Finance Committee on Oct. 20th, 2017

[The Chair, Liberal, Wayne Easter]

Jennifer is from Toronto as well, or close to it.

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

It's the east side of Toronto. I'm the member of Parliament for Pickering—Uxbridge.

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

Good afternoon. My name is Greg Fergus. I am the member of Parliament for Hull—Aylmer, a riding in Quebec, very close to Ottawa.

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

I'm Dan Albas, and if Toronto gets any bigger, it might be adjacent to my riding at some point. I'm from the interior of British Columbia, Central Okanagan—Similkameen—Nicola, and I'm very excited to be with you all today. Thank you.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

My name is Tom Kmiec, and I'm the member of Parliament for Calgary Shepard.

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

Good afternoon, everyone. My name is Alexandre Boulerice. I am the member of Parliament for Rosemont—La Petite-Patrie, a riding in downtown Montreal.

[The Chair, Liberal, Wayne Easter]

I'm Wayne Easter from the riding of Malpeque in Prince Edward Island. It's basically between Charlottetown and Summerside. We had Ms. O'Connell down to do a tour and she even picked a few potatoes and saw what good P.E.I. potatoes are like.

In any event, we'll start. First on my list here, as an individual, is Mr. Goodis, chief executive officer and co-founder of Tax Templates Inc.

[Jay Goodis, Chief Executive Officer and Co-founder, Tax Templates Inc., As an Individual]

Thank you, Mr. Chair, and members of the finance committee for the opportunity to speak about Canadian business productivity and competitiveness. I'd also like to thank the advisers in the business community who share their concerns with me.

Today, I will focus my time on the passive income investment proposal, which the Department of Finance has indicated is a 2018 budget issue. We have seen very strong objections from experts and business owners regarding this proposal. Many see the Canadian dream being extinguished and understand the potential ramifications to the Canadian economy.

These proposals have the government penalizing entrepreneurs who have become successful, and raising the ladder so that others have to overcome more significant burdens to achieve success. Recent and future entrepreneurs can now expect tax rates of over 70% on passive income. The modern entrepreneur is mobile, especially at a time when fewer people than ever can afford to purchase real estate. Why should they choose Canada as a place to grow a business, if business success is demonized as cheating instead of lionized as an example to follow?

The government's communications have created a threatening environment of uncertainty. As such, many businesses are actively exploring other jurisdictions. My network has shared with me that billions of dollars of capital has fled the country or never reached it. Investors and business owners are rightfully concerned that their lifetime of hard work could be confiscated by this government with each new surprise announcement.

Grandfathering the passive income of successful corporations stacks the deck against young entrepreneurs, albeit at a competitive disadvantage to older corporations that are unable to grow as quickly due to a much higher tax burden. I don't believe in retroactive taxation, but the grandfathering of existing wealth is creating a two-tier investment tax system.

Consider a private company with 400 employees. The $50,000 income limit proposal is completely inadequate. If this company can only save around $1 million, in a downturn, the reserves could be eliminated overnight. What is the impact of not being able to cover payroll? Budgeting necessitates saving and growing capital for future contingencies, capital purchases, and other competitive measures. The federal government cannot decide the capital needs of a business.

The Department of Finance reported that there are $200 billion to $300 billion of passive investment in private corporations. How much capital is in public corporations and foreign-owned corporations operating in Canada? Why are public corporations paying a tax rate, averaging only 28%, but private corporations and their shareholders get wrung? If fairness is the prime objective, this tax gap on equivalent income directly hurts the credibility of the proposal.

To be clear, money inside a corporation is rarely dead, unless it's stuck in a mattress. It provides capital that other productive businesses can receive access to. Basic macroeconomics aside, money inside an RRSP, TFSA, pension plan, or non-registered account could also be called dead money. The distinction is nonsensical.

Capital within corporations provides direct support to the economy by purchasing government debt, public corporate debt and equity, and investment in other private companies and ventures. The rate of growth in corporately held passive investments allocates capital with reasonable efficiency. Government intervention can only distort this market. Canadian taxation of investment in private corporations already exceeds that of our top trading partners. This plan to increase taxes makes Canadians less competitive.

I cannot sufficiently emphasize that a cap of $50,000 will be a compliance nightmare, due to complexity, difficulty, and uncertainty. There isn't enough time for the details, but this message is coming from every tax expert I've spoken to across the country. There are ordinary situations in which compliance will be nearly impossible, or at best, create a huge economic cost.

It's unfair to apply the rules to larger businesses and their investments just because of their size. Changes in taxes change behaviours. The passive income proposals are changing behaviour to a level I have never seen and the behaviour change is largely to exit Canada.

Here are representative stories that I've been told. My top 10 clients asked me to do an impact analysis of removing themselves, their capital, and their business from Canada. I can't even estimate the direct and indirect job losses. We've had three high-tech software clients, who are all under the age of 35, already starting to sever their ties. Others have simply asked why they should bother investing at all. Foreign investors who told me that they were planning on investing big in Canada have completely changed their minds.

I am working with a foreign client who has shifted from investing $30 million in Canada to the U.S. Doctors are exploring options to work internationally and are rearranging their affairs. Two or three from our office alone have left. These are actual conversations with real people who create jobs in Canada and generate a significant amount of GDP.

I can assure you that these conversations are happening across Canada in huge numbers. At an event I attended last night, successful entrepreneurs asked me if I could assist with their exit planning from Canada. The government must appreciate the cause and effect.

A productive and efficient tax system must be more than fair, which is a subjective term. It should grow the economy, which allows governments to collect and spend some share of it.

I've seen nothing to demonstrate positive impacts on the economy. I think it is irresponsible that an economic study has not been completed. The federal government is asking millions of Canadians to trust its pliable definition of fairness as it casually creates economic harm.

I would estimate that hundreds of thousands of hours have been spent by some of the most productive members of our country responding to this legislation. This includes writing submissions, public articles, webinars, speeches, and more. How much of a hit do the proposals already have on our GDP? If the government wants to help businesses and investment communities and pinch the capital flight, I would recommend to end the uncertainty and completely withdraw the passive income proposals to restore business and investor confidence.

I could speak for hours about the passive income issues and show mathematical models demonstrating serious flaws in the proposal. I'm happy to continue the conversation.

Thank you. I'm available for any questions.

[The Chair, Liberal, Wayne Easter]

Thank you, Jay. We've heard a bit about that issue over the past couple of weeks.

We now have the Canadian Partnership for Women and Children's Health. Ms. Helen Scott and Ms. Julia Anderson, welcome.

[Helen Scott, Executive Director, Canadian Partnership for Women and Children's Health]

We're very delighted to be here and that we're not going to be talking about taxation today. I am pleased that we're among the last of your speakers, because the issue we're bringing to the table is critically important, so I'm delighted to have your attention.

The Canadian Partnership for Women and Children's Health is a network of Canadian non-governmental organizations, academic institutions, health professional associations, researchers, doctors, nurses, and midwives from coast to coast across Canada, who work together to improve the health and lives of women and children in the world's poorest countries. Our colleagues are working in over 1,000 regions around the world.

Our partnership is focused on getting the most out of every dollar invested in global health, through efficiency and collaboration. We know that healthy women and children are foundational to building healthier and more productive economies, and our research shows us that Canadians care greatly, as I know all of you do around this table.

Budget 2018 is the time for Canada to ensure that empowered women and girls can take full advantage of economic opportunities and decisions critical to their health, daily lives, and livelihood. This vision is reflected in Canada's new feminist international assistance policy and in the universal sustainable development goals.

To meet this vision, we have two recommendations for budget 2018. First, we strongly recommend that Canada meet its international commitment and do its fair share to build a prosperous and peaceful world by committing to a timetable of at least a 12% annual increase to our international assistance envelope, starting in 2018.

We're proud that Canada's development assistance is reducing global poverty and making the world a safer place while also advancing Canada's security, prosperity, and values at home and abroad. Opportunities and productivity for Canadians are directly linked to inclusive and stable global growth that works for everyone. In a global economy, that means greater prosperity for Canadians by strengthening our international market share.

Research indicates that countries receiving development assistance import more Canadian goods than they would without aid, and although it is absolutely not the purpose of international aid, this is a positive by-product. In fact, $1 in aid can contribute to $1.19 in exported goods.

The Government of Canada has stated that it will restore and renew Canada's international assistance and re-engage globally. Since Canada is at its lowest official development assistance level in decades, responsible increases are urgently needed to ensure continued Canadian global leadership.

Second, we recommend that Canada affirm and expand its current commitments to women and children's health. This is the smartest investment with the greatest dividend. Since 1990—and I want you to really listen to this—rates of maternal and child death have been cut in half around the world, and that has been with great thanks to Canadian leadership and investment. It is the first time in history that rates have been cut in half, and Canadians have had a big role in this.

At current funding levels, we are at risk of losing these significant gains. The stakes are high. One woman dies around the world every two minutes from pregnancy and childbirth-related complications. Sixteen thousand children will die today from completely preventable causes, and we know exactly what to do. With basic, quality health care and modern contraception, maternal deaths will be decreased by 67% and newborn deaths by 77%.

The hardest hit by extreme poverty, the effects of climate change, and humanitarian crises are women and girls, and they must be at the heart of ending extreme poverty. The investment case is crystal clear. Investing in women and children's health yields at least a tenfold return through better educational attainments, workforce participation, and social contributions. Investments in early childhood and adolescent health and development yield at least $100 billion U.S. in demographic dividends.

Canada's history of contributing to a healthy and prosperous world by investing in the health and rights of the most vulnerable populations is at risk and can only be safeguarded with renewed investment now.

In closing, we urge you to strengthen Canada's international assistance in budget 2018 to reflect these important Canadian values so that together we can continue to ensure that every woman, every adolescent, and every child survives and thrives everywhere.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you, Helen.

Turning to the other side of the table, the Child Care Advocacy Association of Canada, Ms. Ballantyne, executive director.

[Morna Ballantyne, Executive Director, Child Care Advocacy Association of Canada]

Thank you very much, Mr. Chair.

I'm pleased to represent Canada's umbrella child care advocacy organization. Our mission, which we've been pursuing now for 35 years, is to work with all levels of government to make high-quality, affordable early learning and child care available to all children.

In answer to the two specific questions that your committee has asked us to address, we submit that the Canadian economy can be more productive and competitive through two measures: first, a significant increase in the child care federal spending already allocated in the previous federal budget; and second, an expanded and more robust federal child care policy framework.

We're pleased that the federal government has re-entered the arena of early learning and child care, but we're here to say that the work is far from done. The 2016 and 2017 federal budgets combined commit $7.5 billion for early learning and child care over 11 fiscal periods starting in 2017. Under the plan, the annual spending rises incrementally each year until it reaches just under $900 million in the final years.

To understand the deficiency of this commitment we ask you to put it in perspective. The accepted international benchmark for a country's annual spending on early learning and child care is a minimum of 1% of GDP, which several OECD countries exceed. Canada spends less than 0.3% of GDP, and it's been ranked as the lowest spender among 25 peer wealthy countries.

The multilateral child care agreement that the federal government signed with the provinces and announced in June 2017 was a significant accomplishment, but it leaves in place wide gaps in quality, in affordability, and in access. Those gaps will get wider, not narrower, over the 11 years. This is because it does not compel a move away from the current market-based patchwork approach to child care.

We provided this committee the economic arguments for child care spending on many previous occasions over the years, but there is yet more new research evidence to support what we have said. A research report recently released by the International Monetary Fund identified that increasing women's participation in the paid workforce is key, not just necessary but central, to speeding up labour productivity and growth in Canada. The report states that if just the current gap of seven percentage points between male and female labour force participation were eliminated, the level of real GDP could be about 4% higher today.

Every IMF researcher confirms that the full potential of the female labour force cannot be tapped in the absence of child care services. The IMF report proposes that the federal government spend $8 billion a year directed at reducing child care parent fees by an average of 40%. They say that even if just those women who are now staying at home and who have high educational attainment were to take advantage of lower fees, enter the workforce, and start paying taxes, not only would the economy significantly expand but the additional tax revenue would fully compensate for the cost of the program.

We stress, though, that child care spending and policy must not be driven by economic and productivity objectives alone. They must also be geared to the development and well-being of children, and to addressing women's economic security, to reducing poverty, and finally, to honouring truth and reconciliation.

Our 2018 budget proposal is far more modest than that of the IMF researchers, at least in monetary terms. We recommend a federal early learning and child care allocation in the 2018 budget of $1 billion, and importantly, with a requirement that provinces, territories, and indigenous communities use the funds to make fundamental child care system reforms. This allocation should be increased by an additional $1 billion in each subsequent fiscal period until Canada reaches the international benchmark of 1% of GDP in current dollars.

Second, we ask you to recognize that the work of developing an evidence-based federal child-care policy framework is not done. The federal government must go back to the table with the provinces and the territories, and this time must fully involve the child care stakeholders, including parents, including our own organization—we were not involved—to draw up a plan with timelines, goals, and meaningful accountability measures; a plan that recognizes child care as a public good and a human right, not a commodity; and one that has as its objective building a non-profit, inclusive child care system to provide high-quality child care for all who want it.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Morna.

Turning to the Food and Consumer Products of Canada, Michi Furuya Chang.

[Michi Furuya Chang, Vice-President, Scientific Affairs and Nutrition, Food and Consumer Products of Canada]

Food and Consumer Products of Canada would like to thank the committee for the opportunity to provide input into federal budget 2018.

FCPC is Canada's largest industry association representing the companies that manufacture and distribute the majority of food, beverage, and consumer goods found on store shelves, restaurants, and in people’s homes. Our membership is truly national, providing value-added jobs to urban and rural Canadians in more than 170 federal ridings in every region of the country.

Food processing is the largest employer in the manufacturing sector in Canada, providing 300,000 Canadians with high-quality jobs in over 6,000 manufacturing facilities. Canada’s food manufacturers employ more than the automotive and aerospace sectors combined.

According to the chair of the advisory council on economic growth, Mr. Dominic Barton, food is going to be one of the biggest businesses in the world. The council's report discusses the opportunity to grow and process more food in Canada. It points out that we only add value to 50% of what farmers grow in Canada and that this represents an enormous untapped opportunity.

We were very pleased that budget 2017 singled out agrifood as one of three key strategic industries in Canada with great potential for growth and job creation. Importantly, it identified export targets for the agrifood industry, amounting to at least $75 billion annually by 2025. In order to meet these export targets, we need to address barriers to growth currently facing food manufacturers in Canada.

We know that investment in R and D and capital in food processing facilities in Canada has not kept pace with our international competitors. A 2014 KPMG report showed that Canadian food manufacturers are lagging behind their counterparts in their adoption of advanced technology like automation and robotics. In order to be more productive, we require modern facilities with technology that allows us to make products in a smarter, greener, and more efficient manner.

Our first recommendation for budget 2018 is to provide additional support to our industry to encourage investment in advanced technologies and modern manufacturing facilities in Canada. Our industry is facing other significant barriers to growth coming from beyond our border. The Trump administration's focus on repatriating U.S. manufacturing and the ongoing NAFTA negotiations are putting additional pressure on Canadian manufacturers.

Our second recommendation, therefore, is to modernize NAFTA by building on its beneficial aspects and, at the very least, do no harm. Despite the uncertainties south of the border and declining investments, the most pressing challenges facing food manufacturers today are actually regulatory and entirely within the Canadian government's control. The cost of all of the federal government's food labelling changes alone is $1.8 billion. This is $1.8 billion that food manufacturers will not spend on creating jobs in Canada, not spend on operating plants, and not spend on innovating products.

The government's healthy eating strategy will change how we make our products, how we package our products, and how we market them. It's hard to imagine the government asking any other manufacturing sector in Canada to make these types of drastic changes all at once. To be clear, we support Health Canada's public health objectives and are committed to transparency and education for consumers. We need to ensure, however, that food labels do not unnecessarily confuse consumers and undermine public trust with no proven public health benefits.

Our 130-plus member companies are extremely concerned with Health Canada's alarming proposal to place harsh warning labels on the front of food packages. We are not alone. National farm groups are also opposed to the placement of stop signs on iconic Canadian products like cheese and maple syrup.

There are other ways to improve public health, like education, that take a more informative approach to how people eat, and our own research shows that consumers actually prefer an informative approach over an alarmist judgmental approach. In contrast, there is no evidence to suggest that Health Canada's proposals would improve public health outcomes.

Health Canada cancelled a successful consumer education program, on which we partnered with it, and in its place it proposed stop signs on food. We have grave concerns with Health Canada's process and approach. Following a meeting on September 18, we were alarmed that the department communicated broadly, in writing, that we had arrived at an agreement on criteria for front-of-pack labelling, which we had not. This was a clear misrepresentation of the record.

Health Canada's criteria is so narrow, in fact, that it would exclude exploring labelling options adopted by our major NAFTA and European trading partners. Given that the Canada-EU trade deal includes the first-ever stand-alone regulatory co-operation chapter in Canadian history, and that the government is pushing for inclusion of a similar chapter in NAFTA, it only makes sense for Canada to at least explore the merits and alignment opportunities with the food labels adopted in these countries.

Our third and final recommendation is for Health Canada to take the time to determine the best labelling approach for Canada through consumer research, meaningful consultation, and an openness to consider the labelling options adopted by our major trading partners. Also, to signal that Canada is a predictable economy in which to invest, Health Canada must be open to all stakeholders and stop excluding industry from critical conversations.

In conclusion, we support initiatives to grow and process more of our own food in Canada sustainably and competitively for the benefit of Canadians who rely on good jobs in the food manufacturing sector.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you, Michi.

Turning to March of Dimes Canada, we have Mr. Christianson and Ms. Legge.

[Steven Christianson, National Manager, Government Relations and Advocacy, March of Dimes Canada]

We're sitting in front of you not asking for money. In fact, we're not even going to recommend that you spend any more money. This is a social organization, and we're going to ask that you focus on achieving social goals through measures that you already have at your disposal: procurement.

Good afternoon, Mr. Chair and members of the standing committee's subcommittee, as you've pointed out, Mr. Chair. Thank you for your time and this opportunity to speak about accessibility in Canada.

My name is Steven Christianson. I'm the national manager of government relations and advocacy at March of Dimes Canada. I'm joined by my colleague Jackie Legge, who also focuses on issues of accessibility and inclusion.

Very quickly, March of Dimes Canada was established in 1951, responding to the polio epidemic in North America. We have evolved to become one of Canada's largest service providers and advocates for people with disabilities. We serve upwards of 60,000 Canadians with disabilities and their families, communities, and employers.

Our programs focus on employment, attendant care, vocational services through Veterans Affairs, financial supports for assistive devices, home and vehicle modification, and peer support for stroke survivors. We are also Canada's only organization of its kind to be granted consultative status to the Economic and Social Council of the United Nations.

We're here today to promote the idea that the Government of Canada, in all of its procurement of goods and services, should only spend public money on goods and services that are accessible. Put another way, we say that no public money should be spent on goods or services that perpetuate or create a barrier to the full inclusion of anyone with a disability and anyone whose mobility and inclusion in our economy and society depend on accessibility.

Accessibility legislation refers to laws that identify, remove, and prevent barriers to the full inclusion and participation of anyone with a disability. In Ontario, Canada's first jurisdiction to have a law, we have the Accessibility for Ontarians with Disabilities Act.

This is a law that includes and creates regulations by sector, with each regulation designed to identify, eliminate, and prevent barriers. Each sector is then broken down by its main actor; for example, small businesses, non-profit organizations, health care institutions, and educational institutions.

When companies and organizations comply with the law, the result is enhanced participation by people with disabilities. This could be greater employment, more access to retail goods and services, or being able to retrieve and fill out a form on a government website. The result is greater accessibility. This is highly simplistic, but it gives you a sense of it.

Manitoba is the second province to create such a law, the Accessibility for Manitobans Act, while Nova Scotia, the third in Canada, formalized its legislation last year. Almost every province either has accessibility legislation on its mandate paper or is at least discussing the efficacy of such a law.

Of course, many of you around this table know that the Government of Canada has been consulting nationwide on a law that we could include at the federal level. We expect the introduction of a national accessibility law sometime in 2018.

This is a trend that embraces legislation as a means of getting rid of barriers and achieving accessibility, but I want to emphasize very quickly that this trend is about more than just disability. The functional needs of seniors and Canada's aging population tend to be remarkably consistent with those of people with disabilities. When you combine the functional needs of someone aging with a disability and someone aging into a disability—remember that we tend to lose some functions the older we get—we have a very large population in Canada that needs accessibility.

Not all accessibility measures necessarily need an accessibility law, and procurement is one of those areas. Procurement policies and regulations can work with accessibility legislation but need not wait for a new law. Today in the United States, for example, if a company wants to sell to or receive a contract from the federal government, the goods and services provided by that company must be accessible.

Experience shows that the more standards that exist for accessible purchasing, the greater the incentive for competition, which leads to greater accessibility. Suppliers see a very lucrative market and want those very lucrative contracts, whether they sell computers, mobile devices, or web services, thereby competing with each other and producing ever greater innovation in accessibility in their products.

As we see the national trends towards individual provincial accessibility laws and the current effort towards creating a national accessibility act, one rightly asks what appropriate role the federal government can have.

That role could be to not only harmonize provincial accessibility laws but to develop standards and measures of accessibility through the federal sphere of influence that you already have: procurement. Many of Canada's trading partners already successfully use procurement policy to advance inclusion. The United States, the European Union, Australia, Israel, and New Zealand are just a few examples of where procurement policy that demands accessibility is being used not only to advance inclusion for people with disabilities and seniors but also to help stimulate greater product innovation and employment.

We acknowledge that the Government of Canada has hosted some preliminary round tables on accessible and social procurement, and these were great first steps, but we strongly recommend the creation of an expert working group to develop doable steps and measures that essentially capture this principle. If you want to sell to the Government of Canada, you must ensure accessibility. We think this is an idea whose time is long overdue.

Let's at least get some people together to find out what works, what could work better, and how to put these ideas into action without delay. Buy accessible. We at March of Dimes Canada are always available to help and contribute our expertise towards such an initiative.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Steven.

We'll turn now to No Fly List Kids, with Mr. Ahmed and Ms. Cajee.

[Khadija Cajee, No Fly List Kids]

Thank you for having us here today.

We are a part of the organization called the No Fly List Kids. We're a group of Canadians whose names are flagged on Canada's no-fly list, otherwise known as the passenger protect program.

The attention that this antiquated system has received is international to the point where it was even mentioned by Conan O'Brien on the late show back in February of 2016. This list includes people of all ages and from a variety of diverse backgrounds. In fact, Senator David Smith and former defence minister Bill Graham were both falsely flagged on the no-fly list at one point.

My own son Adam who is now eight and who's here with us, has been flagged on this list since he was a newborn. We first flew with him when he was six weeks old. He must be visually identified each time we travel by air. Once we were delayed in Mexico coming back into Canada on a Canadian airline when our passports were confiscated for an hour with no explanation.

Having a child falsely flagged routinely results in travel delays, inability to check in online, increased scrutiny by airline and security personnel, and stigmatization and marginalization, queuing up the next constitutional crisis. False positives of the no-fly also raise serious privacy implications as well as potentially affecting the charter-protected mobility rights of Canadians under section 6.

Some of our children have been denied initial boarding and delayed to the point that they have missed flights internationally. All the no-fly list kids avoid travel due to the potential for stigmatization. We have some teenagers on the list. They're with us here today as well. All families find that the security screenings become increasingly invasive as the children get older.

Additionally, though this list contains names of people from all backgrounds, it does skew toward Muslim- or Arab-sounding names, thus questioning the violation of their rights under section 15 of the charter, which protects and promotes equality under the law.

False positives also hurt business travel. Stephen Evans, who is also with us here today, was the chief technology officer of Kijiji, and he has also held senior positions at MSN, Canoe, and the Toronto Star. He has written a piece in The Globe and Mail about his experiences being on the no-fly list. He is one of several executives who have shared their stories with us.

With bad data like this being shared with foreign nations, and due to the nature of bilateral information-sharing programs, Canadians also run the risk of being falsely flagged in foreign jurisdictions and by agencies that may not uphold similar values of human rights and life as we do here in Canada. Innocent people risk being associated with acts they did not commit, resulting in possible detention, false imprisonment, and torture, as happened in the past with Maher Arar. His case is a classic example of bad data being shared with, and abused by, a foreign country. Mr. Arar will have the stigma and trauma of this experience with him for the rest of his life, and this gross oversight cost the Canadian taxpayer $10 million. We cannot risk having this happen again to one of our children as they grow up.

Since 2008, Canadian domestic carriers are not required to screen passengers against the U.S. no-fly list on domestic flights, even if they enter U.S. airspace, yet Air Canada in particular is known to continually ignore this directive. Authority needs to be removed from the hands of the airlines to make decisions and screen at their discretion.

My eight-year-old son has been designated high profile since infancy. I do not want him living with this cloud of suspicion lingering over him for the rest of his life. He is a child now. I will be around to protect and advocate for him, but this won't always be the case as he grows older.

In 2009 the United States shifted this responsibility from airline operators to the TSA and has since seen a significant decrease in the number of redress requests. This is important because approximately 98% of the applications to the Department of Homeland Security's traveller redress inquiry program are deemed to be false positives. Most of the children and adults we're speaking on behalf of here today have applied to the DHS TRIP in the United States, and they have been cleared. Yet they continue to face issues while travelling domestically in Canada or internationally on Canadian airlines.

The passenger protect program is airline-designed and contains names only. It does not contain any other identifiable data to distinguish between two people with the same name.

In Canada currently, if a person finds themselves falsely flagged on this list, no mechanism is available to them to get themselves removed and separately identified. These systems exist to law enforcement agencies country-wide: police forces, CBSA, and CSIS. They even exist in school boards.

In November 2016, in The Globe and Mail, Mr. Robert Fife reported that the federal government had approved a redress system in the amount of $78 million annually until 2022, and $12 million every year thereafter to manage the data system changes. However, for reasons unknown to us, this wasn't actually approved in the 2017 budget.

In conversations with senior leadership at major tech companies, we have been told that the daily consulting rate at Accenture, for example, is $1,800 a day. At 200 working days per year, that would mean the $78 million cost would take 194 man-years to build this redress system. The cost estimates are curiously high, and there has been no transparent process used through an independent RFP to get independent estimates on the cost. Even conservative estimates find this number very hard to understand.

Consequently, in the 2018 federal budget, we must have full funding for the build and implementation of a redress system for the passenger protect program. A program like this will result in fewer false flags, and improvements in the efficiency and security of our human rights system, as well as air travel, and our entire national security regime.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you, Ms. Cajee, and also thank you to those who have found themselves on the no-fly list for coming here today.

From ParticipAction, Mr. Antunes and Ms. Knox.

[Elio Antunes, President and Chief Executive Officer, ParticipACTION]

Thank you.

People are often shocked to learn that only 18% of adults and 8% of children and youth get enough physical activity to be healthy. Unfortunately, we pay a hefty price tag for our sedentary population. The estimated health care costs of physical inactivity in Canada total $6.8 billion per year. Caring for people with chronic diseases like diabetes and heart disease costs $2.4 billion, while the remaining $4.5 billion is due to the loss of productivity from poor health, resulting in the huge cost of staff turnover, short-term disability costs, and absenteeism.

Unfortunately, getting the population to move more is not as easy as just telling people to do it. What most decision-makers don't truly understand is that physical inactivity is a very difficult thing to fix. Getting active is something not everyone has time do to, can afford, or is even comfortable doing, even if they want to. It is simple in theory, but in reality it's very difficult to get people to change their behaviour. To better understand what's required, it helps to examine the smoking cessation situation.

Few countries have been as successful as Canada in lowering smoking rates and shifting public attitudes about tobacco. To make this happen, governments have invested over $2 billion in a variety of coordinated efforts from smoking bans to tax policies and public education. Over time, multiple efforts have created supportive environments that help people quit, and even made it socially unacceptable to smoke. This is the kind of large scale, multi-faceted, long-term approach we need to shift Canadians' behaviours to be more active and less sedentary, and government has a critical role to play.

We can't just build new recreation centres, or tell people to simply walk their kids to school. We do need to build new recreation centres, make sidewalks safer to walk and bike on, improve the duration and quality of physical education in schools, have active workplace policies, and create public education campaigns to motivate people to make the active healthy choice.

Being active is not a pastime, a frill, or a nice-to-have we will get to when the economy gets better. Regular physical activity is a fundamental aspect of a productive and high-quality life. Physical activity improves mental health by reducing anxiety, depression, and isolation. Physical activity improves test scores in math and reading. It promotes concentration and keeps your thinking sharp as you age. Physical activity lowers the risk of hip fractures in older adults. Physical activity also improves sleep, which is especially important for children's developing brains.

This is not about creating the next Olympians, but about being competitive in a global market, producing leaders who can stay on task and be innovative, and raising children who are less anxious and more resilient.

We already do many great things in Canada. Permanent bike lanes across a major city artery was just approved in Toronto, for example, but all told, the efforts across Canada are fragmented and inconsistent.

We need an approach that is comprehensive, coordinated, systematic, and ties all the efforts together. ParticipAction is a prominent Canadian organization that ties cross-sectoral physical activity efforts together in a responsible, measurable way.

Even in light of our stellar reputation and long-standing leadership in Canada, ParticipAction is still faced with federal funding that is short-term, unpredictable, and unfortunately rarely guaranteed. Over the last five years, our federal funding has ranged from $2.9 million to $7.8 million per year. For 2018, our confirmed funding is just $305,000.

ParticipAction is only one piece of the solution. Physical activity needs the same kind of commitment as the $1 billion-plus spent on smoking, to support many partners working together on many approaches at every level to be successful. The first step, however, is to provide ParticipAction with guaranteed long-term funding of $10 million per year for five years, to align, support, and lead efforts in a coordinated, persistent way.

ParticipAction's mighty collective effort to create behaviour change, which we're calling a movement, will include a variety of components that reinforce each other to: digitally track and reward physical activity at group and individual levels; educate the public about the latest exercise science; shift attitudes and perceptions; mobilize communities; and ultimately influence behaviour.

With this five-year movement, ParticipAction will connect its 5,000 local partner organizations, the provinces and territories, national, regional, and local NGOs, to get us all working together. This investment won't solve the inactivity crisis alone, but it is a key part of a large-scale successful effort.

There is a reason that Mark Zuckerberg, Elon Musk, Julie Payette, and even our Prime Minister, some of the busiest, most accomplished people in the world, make time for regular physical activity. They are not just staying in shape; they're staying sharp. They know it keeps them competitive and productive.

The nine in 10 kids and eight in 10 adults in Canada who are not active enough also deserve the same. All Canadians deserve to have the opportunity, the skills, and the motivation to be active every day, and an investment in ParticipAction is an investment in them. An active Canada is truly a stronger, more productive Canada.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you, Elio.

We will have to go to five-minute rounds, and Mr. Sorbara, you're the first up.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Mr. Chair.

Thank you for all your presentations today. This is the last panel of the two weeks of travel we've been doing.

I need to get right down to it with No Fly List Kids.

Sulemaan, we've had a number of conversations over the last few months. I appreciate you folks coming here, and I really wish you didn't have to come here. I usually like to meet my stakeholders, and I'm happy to see them, but I think that in this instance it's disappointing to have folks having to come to the finance committee to let us know what's going on, especially with regard to your eight-year-old son, Adam.

I do know from conversations that there are many of us in support of fixing the system. I also know that in Bill C-59, our national security legislation, there have been steps put in place to get us on that journey. This is a system that was created and has been a long time coming. It has created some issues.

How disruptive has this been to your family? I want you to know that there are many MPs and other people working to help fix the situation. I do believe that Bill C-59 is one step towards that.

[Sulemaan Ahmed, No Fly List Kids]

We thank you for the opportunity to be here today, Mr. Sorbara. I would like to thank a few members of the committee including the Honourable Wayne Easter, Kamal Khera, yourself, and others who have already written letters of support. As of today, we have 168 MPs in the House of Commons from all political parties—the Greens, the NDP, the Conservatives, the Bloc Québécois, and the Liberals—who have supported this in writing

Our view is that Bill C-59 is legislation. What we require is funding immediately, and we require it for a technical solution. The United States has had the solution for a decade. As a nation, we do not need to wait another two years for funding or legislation to pass in the House, then another two years for a budget, and yet another two years, because as David Herle, the senior adviser to Minister Goodale has told us, once the funding is provided, it will require two years at least to make a build. That's six years, sir.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you for that.

My understanding is that with Bill C-59, there is a system for recourse. I just want to make sure that if an application is made, the minister can then respond to that application when a person is placed on a no-fly list, specifically children.

[Sulemaan Ahmed]

We were advised that we would be told if our child was on the list or not through Bill C-59, but it does not mean that they will be removed. Therefore, it does not tell us anything that we don't know already.