Finance Committee on Oct. 18th, 2012

[The Chair, Conservative, James Rajotte]

I call this meeting to order. This is the 79th meeting of the Standing Committee on Finance. Pursuant to Standing Order 83.1, we are continuing our pre-budget consultations for 2012.

We have again, colleagues, two panels today. In the first panel we have the Association of Canadian Community Colleges, the Canadian Association of Community Health Centres, and Financial Executives International Canada. By video conference, we have the Council of Canadians with Disabilities.

We will start with the Association of Canadian Community Colleges. You each have five minutes for an opening statement, and we will make our way down the list.

[James Knight, President and Chief Executive Officer, Association of Canadian Community Colleges]

Thank you, Chair.

Thank you, members of the committee, for the invitation to join you this year.

Canada's 130 colleges, institutes of technology, polytechnics, and CEGEPs have campuses in 1,000 Canadian communities. I know many of your ridings have college campuses. We serve 1.5 million learners. The principal attributes of these institutions include sky-high levels of student and employer satisfaction, intimate links with industry, employment placement rates ranging from 85% to 95% within six months of graduation, and educational programs that respond to local economic opportunities. About 20% of college learners have a university background or university degree.

I will speak to measures to address the acute skill shortages pervasive in all sectors of the economy and the contribution of college and small and medium enterprise partnerships to address Canada's innovation ecosystem and productivity needs.

In successive hearings of this committee we have talked about the looming skills deficit. I am happy to report today—or perhaps I am unhappy to report today—that the private sector has come on board this theme very strongly. Both the Canadian Chamber of Commerce and the Canadian Manufacturers & Exporters have said that attracting and retaining qualified employees is the most significant challenge jeopardizing economic growth.

Unless aggressive measures are adopted soon, within 10 years employers will not find qualified candidates for about 1.5 million positions that will be available in our economy. Now 70% of new jobs require a post-secondary credential. Within a decade we foresee that this will be 80%. Our post-secondary achievement rate is 60% in Canada.

Immigration will make a difference, but only a small difference. The real solution is to enhance the capacities of our current population. I want to be very clear on this point. We already have the people we need to replace the baby boomers. They are here, but these people do not have the skill sets that employers require.

We urge the Government of Canada to collaborate with other governments, civil society organizations, and educational institutions toward the goal of equipping every Canadian with the skills necessary to participate in our economy. We have come a great distance here, but we are far short of realizing the vision.

There are many remedies. For example, there are 906,000 people between the ages of 15 and 29 who are neither employed nor in education, and who are obviously at risk of social exclusion. This is the NEET generation. Unless we foster opportunities for disengaged youth, the social costs will be enormous. We should increase access to essential skills and education for employment, which is what colleges do.

The educational gap between aboriginal and non-aboriginal Canadians is vast. Balanced investments in K to 12 and post-secondary education are needed. We made a good start in the 2012 budget. We are very happy about that, but we have some considerable distance to go. We do need to sort out the long-standing impasse surrounding the aboriginal post-secondary student support program.

Immigrants confront barriers to labour market integration, obviously. Their employment outcomes improve through overseas orientation services, occupation-specific language training, and bridge-to-work programs offered at colleges.

Canadian employers report that trades professions are the most difficult to fill, yet apprenticeship completion rates lag compared to registrations. Apprentices would benefit from improved tax credits and interjurisdictional mobility. Despite much self-congratulation about removing barriers for the disabled, the participation of this large sector in the economy falls far short of other groups. We should incentivize employers to engage the disabled through the tax system.

[The Chair, Conservative, James Rajotte]

You have one minute left.

[James Knight]

We urge the Government of Canada to equip the colleges and institutes with a capacity to respond. There are many opportunities. The knowledge infrastructure program provided tremendous support. There's an opportunity to renew that.

We also reference the tremendous contribution colleges make to small and medium enterprise development through their expertise, their equipment, and their eager students who engage in applied projects with the SME community. There has been Government of Canada support for this. We urge that it be increased to 5% of the overall investment in post-secondary research. It's currently at 1.25%.

That is my five minutes, Chair. Thank you.

[The Chair, Conservative, James Rajotte]

We will now hear from the Canadian Association of Community Health Centres, please.

[Simone Thibault, Member of the Board, Canadian Association of Community Health Centres]

Good afternoon.

Like Mr. Knight, we are pleased to have the opportunity to appear before the committee this afternoon. My name is Simone Thibault, and I am the executive director of the Centretown Community Health Centre, which is located just a few blocks from your offices.

I'm also a board member of the Canadian Association of Community Health Centres, CACHC for short. It is in that capacity that I'm here today, along with my colleague, Scott Wolfe, who's the CACHC federal coordinator.

The Canadian Association of Community Health Centres supports community health centres across Canada to increase access to high-quality local health care and to improve the health and well-being of individuals, families, and communities as a whole. There are currently more than 300 CHCs across Canada, although they often go by different names from province to province.

Included in these 300 community health centres are the CLSCs in Quebec, such as the one in Rimouski.

They include Saskatchewan's cooperative health centres, such as the Prince Albert Co-operative Health Centre, and they include Alberta's and Ontario's CHCs, such as the Boyle McCauley Health Centre in Edmonton, the Chatham-Kent Community Health Centre in Chatham, Ontario, and the Parkdale Community Health Centre in Toronto.

In fact, examples of community health centres can now be found in all provinces and territories; however, only a small fraction of Canadians to date have access. In nearly every province, Quebec and Ontario being minor exceptions, CHCs are far too few in number, and where they do exist, they are drastically underfunded.

Let us tell you a little more about what CHCs do on the ground and how this informs the five recommendations that we are presenting to you today.

Community health centres are comprehensive, front-line, primary health care centres. They bring health care providers such as family physicians, nurses, dieticians, therapists, and others together out of their individual isolation to work as a collaborative interprofessional team. This means that people receive comprehensive care from the right providers and at the right time. These diverse health care providers are supported to work to the full scope of their training—this is where we count on the colleges—making the best use of our precious health care resources.

But more than simply making front-line care more integrated and comprehensive, CHCs couple these team-based primary care services with health promotion programs, social services supports, and community programs—especially health promotion—that emphasize illness prevention and well-being rather than simply treatment. It means that a health care provider who encounters issues facing the health of an individual or a family that lie outside of his or her capacity to treat someone—for example, poor diet linked to poverty—can connect the patient or family to in-house resources that can pick up the next steps of the journey towards health.

As a result of this integrated approach, various research studies have found that community health centres provide effective and cost-effective care, achieving better overall outcomes than treatment-focused medical models.

Our full budget submission elaborates on these points in further detail, along with further rationale underscoring the need for investment in key areas of health and health care. What we would like to share with the committee here, based upon our work on the ground and what we are seeing in communities across Canada every day, is the following.

We in Canada are veering dangerously toward an interconnected crisis of poverty, inadequate housing, and illness, and a consequent tsunami of demand on our health care system. We must do a better job—that's clear—of preventing these crises and the tsunami.

I'll move it over to Scott.

[Scott Wolfe, Federal Coordinator, Canadian Association of Community Health Centres]

Thank you.

The good news is that we can change this and we know how.

For starters, we know that an increasing number of Canadians simply do not have the personal and household income and resources required to achieve and maintain health. A widening income gap and the lack of access to adequate and affordable housing across Canada are two key factors. These growing financial pressures and our eroding social safety nets at federal and provincial levels mean that many households simply cannot afford to access the nutritious food, the recreational activity programs, the family supports, and other resources needed to maintain well-being. We must level the playing field and we must give families and communities across Canada the opportunity to access the necessary preconditions for health.

I'm going to move along to our recommendations very quickly. We recognize that these five recommendations don't cover the full spectrum of actions necessary to get us to where we need to go. However, they do provide a launching pad, and we believe they act as key enablers.

The first of these is to design and adequately invest in a federal poverty reduction strategy, such as the one outlined currently in Bill C-233, An Act to eliminate poverty in Canada. This plan must complement provincial and territorial initiatives.

Second is to adopt and implement Bill C-400, An Act to ensure secure, adequate, accessible and affordable housing for Canadians, thereby establishing a desperately needed federal housing strategy.

Third is to negotiate with the provinces and territories a new 10-year health accord, with stable and adequate funding at a minimum 6% escalator over the coming years, and to protect the Canada Health Act within it.

Fourth is to establish a federal pharmacare program and further protect the health and well-being of Canadians by exempting health care—including this new federal pharmacare program—from CETA and other trade agreements.

Fifth is to expand and invest in access for Canadians to high-quality, team-based, primary health care by establishing a federal strategy and funding for a pan-Canadian network of community health centres.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now hear from Financial Executives International Canada, please.

[Michael Conway, Chief Executive and National President, Financial Executives International Canada]

Thank you, Mr. Chair, and good afternoon, committee members.

We are honoured to be here today. FEI Canada is a voluntary membership association comprised of 1,800 of Canada's chief financial officers and senior financial executives across the country. The recommendations we present to you are prepared by FEI Canada's tax committee, whose chair—Peter Effer, vice-president of taxation of Shoppers Drug Mart—is with me here today.

Considering the continuing uncertainty in the world economy, fiscal restraint should remain a top priority. FEI Canada recommends that the federal government retain its objective for balancing the budget in the near term, as this is necessary to be able to maintain Canada's social programs at their current level.

FEI Canada encourages the government to continue its project review to improve efficiency and deliver cost-effective programs and policy development.

If it is determined that additional revenues are required, an increase in the GST rate should be considered, as commodity taxes are viewed by economists as the most efficient and progressive form of taxation.

A few years ago, FEI Canada was one of the first organizations to highlight the need for tax simplification. In fact, I had a bit of fun with it, comparing the little 1917 act that started it all to finance the Great War with today's massive Income Tax Act. Well, unfortunately, I must report that in the last two years, the tax act, like me, has not lost very much weight.

We again recommend that the Minister of Finance establish a task force to undertake a comprehensive review of the federal Income Tax Act, with the objective of reducing complexities, because—to be clear—compliance has become unmanageable, and the costs are killing everyone. The act takes the government too much effort to administer, and it is an excessive burden on corporations—particularly small businesses, which are one of the key drivers of the economy. FEI Canada continues to be prepared to participate in this expert panel or assist the government in any manner to achieve this worthwhile endeavour.

So how can we simplify the tax act?

We and other groups have previously encouraged the government to permit consolidated tax reporting for both corporate income tax and GST/HST. In the interests of time, I will simply refer you to our submission for further details on this.

One big step that we could undertake immediately to simplify the tax system would be to introduce legislation to allow and require a process to settle disputes with the CRA as part of the field audit process. Encouraging settlement of issues at the audit level will save resources for both government and taxpayers, especially for smaller entities whose financial resources are scarce.

We should also adjust the CRA's auditor incentive system, as it currently rewards audit issues put forward, not those ultimately proved to be justified. Right now, their system is like rewarding a hockey player for the number of shots taken rather than the number of goals scored.

FEI Canada believes that to achieve a strong and sustainable economy, Canada needs to facilitate the commercialization of innovation. We suggest that in conjunction with the SR and ED program, the government should allow companies engaged in innovation to issue flow-through shares similar to those in the oil and gas and mining industries. As this concept has successfully encouraged exploration and development in Canada's natural resources, it should be applied to support innovation across all industries, especially manufacturing.

Innovation flow-through shares would encourage private investment in Canadian innovation and would not be an incremental cost to the government, since this program only represents transferring deductions and credits from one taxpayer to another.

The demographic structure of our country is changing. We need to ensure that a healthy and vibrant aging population can continue to add to Canadian productivity in various ways, including by remaining in the workforce longer. However, challenges facing our seniors are considerable. They include ensuring that their retirement income is properly planned and is adequate for both known and unknown expenses, and that health care and supportive living costs are provided for. FEI Canada encourages the government to conduct a study and develop a national framework on this issue.

In conclusion, we believe our recommendations will streamline government, reduce time spent on compliance, foster innovation, and ensure that our aging population continues to contribute positively to the economy.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Conway.

Mr. Dolan, we'll now go to you for your five-minute opening statement, please, sir.

[Tony Dolan, National Chairperson, Council of Canadians with Disabilities]

Thank you, Mr. Chairman.

I'm representing the Council of Canadians with Disabilities, a national organization that represents Canadians with disabilities across this country. The goal of the Council of Canadians with Disabilities is to build a more inclusive and accessible Canada and to ensure that Canadians with disabilities have the same access to goods and services of our great country as do non-disabled persons.

Over the years much progress has been made. Together we have removed barriers to transportation systems, created more accessible elections, developed inclusive education programs, and removed some barriers to employment of persons with disabilities. We have created new service delivery models to empower people with disabilities, and we have continually sought incremental ways to improve the lives of Canadians with disabilities.

To be blunt, these improvements came about because people with disabilities, their families, and their organizations spoke out about the barriers. We spoke out about our rights and our responsibilities as citizens of Canada. The catalyst for change has been and will remain the voice of persons with disabilities speaking for ourselves. This voice must continue to be supported, for it has been and is the catalyst for making our communities more accessible and inclusive.

Sadly, 18 national disability organizations have recently been informed by Minister Finley that the grants provided to them through the social development partnership program, as a disability component, will be reduced by 35% in 2013-14 and by 65% in 2014-15.

In April of 2015, these organizations, including our organization, will no longer receive grant funding.

The Learning Disabilities Association of Canada has already announced that they will close their doors at the end of March 2013. More will follow.

The program will remain open, with $11 million for project funding. However, the project application process will be an open, competitive process. Any non-profit charitable organization, local, provincial, or national, or any university, can apply for this funding. We believe this approach will significantly undermine the capacity of national organizations and silence the voice of people with disabilities.

We have asked Minister Finley to reconsider her decision and protect some funds for national organizations in an open, competitive process. We believe the voice of people with disabilities must be supported. It makes good business sense to engage with people with disabilities, their families, and their organizations in public policy dialogue. CCD will be meeting with Minister Finley in the near future to discuss our concern.

The Government of Canada has a substantial role in supporting Canadians with disabilities to identify barriers and to assist in identifying ways of removing these barriers. That has happened many times in the past few years. Much has been done, but much remains to be done. Canadians with disabilities for the most part are poor, excluded from the labour force, and face new barriers every day. It is highly likely that if you are poor in this country, you have a factor of a disability as well.

What is needed are new initiatives to address poverty, including improving the registered disability savings plan and the Canada Pension Plan disability benefit. Issues to be addressed in this area include removing barriers for those with intellectual disabilities wishing to open a registered disability savings plan, expanding the disability tax credit definition, and making the Canada Pension Plan disability benefit non-taxable.

We need new initiatives to improve employment access, including specific targets for the employment of persons with disabilities in the labour market agreements with the provinces, and expanding EI sick benefits—

[The Chair, Conservative, James Rajotte]

Mr. Dolan, you have one minute left.

[Tony Dolan]

Thank you.

We need new initiatives to improve access, including the regulation of new information technologies to ensure access, and the creation of a centre of excellence that would provide best practices information to employers, businesses, etc., on universal design options.

Our council had hoped that the Government of Canada's ratification of the United Nations Convention on the Rights of Persons with Disabilities in March 2010 would trigger creation of a new national strategy to improve the lives of Canadians with disabilities. Sadly, that has not been the case. While new initiatives have come about, such as the registered disability savings plan and the expansion of the opportunities fund, these on their own are not sufficient to ensure a full participation of Canadians with disabilities in Canadian society.

Thank you for your interest in this matter.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

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

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

Thank you, Mr. Chair.

Welcome to all the witnesses.

I have questions for all of you, but I only have five minutes, so although, Mr. Conway, I don't have time to ask you a question, I agree with you in terms of the complexity of the tax system and the need for simplification. I think that's something the government should look at. We have too many boutique tax credits, and we really need to look at a strategic overhaul of how we approach taxation.

To Mr. Knight, I have a question about the whole issue of community colleges and the skills gap. In fact I raised a question in the House today and talked about youth unemployment. There are many very good-paying jobs that require more skill and expertise, and far too many people of all ages, but especially young people, who today don't qualify for them. I've met with businesses who are very frustrated by the mismatch of skills. Yes, it's university degrees, but it's also trades, as you quite rightly mentioned.

What would be your recommendation, in terms of better marshalling our resources through the community college system, to help meet that gap? I hear employers lamenting it, but how do we make that mismatch disappear?

[James Knight]

There is not a mismatch in the college sector. Our graduates are highly successful at gaining employment. In your area, I think George Brown reports in excess of an 85% placement rate.

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

But businesses say to me, and I heard more businesses say this morning, that they're—

[James Knight]

The problem is that we don't have the capacity to deal with all young people. If only we did.

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

So it's a capacity issue.

[James Knight]

It's a huge capacity issue. There are long waiting lists for those programs for which there is a high employment opportunity. We just don't have the resources to educate all the young people we would like to.

Remarkably, at this time, when employers are extremely unhappy and find it difficult to find the people they need, we are actually reducing investment in college-style education across the province. Every province has served notice that colleges should expect less, precisely at a time when we should be investing more.

My question is this: who will pay for health care if we don't have the educated Canadians who can produce that income?

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

So if provinces are cutting back, is that a factor of the federal government? Is that money that's transferred to the provinces and that then doesn't flow through to the colleges? Is that the issue?

[James Knight]

There is federal money. Through the Canada social transfer, there is a post-secondary component, which is at $3.8 billion. We think that increasing that component and expecting some sort of outcome—as in the health sector now, where there's been increased federal investment with the expectation that the provinces will report improved outcomes—would be a reasonable direction for the federal government in post-secondary education.

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

Okay. Thank you.

Turning to the health care sector, you mentioned Parkdale Community Health, which of course is in my riding. Thank you for mentioning that. It's a huge, valuable resource that promotes wellness and helps so many of our community members, especially the most vulnerable members. It prevents very expensive emergency room treatment when what people really need is better access to food and shelter and some prevention.

We're facing a lot of challenges because of the cut to refugee claimants' health care benefits. Many in my community are seeking those benefits. I know that the community health centres are stretched to the limit.

What do you need the federal government to do besides improved funding? You talked about expanding the community health care system. Is that what we need right across this country? Perhaps you can talk about that.

[Simone Thibault]

I think for sure we need to be investing in community primary health care if we really want to make a difference. I mean, even the hospitals are telling us to start investing at the front end, making sure that there are interprofessional teams, and paying attention to those who we sometimes call “hotspotters”.

If you know the amount of ambulances, police, paramedics, and hospital ERs taking care of a minority of people who have mental health and addiction issues or other chronic conditions, if they're well served by a community health centre that can respond with an interprofessional team, you'll save money—lots of it.

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

Thank you. And thank you for the work.