Evidence of meeting #81 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was investments.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Barry Blake  National Councillor, Actor, Alliance of Canadian Cinema, Television and Radio Artists
Susan Eng  Vice-President, Advocacy, Canadian Association of Retired Persons
Gabe Hayos  Vice-President, Taxation, Canadian Institute of Chartered Accountants
Richard Paton  President and Chief Executive Officer, Chemistry Industry Association of Canada
Kim Allen  Chief Executive Officer, Engineers Canada
Tangie Genshorek  Coordinator, Kamloops Homelessness Action Plan
Warren Everson  Senior Vice-President, Policy, Canadian Chamber of Commerce
Adam Awad  National Chairperson, Canadian Federation of Students
Marie-France Kenny  President, Fédération des communautés francophones et acadienne du Canada
Pierre Gratton  President and Chief Executive Officer, Mining Association of Canada
Elizabeth Aquin  Senior Vice-President, Petroleum Services Association of Canada

4:55 p.m.

Conservative

The Chair Conservative James Rajotte

Okay, I have a further point on the point of order.

Go ahead, Ms. Glover, please.

4:55 p.m.

Conservative

Shelly Glover Conservative Saint Boniface, MB

I'll just add to the point of order, just for clarification for Ms. Nash.

I've repeatedly asked CARP to withdraw something on their website that was quite partisan against me, that was proven to be incorrect, and as of yet I haven't seen a withdrawal, so I support what Mr. Calandra's saying.

4:55 p.m.

Conservative

The Chair Conservative James Rajotte

I'm going to leave this as a matter of debate.

I'll just encourage Mr. Calandra. These are pre-budget consultations, so please focus your questions on pre-budget consultation matters.

You have about three minutes left, and that's the final part of this panel.

4:55 p.m.

Conservative

Paul Calandra Conservative Oak Ridges—Markham, ON

Sure.

Are you able to look at fiscal matters and what we've put into not only the economic action plan in the past but going forward, and take off the lens of partisan politics and advocate on behalf of the people you're supposed to advocate for?

4:55 p.m.

Vice-President, Advocacy, Canadian Association of Retired Persons

Susan Eng

Mr. Chair, it's quite an accusation, and it's inaccurate.

At the meeting, which was held at a nursing home with which I had some relationship, the then minister for seniors, Julian Fantino, was one of our headliners. We had members from all parties deliberately, because it was during the federal campaign. Mr. Ignatieff, who was there at the time as well, worked the room, as candidates will, and the other members who were there were also welcome to do the same. The fact that the minister was there was not on account of anything that I did.

In any event, I think you'll see from our work that we're not partisan, and I think our members also see that we are not. If our members, who vote across the spectrum, were to think that we were acting in a partisan manner, I can assure you they would let us know.

I think our record speaks for itself, in terms of the kind of work we have done. We're grateful for the response that the government has provided to us and all the things that Mr. Van Kesteren has mentioned, in addition to what he hadn't mentioned, including the action recently with the advance on elder abuse sentencing and a number of other things that I don't want to use up the time to mention. They are all on the record, and we're looking forward to further response from the government, with the help of the opposition, to move these things through the House.

Anything we have ever done is, for the record, on the record. People can make their own judgments as to whether or not we're acting on behalf of any political party or on behalf of older Canadians generally.

4:55 p.m.

Conservative

The Chair Conservative James Rajotte

You have about 30 seconds, Mr. Calandra.

4:55 p.m.

Conservative

Paul Calandra Conservative Oak Ridges—Markham, ON

I'll just summarize it this way: we'll have to agree to disagree on your role in promoting partisan political politics. At an announcement of the government.... When people bring their political literature, and when you're advised of this and you make no attempt to stop—

October 23rd, 2012 / 4:55 p.m.

Vice-President, Advocacy, Canadian Association of Retired Persons

Susan Eng

That's not accurate.

4:55 p.m.

Conservative

Paul Calandra Conservative Oak Ridges—Markham, ON

—what had become a political rally, then—

4:55 p.m.

Vice-President, Advocacy, Canadian Association of Retired Persons

Susan Eng

I don't know if I have a point of personal privilege, but frankly, that's inaccurate.

4:55 p.m.

Conservative

The Chair Conservative James Rajotte

Please give a brief response.

4:55 p.m.

Conservative

Paul Calandra Conservative Oak Ridges—Markham, ON

—I would think the independence or the credibility of the advice that you bring forward has to be brought into question.

4:55 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you.

You can give a brief response, Ms. Eng, to that.

5 p.m.

Vice-President, Advocacy, Canadian Association of Retired Persons

Susan Eng

It's simply inaccurate, and I take exception to the accusations. I think the member should check his facts.

5 p.m.

Conservative

The Chair Conservative James Rajotte

I appreciate that. Thank you.

I want to thank all of our witnesses for being here this afternoon. We appreciate your input into the pre-budget consultation process.

Colleagues, we will suspend for about two minutes and bring the next panel immediately forward.

Thank you.

5:03 p.m.

Conservative

The Chair Conservative James Rajotte

I will call this meeting back to order. We are continuing meeting number 81 of the Standing Committee on Finance on our pre-budget consultations 2012.

We will have a shortened panel, unfortunately. I want to inform our witnesses that we have votes, and bells will ring in about 30 minutes, I understand. I'll just point that out to our witnesses and colleagues.

We have with us here today the Canadian Chamber of Commerce, the Canadian Federation of Students, the Fédération des communautés francophones et acadienne du Canada, the Mining Association of Canada, and the Petroleum Services Association of Canada.

You each have up to five minutes for an opening statement. We'll make our way down the row, starting with Mr. Everson, please.

5:03 p.m.

Warren Everson Senior Vice-President, Policy, Canadian Chamber of Commerce

Thank you very much, Mr. Chairman.

I will try to keep my remarks very brief. I will start by thanking the committee for calling us, noting that I know this time of year becomes very gruelling for members when you have an assembly line of witnesses. Please be assured that the opportunity to come before you to talk about the priorities for the upcoming budget, and indeed for the country, is very much appreciated.

Canada' s economy, as everyone here will know, is a case of bad news and good news. We are all familiar with some of the bad news elements: the uncertainty in Europe, the slowdown in China, and continuing problems with U.S. recovery. Those problems are starting to impact hiring and investment decisions among the members of the chamber. This morning's forecast from the Bank of Canada affirms a very modest growth forecast in the near term, and that's the bad news.

In a larger context, it's clear to us that Canada is very strongly positioned as a desirable investment location and an increasingly effective international trader. A succession of governments have taken the boring doctrinaire decisions that every economics textbook recommends, and to some extent they are working.

I will mention two critical areas where we think Canada is making the right moves. Eliminating the deficit is the single most important thing the government can do now to strengthen our economy and create jobs and protect what Canadians have created. It's debt that is creating so much uncertainty in the United States, and in Japan and Europe. Canada, free of deficits, will be a standout among nations.

To enhance economic growth and our job creation, we also have to diversify our international trade portfolio. Canada trades as a lifeblood issue; two-thirds of our GDP is trade-related. Our traditional trade agreements are out of date, and the government can be commended for aggressive pursuit of new deals in the Trans-Pacific Partnership, in Japan, in India and, of course, in Europe.

Emerging market economies remain the engines of global growth, despite some recent slowdown. We need to seize the immense opportunities available in market economies that are emerging in our time.

One area we are not doing so well in is innovation. This is a key issue for a Canadian economy that does not want to compete on cost. We don't want the low wages and deficient social programs and the careless environmental standards that are sometimes associated with cost-competitive emerging economies, so we have to compete with our brains, yet when it comes to the capacity for innovation, the World Economic Forum ranks us 25th, and we rank near the bottom of OECD nations in getting innovative products and services to the market.

To foster innovation, the government must focus on implementing a new, reinvigorated national strategy, with the spotlight on research, commercialization, training, and retraining. The budget 2012 decision to cut a quarter of the SR and ED tax credit was, in our opinion, a step in the wrong direction. With so many of our trade rivals in so much trouble, there's an opportunity now for Canada to steal a march on the rest of the world. Cutting supports for research and innovation is a counterproductive move.

Generally I would say, Mr. Chairman, that the single most pressing issue for members of the Chamber of Commerce this last year and in the year going forward was Canada's labour and skills shortages. It's a very complex issue. We'll be working on it, and Canada needs a myriad of tools to address it.

We commend the government for action on immigration and for worker mobility in reform of the EI program. Changes to the unemployment insurance program are painful, for certain, but it's a step in the right direction.

I will end my remarks here and welcome questions. I commend the committee for your deliberations.

5:05 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you for your presentation.

We'll now hear from the Canadian Federation of Students, please.

5:05 p.m.

Adam Awad National Chairperson, Canadian Federation of Students

Good evening.

My name is Adam Awad, and I'm the national chairperson for the Canadian Federation of Students.

The Canadian Federation of Students is Canada's largest and oldest national students' organization, representing more than 600,000 students in all 10 provinces. Our organization advocates for an accessible, affordable, high-quality, public post-secondary education system.

Our budget recommendations focus on how to make education more affordable for students and address mounting student debt in Canada. Ensuring that all people in the country are able to pursue a higher education and training must be part of any significant, stable, long-term recovery for our economy. Relatively high youth unemployment, record levels of personal debt, low levels of industry research and innovation, and a rapidly growing income gap all compound the problems of the global financial crash and subsequent recession and must be addressed.

In its most recent global economic competitiveness report, the World Economic Forum ranked Canada 15th in the ability to compete economically with other countries around the world, down from 12th last year and 8th the year before. This is a worrying trend. In its explanation, the forum noted that Canada's disjointed and inefficient post-secondary education system was one of the main reasons for this slide.

The OECD has also highlighted that participation rates will have to grow significantly if Canada is going to address changing labour market demands and an aging workforce. Unfortunately, the cost of post-secondary education continues to be downloaded onto students and their families, despite the significant public rate of return on investments in post-secondary education: every dollar invested into post-secondary education brings in $1.63 in return, so there is a 63% return on that investment.

As a result of high tuition fees, student debt has increased substantially. Average public student debt is now over $27,000 after an undergraduate degree alone. Paired with rising tuition fees, it's easy to understand how we've arrived at a situation in which Canadians collectively owe $15 billion to the federal government alone, not including the billions more that they owe to provincial and private loans.

Credit agencies and major banks are now warning that student debt has reached unstable levels. The long-term impacts of carrying such debt include delayed participation in the economy, the inability to invest or save for retirement, choosing to move out of the country in order to find work, starting a family later in life, and the aversion to taking on further financial risks, such as starting a business. Those in finance have finally caught on to what students have been saying for years: that debt is an issue, and it's not going away.

Today, over 25% of the Canada student loan borrowers are on the government's repayment assistance program, meaning that they do not make enough money to make their monthly loan payments. Over 147,000 Canadians are currently unable to make any payments on their loans from month to month. In conditions like these, how could we possibly expect students and graduates to participate fully in the economy?

Students are putting forward a vision that would work to address the root cause of the debt crisis and address the debt itself.

First, the government should implement a federal post-secondary education act modelled on the Canada Health Act and create a dedicated cash transfer for post-secondary education. Provincial governments must be accountable for the transfers they receive from the federal government, and an act would ensure that federal funding to the provinces for post-secondary education would actually be spent on just that. The lack of a national vision has resulted in significant disparity in tuition fee levels and per-student funding across the country, with students in Ontario paying almost three times more than students in Newfoundland and Labrador and students in Alberta receiving almost double the rate of per-student funding than those in Quebec. Students are calling on the government to ensure that merit, and not geography, determines whether someone can go to college or university.

The government also needs to address the historic underfunding of post-secondary education that results from the cuts to federal transfers in the late 1990s. By filling the gap left by two decades of inadequate funding, the federal government could take action to reduce high tuition fees, which are the heart of the student debt crisis.

We're also recommending that in order to stop the federal student loan debt from increasing, government should redirect the $2.52 billion currently allocated in ineffective education tax credits and savings schemes into the Canada student grants program. This simple solution would remove the need for the $2.3 billion the Canada student loans program gives out every year, and such a change would have a significant impact on students' ability to both get an education in the short term and to contribute meaningfully to Canada's economy and society in the long term.

In order to address the existing debt, we recommend reducing student debt by half, bringing it down from $15 billion outstanding to $7.5 billion by 2015. By consulting with the provinces and national stakeholders, the government would be able to effectively distribute this debt relief to have the greatest measurable impact.

I certainly appreciate the opportunity to address the committee this evening. Five minutes is not quite enough time to do justice to all of the recommendations included in the book that was handed out, “Public Education for the Public Good”.

I am more than happy to answer any questions, should members have any.

Thank you.

5:10 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you very much for your presentation.

We will now go to the Fédération des communautés francophones et acadienne du Canada.

Ms. Kenny, you have the floor.

5:10 p.m.

Marie-France Kenny President, Fédération des communautés francophones et acadienne du Canada

Good afternoon. Thank you for inviting the Fédération des communautés francophones et acadienne du Canada to participate in the pre-budget consultations.

I am appearing before you today on behalf of 2.5 million French-speaking citizens and taxpayers living in nine provinces and three territories.

The Canadian government's priority is to create jobs and stimulate economic growth. That objective is shared by the citizens of francophone and Acadian communities. We contribute to that goal in a concrete way. Recently, the Conference Board of Canada carried out another study that showed the full contribution of those francophone citizens to our country's economic growth.

However, there is still much to be done. Although a large portion of French-speaking citizens seem to be doing well on an individual basis, the same is not true of francophone communities, where there are still discrepancies in access to services and economic vitality.

By creating favourable conditions for francophone communities to be able to thrive in French, the government will be much more successful in reaching its economic growth objectives. We recently presented those conditions as part of the consultations on official languages held by the Minister of Canadian Heritage and Official Languages, the Honourable James Moore.

First, the government should invest in our population. I am talking about support measures for young families and young people to enable them to pass on the French language and strengthen their sense of identity through increased access to cultural and heritage activities, and child development support programs. But that is not all. Like all of Canada, our francophone communities depend on the contribution of newcomers who settle among us to succeed and help our regions grow. That requires investments in the promotion, recruitment, welcoming, economic integration and retention of French-speaking migrants and immigrants.

Second, we recommend investing in our space. To be successful, francophones must have access to a wide range of services and activities covering all areas of our daily life—from education to health, from justice to culture, from young people to seniors.

Third, investments should be made in our development. We need measures to create thriving francophone communities where people can be successful. Communities play a role in regional economic development. That involves investments in workforce training—be that in terms essential skills, such as literacy, or post-secondary education—and support for entrepreneurship, and for cultural and heritage tourism initiatives.

For those investments to produce the anticipated results, emphasis should be placed on strengthening the capacities of organizations and institutions on the ground. They deliver those services and activities, and achieve that development by and for the community. Francophone citizens increasingly want to live in French, and they want to have those services and activities provided in that language. Organizations and institutions that produce results for Canadians have not received additional support for doing that work. They are trying to meet a growing demand, with resources that, in most cases, have not increased since 2005.

That has prompted us to issue two recommendations.

The first recommendation is for the next federal budget to announce the renewal of the Roadmap for Canada's Linguistic Duality with investments in the three major priorities we have just presented—our population, our space and our development.

The second recommendation is for the budget to announce increased support for organizations and institutions that ensure the provision of services to francophone citizens. That increased support would involve, among other things, improvements to the Community Life component of Canadian Heritage's Official Languages Support Programs.

However, creating favourable conditions for our communities to contribute more to Canada's economic growth is not limited to investments. As I have already pointed out to this committee, very often and too often, the Canadian government's investments—through federal, provincial or territorial agreements—did not benefit the French-speaking citizens we represent.

Currently, nothing is stopping provincial and territorial governments from being accountable when it comes to the way funds from transfers in areas such as health, education, immigration or labour have translated into concrete services for francophones. We are talking about taxpayers' money and services for all citizens.

Improvements must be made in order to ensure efficiency and responsibility. That is why the FCFA recommends that, in future federal/provincial/territorial agreements, the Government of Canada identify an amount dedicated to services specifically intended for French-speaking citizens of the province or territory with which an agreement is being signed.

We also recommend that those agreements systematically include strong linguistic clauses that make provinces and territories accountable.

Thank you.

5:15 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you for your presentation.

I'll ask the Mining Association of Canada for their opening statement.

I'll let people know that Ms. Nash will be assuming the chair for about 15 minutes.

5:15 p.m.

Pierre Gratton President and Chief Executive Officer, Mining Association of Canada

Thank you.

I'm here with my colleague, Brendan Marshall, the director of economic affairs for the Mining Association of Canada.

In 2011, the mining industry contributed $35.6 billion to Canada's GDP, employed 320,000 workers, and paid $9 billion in taxes and royalties to both levels of government, an increase in all three areas over the previous year, reflecting the strong performance of the mining industry in recent years.

According to recent MAC research, Canada's mining industry is poised to invest some $140 billion in projects across the country over the next decade.

The government has contributed positively in recent years with policy developments and investments supporting the growth of our sector, including geo-mapping, exploration financing, capital investment in critical infrastructure, and a responsible resource development plan in budget 2012.

To ensure that the mining industry's contribution to Canada's economy remains robust, a competitive and predictable domestic regulatory environment is key. To this end, the government should continue upholding Canada's economic fundamentals by maintaining low inflation, eliminating the deficit, preserving and improving our tax levels, and decreasing the national debt.

Continued forward thinking, such as the promise of regulatory reform displayed in budget 2012, is essential. Canada has the opportunity to capitalize on a growing mining sector and the many economic benefits that flow from it. Though many improvements are anticipated to result from the federal government's responsible resource development plan, uncertainty currently exists over how relevant authorities will work together to enact the legislation. Governments should continue working with each other and stakeholders to ensure that the intended outcomes are achieved.

Further, the government should implement a functional permitting system for the Species at Risk Act and should modernize and complete the environmental legislation governing Canada's north.

On the human resources front, it is estimated that the mining industry will require 140,000 new workers over the next 10 years. Governments must work with industry, schools, aboriginal groups, and other communities to address the skills shortages facing mining and other sectors and to address issues such as mobility and immigration needs.

Despite the abolition of the mining industry human resources sector council, the mining industry, through MAC, will be stepping in to secure the future of MiHR. Replacing government core funding with our own, we are hopeful that MiHR's proposals for specific program funding to support labour market research, labour certification, and aboriginal inclusion will be supported.

The mining industry is the largest private sector employer of aboriginal people, and the recent discontinuation of the aboriginal skills and employment partnership program has created a gap that needs to be filled. The potential for significant aboriginal employment opportunities in our sector is strong, but essential training to develop the requisite skills is needed.

Innovation is key to addressing declining ore reserves, meeting increasing regulatory standards, and managing higher operating costs. To capitalize on a pan-Canadian research program, the Canadian Mining Innovation Council is requesting $18 million per year over five years in support of the industry's R and D priorities. Mining already spends some $500 million annually on R and D in Canada, but not through CMIC's collaborative model. Support for CMIC, which is the Canadian Mining Innovation Council, would bring federal investment in mining R and D closer to levels already enjoyed by other major Canadian economic sectors. It would also bring Canada in line with what some other major mining jurisdictions, such as Australia, Sweden, and Norway, have done, recognizing the potential that exists in their countries for mining but recognizing that more R and D is needed to capitalize on that.

Given the remote location of many mining projects, infrastructure remains a key challenge in making the economics of multiple projects across the country viable for development.

Ongoing investment in transportation and power, including through public-private partnerships, is crucial. Fulfilling the government's commitment to restore market balance between shippers and railways is also critical.

Canadian-based metal reserves have been in decline for 30 years, putting our smelters at risk. Without sustained exploration, mineral production will outstrip reserve additions, which will have serious consequences for our economy.

Given current challenges in raising capital for Canada's junior firms, we strongly recommend, again, that Canada's mineral exploration tax credit and flow-through mechanisms be maintained and extended.

Thank you for your consideration.

5:20 p.m.

NDP

The Vice-Chair NDP Peggy Nash

Thank you very much, Mr. Gratton.

Next we have Ms. Aquin, from the Petroleum Services Association of Canada—oh, sorry, Mr. Marshall; I don't have you on the list.

5:20 p.m.

President and Chief Executive Officer, Mining Association of Canada

Pierre Gratton

No, he's with me.