Finance Committee on Nov. 1st, 2011

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair, and again thank you to everybody for being here today.

Mr. Jules, you're a breath of fresh air, I must say. As I drive though some of the local reserves in my riding and I see the problems, I think that if these don't break your heart, you don't have a heart. I think that's reality. Where I get really conflicted as a member of Parliament is when we look at that situation and look for solutions within the existing structure. I say this because I just don't see these being there. When you hear people say, throw more money at it, and you talk to the individuals, they come back to you and say you can do that. So I still don't see the benefit of throwing more money at it. It's always about the efficiency of that dollar being used. Does it actually achieve the intended results?

I look back at my farm. When I expanded my farm, I could actually take my land and leverage it. I could take that leveraged money and buy more land and grow my business, my farm. When I look at my friend whom I went to school with, who lived on a reserve, he had no assets to leverage. He had nothing to put up for collateral or security. Right off the bat he's at a disadvantage when he gets out of grade 12. He can have the exact same education, but the opportunity isn't there because he doesn't have that ability to leverage his assets that he utilizes.

When you talk to some of the elders about this situation, they say they don't want to see that land being given up for leverage. They don't want to see that land ever leave the band per se.

How do you address that question? How do you move this file forward addressing the concerns of the elders yet still recognize that what we're doing now isn't working, so it needs to change?

[Clarence T. Jules]

That's right. There needs to be a fundamental change and shift in the philosophy of how first nations fit within the Canadian federation, and that means true governance.

When you look at the underlying title, that's the fundamental thing to address. The title has to be transferred from the federal government to the first nation. It's like somebody purchasing a piece of property in British Columbia; it doesn't make it Ontarian. The same would be true for these bits of property. They would always remain under the jurisdiction and territorial jurisdiction of the first nation, but the first nation individual has to be able to operate within a free market system. He has to be able to be bonded. Right now under the Indian reserve system, an individual cannot be bonded, and if you can't be bonded you can't get into business. Those kinds of fundamentals have to change.

We come from a trading culture. All of us--the Inuit, the Métis, the first nations--lived on this land with our own economies. What I'm proposing is that we recreate something that's been hibernating, and that's the entrepreneurialism that flourished on these lands that were clearly once under our jurisdiction. That's what I'm proposing. The fundamental thing to do is very clear: the title has to be transferred to the individual first nation. That will always be the case. Individuals have to be able to have private property rights enjoyed by every other Canadian.

[The Chair, Conservative, James Rajotte]

Mr. Hoback, and Mr. Jock, do you want to comment as well? I don't know how much you want to--

[Richard Jock]

I want to point out that the plan or proposal by Mr. Jules occupies a certain percentage of the spectrum and that there are other possibilities within the First Nations Land Management Act, which would also accomplish similar or equivalent benefits. There are different ways and different paths forward, and there really is no one-size-fits-all solution in looking at how first nations approach things.

I think the issue of land certainty is also important. It takes several years to put up an additional piece of land for a reserve, some of which creates the void or lack of economic development, especially if those places are in strategic areas next to cities and if the could be of economic benefit. So moving much more quickly on additions to reserve and land certainty matters are also important parts of any forward movement economically.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you for that, Mr. Jock. That's a regulatory thing, an administrative thing. It's not going to cost any more money if we do it over seven years or one year, but it makes a big impact.

I appreciate your bringing that forward.

[The Chair, Conservative, James Rajotte]

Okay. Thank you, Mr. Hoback.

We'll go to Mr. Julian, please.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you, Mr. Chair.

Thanks to all our witnesses.

I'll start with Ms. Bittman. You talked in your brief about government R and D activities, and in the last few weeks we've certainly received a strong indication of a failure of investment in R and D. What we've seen is that, among industrialized countries, Canada has the lowest direct investment in R and D; the lowest success rate in terms of producing Ph.D. students, which is in part coupled with the lack of access to post-secondary education; and also one of the worst rates for patent development among industrialized countries.

The government's response has been to throw more money at this via tax credits, but we've seen falling levels of business investment in R and D. So that hasn't worked either.

Because I have other questions, I was wondering if you could comment briefly on the failure to promote a robust R and D sector on the part of the Canadian federal government.

[Shannon Bittman]

My initial comments would be that the action plan that the government is following right now in reducing the number of our scientists and meteorologists is only going to further contribute further to this problem and our lack of competitiveness across the board.

As you said, the government does offer lots of investment tax credits with respect to R and D, but one has to question whether money is being funnelled to the appropriate places. There needs to be extensive research or a re-look at how the Canada Revenue Agency, for instance, farms out investment tax credits for research and development.

We need to make sure that the tax credits are going to areas that are going to create innovation and competitiveness in the future.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you very much for that.

I'd now like to go to Ms. Simon, Mr. Jules, and Mr. Jock.

On January 1 the government is planning to throw more money into corporate tax cuts, with another $4 billion in spending thrown to very profitable Canadian companies.

You have each been very eloquent about the investments that are needed. When going to northern Canada, I've seen that myself and how appalling the housing situation is there. Yesterday we heard testimony from the Canadian Federation of Students in regard to the PSSSP that about a third of aboriginal students who apply for supports to get education and training to take that next step are denied because there's inadequate funding.

We've seen a wide variety of very compelling arguments about increasing inequality in this country, the record levels of inequality among aboriginal people, new Canadians, people with disabilities, youth, and older Canadians. I'd like you to address the issue of what the cost is of not acting.

If we look to austerity measures rather than taking a balanced approach that includes substantial investments, so that first nations can improve their housing and have access to educational programs and provide more services for their communities, what is the price of not acting?

[The Chair, Conservative, James Rajotte]

Could we get a very brief comment from each of you.

Ms. Simon.

[Mary Simon]

Thank you for that question, Mr. Julian.

What is the price of the loss of lives and poverty that our people are experiencing? I came here to talk about bread-and-butter issues. These things are taken for granted every day in a country as rich as ours. But in the Arctic, these issues are not being addressed, and they are tied to mental health, education, and housing. They are interlinked.

A mentally healthy child who hasn't had any help from the mental health sector is not going to complete her education and won't be employable. Our population is over 50% younger. Newborns to those of the age of 25 are over half the population in the north. If they don't get that education, they won't become the workforce, either up north or in Canada, and that's a big loss.

[The Chair, Conservative, James Rajotte]

Unfortunately, you're out of time, Mr. Julian. We can come back to that question in the next NDP round, if the NDP chooses.

We'll go to Mr. Van Kesteren.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Chair, and my thanks to everybody for appearing.

I have a clarification to make on Mr. Julian's point. The government has increased funding to SR and ED and to the granting councils. The money has flown to universities. It is true that the government agencies have been taking less, but that money has increased every year. I think that's a point that needs to be considered.

Mr. Jules, it is refreshing to hear what you're saying. I don't think there's a Canadian who would object to giving more money to first nations, if they thought it was going to work. It's interesting that at Foreign Affairs, we're looking at aid effectiveness in Africa in the same way. You're absolutely right that we've been doing this since 1964 and it's not working. So I commend you and I want to have a chat with you later, if we get the opportunity.

Ms. Bittman, I want to direct something to you. I'm listening to what you're saying and I appreciate your concerns. But I have six sons—three of them are policemen and three work in our family dealership. My youngest son is an OPP officer who just became a first class constable.

I realize that you are don't represent this issue, but it more or less states the problems that we're having.

God bless him, I'm happy for him, and I'm proud of all my sons. He's going to make $84,000 as a first class constable. However, my other three sons can only dream about making that kind of salary, never mind benefit from the pension plan and all of the other benefits that come to a public servant. And I don't think there's anybody who faults the son of mine who is a policeman, a job in which he risks his life. Policemen have a tough job and when I talk to my sons, nobody would fault them for making a good salary. But in the private sector, there is an inequity that's beginning to loom large.

I understand that you would come here and make some...well, I don't know if they are recommendations. But we have a problem. We have a problem in this country and I think everybody here appreciates it. We see the fine work that's done by public servants and we see how important it is. However, there has to be wealth generated. That's the long and short of it, and I think that's what Mr. Jules was saying.

I would like to see some concrete recommendations. We have to recognize that we all participate in the marketplace. Whether we work for the government, in a factory, or in a restaurant, we're participating in the marketplace. I think the time has come for all parties to come to the table and admit that we have some serious challenges. We need to address the fact that only so much is being generated. I'd like to see this as part of a dialogue between government and your association. We need to recognize those things and become part of the solution, instead of just criticizing where the government's going, because we are really trying to just....

I know I haven't asked much of a question. Do I have time left, Mr. Chair?

[The Chair, Conservative, James Rajotte]

You've got 30 seconds. Do you want to let Ms. Bittman respond to that?

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

I want to get Mr. Jules's take on it.

How do you see that as part of the solution?

[Clarence T. Jules]

One of the things that we've created very successfully within first nations communities is bureaucracies. What I want to be successful at is creating economies. We must have a good public sector, but fundamentally we need to have an economic base. If we don't have entrepreneurs who can compete globally, we're going to condemn yet another generation to poverty.

[The Chair, Conservative, James Rajotte]

Unfortunately, Mr. Van Kesteren is out of time.

I want to remind colleagues that the reason I'm so harsh on time is to give every colleague an opportunity to ask a question. Again, if you have a question, please state it, and we'll try to leave some time for everyone to respond.

We'll go to Mr. Marston, please.

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

I'll be as succinct as I can, but it's going to take a bit of work.

Ms. Bittman, I appreciate the analysis you have in your document, and I want to say I agree with one statement you made in your presentation, about the nineties when the Liberals of the day did their cutting.

I worked at Bell Canada, and in 1995 Bell Canada executives put 10,000 jobs up on a wall and said cut them. In fairness to Bell, they gave people a reasonable package to people to leave. In fact, I was one of them at the time. But they woke up one day and said they'd lost 80% of their expertise and couldn't do business, and they hired a good number of them back on contract.

When we look at your analysis, I think of the following. Day in and day out in this place, we hear from people with genuine, honest needs. We have 90-some presenters who are coming before us.

On your first page, you say that “Analysis shows that corporate tax cuts have neither stimulated economic activity, nor resulted in increased business....” And then you go on to quote the Parliamentary Budget Officer.

In your analysis, can you find any place where the business community, which has benefited from these corporate tax cuts, has reinvested back into the economy? We're being told that right now there's something like $500 billion being held by corporations, but I'm curious as to your analysis. Have you seen any evidence of that?

[Shannon Bittman]

Quite honestly, we haven't seen any evidence of the corporate tax cuts being invested in the economy and, therefore, creating positive impacts.

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

Thank you.

[The Chair, Conservative, James Rajotte]

Mr. Whyte would like to make a comment.

Mr. Whyte, briefly.

[Garth Whyte]

We represent the fourth largest sector. We represent ma and pa, all the way up to big corporations.

I was just down in Washington and met with a lot of key people. A lot of the people in the States mention that there's a lot of uncertainty there and would like to invest in Canada. One major company alone spent a billion dollars in infrastructure this year.

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

Well, I was really referring to the companies within Canada. There's a concern in the business community that because of the fragile situation and the banks withholding credit, they weren't getting involved that much.

Mr. Durnie, I will turn to you. We were recently in Whitehorse and heard about the infrastructure problems there. The transmission lines there are 50 to 60 years old. You mentioned IT. I would point out that their broadband is collapsing around them. So it's very clear that locations like that can't afford to sustain and maintain their own infrastructure.

We've been saying to this government that there's a balance between corporate tax cuts and how deep they run, and the needs we see day to day in this place.

We've moved substantially and are now in the middle of the G-7 as far as tax cuts go, and there's the resulting loss in fiscal capacity. They're trying to find $2.8 billion. All they have to look at doing, as Ms. Bittman has indicated, is stopping the next tax break and they've got that money right there.

But in response to that need for investment across our country, I am wondering if you could comment.

[Darwin Durnie]

Thank you.

With respect to the core infrastructure needs of particular areas of Canada, I was very recently in Whitehorse as well, and whether it's Corner Brook, Newfoundland or wherever, yes, I agree there is aging infrastructure

I think with the resource extraction opportunities—perhaps it's power generation by the private sector—part of the deal, not unlike a private developer building a new subdivision, is that industries are going to have to help augment those communities to increase and bolster their core infrastructure and become part and parcel of the communities they serve.

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

My suggestion is that there's a role for government in that, as well.