise could if we were to support them.

The second recommendation, which talks about enhancing caregiver tax measures, is an immediate measure. The federal government should provide increased support for the caregiving and infirm dependant credit.

The credit could be enriched in three ways, and these are mechanisms that already exist: they could be enriched by increasing the amount of both credits, which will help caregivers with more of the costs they incur; modifying the caregiver credit to phase out more gradually; and making the caregiver credit refundable, such as in Manitoba. Our recommendation is that an expert advisory committee be put in place to look at the tax system.

The third recommendation is enhancing the employment benefit, and that's the CPP. We already have mechanisms by which individuals can discount some of their unproductive years. We should pay attention and do the same thing with family caregivers. We should institute government pension contributions on the hours of work provided by family caregivers, effectively ascribing a value to caregiving, and create a caregiver-specific pension that would operate like an income supplement.

The final point is on our data component. We need data. All the data we have is from 1997.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll go ensuite to Madame Kenny, s'il vous plaît.

[Marie-France Kenny, President, Fédération des communautés francophones et acadienne du Canada]

Mr. Chair, members of Parliament, on behalf of the 2.5 million French-speaking Canadians living in 9 provinces and territories who I am representing here today, I want to thank you for inviting us to appear this afternoon.

We are here today to talk about efficiency, productivity and Canada's success. We are here to tell you that we share those priorities of the Government of Canada and that they are not just hollow words to us. They are the guiding principles at the heart of hundreds of organizations and institutions in francophone and Acadian communities that work every day to develop programs, activities and services to support French-speaking Canadians in all aspects of their daily lives.

The Government of Canada has built innovative partnerships with these organizations through investment mechanisms, such as the Roadmap for Canada's Linguistic Duality initiative and Canadian Heritage programs that support official languages. These partnerships help the government adopt new approaches to many social challenges, an objective outlined by the government in its throne speech this past March. These partnerships enable the government to meet its objectives and obligations under the Official Languages Act in a more cost-effective manner; pursuant to the act, the government has a duty to support the development and vitality of official language communities. These partnerships also enable the government to more efficiently and cost-effectively fulfill its role, which, as the Minister of Finance indicated on Tuesday, is to provide the infrastructure, programs and services necessary for the economy and society to prosper in the long term. Whether their focus is health, education, the economy, job creation, access to justice or literacy, these organizations tackle local and regional challenges while enhancing Canadians' ability to live in French across the country.

Did you know, for instance, that investing in organizations in francophone and Acadian communities helps welcome and integrate immigrants? Did you know that investing in organizations in francophone and Acadian communities helps small and medium-size businesses grow and enhances employability? And did you know that investing in organizations in our communities promotes health training?

The work carried out by organizations in francophone and Acadian communities reflects the government's priorities and helps the government meet its objectives. Organizations that contribute to the development and vitality of French-speaking communities across nine provinces and three territories use federal funds in efficient and innovative ways to help the government achieve its objectives of strengthening the francophone identity and supporting local communities. That is one of the reasons we are here today.

The other is that we are aware of the two review and reporting exercises currently underway focusing on the organizations in our communities and their ability to help Canada grow and prosper.

On one hand, the Government of Canada has undertaken a review of programs and spending in an effort to restore fiscal balance in the next few years. That is why you invited us to appear today. On the other hand, the Government of Canada is in the midst of a mid-term report on the Roadmap for Canada's Linguistic Duality 2008-2013. Both activities are necessarily interconnected.

Our message for you today is this: assuming that organizations in francophone and Acadian communities are essential partners delivering services to Canadians and thus helping the government meet its objectives, the Roadmap for Canada's Linguistic Duality is one of the levers allowing those organizations to fulfill that role. I say “one of the levers” because it would not be to the government's advantage to have just one. Programs to support official languages and investments in francophone and Acadian communities provided by such departments as Human Resources and Skills Development Canada, Justice Canada, Health Canada, and Citizenship and Immigration Canada are all important in their own right.

As we mentioned in our brief, nearly 60% of the revenue provided by the Government of Canada is invested by community organizations in projects and services for residents. The remaining 40% is used to build financial or other types of partnerships with provincial, territorial and municipal governments, as well as the private sector, foundations and other community agencies. These investments should be maintained and ultimately even enhanced.

Because they understand this environment, francophone and Acadian community agencies are able to help the federal government meet its objectives of supporting local communities and enhancing the presence of French culture throughout Canada in an efficient and more cost-effective manner. By strengthening the role and capacity of these organizations, the government will have all the tools it needs to work with these communities to create jobs, stimulate investment and contribute to our country's growth.

Thank you.

[The Chair, Conservative, James Rajotte]

Merci beaucoup.

Next we'll have BIOTECanada, please.

[Anthony Giovinazzo, President and Chief Executive Officer, Cynapsus Therapeutics Inc., BIOTECanada]

Mr. Chairman, honourable members, thank you for the opportunity to appear in front of your committee. My name is Anthony Giovinazzo and I am the CEO of a biotech company in Toronto that has a lead program in Parkinson's, applicable to worldwide markets.

I am here today to plead for your support on the proposal presented to you by BIOTECanada to build a better business case for companies like mine to grow and, more importantly, stay in Canada.

For a number of years we've reached out to the government, and you and your colleagues, to your credit, have responded with expansion of the SR and ED credits and with the elimination of the applicability of section 116 of the Canadian and U.S. tax treaty.

The issue is not funding for scientific research or seed capital; it is for what we call the valley of death: the development and commercialization piece of the value chain.

In addition, times have changed. Global competitors to match our early biotechnology leadership have upped their game and further exacerbated the problem. Many countries have begun to outpace us with both research and investment capital. They have also understood the inextricable link between research and commercialization.

In order to simply sustain what we have here in Canada in this industry today, our companies need to attract at least $1 billion a year of capital.

I'm here to tell you that we can build companies that will provide tax returns and real returns on investment to Canadian taxpayers. To do so, we must have access to the full continuum of capital.

Why are we here recommending flow-through shares? The traditional capital markets have changed. Where there was once a strong and competitive VC market, we are down to a couple that are struggling to replenish investment funds. Flow-through shares offer a new marketplace for investment to be drawn into our companies. They reward investors who are able to accept the risk-reward paradigm that our industry can provide. This industry is almost identical to the minerals and resources industry in terms of risk and timelines.

The flow-through shares program is a smart choice because at its core it is market driven as to which companies are funded. For many biotech companies with significant current or near-term commercialization needs, monetizing historical losses is the only asset that can provide capital.

The long-term health of our national economy requires a strategic prioritization of the life sciences-related commercialization funding. There are large amounts of taxpayer money in health care, post-secondary education, and research funding. The availability of commercialization funding through a basic structure like flow-through shares complements that funding and further provides for a measurable return on it.

As a result of the flow-through share provisions, an internationally competitive mining industry has been built and has attracted foreign investment. To this end, the federal budget last year expanded these provisions for certain renewable energy sectors.

I'll now hand you over to Peter Brenders, the president of BIOTECanada.

[Peter Brenders, President and Chief Executive Officer, BIOTECanada]

In addition to flow-through shares, Canada works on a number of leading innovative sectors, and it boasts a world-class portfolio of research organizations and leading companies developing innovative vaccines for debilitating diseases.

Our companies are doing much to help Canadians and Canada's health care system. In 2003 the federal government launched the national immunization strategy, which has since contributed approximately $100 million a year in federal funding toward immunization programs for new vaccines related to chicken pox, pneumococcus, adolescent whooping cough, meningitis, and HPV-related diseases.

We need you to keep building on the success of the NIS program, to create a permanent fund of a minimum $100 million per year to ensure newly recommended vaccines can reach all Canadians. The investment will not only save lives, but it will send a signal to the world that Canada remains at the forefront of vaccine discovery.

[The Chair, Conservative, James Rajotte]

You have one minute.

[Peter Brenders]

Our final recommendation is to call for support for industrial biotechnology companies that are developing new, dedicated biomass crops, transitioning our forestry industries into centres of biorefining, and developing renewable materials for our auto and housing sectors, all helping Canada to achieve commitments to reduce greenhouse gas emissions. Such technologies produce broader and more integrated supply chains, creating economic opportunities and new jobs for Canadians.

The commercial deployment of industrial biotechnology is capital intensive. Public support of pilot-stage technologies is critical to bridge the development from laboratory science to private equity investments.

The SD Tech Fund of Sustainable Development Technology Canada has been crucial in helping these companies transition to market. The pace of Canadian innovation in this sector has outstripped the funding allocated to the SD Tech Fund, and additional funding is needed.

To help ensure the bioeconomy continues to grow here, BIOTECanada urges the federal government to secure Canada's place in the global bioeconomy by renewing and providing a minimum $100 million per year to SDTC to continue to support the next generation of industrial biotechnology and clean tech innovations and to expand this fund's eligibility to include more diverse bio-based technology.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll now go to the Canadian Festivals Coalition for their five-minute opening statement, please.

[David Heurtel, Vice-President, Corporate and Public Affairs, Just for Laughs Group, Canadian Festivals Coalition]

Mr. Chair, members of the committee, good afternoon. My name is David Heurtel, and I am the Vice-President of Corporate and Public Affairs for the Just for Laughs Group, which puts on the Just for Laughs festivals in both Montreal and Toronto.

On behalf of the Canadian Festivals Coalition, I would like to thank the committee for including our voice in its discussions regarding budget priorities. In addition to the report you have already received, we have provided the members with a copy of our impact study on the 2009 funding for the marquee tourism events program.

The Canadian Festivals Coalition is an organization that brings together 12 world-class festivals and events from across Canada. The CFC's goal is to promote the growing major festivals and events sector, which contributes significantly to the Canadian economy, most notably through tourism development. World-class festivals and events helped to drive Canada's economy during the recent crisis, according to an independent study based on the reports submitted by these organizations to the federal government in 2009. The study showed that 15 of the largest festivals and events in Canada attracted 12.6 million attendees annually, contributed $650 million to local economies and supported the equivalent of 15,600 full-time jobs nationwide. This substantial economic impact was derived primarily from operational spending by these organizations and tourism spending, for a total of $1.1 billion per year. Tourism and operational spending related to these 15 events generated approximately $260 million in tax revenue for all three levels of government. These figures clearly show that major festivals and events, especially major cultural events, form a sector of the economy that generates significant economic returns. This study recognizes the tremendous economic impact that major cultural festivals and events have across the country.

The federal government's investment in major festivals, through the marquee tourism events program, helped our events expand and diversify their programming and extend their marketing reach at the international level, which was especially important during a period of global economic instability. The study demonstrates the immediate positive effects of that investment and highlights the incredible ability of this sector to grow and develop. Not only does the industry believe that the study results prove its ability to grow, but it is also certain that it can continue to develop the tourism base and deliver excellent economic results in the future.

At a time when Canada's tourism industry is in trouble, it is essential to invest in leading-edge products that have been proven and that have the potential to further benefit the tourism sector and the economy.

I will now hand the floor over to my colleague, Janice Price.

[Janice Price, Chief Executive Officer, Luminato, Canadian Festivals Coalition]

Thank you, and good afternoon.

The government's financial investment through the marquee tourism events program allowed Canada's major festivals and events to update their infrastructure, expand their marketing research, and improve their product offerings. These activities resulted in a direct impact on job creation and generated major economic spin-offs across the country. A long-term, sustainable funding program would allow major festivals and events to plan for future growth and would go a long way toward establishing Canada as a world-class tourism destination in a very competitive global market for many years to come.

Although the CFC recognizes that MTEP was established as a temporary stimulus program, now that major festivals and events have clearly proven themselves to be significant economic generators—particularly for the tourism industry—and that the impact of federal investment in this area has been demonstrated, the CFC recommends that the government invest $50 million annually for a permanent program for major festivals and events in order to continue and build upon the success of what MTEP has achieved.

Since 2002 Canada's tourism sector has been experiencing a period of serious decline. While there are many reasons for that tourism deficit, one significant cause is a lack of an internationally competitive product. After years of marketing ourselves as a destination for moose, Mounties, and mountains, Canada is simply less compelling. On the other hand, Canada's major festivals and events sector is one of the areas in which we can compete on a global level. Festivals such as the Toronto International Film Festival, the Carnaval de Québec, the Calgary Stampede, Luminato, and the Stratford Shakespeare Festival are world-leading events. Therefore, the CFC is calling on government to invest in an area in which we are strong and to help us further develop the festivals and events sector.

Canada's major festivals and events provide an economic and cultural gateway to their respective communities and regions. They provide a platform from which other events, destinations, and organizations can draw patronage, sponsorship, and audience. In a way, the marquee event has the potential to be the tide that lifts all local boats.

Thank you.

[The Chair, Conservative, James Rajotte]

Ms. Price, thank you very much for your presentation.

We'll now start with members' questions.

Mr. Szabo, please.

[Paul Szabo, Liberal, Mississauga South, ON]

Thank you.

Ms. Shamian, I very much enjoyed your presentation. I wish we had more time, but we don't, so let me get right to it.

The national caregiver strategy recommendation is absolutely essential, simply for the reasons you have articulated. It is cross-jurisdictional, and if we don't have everyone, we'll make no progress.

I'm going to skip to the CPP. We have in there what used to be called a child rearing drop-out provision, which I think is more sensitively described now as the child rearing provision form. The interesting thing is that it is a very good parallel for what you require. The importance is not only that they lose some credit or value for the earned pension benefits, but they lose years of opportunity to increase them from where they are. So I agree there.

I want to ask you to speak a little more about family caregivers. Probably the vast majority of families in Canada are facing those situations now, with our aging society. Tell me more about your views on financial assistance through tax credits or other bases for family caregivers.

[Dr. Judith Shamian]

Thank you.

Recommendations two and three both deal with those kinds of potential supports.

Let me talk first about CPP, which you raised. You're absolutely right that we have parallels in both recommendations two and three. We mention recommendations where the mechanisms are already there, and they need to be transferred and expanded to include family caregivers.

For example, around CPP and the drop-out for individuals who have left work in order to provide care for adult family members, we can apply the same thing you're talking about. Institute government pension contributions on the hours of work provided by family caregivers, effectively ascribing a value to caregiving. So count them toward the contribution--you talked about that. Create a caregiver-specific pension that would operate like an income supplement.

Those are the kinds of things we have to look at. Basically it's unrealistic to expect that, voila, it's going to happen. Maybe there is a need for a CPP working group to look at those issues as we move forward. Many of us are willing to help with that.

The second area we talked about had to do with increased support through a caregiver, an infirm dependant tax benefit. Your party has raised those issues in recent weeks. Increasing the amount of both credits would help caregivers with more of the costs they incur. Then multiply the caregiving credit to the phased-out credit we talked about before. The drop-off rate is minimal--about $18,000--and the minute you earn $18,000 you can't phase out those benefits. Also, make a caregiver credit refundable, as in Quebec and Manitoba.

Again, if we can't get those things included, maybe an expert advisory committee of your own should be looking at it and moving that forward.

[Paul Szabo, Liberal, Mississauga South, ON]

Do you have any idea of the dimensions of the demand or shortage to meet the demand for long-term chronic care or respite care that Canadians are asking for?

[Dr. Judith Shamian]

I would answer it in a different way. I think there is a lot of provincial commitment to build tens of thousands of beds. In my opinion, they are not necessary, per se. We need some, but there are some very innovative programs in Ontario and other places across the country. In one program I am very familiar with, a third of the people came off the long-term care list because they could manage at home if they were able to keep the support they needed. That's what they are asking for.

[Paul Szabo, Liberal, Mississauga South, ON]

I want to give you the last minute to finish off anything else you want to say. Yesterday I was with my mom, who is pre-Alzheimer's, and tomorrow we're taking her to a care facility for probably the rest of her life.