Finance Committee on Sept. 28th, 2017

[The Chair, Liberal, Wayne Easter]

I offer my apologies to the witnesses for starting a little late. We had a member retiring today in the House, so we stayed for remarks concerning that.

This hearing is held pursuant to Standing Order 83.1 to undertake pre-budget consultations in advance of the 2018 budget. We held hearings this morning on the tax measures. We have to keep track of what we're holding hearings on.

In any event, I want to thank everyone for coming. We thank those who were able to forward their submissions prior to the mid-August deadline on the topics and questions we had outlined for doing so. That information is on members' iPads, You may see members looking at their iPads from time to time to see the briefs.

With that, welcome again. We'll start with the Agricultural Institute of Canada and Mr. Buy, chief executive officer.

[Serge Buy, Chief Executive Officer, Agricultural Institute of Canada]

Thank you very much, Mr. Chair.

I'll start my remarks by talking about drone-monitored crops, solar-powered irrigation systems, and wireless sensors to collect data. These are all innovations that producers in Canada are using to bring food to our tables.

Canadian researchers are world leaders in areas such as bovine research, plant genomics, and many other items.

The agrifood sector was specifically identified by the federal government's Advisory Council on Economic Growth led by Dominic Barton, as one of the most promising in economic development, employment, and innovation capacity.

Perhaps the best example of Canadian agricultural innovation is canola. Developed by agricultural scientists in the 1970s, canola has grown to be one of the world's most important oilseed crops, and the most profitable commodity for Canadian farmers.

According to Agriculture and Agri-Food Canada, about half of Canadian farms adopted at least one type of innovation that significantly improved product, process, or practice between 2011 and 2013. Our agricultural innovation sector has the potential to be a key engine of economic growth and productivity.

Since 1920 the Agricultural Institute of Canada has been the voice of Canada's agricultural research and innovation sector. Our members are the innovation takers of the agricultural sector. Whether it's precision agriculture that allows farmers to produce more food at a fraction of the cost or using plant genomics to develop climate change resistant crops, agricultural research is at the forefront.

In tandem with other initiatives, the creation of a national innovation strategy with special attention paid to strategic context in sector-specific initiatives, would help to ensure that Canadian innovative breakthroughs are appreciated across sector lines by both pure and applied researchers.

Some of the key measures we recommended deal with retraining. One of the major obstacles that Canada's agricultural sector has always had to work to overcome is labour shortages. The advent of new technology and innovation brings a new level to this existing problem. As new technology is being utilized by producers, for example, unmanned aerial systems and remotely sensed images to monitored crops, new problems and opportunities are created.

While jobs may be lost to technological advancements, an opportunity exists to retrain those individuals and transition them to have other roles related to the new technology. For example, we can offer retraining to some farmhands or other workers to transition them to operate the drones and then collect and analyze the data. By offering retraining and transition assistance, the government can help encourage farmers to utilize new technologies and ensure that qualified individuals are on hand to operate them. This helps Canada to be more productive in the short and long terms.

We have also made recommendations related to Canadian-made technology. Canada's agricultural sector provides one in eight jobs in Canada and employs over 2.3 million people. With a rapidly growing rural population and favourable global market trends, demand for Canadian agrifood products is expected to rise to at least $75 billion by 2025.

Agricultural innovation has the potential to be a key engine of economic growth, job creation, and productivity, thus strengthening Canada's competitive position internationally. Unless we capitalize on the strong innovation potential, Canada's agricultural production will be unable to meet the world's market demand. An easy way to do this would be to help bridge the gap between academic research and its application. To move forward, we need to create a climate where researchers, innovators, and producers work together to use agricultural research to better the sector as a whole. Enhanced cross-sector collaboration will allow for the rapid adoption of made-in-Canada technology.

We need to support private sector involvement in long-term research as well. In November of last year, Vineland Research and Innovation Centre hosted a symposium to develop an automation technology strategy for Canada's horticultural sector. This is a great example of a private organization taking steps to promote innovation, and something the government should strive to see more of. Creating incentives for private investment in agricultural innovation will increase the number of companies in Canada willing to capitalize on our research capacity, and in the long term will stimulate Canada's competitiveness and productivity.

In the spring of this year, AIC brought together government officials, industry representatives, and other agricultural research stakeholders to discuss agricultural innovation in a changing environment. We heard from those groups that strong, targeted incentives and lower investment rates for innovative producers and agribusinesses are needed to support the development and usage of green technology.

The government's recent superclusters initiative is a good first step. Creating opportunities and attractive climates for companies to make strategic investments in long-term research will ultimately lead to those technologies being used more broadly by the sector as a whole, increasing our productivity.

In tandem with the superclusters initiative, the government should take steps to incentivize collaboration and research. The first step should be to bring agricultural researchers and other stakeholders together to set medium- and long-term objectives and a key set of priorities.

Take, for example, an agricultural researcher at the Swift Current Research and Development Centre who is working on the carbon sequestration project. He is developing a way to use plant matter, that is, straw or corn stalks, heated to a high temperature in a low-oxygen environment. The result is black carbon-rich material similar to charcoal. It helps to enrich the soil and can be used for long-term carbon sequestration. In a nutshell, this research is minimizing agriculture's impact on the environment and helping us achieve our productivity goal. More of this research needs to be enhanced through various measures, including taxation measures.

As you can see, this research touches on more than just agriculture. In that vein, we support the idea of other government departments, including Innovation, Science and Economic Development Canada, Natural Resources Canada, and Environment and Climate Change Canada, paying closer attention to agricultural research and its interrelationship with other sectors. We hope the government will recognize the important role that agricultural research plays in more than just traditional farming.

Budgetary expenditures financing the Canadian agricultural innovation system represented 0.046% of Canada's total GDP in 2015, steadily declining over the past three decades. We recognize that the present government has reinvested some money, but more needs to be done.

Recently the Honourable Kirsty Duncan, Minister of Science, noted:

The Government of Canada is committed to investing in fundamental research and engineering that will [improve and] enrich our country’s knowledge economy. We believe in encouraging scientists’ cutting-edge ideas that will lead Canada to greater social and economic growth.

We agree. The AIC echoes that and believes that the time to make strategic investments to ensure a successful future for Canada's agriculture innovation sector is now. Our brief provides some examples.

Thank you very much, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Buy.

I'll turn to the Canadian Association of Fire Chiefs, to Mr. Block, president, and Ms. Saryeddine, executive director. Welcome to you both.

[Ken Block, President, Canadian Association of Fire Chiefs]

Thank you, and good afternoon.

My name is Ken Block, and it is indeed a privilege to speak to you today in my role as the president of the Canadian Association of Fire Chiefs. I also serve as the fire chief in Edmonton, Alberta, an internationally accredited fire service. I am joined at the table, as you mentioned, by CAFC's executive director, Dr. Tina Saryeddine.

We recognize that you have many groups and priorities to consider, and we thank you and your staff for both the opportunity and the effort you are making to protect Canadians across the country and at home in your ridings and provinces.

The last five years have not been easy ones for the fire service. Each region of our country has been directly affected. In Quebec, we saw the deadliest train crash since Confederation. Our colleagues in British Columbia remain in a state of emergency. My own province of Alberta suffered the largest natural disaster in our country's history, with economic costs and consequences still being felt.

What we are seeing is less about the number of fires and disasters and more about their increasing severity, impact, and socio-economic consequences on businesses and on individual Canadians. These stories make headlines, but what doesn't make the headlines is what happens post-event to victims, families, and first responders. Every disaster is a traumatic event that will affect those who experience it to their deepest core. Few firefighters in Canada are trained to deal with the mental health issues that they will encounter.

The efforts of the federal government around a post-traumatic stress injury framework, while commendable, remain a work in progress. The question is, what do we do in the meantime? We need innovative ways to increase training, access, and coverage for mental health services. This is why we support the call for a mental health innovation fund that has been on the platforms and proposals of many groups.

This is also why we are asking the federal government for funding to make the Mental Health Commission of Canada's road to mental readiness program available to every firefighter in Canada. This program was rolled out in my own department and to great effect. It's an evidence-informed approach to increasing resilience so that the impacts of traumatic events and mental health issues can be managed.

These programs cost money, and please keep in mind that the majority of fire departments across this country are volunteer. They often fundraise for the most basic of equipment, and paying for such a program is clearly out of their reach. They need help.

You also likely recall seeing the travesty of the Grenfell high-rise fire in England earlier this summer. This is the story of a building. Buildings reflect the building codes of countries, provinces, and regions. Could this happen here? Could it happen in your riding? Fires can happen anywhere.

Canada's building code system is an extraordinary, evidence-informed process. It involves stating the issue and showing the evidence for the issue and solution. Firefighters know what the issues are. They see them first-hand every day; however, experience, as real and as valuable as it is, is not the research evidence that is preferred to inform building code change. Industry and academia have a decided advantage over the fire service in advocating building code revision.

Research, while extremely valued, is not the primary purpose of a fire department. As a consequence, what we know from experience currently is not being effectively synthesized and submitted to building code amendments as research-grade evidence.

We are thus asking you to create a fire service research fund that would be directed so that what we know from experience can be explored and expressed to Canadians and policy-makers in an evidence-informed manner.

As well, unlike any other first responders, fire services in Canada rely on part-time firefighters in volunteer departments. We commend the volunteer firefighters' tax credit and cannot underscore enough the importance of maintaining such a gesture. This is the type of tax credit that recognizes people who put their own lives at risk for their communities. We ask you to protect this as you undertake any further review of tax credits.

I'd like to leave you with the following notion. Fire departments are often considered an issue of municipal jurisdiction. We in the CAFC consider the federal government as a key player in the fire services in Canada. While we have spoken today of three budget measures, there are actually over 16 national and federal policy issues spanning multiple federal departments, from transport to public safety, science to health, innovation to national defence, and foreign affairs, as well as others.

As an association, we recommend to you that it is time for the creation of a national fire adviser secretariat in Canada, one that can provide a data-informed, evidence-based, holistic, and integrated perspective. Other G7 countries have invested in this to great effect.

In November, my colleagues and I will be back in Ottawa to continue this conversation with all MPs about the future of the fire service in Canada.

We thank you for your time and commend you for your ongoing work.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

Mr. Dennis, president of the Canadian Association of Optometrists, and Ms. Clement, chief executive officer, welcome.

[Dr. Michael Dennis, President, Canadian Association of Optometrists]

Mr. Chair, good afternoon and thank you for inviting us to appear before you today. My name is Dr. Michael A. Dennis, and I am president of the Canadian Association of Optometrists. I practise in Prince George, British Columbia. I'm joined today by Laurie Clement, our chief executive officer.

[Laurie Clement, Chief Executive Officer, Canadian Association of Optometrists]

The national voice of optometry in Canada, the association represents more than 5,000 optometrists and 400 students, dedicated to collaboratively advancing the highest standard of primary eye care through the promotion of optimal vision and eye health.

Optometrists are independent, primary health care specialists who provide nearly 90% of primary eye health and vision care in Canada. They specialize in the examination, diagnosis, treatment, management and prevention of disease and disorders of the eye.

[Dr. Michael Dennis]

As both health care professionals and small business owners, optometrists have much to contribute toward building a vibrant and growing economy.

We know there is an emerging crisis in eye health, vision care, and rehabilitation in Canada. We also know that the reality of vision loss on productivity in Canada has a profound effect on the economy. For example, only one-third of working-age adults with vision loss are employed. According to the most recent Statistics Canada data, people living with vision impairment and loss had an unemployment rate of 13%. They also are at greater risk of social isolation and reduced community participation.

An estimated 5.5 million Canadians have vision-threatening eye conditions. The number of Canadian adults with one of the leading ocular diseases will double in the next 20 years. Age-related eye disease is skyrocketing. Data from the Public Health Agency of Canada shows that vision loss accounts for approximately 8% of the economic burden of illness in Canada.

Vision loss has the highest direct health care costs of any disease category in Canada, more than diabetes, cancer, mental disorders, respiratory disease, arthritis, or cardiovascular disease. The total cost of vision loss is expected to cost Canadians more than $30 billion annually by 2032. However, the good news is that 75% of vision loss is preventable or treatable. Preventive primary care can make a difference.

[Laurie Clement]

While many Canadians have access to vision care, this is not the case for everyone. The main factors influencing timely access include public awareness, availability and regularity of services—particularly in rural, remote and indigenous communities—technological support, affordability and physical accessibility.

Enhancing public awareness about eye health is the first line of defence in reducing the risk of eye disease, avoidable vision loss and blindness. Improving Canadians' knowledge about eye health is a wise and prudent financial investment in the well-being of our population and by consequence, our economy.

[Dr. Michael Dennis]

Therefore, the Canadian Association of Optometrists recommends that the government establish a federally funded public awareness campaign addressing the importance of eye health and vision care. Nobody in Canada should be needlessly visually impaired. Those with unavoidable vision loss should be supported to achieve their full potential. Comprehensive eye care services should become an integral part of the primary health care system.

[Laurie Clement]

A made-in-Canada framework would provide an opportunity for Canada to join the WHO in recognizing eye health as a public health imperative and vision correction as one of the most cost-effective interventions in human and economic development, considered equal to immunizations in both importance and impact.

[Dr. Michael Dennis]

A framework that includes vision as part of the population health agenda would maximize health, independence, and economic participation of its citizens. It is 2017. What are we waiting for?

The committee also invited input on how the federal measures would help Canadian business to be more productive and competitive. The association concurs with the finance minister that an economy that works for the middle class means a country that works for everybody. We agree with supporting entrepreneurs, and an innovative economy encourages competitiveness and growth. To that end, we would recommend a full and careful review of the implications of the passive investment on all private corporations, small and large.

We would further implore the government to extend the current consultation period and do a deep dive into the consequences of the proposed changes.

[Laurie Clement]

Thank you for the opportunity to appear before you today.

This is a reminder that October is children's vision month.

[The Chair, Liberal, Wayne Easter]

Thank you to you both.

On the tax measures, you mentioned passive investments. I should have mentioned to you in the beginning that the committee has held hearings in the mornings this week. In fact, we met as a committee with Minister Morneau before question period. October 2 is the deadline for consultations with the department, but if you care to make a submission to this committee as well, you can do so. Go to this committee's website. There's a place to submit a brief there. Turn to that study. All that information will be presented to the Department of Finance come Monday, so if you want to take that opportunity, you can do so.

[Laurie Clement]

Thank you.

[The Chair, Liberal, Wayne Easter]

We will turn now to Mr. Lee and Mr. Neuheimer, with the Canadian Association of Radiologists. Welcome.

[Dr. Emil Lee, President, Canadian Association of Radiologists]

Mr. Chair and honourable members of the committee, hello and bonjour.

My name is Dr. Emil Lee, and this is Mr. Nicholas Neuheimer, our Canadian Association of Radiologists CEO.

I am a radiologist, a physician in the Fraser Valley, and the regional medical director of medical imaging for the Fraser Health Authority, which is the largest such health authority in B.C., serving 1.5 million Canadians. Today, I am speaking to you as the president of the Canadian Association of Radiologists, the national voice of radiologists in Canada, with over 2,500 members, and serving the entire Canadian population, 36.3 million patients.

Radiology is a key component of the health care system. We are the ones who specialize in interpreting the results of MRIs, CT scans, ultrasounds, and X-rays for patients right across Canada, in communities of all sizes. Many of us are also privileged to perform image-guided, minimally invasive surgery, from clearing clots inside our patients' brains and preventing strokes, to reconstructing blood flow to patients' legs to allow them to walk pain-free once again.

During the next five minutes I will speak about four points: one, the need for a new medical imaging equipment fund; two, enhancing referrals; three, incorporating artificial intelligence; and four, the unintended consequences of the proposed small business tax changes.

This will address the committee's call to improve productivity in the Canadian economy. The Conference Board of Canada reported that diagnostic imaging adds significant value to the health care system by reducing treatment costs down the road, but there is a lot of room for improvement. This year The Commonwealth Fund ranked Canada ninth out of 11 OECD nations studied, which brings me to our first recommendation, to invest $612 million to ensure that medical imaging equipment in Canada meets the standards that our patients deserve.

Canadian family practitioners reported that 40% of their patients have experienced difficulty accessing timely, specialized diagnostic imaging tests. That is double the current international average. While these patients wait, they are not productive. In 2004, the previous federal government invested $2.5 billion to support the purchase of equipment. Today, many of the machines we have are outdated. New equipment emits less radiation and provides better, higher resolution images.

Our second recommendation asks for $9 million over three years to fund projects to enhance and integrate electronic referrals. This investment in clinical decision support systems would help family practitioners and other referring physicians to request the most appropriate test for every patient, to reduce waste and ensure quality care. There are projects under way at St. Michael's Hospital in Toronto, as well as in Saskatoon, and on Vancouver Island, which we believe will show the value and effectiveness of e-referrals.

Third, we are seeking an investment of $10.5 million over three years to implement the use of artificial intelligence in imaging. In the 2017 federal budget, the government committed funds for the pan-Canadian artificial intelligence strategy. This is a great first step. We are recommending the development of a pan-Canadian AI research network in imaging. This type of innovative investment would have a great impact on Canadian patients and their productivity in the years to come.

Last, there is the tax issue. The government's proposed changes to the small business tax structure would have a significant negative impact on radiology and medicine. We have heard from and met with many patients, members, and members of Parliament who have voiced their concerns, especially the chair. Thank you, Mr. Chair.

Here are some facts. The majority of physicians—66%, or 54,000—own and operate a small business corporation. In 2016, physician offices paid $6.2 billion in wages and salaries, employed 137,000 people, and contributed $643 million in tax revenues to governments. Unlike salaried employees, physicians pay for their own medical coverage, maternity leave, and extended health benefits, and must entirely fund their own pensions.

In a recent survey of New Brunswick physicians, 82% said they would consider scaling back their practice or reducing hours if these proposals go forward. I am worried. We are small business owners. These changes could negatively impact health services across Canada, particularly in rural and remote regions. We are asking that the government reconsider the proposals, or at the very least, extend the time frame for comment and consultation on these proposals.

In conclusion, we are asking for: one, a new medical imaging equipment fund; two, investment and leadership to enhance e-referrals; three, the thoughtful deployment and integration of artificial intelligence in health care; and four, reconsideration of the proposed small business tax changes.

Thank you for your time and for inviting us to speak.

Thank you for your attention. I look forward to your questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Dr. Lee.

I have the same point, especially on the last two pages. I suggest you go to tax planning using private corporations and submit your thoughts.

[Dr. Emil Lee]

We will.

[The Chair, Liberal, Wayne Easter]

Thank you for that.

Now we have the Canadian Association for Graduate Studies, Ms. Brouwer and Ms. Rutherford.

[Dr. Brenda Brouwer, President, Canadian Association for Graduate Studies]

Good afternoon, Mr. Chair, and members of the committee. Thank you for the opportunity to address you today.

My name is Brenda Brouwer. I am vice-provost and dean of the school of graduate studies at Queen's University, and president of the Canadian Association for Graduate Studies. It is in this latter capacity that I am here this afternoon, along with our executive director, Sally Rutherford.

I'll begin by telling you a bit about the Canadian Association for Graduate Studies, or CAGS, and the tremendous value proposition that is graduate studies for enhancing Canada's prosperity, productivity, and global engagement. CAGS consists of nearly 60 post-secondary member institutions from across the country dedicated to advancing excellence in graduate education, research, and scholarship to support the formation of highly trained and skilled individuals who contribute to the health, wellness, and advancement of societies in Canada and globally.

We work in partnership with regional, provincial, and federal agencies, including the tri-council granting agencies, to support graduate education as an essential resource underpinning Canada's capacity to become a more economically and socially robust country.

The value of a graduate education extends far beyond the increased earning power of graduates, and thus higher taxable income. It lies in the intellectual capacity, critical and analytical thinking, and hands-on research capability that are cultivated to be applied and mobilized in all sectors of the Canadian economy.

Canada has considerable raw talent in our highly qualified personnel. Canada must do better in supporting them, leveraging their discoveries, and enabling them to effect positive change from which we all stand to benefit.

This leads to several of CAGS' recommendations to this committee. I'll highlight some of them today.

The first is continued investment in fundamental research through the tri-council agencies. Supporting investigator-led research is critical for the pipeline of innovation and discovery, and next-generation researchers. Such research creates opportunities for graduate students to conduct impactful, high-yield research with future commercial value, societal value, and global reach. CAGS echoes post-secondary support to the recommendations of the fundamental science review, chaired by David Naylor and including Queen's Nobel laureate, Dr. Art McDonald.

Funding for the tri-councils has not kept up with inflation or the growing demand to support research, innovation, and discovery. CAGS urges the committee to support the science review's recommendation for an increase of $485 million over four years to address the cumulative underfunding developed over the past years.

Canada must be outwardly focused. Our discoveries, products, and technologies have implications beyond our borders, and our efforts must be enlightened by multiple perspectives, ideas, cultures, and practices to garner global recognition and leadership, yet existing policies and practices restrict our talent pool.

The tri-council's Canada graduate scholarships program is restricted to Canadian applicants. We want to attract the best talent, period, regardless of citizenship. The number of scholarships has been static since 2007, despite a 30% increase in graduate enrolment, and their value remains unchanged since 2003. We need to be competitive to attract the best and make graduate study accessible. We must cast a wide net to ensure that diversity and inclusivity of thought, culture, and experience enrich the graduate experience, promoting ideation, innovation, and inspiration that can be transformative.

CAGS strongly advocates for new investment in the Canadian graduate scholarships program to increase the number of awards and their value, and we urge revision of the eligibility criteria to include international students.

Worth noting is that over 30% of Ph.D. students studying in Canada are international students, about half of whom desire to stay in Canada, contributing directly to our economy, and all strengthen international ties and collaborations.

CAGS recommends that the federal government provide new funds for robust programs to assist Canadian graduate students to gain international experience through research and study abroad. Current imbalances in scholarship support limit the number of outbound Canadian students relative to inbound international students. We need to graduate global citizens who can navigate global economies and communities. Investing in programs that enable student mobility stands to garner high return for Canada.

Access to graduate education is a priority. CAGS believes that pathways and resources must be in place to enable disadvantaged and under-represented groups access university and graduate studies.

We support the Naylor report recommendation that the tri-councils collaborate on a comprehensive plan to promote and provide support for indigenous research with the goal of enhancing research and training by and with indigenous researchers and communities.

Canadian universities graduate over 7,100 Ph.D. candidates annually, each of whom has completed original research, acquired specialized knowledge, and a broad range of transferable skills. Enabling graduate students to incorporate experiential learning into their programs catalyzes collaborations and partnerships, and stimulates job creation, product development, and social innovations that benefit companies, organizations, and communities. The expansion and added investment into the Mitacs accelerate program beyond STEM, bringing in not-for-profits and the federal government, has been very welcome. The uptake beyond STEM, however, is limited due to the investment requirement from the partner. CAGS encourages the government to address the barriers to non-STEM partner receptivity to fully mobilize graduate student capacity and knowledge to all sectors and incorporate research and development into the labour market broadly to maximize opportunity and return.

Finally, we encourage the government to champion the labour market information initiative. Graduate students, potential employers, and the broader Canadian economy will all benefit from labour market information that is accurate, valid, regionally responsive, accessible, and timely.

Mr. Chair, on behalf of the Canadian Association of Graduate Studies, thank you for the opportunity to speak, and we look forward to questions.

[The Chair, Liberal, Wayne Easter]

Thank you for your presentation.

Turning to the Canadian Federation of Students, we have Ms. Kiddell.

[Charlotte Kiddell, National Deputy Chairperson, Canadian Federation of Students]

Thank you, Mr. Chair. Good afternoon, members of the committee.

My name is Charlotte Kiddell, and I am the deputy chairperson of the Canadian Federation of Students. The federation is Canada's largest and oldest national student organization, representing over 650,000 post-secondary students from coast to coast. I appreciate the opportunity to be here today.

You have asked the federation to comment on federal budget measures to help Canadians and the Canadian economy. To us, the evidence is clear: major investments in post-secondary education are needed for both.

Decades of austerity budgeting and piecemeal reforms in post-secondary education have hurt students, their families, businesses, the economy, and our society as a whole. It's time to think big.

Of course, there is some good news. Canada has one of the highest rates of post-secondary participation in the world. That's welcome, given that 70% of new jobs in the Canadian economy require some form of post-secondary training. As well, we just heard from the Canadian Association for Graduate Studies on the social benefits of higher education. The problem is who is currently accessing post-secondary education.

The steep costs associated with post-secondary training and the impact of decades of federal funding cuts mean that post-secondary education is increasingly inaccessible to low- and middle-income earners and their families. Those hurt most by this crisis in post-secondary education are already marginalized groups—women, indigenous peoples, racialized communities, people with disabilities, single parents, LGBTQ+ people, and so on. As the social determinants of health literature tell us, greater debt intensifies existing inequalities.

In 1996, a 20% cut was made to federal transfers to post-secondary education, the largest federal funding cut to PSE in Canada's history. That has led to massive increases in tuition and student debt. Tuition revenues to post-secondary institutions have tripled in the last 15 years alone.

Today, three semesters of studying aircraft maintenance at Seneca College, for example, costs $18,000 for domestic students and $71,000 for international students. Tuition at McMaster University's medical school is now $26,000 per year for domestic students and $97,000 for international students. These are local examples that have fuelled historic levels of student debt, measured at $28 billion in 2012, and increasing by $1 million every day.

This isn't hurting only individual students and their families. High student debt also hurts our society as a whole, which now suffers from a serious household debt crisis. On average, Canadians hold a debt level that equals 171% of their annual income.

The federal government says it has taken steps to address this problem. Canada student grants were increased by 50% in 2016, and a $90-million investment was made to the post-secondary student support program for indigenous learners last year. Both investments students had called for and welcomed.

These measures won't address the gaping hole cut in the system two decades ago. They won't stop rising tuition and student debt, and they won't meaningfully increase access to post-secondary education. In fact, after the federal government cancelled education tax credits and increased Canada student grants in 2016, it will spend $3 billion less on post-secondary education over the next five years, while student debt continues to rise.

We say enough is enough. It's time for renewal in post-secondary education.

That is why, in our pre-budget submission, we support restoring core funding for institutions and eliminating tuition fees for all students studying in Canada, in all programs. An ongoing investment of $9.1 billion would make this happen. That is why we support dedicating $10 million from the aboriginal languages initiative to ensure the instruction of indigenous languages on campus. That is why we support the findings of the Naylor report and its call to invest $1.3 billion in basic investigator-led research by 2022. That is why we are calling for a $300-million investment over two years dedicated to improving on-campus mental health services.

Members of the committee, thank you again for having me here today. I look forward to your questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Charlotte.

From the Northern Air Transport Association, we welcome Mr. Priestley, executive director.

[Glenn Priestley, Executive Director, Northern Air Transport Association]

Thank you, Mr Chair.

Thank you to the committee and to the staff, as well as my colleagues here today. It was most interesting listening to the passion of everybody.

NATA represents northern remote operations across Canada in these important pre-budget discussions. We previously submitted a briefing note to the committee with NATA's 2017 resolutions, identifying infrastructure issues, funding issues, as well as funding solutions. We have also identified regulatory issues that would increase the cost of federally funded programs, such as health programs and sovereignty support flights.

The Northern Air Transport Association was formed just over 40 years ago with a mandate to help in the economic development of northern Canada by providing safe, reliable, and sustainable air transport support. NATA membership is representative of all aspects of northern remote air operations, including scheduled passenger and cargo service, air taxi operations, helicopters, and specialized operations, including internationally renowned medevac capabilities.

For today, Mr. Chair, NATA was asked to provide input on two specific questions, and we welcome this opportunity.

In regard to what federal measures would help Canadians be more productive, I polled my directors overnight and received several responses that focused on the need for a well-trained workforce and indeed a strategy to attract a replacement workforce. NATA's chair of its skills development committee offered the following quote:

The most critical thing is training. I believe that training for the commercial licence and above, i.e. Multi engine rating and Instrument flying rating have tax rebates for the student. Maybe it is time to bring back the incentive on top of the rebate, as there was back in the 1950’s and 60’s whereby students who completed their training also received a ‘bonus’ from the government. In the day it was to have a base of pilots ready to join the RCAF if necessary, but I think that it could be an idea to help defray the huge costs to the candidate, before they can even start applying for a job.

In 1970, when I obtained my private licence, I got $100 back from the federal government, which I used towards the night rating. My private licence cost me $990. Up until 1990, private pilot training was tax exempt through the Excise Tax Act, but this exemption was removed because it was considered a recreational activity. By the way, a PPL, private pilot licence, today costs about $9,000, and there are no enrolment or graduation benefits. This has resulted in a reduction of student starts, which also means fewer pilots progressing to commercial pilot training. This has led to a skilled labour shortage in Canada that extends to flight crew as well as maintainers. There is a simple solution to this problem: reinstate a tuition tax exemption and a graduation rebate upon completion of commercial pilot training.

There needs to be a better program that provides employers with incentives to hire graduates and provide a comprehensive training program. For instance, in 1982, back when I had hair and was a lot taller, there was a pilot shortage. Canada Manpower at the time provided funding to upgrade my flight crews with multi-engine and instrument flying training.

The industry has developed some very innovative programs such as Air Inuit's Sparrow program to attract northern youth, which has resulted in the successful development of over a dozen Inuit flight crews. There needs to be more skills development funding opportunities that are aviation-focused with aboriginal and northern outreach for the future workforce.

In closing off on question number one, I think the following comment from one of my other board members is important: “I think it is important that the federal government understand the critical nature of the pending pilot shortage.” We are now parking airplanes in Canada. “This shortage will impact all Canadians as air transport has become a critical aspect”, a norm to life, “to all Canadians.”

The federal job grant is capped at $10,000. We think there's a good opportunity to increase that to help employers get the biomass of the workforce back.

This ties to the second question, Mr. Chair. What federal measures would help Canadian businesses to be more productive and competitive?

NATA's response is the lack of airport infrastructure. According to the Office of the Auditor General's report on Transport Canada's northern infrastructure strategy “Civil Aviation Infrastructure in the North—Transport Canada ”, only about half of the 117 airports listed have adequate navigational runway lighting and length compared to southern Canadian airports. Only 10 have hard-surface runways. I'll come back to that in a minute regarding innovation. This causes aviation safety issues as well as service delivery issues, which can also impact society system safety overall. For example, if an air operator cannot get in or out of an airport while trying to deliver an essential service, such as a medevac, this causes undue stress on the whole system, including the air operator, the health providers, and the family.

What recently happened just last week in Rankin Inlet, Nunavut, is a good example of the need for better northern infrastructure support, both in runway construction and passenger support. We also provided a solution in our submission of the use of the airport rent. A flight scheduled from Rankin Inlet to Arviat was unable to depart due to inclement weather in Arviat. It happened on September 19, and stranded 15 passengers. By the time the passengers deplaned and boarded a smaller craft, because the 737s used to fly out of Winnipeg to Rankin Inlet are not able to land on Arviat's short gravel landing strip, the weather made landing impossible.

The operator started to make phone calls and realized that the hotels—all three of them—were booked up, adding that the airline would have paid for the hotel rooms had they been available. Blankets and pillows were distributed to make people as comfortable as possible for the night given the circumstances, and staff came in at about 5:00 a.m. to give passengers taxi vouchers and meal vouchers so that they could get into town and have breakfast. They got them into Arviat that morning.

It was good work by the air operator. However, as was published in the report of the Canada Transportation Act review, the predominant material used in airstrips in the territories is compacted gravel. The only jet aircrafts in service that can use these airstrips are Boeing 737-200s—the latest 737s are 900s—which are between 25 and 45 years old and are no longer manufactured. There are no new 737s that can land on gravel.

Most northern airports are not capable of accommodating jet aircrafts. This requires the use of aircrafts that are smaller and have less payload capability, which in turn contributes to the higher cost of living in remote communities.

The federal government needs to implement a new northern and remote airport infrastructure investment program to deal with the airport infrastructure deficits in the territories and in remote airports in the provincial north. Like ACAP, this program would include airport infrastructure improvements such as paving, not just maintenance.

NATA supports this recommendation, with the caveat that flexibility is needed in the application of current standards such as the “Aerodromes Standards and Recommended Practices (TP 312) 5th Edition”, which requires that all airports meet the standard before any funding is given. However, half the airports were built so long ago that we can't move the facilities, so they can't get access to funding. It seems like a nasty catch-22.

In closing, and I have to give thanks again to Mr. McLeod, on August 27, 2017, in Yellowknife, Minister Marc Garneau announced the national trade corridors fund, with a request that expressions of interest be submitted by September 5.

NATA submitted an expression of interest to this fund, which we hope will provide support for a test project of runway surfaces that have a performance rating equivalent to that of asphalt, with fewer of the the negative operational aspects associated with building paved runways in northern and remote locations. These negative aspects, such as locating the paving equipment on site, and the ongoing maintenance, now include the real climatic changes that are impacting the permafrost, which doesn't help because runways are black and therefore attract more sunlight. It's an ongoing problem.

In closing, NATA encourages the finance committee to meet with northern stakeholders with a more formal regular forum to address the aviation transportation needs of northern and remote communities. We would be prepared to provide a comprehensive brief to the committee if it is helpful in recognizing the northern operational realities and funding priorities.

Thank you very much.