Finance Committee on Oct. 20th, 2011

[David Goldstein]

Thanks for the question. The short answer is yes. In fact, what we've done and what was produced last week...the Australian example is an excellent one. The Howard government almost 10 years ago brought forward a comprehensive tourism strategy. It's something we've been working on with successive governments. In fairness, and not meaning to be partisan, there was a commitment to that in 2009 by the Prime Minister. It was part of their platform and was announced two weeks ago by Minister Bernier.

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

But it would be a good idea for you to come back at some point with a joint submission with the Canadian universities. If you can get the Canadian universities to agree on one thing, I suspect it might be this one.

I have one question on commercialization. I appreciate, Mr. Monk, your bringing up this important topic. We invest a lot in public research, but somehow we're not getting as much commercialization in Canada as we ought to be getting. Have you looked at the Israeli model, the whole start-up nation model, in terms of its public policy approaches? What can we in Canada learn from Israel about innovation and commercialization?

[The Chair, Conservative, James Rajotte]

Just a very brief response, Mr. Monk.

[Richard Monk]

The short answer is that we haven't looked at it, but we will.

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

Israel is a world-beater in terms of commercialization, so I think that would be—

[The Chair, Conservative, James Rajotte]

Again, I want to apologize to members and to the witnesses. We do have a vote. Members, there is a bus ready to take you to the Hill.

If I could ask the witnesses—the clerk will talk to you and we may look at bringing you back at a later date. Again, I apologize for this. It's just that there is an unexpected vote this morning.

I'll suspend the meeting until after the vote.

[The Chair, Conservative, James Rajotte]

I'll ask our guests and colleagues to take their seats, please.

I apologize to our witnesses for our late start.

In this panel before us, continuing our pre-budget consultations, we have seven organizations presenting: we have Polytechnics Canada; the Forest Products Association of Canada; the New Economy Alliance; the Canadian Federation for the Humanities and Social Sciences; the Canadian Life and Health Insurance Association Inc.; the Native Women's Association of Canada; and the Canadian Institute for Military and Veteran Health Research.

Thank you all for being with us here today.

You each have up to a maximum of five minutes for an opening statement.

We'll begin with Ms. Robinson, please.

[Nobina Robinson, Chief executive Officer, Polytechnics Canada]

Thank you.

Thank you for inviting us to address your committee.

My name is Nobina Robinson, and I am pleased to speak to you as CEO of Polytechnics Canada.

By all accounts, the immediate economic outlook is generally pessimistic, and the word “recession” is no longer being whispered in corridors. No one seems to have a single solution, but the nine leading polytechnic institutions and colleges I represent believe sincerely that we can help move the economy forward in tangible ways.

You have asked for our views on four vital questions. Given the time constraints, I am going to focus on just one: how to create sustainable jobs.

We are all troubled by current employment trends. The jobless rate among young people is higher than 14%—almost double the average unemployment rate. Second, newcomers with professional backgrounds are not finding suitable jobs that will benefit them and the new Canadian economy. We are suffering from a critical shortage of skilled tradespeople. As entrepreneurs retire, we risk losing valuable business know-how. None of this is news to you.

As a member of the expert panel on federal support to business R and D, which released its report on Monday this week, I have spent a year immersed in deep reflection on Canada's business innovation challenges. Innovation is in danger of becoming like the weather—everyone talks about it, but no one does anything about it. Canada's innovation challenges are these: government programs that are not designed to speed a product or process to market; lack of capital; and, above all, lack of business innovation talent.

Let me assure you that our polytechnic institutes and colleges are doing something about innovation. Innovation does not come from a doctorate or a PhD alone. Innovation comes largely from bridging the gap between curiosity research and business needs, between customer demand and R and D expertise—exactly what polytechnics do when collaborating with business. We call it applied research, and it combines highly technical training with a rigorous focus on communications, critical thinking, and practical problem solving. Canada's innovation challenge is a skills problem. It is not companies nor higher education institutions that innovate; it is people. Canada's innovation solution will be solved with a national talent strategy that enables firms to access all kinds of talent.

We all know that governments alone do not create jobs for the innovation economy; companies play the lead role in this. And our member institutions help companies fill the jobs they require in timeframes that meet their needs. Canada's leading polytechnic institutions and colleges are helping job creation in traditional and non-traditional ways. Indeed, up to 85% of our graduates obtain jobs in their chosen fields within six months of graduation. With modest federal support, we are capable of contributing even more to the talent pool that industry needs.

Since 2008, over 13,000 of our students undertook 1,100 applied research and development projects for over 2,500 Canadian small and medium-sized firms, many of which had no previous R and D capacity. And by the way, these projects create innovative jobs that are meant to last.

Why are our graduates so successful? Again, because we work closely with industry in developing programs relevant and responsive to its needs. Our graduates are shop-ready, research-ready, and career-ready on day one. One CEO said applied research at these kinds of institutions has allowed his firm to increase its R and D during the recession, keeping them competitive and innovative at a time when they are seeing peers in the manufacturing sector closing doors and shedding jobs.

The federal government has come to recognize our efforts. I mentioned how we can do more. We have our formal brief that outlines three practical and realistic measures that would help to create jobs.

We are advocating two new college-based pilot projects for innovation skills. One would provide opportunities to connect foreign-trained professionals already in Canada to the innovation economy. The second would allow entrepreneurs to transfer their valuable knowledge to students and to firms we collaborate with.

Our third recommendation involves apprenticeship and removing tax inequities for them.

You no doubt are familiar with the sports cliché that the best defence is a good offence. At Polytechnics Canada, we believe the best defence against a possible recession is investment in people. That is why we call our proposals “smart spending for smart jobs”.

Thank you.

I look forward to your questions.

[The Chair, Conservative, James Rajotte]

Thank you.

We will now hear from Mr. Lazar, please.

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

Thank you. Allow me to start by congratulating Nobina on her panel's excellent report. The forest industry is very supportive of its work.

The Canadian forest industry continues to employ 600,000 people, and we are the major support for 200 communities across this country, communities that fall into social despair when the mill closes. So I want to talk mostly about how to sustain jobs across Canada and especially in rural Canada.

The question of how much spending government should do and how much controlling of the deficit it should do obviously is a fine balance. We all know that with a looming recession, some stimulus is needed and the government still has to do some spending.

What I want to talk about most is whether we can do that spending so as to maximize its impact on people keeping their jobs. And the best way of maximizing the impact of the government's spending is to look at measures that increase our long-term capacity to compete. There's no point in government stimulating in a way that supports the status quo. What we need is government intervention that accelerates transformation of industry so that we can keep jobs in the long term, and so that when the government stimulus is removed, the industries will be stronger rather than weaker as a result of the government stimulus.

The Canadian forest industry has four ways in which it is rapidly transforming: we are increasing productivity--we are already 20% better than the Canadian manufacturing average; we're exporting more to China and emerging markets; we are doing rapid innovation in both our business model and our technology; and we are improving our environmental performance.

The government has supported all those changes, and our key message today is this: don't allow the programs that support those changes to sunset. The programs under the forest industry long-term competitiveness strategy—such as the support for the innovation institute, for the Canada wood program, for exports, for advertising our environmental credentials—are the key to industry transformation, and they should not be sunsetted. If the government has to cut, it should be somewhere else, not in the programs that have the transformative effect, not in the programs that actually increase our capacity to compete.

I believe the total cost of those programs per year is $64 million, and if it's necessary to find the savings elsewhere, we strongly suggest doing that, but we do not want to see that cut. We also want to see those programs modified to better support the implementation of the Canadian Boreal Forest Agreement, which has added a huge amount of environmental status to both the country and the industry in international markets.

The IFIT program, which allows us to commercialize R and D—that is, instead of letting the new ideas languish in the lab, bring them up to scale—has been funded at a level of $100 million in the past. It's a huge success. I think at last count we had 52 more applications than there is money. That fund should be replenished at $100 million a year for the next three years, because it is probably the thing with the most leverage of everything the government can do. It's taking good ideas that transform the industry out of the laboratory, out of the university, and putting them into the field where they actually create jobs.

We are great supporters of SDTC and the work it does, and we want to see the government continue to support it. There is one fund in there, the renewable energy fund—I think it's called next generation renewable—whose terms and conditions we'd like to see change from bioenergy and biochemicals to either one or the other.

Finally, going beyond the forest industry, the accelerated capital depreciation remains a great way of encouraging investment and increasing productivity, and we support all the other industries who are coming here to say we need investment in skilled labour, in trades, and a review of immigration procedures so that we can get the people we need here to keep the jobs here.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Lazar.

We'll hear from Mr. Passmore next, please.

[Jeff Passmore, Chair, New Economy Alliance]

Thank you, Mr. Chair.

And thanks very much to the committee for the opportunity to appear.

I'm representing the New Economy Alliance, and this is the first time, to my knowledge, in Canada that a group of industries representing forestry, chemicals, agriculture, renewable fuels, and biotechnology have come together with a common vision, one that seeks to see Canada develop a world-leading bioeconomy that adds value to our vast wealth of natural resources.

By happy circumstance, one of the founding members of the New Economy Alliance is beside me here, so, Mr. Chair, if you'll allow me, I'll save 30 seconds at the end for Avrim to also talk about why the Forest Products Association of Canada supports the New Economy Alliance.

Ladies and gentlemen, as you contemplated the questions that you put before all of us to answer, I was looking at all five of those questions, and two words kept coming to my mind. On every question that you asked, I couldn't help but think the answer to it was, “Make stuff”. Now, of course, Canada does make stuff. So if you don't want two words, and you want five, then it's “Make stuff from renewable resources” or “Make stuff from Canada's natural resources”.

Canada has a wealth of natural resources. We have 10% of the world's forests, for example. For decades Canada has been accused of being hewers of wood and drawers of water. What the New Economy Alliance is attempting to suggest is that in fact we need to take that natural resource advantage and create more than mere extraction value from it to drive the Canadian economy. Sophisticated value-added manufacturing jobs generate greater tax revenues for government.

In practical terms, what are we talking about here? Well, we need to learn how to do more with a tree than making two-by-fours and pulp. We need to make a new generation of manufactured goods, produced wholly or in part from renewable resources such as agricultural crops, trees, plants, micro-organisms, and organic residues.

Goods produced from renewable resources are typically referred to as bioproducts or biomaterials or biochemicals, and they include things like solvents and plastics and paints and adhesives and insulation and textiles and cosmetics and diapers. Canadians consume all of these products, but by making them in Canada as well, we can provide opportunities for traditional industries to upgrade and expand and stimulate much-needed economic development in rural and coastal communities, where a lot of these resources reside.

Value-added resource upgrading and technology innovation could open up multi-billion-dollar markets for a Canadian industry. The 2009 global market for green chemicals alone was $46 billion, and it is forecast to be $62 billion by 2015. So the members of the New Economy Alliance believe that by adding value, i.e. “making stuff”, we could supply this fast-growing international bioproducts market.

Our written submission refers you to others who make the same point. One is a quote I took from the July/August edition of Foreign Affairs magazine that asks why Germany is such a success today. And the quote is:

...having companies that “make something” is a key element of economic success, in part because manufacturing jobs have historically paid above average wages. For its part, Germany embraced manufacturing, and much of its economic success is thanks to that decision.

And the OECD's comment is:

If it continues on course, the bioeconomy could make major socioeconomic contributions in OECD and non-OECD countries. ...The bioeconomy's success is not, however, guaranteed: harnessing its potential will require coordinated policy action by governments to reap the benefits of the biotechnology revolution.

That last quote really gets me to the sole ask. And I know everybody was allowed three, but we really only have one ask of the Government of Canada--and that's basically whichever is the appropriate department, whether it be Agriculture Canada or Natural Resources Canada or Industry Canada, or a combination of departments. They should, in collaboration with industry and other stakeholders, assess what the precise steps are that need to be taken. Are these tax steps? Are these program design steps? Is it government procurement? What steps need to be taken to drive investment in the bioeconomy and set Canada on the path to sustainable job creation and economic recovery?

I thank you for your attention, and I'll turn the floor over to Avrim for 30 seconds on why the Forest Products Association was one of the founding members of the New Economy Alliance.

[The Chair, Conservative, James Rajotte]

Mr. Lazar, you have 30 seconds.

[Avrim Lazar]

This is two-dimensional pulp turned into a piece of paper. Very strong in two dimensions. Obviously, it tears. The third dimension doesn't work.

One of my companies that went nearly bankrupt has the global patents for three-dimensional pulp. It's as light as paper and as strong in three dimensions. You can use it in airplanes. You can use it in automobiles. It's very light. It's made out of trees, it's renewable, and it's very strong. It's that kind of investment in new technology and research that changed.... It's not just the company. The town that would have closed when that pulp mill shut down will be eternally grateful for that research and high-tech development.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll hear from Mr. Carr now, please.

[Dr. Graham Carr, President, Canadian Federation for the Humanities and Social Sciences]

Good morning. Thank you for giving me the opportunity to speak to you today.

I've just come from our big thinking lecture on the Hill where York University's Philip Kelly spoke about the educational and employment outcomes of the children of immigrants. He's spending the rest of the day meeting with senior civil servants and MPs who are taking advantage of his time in Ottawa. This is par for the course for lecturers of big thinking, our longstanding program that connects the policy-makers and users of research with experts in our disciplines.

Next month we're bringing in University of Calgary tax and economic expert Jack Mintz, who advised us on our submission to the Jenkins panel. With the release of Monday's report, Jack's perspectives on where Canada stands in the global economy will be timely.

While their expertise varies, these people have much in common. They're addressing urgent matters that are on the minds of leaders, policy-makers, and Canadians.

Today, with the support of the granting agencies, notably the Social Sciences and Humanities Research Council of Canada, and other funding mechanisms, our students and researchers are tackling everything from cybercrime to aging to aboriginal education to digital media.

To be sure, some of the impacts of this work are not always easily measured, but that doesn't mean the impacts aren't real. Our students and researchers are in communities across the country, making tangible contributions every day. For example, University of Northern British Columbia researchers developed innovative commercial solutions to help sustain the $13 billion forestry sector after the pine beetle infestation devastated 80% of merchantable lumber.

The Ottawa Neighbourhood Study is one of only 11 projects worldwide to receive an IBM centennial grant dedicated to improving health and social service delivery to Ottawa residents and neighbourhoods.

Researchers at the Université du Québec à Trois-Rivières have developed tools that make it possible to increase the flexibility, reaction time and capacity for innovation. These tools are currently being used in over 600 SMEs in Canada.

It's no wonder that Google recently announced plans to hire around 5,000 employees from the liberal arts. This is the logical extension of the advice delivered by Don Tapscott and dozens of other Canadian high-tech CEOs 10 years ago, and I'm quoting:

To prosper we need creative thinkers at all levels of the enterprise who are comfortable dealing with decisions in the bigger context. They must be able to communicate - to reason, create, write, and speak - for shared purposes....

Contrary to what some would have you believe, this need still persists. Workers who understand how people in different contexts think and behave are invaluable to productivity and prosperity. This will be even more essential as Canada moves forward into the knowledge-centred and digital economy. By more effectively harnessing and pairing diverse types of knowledge and by stimulating more research of all kinds, we believe Canada can achieve greater success by developing its comparative advantage, a knowledgeable, nimble, and globally connected citizenry and workforce.

With Budget 2011, we welcome the increased funding for the granting agencies, particularly for SSHRC, and the explicit acknowledgement of the important role for the humanities and social sciences in our society.

To take advantage of this situation, we recommend that the committee take into consideration the following three elements for the 2012 budget: first, maintaining investments in federal granting agencies and the Canadian Foundation for Innovation; second, greater support for cross-sector collaboration; third, more opportunities for students to display their talents in a wide range of businesses with real and often unmet research needs.

Michael Allen, president and CEO of United Way Canada, said it best when the Ottawa Neighbourhood Study received IBM support.

By bringing these partners together from academia, social services, government and business, we are leveraging each sector’s expertise to ensure we have the greatest impact and enable positive change....

Ladies and gentlemen, as this committee carefully grapples with how to nurture an innovation system and generate better results in a financially constrained climate, it's a responsible decision to protect and sustain what we've built. Let's be strategic. Let's be holistic. And let's work together to bolster the whole. To fail to do so would jeopardize the momentum Canada has enviably generated in this innovation race.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much.

We will now hear from the Canadian Life and Health Insurance Association, please.

[Frank Swedlove, President, Canadian Life and Health Insurance Association Inc.]

Mr. Chair, members of the committee, I am very pleased to have the opportunity to be here today on behalf of the Canadian Life and Health Insurance Association. We welcome the opportunity to share our views with the committee as part of your pre-budget deliberations.

The CLHIA is a voluntary organization whose member companies account for 99% of Canada's life and health insurance business. The industry provides a wide range of financial security products such as life insurance, annuities and supplementary health insurance to about 26 million Canadians. Also, over two-thirds of Canada's pension plans, primarily defined contribution plans for small and medium-sized businesses, are administered by Canada's life and health insurance industry.

I will focus most of my remarks today on the implementation of Pooled Registered Pension Plans, or PRPPs, and their benefits to Canadian workers.

But I first want to touch briefly on a tax matter that we raised in our pre-budget submission.

We strongly urge government to adopt a comprehensive group taxation regime. To attract more head offices and investment, taxation of corporate groups needs to be competitive with major developed countries around the world. Canada is the only G-8 country that does not have a statutory group tax relief mechanism.

Moving on to the pooled registered pension plans, we were pleased to see the statement from the Honourable Minister of State for Finance last week that he hopes to introduce legislation by the end of the year to implement PRPPs. However, if this does not occur, we would ask that the Minister of Finance take steps to introduce the necessary legislation in his next budget.

PRPPs offer an excellent opportunity to improve the retirement saving prospects for millions of Canadians. PRPPs will build on the successful defined contribution model by pooling many employees together in a plan offered and administered by regulated financial institutions. PRPPs will be attractive to small and mid-sized employers as well as the self-employed, and they will be available at a cost usually only realized by the very largest pension plans.

To be successful and to maintain low costs, it will be important to get the structure right. PRPPs will need to be simple, consistent across the country, and they will need to promote participation and growth of retirement savings.

To get Canadians started on a retirement savings plan in the first place, we recommend two provisions. The first involves auto-enrollment. When an employer offers a plan, employees would be told about it, and unless they choose to opt out they would be enrolled 60 days later and payroll deductions would begin. The second provision would be to require that all employers at least offer some form of workplace retirement plan. This would not require employer contributions, recognizing this might present a hardship for some employers, particularly in this economy; it would simply require that they facilitate a plan in the workplace.

We estimate that without these provisions, 175,000 Canadian workers could be enrolled in a PRPP. With auto-enrollment only, that number would rise to about 750,000. With auto-enrollment and a requirement that employers offer a plan, almost three million Canadians could be enrolled and saving for retirement.

We believe this is a wonderful opportunity that should not be missed. To get there we recommend that a framework be established for PRPPs that requires auto-enrollment of employees and that can be adopted by provinces and territories.

We recommend changes to the Income Tax Act to remove the requirement for an employment relationship between pension plan members and the plan sponsor. This would allow for pooled plans where there isn't a common employer and for plans administered by a financial institution.

We also recommend changes in the Income Tax Act to use a hybrid administrative regime for PRPPs that provides pension protection for spouses and common-law partners on death or marital breakdown. It would be locked in to provide retirement income but would also use the Income Tax Act's simpler RRSP contribution rules to reduce the administrative burden. These recommendations can be found in our August 2011 submission to the finance department.

Thank you again Mr. Chair for the opportunity to appear before the committee today. I would be pleased to provide any further input that the committee would find useful and answer any questions from the members of the committee.

Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

Next we will have the Native Women's Association of Canada.

[Jeannette Corbiere Lavell, President, Native Women's Association of Canada]

Bonjour. I acknowledge the traditional people of this territory we are meeting on; that's the Algonquin Nation.

Megwetch to all of you for inviting the Native Women's Association of Canada to speak to this committee on the matters that are crucial to us as aboriginal women, our families, and our communities.

The Native Women's Association of Canada is a nationally representative political organization comprised of 13 provincial and territorial member associations from across this country. It is dedicated to improving the social, economic, health, and political well-being of aboriginal women in Canada.

I also appreciate the opportunity to speak to NWAC's perspective on the pre-budget consultations for 2012. I would like to begin by highlighting the growing gap in the comparative funding and treatment of our children, the first nations child welfare and support services for families.

Aboriginal Affairs and Northern Development funds aboriginal child and family service agencies at an average of 22% less than their provincial counterparts, even though it was 12 times more likely for an aboriginal child to be in care than a non-aboriginal child in 2009-10. Comprising only 4% of the total Canadian population, aboriginal children make up a staggering 30% of children in foster care.

Aboriginal children in foster care, like those children who were placed in residential schools, are being raised without their language, their culture, or their families.

We all are aware and continue to experience the negative impacts of the Indian residential school system. Similar and perhaps even worse negative outcomes will result if aboriginal children continue to be removed from their homes to become wards of the child welfare system.

NWAC regards this situation as urgent and one that must be addressed by all levels of government.

Aboriginal Affairs and Northern Development should determine the full costs of meeting the policy requirements of the first nations child and family services program and periodically review the program's budget to ensure that it continues to meet program requirements.

NWAC supports the recommendations made by the First Nations Child and Family Services Caring Society of Canada, imploring the government to take immediate steps to fully redress the inequities and structural problems that currently exist.

Another major concern for NWAC is the lack of equitable funding for first nations education on reserves. Evidence of the unequal provision of services to first nations children on reserve in Canada is overwhelming.

The underfunding of elementary education has led to the deterioration of first nations on-reserve schools, which are already in miserable condition and disrepair. Education funding for first nations must be increased to that of their provincial and territorial counterparts.

As most of you are also aware, NWAC's research has revealed that aboriginal women and girls are more vulnerable to violence due to impacts of past and current state policies, such as the residential schools, the “sixties scoop”, and the child welfare system, all connected to poverty and racism. These deplorable conditions have resulted in more than 600 missing and/or murdered aboriginal women and girls.

NWAC is strongly recommending funding be allocated by all governments for a national inquiry on missing and murdered aboriginal women and girls. The national inquiry would focus on missing and murdered aboriginal women and girls across Canada. It is extremely necessary.

Lastly I want to emphasize that even though we at NWAC are very strategic in addressing priority areas, we are underfunded. While we partner with others, we are extremely limited by our resources. We are a national organization. This underfunding may be construed, not only by us but by others, as being discriminatory to us as aboriginal women, and perhaps it is contrary to the equality provision under the Canadian Constitution. This disparity in funding and equality cannot continue.

We encourage you to allocate additional funding that would allow NWAC and the provincial-territorial members to work collaboratively and effectively with the Government of Canada to address the barriers that hinder the well-being of our women, children, and our families.

Megwetch. Thank you for listening.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll now hear from the Canadian Institute for Military and Veteran Health Research.

[Dr. Alice Aiken, Director, Canadian Institute for Military and Veteran Health Research]

Thank you, Mr. Chair.

Good afternoon, honourable members of the Standing Committee on Finance.

Three weeks ago the Kingston community mourned the loss of a soldier veteran, one of our own who took his life as a result of the PTSD he suffered from multiple tours in Afghanistan. That same week, two other Canadian communities mourned a similar loss of veterans. We must ask ourselves what we can do to prevent these tragic outcomes of Canada's contribution to international peace and security.

I'm Dr. Alice Aiken, the scientific director of the Canadian Institute for Military and Veteran Health Research, a university professor in rehabilitation, and a proud veteran of the Royal Canadian Navy. I'm here today with my colleague, Brigadier-General Bill Richard, the co-chair of the institute's implementation committee and a 37-year veteran of the Canadian Army.

In November last year we established the Canadian Institute for Military and Veteran Health Research, with the full support of Veterans Affairs Canada and the Department of National Defence. Until then, Canada was alone among our major allies in not having such an institute. This academic institute that extends from east to west across Canada includes 19 universities and 150 researchers, and is still growing.

We've joined together to respond to government priorities for research on the unique health and social consequences that impact military personnel, veterans, and their families, those who have sacrificed so much for our country. We are here today to recommend that the Government of Canada invest in the institute's research program to guide the health and social programs and services to support these patriotic individuals.

Over 700,000 veterans in Canada and over 100,000 active service personnel constitute a significant population, exposed to particular risks and experiences that require new standards of protection, prevention and care for sick and injured military members, veterans and their families.

As of now, more people have served in Afghanistan than served in Korea. We have the largest number of injuries since the Korean War, and these injuries are more complex. Parliament has been advised that one in five of those who served in Afghanistan and our other recent missions will suffer from mental health issues, and we have no idea if the scope of this problem is in fact this limited.

The Canadian government has provided our military going into battle with the best training and equipment in the world, but we must ensure that when these soldiers return to their new battlefield, a personal battlefield that's marked by physical and mental injuries and social challenges in reintegrating into family and community life, we provide them with the same level of support. This support must be based on the best evidence possible resulting from research by the best and brightest Canada has to offer.

The institute will be responsive to the priorities set by the government, but it will be at arm's length. This is at the request of the Canadian Forces Surgeon General and Veterans Affairs, in order to ensure the research is accepted as independent of government and in the best interests of the beneficiaries. It's important that the research be proactive in examining the health consequences of current and future operations rather than chasing syndromes or Agent Orange types of scenarios long after the issue. And it's critical that this research gets into the hands of those who can use it: health care providers, program developers, and policy makers.

Government support to this institute is an excellent investment because it will create jobs in areas such as technology, research, and health and knowledge exchange. It will reduce health care costs and improve the economy by ensuring veterans successfully transition to civilian life and contribute to the Canadian workforce. The knowledge generated by the research will also benefit first responders such as firefighters and police who work in similar situations, and indeed the entire Canadian population, as demonstrated by the Afghanistan operation, which has already produced excellent evidence on trauma care.

We've asked for $30 million over five years, and we will leverage this funding through public-private partnerships with industry, through Canadian philanthropic support, and by partnering with research funding organizations and our military allies. We have also asked the government to provide an incentive that will encourage the defence industry to invest in research for military and veteran health.

Our soldiers are returning from a difficult 10-year combat mission and they're already preparing for future deployments. Our country has a social covenant with these Canadian sons and daughters, husbands and wives, mothers and fathers that we send into harm's way in defence of the freedom and quality of life we all enjoy. The academic community is mobilized, our partners are committed, and Canadian pride in the military is strong.

Our government's support for the best possible care of these men and women needs to be formalized, and funding the Canadian Institute for Military and Veteran Health Research is a sustainable key.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll begin members' questions with Ms. Nash for a five-minute round.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you, Mr. Chair, and thank you for those very interesting presentations.

I'd like to begin with Mr. Lazar and Mr. Passmore.

I'm very interested in the accelerator fund, the repayable fund, for more sustainable innovation in the forestry product sector. Would you agree that this kind of a fund, especially because it's repayable, is an investment in our economy even if money is spent there? They are about positioning our economy for the future, not to mention the job creation benefits and various spinoffs that come from that.

[Avrim Lazar]

Yes, of course, it's an investment. It's an investment in the country's economy and in future employment.

The reason why we're experimenting with the idea of an accelerator fund is that if all these moneys were repayable, it would avoid the sort of traditional problems we've had with government investment, which is either politically or socially persuaded choices that didn't have sound economics. If the companies applying for these funds actually had to make the business case and say they would be repayable, that would mean (a) the fund would last forever, and (b) only wise investments would be made.

You could say that if it's a good business case, why not just borrow the money from the banks and what not. The answer is that we can, but it moves very slowly. The availability of cash for the forestry industry is very difficult.

If we want, as a nation, to see both the environmental and job performance of the industry enhanced, the idea is to use government money to accelerate the investment process.