Finance Committee on Oct. 22nd, 2012

[The Chair, Conservative, James Rajotte]

I call this meeting to order.

This is the 80th meeting of the Standing Committee on Finance. Our orders of the day are pursuant to Standing Order 83.1; we are continuing our pre-budget consultations for 2012. I want to thank all our witnesses for being here today.

We have two panels. In the first panel, six organizations are presenting. First of all, we have the Canadian Association of Petroleum Producers. Second is Canadian Doctors for Medicare. Then we have the Public Service Alliance of Canada.

We will hear the representative of the Regroupement des jeunes chambres de commerce du Québec, and then the representative of the Société de transport de Montréal.

Finally, we have the University of Saskatchewan.

You will each have five minutes for your opening statement, and then we will have questions for members. We will begin with the Canadian Association of Petroleum Producers.

[David Collyer, President, Canadian Association of Petroleum Producers]

Thanks very much, Mr. Chairman and members of the committee. We very much appreciate the opportunity to appear before you.

My name is David Collyer. I am the president of the Canadian Association of Petroleum Producers, or CAPP. We have representatives from Encana and Shell also in attendance at the committee this afternoon, reinforcing the importance of our submission.

We have a single recommendation for your consideration in the next federal budget, that being a change in the federal tax treatment of liquefied natural gas, liquefaction, or LNG liquefaction facilities to tax class 43, which is a 30% declining balance, from tax class 47, which is an 8% declining balance.

In our view, this reclassification would do several things. First, it would harmonize the treatment of LNG liquefaction with other comparable manufacturing and processing facilities and equipment, for example, straddle plants. It would enhance the competitiveness of the Canadian LNG export industry, thereby encouraging economic growth. It would positively influence near-term final investment decisions for LNG liquefaction facilities.

As the committee is aware, the natural gas market is undergoing significant change. Shale gas supply is abundant, and it will provide Canadians with a long-term, reliable supply of an affordable, cleaner-burning fuel. This abundance of supply relative to demand has put downward pressure on natural gas prices and increased the imperative for Canada to develop new international markets through LNG export opportunities, particularly from the coast of British Columbia. This will provide both additional demand for western Canadian natural gas and provide access to global natural gas pricing.

Canada's LNG export facilities will be among the greenest in the world. LNG exports to Asian markets will displace the use of more carbon-intensive fuels in those markets. For all those reasons, we think it's in Canada's interest to develop a sustainable LNG export industry.

I turn now to the specific tax treatment for LNG liquefaction facilities.

In our view, LNG liquefaction is a manufacturing and processing business, not unlike straddle plants. These facilities are complex, and much more technical detail is provided in our submission. The bottom line is that LNG liquefaction facilities process input sales gas, resulting in changes to both chemical composition and physical characteristics in order to manufacture marketable LNG and NGL products. In doing so, they meet the test of M and P, which means they should be included in tax class 43 rather than in tax class 47.

We presume LNG liquefaction was not contemplated when class 47 was amended to cover the much simpler regasification process of LNG import facilities, as the potential for export of significant volumes of natural gas from Canada was not contemplated at the time those changes were made.

Very briefly, in a global competitive context, as you aware, the world demand for LNG continues to grow, especially in Southeast Asia. Canada can participate in those markets, but it's fair to say we face stiff competition as well in terms of supplying Asian markets, competition both from established LNG exporters in Australia and the Middle East as well as from emerging LNG suppliers. The current class 47 tax classification puts Canadian LNG liquefaction facilities at a significant disadvantage relative to competitors in both the U.S. and Australia. It takes about 27 years to write off 90% of an asset under class 47 as compared to about 13 years in the U.S. or Australia, and about seven years under the proposed tax class 43. That said, class 43 would make Canadian LNG liquefaction facilities much more competitive on an international basis.

Timely development of Canada's LNG export facilities is also an imperative. As you are aware, a number of proposed facilities are on the books. We're operating in a very competitive international market. This tax class reclassification would positively influence those upcoming investment decisions.

To summarize, in our view Canada has a unique opportunity to diversify its natural gas markets through development of a sustainable LNG export industry. This will support investment and jobs in Canada, and supply reliable, cleaner-burning natural gas to the growing economies of Southeast Asia. I believe we can compete with the best in the world. The tax reclassification we are talking about for LNG liquefaction facilities will help to enable those significant investments in Canada.

Thank you very much. I look forward to your questions.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now hear from Canadian Doctors for Medicare.

[Dr. Danyaal Raza, Board Member, Canadian Doctors for Medicare]

Good afternoon.

Thank you, Mr. Chair, and thank you to the rest of the committee for having us here today.

My name is Dr. Danyaal Raza, and I'm a family physician here in Ottawa. I'm here on behalf of Canadian Doctors for Medicare.

We're an organization that represents physicians across Canada as well as citizens who support a strong public health care system. We conduct research, advocacy, and education activities in support of an equitable, accessible, and improved public health care system.

In regard to the federal government's next budget, we have three main recommendations for improvement.

First, we believe this government should commit to establishing a 2014 health accord.

Second, we believe the Canada Health Act should be enforced across the country.

Third, we believe the federal government should commit to a strong role in promoting health care innovation.

All three impact our ability to have an efficient and sustainable health care system that provides the best value for taxpayer money.

With respect to our first recommendation, we're concerned that the federal government has walked away from its role in a 2014 health accord. Health care is about more than dollars and cents, and our country is more than a collection of provinces.

There is a role for the federal government in health care. It helps ensure that Canadians can count on quality care wherever they live and wherever they travel within the country. Without national leadership, the quality and levels of service of health care in Canada will depend on each province, not on the universal health care system that Canadians expect to be there for them.

The 2003-2004 health accords were landmark developments in Canada. Over the past 10 years there's been mixed progress. For example, in some parts of the country there has been success in reducing wait times for certain procedures, but this has not happened uniformly across the country. There's been little progress on a national pharmaceutical strategy to reduce costs and increase access to drugs. In addition, there was weak accountability for results. The accord provided for large transfers of money to provinces without enforceable conditions for delivery outcomes.

We urge the federal government to initiate the timely development of a new 10-year health accord, negotiated jointly to ensure that it reflects the needs of all regions and also reflects the priorities that we share as Canadians. We would also add that moneys from any new accord should be conditional on adherence to the Canada Health Act.

This leads to our second recommendation, which is the need to enforce the Canada Health Act with respect to illegal extra billing. The evidence is mounting that many for-profit providers of health care are charging patients for additional services tied to their medically necessary and already publicly insured services. In some cases, private surgical facilities such as the Cambie clinic in B.C. are making millions of dollars by openly charging patients to jump the queue ahead of other needy patients on public wait-lists. We know many Canadians feel that wait times are too long, and we agree. In fact, there is evidence that wait times can improve. Allowing those with the ability to pay to jump in front of the line is not a solution.

The federal government has a responsibility to ensure that all Canadians have equitable access to care, and Canadians expect the laws of their land to be enforced. Extra billing is expressly prohibited in the Canada Health Act, and the federal government has a responsibility to work with provinces to ensure that this practice does not take place. We ask the federal government to meet this expectation.

Our final recommendation asks for federal leadership to help identify smart innovations in Canada and scale them up across the country so that our best practices are not limited to isolated projects in single hospitals or clinics. For example, in a pilot project, the Alberta Bone and Joint Health Institute was able to reduce wait times for hip and knee surgeries from 82 weeks to just 11 weeks, and with better patient outcomes. In Saskatchewan they're learning from the experience of Nova Scotians and their success with a collaborative emergency centre system in rural areas that is helping connect patients to doctors and in fact cutting wait times to see doctors from six weeks to three days.

[The Chair, Conservative, James Rajotte]

You have one minute.

[Dr. Danyaal Raza]

Thank you.

These are key successes, and there are more. We need to scale up these innovations. The federal government is in a key position to push for this kind of reform to a renewed health accord.

We also see room for national leadership in evidence and translation to provide the highest quality care possible. For example, according to the Canadian Association of Radiologists, as many as 30% of CT scans and other imaging procedures are inappropriate or contribute no useful information. A national body tasked with continuously reviewing the evidence and issuing guidance to health care providers, similar to NICE in the U.K., would likely improve the quality of Canadian health care and save money.

The federal government must be involved in setting standards and applying the best of our knowledge across the country. We urge the committee to consider these issues as it develops the next federal budget.

Thank you for your time. I look forward to answering any questions you may have.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We will now hear from the Public Service Alliance of Canada.

[Chris Aylward, National Executive Vice-President, Public Service Alliance of Canada]

Thank you, Mr. Chair and committee members, for allowing me the opportunity to present to you today.

My name is Chris Aylward. I'm the national executive vice-president of the Public Service Alliance of Canada. The Public Service Alliance of Canada represents the majority of federal government workers in Canada, more than 172,000 people who deliver crucial services and programs to Canadians across the country.

Since the 2012 budget was tabled in the spring, more than 18,000 of our members have been told they may lose their jobs. They are anxious for their futures and for their families, but they are also worried about what these cuts mean for those who rely on the services and programs they deliver.

Mr. Chair, committee members, I'm here today to call upon you to do two things. First, we want this government to reverse course. Federal government cuts are bad for Canadian families, communities, and the economy. Second, we want this government to start listening to Canadians before making decisions.

We were encouraged to learn last week that after hearing from communities about how their economies would be hurt, the government backed off on its decision to cut the seasons for Canada's waterways and canals. That was a good first step. Now we need the government to do the same for all of Canada's national historic sites and parks, because the communities that depend on them are saying their economies are going to suffer as well.

Mr. Chair, it is clear that public services and the workers who provide them are a major contributor to the prosperity of our families and communities. Economists estimate that the last federal budget could amount to the loss of 55,000 public sector jobs and 61,000 private sector jobs across the country. That's bad for our economy.

The government needs to listen to people like Mayor Claude Elliott of Gander, Newfoundland and Labrador, who says that losing 30 Service Canada jobs there means losing about $1.5 million per year from their economy, and that's in salaries alone. He put it best when he told us,“When you're out there trying to expand and grow by attracting new businesses to the community, it doesn't give businesses a good sense of profitability when the federal government is out cutting jobs.”

Brad Barkhouse, the owner of a bookstore in Gander, who told us, “When the cuts hit here, it's going to affect my customers. All of the businesses will be affected. There's a snowball effect, and it takes money out of everyone's pocket.”

The government also needs to listen to Canadians about how these cuts are undermining our health and our safety. As of last week, we had 15 confirmed cases of illness caused by food contaminated with E. coli, food that came from XL Foods' slaughterhouse in Brooks, Alberta. This follows a $56 million cut to the Canadian Food Inspection Agency's budget.

The government says it has hired 700 new inspectors, but refuses to give anyone a breakdown of where they are. What we do know is that none of these new hires went to inspecting slaughterhouses like the one at XL Foods. What we also know is that this government continues to push for less hands-on inspections and more self-regulation by the industry. That is putting lives at risk. The government needs to listen to Canadians and recognize that this is not the time to cut back on food safety.

The government also needs to stop ignoring people who live and work along Canada's coasts. Last year we spoke to this committee about lives being put at risk by the shutdown of the St. John's and Quebec City search and rescue stations, and now B.C.'s fishing, tugboat, and pleasure boat communities are protesting the government's decision to shut down the Kitsilano Coast Guard station in Vancouver. They say that lives will be at risk because calls for help from Vancouver harbour will now go to the Sea Island station in Richmond, 17 nautical miles and 35 minutes away. The government needs to listen to what the experts there have to say and reverse that decision too.

The government needs to listen to Canada's veterans and reverse its decision to shut down nine Veterans Affairs district offices across Canada. That includes the one and only office in Charlottetown, Prince Edward Island. One of our local presidents there told us,“The Charlottetown district office has the highest ratio of walk-in clientele in Canada. We deal with veterans who are young and old, but depending on their different abilities and disabilities, a trip to New Brunswick may not even be possible for them.”

If I had more time today, I could talk to you about so many more examples of how the economy, families, and communities are being hurt by this government, or I could talk to you about the cuts to the fisheries habitat staff and the shutdown of the internationally renowned Experimental Lakes research centre. What will that mean for our environment?

I urge you to read our full submission, which was mailed directly to you, Mr. Chair, back in August, which we have distributed here today.

Thank you. I look forward to your questions.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We will now go to the representative of the Regroupement des jeunes chambres de commerce du Québec.

[Guillaum Dubreuil, Vice-President, Regroupement des jeunes chambres de commerce du Québec]

Thank you, members, for having us here today.

For over 20 years, the Regroupement des jeunes chambres de commerce du Québec has been supporting and growing a strong network of young people's chambers of commerce and youth sections throughout the province. The RJCCQ represents more than 7,000 young entrepreneurs, businesspeople and professionals aged from 18 to 40 from 34 different organizations. In addition to covering a vast territory, the RJCCQ represents eight culture-specific organizations, which gives it a unique perspective and allows it to defend its members well.

It is in indeed in our role as representatives and advocates that we have noted some concerns. At the RJCCQ, we believe that the demographic and economic changes of the next few years will have major repercussions. Furthermore, we believe that we must take on these changes properly and maintain Quebec's financial momentum. In order to do so, we suggest three strategic points.

The first is to consolidate. Canada's economy is based largely on a comprehensive and dynamic system of small and medium enterprises, working in all areas of business from the primary sector to the service sector. These companies are finding it increasingly difficult to maintain a competitive position on the world stage, not to mention that Canada is beginning to see its rate of entrepreneurship decrease compared to its international partners.

Without diminishing the role of big business, the RJCCQ continues to believe that Canada's economic strength lies largely in this complex web of small and medium enterprises. They are the cornerstone of our economic system. Today in Canada, 97.9% of firms have fewer than 100 employees. Unfortunately, many of these companies are destined to disappear or fall into foreign hands over the coming years. The reason is very simple: our entrepreneurs are growing older and approaching retirement. At that point, they will transfer the business as profitably as possible. Unfortunately, we are seeing more businesses being sold than businesses who have the next generation ready. We believe that this outcome is unacceptable. That is why we suggest that means of promoting the transfer of businesses to young entrepreneurs be implemented.

For the past few years, the RJCCQ has been advocating the introduction of a Business Ownership Access program. This BOA program would allow a young entrepreneur to use the funds in his or her RRSP to finance the purchase of a first business, without incurring penalties or taxes. The entrepreneur would then be required to repay the amounts within 10 or 15 years, ensuring he or she will not be penalized at the time of retirement.

As you know, the issue of credit, of a downpayment, is the main obstacle for people who want to buy a business, and the Home Buyers' Plan already exists. Buying a house is certainly a safe investment. Buying a profitable company is even more so. We therefore suggest that a similar program be created for purchasing a business.

We also believe—and it is our second strategic point—that we must invest in youth. The RJCCQ believes that the main challenge that stems from the aging of the Canadian population is ensuring inter-generational equity. Previous generations have enjoyed substantial benefits that are unsustainable now that the number of workers is decreasing. The RJCCQ is fully aware that it is impossible for the new generation of workers to enjoy the same benefits as previous generations, but we also believe that we must make sure that we do not have to pay the price.

To do so, the current government's efforts to return to a balanced budget must obviously be maintained. We congratulate the government for implementing a plan that is certainly bold. It requires a lot of sacrifice, I'll admit, but we believe that for the future of the country and the next generation of workers, it is the right path.

However, we also believe that we must take it a step further. Once the budget balance is restored, it will be important to prepare for the future by developing a plan to repay the national debt. The RJCCQ believes that the country's debt is a heavy burden to carry and undermines Canada's economic development.

[The Chair, Conservative, James Rajotte]

You have one minute left.

[Guillaum Dubreuil]

Fine.

Our last strategic point is using all our resources. Canada has long relied on its vast natural resources to act as an engine of economic development, but we now believe that we must promote the use of natural resources in accordance with the most stringent environmental standards. We also believe that we must put in place the necessary measures to diversify into new and important sectors of Canada's industry.

Let us therefore favour a gradual shift towards a better-developed knowledge-based economy. Investments in education are of utmost importance, as are measures to promote partnerships between the private sector and our research institutions, such as universities. In that regard, the RJCCQ supports some of the recommendations of the Jenkins report.

Moreover, the RJCCQ believes that Canada's greatest resource is its diverse pool of expert workers. Unfortunately, many of these young professionals say they feel they are victims of discrimination. We believe this issue should be looked into a bit more.

Thank you very much. It will be my pleasure to answer your questions.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We will now hear from the representative of the Société de transport de Montréal.

[Bernard Blanchet, Board Member, City Councillor, Lachine Borough, Montréal, Société de transport de Montréal]

Good afternoon Mr. Chairman and committee members. I would like to begin by thanking you for allowing the STM to speak to you during your pre-budget consultations.

My name is Bernard Blanchet. I have been a board member for 10 years and I am responsible for two committees, the environmental and infrastructure assets maintenance committee and the operations committee.

I'm going to begin with the three recommendations that we are making to the federal government.

We propose that public transport remain a part of the eligible category for the purposes of the general infrastructure program that will be replacing the Building Canada Plan and that the amounts allocated be sufficient to meet those needs.

We also propose that all federal excise taxes on fuel, that is 10¢ per litre, be transferred to the Gas Tax Fund.

Last, we suggest that the next long-term Canadian infrastructure plan be initiated without further delay.

The STM is appearing before you as a public corporation that is committed to the economic development of Montreal, Quebec and Canada. The STM is an engine for prosperity and wealth creation throughout the country and it wants to be an important partner of the Government of Canada. With more than 9,500 employees and a $1.2 billion budget, the STM is the second biggest transporter in Canada, the 14th biggest business in Quebec, and ranks among the 70 biggest employers in Canada.

In 2011, the STM reached a 405 million ridership record, that is an 11.4% increase in five years. It beat a record going back to 1949. The STM's goal is to reach 540 million by 2020. Besides improving its service, maintaining its infrastructure is a particularly important challenge that the STM plans on making its priority.

The pre-budget consultations are taking place in an uncertain and risky global economic context; we are quite aware of this. The Government of Canada has to balance its budget while supporting job creation, economic growth and long-term prosperity.

Practically speaking, that means that government expenditures have to be reasonable, strategic and targeted. Those expenditures must generate maximum economic benefits, generate employment, stimulate our productivity and improve our competitiveness. The STM can be a partner to get there. In fact, we believe that investment in public transportation is one of the best ways to meet those goals.

The brief that we are presenting today focuses mainly on economic recovery, job creation and productivity, all issues at the heart of this committee's concerns and all part of the online questionnaire provided to Canadians.

The first issue is economic recovery. The Governor of the Bank of Canada, Mark Carney, stated last April that household debt was the main domestic risk for the Canadian economy. Canadian household debt now represents 166% of income, an enormous number.

In supporting public transit, the Government of Canada can put money directly into the pockets of Canadians and help them to reduce their expenditures.

In 2010, Canadians spent an average of $11,000 on transportation, 21% of their income. That is huge. That is the second highest household expenditure after housing, which is 28%. Of course, using public transport is much less costly than travelling by car; on average it costs three times less. Even for a car owner, it costs 40% less to leave the car at home whenever possible. In short, we need to help Canadians cut their costs. The STM can be a partner to do that.

The second issue is job creation. In these times of economic downturn, strategic investments in infrastructure can stimulate growth. In fact, that is what Canada is doing. The Building Canada Plan contributed to this country's good economic performance. That has to be continued. Public transit should be a priority amongst infrastructure investments.

Canadian bus, train and subway manufacturers are very high value-added innovative export businesses. In total, the Canadian public transportation industry supported 80,000 direct and indirect jobs in this country, according to the Canadian Urban Transit Association. Furthermore, the annual economic benefits of investment in public transportation are estimated at $1.5 billion.

Last week, a traffic congestion report showed that Vancouver, Montreal and Toronto were among the five most congested cities in North America. In Montreal, costs related to road congestion are estimated to be at least $3 billion, and in Toronto, at least $6 billion. Funding should therefore be dedicated, recurrent and indexed.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your remarks.

Last, we have the University of Saskatchewan.

[Dr. Ilene Busch-Vishniac, President and Vice-Chancellor, University of Saskatchewan]

Good afternoon, ladies and gentlemen, and thank you for letting me address your committee today.

I am Ilene Busch-Vishniac, the president of the University of Saskatchewan.

As one of the medical-doctoral, research-intensive universities in Canada, the U of S is extremely interested in the strategic and financial impacts of the next federal budget. We were pleased with the strategic directions taken in 2012 and hope that the Government of Canada continues to recognize the importance of post-secondary education and research in advancing our country's innovation agenda.

Our written submission contains a number of observations and recommendations, but today I wish to focus on three key recommendations, those being continued support for research and development, funding of national science facilities in the long term, and investment in addressing the educational gap for Canada's aboriginal peoples.

Canada's investments in R and D as a percentage of GDP are lower than the OECD average, and much lower than countries such as Israel, Sweden, and the U.S. If Canada wishes to be internationally competitive, we should explore increasing R and D investments to levels well above the OECD average, and it is this that we recommend.

University research attracts talent and has tremendous social and economic impacts. For example, U of S researchers at the Canadian Light Source are developing new drugs, new materials for energy storage, and new ways to diagnose and treat serious medical conditions such as cancer and heart disease, but Canada must also recognize that R and D investments made today do not bear fruit immediately. Instead, they lay the foundation for the new discoveries we make tomorrow.

Canada's efforts to increase business investment in R and D and develop new industry partnerships are important, but these efforts must be coupled with investments in fundamental research. The U of S is very privileged to be the home to both the Canadian Light Source, Canada's only synchrotron facility, and VIDO-InterVac, an international vaccine centre. These facilities enhance our capacity to innovate, create employment and wealth, and solve global issues that affect the most basic of human needs: water, energy, food, and health.

But buildings do not innovate; people innovate. In order to grow our human infrastructure in Canada, we need to be able to attract and retain the best and the brightest scientists and thinkers from around the world. This brain gain will occur only if we can provide the necessary research environment and equipment to enable these researchers to do their work, which frequently spans decades. This is why it is so important to ensure that national research facilities like CLS and VIDO-InterVac have stable, long-term operational funding in place, and that is the nature of our recommendation.

On aboriginal challenges and opportunities, the measures outlined in Canada's economic action plan 2012 to improve first nations education will help to reduce the existing gap between Canadian aboriginal and non-aboriginal people, particularly in the K-12 system, but we need to find effective mechanisms that reach all aboriginal people. At the U of S, we have the highest proportion of self-declared aboriginal students of any medical-doctoral institution in Canada, but we recognize that we need to do more to increase the number of aboriginal graduates, teachers, researchers, and organizational leaders.

New approaches are being explored to enhance aboriginal education and partnering. These efforts would go much faster with federal investment in such strategies. Investing in aboriginal education and employment is not only a moral imperative, it is a sound investment. Studies have shown that closing the education and labour market gap between aboriginals and non-aboriginals by 2026 would lead to cumulative benefits of $400.5 billion in additional output and $115 billion in avoided government expenditures over the period from 2001 to 2026.

In summary, Canada needs a national innovation strategy that supports human, physical, and technological capital through investments in advanced education, research, knowledge transfer, and business development.

It also needs to optimize the sustainability of our national research facilities and strengthen the capacity for all Canadians to contribute to the economy.

This is not only the right thing to do, but the smart thing to do, and now is the time to do it.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

I should also have said congratulations on behalf of the committee on being named president of the University of Saskatchewan, and welcome.

We've certainly been to the Canadian Light Source and VIDO, so we understand the work that is being done there.

We're going to start members' questions with Ms. Nash. You have five minutes, please.

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

Welcome to all of the witnesses, and thank you for your presentations.

I'd like to ask everyone a question, but I'm not going to get there, so let me start with Dr. Raza.

On this side of the committee, we certainly agree with you about renewing the Canada health accord. We see that as a priority for Canadians. We are concerned about growing inequality in this country and about the social and economic impact of that growing inequality.

I'd like to get your take on what the physicians see as the impact of inequality and rising poverty in terms of the demands on health care.

[Dr. Danyaal Raza]

Thank you for the question, Ms. Nash.

There has actually been quite a remarkable focus within the medical community on social inequality's implications for health. The recent Canadian Medical Association meeting in Yellowknife, in fact, made this its theme. Physicians are speaking out more on how this social inequality can actually decrease patient health outcomes and cost the health care system more money in the long term. I would certainly agree that it plays a key component in keeping Canadians healthy.

With respect to inequality, I would bring it back to access to health services as well. One of the things we mentioned in our brief is the impact of increased for-profit delivery on access to care. In fact, deliverers who are delivering for-profit health care will only go where they can make money.

It's difficult to make money in remote communities, aboriginal communities, and marginalized urban communities. It's also difficult to make money delivering complex chronic care or difficult emergency care. All of these have implications for equity and for Canadians living at or below the poverty line.

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

I assume that reducing inequality would actually save our health care system money. I don't have time to ask you a question about that, but I'm making that assumption.

I'd like to ask a question to Mr. Aylward.

Your comments made me think about the Parliamentary Budget Officer. When he was here at an earlier time, he talked about the cuts to the public sector in this budget as a drag on our economy and on economic growth and said that it would cost us more in the long term. I've heard you talk about the numbers of public sector and private sector jobs that you've seen cut.

I know Paul Krugman, the Nobel Prize winner, has said that reducing government expenditure in times of a slowing economy actually works to slow the economy further, so it may work against our best interests in terms of job creation and keeping our economy moving.

I want to ask you specifically about cuts to food inspection. Of these supposed 700 food inspectors that the government has told us they have hired, do I understand correctly that your members have not seen any of these newly hired food inspectors at XL Foods?

[Chris Aylward]

Thank you for the question.

Specifically in XL Foods, no, not at all. As a matter of fact, there have been no new inspectors put in slaughterhouses since 2006. We don't know where these inspectors are going.

We do know several of them went to a program called the invasive alien species program, which basically works to keep harmful organisms out of Canada. That's not directly related to food safety at all.

With respect to where the 700 inspectors went, we don't know. We're certainly not seeing them.

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

There have been no new inspectors since 2006, and now Canadians find themselves with the largest meat recall in Canadian history and people are falling sick from E. coli.

[Chris Aylward]

That's right, and I just want to specify that in that particular program, called the meat hygiene slaughter program, which is directly related to food safety, there have been no new inspectors hired.

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

As it was a problem with hygiene that was the cause of the E. coli contamination, I draw the conclusion that it seems as though these cuts are in fact costing us more in the outcomes. Do you agree with that?

[Chris Aylward]

For sure.

Canadians from coast to coast to coast are agreeing with us that these cuts are having a terrible, detrimental effect on local economies. Earlier this summer, I had the privilege of being in Saint Andrews, New Brunswick, where—