Finance Committee on Nov. 1st, 2010

[The Chair, Conservative, James Rajotte]

I call this meeting to order, the 42nd meeting of the Standing Committee on Finance.

I want to welcome all of our witnesses here today to continue our discussion regarding the pre-budget consultations.

We have with us here, on the first panel, seven organizations to present to us. We have, first of all, the Canadian Council of Christian Charities; deuxièmement, l'Association des producteurs de films et de télévision du Québec. We have the Association of Canadian Community Colleges, the Canadian Federation of Nurses Unions, the Canadian Nurses Association, the Canadian Dental Hygienists Association, and the Canadian Alliance of Student Associations.

You'll each have five minutes for an opening statement, and we'll proceed in that order. So we will start with the Canadian Council of Christian Charities, please.

[Teresa Douma, Senior Director, Legal Affairs, Canadian Council of Christian Charities]

Thank you, Mr. Chairperson.

Honourable members and guests, good afternoon. My name is Teresa Douma. I'm senior director of legal affairs for the Canadian Council of Christian Charities, also known as the four Cs. We are a member-based association of over 3,100 faith-based charities. Of these, 130 are umbrella charities themselves, representing 25 to several hundred charities. Our membership includes inner-city missions, such as the Yonge Street Mission in Toronto and the Union Gospel Mission in both Vancouver and Winnipeg; faith-based colleges and universities, such as Trinity Western University in B.C. and Redeemer University College in Ontario; relief and development organizations, such as World Vision Canada and Compassion Canada; and disaster relief organizations, such as MSC Canada and the Mennonite Central Committee of Canada. As of October 29, 2010, and based on the most recent T3010s available, collectively our members account for 15.4% of all receipted donations made it Canada.

Our association provides two key functions to our sector. We provide practical resources, and every year we answer over 18,000 calls and e-mails from our members on a wide range of issues, including finance, charity log, governance, and human resources. Our second key function is a charities certification program where we confer a seal of accountability on charities who meet our standards.

We bring three recommendations to the committee.

First, we recommend that the current tax treatment for donations of publicly listed securities be extended to donations of real estate and land. Donations of real estate could include vacant land, vacation, industrial, commercial, and residential investment properties. Principal residences would not be included, given that they are already exempt from capital gains tax. The charities could receive donated land as cash proceeds or in kind. If a donor gave cash proceeds, the donor would be exempt from capital gains tax only on that portion of real estate proceeds donated. The donor could also make an in-kind real estate donation that would enable the recipient charity to liquidate the property itself or retain the property for its own use. The donor would be exempt from capital gains tax on the entire value of the real estate gifted. Both ways of giving parallel the treatment of donations of publicly listed securities. This suggestion was included in this committee's recommendations last year, and we would suggest it merits being recommended again.

Second, we recommend an increase in the federal charitable tax credit from 29% to 42%. For example, if a donor has already made a gift of $200, a further gift of $300 at 29% would give the taxpayer a tax benefit of $87. However, a gift at the 42% rate would make that $300 gift provide a tax benefit of $126 instead of $87. This measure could work to increase support from core existing donors and encourage new ones. It would require a simple and straightforward adjustment to Canada's tax laws.

Third, related to donations of publicly listed securities, we recommend that a taxpayer receive a federal charitable tax credit of 42% on the adjusted-cost-base portion and keep the existing federal charitable tax credit of 29% on the capital gains portion. You will recall that on the capital gains part the taxpayer also benefits from not paying capital gains tax, and that's worth about 23%.

This proposal would align the benefit received from the cost portion of the gift more closely with the benefit received from the capital gains portion. Also, adjusting the tax credit from 29% to 42% on this cost portion would align it with the treatment of donations, as per our second proposal.

[The Chair, Conservative, James Rajotte]

You have one minute.

[Teresa Douma]

This proposal also reduces the gap between the benefit realized on securities and on other donations. It may encourage people to donate listed securities that have fallen in value, because they would receive the enhanced 42% charitable tax credit on the cost base.

All of these suggestions together would create more incentive for giving.

Thank you for the opportunity.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll now hear from the Association des producteurs de films et de télévision du Québec.

[Claire Samson, President and Chief Executive Officer, Association des producteurs de films et de télévision du Québec]

Thank you, Mr. Chair.

My name is Claire Samson. I am the President and CEO of the Association des producteurs de films et de télévision du Québec. With me today is Brigitte Doucet, Deputy General Director.

For 40 years now, the APFTQ has been the umbrella organization for over 140 production companies working in both official languages and in all sectors of audiovisual production in Quebec. I would remind the committee that the total volume of film and television production in Canada in 2008-09 was worth $5 billion. During that same time period, the sector provided 122,400 direct and indirect full-time equivalent jobs.

Despite this success, the audiovisual industry requires stable funding in order to be able to meet the challenges of the new digital economy and grow again following the country's economic downturn. We represent a fragile, fragmented industry at a time when the trend is towards convergence. Without additional support from the government, the presence and diversity of Canadian content are at risk, and this applies to both traditional and digital distribution platforms. We need to make it easier for Canadians to access productions that have been created and produced in Canada—by Canadians, for Canadians—that is, productions that we can identify with.

We believe that the following measures are absolutely crucial.

[Brigitte Doucet, Deputy General Director, Association des producteurs de films et de télévision du Québec]

First of all, funding is needed for research and development in the audiovisual industry, which now has to create productions on all platforms. Film and television producers now need to discover and learn about information and communications technologies, develop content that is available on all platforms, and more importantly, create and test new business models. Federal programs that provide funding for research and development in ICT do exist, but we need programs that respond to the new needs of audiovisual producers.

Second, funding for the Canada Media Fund needs to be increased and digital content providers—in other words, Internet and cellphone service providers—must be obliged to make an annual contribution, following the example of broadcasting distribution companies. Those providers already benefit considerably from digital content, without contributing to its funding. These new financial contributions to the Canada Media Fund will help ensure adequate funding for digital content productions in order to provide Canadians with high-quality, diverse Canadian content, while allowing television productions to benefit from full funding, given that Canadian audiences still really appreciate these productions. In addition, the government must ensure permanent funding for the Canada Media Fund for at least five years. This measure would increase the financial stability of our industry.

[Claire Samson]

Third, funding for the Canada Feature Film Fund needs to be increased and a separate fund must be created for documentary feature films. We believe that an additional $20 million needs to be invested to boost the Canadian film industry, specifically, $15 million for the Canada Feature Film Fund and $5 million for a fund dedicated to theatrical-release documentaries. Since its inception, the Feature Film Fund has provided the Canadian industry with the tools needed to produce high-quality feature films. Unfortunately, the funding provided no longer corresponds to the needs, which explains, for the most part, the considerable decrease in production volume in 2008-09, which dropped by 22%. Furthermore, the importance of theatrical-release documentaries and their growing popularity among Canadians are remarkable. In order to promote the growth of Canadian documentary film-making, a separate fund must be created that will be dedicated to that sector, without taking away from the traditional Feature Film Fund.

Fourth, support is needed for international co-production. A $30 million investment to create an international co-production fund would help revive this business model at a time when Canada is about to update some of its treaties with certain countries and negotiate new ones with other countries. Foreign co-production enables participating producers to pool their creative, artistic, technical and financial resources in order to further their “homegrown” production, and to distribute them within all participating countries. In order to access them, Canadian producers need a dedicated fund that will allow them to fulfill the obligations set out in the various international co-production treaties.

[Brigitte Doucet]

Fifth, a review of the Canadian Film or Video Production Tax Credit program is needed in order to better support the Canadian film industry and to ensure that it is better adapted to the new needs of the digital economy.

The support of federal tax credits, which represent, on average, 10% of total financing for productions, has decreased by 5% for film, and some French-language feature films received as little as 2%.

We would like the rules for the tax credit program to be more flexible for all theatrical-release feature film productions, whether fictional or documentary, so that government and non-government assistance, with the exception of provincial tax credits, no longer reduce the cost of production used to determine the value of the labour eligible for the tax credit.

Furthermore, the tax credit program should be changed to make all necessary labour expenditures for the supplementary production of digital content related to television and film production eligible, since those productions must now be produced on all platforms. This measure would fit into the federal government's goal to be a world leader in the new digital economy.

On behalf of Quebec's audiovisual producers, thank you for this opportunity to appear before the committee today. We are available to take your questions.

[The Chair, Conservative, James Rajotte]

Thank you very much.

We'll now hear from the Association of Canadian Community Colleges, please.

[James Knight, President and Chief Executive Officer, Association of Canadian Community Colleges]

Hello, ladies and gentlemen. My name is James Knight and I am president of the Association of Canadian Community Colleges. With me today is Paul Brennan, our vice-president of International Partnerships.

I commend the committee on its broad-based consultation with Canadians on priorities for 2011-12. Your work is important and onerous, and we're very proud to be here. For the college sector, your report in 2010-11 was particularly helpful, and we thank you for that.

This year our orientation is towards the long term. Most of you remember David Foot's groundbreaking book, Boom, Bust & Echo. Well, I'm here to tell you that the bust has arrived. The first baby boomer will celebrate his 65th birthday in 2011, and millions more will follow in quick succession. The high end of our labour force, the most skilled and the most experienced, will retire in vast numbers. As we age, the percentage of Canadians who do not participate in the labour force will rise from 44% to 61% in less than a generation.

HRSDC and Statistics Canada predict a labour shortage of 1.5 million within a decade. These numbers are grim enough, but another consideration makes things even more challenging. Owing to the penetration of technology into everything we do, employers will require persons with a much higher skill level. Not long ago someone could have a good career with no more than a high school diploma. The new standard will be a post-secondary credential. Already, 70% of employment opportunities require PSE, post-secondary education. Within a generation, the figure will be 80%. Currently, only 60% of Canadians between the ages of 25 and 64 meet this standard. This is one reason why we already experience high unemployment and large numbers of job vacancies at the same time. Unless something significant changes soon, by 2016, the 550,000 Canadians without a post-secondary credential will not qualify for positions that will be available. This is the syndrome of people without jobs and jobs without people.

Meeting these challenges will require a whole basket of strategies. Immigration is important but only a small part of the answer. Making post-secondary education more efficient is another opportunity. Encouraging people to work longer is a third opportunity. But by far the most important strategy is to increase the labour participation rates among those who generally fare poorly in the employment market: aboriginals, poor immigrants, the disabled, multi-generation welfare dependants, and disengaged youth, particularly young men.

If we fail to attract these marginalized populations, post-secondary enrolment in Canada will plateau and then begin to decline in 2016. However, if we can bring only 25% of these groups into education, enrolment will increase for a generation and beyond.

Canadian colleges excel at providing accessible, cost-effective post-secondary education and lifelong learning for people of all ages. Colleges have a mandate and a unique ability to reach out to and nurture the marginalized through to graduation and employment.

Meeting these demographic and skills challenges will require a huge national enterprise. We urge the Government of Canada to launch a dialogue with provincial and territorial governments, educational institutions, the private sector, and civil society now. Failure to act will result in a declining standard of living and threaten our most valued national institutions, and I would put health care at the top of the list.

In the short term, we recommend three specific, affordable actions. We must find mechanisms to increase the educational success of our fastest-growing demographic, our aboriginal populations. Shamefully, the number of aboriginal post-secondary graduates is falling. We must act now to recover lost market share for our education exports; that is, bringing foreign post-secondary students into Canada. Higher tuition fees are a great resource for all post-secondary institutions, but our marketing efforts abroad pale in comparison with those of our competitors. Many of these students are now able to remain in Canada following graduation.

On the reciprocal side, it is curious that the country that is the most trade-dependent in the world is the weakest in terms of sending students abroad for cultural and language experiences. Employers place a very high premium on graduates with offshore experience.

Finally, we must continue to invest in college-private sector partnerships, innovation, applied research, and commercialization. These arrangements increase productivity and employment in the SME sector, where most new jobs are created.

Thank you, Chair.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll now hear from the Canadian Federation of Nurses Unions.

[Pauline Worsfold, Secretary-Treasurer, Canadian Federation of Nurses Unions]

Good afternoon.

I'm Pauline Worsfold, the secretary-treasurer of the Canadian Federation of Nurses Unions, and with me today is our health researcher, Amanda Crupi.

The Canadian Federation of Nurses Unions represents 138,000 nurses in all provinces, sans Quebec so far, as well as over 25,000 associate members, who are part of the Canadian Nursing Students' Association. Our members work in hospitals, long-term care facilities, community health care, and our homes.

We thank the Standing Committee on Finance for the opportunity to share our views on the prioritization of issues for the next federal budget.

Recent polling by Nanos Research has placed health care as the most important national issue of concern among Canadians. Health care was identified by 35% of Canadians as their most important national issue, followed by jobs and the economy at 19%.

Our suggestions for the 2011 budget remain constant and will have a significant and positive impact on the health and well-being of Canadians, while ensuring the long-term viability of our public health care system.

The 2004 first ministers health accord is set to expire in 2014. CFNU would like to see the federal government take the lead in negotiating a successor accord based on three recommendations presented in our brief today: first, establish a basis for federal leadership in the creation of a national universal pharmacare plan; second, improve the position of the federal government in funding medicare; and third, provide opportunities for system change and improvement rooted in public funding and public delivery of health care.

Canadian nurses urge the federal government to work together with provinces and territories to adopt and fund a national pharmacare program that would provide access to prescription drugs through first-dollar coverage, control drug costs through a national drug formulary and bulk purchasing, and increase the safety and efficacy of drugs.

In the final press release of the Council of the Federation meeting on August 6 this year, the premiers noted the need for “a critical path in the review of...the Canada Health Transfer” and agreed that the federal government “needs to remain a strong partner with provinces and territories in funding health care”—and nurses couldn't agree more.

Many here will know that pharmaceuticals have been responsible for 25% of the increase in medicare costs as a share of GDP since 1975 and that the cost of drugs is the fastest-growing part of our health care pie. A recent report released by the Canadian Health Coalition and the Canadian Centre for Policy Alternatives outlines the costs and benefits of publicly funded drug coverage for all Canadians. Their analysis reveals a number of different policy scenarios that could save the country $10.7 billion—and that's “billion” with a “b”—by implementing universal pharmacare and reviewing policies that artificially inflate drug costs. More details are available in the report, which we mailed to all MPs and senators last week.

To put this in a real-world context, because I'm a real working nurse—in fact, my last shift was on Saturday in the university hospital in Edmonton—I know examples of where people have cut their pills in half to make them last longer because they can't afford them. As a consequence, the medication's effectiveness is also cut in half, resulting in frequent visits to emergency room departments and doctors' offices. The ripple effect of this action not only jeopardizes the health of the person, but it also drives health care costs up and overtaxes already limited resources. So a national pharmacare plan would be a win, win, win—a win for the government who introduces it, a win for the health care system, and a win for the citizens of Canada.

The concept of the continuum of health care ties into another report recently released by the CFNU, The Sustainability of Medicare, of which you've all received a copy as well, written by Dr. Michael Rachlis and Hugh Mackenzie, the health economist. It says that medicare costs are not out of control, as some critics would have the public believe. In fact, costs have remained remarkably stable as a share of GDP.

Canada could not have achieved what it has in health care to date without the active participation of the federal government. Although the federal government's responsibility for health care delivery is limited to Veterans Affairs, first nations, Inuit, and aboriginal health, and the Correctional Service of Canada, we must not lose sight of the fact that they still have a critical role to play in supporting health care innovation and ensuring stable and predictable funding to support Canada's health systems.

In 2004, the first ministers reaffirmed that the federal government has a major role to play in ensuring the viability of medicare, and the creation of the health accord helped to re-establish their role in doing so. In September--

[The Chair, Conservative, James Rajotte]

Okay.

[Pauline Worsfold]

--CFNU and the Canadian Nurses Association met with the provincial health ministers in St. John's to discuss this very issue.

[The Chair, Conservative, James Rajotte]

Thank you.

[Pauline Worsfold]

We, along with many other stakeholders, urge the government to adopt an even more active leadership role--

[The Chair, Conservative, James Rajotte]

Thank you.

[Pauline Worsfold]

--beginning with building programs into our federal budget that support the sustainability of our health care system.

Thank you, and we welcome questions and comments.

[The Chair, Conservative, James Rajotte]

Thank you very much.

We'll now hear from the Canadian Nurses Association. Welcome back.

[Dr. Judith Shamian, President, Canadian Nurses Association]

Yes. You see, we are managing our human resources really well.

It's a pleasure to be back. I'm Judy Shamian, and I'm here in my capacity as the president of the Canadian Nurses Association. With me is Michael Villeneuve, who is the resident scholar at the Canadian Nurses Association.

I'm delighted to be here, and I'm going to focus on two separate issues. One is health human resources, and the other is a return on investment when investing in nursing research.

Health human resources--it's an issue that often feels as if we should sleep on it, because we don't stop talking about it, but it's an issue that is getting more and more acute. Based on research that's been carried out recently, we know, and we just heard, that the bust is here, and that by 2025 we will be short 60,000 nurses. We currently are short around 11,000. That's if things stay as they are, but there are additional issues that need to be taken into account, and we have some major concerns for you to consider.

One of them, for example, is that 4.3 million Canadians have no access to primary care. We know there are over 2,000 nurse practitioners in this country who provide primary care to tens of thousands of Canadians, and that's a trend we can deal with. If we had proper planning, we would not be in a position today where 4.3 million Canadians have no access to primary care. That's really difficult to consider in a country like Canada.

The other issue for us to consider is that if you're looking at what's happening south of the border, with the U.S. investment in access to health care, their investment will increase access to health care to 30 million Americans. Guess where they will be going for their general practitioners, for their nurse practitioners, and for their nurses? Currently 5% of our production in Canada in the nineties work in the U.S. They will be at our door, and with NAFTA and all the other agreements, they will be sucking up our physicians, family physicians, nurse practitioners, faculty--because they will need to prepare their own workforce eventually--and so on. So unless we do some proper planning...if we think it's 60,000, we can double, triple, or quadruple that for the coming years. We have some time to act on those issues.

Another issue to consider is the whole notion of chronic diseases and the impact we can have through team effort and collaborative work. Plenty of research shows that currently we're spending close to $90 billion--and again it's with a “b”, reinforcing Pauline's message--on chronic disease management, and that can be managed if we work differently as teams in human resources. The bottom line is that investing $100 million over five years to invest in planning and pan-Canadian work, and figuring out some pilot initiative to deliver our care differently, will pay back in spades.

Let me just reinforce the recommendation in front of you. The federal government invests $100 million over five years toward collaboratively funded Canadian health human resource planning. Over the question period we can reinforce what it can do and how it works.

Let me talk about investment in research. Again, what we are asking for is very minimal, an investment of $60 million over 10 years. So our two requests add up to $26 million a year, which is really peanuts. We need investment in nursing research, because the return on that investment is pretty phenomenal, and we have proven it in the last 10 years, where we did get investment from the federal government dedicated to nursing research. I will give you one example.

One of the studies that was carried out in one province resulted in the implementation of doing home care differently, which saved the province of Ontario $10 million a year. That's $10 million--and we are asking for an investment of $6 million per year in nursing research. That's a single study, and there are many more examples.

So investing in nursing research will help us to test different care delivery models that can be helpful in improving and strengthening the Canadian health care system. It can also help us with the areas of chronic disease management and how we can handle issues differently. Another study, for example, that was carried out that looked at how to manage wound care has saved the Province of Alberta and others millions of dollars by doing it differently, based on research generated from nursing research.

So there are two recommendations: one around human resources and one around nursing research.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much.

We'll now hear from the Canadian Dental Hygienists Association.

[Palmer Nelson, President, Canadian Dental Hygienists Association]

Thank you for the opportunity to address you today.

CDHA represents dental hygienists in Canada, who number 20,000. We rank eighth in size among other health professional disciplines.

The newly released “Report on the Findings of the Oral Health Component of the Canadian Health Measures Survey 2007-2009” is a call to action to invest in oral health. The survey shows good oral health is not experienced evenly across all segments of the population, since there is a lack of equitable access to oral health professionals and the cost of treatment for oral diseases is prohibitive for vulnerable segments of the population, including low-income Canadians.

Canada’s health system is ranked a shocking fifth out of seven countries on equity issues, particularly equitable access to oral health care. Those with the poorest oral health, the least education, and the lowest income have less access to oral health care providers. Many of these individuals are children, seniors, persons with disabilities, and aboriginal people.

Because of the cost, between 17% and 33% of low-income individuals do not visit oral health professionals, and their oral health outcomes are two times worse than those of higher-income Canadians.

When it comes to oral health care, many European nations have national oral health plans. However, in Canada public funding is a paltry 6% of all oral health expenditures, with the federal government contributing 40% and the provinces 60%.

We call on the federal government to invest in oral health in five areas.

The first is the Canadian oral health strategy. We ask for financial support for the office of the chief dental officer to revise the 2005 oral health strategy to reflect the findings from the oral health survey. The strategy must include a government implementation plan, and a working group should include dental hygienists.

Second is the Canada Health Act. We call for the development of a comprehensive plan to provide oral health promotion and disease prevention for all Canadians as part of the continuum of care in the Canada Health Act. The timing is right, as community and physicians' groups are also calling for expanded oral health coverage based on the tie-in with systemic health. You have to connect the mouth to the body. It is time to classify oral diseases such as caries and periodontal disease, or gum disease, as chronic diseases.

Third is public health human resources. We call for collaboration with the provincial and territorial governments to develop a comprehensive plan to fund oral health promotion and disease prevention public health programs. At the present time, there are almost 43,000 oral health care providers in Canada; however, only 700 are in public health, creating a ratio of 46,000 Canadians to every oral public health professional. The federal government must invest $10 million each year into a designated fund in order to double the existing 453 dental hygienists who practise in public health. It is a necessity to mobilize dental hygiene professionals in the public health system, as they are prevention specialists, oral health educators, and interdisciplinary collaborators.

Fourth is data collection and research. Oral health data are critical to developing oral health policies and programs, but we've had no new data for 30 years. The federal government must incorporate an oral health component into the oral health strategy every five years and expand the strategy to include infants, young children, adolescents at risk, and seniors.

It's important to survey children because early childhood caries is the most common chronic childhood disease and one of the main reasons that children receive a general anaesthetic. It's also important to survey seniors, as a large number of seniors are keeping their teeth as they age. However, physical and mental health complications, medication, and decreased dexterity significantly compromise their oral health.

The fifth area is first nations and Inuit oral health. Upon release of the first nations and Inuit oral health surveys expected early in 2011, the federal government must work collaboratively with stakeholders--

[The Chair, Conservative, James Rajotte]

You have one minute.

[Palmer Nelson]

--to develop a comprehensive long-term plan with secure and stable funding to address oral health issues.

We present two economic arguments that support a call for federal investment in oral health to create a cost-effective system with a prevention emphasis.

First, there are a group of individuals who do not have access to oral health professionals, and the burden of illness negatively impacts the economy. An estimated total of 40.36 million hours are lost from normal activities, school, or work each year because of problems with teeth.

Dental decay can be acute. It can involve chronic pain and interference with eating, sleeping, and general health. In addition, there is a connection between oral diseases and other diseases such as diabetes, lung disease, and heart disease. Access to oral disease prevention will lead to better productivity and a stronger economy.

Second, for the group of individuals who do have access to oral health care, it is costly relative to other conditions covered by medicare. For example, oral health care parallels prescription drugs as the greatest component of total private health spending.