Finance Committee on Oct. 16th, 2012

[The Chair, Conservative, James Rajotte]

I call this meeting to order.

This is the 77th meeting of the Standing Committee on Finance. Our orders of the day, pursuant to Standing Order 83.1, are to continue with the pre-budget consultations of 2012.

We have two panels here, colleagues. On our first panel we have five organizations.

First of all, we have Canada Without Poverty; next we have the Canadian Cancer Society; next we have the Canola Council of Canada; ensuite le Mouvement Desjardins, et après ça, le Réseau Solidarité Itinérance du Québec.

I want to welcome all our witnesses here today. You have five minutes for an opening statement. We will start with Canada Without Poverty and make our way down the row.

Ms. McLachlan, please begin your opening statement.

[Harriett McLachlan, President, Board of Directors, Canada Without Poverty]

Thank you, Chair Rajotte and honourable members of the committee, for allowing us to present today.

My name is Harriett McLachlan. I'm the president of the board of directors of Canada Without Poverty. It's a board that's made up of individuals who have lived the experience of poverty.

Before I get to my recommendations, I'd like you to know that I have a master's degree in social work and I have worked with various population groups, many of whom have lived in poverty and experienced poverty. Even though I'm a professional, I've lived 35 years in poverty. I've lived 10 years with rats and I've scrambled to make ends meet and to eat. I want to say that as a preface.

That said, there are four recommendations we want to make today.

One is to direct resources for creating and implementing a federal plan for poverty elimination that's based on our human rights obligations, a plan that complements provincial and territorial plans and sets targets and timelines for poverty reduction and elimination.

The second is to establish a low-income refundable tax credit equal to the gap between a person's total income and the value of the low-income measure of applicable households.

The third is to create an anti-poverty competitiveness tax force and an anti-poverty impact test similar to the business impact test now done by departments to evaluate regulations and regulatory burden.

The fourth, in anticipation of the significant spike of food prices due to the catastrophic 2012 North American drought, is to establish a special national emergency fund for food security to assist low-income individuals and families in meeting their food requirements.

Within that scope, I'd like to remind this committee that the federal government's obligation is to, in part, fulfill the Constitution Act, which in part III says that without altering any legislative authority, the government will promote equal opportunities for the well-being of Canadians, furthering economic development, reducing disparity of opportunities, and providing essential public services of reasonable quality to all Canadians. What must be noted here is that it is the duty of the federal government to do so.

I think what's also important is that when we think of putting in place some measures and strategies, we must start with those who are most vulnerable, those who are living in poverty, those who are on the fringes of society.

Thank you. I am open to questions.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

I will now go to the Canadian Cancer Society, please.

[Daniel Demers, Director, National Public Issues Office, Canadian Cancer Society]

Good afternoon. Thank you very much for inviting us to speak today.

As many of you know, the Canadian Cancer Society is a national community-based organization. We have over 170,000 volunteers across the country who work in communities, providing services. Our vision is to create a country in which no one fears cancer. We do so by focusing on the eradication of cancer and the enhancement of the quality of life of individuals facing cancer.

We do this primarily through research, by providing information, and by providing services, but also through advocacy and prevention. That's where I really want to focus my remarks today.

Today I want to try to draw some linkages for you between cancer and Canada's economic prosperity, in particular as we face an aging society and an aging labour force. From our perspective, preventing disease just makes good economic sense. The bad news is that another Canadian is diagnosed with cancer every three minutes. In fact, in this country, this year, another 186,000 Canadians will find out they have cancer. Not only does this have a devastating impact on patients and their families, but it also affects the health care system, our workforce, and our economy.

But there is encouraging news. We know that prevention is key to reversing the alarming trend in the growth of cancer incidence. In fact, about half of all cancers can be prevented through healthy living and policies that help protect the health of Canadians. At the Canadian Cancer Society, we believe it is important to look at the entire continuum of care for cancer patients, from prevention to end of life.

I want to focus on one part of this continuum in particular, namely prevention, for it offers the greatest positive impact and the greatest return in terms of impact on peoples' lives and on our economy.

We strongly urge the government to emphasize prevention as a means to curb the incidence of cancer and other chronic diseases and their impact on our economy. Investments in cancer prevention are also investments in the prevention of other diseases such as diabetes, respiratory diseases, and cardiovascular disease.The four major risk factors, as we all know them—tobacco, alcohol, physical inactivity, and unhealthy diets—all contribute to cancer and to these other chronic diseases and the impact of these diseases on our economy.

The good news is that Canada is already shifting its focus to prevention. In September of last year, Canada signed on to the UN political declaration for the prevention and control of non-communicable diseases, or as they are more commonly called, chronic diseases.

We are encouraged by Canada's leadership role in the declaration and the ongoing work since the declaration was signed. In a speech at the UN General Assembly, the Minister of Health referred to Canada's own declaration on prevention and promotion as having been endorsed by the federal, provincial, and territorial ministers of health and as serving as a guiding document.

Minister Agluqqak further reiterated Canada's commitment to promoting healthy living, preventing diseases, and reducing health disparities, and in many areas Canada is recognized around the world as a leader in innovative health policies and practices. Now showing the world that we're investing in prevention as a way of controlling the human and economic impacts of cancer and chronic diseases will help maintain Canada's leadership in global health care.

Therefore, we urge the federal government to increase investments in prevention research and to integrate this research into policies and programs that will help empower Canadians to make healthy decisions.

We believe that a multi-sectoral approach is of key importance to addressing chronic disease and that NGOs, governments, and the private sector are all key players in this fight. We ask the federal government to take a leadership role in bringing these groups together to advance shared practices and to advance our common goals.

For example, workplace wellness programs are known to have a tremendous impact on individual cancer rates and the productivities of the companies that the individuals work in.

In the United States the CEO gold seal program and a recent study here in Canada by the Conference Board of Canada clearly demonstrate that by investing in prevention and sharing best practices, companies and even governments can see a 3:1 return on their investment. Clearly, prevention makes sense. This return on investment includes reduced absenteeism, more productive workers, and reduced health insurance and related health care expenditures. Workplace wellness is the kind of partnership among governments, the private sector, and charities that will be a key to addressing the challenges of an aging workforce.

We believe that by investing in prevention and health promotion, we can reduce the negative impact of premature disease and death on our aging workforce and ensure that all Canadians have the opportunity to contribute to Canada's economic growth.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll now hear from the Canola Council of Canada, please.

[Patti Miller, President, Canola Council of Canada]

Thank you very much, Mr. Chairman and committee members.

My name is Patti Miller. I am president of the Canola Council. I really appreciate the opportunity to be here today and update the committee on our industry and our priorities.

In just a few decades, canola has really become a major driver in the Canadian economy. It's now Canada's most valuable crop. It generates one-quarter of all farm cash receipts, about $7.3 billion in 2011. Beyond the farm gate, it is an economic powerhouse. It contributes $15.4 billion to the Canadian economy and generates more than 228,000 jobs and $8.2 billion in wages. Industry investment has resulted in 13 crushing and refining plants in Canada, with new plants and expansions under way, adding value-added processing in Canada.

The Canola Council is the voice of the industry. Our organization is unique because we represent the entire value chain, from the farmers who grow the crop to the companies that process and export to customers around the world. Teamwork really is our strength. We bring together 43,000 canola growers, crop input suppliers, and grain-handling companies, exporters and processors, all pulling together to help the industry grow.

Our core funding comes from stakeholders in the industry. It's a voluntary levy, paid by farmers, crushers, exporters, and the life science companies.

In 2006, our industry set a goal to increase annual production from 9 million tonnes to 15 million tonnes, which would contribute additional billions of dollars to Canada's economy, and to do that by 2015. This year, farmers seeded record acreage, and we're getting very close to that goal, except for a few rough spots this summer. Having said that, canola is a big winner in the marketplace. An average farmer saw a 30% increase in revenues from canola, and domestic crush went up 30%.

In terms of our partnership with the federal government, we work very closely with Agriculture Canada, with the Department of Foreign Affairs, with the Canadian Food Inspection Agency, and with the Growing Forward program run through Agriculture Canada, which is our main source of federal investment. Our focus areas with the government have been on research, market access, and market development.

In Growing Forward 2, the next round of this agreement, we really hope to see the federal commitment in these areas continue.

Research, market development, and market access all working together can transform market potential into jobs and wealth for Canadians. Clearly we need the research to be able to continue to grow and improve the productivity of the crop and to uncover the numerous health benefits of our product. However, over 85% of our Canadian canola is exported, so if doors to global markets are closed, a resilient crop and superior products do us little good. We need market development and market access programs to ensure that this crop remains profitable for the industry.

Investment in market development has yielded great returns for us. Investment in the U.S. canola oil promotion program has improved awareness in that key market for us and increased market share of our products. This program has also helped us expand our reach in existing key markets in Japan, Mexico, and China, and it has opened doors in new markets.

Market access programs keep those doors open, though. When we talk about market access, we talk about getting the most value we can out of the product that's grown and processed here. Threats to access includes things like differential tariffs. For example, China has a 9% tariff for canola imports and only 3% for our biggest competing commodity, which is soybeans, and there are technical and non-tariff barriers. An example is China's 2009 restriction on blackleg. These threats have to be continually addressed.

One of the reasons we've been able to overcome access issues is the support of both trade and agriculture, and specifically the ministers and their departments participating with us and travelling to these key markets. They are able to open doors for us that we might not have been able to open ourselves.

Agriculture is one of the most exciting sources of economic development for Canada in the years ahead, and we think canola is one of the most promising commodities of all.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We will now go to the presentation by the Desjardins Group representative. You have the floor.

[Bernard Brun, Director, Government Relations, Desjardins Group]

Thank you, Mr. Chair.

Desjardins Group thanks the Standing Committee on Finance for the opportunity to meet with members of the committee during the 2012 pre-budget consultations.

With current assets of 194 billion dollars, the Desjardins Group is the largest cooperative financial group in Canada. Its main network of caisses is in Quebec and Ontario, with branches found around Canada. Desjardins Group offers expertise in wealth management, life and health insurance, property and casualty insurance, personal services and business services. It has 5.6 million members.

Recognized in 2012 as the top corporate citizen in Canada and ranked among the 100 best employers in Canada in 2012, we focus on the skills of nearly 45,000 employees and over 5,400 elected officers.

It is also worth noting that Desjardins Group offers an education and cooperation program for its members, but also for the general public. In addition to responses provided earlier this year during written consultations, we would like to draw the committee's attention to avenues that fit with issues related to the economic recovery, i.e. growth, job creation and economic stability.

The year 2012 is the International Year of Cooperatives, as declared by the United Nations and supported by Canada. The year has seen many cooperative events including, more recently, the first International Summit of Cooperatives held last week in Quebec City. This event brought together over 2,800 participants, representing over 91 countries. Regulations on cooperative banks were also published this year, and a special committee on cooperatives was struck and published its report a little earlier.

All of these measures, and the International Year of Cooperatives, have highlighted a plural economy. Diversification, which most of our economists advocate, is not only about different sectors but also about different types of businesses. The cooperative structure deserves to have its place in the Canadian economy. It is an excellent complement to the traditional structure of equity companies.

To illustrate the economic role of cooperatives, there are 9,000 cooperatives in Canada, representing 18 million members. There are over 150,000 jobs through them. The survival rate of cooperatives is twice as high as that of traditional equity companies; they are more resilient and perform better, particularly during times of economic stress. They also serve regions and categories of clients that are not served by traditional business and they are highly adaptable.

Nevertheless, financial cooperatives and all cooperatives are facing particular issues including capitalization issues, which also lead to demutualization pressures. Even more importantly, cooperatives need a high-quality representative within government. The significant reduction to the Rural and Co-operatives Secretariat a little earlier this year, as announced in the previous budget, sent a mixed message to all cooperatives from the government. It can be interpreted either as a lack of interest or, on the contrary, as an opportunity for renewal and transformation. We fervently hope that it is the latter that is planned.

In conclusion, the federal government can greatly contribute to spreading the cooperative model for the benefit of all. Transfer and responsibility for cooperatives from the Department of Agriculture, where it is now, to the Department of Industry is essential in our eyes for cooperatives to be able to benefit from all policy and program support.

Finally, we invite the government to ensure there are safeguards to prevent all unjustified enrichment, particularly for demutualization applications.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

I will now give the floor to the representative from Réseau Solidarité Itinérance du Québec.

[Pierre Gaudreau, President, Réseau Solidarité Itinérance du Québec]

Ladies and gentlemen committee members, my name is Pierre Gaudreau. I am the president of the Réseau Solidarité Itinérance du Québec and the coordinator of the Réseau d'aide aux personnes seules et itinérantes de Montréal. We would like to thank you for hearing us on issues related to the next federal budget.

The Réseau Solidarité Itinérance du Québec is an association comprising 13 homelessness associations from various regions of Quebec.

Before taking another look at the issues in the next budget, as we outlined in the brief we submitted, I would like to talk to you briefly about the homelessness situation in Quebec.

As some of you may have read in yesterday's edition of La Presse on pages 1, 2 and 3, we are now seeing the new faces of the homeless. The articles referred to men, baby-boomers, who have lost their jobs and who are now out in the street as a result of various personal problems that cause all kinds of people to be on the street.

In Quebec, we are talking about three aspects of homelessness. It has been said that we have seen an increase, something borne out unfortunately in the various shelters both in Montreal and in the other regions. It has also been said that there has been a deterioration, because the situation of the people, their states, lives and experience have caused them to go through greater difficulties. Obviously, there is a lack of housing, which applies to all of these people. Those are the features of homelessness, but there are also other problems that people are going through: mental health issues, drug addiction, legal problems, exclusion, and so forth.

The previous government of Quebec came up with a definition of homelessness which is very accurate because it does not tie homelessness to one issue alone. Indeed, there are all kinds of convergent causes that lead to homelessness, one reason weighing no more heavily than the others. As a result, the situations are very diverse. We are seeing more faces now. We are starting to see people from the cultural communities in Quebec, which was not the case previously. We are seeing more and more aboriginal people on the streets. As I said, this is not occurring only in Montreal, we see this happening in the other regions. This phenomenon is occurring in more and more cities, throughout the province. This week on Friday, October 19, the 23^rd Nuit des sans-abri will be held in 27 cities and regions of Quebec to create more awareness and solidarity. Homelessness, both in Quebec and Canada, is therefore a significant issue.

A federal program was established further to a strategy adopted by the government in 1989. The program is now known as the Homelessness Partnering Strategy. The government renewed the program for five years in 2008, namely from 2009 to 2014. We are very pleased with this initiative taken by the government, which recognized the usefulness of this program and enables us to deal with various situations through a variety of solutions, including housing, shelter, intake and reintegration support.

This program also plays a vital role enabling organizations to establish social housing projects in cooperation with the Government of Quebec program. This is a very strong program because it is rooted in the community. It is the communities, as established through the government agreements, that determine what the needs are in Montreal, Gatineau or Quebec City.

We must underscore one negative aspect regarding this program. Its budget has been frozen since it was implemented in 2001. This sector is being asked to do more—and this is the case throughout Canada—to deal with a problem that is growing throughout the country and becoming increasingly costly. I am not talking so much about the costs incurred by people working in the sector. Rather, I am talking about the property costs. Setting up social housing projects, improving facilities, saving rooming houses, all costs a great deal of money.

The federal government's Homelessness Partnering Strategy is essential but it has not curbed the increase in the number of homeless people. When the program was set up, people said that not enough investment was going into social housing. I would like to point to another good move made by the government. From 2009 to 2011, the government's economic action plan included investments in social housing which led to the construction of social housing throughout the country, in Montreal and in the other regions.

We are therefore asking that the next budget include an increase from 20 to 50 million dollars in the Homelessness Partnering Strategy budget for Quebec for 2014, and that this money be provided over several years, in order to consolidate the activities of the sector. It is important that this announcement be made quickly because we have to continue pursuing our activities, maintain ties with people on the street, and consolidate the work of our organizations in order to get people off the street. Such an investment would be profitable for the government.

Stephen Gaetz has shown in his report, published in September, that the cost of homelessness is very big in Canada. It is between $4.5 billion and $6 billion per year. He was asking in the title of his report whether we could save money by doing the right thing. It has been shown that the answer is yes. In Quebec, in the network of groups working together and among people out on the street, we also say yes, and the next budget should go ahead in that way.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll begin members' questions with Ms. Nash. You have five minutes, please.

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

Thank you to all the witnesses for being here. We wish we had more time to ask you more questions.

I want to begin with Ms. McLachlan.

A question I asked yesterday to a group of witnesses mostly from the business sector was about the latest issue of The Economist, which is focused on the global increase of inequality. I wondered what your specific recommendations would do to decrease inequality in this country.

Secondly, more specifically, you talk about a federal plan for poverty elimination? Can you give us an example of a country that has effectively introduced a strategy for poverty elimination with targets and timetables that has been effective in reducing poverty?

[Harriett McLachlan]

Thank you for your questions.

If I understand the first question about inequality, it's more an example of a federal plan in another country. It's a very technical question. I have the new director of Canada Without Poverty here, Leilani Farha.

[Leilani Farha, Executive Director, Canada Without Poverty]

I'm Leilani Farha, the executive director of Canada Without Poverty. I was originally one of the panellists, but they said there wasn't room at the table. Here I am.

I have an example, to answer Ms. Nash's question, about another country that has an anti-poverty plan in place with measurable timelines and goals, a plan that has actually been successful. In actual fact, the United Kingdom does have a plan in place that resembles what we might call a national anti-poverty strategy. They were reaching their targets and their measures until the recent change in government. At this point they're not exactly sure whether they will make those targets. There has been speculation that they won't, but until the change in government, they were on target with their plan. Their plan was very much in keeping with international human rights obligations that this country has, which are very similar to those back here in Canada.

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

Okay, thank you.

I also want to ask a question of Mr. Brun and perhaps Mr. Gaudreau about cooperative housing.

You talked about le mouvement coopératif and the importance of investing in cooperatives. I don't see any expansion in investment in cooperative housing, which to me seems like a smart way to deal with the issue of affordability and homelessness, but also the affordability of housing. I'm wondering if you have any recommendations or thoughts on what the federal government could do specifically around co-op housing, again getting back to the issue of reducing inequality, but also addressing affordability for families.

[The Chair, Conservative, James Rajotte]

We have about one and a half minutes.

You wanted both gentlemen to answer. Who would like to start?

[Pierre Gaudreau]

The economic plan of the government between 2009 and 2011 did direct money for social housing. In the province of Quebec the money was used to make some new co-ops. As you pointed out in your questions, social housing or co-op housing is one of the ways to prevent homelessness, because it satellites people into housing and gives a way of life whereby people can pay their rent because it's affordable housing. The government did do it in the economic plan, and it was a great move. They should do it again.

[The Chair, Conservative, James Rajotte]

You have 30 seconds.

[Bernard Brun]

I will just add one point. There is an issue regarding housing co-ops, which is more regarding CMHC and the program. I don't want to get into too many details, but they have an issue regarding refinancing with this specific program. This has been an issue. I know the government has been aware of it and there is still a lot of work, but the answer has not been given yet on that.

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

Thank you for raising that point.

[The Chair, Conservative, James Rajotte]

Okay, thank you.

Go ahead, Mr. Hoback, please.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair, and welcome to everybody here this afternoon. It's great to see you out there, and your testimony is very important for the budget process.

Unfortunately, I only have five minutes. I am going to be very quick and probably just deal with one witness here today. That will probably be you, Ms. Miller, given that canola is such an important factor in Saskatchewan.

What has gone on in the canola sector is such a strong success story. Folks, this is an industry that has really been born and bred in Canada. It started off, actually, in my riding. Shellbrook was one of the first areas where canola was planted in Canada, and it has grown from there to be planted right across the Prairies.

If you look at the Canola Council and how that industry works, you see the growers, the industry, and the input suppliers all working together to develop a market and a network for the product all the way through the system. It is a really good business model that I think other associations should look at, because it has been very successful.

In terms of what's going on in the industry, Camrose was an exciting place a couple of weeks ago. There was a nice announcement there of a new crush plant. We have a crush plant in Clavet, one in Nipawin, one in Lloydminster, a couple in Manitoba, one in Lethbridge, and of course there may be a few more coming down the road too.

It's just another success story of good economic policy and good business cooperation between the farmers and through this network. However, one thing that is very important, and you touched on it, is the trade side of things.

In your opinion, how important is trade with India or through TPP or CETA? What impact do you see trade has on the canola sector, and what benefits does it bring? How do we help you when we look at the budget process?

[Patti Miller]

Those kinds of trade agreements are critical to our success. More than 85% of the canola crop is exported, and so the profitability, the jobs, and the investment in Canada really rely on those export markets and secure, predictable access to them.

We spent most of the earlier part of this day meeting with representatives from Agriculture Canada, foreign affairs, and CFIA, talking about market development and market access issues and the number of agreements that are under way and about how we're going to tackle those markets and secure and close the trade deals so that we can continue to profit from the export market.

[Randy Hoback, Conservative, Prince Albert, SK]

You touched on the blackleg issue in China. That's a good example of an area where industry and government can work together. Can you elaborate on what that situation was and how we helped you in that situation?

[Patti Miller]

Blackleg is a crop disease in Canada that affects the yield. It doesn't affect the quality of the product at all. China does not have that disease in their country and they don't want to see it introduced, so they restricted our exports to their country.

We worked with Agriculture Canada and with CFIA and made a significant investment in research to address some of their concerns, and were able to secure a guarantee of four million tonnes of market access to that country. We're continuing to try to resolve some of those issues. We feel that our opportunities there go well beyond four million tonnes, so our efforts are continuing there.