Finance Committee on Oct. 25th, 2010

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

I see.

[The Chair, Conservative, James Rajotte]

You have 20 seconds.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

Okay. My question is about tax credits.

Mr. Lauzière, you talk about tax credits. How do our tax credits compare with those of other countries, in terms of their generosity?

[Marcel Lauzière]

The tax credit system that we have now is a very generous one. One of the issues is that awareness of that is not huge. The reason we are proposing this stretch tax credit is the idea of giving people an incentive to always give a bit more. That's why we're not recommending that the tax credit be raised holus bolus from 29% to 39% or 40%, because it is at a generous level.

What we're looking at, and I think that's where the innovation is here, is to try to get people to constantly give a bit more, so that over the next 10 to 20 years we will rebuild that base of donors that is slowly starting to erode in Canada.

[The Chair, Conservative, James Rajotte]

Thank you very much.

I want to thank all of the presenters for being here, for your presentations, and for responding to our questions.

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

[The Chair, Conservative, James Rajotte]

I'll ask colleagues and witnesses to take their seats, please, for our second panel.

The organizations we have here are, first of all, the Canadian Bankers Association; Polytechnics Canada; the Forest Products Association of Canada; the Western Canadian Wheat Growers Association; the Grain Growers of Canada; the Canada Foundation for Innovation; and the Co-operative Housing Federation of Canada.

Each of you will have five minutes for an opening statement, and we'll start with the Canadian Bankers Association.

[Nancy Hughes Anthony, President and Chief Executive Officer, Canadian Bankers Association]

Thank you very much, Mr. Chair, and thank you to the committee for allowing us to appear today. I'm with my colleague, Darren Hannah.

We are pleased to note that, despite the recent economic instability, our banks have remained robust and are continuing their considerable contribution to the Canadian economy.

Canada was one of the few countries whose banking system saw no bankruptcies and had no need for bailouts.

In fact, last month, for the third consecutive year, the World Economic Forum said that Canada has the most robust banking system in the world.

Mr. Chair, I think for the benefit of time and efficiency, I will not go through some of the great benefits of our banking system. I'm sure this committee is well aware of the impact on the economy. I would say, though, that our submission today focuses on three things: enhancing the climate for business investment and job creation, improving the international competitiveness of business in Canada, and reviewing and updating measures in our retirement system.

First, a short note on regulation, Mr. Chair. The strength of our banking system makes it very clear that our regulatory system here in Canada is sound. Nonetheless, our banks will be subject to new international rules being decided by the G-20 and the Basel Committee, rules that will certainly impose higher capital and liquidity levels on all banks. While these rules are very important to the stability of the global banking system, there will be an impact on banks in Canada. Our banks have already been at a higher standard than most banks around the world, and yet they will certainly have to adjust to these new requirements.

Mr. Chair, we also believe the benefits of our sound national regulatory system should be applied to our securities sector as well. For many years, I think you know, the CBA has advocated for efficient securities regulation that would offer improved investor protection and reduce the costs of raising capital for businesses across the country. So we are encouraged by the work of the Canadian Securities Transition Office, and we will continue to support the need for Parliament to pass the necessary legislation.

I will move to tax. When it comes to creating a more competitive tax system, we believe the government is on the right track. You clearly know about the federal government's announced commitment to reduce the corporate income tax rate to 15% by 2012. We certainly feel that making Canada's tax system more competitive will contribute to our economy in the form of new jobs and increased investment. It has in fact been estimated that the 3% decline in the federal corporate income tax rate for businesses of all sizes will generate $47 billion in additional capital investment and some 223,000 jobs over time. These are substantial benefits, and we very much support these reductions for the benefit of all Canadians.

We were also pleased, Mr. Chair, to note that among this committee's 2009 pre-budget recommendations, there was one to explore the feasibility of implementing a consolidated tax reporting framework for all business in Canada, and that was referenced as well in the last federal budget. This initiative is absolutely required to stop wasteful administrative and transaction costs and also to put Canada's businesses on an equal footing with the other G-7 countries, since we are the only G-7 country without a consolidated reporting framework.

Mr. Chair, I just want to mention the importance of personal saving and investment. There is a section in our brief with respect to that issue. Saving for retirement is certainly on the minds of all Canadians, but many do not have access to employer pension plans, and particularly small business owners. So we feel it's important to delink pension plans from the employment relationship and allow third parties, like financial institutions, to offer such plans so that all Canadians will be provided with the same tools to save for their retirement.

Finally, Mr. Chair, there is, as you know,

the Financial Literacy Working Group, which was established by government.

We intend to continue our discussion on financial literacy with the federal government, as well as with all parliamentarians. In our opinion, this issue is a priority.

Thank you, Mr. Chair.

On that note, I will conclude and be happy to answer your questions.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now hear from Polytechnics Canada.

[Nobina Robinson, Chief executive Officer, Polytechnics Canada]

Good afternoon, Mr. Chairman. Thank you for inviting us again to address your committee.

My name is Nobina Robinson, and I'm joined by my colleague, Ken Doyle, of Polytechnics Canada.

Contributing to Canada's economic success is what polytechnic institutions do. It is an integral part of our mission. We foster economic growth through applied research that addresses commercial needs. I can't emphasize this enough. Our research is driven by industry requirements, not by academic curiosity. Being close to our clients, we deliver results quickly and efficiently. Just ask the thousands of firms that come to us for help. We help small and medium-sized businesses solve a variety of challenges, from the design and prototype stages of new products right through to their commercialization, and finally to adoption by Canadian consumers.

In the past year, the federal budget and its research funding agencies of government have recognized our positive economic contribution by boosting available applied research support to the college sector, and for that we are thankful. We appreciate the measured, positive, and forward changes within programs at NSERC, at the Federal Economic Development Agency for Southern Ontario, and SSHRC. I note particularly the presence today of the Canada Foundation for Innovation, CFI, which has recently announced a new fund for vitally needed college research infrastructure. I wish to thank the CFI for this recognition.

The nine members of Polytechnics Canada are located in key economic regions across the country in B.C., Alberta, and Ontario. All nine have broken out of the mould of the traditional community college. While we still proudly offer diplomas, essential trades and apprenticeship training, together the nine of us offer 76 bachelor degrees, and we work together with our university partners to offer another 21 joint bachelor degrees. We are seeing more and more examples of collaborative research projects between university and college faculty on an informal project-by-project basis. This is an important new trend that should be encouraged.

Last year we provided you with concrete examples of how our members are helping companies in Canada. Today, I want to share three more success stories.

In Vancouver, the British Columbia Institute of Technology is helping to develop a smart grid electricity system for Schneider Electric, the world's largest producer of energy management software. The idea is to let customers manage their electricity use to take advantage of different prices during peak demand periods to reduce their costs.

In Toronto, Mill Pond Cannery and Preserves Company sought George Brown College's assistance in developing their business. The partnership resulted in the commercialization of Mill Pond's maiden line of fruit butters in an interdisciplinary effort that saw the product through R and D to the assembly line to store shelves and consumers.

In Calgary, Bobsleigh Canada Skeleton is making use of SAIT Polytechnic's expertise in sports engineering to design a sled that can be produced at a lower cost to encourage more participants in a sport where Canada is a world leader.

These are just three examples of the dozens of examples of win-win cooperation between SMEs and polytechnic institutions, often propelled by the one modest federal granting council program for college research. In 2009-10, our nine members consulted with 750 local companies, conducted 351 applied research projects, which resulted in 124 prototypes being developed. We believe in measuring the output of your dollars; it's very important for us.

Due to the size and nature of these companies, and the current economic situation, we are confident that without the applied research services of our students and faculty, the majority of these companies would not have undertaken these projects, and these ideas would have remained on blueprint paper instead of being turned into tangible prototypes.

We recognize that the country is now facing severe constraints on new spending. That is why we have offered practical ideas for small-scale, targeted, incremental, and pilot projects that continue to modestly build the capacity and momentum of research-intensive colleges in Canada. Opportunities exist to encourage and incentivize the smaller and newer entrants in the innovation system, such as colleges and small companies. We've mentioned two such opportunities in our paper: a commercialization chair program, and a program designed to harness the latent talent of newcomers with industrial experience to mentor our students.

With additional research training support for the Canadian college sector, Canada could make better use not only of the 130,000 full-time students at our polytechnics but of the creativity and innovation that lies untapped in all Canadian college graduates, coast to coast to coast.

I look forward to your questions. Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much.

We'll hear next from Mr. Lazar, please, from the Forest Products Association of Canada.

[Avrim Lazar, President and Chief Executive Officer, Forest Products Association of Canada]

Thank you.

As I'm certain all the parliamentarians sitting around these tables know, the last few years have been very painful for the forest industry. Many towns have suffered the heartbreak of mills closing, and 55,000 Canadians lost their jobs.

Change is very painful, but there are still 600,000 Canadians who depend upon the forest industry. We have been at this committee many times and we've always delivered the same message. We implore parliamentarians not to try to freeze the status quo, not to try to help us by preventing change; the role of government is to help accelerate the transformation of Canada's forest industry so that we can secure those 600,000 jobs tomorrow and tomorrow and in the future.

We know the markets are there, and we know we can do it. We haven't been waiting for governments to do this for us. We have improved our productivity. We have increased our exports to China and India. In fact, we are the biggest exporter to China now from Canada. We have secured our environmental reputation with the boreal agreement. We have gone to a model of extracting maximum value from every tree so that now we are working from a biorefinery concept in which we get not just two-by-fours and pulp and paper, but also bioenergy, biofuels, and bioplastics from every tree. In other words, we have been doing the hard work of transforming the industry, work that is sometimes painful, sometimes quite joyous, but all necessary if we're going to keep these jobs.

In the past, parliamentarians have responded in the right way by supporting us with research and development funds, with export development funds, and with green transformation funds. What we are asking today, in the next budget, is to see a continuation of that support. And we have three Rs for you.

The first is to renew the existing programs that support R and D, market development, and environmental reputation. So renew those programs. We're not looking for more funding. We're not looking for big increases. We need those programs renewed, and we hope you take a close look at them and make certain they're well focused and revitalized.

Second, we want to see a recapitalization of the IFIT program. That's the forest industry transformation program. It's tremendously successful. We have seen some near miraculous transformations in many companies that are now applying to use that money, which will change the business model. It's a program that creates industry independence and competitiveness instead of dependence. So we'd like to see it recapitalized.

Third, we'd like to see the money that is now in the nextgen biofuels fund at SDTC re-profiled to be open to all bioenergy projects. That is stranded money, $500 million that's not being used anywhere near where it could be. We can take that money and use it to secure jobs across the country. We can use that money to switch from fossil fuels to bioenergy and reduce costs. It will have an immediate impact on employment in Canada's forest regions as well as long-term competitiveness, as well as Canada's clean and green energy profile.

So this is not a time for big new spending. It's a time for spending smarter, renewing the existing programs with a clear eye to how they could be fine-tuned, recapitalizing the industry transformation program, and re-profiling the money that is now there for next-generation biofuels so we can use them this generation to secure jobs in Canada's rural regions.

We have always said that the role of Parliament, the role of the government, is to support our transformation. The role of industry, of unions, of workers, of managers is to do the heavy lifting of transforming. We have tightened our belts. We have suffered the pain of consolidating factories. Unions have taken rollbacks in wages, as have owners and managers. We see huge potential in the future, with markets growing, and we hope that parliamentarians and the government will continue to support these necessary and profoundly useful programs.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll now hear from the Western Canadian Wheat Growers Association.

[Gerrid Gust, Chair, Western Canadian Wheat Growers Association]

Thank you for the opportunity to provide our association's views to the finance committee on the changes we believe the Minister of Finance should include in the 2011 budget.

My name is Gerrid Gust, and I am a full-time farmer and the volunteer chair of the Western Canadian Wheat Growers.

For the past 40 years, the Wheat Growers have been a voluntary organization of business-minded prairie farmers who recognize the importance of competitive markets, innovation, and free trade. Our mandate is to advance the development of a profitable and sustainable agriculture industry.

The competitiveness of Canadian farmers has been undermined by an excessive tax burden and onerous regulatory impediments. The Wheat Growers provide the following five recommendations, with the sure knowledge that these changes will lead to greater economic prosperity and investment in the agriculture sector.

First, we recommend that block averaging of farm income over five years be restored. As I'm sure you know, due to environmental factors, grain farming is subject to tremendous swings in farm income. These are not factories, mines, or mills, where a set production is almost guaranteed as long as the equipment is operating. The inability to average income causes farmers to pre-purchase inputs or buy equipment to reduce their tax liability in those years when their tax income is projected to be relatively high. While this makes perfect sense from a tax planning point of view, it may not be in keeping with the best farm practices. In our view, the tax system should be structured in a way that encourages farmers to engage in sound business practices. The restoration of five-year block averaging would help achieve this.

Second, we recommend the introduction of an investment tax credit on the purchase of certified seed. Currently, the use of certified seed in western Canada is at 18%, which is among the lowest of all industrialized nations. The use of certified seed tends to increase and improve uniformity of product, which allows us to better meet the quality needs of end-users in markets here and around the world. Such a tax credit would promote innovation and would allow Canadian farmers to retain our reputation as a leading producer of quality wheat. It would also encourage the development of new varieties that have the potential to enhance human health.

Our third recommendation is to increase public expenditures on seed research and development. For various reasons, there is very little private investment in cereal and grain research in Canada. To compensate for this, we recommend that A-base agricultural research funding be returned to 1994 levels, adjusted for inflation. This should be done in increments over the next 10 years.

I'd like to pass the rest of my time over to our Saskatchewan VP, Geoff Hewson.

I thank you very much for your time.

[The Chair, Conservative, James Rajotte]

You have two minutes, Mr. Hewson.

[Geoff Hewson, Vice-President, Saskatchewan, Western Canadian Wheat Growers Association]

Thanks very much.

Thank you, Gerrid.

Our fourth recommendation is to increase the lifetime capital gains exemption on the sale of farm assets. Currently, the exemption on the sale of qualified farm property is $750,000. According to the 2006 census of agriculture, the average age of Canadian farmers is 52. This means that a large number of farmers will be retiring from farming over the next several years. To facilitate the transfer of farm assets to the next generation and to encourage young farmers' entry into the business, the Wheat Growers recommends that the capital gains exemption be increased to $1 million.

Our fifth and final recommendation is for the government to move forward in implementing a voluntary Canadian Wheat Board. The continuation of the CWB marketing monopoly in western Canada represents the single greatest impediment to farm profitability and economic prosperity in western agriculture today. The monopoly stifles investment in research and grain processing in western wheat and barley.

The CWB monopoly provides lower returns to prairie farmers than would exist in open market conditions. One example is a 2008 study by Informa Economics, which found that the Canadian Wheat Board provided western Canadian farmers with lower returns than an open market in five of the six years it examined, for both spring wheat and durum wheat. The Informa study pegged farmer losses due to the monopoly at $450 million to $628 million annually. Needless to say, the increase in farm revenue resulting from a voluntary CWB would greatly improve farm income and would generate considerably more tax revenue.

I would add as well that implementing a voluntary CWB does not require any increased spending on the part of the government. This policy change represents a cost-free means of stimulating the economy and helping to slay the deficit.

I'd like to thank the committee members and the chair for inviting us, and we look forward to your questions after presentations.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now hear from the Grain Growers of Canada.

[Gary Stanford, Director, Grain Growers of Canada]

Thank you, Mr. Chair.

My name is Gary Stanford and I am a farmer from southern Alberta.

The Grain Growers of Canada represents 80,000 grain, pulse, and oilseed farmers. We believe that the government does not owe farmers a living, but should create a policy environment that will allow us to make a living. Our aim is to ensure an advantage for our farmers through innovation, and we have a couple of budget requests to make.

On public research, the federal contributions to Agriculture and Agri-Food Canada's research branch are only 60% of the 1994 inflation adjusted numbers, and we have far fewer plant scientists and breeders today. There is a big need for increased investment in research branch expenditures and a plan to replace aging scientists.

A good example of public research on my farm is the use of Agriculture Canada breeders' development of a winter wheat that is resistant to the leaf curl mite. This insect used to wipe out acres of my crop and there was no way to control it. The winter wheat has now put thousands of dollars a year in my pocket, just on my farm alone.

On a certified seed tax incentive, one of the barriers to private and public investment in cereal and pulse research is the low use of certified seed—except in Quebec, where farmers plant certified seed to qualify for crop insurance. When I go to talk to public plant breeders at the Lethbridge research station in Alberta, they tell me that the more certified seed sold, the more money would flow back into their work. A tax credit of 155% for farmers to buy new certified seed annually would encourage more investment in cereals and pulses.

The George Morris Centre estimates that if we reached full certified seed use potential, the tax credit would increase farm incomes by over $170 million, just from the eight most recent varieties alone, and would generate over $60 million in tax revenues from just those eight varieties. The return to the economy would be $600 million.

On capital cost allowance adjustments, there are farms where adjustments to depreciation rates would provide a direct stimulus to jobs and improve our sustainability. Here, we would encourage, first, safe on-farm fertilizer storage to allow us to buy when prices are low and to ensure supplies.

Second, just as you MPs use GPS devices in your cars, we should encourage all farmers to use GPS in our machinery, because it will keep our tractors driving in straight lines. This reduces pesticide use, fertilizer use, and fuel consumption on our farms.

Lastly, we must improve the quality of our on-farm grain storage. In the last couple of years, we have seen greatly increased testing of cereals, pulses, and oilseeds for trace amounts of mycotoxins. We need better storage and monitoring systems on our farms. For example, aeration blows large volumes of air, drying our grain and cooling it down to prevent growth of harmful bacteria. Looking forward, we are going to have to install more temperature monitoring control cables to catch any early problems. This would help ensure that our harvested grain remains in top condition and is healthy for Canadian consumers.

In conclusion, Grain Growers of Canada believes that increased agricultural research in Canada is critical to securing the prosperity of Canadian farmers. An amount of $26 million a year in increased core Agriculture Canada research funding over 10 years would restore us to 1994 levels. A certified seed tax credit incentive would promote greater public and private sector involvement in cereals, pulses, and forage research. Investments in more environmental and sustainable ways of farming and safer grain storage would help increase consumer confidence in our own domestic food systems. These initiatives would create jobs and economic activity, as well as strengthen the competiveness of Canadian farmers, and would also help reduce the need for farm support programs.

We urge you to give careful consideration to our thoughts and ideas. We look forward to your questions. Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We will now move on to the Canada Foundation for Innovation.

[Gilles Patry, President and Chief Executive Officer, Canada Foundation for Innovation]

Thank you Mr. Chair.

First, I want to thank you for giving me the opportunity to speak to the Standing Committee on Finance.

Budgets are about tough choices for government—everybody accepts that. They are about setting some clear national priorities and making sure that the impact of the investments being made will benefit all Canadians.

Today I'd like to share with you my vision of the CFI's role in meeting both the current and future challenges facing Canada, particularly when it comes to strengthening our capacity to conduct world-class research, attracting the best researchers from around the world, and translating their research findings into tangible solutions.

As you know, the mission of the CFI is to invest in cutting-edge research infrastructure that strengthens the capacity of Canadian universities, colleges, and research hospitals to carry out world-class research and technology development that benefits Canadians. The CFI funds 40% of the infrastructure costs, and institutions then use this funding to attract the remainder from partners in the public, private, and not-for-profit sectors.

The research enabled by these CFI investments supports the conditions necessary for sustainable, long-term economic growth, and helps inform the policy-making process—leading to the creation and development of improved public policies and programs in areas such as natural resources, health and the environment.

Since its creation, the CFI has committed $5.3 billion in support of 6,800 projects at 130 research institutions in 65 municipalities across the country. These investments by the Government of Canada through the CFI have leveraged an additional $7 billion in partnerships for a total of $12 billion in just over a decade. The overall economic impact from these infrastructure investments and their ongoing operation is an important part of the Canadian economy, given that it can be measured in the tens of billions of dollars.

The CFI exists thanks to the belief of successive governments that research and innovation underpin the competitiveness of our industries and can transform our economy. As one of my predecessors once said, the challenge of building a more innovative economy is about more than a slab of concrete or a piece of equipment. It's about people. It's about supporting the best and the brightest by providing them with the environment they need to conduct world-class research. This, in turn, will create prosperity for Canadians.

Imagine for a moment your reaction if I had stood before you 10 years ago and boldly declared that within a decade Saskatoon would be home to a state-of-the-art synchrotron, Canada's biggest science project in a generation; that Chicoutimi would be a world leader in developing de-icing technology for commercial airplanes and hydroelectric wires around the world; that British Columbia would be on the cutting edge of helping to improve the quality of life for people with spinal cord injury; or that Nova Scotia would be leading an 82-nation project to gauge and record the diversity, distribution, and abundance of life in the world's oceans. You likely would have reacted with disbelief. Yet today, as I stand here, all these advances are a reality for Canada, in large part due to the investments made by the Canada Foundation for Innovation.

Investments like these are creating jobs and leading to innovative breakthroughs in some of today's most important and exciting areas of investigation—from advanced materials to pharmaceuticals, renewal energy, high-performance computing and early childhood education.

Consider a recent study on university research contracting. It found that in 2008, companies, governments, and not-for-profit organizations contracted almost $2 billion worth of research from Canadian universities and affiliated teaching hospitals, up from $1.1 billion in 2006. This is an increase of 80% over a two-year period. Why? Because Canada's best is now becoming the world's best.

To ensure that the CFI continues to carry out its mandate of promoting research excellence while continuing to improve Canada's long-term competitiveness and the quality of life of Canadians, we require continued support from the Government of Canada in four areas: first, to address the needs of our core leading-edge and new initiatives funds programs; second, to develop collaborative initiatives with other federal research granting agencies to focus Canada's research strengths on issues of national importance; third, to ensure that Canada continues to play an active role in strategic international research activities; and finally, to support national research platforms in areas such as high-performance computing and other new initiatives.

It is critically important that Budget 2011 send a clear signal to Canada's research community that when it comes to science and technology, Canada will continue to invest in cutting-edge, world-class research infrastructure.

In closing, I want to thank you again for providing me with this, my first opportunity to testify before Parliament at the helm of the CFI.

Mr. Chair, I look forward to your questions.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much.

Ensuite, we have the Co-operative Housing Federation of Canada.

[Nicholas Gazzard, Executive Director, Co-operative Housing Federation of Canada]

Good afternoon. Thank you.

I want to very briefly go over the proposals that we've put into our brief and then talk about something a little bit different.

First, like many others here, we recognize the economic situation Canada is facing and the impact it will have on next year's budget, so we are not proposing new housing spending for 2011. There is money, however, on the table. The federal government has put money on the table for the affordable housing initiative, and that runs to 2014.

Our recommendation is that in the redesign of that program, which is supposed to come next year, there be a much closer relationship between the amount of money provided to the provinces and territories and the outcomes Canada needs, which is a reduction in housing need among Canadians. Right now there is a lack of an accountability framework, and in my view far too much discretion in how the housing spending is targeted to, if you like, pet markets by the provinces. I won't go any further into that, but it's the same message I came here with last year: if you're going to hand money over to the provinces to spend on housing, we need an accountability framework.

Second, I'd like to alert parliamentarians to what I would describe as an impending crisis in existing social housing. We have some 600,000 units of social housing in Canada that have been federally sponsored in some way or other. Over the next decade, we're going to see the present funding agreements for those projects come to an end. A lot of that funding comes by way of assistance to help lower-income Canadians, particularly those with fixed incomes, pay their rents. Absent those funding agreements and absent that money, I think we are facing an affordability crisis of monumental proportions. Just to give you one example, there are some 60,000 units of federally sponsored cooperative housing. By 2020, fully 50,000 of those units will no longer have any federal assistance to help house low-income people. The situation is much worse still for municipal housing providers and for non-profit housing providers.

We're saying that this would be a very good time for the Government of Canada to study this problem and to decide what, if anything, they're going to do about it. Personally, I think we have to do a lot about it, and we have to involve stakeholders in that study. Right now all we're hearing from government is a deafening silence on this issue. It's going to creep up on us, and we are going to have a very hot potato to handle unless we consider how we're going to handle this crisis in advance.

Our brief also talks about the economic case for housing. I'd like to refer to the report from the Conference Board of Canada, “Building From the Ground Up: Enhancing Affordable Housing in Canada”, which came out earlier this year. Quite simply, what they said--and we agree--is that a better-housed population is healthier, better educated, more productive, and less likely to produce clients of the justice system. These are precisely the attributes of the workforce needed in an emerging knowledge-based economy.

The cost of inaction, when taken as a whole, including the relationship between poverty and a whole range of negative social outcomes, is likely greater than the cost of doing something about it. We can do something about it in two ways: better access to affordable housing--hence my accountability framework proposal--and better opportunities for personal income growth. We can go a long way toward achieving the latter by just making it easier for Canadians to escape the welfare trap and enter the workforce. We can do so through a combination of tax and benefits policies that will act as an incentive to escape income assistance dependency.

I'd like to conclude with a more general observation. There was once a report that was created that described the conditions under which the working poor lived. The study concluded that after paying for their shelter costs, many families were barely able to afford the necessities of life. If the family breadwinner were to become incapacitated in some way, or taken ill, the family would go hungry. Children and the elderly were found to be particularly at risk for malnourishment. That study was called “Poverty: A Study of Town Life”. It was released in 1900 in the U.K. It was written by a guy called Seebohm Rowntree, of Rowntree Foundation fame.

What I find amazing is that you can still find echoes of Rowntree's report right here in Canada, 110 years later. In Canada today there are an estimated 500,000 households that will spend more than 50% of their income just to put a roof over their heads. That doesn't leave very much room to feed and clothe the rest of the family. The result--and I think most Canadians are not aware of this--is that there are numbers of children, women, and men in this country who often go to bed hungry, and just as in Rowntree's day, the working poor are still vulnerable: 14% of food bank clients in this country are the working poor--

[The Chair, Conservative, James Rajotte]

You have one minute.

[Nicholas Gazzard]

--and seniors and children remain disproportionately at risk.

Regardless of which side of the political spectrum the people in this room may sit on, I can't imagine there's a single one of us who considers it an acceptable situation to still have conditions in 21st century Canada that Seebohm Rowntree would recognize from his own report of 110 years ago.

The problem of hunger in Canada is very closely related to a shortage of decent housing that is affordable to Canadians with low incomes. So what can we do? I have already noted that we could improve the accountability framework of the money that's already on the table. It's probably less than what we need, so let's make sure we spend it wisely.

Let's also set the housing agenda in the broader context of jobs and incomes and in terms of the economic benefits housing development brings.

But beyond that, let's not forget for one moment that this country continues to suffer under the blight of real poverty that leaves children without enough to eat. It is something we should not be prepared to live with.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll start members' questions with Mr. Brison, for seven minutes.

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you, Mr. Chair, and thanks to each of you for your intervention.

My first question is to Mr. Lazar. I'm impressed with the degree to which the Canadian forestry industry has transformed and continues to transform itself into a green industry. To be competitive in a global carbon-constrained economy is going to be very important for the entire Canadian economy, but how do the environment in Canada and the incentives provided by the Canadian government for your industry to embrace the bio-economy and the green economy compare with those of other countries, for instance, the U.S. and European countries?