Finance Committee on Oct. 18th, 2011

[The Chair, Conservative, James Rajotte]

Okay. Thank you.

[Nadine Miller]

--and we need infrastructure--

[The Chair, Conservative, James Rajotte]

Merci.

[Nadine Miller]

--to stay competitive in our global marketplace, so anything that gets money there will help.

[The Chair, Conservative, James Rajotte]

Thank you very much.

[Voices]

Oh, oh!

[The Chair, Conservative, James Rajotte]

Thank you very much.

Thank you, Mr. Van Kesteren.

We'll go to Mr. Marston, please.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Thank you, Mr. Chair.

Mr. Hayos, you said the government's ongoing corporate tax cuts were necessary for the country's economic recovery. I would like to know what specific analysis you base that on, but I'll go a little further. Witnesses before our committee have talked about the fact that the corporations are now holding in the area of $500 billion that they're not investing. That has to do with fears of a credit crunch again. The FCM and the Conference Board of Canada have been calling for more government intervention particularly in the area of investing in infrastructure. We have interest rates at practically record-low levels. It strikes me that this is the time for the government to leave or to take a leadership role in investing in the infrastructure the $130 billion that's outstanding.

The Department of Finance figures say that every dollar invested by the government in infrastructure generates $1.50 in the GDP. I'd like you to comment on that if you would, sir.

[Gabe Hayos]

First, there are innumerable economic studies.

Jack Mintz recently did studies supporting the fact that lowering the Canadian income tax rate does generate jobs. As for the comment on the cash that's retained by corporations, they'll invest the cash when they have good opportunities for investing it. The best thing the government can do is create the opportunities for these businesses to make investments. We're in a global competitive environment, and the companies will invest the money where they think the best opportunities are. In this unstable, economic time, I think they're being very conservative about it. Trying to do anything to force them to put money in places they don't think are appropriate is not the right approach.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

From my standpoint, though, to be part of the global competitive network, we have to have a sustainable infrastructure that supports the movement of our goods and services, training, and a number of things. We can disagree, and maybe we can chat another time on it.

Ms. Fralick, witnesses who have come before this committee have talked about the state of health care, and the aboriginal situation was spoken to a moment ago. Witnesses have said that poverty has a substantial impact on health care costs: in the area of 20% of our health care costs.

I'd like your comments on that.

[Pamela Fralick]

I could certainly agree to that and expand on some of my earlier comments, again with the greatest of respect, about needing hospitals and needing physicians in those hospitals, and so on, but the biggest bang for our buck is going to be in preventing people from getting there in the first place. That does speak to some very specific health initiatives: for instance, the low-sodium strategies, physical activity initiatives, and ParticipACTION. These are all great things.

In fact, we've known in Canada...and every province and territory signed on with the federal government back in 1994, I think, to a declaration on determinants of health. With regard to poverty, Mr. Moist mentioned the recent Conference Board of Canada report that speaks to the increasing inequities in this country. Poverty is a very broad-reaching piece of what I'm talking about. Determinants of health include things like education, employment, and drinking water, and then health care is thrown in with that mix. Even though we're a Canadian health care association, my members, these regional health authorities and all the others, are very supportive of putting our funds where our mouth is, if you will.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Moist, it's interesting. I'm not surprised Ms. Fralick agrees with your presentation, but having the government agree with your presentation was something close to shocking for me.

I'd like to refer to a CBC report, Mr. Moist, that was up in the last day or so. In the state of Texas, they're reversing their approach to criminal sentencing, in fact, to the point where...the state is noted around the world for its approach to crime and so-called justice. They actually closed a prison down there. What are your thoughts on the billions that could be saved if the government doesn't proceed in this country with the building of our super-jails and the changes they are going to enact? Wouldn't it be better for it to invest those moneys in child care, senior care, and some real job training?

[The Chair, Conservative, James Rajotte]

You have 30 seconds.

[Paul Moist]

Thank you.

Budget 2012 will be like all the budgets that came prior to it. It's about choices. We talked at the transportation committee yesterday, and on page 3 of our formal submission to this committee, we show that total government net debt to GDP is at low levels compared to what it has been over the last 21 years.

There's a capacity for the Government of Canada to not see this country go back into recession. Many Canadians would choose to repair the infrastructure and to invest in Canadians, our transportation systems, our water systems, and our health, as the previous speaker said. I wouldn't say that prison systems are at the top of CUPE's priority list; they would be at the bottom.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Mr. Adler, please.

[Mark Adler, Conservative, York Centre, ON]

Thank you, Chair.

I want to thank all of the witnesses for appearing today. I want to begin my questioning with Mr. Lord.

A recent study by the Information and Communications Technology Council is saying that within the next five years we're going to need an extra 100,000 workers in the information technology sector because of the great success that sector has been having. Do you think the federal government has done enough in terms of attracting qualified IT workers? Is there anything more that can be done?

[Bernard Lord]

This sector is growing very quickly and will continue to grow very quickly. It's a clear indication that the world around us is changing as well.

I'm not one who always looks to the government to do more. Usually I prefer it when the government doesn't get in the way, and I think that's maybe the difference with me and most of the other presenters you'll see: instead of coming here asking for more, we really just want less. We want less red tape, less regulation, and fewer obstacles to growth.

There's a lot of demand for infrastructure, but I believe the most important infrastructure in this next decade, if we really want to truly embrace growth in Canada, will be infrastructure dealing not only with how we move people and goods, but with how we move ideas, and that infrastructure and those ideas will be moved by wireless mobile technology.

We're not asking for any money from the government to build those networks. We already have the fastest and best networks in the world. We just want to make sure that we continue, that we stay, and that we have those best networks of the next generation. For that, we're not asking the government for more money. We're asking the government to take less from us so we can invest more.

That, I think, is an approach.... Certainly governments have a role in making sure that we have good education and good training--absolutely--and that we have a fiscal environment that is competitive and attractive to business. But when we ask governments to try to do more and do too much social engineering or economic engineering, unfortunately sometimes it just doesn't work. Allow those who succeed to make the decisions and invest and you will see more growth.

[Mark Adler, Conservative, York Centre, ON]

Thank you.

Ms. Fralick, it's good to see you again. Here's my question. You will remember that throughout the nineties the government at that time balanced the budget by cutting transfers, the social transfers and health care transfers to the provinces, which had serious implications. Could you talk a bit about that and how it compares to our government's approach of increasing transfers to the provinces by 6% every year going forward?

[Pamela Fralick]

Well, certainly the nineties were the dark decade--or to use the phrase that Rick Hillier uses for the military, “the decade of darkness”--in terms of cuts to the health sector. The federal contributions decreased dramatically and started increasing into this century, basically. I think the levels that we're at now are quite reasonable. I don't hear a lot of people asking for more money, frankly. You'll hear that, but we know we can do it.

However, I also would say that jumping on the bandwagon of “just throw in the 6% escalator” is not all that we need right now. Clearly, the predictability and the sustainability of the funding for the health system are absolutely critical. We have to be able to do that. What we're looking for, what my members are looking for, is some leadership, some fiscal federalism, if you will, on top of that, in using that fiscal spending power to target and to make sure the nation benefits from directed actions.

[Mark Adler, Conservative, York Centre, ON]

Thank you.

[The Chair, Conservative, James Rajotte]

You have one minute.

[Mark Adler, Conservative, York Centre, ON]

Mr. Moist, I have a quick question. Would you be in favour, in the spirit of fairness, since you're calling for corporations to pay more taxes, of trade unions paying taxes?

[Paul Moist]

Mr. Chair, the member is asking about a private member's bill that has yet to come before committee. We'll speak to that bill when it comes through committee.

But on page 3 of our formal submission to this finance committee, we talk about something Mr. Carney has spoken to you about, and publicly, and that's the red line: household debt to personal disposable income, tracked against total government net debt and corporate credit market debt to equity. Those trend lines are downwards.

[Mark Adler, Conservative, York Centre, ON]

Excuse me, Mr. Moist. I asked a question that you're not giving an answer to.

[Paul Moist]

I think, Mr. Chairman, that this is a replay of yesterday. This is a triumph of partisanship over talking about Budget 2012 and I won't be party to that.