Finance Committee on May 31st, 2012

[The Chair, Conservative, James Rajotte]

Thank you.

I want to thank our witnesses in our first panel for being here and responding to our questions. If there's anything further, please submit it to the clerk. We will ensure members get it.

Mr. Jackson, thank you very much for joining us from British Columbia. We appreciate your time today.

Colleagues, I'll suspend for a couple of minutes and bring the next panel forward.

[The Chair, Conservative, James Rajotte]

I call this meeting back to order. I ask that all witnesses and members of Parliament find their seats, please. We have another panel and another hour-and-a-half session.

We are continuing our discussion of Bill C-38, the budget implementation act. We have another six panellists during this session.

We want to thank all of you for being here. We are a little bit behind time because we had to have a brief meeting prior to the last panel, but we want to thank all of you for coming in.

First of all, we have

Alain Noël, who is a professor in the Department of Political Science at the Université de Montréal.

Welcome.

We also have with us the Canadian Conference of the Arts, with Monsieur Alain Pineau, national director; the Canadian Federation of Nurses Unions, with Linda Silas, president; the Canadian Media Guild, with Ms. Karen Wirsig; the Canadian Museums Association, with executive director John McAvity; and the Council of Canadians, with Mr. Anil Naidoo.

You each have up to five minutes for your opening statement. We'll proceed in the order that I've read to you.

We will begin with Mr. Noël.

You have five minutes.

[Alain Noël, Full Professor, Department of Political Science, Université de Montréal, As an Individual]

Thank you.

Thank you for inviting me. I am appearing today in my personal capacity, but also as a professor of political science who has been working for several years on subjects like the architecture of Canadian social programs and transfers, the issues I have been asked to address today.

I will start by saying I was a little reluctant to accept this invitation. I was sceptical about the possibility of a real discussion of a bill like Bill C-38, which is very long and lumps together a large number of very important issues, and which seems to have been passed precipitously. I decided that I could at least come and share that impression with you and comment briefly on the division I was asked to address—and I am glad there is only one: division 17 of part 4, which deals with changes to the Federal-Provincial Fiscal Arrangements Act.

Included in that division are two provisions relating to the Canada Health Transfer. In both cases, those measures had already been announced. The first provision involves allocating the Canada Health Transfer on a strictly per capita basis starting in 2014, and no longer using the value of the tax points transferred in 1977-1978. I will come back to this later. The second provision deals with the ceiling, starting in 2017-2018, on the growth of the Canada Health Transfer, based on economic growth. The two measures are very different, but they reflect the federal government's withdrawal from preserving our health care system, as well as a particular idea about redistribution across the federation.

We will start with the second one, which is probably the most important: the ceiling on growth based on economic growth. I will simply say that in order to evaluate that decision, that measure or approach, we have to understand where we are coming from, in Canada. We have to understand that the role of the federal government in health care funding was originally defined by the idea of the costs being shared equally by the federal government and the provinces.

In fact, there was never really equal sharing, but in 1976, the federal government did contribute 38% of health care costs paid. In 1980, that contribution fell to 25%. It declined considerably starting in 1995. We will recall that this was the year when the federal government took draconian measures to eliminate the public deficit. In 2000, the federal government's contribution to health care funding was a mere 10%. We have gone from a 38% contribution in 1976 to a 10% contribution.

In the first decade of this century, the Government of Quebec established the Commission sur le déséquilibre fiscal, the Séguin Commission, of which I was a member. The commission's purpose was to review all transfers within the Canadian federation. At the same time, the Romanow Commission was proposing that we return to a 25% financial contribution to ensure that the federal government continued to play its role.

By making growth in the federal transfer dependent on economic growth, we are instead moving toward a 19% contribution, which would be a step backwards. This measure is going to create a further fiscal imbalance in Canada and lessen the possibility of the federal government participating in broad policy directions in the health system.

The per capital allocation is also a measure that is far removed from the origins of our health care system. It completely separates needs from funding. It is an allocation that will essentially favour Alberta at the expense of virtually every other province.

In conclusion, I would recommend keeping a link between growth in health spending and the federal contribution, first.

Second, I would recommend that needs be taken into account, possibly by taking into account the number of seniors in the provinces.

With respect to my third recommendation, I have not talked about it, but we could come back to that in the discussion. It is that this also be reviewed in light of the equalization program, on which a ceiling was also imposed in 2008, which makes the mechanics of redistribution much less effective in Canada.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

Mr. Pineau now has the floor.

[Alain Pineau, National Director, Canadian Conference of the Arts]

Good afternoon. Thank you for the honour of inviting me to testify before you on behalf of the arts, cultural industries and heritage institutions from coast to coast.

My name is Alain Pineau, national director of the Canadian Conference of the Arts, which was created in 1945 by, among others, members of the Group of Seven. The CCA is a nonprofit, nonpartisan organization composed of members representing nearly 400,000 professionals in the arts, culture and heritage throughout the country. The perspectives that the CCA brings to questions of cultural policy are broad and long term. The unique contribution that CCA brings to public debate has been recognized by 46 years of financial support from the federal government.

The abolition of the Canadian Artists and Producers Professional Relations Tribunal and the transfer of its functions to the Canadian Industrial Relation Board is one of many amendment to other acts found in Bill C-38.

The Tribunal was created in 1993 under the Status of the Artist Act. That act governs professional relations, that is, labour relations, between self-employed artists and the producers who retain their services. It grants the exclusive right to negotiate scale agreements with producers. A scale agreement specifies the minimum terms and conditions under which producers engage the services of, or commission works from, self-employed artists in a specified sector.

Some of our members were concerned that the Canada Industrial Relations Board may not understand artists' issues and unique working conditions. We were comforted on Monday night when we heard heritage officials confirm that some of the tribunal expertise will be moving to the board and that decisions will be based on the Status of the Artist Act and on jurisprudence accumulated since the creation of the tribunal.

Maintaining the Status of the Artist Act as a basis for decision is what matters; whether the CIRB or the current tribunal decides on issues should not matter all that much. I will note that Quebec has taken a similar path in the administration of its own status of the artist legislation, and without any negative repercussions.

To sum up, given the guarantees provided by the government, this specific aspect of Bill C-38 is not of major concern.

This said, within the time allotted to me I would be remiss not to use this unique opportunity to raise areas of greater concern in the budget.

Like so many others, we rejoice in the fact that the parliamentary appropriations to the Canada Council have been spared. The CCA is a strong protagonist of the importance—for our economy, our quality of life, and our international reputation—of investing in artists and creators.

This being said, a reality check shows that, in constant dollars, parliamentary appropriations to the Canada Council on a per capita basis have actually declined somewhat between 1990 and 2010. Obviously, given this renewable and non-polluting resource, we need to make more efforts if we don't want to miss opportunities to invest in Canadian creativity.

Cuts in the audiovisual sector will have repercussions on the whole production sector in Canada. These cuts have many people, including the Quebec Minister of Finance, worried about the impact on the ecology of the system. Cutting 10% to Telefilm Canada, the NFB and the CBC's budgets, not to mention the cumulative effects of past restrictions not yet absorbed, means breaking the balance between creation, public money and private investments. These public funds are often used for productions and for research and development that cannot rely on private money. We also emphasize that documentary filmmaking, a genre for which Canada has earned an international reputation, is particularly at risk.

There is reason to rejoice in the fact that the budgets of the national museums were also spared, but the cuts to Library and Archives are major and widespread. Daniel Caron, librarian and archivist of Library and Archives Canada, is quoted today as saying that “the new environment is totally decentralized and our monopoly as stewards of the national documentary heritage is over”. This is troubling.

Archivists, a group not particularly prone to terrorism, have risen in protest to defend the budget of $1.7 million for the national archival development program, which is very important for future historians and researchers. It is ironic that as we celebrate the War of 1812, a founding moment of our history too long neglected, and as we prepare to celebrate the 150th anniversary of our country, we have to fight such small battles in the fields of history.

Several other budget cuts will jeopardize the strength of a complex sector that is so important in the knowledge and creativity economy. I will mention just a few: severe cuts to Statistics Canada, where the last remains of the culture statistics unit, which was formerly highly regarded internationally, are disappearing; the elimination of the Cultural Human Resources Council and the abandonment of its programs; and cuts to the Canadian Music Fund that will weaken an industry that has already been undermined.

Dear members of Parliament, I thank you for your attention. I will be happy to answer any question.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We will now hear from Ms. Silas, please.

[Linda Silas, President, Canadian Federation of Nurses Unions]

Good afternoon.

I am president of the Canadian Federation of Nurses Unions. The CFNU represents close to 160,000 nurses working in hospitals, in nursing homes, in homes, and in our communities.

I thank the committee for providing us this opportunity to appear. I have to say that it reminds me of my days in the emergency room, when we didn't know what would come through the door. Nowadays we don't know what kind of invitation we will get overnight. We rushed to prepare for this.

We will focus on health care, of course, and add our voice to those who are critical of the omnibus nature of this bill. We would ask that non-budget-related items be removed from the bill.

I will focus on the December 19 announcement by Minister Flaherty in regard to the size of Canada's health transfer until 2024, which is in part 4 of this bill. The announcement came as a surprise to every health care stakeholder, and I would say to every premier in this country, because of the Speech from the Throne one year ago, which said:

Our Government is committed to...working with the provinces and territories to ensure that the health care system is sustainable and that there is accountability for results. It will maintain the six percent escalator for the Canada Health Transfer, while working collaboratively with provincial partners to renew the Health Accord and to continue reducing wait times.

Let's build on the words “working collaboratively”. Bill C-38, part 4, is unilateral, and does not go in the spirit of the health accord. The bill does not maintain the 6% escalator. Instead, it will reduce five years later, potentially by half. Nor does this bill make any reference to a plan or accountability framework for the billions that will be transferred to the provinces for health care. Nor does it provide a framework for the redesign needed in our health care system.

Bill C-38 means two bad things for Canadians: the same old same old debate about health care, and a race to the bottom on services. We have population growth, aging, the use and cost of medical technology, the increase in drug costs, and inflation in general. Plus, hospitals across this country are working at over 100% capacity when the safest level for improving patient outcomes and containing costs of overtime, hospital-acquired infections, etc., is closer to an 80% capacity.

We need to improve access, quality, and service across the continuum and across this country. We need federal leadership on a redesign of our health care system. Provinces and territories have good intentions, but they cannot succeed on their own, and they cannot succeed in bending the cost curve on their own.

We are a land of successful pilot projects. It is time this changes. The federal government needs to be at the table for fostering prototypes for positive change and providing leadership, coordination, and cooperation to ensure a race to the top in terms of health care excellence.

I'm sure you share, as federal MPs, the desire to make it right for all your constituents. You do not want your constituents to fall behind. Well, in the absence of a stronger federal role in coordinating health care, you will find gaps in your community. If you live in Alberta, it's one of the best places in Canada if you need home care. But if you're like me and you come from the Atlantic provinces, it is the worst place, because it has the most expensive medication.

We are not alone in reaching this conclusion. The Senate committee reviewed the 10-year accord and concluded that we know what reforms are necessary, and now we need governments, including the federal government, to set up and create the initiative to propel transformation change. A report commissioned by Health Canada on March 2, 2012, just a few months ago, said the same thing.

We ask from this committee that Bill C-38 be amended to ensure that the 6% escalator clause is there for 10 years, followed by an extensive review, and that funding be tied to the new accord being negotiated, which will include accountability for progress towards shared objectives. We also recommend, because health care is not alone here, that the escalator for the Canada social transfer be the same size as the Canada health transfer here.

Some of you will ask how the federal government will afford this. Well, in my last recommendation we urge the committee to study taxation, and as a part of this study to look both at the impacts of tax cuts on Canadians' well-being and at the possible benefits of taxation, such as a financial transaction tax.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll now hear from Ms. Wirsig, please.

[Karen Wirsig, Communication Policy, Canadian Media Guild]

Thank you very much.

My name is Karen Wirsig. I'm the communications coordinator for the Canadian Media Guild, a union that represents 6,000 media workers across the country. Thank you for inviting me to appear before you today.

Bill C-38 is a massive undertaking that changes an astounding number of pieces of legislation to enact a budget that itself makes fundamental changes to what our government does and how it does it.

It's inappropriate, in our view, that this budget implementation bill covers substantial legislative changes in a number of areas, including old age security, employment insurance, and environmental protection. More study, opportunities for public involvement, and transparency would be possible if such changes were dealt with under separate bills.

In this context, the elimination of the Canadian Artists and Producers Professional Relations Tribunal and the shifting of its responsibilities to the Canada Industrial Relations Board is not particularly momentous, as I think Alain pointed out. Although details are scarce on how these changes would be enacted in practice, we urge the government to ensure that the CIRB has both the resources and the expertise needed to deal effectively with the issues that have come before CAPPRT in the past and to address its existing files at the CIRB in a timely manner.

I'd also like to take a few moments to talk about the impacts of other budget and Bill C-38 measures on the lives of cultural workers in Canada.

Over the next three years, $191 million is slated to be cut from Canadian heritage programs. Included in this are disproportionate cuts to funding for CBC/Radio-Canada, Telefilm, and the National Film Board. Not only will this shrink opportunities for cultural workers and diminish a vibrant sector of our economy, but the obvious corollary is that Canadians will have fewer opportunities to see and hear ourselves and our stories on our screens and radios. For individual Canadian artists to thrive in our vast and diverse country, institutional supports—including our public broadcaster, film funding agencies, and museums and performance spaces—are essential.

Looking at the planned cuts to CBC alone, we see the disappearance of regional music recording facilities and production assistance. That is causing great concern, especially within the legendary music scene of Newfoundland and Labrador. CBC music producers, recordings, and live broadcasts have helped nurture regional and national music scenes that contribute both to our identity and to our economy. Because of the drop in funding, CBC is also planning to close the only TV production studio in Canada east of Montreal, the home of This Hour Has 22 Minutes, in Halifax. This country would not have a TV production sector without significant government supports, starting with the CBC.

We urge Parliament to examine its support for Canada's cultural sector with a view to reinvesting in the institutions that anchor artistic and cultural expression in the country. Later this year, the Canadian Radio-television and Telecommunications Commission will hold public hearings to renew CBC's broadcast licences. Tens of thousands of Canadians are already participating in a “Reimagine CBC” project. Canadians know that our stories, our diverse cultural experiences, and our ideas rely on public institutions such as the CBC to flourish.

We also know that the cultural sector contributes enormously to our economic well-being. For example, Deloitte and Touche found last year that the $1.1 billion the government has been giving CBC translates into $3.7 billion in economic activity in this important sector. The guild is very concerned that the government is backing away from national public support for culture.

Finally, I have a few words on how other measures in this bill will affect cultural workers. Proposed changes to old age security will primarily affect lower-wage Canadians who don't have a workplace pension. Artists and cultural workers in Canada are too well represented within this group. With the changes to OAS, these lower-wage workers will spend more of their later years struggling to put food on the table. This country needs a decent pension plan for all types of workers—union and non-union, employees and the self-employed. The planned changes to OAS move us in the wrong direction.

Further, the changes to EI are very troubling and will affect our own members who, along with 19,000 federal public servants, are being thrown out of work as a result of the cuts in this very budget. Employment insurance is a plan we all pay into. We rely on it to be there in critical times. It should not be considered the same as general revenues. It's a public trust with a specific mandate, and changes must be made with great care and much consultation among the people who pay into it.

The changes to the definition of an acceptable job and the reduction in benefits to those in higher unemployment areas essentially serve to reduce access to much-needed benefits for unemployed Canadians. Furthermore, the changes to the appeals process stand to create even more delays for Canadians who challenge a denial of benefits. In effect, you are telling workers not to bother appealing, thus giving up on an insurance system they pay into. This feels like a naked cash grab.

With all of the changes in this omnibus bill, the government is provoking widespread anger as more Canadians feel the pain of economic injustice. The polarizing effects of this approach may well lead to situations and consequences that the government hasn't foreseen and cannot control.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll hear from Mr. McAvity, please.

[John McAvity, Executive Director, Canadian Museums Association]

Thank you, Mr. Chair.

I'm very pleased to be here, and for a couple of reasons. One reason is that I feel right at home in this room, because this structure, this building we're in, used to be the Museum of Contemporary Photography. I remember touring it before it was officially opened.

The CMA is very pleased to be here to discuss division 47 of the bill, which includes the amendments for Canada's travelling exhibitions program.

But first, before I go into details on that, I'd like to take an opportunity to say how very pleased we are as a sector over this budget. In fact, we've seen three out of the four recommendations that we made being implemented in this legislation, so we as a sector are very pleased.

Let me just mention what the three recommendations are: first, no cuts to the national museums over a three-year period, and no cuts to support programs for museums or for most support programs that we're aware of; secondly, an increase in youth employment of $50 million, a small part of which we hope will come to the museum sector, as we are currently turning down 90% of all applications for internships each year; and finally, a significant increase in the indemnification program for large travelling exhibitions, which I'm here to discuss today.

Division 47 includes only three short but very important amendments that will have a major impact on all Canadians and their communities. These amendments will more than double the capacity of the indemnification program, giving Canadians rare opportunities to see exhibits that they would never normally be able to see, and resulting in a very positive economic impact on the host communities.

For example, Titanic, the artifact exhibition hosted by the Royal British Columbia Museum in 2007, was visited by more than 450,000 visitors in a six-month period, 26% of them from outside the region. The exhibition generated more than $30 million in economic activity and more than 742 full-time jobs in southern B.C., out on Vancouver Island.

This act has permitted the indemnification of major exhibitions for over 12 years in Canada, and it has been a complete success. There has never been a single claim against this program due to the high standards of museums. The program has minimal operating costs, and the economic activity generated by major exhibitions in fact results in a net gain of $15 million in tax revenues. In a phrase, this is a win-win scenario.

With the proposed increases from total coverage of $1.5 billion to $3 billion at any one time, which is a very important amendment that's included before you, and a new cap on the amount of coverage per exhibition, exhibitions such as the Art Gallery of Ontario's Picasso: Masterpieces, which is valued at $1.27 billion, can be viewed by a large number of Canadians and generate economic impact.

The proposed amendments, however, will not solve all of the issues facing exhibitions, and will not cover all exhibitions in Canada, but will more than double the impact from this program. Given the increases in the valuations of art and objects, this will lift an important roadblock that has prevented a number of exhibitions from being covered. We urge your speedy consideration of these amendments.

In addition, we would like suggest that a program review be undertaken of the effectiveness of this program in two years' time with a view to bringing this program in line with international standards. Most nations have unlimited indemnification programs in their nations that are based on the eligibility of the exhibit rather than the financial value. Such a measure would improve planning, increase the number of exhibitions presented, and have a positive economic, educational, and social impact for all Canadians.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

Our final presenter is Mr. Naidoo, please.

[Anil Naidoo, Project Organizer, Council of Canadians]

Thank you.

Good evening. I want to thank the committee for inviting us to present.

My name is Anil Naidoo. I am here on behalf of the Council of Canadians, which is over 25 years old, with tens of thousands of members across every province and territory, and with chapters in almost 80 communities across the country.

To give you a sense of the organization, we take no corporate or government money, and therefore we feel we are able to speak independently in the interests of our members and the broader public interest, as we see it.

For full disclosure, the Council of Canadians is assiduously non-partisan, with members from every political party, but I took leave to stand as a provincial candidate for the NDP in the last Ontario election.

The council's campaigns are focused on water, trade, public health care, energy, as well as sometimes carrying forward our members' concerns around issues of democracy and social programs.

Right now our chairperson, Maude Barlow, is travelling around the Great Lakes, holding town halls to protect this most precious body of water, and we are simultaneously hosting a mining conference in Vancouver.

Over our 25 years we have held meetings across the country on the Canada-EU free trade agreement, medicare, bottled water, and many issues of concern to Canadians and our members.

Personally, I am highly focused on the issues of water and want to note that Canada had an important breakthrough on Tuesday when this government recognized the human right to water and sanitation at the United Nations Rio+20 negotiations. The council has been advocating for the human right to water for the past ten years, internationally, as well as pressing successive Canadian governments at home. We are pleased to have been part of the campaign to get the UN to recognize the human right to water. Canada joining the international community is clearly a positive step forward.

Recognizing the human right to water is in the public interest, but we believe those parts of Bill C-38 that deal with water are not. The bill contains amendments to acts related to environmental assessment, fisheries, parks, navigable waters, not to mention cuts to front-line programs at Environment Canada and decades-long monitoring programs studying the health of our lakes, effluent monitoring, and water use efficiency.

I know that others, including former Progressive Conservative Minister Tom Siddon, have presented many of these concerns to you already, so let me suggest that what this process is asking you to do as members of Parliament I believe is untenable. To try to assess, in a matter of mere hours, the impacts of the profound changes to 70 acts of Parliament contained in these 420 pages is in itself daunting, but it is even more complicated than this. Each paragraph impacts whole laws, which are themselves massively complex, as you know.

We should not expect members of one committee to be asked to pass judgment on whether these changes are in the best interests of Canadians. In your situation, I would appreciate more time before making such major decisions regarding these myriad acts and changes. Even a short bill of a few paragraphs, such as Bill C-36, would have a fuller review.

We all know that in one form or another, majority governments get bills passed. This is not the issue. The issue is whether members of Parliament, including Conservative members, get the time to grapple with the issues, suggest constructive changes, and are confident when they vote that they are representing the broader interests of their constituents. This ultimately goes to Canadians being able to have confidence in our system of government.

Right now, people are losing confidence in politics—you know this—and I believe the reactions you are seeing to Bill C-38 are only going to build if there is no political solution to address these types of concerns. Our system is based on convention and tradition, and I believe this bill, while legal according to the letter of the law, does challenge the spirit of our parliamentary system.

I also want to address the framing of this bill. I believe that if we are truly focused on jobs, growth, and long-term prosperity, we must be focused on the environment as the foundation of a healthy economy and society. The environmental legislation we have currently is not frivolous. It was deemed necessary by previous members of Parliament and governments. The threats to our environment are now enhanced, as you all know, not diminished.

I'm asking you to send this piece of legislation back and ask for more time and thought to be put into the implications, and to ask for the consideration that you need to do your job as members of Parliament the way that we, as Canadians, expect you to do it. I know that many other witnesses would also join me in supporting you, if that were your recommendation.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll start members' questions with Ms. Nash, please, for five minutes.

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

Thank you very much.

Thank you to all the witnesses for being here this afternoon.

I want to first of all make a comment, picking up on Mr. Naidoo's statement around the scope of this bill. Others have referenced that.

We are members of the finance committee, and as members of the finance committee we are dealing with an unprecedented bill. There have been two other Conservative budget implementation acts that had more pages, but there has never been one that has had this scope and complexity and impact of these—

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

A point of order, Mr. Chair.

[The Chair, Conservative, James Rajotte]

On a point of order, Mr. Jean.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

I just wanted to point out that Mr. Del Mastro is the parliamentary secretary to the Prime Minister , and was previously to the Minister of Heritage, so he's not a member of the finance committee. He's here serving today.

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

If I understand correctly, he's substituting on the finance committee. This is a meeting of the finance committee.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

I understand, Ms. Nash, but he's not a full member.

[The Chair, Conservative, James Rajotte]

What is the point of order?

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

The point of order is that it's misrepresentation. I want to make sure that people know that he was a parliamentary secretary—

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

It's a pointless point of order.

[The Chair, Conservative, James Rajotte]

It's a point of debate.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

He's the parliamentary secretary, so he's not a full member of the finance committee.