Finance Committee on Oct. 21st, 2010

[Dr. Chris Ferns, President, Association of Nova Scotia University Teachers]

Thank you.

If you have in front of you a copy of the brief we submitted, you'll notice the venue is given as St. John’s, Newfoundland. It's not entirely clear why the venue switched, and I hope it does not reflect the marginalization of the concerns of Atlantic Canadians.

I'd just like to flag two or three issues covered in our brief. I'm going to begin perhaps with somewhat of a general observation on the situation. The cautionary words of Mark Carney notwithstanding, it's clear that Canada has weathered the recent global recession in considerably better shape than have most other industrial countries, and I guess now might well be the time to explore how best to ensure sustainable growth and development.

In that context, I think the issue of adequate funding for post-secondary education is one of crucial importance, because this is an area where Canada has lagged behind many other industrial countries. In 2009 the proportion of public funding to university revenues in Canada was 58%, compared with the OECD average of over 70%. This is not a new problem. It's something that's been going on for 20 years, ever since the cutbacks in federal transfers in the 1990s.

But one result of this has been increasing disparity in the availability and access to education in different provinces, because effectively each province has had to devise its own strategies for addressing the consequences of the federal cuts. For example, in some provinces you might find that they've tried to mitigate these cuts through increases in funding for PSE of up to 25% since 1993-94, whereas in other jurisdictions you'll find cuts of almost exactly the same amount. Cumulatively, that is bound to result in disparities in terms of the quality of education and access to education in the different provinces. I would have thought that one of the bedrock concerns we have here is to ensure that all Canadians have equal access to an equal quality of education. So for that reason we would support the proposal, first, to increase federal funding for post-secondary education, but also to ensure that it is administered fairly and transparently through a post-secondary education act.

I'd also like to draw the attention of the committee to one other disparity, which is perhaps a structural one as opposed to simply being an issue resulting from perennial underfunding. This is of specific concern to Nova Scotia, where we actually educate a disproportionate number of students from elsewhere in Canada. In fact, roughly 30% of the students in Nova Scotia are from elsewhere in Canada.

We think that's an important national endeavour. We think it's desirable in a country as large and as disparate as Canada that there be increased communication between people from different parts of the country. But when the funding formula is based on the population of the province rather than the number of students it actually educates, the effect is that an already underresourced province like Nova Scotia is forced to devote a disproportionate amount of its resources to educating students from elsewhere.

The other concern we'd like to draw the committee's attention to, and again this is something that is particularly acute in Nova Scotia, is the issue of student tuition fees and student debt. Once again, different provinces have adopted very different strategies for dealing with the funding challenges they face. In some provinces, such as Quebec or Newfoundland, there have been concerted efforts made to try to moderate the effect of tuition increases. Elsewhere, most recently in Ontario, it appears that tuition fees can be allowed to rise by whatever the market will bear. That has a major impact both on the conditions of the students themselves and also on the quality of the education they receive.

In terms of the quality of education, in my over 20 years of experience in the university system in Nova Scotia, I've increasingly seen how students are forced to take on increasing amounts of part-time work, often translating into almost full-time work, to the detriment of their studies. But also, I think we're looking at a situation where student debt has increased massively over the last 20 years, one of the ironies being that it's effectively a result of decisions taken by policy-makers who, being of my generation or the generation before, had access to affordable education themselves. In my own case, I graduated debt free, largely because I was educated in England, where tuition was free at that time.

The result is that our generation has benefited from the tax cuts that have taken place, which clearly benefit us as we reach higher earning levels. At the same time, we benefit from the affordable education that was available to us.

Now we're saying to our children, welcome to the harsh reality of the modern world--the harsh reality that we in fact didn't have to cope with. I think when we look at a situation where what we've done, effectively, is to pull up the ladder behind ourselves...we're asking our children to pay for things that benefit us. I would have thought that regardless of your political affiliation, be it left, right, or centre, one bedrock conviction that we should have is that our duty in whatever forum we work is to ensure that our children have a better opportunity than we did.

The effect of public policy with regard to post-secondary education over the past 20 years has ensured precisely the opposite. I would put it to you that it's unwarranted, it's unethical, and it is just plain wrong.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Ferns.

The Conseil national des cycles supérieurs.

[Laurent Viau, President, Conseil national des cycles supérieurs (Québec)]

Thank you.

Ladies and gentlemen, good morning.

The Conseil national des cycles supérieurs (Quebec Council for Graduate Studies) represents some 30,000 graduate students in Quebec, and it is on behalf of the council that I am presenting some of the proposals included in our brief.

The brief that we submitted in August deals mainly with the need to support university research and thus help in the training of future researchers so that Canada can remain competitive within a knowledge-based economy that is ever more globalized and, especially, given the rather uncertain economic recovery.

We have articulated three key proposals. First, with regard to the training of future researchers, the three federal funding councils have expressed significant needs in recent years. There are thousands of students whose applications are turned down despite their academic merits, for lack of funding.

Therefore, we believe that the federal government must cover part of those agencies' needs by maintaining the 900 additional scholarships that were created as part of the federal government stimulus plan, and by providing the councils, i.e., the SSHRC, CIHR and NSERC, with the funds needed to meet their expressed needs.

Our second point deals with the issue of research infrastructure. Since 2001, the federal government has supported universities by offsetting their indirect research costs.

To support research funded by the government, universities incur indirect research costs, including the cost of maintenance, equipment and additional space.

The federal grant only covers 20% of those indirect research costs, whereas estimates show that Quebec covers about 65%.

We believe that the federal government should set as its target the funding of at least 40% of indirect research costs.

Furthermore, a noteworthy element of the economic recovery plan is the knowledge infrastructure program, which has injected $2 billion into Canadian universities and colleges. Among other things, that program has helped alleviate part of the significant problem of accumulated deferred maintenance within our institutions—a problem that amounted to nearly $10 billion in 2008 for all of Canada.

The program helped reduce the scope of the problem by 20%. Moreover, universities, provinces and, in some cases, municipalities provided matching funds and thus helped us make good progress.

We think that the recovery is uncertain and that some stimulus measures must be maintained. As well, accumulated deferred maintenance in our universities remains a problem that we have to address. In our opinion, the knowledge infrastructure program should be extended for a number of years.

The last issue we would like to address concerns post-doctoral fellows. In our introduction, we highlighted the importance of remaining competitive within a knowledge-based economy. In that regard, post-doctoral fellows represent Canada's research elite. Their skills are highly coveted around the world. In fact, 65% of post-doctoral fellows in Canada come from abroad.

The decision by the federal government to tax post-doctoral fellowships is contrary to what we are advocating and places Canada in a much less competitive situation. We therefore recommend that the federal government maintain the tax exemption on post-doctoral fellowships.

Because of their university training activities, we consider that post-doctoral fellows are students. Furthermore, the CNCS represents over two thirds of Quebec post-doctoral fellows.

We also want to point out the fact that, once their taxes have been paid, post-doctoral fellows receive less than a doctoral student with a $30,000 scholarship, for example, which is tax free. That leads to an imbalance in the salary scale of master's, doctoral and post-doctoral students, and eventually of full professors.

[The Chair, Conservative, James Rajotte]

Very well, thank you.

[Laurent Viau]

That makes us less competitive internationally.

If I may conclude, what we would like is for the government to come back on its decision, and also ensure that the measure no longer be retroactive to 2006, as is now the case.

[The Chair, Conservative, James Rajotte]

Thank you very much.

We'll now go to the Canadian Clean Technology Coalition.

[Céline Bak, Partner, Russell Mitchell Group, Canadian Clean Technology Coalition]

Good morning, Mr. Chair and distinguished members of the committee. I have the pleasure to be here today with one of the members of the Canadian Clean Technology Coalition, Nova Scotia-based LED Roadway Lighting.

The Canadian clean technology industry is globally competitive and is a potential driver of the country's economic productivity. We are an emerging sector—often under-appreciated—that can mean wealth, job creation, investment and international trade opportunities.

But we must take time now to nurture the fundamentals that we discovered in our research, a report called the “2010 SDTC Cleantech Growth and Go-To-Market Report.”

There are more than 400 clean technology companies already in Canada. Our industry is national, broad, and deep, with B.C., the Prairies, Ontario, and Quebec each contributing between 90 and 110 companies and Atlantic Canada contributing its fair share.

Our technology products and services span nine sub-sectors, as indicated in the materials we've circulated.

The Canadian clean technology industry is made up of companies that improve efficiencies in the production and use of energy, water, and resources. We do more with less. You should know that over 320 of these technology SMEs have products that are being sold today, and 80% are engaged in export sales.

Newly published information from the U.S. trade department suggests that Canada has as many exporting clean technology companies, in absolute terms, as does the U.S. This is an opportunity that we should not squander.

We are exactly the kinds of companies that will help stimulate and extend economic recovery. This is a sector that invests in research and development, brings products to market and can create jobs. During the economic recession in 2007 and 2008, Canadian clean technology companies grew on average by close to 50% annually, with the fastest growing among them achieving 170% growth. This sets our sector apart.

But there is a caveat. Today, we risk our leadership because many of these Canadian companies could be sold before they reach their potential. The market for the purchase of these companies is heating up, and even since we took the census of the industry nine months ago, some of the country's very best companies have already been bought. For this reason, we would like the members of the finance committee to support establishing a federal strategy for this sector, an “own the podium” plan for Canadian clean technologies. The U.S. already has one.

We are calling for the Canadian Cleantech 20 by 2020, a plan that has, as its objective, the establishment of 20 Canadian clean technology companies having achieved annual revenues of more than $100 million by 2020. To do this requires not only patient investment, but also patient public policy and continued nurturing from both the federal and provincial governments.

We can build on work already under way in several government departments: Natural Resources, Foreign Affairs, Environment, and Industry Canada, as well as others. As a first critical step, we strongly advise that the government establish a mass adoption approach for clean technology that builds on the $40 million merit-based procurement program at Public Works so that SMEs can sell Canadian technology at home. This is a simple but powerful step with many benefits. It marries green government policy and Canadian technology, and it will support commercialization at a critical stage.

I'm joined by Curtis Cartmill, whose company represents a living example of what we found in our study.

[Curtis Cartmill, Chief Information Officer, LED Roadway Lighting, Canadian Clean Technology Coalition]

LED Roadway Lighting is emerging as a global leader in LED-based street and highway lighting technologies. In only 16 months of production, we've shipped our products to 225 locations in 10 countries.

The conversion of roadway lights to LED technology is a $250 billion market globally. To capture a portion of this global market, we must show leadership and deploy our technologies at home, particularly in cases where the technology can provide a substantial economic and environmental impact with easily quantifiable results.

Incentives for mass clean technology adoption in Canada will drive overall costing and pricing down for Canadian manufacturers, which eventually will allow us to become more competitive in the global export of our technology. This will also be a significant driver of job creation in the clean tech manufacturing sector.

Within Canada and other industrialized nations, street lighting costs typically account for 30% to 80% of municipal energy budgets. In an assessment conducted by staff of the Province of Nova Scotia, it was determined that Nova Scotia municipalities could realize a net savings of $285 million by adopting our Satellite series roadway light.

We estimate that the impact of converting Canada's 4.3 million street lights over to LED Roadway Lighting technology would result in an $8.5 billion savings and could create upward of 7,500 jobs. There are significant environmental benefits to a Canadian conversion program, which we have distributed on a sheet.

Your support would allow Canadian clean technology companies to grow locally, improve our global competitiveness, provide us access to export markets, and promote the reduction of Canada's carbon and resource footprint. In the case of LED Roadway Lighting, this support would also translate to substantial financial savings for municipal, provincial, and federal governments.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll now go to the Canadian Arts Coalition, please.

[Eric Dubeau, Co-chair, Canadian Arts Coalition]

Mr. Chair, ladies and gentlemen members of the committee, distinguished guests, good morning. I would like to thank you for having invited the Canadian Arts Coalition to appear before the Standing Committee on Finance as part of its pre-budget consultations. I am pleased to speak on behalf of the largest association of arts, culture and heritage stakeholders in Canada and to talk about the importance of the arts as a driver of the Canadian economy and a sector that will help Canada come out of the current economic crisis in a stronger position.

We believe that the arts sector can play a key role in Canada's economic recovery, particularly with regard to job creation. In fact, as you already know, Canada's cultural sector employs more than 600,000 people.

As the government is aware, investing in the arts is sound strategic economic policy, and I'd like to say a word of thanks to the Government of Canada for the arts investments it's made of late, particularly the $30 million permanent investment to the Canada Council in 2008, the renewal of significant investment in the arts and culture programs of the Department of Canadian Heritage in 2009, and the inclusion of Capital Arts Projects as part of the economic stimulus package.

Research by the Conference Board of Canada has shown that arts organizations generate $2.70 in revenues for every dollar they receive from government.

The best way to ensure that the arts sector delivers positive economic spin-offs is to invest directly in artists and the arts organizations that support them, through increased funding to the Canada Council for the Arts.

This is why the Canadian Arts Coalition recommends that the Government of Canada invest in Canadian creativity and Canadian communities by increasing the base budget of the Canada Council for the Arts by an additional $30 million per year in each of the next four years, bringing the council's funding base to $300 million per annum by 2015.

We believe that the Canada Council is essential to our cultural infrastructure in its role as the key public vehicle for supporting the arts continuum in Canada.

The Canada Council is familiar with Canadian artists and the communities in which they work and live. This awareness of the sector allows the council to implement programs that are tailored to the specific needs of organizations as well as to respond to an ever-changing environment. In 2009-2010, the Canada Council invested $158 million in over 4,000 artists living in 689 communities across Canada. If the government were to choose to implement the coalition's recommendation and double the Canada Council's budget by 2015, the spinoffs from that enhanced investment would be even more impressive and Canadian communities would be even more dynamic, which would allow them to attract further investments and create more jobs.

Canadians view the arts as cornerstones of excellence, innovation, and creative leadership in Canada, and recognize that these attributes are the contemporary building blocks of an internationally competitive society. In fact, the arts were the driving force behind the advancement of Canada's position in a global society that values economic prosperity, social cohesion, creativity, innovation, and excellence.

Historically, Canada has always taken important steps to foster and develop a knowledge-based economy, domestically and internationally. We were the first country to accept the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions and a founding force behind the International Network on Cultural Policy.

This leads us to the coalition's second recommendation. If implemented, it would help artists and arts organizations obtain the funds needed to showcase Canadian excellence on the international stage.

The coalition recommends that the Government of Canada acknowledge the role that arts and culture plays in enhancing Canada's reputation internationally and put Canadian artists on the world stage by investing $25 million in strategic international market access and development initiatives.

Arts and culture enrich us as people and contribute directly to our collective prosperity. The essential role arts and culture play in our country’s economy was confirmed when the government embedded support for the cultural sector in Canada's economic action plan. Increased investment through the Canada Council will ensure that the core of Canada's cultural milieu—artists and arts organizations—are supported in the shared public purpose of exploring and expressing what defines us as Canadians. It will also help us to ensure that Canadians have better access to artistic work from all regions of Canada that reflects our rich cultural diversity. Canadian communities of all backgrounds will have the opportunity to participate in and benefit from the broadest possible range of artistic experiences.

I'll wrap up quickly.

Arts and culture, creators and cultural workers represent precious social and economic assets. If we want them to continue to improve our quality of life, strengthen the ties that bind us and help express what defines us as Canadians, the government must support those assets by investing in Canada's creativity and innovation leaders, i.e., artists and arts organizations. By reaffirming the important role government has historically played in bringing the best Canadian art to international audiences, Canada will reclaim its place as cultural leader on the world stage. By sustaining and increasing its investment in the cultural sector, Canada will be first among equals in a global society that values economic prosperity, social cohesion, innovation and excellence. Canadian artists and arts organizations are playing an important role in Canadian society and they are eager to do more, in partnership with the Government of Canada. Thank you.

[The Chair, Conservative, James Rajotte]

Merci beaucoup.

We'll now go to Ms. Clayton for your five-minute opening presentation.

[Shelley Clayton, President, Canadian Association of Student Financial Aid Administrators]

Thank you. My apologies for being late.

I'm representing the Canadian Association of Student Financial Aid Administrators, or CASFAA, and I want to thank you for the opportunity to present here today.

We administer a large spectrum of student financial aid programs at all levels, including government-sponsored aid programs such as the Canada student loans, provincial assistance programs, institutional scholarships, bursaries, and work-study programs.

We are the front-line people who deal with students on an everyday basis. Because of that role, we are uniquely positioned to witness not only the success of the Canada student loans program but the gaps that seriously compromise the academic potential of a great number of students.

This particular consultation will focus on borrowing and debt. Government student loan and borrowing is a necessity for a large part of post-secondary participants. However, access to financial aid administrators and planning rarely happens before grade 12, or, in the case of mature students, until they are at their institution of choice. Most financial aid administrators, or FAOs, as we are known, will tell you that this process is way too late, and detrimental in some cases to the most disadvantaged of society. FAOs are crucial to the development and enhancement of financial literacy at all levels and years of post-secondary education, undergraduate and graduate, for Canadian domestic and international students, including first year, first entry, mature, single parent, aboriginal, etc. We see the gaps in financial literacy that hinder academic and career pursuits.

We recommend that a national strategy that includes key points of intervention at elementary, junior, high school, and post-secondary build on the success already established by such programs such as Planning 10 program in B.C. high schools and the Future to Discover program in my home province, New Brunswick, to begin financial literacy early.

For those of you who are not aware, Planning 10 is a course required by the B.C. Ministry of Education for all grade 10 students. It starts to prepare students for life after high school. It covers education and career paths, health, personal finance, and graduation.

The Future to Discover is a joint project of the governments of New Brunswick, Manitoba, and the Canadian Millennium Scholarship Foundation. It has two components. Explore Your Horizons helps students understand the range of occupational and post-secondary choices and make meaningful decisions about their future. They are also given learning accounts that support participation of students who face financial obstacles. They have an incentive of $8,000, which is deposited into a trust account that can be accessed upon successful completion of high school and enrollment at an accredited post-secondary education institution. This second component, however, is only delivered in New Brunswick and is available to students from families with incomes below the provincial median.

Recommendation two. The government has spent increasingly on student assistance through fiscal measures introduced to the tax system such as scholarship and bursary exemptions, credit, tuition fees, and allowance for each month of full-time enrollment as well as contributions to registered education savings plans, or RESPs. These tax credits are distributed almost entirely without regard to financial need, disproportionately benefiting families with higher incomes. They do little to assist high-needs students and underrepresented groups—students with disabilities, aboriginal students, adult learners—to enter our post-secondary education system.

CASFAA believes that means-tested student financial assistance that is accessible through a simplified program delivering funds at the time expenses are incurred is the most effective use of taxpayer dollars.

Recommendation three. There is growing empirical evidence from the Canadian Millennium Scholarship Foundation and Higher Education Strategy Associates, formerly known as EPI, and private researchers that qualified students will abandon post-secondary education if their student debt load is too high. Canadian-based research also states that it is not the amount of debt incurred, but it is also the affordability of education. If the gap between resources and cost of education is too vast, students will discard their educational pursuits.

Do I have one minute, or am I done?

[The Chair, Conservative, James Rajotte]

You're at about 40 seconds.

[Shelley Clayton]

Okay.

The changes to the Canada student loans program in the 2008 budget and the relaxation of special contributions, new grant programs for low- and middle-income students, and the repayment assistance program have enhanced this program, providing encouragement for many students and their families. However, CASFAA believes that more needs to be done to improve access to post-secondary and to encourage and support successful completion of programs, particularly for students who have traditionally been underrepresented in post-secondary studies.

[The Chair, Conservative, James Rajotte]

Okay. Thank you very much for your presentation.

We'll now go to the Canadian Association of University Teachers.

[James L. Turk, Executive Director, Canadian Association of University Teachers]

Thank you, Mr. Chair.

My colleague, David Robinson, and I are pleased to be here with you.

We don't envy the job you have. You listen to hundreds of groups come to talk about their needs. We suggest there are some sectors and some needs that undergird virtually everyone else: health care, post-secondary education, and social services. And we want to speak about post-secondary education.

We feel there are some serious difficulties in post-secondary education in this country. We'd like to highlight three of those, talk a bit about the problem in each, and suggest some solutions.

The three problems are what we see to be a misguided approach to research funding, inadequate federal support for post-secondary education, and restricted accessibility to universities and colleges.

With regard to a misguided approach to research funding, the problem starts if one looks at the 2009 federal budget, where the three federal funding agencies, which provide the bulk of the money for basic research and applied research in this country, had their budgets reduced by $147.9 million over three years.

Budget 2010 increased core funding by just $32 million, which wasn't even enough to keep up with inflation much less offset the previous year's cuts. At the same time, there were dramatic increases in funding to the American granting councils.

As well, in last year's budget there was $45 million for five years given to the granting councils for the creation of the Banting post-doctoral fellowship program, which, unfortunately, only rewards a small handful of researchers and institutions that house them, leaving the vast majority of Canada's post-doctoral scholars and postgraduate institutions with no benefit whatsoever.

At the same time, the federal government, beginning in 2009, rolled out a $2 billion knowledge infrastructure program, which has created enormous building and construction, and further infrastructure, but it's been done at the same time as the operational side has been starved.

Finally, part of the problem is the cuts to Statistics Canada. All of us in the research sector rely very heavily on data from Statistics Canada. The $6 million reduction, as part of the government's strategic review, resulted in the elimination of a number of important surveys, and the elimination of the mandatory long-form census is going to have a devastating impact on our ability to have data that is only gathered through that survey. As well, it undermines other sample surveys because the long-form census was used to benchmark those.

The solutions are to increase basic funding for research for Canada's three funding agencies over the next two years proportionally to what the Americans have put into theirs. After all, we lose scholars to the United States when the money isn't available here and it is in the United States. Based on the relative size of the Canadian economy, that would require an increase of about $1 billion over two years to be matched on a proportional basis to what the Americans are providing.

We also have to ensure that the research funding provided through the federal agencies is provided through them and not around them to ensure that decisions about what is funded are based on peer review based on merit, as determined by the scientific community.

Finally, the base budget of StatsCan should be increased by 10% and the long-form census should be restored.

The second problem is the inadequate federal support for post-secondary education. Funding transfers for post-secondary education, on a constant dollar basis and recognizing the adjustment for inflation, are now about $410 million less than they were in 1992-93.

On public funding for universities and colleges, government operating grants used to make up 80% of total university operating revenues in 1990. Today they make up only about 58%.

The Canada social transfer is set to increase by 3% this year. The Council of the Federation is telling the federal government it has to go up by at least 4.5% to more accurately reflect the projections.

The solution is to bring the funding for post-secondary education at least back to the level it was at in 1992-93, which would mean a $410 million increase in funding in this budget year.

We think the long-term solution is to tie it to the GDP, to say that we can afford to invest one-half of one penny of each dollar created by the Canadian economy in our post-secondary sector, which all of you have acknowledged is key to the future of the country. That would require, over the next three years, an increase of $4.8 billion to get us back to half of 1¢ of every dollar created by the economy. The method for doing that should be through a Canada post-secondary transfer governed by a Canada post-secondary education act, to ensure the funding the federal government provides is provided through a mechanism that ensures the money goes for post-secondary education in a way that's agreeable both to the federal government and to the provinces.

Thank you, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Turk.

We'll now hear from the Canadian Federation of Agriculture.

[Ron Bonnett, President, Canadian Federation of Agriculture]

Thank you, Mr. Chair. And thanks to the committee for having us in to make a presentation.

My name is Ron Bonnett. I'm a beef farmer from northern Ontario, but I'm president of the Canadian Federation of Agriculture.

The CFA represents about 200,000 farmers from across the country, and we represent a number of different commodity organizations. There are a few points I would like to make at the start about agriculture being core to economic activity in both rural and urban communities. We fuel jobs with our domestic production, as well as being a significant contributor to export sales to hundreds of other countries.

In general, when it comes to federal policy it should be designed with the idea of keeping farmers and farm businesses competitive in the worldwide scene. Taxes, investment, infrastructure, regulations, and fees should be designed with our competitors in mind and making sure that there are parallel standards, taxes, and fees in our area compared to other areas.

We see agriculture with potential opportunity. Global population that is projected to increase, climate change, and new markets emerging for agriculture products could create huge opportunities for economic activity, job development, and growth in the agriculture sector, not just at the primary sector but through the whole system.

The Canadian Federation of Agriculture is currently working with partners in the whole value chain on developing overall strategies to capture some of these opportunities. In future presentations, that will guide some of our requests.

There are lots of opportunities out there, but there are some investments needed in the short term. We've decided to focus our request this year on three key areas. You have a full written brief in front of you.

The first recommendation is to deal with changes to some of the existing programming. I don't think it's any secret that the AgriStability program has not responded to some of the financial issues facing the agriculture sector, particularly livestock. We are recommending that there be changes made immediately to the AgriStability program, removing the negative margin viability test and increasing negative margin coverage from 60% to 70%.

Also, if you could provide farmers with the choice of having either the top 15% of the reference margin coverage or participation in the AgriInvest program, that would allow farmers to make the most appropriate choice.

Also, reference margin issues are a problem because of long-term declines in prices, particularly in the livestock sector. If you could choose from the three-year average reference period or take the overall higher average of a five-year period....

Additionally, to inject money into the farm community immediately, we would remind you of a promise made in the previous election to enact a 2¢ per litre reduction in the diesel fuel excise tax. That would directly put money in farmers' pockets for the 2010-11 crop year.

Recommendation two is designed around creating a bridge to the future as we design new programming going forward. The government did approve an AgriFlexibility program, and we congratulate them for that, but we had asked that the non-business risk management clause be removed to provide some flexibility to put specific solutions within different regions of Canada.

On bridging to the future, we would ask that the federal government work towards restoring investment in research to pre-1994 levels. Research has been cut over a large number of years. As I said, we're poised to capture new and emerging markets, everything from energy markets to bio products, and that investment in research would give us the edge to move ahead.

Finally, we will be asking for a co-op investment plan, which would give a 125% tax deduction to members who invest in their co-op's preferred shares. This would spark value-added investment.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you.

The final presenter, la Fédération étudiante universitaire du Québec, s'il vous plaît, pour cinq minutes.

[Louis-Philippe Savoie, President, Fédération étudiante universitaire du Québec]

Thank you. My name is Louis-Phillipe Savoie, President of the Fédération étudiante universitaire du Québec (Quebec University Students' Federation). With me today is Mathieu Oliny, Vice-President of Socio-political Affairs at the FEUQ.

My presentation will be brief. The FEUQ is the largest university association in Quebec, representing 115,000 students from across Quebec and 14 student associations, both in the francophone and anglophone sectors, as well as university associations in major centres and smaller regions.

Today, we would like to present to you three federal funding proposals, more particularly in the area of post-secondary education. Clearly, the FEUQ believes that university education must be a priority. However, we should also keep in mind that university education is an area of provincial jurisdiction, and act accordingly. The three concerns that are outlined in our brief and that I will briefly present to you today are consistent with those principles.

Our first concern deals with federal transfers for post-secondary education. You are no doubt aware that there were major cuts to the federal transfers for post-secondary education in the early 1990s, and that the funding has still not come back to earlier levels. Taking into account inflation, there is still a gap of approximately $3.5 billion in federal transfers, with some $820 million to be allocated to Quebec. That is according to the estimates done by the Government of Quebec last year. That figure is supported by all Quebec stakeholders. Those cuts had a very significant impact across Canada. In Quebec, funding has still not returned to 1994 levels, essentially owing to the cuts in federal transfers.

We therefore believe that, when the federal government sits down to review federal transfers in 2014, priority should be given to increasing federal transfers for post-secondary education. That will help bring funding back up to 1994 levels. In our opinion, those transfers must be made without any conditions and respect provincial areas of jurisdiction. Above all, the provinces are the ones with the expertise needed to make proper use of the funds allocated for university education.

Another concern of the FEUQ deals with regional access to university education. In developing the university education system, it has become imperative to decentralize certain teaching activities. It has been recognized that the closer a student is to a university, the more likely he or she will enrol. However, even today many students have to leave their regions of origin. In Quebec, 50% to 75% of students living in resource regions, which are the most remote, must leave home in order to pursue their studies. Many of those students never return to their regions of origin. We know that those regions are currently facing problems, including an exodus of young people that is having a very significant impact on the economy of Quebec's regions as well as in regions of Canada as a whole. Ultimately, this will be a heavy burden on the entire economy.

To counter that exodus, the government of Quebec, in the early 2000s, implemented a tax credit for post-secondary graduates who choose to return to their regions. This is an $8,000 tax credit over a three-year period for students who settle in a designated region. Over 15,000 people took advantage of that tax credit in 2007. That is of considerable help to Quebec's regions. We believe that the federal government should follow Quebec's lead and adopt Bill C-288, which is currently being debated in the Senate and was previously passed by the House of Commons. We believe that passage of the bill should be expedited in order to ensure the sustainability of Quebec's regions.

And now, on to our third point. Needless to say, Quebec's students are also concerned by general taxation issues, given that they have major impacts on the funding of post-secondary education and social programs. We have highlighted two issues that are of recent concern. I will not get into the details, but the concerns are regarding adjustments made to equalization in recent years. There is also the issue of the harmonization of Quebec's sales tax. Those two issues have not yet been resolved and are the source of significant shortfalls for the government of Quebec. As a result, the province faces significant challenges because it must adequately fund its various social programs, and post-secondary education in particular.

Therefore, the three priorities that I have presented, i.e., federal transfers, Bill C-288 and the various taxation issues, must be urgently addressed by the federal government in order to ensure Canada's economic future. Investing in university education must be seen as a priority to ensure the future development of society.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll begin members' questions with Mr. Szabo, please.

[Paul Szabo, Liberal, Mississauga South, ON]

Thank you.

Ms. Clayton, I want to compliment your organization for their presentation. I think it is an extremely important point, as are the issues that you brought here about the need question.

I don't know how to put it delicately, but in a lot of the presentations that we've had with regard to post-secondary education and the funding, the hardship, the debt, very rarely has there been analysis to back up the statements. We really need that. I know it exists, but we don't have it.

In recommendation 2 you made the broad statement that the tax credits and everything else we have disproportionately benefit families with higher incomes. You can't make that statement without having seen some evidence, some basis, for making the statement. That's important. I bet you it exists; I think it exists, and I think the committee should have it.

[Shelley Clayton]

It exists with the Canadian Education Project, higher education strategies. There are many, many documents. I can provide you with backup on that, if you like, at a later date.

[Paul Szabo, Liberal, Mississauga South, ON]

I'm not sure if we want “many, many documents”. The key is really to get the underpinning to the statements, to get a dimension. We need to be able to express ourselves in terms of recommendations in our report and say that it's not just an editorial conclusion, but substantive evidence with the support of various groups.

I want to ask especially if you can help direct us somehow. It may be any of the groups. The post-secondary education thing is absolutely bang on: if you get the grades, you should get to go. One way or another we have to find a way to make that happen.

There are so many elements for families and students to get benefits that are directed or prompted by post-secondary attendance. It can be RESPs, student loan scholarships, or loan forgiveness. There are so many elements that are possible, not to mention students' own incomes. For one-third of the year they are not at school; they must be doing something, or should be doing something.

We need the kind of analysis that really breaks it down to the reality of the average case, the average student. I can give you a terrible case in which the family is destitute and the student is living on welfare and stuff like this, and that generates big numbers, but we need it for the preponderance of students.

Do any of the other three presenters who talked about the post-secondary side have a concern with moving towards a needs-based focus for assisting post-secondary students?

[Shelley Clayton]

I think I did say “means-tested”. Needs-based is where we're at in most provinces anyway, but it's not universal. There are eight different tests out there, depending on which province you go to, and cars are more valuable in Ontario than they are in New Brunswick. That's facetious--they're really not--but there's a whole different needs testing that you can do by province. I think we need to make it universal, so that students who are going into an educational institution in New Brunswick are going to have the ability to get as much assistance as they would get if they were going to Quebec.

In reference to Quebec, in my career--because I am a paid financial aid administrator--I have often told students to go to Quebec, establish a residency, and then come back and see me, because it is probably one of the better provinces for funding educational experiences.