Finance Committee on Sept. 29th, 2014

[Guy Parent, Veterans Ombudsman, Office of the Veterans Ombudsman]

Mr. Chair, committee members, fellow panellists, and ladies and gentlemen, thank you for inviting me to be here today to share with you my thoughts on balancing federal budgets and ensuring fiscal sustainability and economic growth.

As Veterans Ombudsman and Special Adviser to the Minister of Veterans Affairs, most of my previous parliamentary appearances have been before Veterans Affairs or National Defence committees of the House of Commons or Senate. Each time, I have presented an evidence-based position on current deficiencies in federal support to veterans, especially those who are the most severely impaired.

Some of the recommended improvements will require an increase in federal expenditure. Other changes, such as collapsing current approaches to veterans' transition from military to civilian life, and reducing red tape particularly in relation to service delivery, may well be sufficient to improve effectiveness and provide better service to our veterans. Either way, the immediate unmet needs of these veterans and their families must be addressed in the 2015 budget by implementing the recommendations of the June 2014 report by the House of Commons Standing Committee on Veterans Affairs, entitled “The New Veterans Charter: Moving Forward”.

Veterans' expectations are very high that long-standing program deficiencies will be addressed in this budget. I have been working closely with the Office of the Minister of Veterans Affairs, the Honourable Julian Fantino, and with officials from the Department of Veterans Affairs Canada, to try to bring about meaningful improvements to the new Veterans Charter.

Most of us recognize intuitively that there is a direct link between how a nation treats its veterans and its ability to recruit and retain citizens for its military. It is not rocket science. If injured or ill veterans' needs are not being met, then why would anyone join the military and stay in for any length of time? For this reason, we need to address the deficiencies in our support to veterans not only because it is a debt we owe them for their service to Canada; it is also a matter of national security.

Let me put this in perspective.

There are approximately 700,000 Canadian armed forces and Royal Canadian Mounted Police veterans in Canada today. About 15% are clients of Veterans Affairs Canada. The majority of these clients are assessed with a minor disability, with the most seriously impaired representing only 1% of the total population of veterans.

However, when one mentions veterans today, what tends to come to mind first is an injured or ill person requiring government support. In a sense, this is as it should be. However, while we must never forget those who have sacrificed so much for their country, I believe it is time we also start paying more attention to our healthy veterans who transition into their local community with minimal support.

While serving in the Canadian Armed Forces, these veterans have benefited from millions of dollars in educational, technical, and professional development training. They have also gained leadership experience that can be acquired nowhere else. As a result, they are recognized as being skilled, experienced, and dependable, with a strong work ethic. Are these not attributes that Canadian employers are seeking? Yet today as a nation we are not capitalizing enough on the effort and time and expense that Canada has put into developing the skill sets for these men and women. When they finish their service, for the most part we thank them and then they drop off our radar screen. Although veterans are woven into the fabric of our everyday lives, as first responders, coaches, volunteers, and service club members, for the most part we are not aware that these citizens are veterans.

With the challenges of the 21st century world economy before us, I believe it is time we really start to leverage their skills when they transition from military to civilian life. Veterans can help advance our country's fiscal sustainability and economic growth. They can help Canada strengthen its leadership role in the 21st century global economy.

It is a matter of looking at veterans through a new lens. It is a matter of starting to treat veterans as an investment again. Why do I say “again”? Because history shows us that when a million men and women returned from World War II, the Government of Canada had a strategic plan to ensure that these veterans learned the skills necessary to successfully transition into civilian life.

[The Chair, Conservative, James Rajotte]

One minute.

[Guy Parent]

Injecting veterans into all corners of the country became a catalyst for the economic boom of the 1950s and 1960s. Not only did we hone their skills for civilian life, but we also provided loans, grants, insurance, and other incentives to enable their success.

In the United States, the post-World War II GI Bill is estimated to have returned $7 for every dollar invested. Canada's post-World War II investment in veterans not only positively affected our economy, it also changed the social fabric of Canadian society. The creation of our national health care system was influenced by the federal system of veterans hospitals. The socio-economic barriers to attending colleges and universities were broken by the expansion of post-secondary education institutions trying to meet the need of our returning World War II veterans. Owning a house today for most Canadians is made possible by Canada Mortgage and Housing Corporation, which started as a program for veterans.

In other economic sectors, could we not start working with post-secondary educators to capitalize on the strength of veterans and tailor programs to fit specific occupations that are in short demand?

There are many more ideas that could be considered in this regard, but the limited time allotted only allows me to give you a flavour of what is in the art of the possible.

From a sustainability perspective, one only has to remember that every year, the Canadian Armed Forces releases more than 5,000 highly skilled and experienced personnel. It is time we fixed the deficiencies of the new Veterans Charter in the upcoming budget and started to consider the long game.

We have an opportunity to help ensure the fiscal sustainability and economic growth of our country by changing the way we look at veterans. Canada can profit from that change. I say let's get the wheels turning and seize this opportunity to recognize the full potential of our veterans. Mr. Chair, committee members, we owe them that much.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

Colleagues, we do have a vote, I believe at 6:30, so I'm recommending we do the first round of seven minutes. It will be the first four questioners. After that, we'll go to the five-minute rounds.

We'll start with Mr. Cullen, please.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Thank you to all of our witnesses for being brief. This is difficult. We're very restricted, as you can imagine, in this study as we make recommendations to the government and the finance minister. Mr. Parent, in particular, thank you for your testimony today.

One of the challenges that we start with as we look at recommendations to the government is to try to understand the Canadian economy's health or weakness, depending on your perspectives.

Mr. Hodgson, I want to ask you what your perspective is on private sector job growth over the last year or year and a half within the Canadian economy. Would you describe it as robust and trending in the positive direction? How many private sector jobs have been created in Canada in the last year?

[Glen Hodgson]

I don't know the number off the top of my head, but I would describe it as positive but not robust. There was actually a weaker growth here. It grew about 1% over the last year, but it's not as robust as we've seen in the U.S. recovery, for example.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Some have said we're underperforming right now, that the Canadian economy broadly speaking is underperforming with respect to its potential. Would that be an assessment you'd feel comfortable with?

[Glen Hodgson]

Overall that's probably not a bad assessment.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Okay.

Mr. Kingston, I'm not sure how you felt. These words are loaded; they can mean different things to different people. Mr. Page was testifying just before you and recounting some of the key economic indicators and showing that there is place for concern. If we start from at least that place, that the Canadian economy is middle of the pack, doing okay but not great, underperforming, some range in there, that would then prescribe the type of recommendations you would make.

Again, similar to our first panel, I didn't hear anyone suggest income splitting was the ticket to help the Canadian economy become better performing, or more enhanced. Does the CCCE have a clear position on this policy option as being a priority, a lower priority, or not a priority right now?

[Brian Kingston]

Mr. Chair, we don't have a clear position on income splitting, but what I would say is that with a surplus, we think that pro-growth policies are the best use of funds. The policies that I laid out I think would be the best choice for the government to encourage growth in this environment where there is serious fiscal challenges facing the country. Again, we have no clear position on income splitting, but if it's not a growth-related policy, then I would look at it through that lens.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

If it's not a growth-related policy, then you would look at it through that lens. That's the test that you would apply to all of these.

Mr. Moist, you were perhaps most specific with some of your policy recommendations that we've heard to this point. Others would argue this is not a time for government expenditure towards something like child care. Does your group have any familiarity with what the experience has been like in terms of the economic impact in the one province in Canada that has instituted affordable child care? We know many of the social benefits, but I wonder if you could speak to the economics.

[Paul Moist]

The labour force participation of females over 24 in Quebec went from number 10 to number 1 within 24 months of the implementation of the child care program that Quebec has. This stimulated government revenues. For every dollar in investment $2 has been returned to the Government of Quebec by their own study. It's interesting. Canada would have input into this. The International Labour Organization prepared a document for the recent G-20 meetings in Australia. This is a global comment but this is apropos to Canada, in my view:

Re-igniting economic growth also depends on recovery of demand, and this in turn requires stronger job creation and wage growth. Without confidence in their job and income prospects, households will continue to be cautious about consumption and firms will remain hesitant to invest in productive capacity until they see demand rising for their products and services.

I think it's a very relevant comment to the Canadian economy in 2014.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

It's tough to have a strong economy if you don't have a lot of willing customers.

[Paul Moist]

Canadians don't have record rates of personal indebtedness because they've become irresponsible overnight; it's been driven by sluggish, sluggish wage growth. I'll just speak for CUPE members. The average full-time CUPE member who has a full-time job—that's about 70% of the membership—makes $41,000 a year. If that wage hasn't moved in six, seven, eight, nine years, people have dealt with normal inflation by taking on more debt.

There's a lot of hesitancy in the Canadian economy. The ILO G-20 report says that it becomes a vicious circle. Business won't invest unless demand's evident, and demand's not evident absent wage growth. I would call our economic performance sluggish at best.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

At best.

Mr. Hodgson, your group came out recently with a report that generated a lot of attention in terms of the generation gap, the gap in terms of the realities for the younger generation coming up versus what's often referred to casually as the boomer generation. Why should this be a concern, and should it be something that the committee should be recommending to the government to do something about?

[Glen Hodgson]

Well, it directly plays into the long-term growth capacity of our economy. If you have a generation that's being left behind in absolute or relative terms, you're losing a generation of consumers, of workers, of people who may not freely advance in their careers the way we would like to see them advance.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Is that the suggestion out of your report, that we potentially are leaving a generation behind?

[Glen Hodgson]

It didn't go that far, but whenever you see the data where you see that wide a difference between 25 years ago and today, you have to start asking deeper questions about whether we're doing all the right things to ensure that kids find their way from school into employment and really become full members of the society.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Is this something, Mr. Moist, that preoccupies you in terms of the recommendations you bring forward, this generational gap, the potential trend towards leaving a generation behind?

[Paul Moist]

We argue that in most provinces in Canada, the youth unemployment rate is double the official unemployment rate, which is too high four years after a recession ended. We think a lot of people are being left with huge amounts of debt and no obvious pathway to full-time paid employment. The young are paying a disproportionate price in Canada right now.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Kingston, can I have a small comment from you about this particular report that came out from the Conference Board?

[Brian Kingston]

Yes, it is something that concerns us, and that's why we've recommended looking at a virtual labour market, implementing that. We're seeing a huge issue with students going from university to finding their first career job.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Just very quickly, do we collect enough data in this country right now on the health and quality of the labour market?

[Brian Kingston]

No. Hence, the reason I think an integrated labour market survey would be better.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Thank you very much.