Finance Committee on Oct. 16th, 2017

[The Chair, Liberal, Wayne Easter]

We'll call to order the meeting on pre-budget consultations 2018.

I ask those who sent us submissions and who are on the official presentation list to please come up to the table.

As I explained to a couple of the folks who sent in submissions and who have a more detailed presentation, we have a few minutes for an open-mike session. We give people the opportunity to go to the mike and do a presentation of one minute or thereabouts on the issues as they see them. It becomes part of the official record and will be considered as part of the pre-budget consultation.

First up is Pauline Finlay.

Pauline, welcome. I believe you're with ONE.

[Pauline Finlay, As an Individual]

Yes.

[The Chair, Liberal, Wayne Easter]

Good. Go ahead. The floor is yours.

[Pauline Finlay]

Good morning, everyone.

Honourable members, members of the audience, 130 million girls are out of school. If they were a country, they would be the tenth largest. Let that sink in.

Canada contributes about two cents per Canadian per day to global education. According to the education commission, it is indispensable to double our contributions to education if we want to close the 130 million gap and provide every girl with the opportunity to go to school. This means that with just two more cents—two cents—Canada can lead the way.

Today we ask Canada to contribute to the financing of the Global Partnership for Education in 2018, as part of the solution, so that it can help millions of girls in the poorest countries get the education they deserve.

I want to close by asking this to the honourable members and the audience: where would you be without your education?

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Pauline, and thank you for sticking very close to the one-minute time limit.

Next is Kevin Stacey, who I believe is with the retirees.

Go ahead, Kevin.

[Kevin Stacey, As an Individual]

Good morning, honourable members and members of the general public.

My name is Kevin Stacey. I'm with the National Association of Federal Retirees. I'm the president of the local branch of the Avalon-Burin branch here. We have about 2,200 members. In Newfoundland we have about 3,500 members, and across Canada we are 180,000 members and growing.

I'd like to make a few key points to you today. First, secure retirements, strong health care, and a national seniors strategy are the best ways to help seniors and their families. On retirement security, I urge this government to scrap Bill C-27. This bill would introduce a new type of pension plan, Canada benefit pensions, while taking away retirement security and killing off good old defined benefit plans that people have worked for and that bring back benefits to both the local and national economies.

For budget 2018, I believe the federal government should lead a national seniors strategy that builds on the home care and seniors housing investments that have been made so far. The strategy needs to include a national palliative and end-of-life care strategy and better pharmacare for seniors. It must continue to tackle infrastructure investment, with age-friendly communities and universal design standards in mind to ensure that seniors' residential needs are met. The government should appoint a minister responsible for seniors to make sure that public policy decisions are always viewed through a seniors lens. These actions would lead to better productivity and a stronger economy, not just for seniors but also for their families and for Canadian communities.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Kevin.

Next is Kevin Nicholas Bell from Engineers Without Borders.

Kevin, at pretty nearly every stop we hear from Engineers Without Borders at the open mike, so congratulations to your organization.

[Kevin Nicholas Bell, As an Individual]

Thank you very much. I'll pass that along.

Good morning, honourable members and members of the public. As mentioned, my name is Kevin Bell. I'm a volunteer on behalf of Engineers Without Borders.

In budget 2018 we are asking that the government commit to a predictable annual timetable of increases to our international assistance envelope, of up to 0.31% of GNI within its first mandate. Currently our level of assistance is 0.26% of GNI, the lowest it's been in recent history, and it hasn't increased by a significant amount in quite some time. According to the OECD, global assistance has increased by 9%, but it's disappointing to see that Canada's own contributions have decreased by 4%.

If we increase funding, if we increase assistance, we will be able to achieve the sustainable development goals and grow the economy here and globally. In 2018 we hope to see the downward spending trend end so that Canada can meet its global commitments.

Thank you very much for your time.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Kevin.

I don't believe there's anybody else here for the open-mike session. I believe we have all of our witnesses here as well.

We'll turn the floor over to Derek in a minute, but first I want to say welcome to the witnesses. Thank you to any of the groups who put in a submission prior to mid-August. Although we are not dealing extensively with those submissions here, other than the remarks that are made, they are on people's iPads. You'll see them refer to them once in a while. The official submissions are being considered as part of pre-budget consultation as well.

I know that Mr. Butler has to leave at 10 o'clock, so if people have any questions in mind for Mr. Butler, you'll need to get those in pretty quickly.

Usually when we're on the road, I like to have members introduce themselves so that you have an idea of where they're from and of the kind of cross-country representation that's here.

I'm Wayne Easter. I'm the member from Malpeque, Prince Edward Island—the other island, not quite as big as this one.

Raj, do you want to start?

[Raj Grewal, Liberal, Brampton East, ON]

Sure.

My name is Raj Grewal, and I'm the member of Parliament from Brampton East.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

I'm Jennifer O'Connell, member of Parliament from Pickering—Uxbridge, just outside Toronto. My local connection is that my family is from Upper Island Cove, so I know the area a little bit.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

My name is Greg Fergus. I am the member for Hull—Aylmer, Quebec, a riding that is just opposite Ottawa. Unfortunately, I have no relatives in Newfoundland and Labrador, but I adore this province. This not my first time here.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

I'm Dan Albas from Central Okanagan—Similkameen—Nicola in British Columbia. I'm excited to be here with you all in St. John's.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

I'm Tom Kmiec, member of Parliament from Calgary Shepard.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

My name is Alexandre Boulerice. I am the member for the Rosemont—La Petite-Patrie riding in Montreal, Quebec.

[The Chair, Liberal, Wayne Easter]

Thank you, all.

We'll start with Mr. Butler from the Association of Seafood Producers.

Welcome, Derek. I know you're trying to fit this in under a tight schedule, so thank you.

[Derek Butler, Executive Director, Association of Seafood Producers]

Thank you very much, Mr. Chair.

Thank you for the kind invitation to appear this morning. Again, my apologies; I had a prior commitment some two hours outside of town, and I'm sure we could find you a house in Upper Island Cove if you'd like to have some additional connections to Newfoundlanders.

[Voices]

Oh, oh!

[Derek Butler]

The ASP is a typical industry trade association. We represent the majority of seafood producers in the province, both by value and by volume. For the major species, snow crab and shrimp, we're close to 90%, so we're a significant organization.

You've asked us two very important questions. Whether we are responding in the context of question one as individuals or to question two as Canadian businesses, the benefits come back to us all, both as a country and as beneficiaries of a strong and dynamic business sector. Whether as employees or business owners, whether in business or as part of society generally, where we participate in the rewards of business—taxes to government, general services, a strong economy—we all benefit. These are important questions. They represent the core of what we want to achieve as a country for our collective benefit and not for the sake of the dollar, per se.

On behalf of the seafood producers that I represent, I would say one simple thing with respect to the seafood industry: change the model. I called it a simple thing, but it's not easy. Let me repeat: change the model.

There are at least three models of approach for fisheries the world over in terms of structure. The first is what we have been for a long time, which is a harvest-driven or capture model. We fish. We pride ourselves on that. We do it well. We focus on how much we catch, what the quotas are, what the allocations might be, and on the allocation debates—robbing Peter to pay Paul—between industry sectors, we focus on where the stocks might be growing, and yes, still in 2017 to a large measure, because it is a seasonal industry, we focus on the impacts of EI for both harvesters and plant workers.

That is the capture model. It is not, sadly, about innovation. It is not about capital accumulation for reinvestment or research. It's really just about fishing, and we're proud of it. We fish well. There's some processing, and then we sell it. That's our model.

The second model is the market-driven model. In this model we're focused on markets, ocean to plate. The plate becomes the new “cod end”, if you know the expression. It's what consumers want. It's about catching the fish, yes, as always, but also about selling it and really focusing on consumer and market demand. It's about letting that cod end—the plate—and the democracy of the marketplace, the prerogative of the consumer who is going to buy our fish, make the decision of what they want. It's about getting a certain value per kilo and then bringing back those returns.

I underscore bringing back the returns, because we are, above all, a trading industry. It is appropriate that in giving my testimony, my appearances before House of Commons committees have more often than not been made before the trade committee as opposed to the fisheries committee, because that is the nature of the business I represent. We're a trading industry. Some 90% plus of what we catch and produce in Newfoundland and Labrador is exported.

That second model has value. It's a step up from the catching model, the harvest-driven model, but Canada, sadly, is still too much along the lines of the first model in too many regards. That's my simple message this morning, because that represents an opportunity cost. We leave value on the table. It is lost value. We are, as has been said before, more focused sometimes on deriving EI value than on market value. That needs to change, because the world is changing.

I have a Telegram story from this morning. Am I allowed props, Mr. Chair?

[The Chair, Liberal, Wayne Easter]

Yes, sure. This is not the House of Commons.

[Derek Butler]

It says, “Poor signs for N.L. snow crab. Official DFO survey results available early next year”. We know the world is changing. Stocks are going to be in decline in respect to shellfish in Newfoundland and Labrador and groundfish will come back, but these are the valuable species. These are the species of high value per kilogram in the marketplace, much more so than cod is, so we will need that much more groundfish to make up for the absent shellfish value. The crab, our most valuable species, are in decline, with an aging population and low birth rates. The story is written.

While there are signs of groundfish recovery, we are in no way back to the old days of groundfish abundance. The northern cod stock, the very foundation of our province, remains in the critical zone, and fishery removals must be kept to a minimum.

So the world is changing, but we have not changed. Aspects of the model, such as how capital is used and secured and how harvesters are permitted to access the resource, as well as the business relationships between harvester and harvester and between harvester and producer are all highly regulated, with ostensibly good goals but at high costs.

My message this morning is that the model must change so that industry participants and Canada as a whole can derive greater value from the industry. We need stronger fisheries management, better resource science, and more sustainable fisheries practices. All of those cost money, and a healthier, more sustainable business model can achieve it. As I heard recently in Iceland, “We can't be green until we're out of the red.” We can take better care of the fish in the process. A new model can do better.

There's a third model. I referenced the first one, the capture-driven model, and the second one, the market-driven model, but there's a third model. I'll close by expanding on that briefly.

In many parts of Iceland, and increasingly so, there's a research- and value-driven model that includes innovation, ocean clusters, added value, pharmaceuticals, skin grafts from cod skin, beauty products, high-level food protein, enzyme extraction for food flavouring, and the list goes on. The joke is, “You take the fillet, and we'll take the rack and the rest of the fish, because we'll have higher value from that.” That's not our model.

While Iceland's cod resource has declined over the years, the value per kilogram of catch grows. Their model is such that it allows for extremely high quality, capital development, greater wealth from less resource, and more sustainable fisheries overall, whether measured in terms of economics, fish sustainability, or social sustainability. They go together. That takes a new model with a focus on fish sustainability, on capital accumulation and reinvestment, and on market and innovation.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Derek. I read that Telegram article this morning, and it is really good in terms of the research it presents. I was parliamentary secretary to the Minister of Fisheries when we did the TAGS program, and I never want to have to do that again. That was a tough one.

From the Community Sector Council Newfoundland and Labrador, we have Ms. Rowe.

[Penelope Rowe, Chief Executive Officer, Community Sector Council Newfoundland and Labrador]

Good morning to you all, and welcome to St. John's, Newfoundland. It was great to hear the introductions from each of you and to hear where you're from. I hope that you have at least a little time to enjoy our hospitality while you're here, if you're not all rushing back to Ottawa.

Thank you, first of all, for the invitation to join this pre-budget consultation. Let me just make a few words of introduction to position my comments.

We are a charitable organization, founded in 1976—and this is an interesting comment—with funds from the federal government as an innovative demonstration project. We all think innovation is a new word that's just hit our lexicon, but in 1976 the federal government was actually encouraging that kind of activity in the community sector.

The Community Sector Council Newfoundland and Labrador has a vision of a prosperous and inclusive society that supports individuals, families, and communities. We support citizen participation and, importantly, the integration of social and economic development. We deliver innovative employment programs, particularly for young people. During the last 20 years we have provided—and this is a clear fact—over 15,000 jobs for young people throughout the province of Newfoundland and Labrador, and we have done that significantly with federal government funds. One of the advantages of our work with the non-profit sector is that we're able to provide work during the summer for young people in very small communities where they live. In fact, our latest statistics show that over 25% of the young people to whom we provide summer work are in communities of fewer than 1,000 people, so the reach that an organization like ours has to build on your youth employment strategy is really very significant.

It's our view that the community sector, which is often referred to as a non-profit or voluntary sector, is absolutely fundamental, and in fact central, to economic and social progress in Canada. A strong civic economy encourages productive citizens, contributes to the private sector, and delivers many programs for public benefit. In fact, each and every one of us benefits every single day from non-profit and community-based organizations. Whether through sports activities, hiking trails, services for seniors or youth, social services, or health services, there's not a Canadian who does not benefit from the work of the non-profit sector.

Let me now turn to the specific questions the committee has posed this year. First of all, let me make some suggestions for federal measures to help Canadians be more productive.

Our first recommendation is that you continue and, in fact, expand financial support for youth employment programs such as Canada summer jobs, skills link, and youth internships. I think we all know that early job experience is very important. It should provide a positive experience and an opportunity for personal growth. One of the things we've learned over the years as we have provided support to so many students is that early career development opportunities should go hand in hand with work opportunities.

Our second recommendation is that in budget 2018 you require that career development learning opportunities be incorporated into all employment programs financed by the Government of Canada. Often the most important skills that young people need to learn are the soft skills, which are not taught in many educational programs but which are of real value.

Let me just make a side note here. This summer we had a particular program in which we placed 150 young people who were at significant risk and vulnerable. Many of them were already wards of the provincial government. These young people had had very little exposure to networking, to meeting people, and to the world of work. We actually did a workshop with them, which taught them how to look people in the eye, how to shake hands, and how to introduce themselves. While that seems so incredibly simple, you wouldn't believe the impact that had on the young people who came from small communities and who had never been in that kind of environment before.

After a couple of the sessions we did with them, doing those simple kinds of career development exercises, a couple of the young men actually came up crying, saying that it was the most important day they had ever had, being taught those simple skills. It's pretty easy sometimes when we're working in our world, at the level we work at, to forget those simple things that are so important.

Our third recommendation, therefore, is that because career development is fundamental to helping Canadians be more productive, we suggest the creation of a round table of non-profit leaders with on-the-ground career development experience to co-create, with the federal government, a strengthened framework for delivering effective and efficient work and career training programs directed at assisting people to become more productive. This speaks directly to your question about Canadians being more productive. We need to appreciate that all Canadians have a place in our economy and that sometimes some people need additional support.

Our fourth recommendation, in line with budget 2017, is that we recommend that you move forward quickly to improve access to, and take-up of, post-secondary education for lower-income Canadians through the Canada learning bond. This is an incredibly important program. It is available through the registered educational plan, but it is a special program for low-income Canadians who do not have to make any contribution of their own. By the time their children finish high school, they actually have a nest egg of $2,000 for their children's education. This has really a two-pronged benefit. First, it provides cash, but it also creates an attitude toward post-secondary education. We also encourage that the ceiling be increased regularly, in line with CPI, from the current $2,000 limit.

Your second question was around measures to help Canadian businesses become more productive and competitive. We adhere to the view that the term “business” applies not only to a for-profit business but also to a non-profit business that has a mission to build and fulfill charitable missions. As our fifth recommendation, we urge you to augment the collection of key data on the non-profit sector by Statistics Canada that would enable better policy-making and more effective business planning by the non-profit sector. Years ago there was much greater collection of appropriate data. That has been curtailed significantly. We think it's fundamental that we understand more the role of the non-profit sector in the Canadian economy.

Our sixth recommendation is that you consider the creation of a social innovation fund—much like the strategic innovation fund, but with an emphasis on social innovation—to ramp up capacity to address complex social problems and to find ways to meet the needs of Canadians in the face of changing demographics and new economic realities. Many of the solutions that we see to complex problems often come from community-based organizations. We think we need to free up that social innovation capacity. We are pleased to see the creation of a social innovation and social finance co-creation steering committee. We suggest that its work be further advanced in budget 2018.

Our final recommendation is that the federal government should acknowledge more fully the economic contribution of the community sector and provide additional funding for research and development to support social innovation. We know that many non-profits contribute extensively to the economy in addition to improving the quality of life in Canada, yet we don't necessarily know the full impact of the work of non-profits to the economy.

The next comment I would like to make is perhaps a little bit more negative than the rest of my comments.

There is an incredibly prevalent view across the country, and, I have to say, particularly often in relations we have with federal government departments and individuals, that the only real or actual jobs are created by and in the private sector.

This is an extraordinarily short-sighted view, and it leads to many missed opportunities that this country could be developing and moving forward.

In summary, there are opportunities that might be embraced by the Government of Canada to more fully explore the essential role and collective value of the community sector and to more clearly understand and appreciate that social development is absolutely essential to economic growth. We encourage you in budget 2018 to fully recognize this sector as a major economic driver and not just as peripheral to the economy. We call for a mindset shift and bold actions to ensure that its leaders are included as partners in all opportunities for greater productivity and business growth. The sector has an amazing capacity to help Canadians be more productive, and knowledge to spur innovation to enhance Canadian competitiveness.

Thank you for the opportunity to meet with you today and to present our point of view.

[The Chair, Liberal, Wayne Easter]

Thank you, Penelope.

Turning to the Federation for the Humanities and Social Sciences, we welcome Mr. Miller.

[Gabriel Miller, Executive Director, Federation for the Humanities and Social Sciences]

Thank you, Mr. Chair. Thank you for inviting me here today. I am thrilled to have the chance to contribute to the important work you're doing on this committee. Merci beaucoup.

The Government of Canada has set a goal to boost Canada's productivity, competitiveness, and prosperity, and to do so in a way that helps more diverse groups of people enjoy the benefits of a growing economy. I believe we can all get behind these goals. The message I want to convey today is simply this: to achieve these things, we are going to need a strong research system.

My organization represents 90,000 scholars across Canada.

The Federation for the Humanities and Social Sciences is the largest community of researchers in the country. These researchers teach the largest community of post-secondary students in Canada. About half of all the students in Canada are registered in humanities and social science programs.

Our researchers and students are tremendous resources for Canada. Our economy is increasingly a service and knowledge economy. Service industries now account for 70% of our GDP, and Canadian employers tells us that they are looking for the kinds of skills taught in the humanities and social sciences: critical thinking, creativity, and writing and communication skills. Research in the humanities and social sciences will also be vital in helping us address some of the biggest challenges facing Canada today: climate change, indigenous reconciliation, youth employment, and the integration of refugees and immigrants.

Governments past and present have taken critical steps to support research, and I want to thank you for that, but according to the fundamental science review completed earlier this year, all is not well. Canada is falling behind.

In particular, investments in the humanities and social sciences, which cover research about Canada's people—our greatest asset—are out of line with our needs, receiving just 15% of federal research funding. As a result, only about a quarter of Canada's talent pool in these areas is able to find funding for their research in a given year. This is a lost opportunity for Canada as other countries surge ahead with investments in basic science and research.

Fortunately, the science review has given us clear recommendations to improve the situation. We have more detailed recommendations in our brief, but let me focus for now on just two.

First, as per the expert panel's advice, we recommend increasing the base funding of Canada’s research-granting agencies by $485 million over four years.

Second, as investments are made to the granting councils, we recommend that humanities and social science research receive a share of new injections equal to that for physical and health sciences in order to better balance Canada’s overall research portfolio, a principle also underscored by the expert panel.

Finally, let's not overlook the fact that one of Canada's most important economic drivers is the cohesiveness of our diverse society. In Canada, people from many different backgrounds are able to work together to create amazing things, and not every country has that. This is perhaps our greatest competitive advantage. How did we build it? What sustains it? What risks are we facing today that threaten it? Canadian scholars in the humanities and social sciences are exploring exactly these questions, and I believe that if we truly want to continue to build a sustainable, prosperous, and inclusive economy, their contributions will be vital.

Thank you. Merci beaucoup.