Finance Committee on Sept. 28th, 2016

[The Chair, Liberal, Wayne Easter]

We'll call the meeting to order. This afternoon we're continuing our pre-budget consultations in advance of the 2017 budget. We have seven witnesses before us.

Before we start, we have a vote tonight at six o'clock, which means that we'll have to stop at 5:45. I believe there are four votes. It doesn't seem right to ask people to sit around for 45 minutes or an hour to wait for us. What I suggest we do is tighten up this panel until 4:45 and the next panel from 4:45 to 5:45. We'll limit questions to four minutes. We'll limit the presentations and hold them tight to five minutes. I think we can get everybody through without creating undue difficulties. I'm sorry we have to do that, but this is the way this place works from time to time.

To get everybody through as fast as we can and hear all the good information they have for us on growing the economy and on the budget, we'll start with the Canadian Chamber of Commerce, Mr. Brakel.

[Hendrik Brakel, Senior Director, Economic, Financial and Tax Policy, Canadian Chamber of Commerce]

Thank you so much, Mr. Chair, and honourable members.

It's a pleasure to be here with you today.

The year 2016 has been tough for the economy so far. Zeroing in on exports, if you take the first seven months of this year compared to the first seven months of last year, exports have fallen 3%. We think that by the end of this year we'll get back to about zero growth in exports, but that would be our second consecutive year of zero growth in exports, so we're a little alarmed. Canada's GDP overall will grow about 1% this year. Hopefully, we'll get it up to 2%. That's why the Canadian Chamber of Commerce continues to bang on about competitiveness and how to improve Canadian competitiveness.

There are three main messages. You have a written submission, which is more detailed, but there are three key messages.

First, on infrastructure, we want to emphasize the trade-enabling infrastructure with the export corridors. That's the kind of stuff that will improve Canadian productivity and help us to generate wealth so that we can pay for all of those other things that are so important.

The second point is on innovation. We think it's absolutely critical to have Canadian competitiveness. The Canadian economy is not going to succeed by being low cost. We have to be more innovative and more successful, and that's why we're recommending an innovation box regime. If you produce a patent here in Canada, the revenues deriving from that product would be taxed at a much lower rate.

We would love to improve the venture capital environment in Canada with an investment tax credit similar to what they have in B.C. Maybe we could have more government investment in venture capital along the lines of the VCAP.

Finally, skills are absolutely the most important competitive advantage we have in Canada. We would appreciate any improvements to the express entry program to make it move more quickly and to get employers the skills they need. We welcome the findings of the HUMA report last week about easing temporary foreign workers, because those highly skilled people and those highly skilled jobs make Canadian business more competitive.

I'll stop there. Those are the three things we want on infrastructure, on innovation, and on skills.

[The Chair, Liberal, Wayne Easter]

Thank you very much for those points and for your brief.

We will go now to the Canadian Home Builders' Association, Kevin Lee, CEO, and Bob Finnigan, president.

Bob.

[Bob Finnigan, President, Canadian Home Builders' Association]

Good afternoon. I am the president of the association, and a builder and developer from Toronto. I'll lead off and then pass the mic over to Kevin.

Our industry has been a major source of stability for Canada's economy over the last decade, and this needs to continue. Residential construction supported over one million jobs, paid $58 billion in wages, and generated over $128 billion in economic activity in 2015, including over $41 billion in government revenues.

Home building and renovation is a vital part of every community, large and small, and coast to coast. An effective housing policy is key to supporting Canadian businesses and communities, and to achieving inclusive economic growth. To do this, we need to address a number of challenges. We must improve housing affordability for those in the middle class and those who aspire to join it. We must reduce greenhouse gas emissions through energy retrofits, while curbing the underground economy. We must encourage and support those pursuing skilled jobs in our industry and the R and D that will bring innovation and increase productivity. We must ensure that federal infrastructure and transit investment support housing affordability and the development of complete and inclusive communities.

Today I want to focus on the most pressing issue facing our industry, facing Canadians, and facing the government, and that's housing affordability. I see the real impact of this every day in my business, as young families realize that the modest home they dream of owning is simply beyond their financial reach. Hard-working Canadians, especially our young people, must have the same opportunity to fulfill their dreams of home ownership as previous generations. While our homes provide shelter and connect us with our communities, they also account for more than $4 trillion of Canadian equity, and $3 trillion of that is owned outright.

CHB is pleased that the Minister of Finance, and the Minister of Families, Children and Social Development are looking closely at housing markets to determine the true causes of house price escalation in our largest cities. Understanding the complexities involved is essential for smart and effective policy that avoids destabilizing markets.

It is critical to recognize that, in the face of growing demand for housing, many current government policies limit supply and drive up prices in other ways. It is encouraging that the federal ministers are seeking the collaboration and involvement of municipal and provincial governments, and such three-way collaboration is the only route to real solutions in the country.

Kevin will now outline the specific actions.

[Kevin Lee, Chief Executive Officer, Canadian Home Builders' Association]

In terms of those specific actions, the federal government can take immediate steps to improve affordability and contribute to the prosperity of middle-class Canadians.

First, Canadians must get the maximum benefit from infrastructure and transit investment. To this end, the federal government should encourage its government partners to mandate appropriate densities along transit corridors and nodes. The federal government needs to offer land writedowns for family-oriented housing and mixed-income/mixed-use complete communities.

Second, to assist first-time homebuyers, federal housing policy should support both stability for housing markets and access to home ownership. Macroprudential rules that guard against financial system risks must not lock out well-qualified first-time homebuyers. Specific measures include support via the home buyers' plan, the continued availability of 5% down payment mortgages, and provision of 30-year amortization periods for well-qualified first-time homebuyers for homes priced under $500,000. Shared appreciation mortgages are another tool that should be explored to increase access to home ownership. Supporting first-time homebuyers is the key to healthy housing markets and a growing, inclusive economy.

Third, market rental housing is an important part of the housing spectrum. Modest revisions to how GST is applied would remove barriers to new market rental production. GST on new purpose-built rental developments is based on final value, as if they were for-sale condominiums, but should be based on actual project costs plus profit.

Also, the current arbitrary application of GST on secondary suites discriminates between attached and detached units and favours renters who have a family tied to the owner. This doesn't make sense. Secondary suites are an innovative form of affordable infill rental housing favoured by many municipalities, and they shouldn't be stymied by a federal tax policy glitch.

My final comment concerns the need for a renewed home energy retrofit program to benefit the environment, improve existing homes, and help Canadians save money.

In terms of climate change, housing is a Canadian success story. We have 38% more houses in Canada today than we did in 1990. Even with this, total residential emissions are down 11%. This has not come through codes, but from ongoing innovation and voluntary improvement supported by industry and government R and D collaboration.

Moving forward, we will continue to build homes that are even more efficient, but more stringent codes that reduce affordability are not the answer because new housing is not the problem. The largest GHG opportunity lies in retrofitting existing homes and a dollar invested in an existing home will yield four to seven times more GHG reductions than the same level of investment in a new home. A permanent refundable energy retrofit tax credit, using the EnerGuide rating system will most effectively address the government's climate change goals related to housing. By requiring homeowners to get receipts to qualify, our research suggests reduced underground economy activity can make such a program cost-neutral to government.

I'll leave it there. Bob and I will be happy to answer questions about these or other recommendations from our more detailed pre-budget submission.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

Mr. Alexander, with the Conference Board of Canada, welcome. The floor is yours.

[Craig Alexander, Senior Vice-President and Chief Economist, The Conference Board of Canada]

Thank you for the opportunity to participate in your consultations.

After contracting in the second quarter, Canadian economic growth is reviving; however, the pace of economic growth will remain modest, and it will take considerable time for the slack in the economy to be absorbed. This reflects the fact that Canada has a small open economy. It is importing the weakness from the global economy through the channel of soft global demand and sustained lower commodity prices. While the Canadian economy weathers the cyclical forces, there are structural factors weighing down the trend rate of economic growth. The pace of growth in the long run is determined by either having more workers or using workers more productively. Canada's population is aging. The labour force is slowing. At the same time, labour productivity is weak.

If Canada stays on its current track, the potential pace of annual growth in the economy will drop to well below 2% in the coming decade. This has far-reaching implications. It means Canadians will be frustrated by the fact that their standard of living is rising extremely slowly. It means businesses will be frustrated by the limited domestic growth opportunities. For governments, it means that national income growth will only be about 3.5% per annum. This will constrain tax revenue growth and limit fiscal capacity for economic and social imperatives.

At the same time, the Canadian economy is being shaped by powerful forces of globalization and technical change that are fundamentally altering demand for workers in the labour market. Specifically, job creation for high-skilled workers will be strong, while employment opportunities for middle- and low-skilled workers are likely to be poor.

What can policy-makers do to help foster stronger economic growth? Well, monetary policy is extremely and appropriately accommodative, but low interest rates will not be sufficient to propel robust economic growth. Further monetary stimulus through exceptional policies like quantitative easing or negative interest rates carry significant risk, and in my opinion should be avoided.

If monetary policy is stretched to the limit, this naturally leads the question, can fiscal policy play a role in providing stimulus to the economy?

Targeted timely and temporary fiscal measures such as investment in key infrastructure have the potential to lift productivity and economic activity. At this point in time there is little risk of crowding out private investment, which remains weak. The cost of debt financing is cheap. It should also be highlighted that investment in public infrastructure can not only boost economic activity directly, but it can also act as a catalyst for private sector investment. The key is to invest in the right projects that will have the greatest economic payoff over the long haul.

I also feel fiscal policy can be used to address some of the social and economic implications of the slow growth and changing job environment. For example, displaced and temporary workers need better support. Canada needs to build the skilled workforce of the future. This means greater investment in education, including early childhood education and adult skills training.

Canada has large pools of underutilized labour, including aboriginals, immigrants, and youths. While there is slack in the labour market, it is remarkable that close to a quarter of employers report having shortages of high-skilled labour. These shortages need to be addressed with immigration, education, and skills policy. Older workers should also be incented to stay attached to the labour market for longer. Weak private sector investment has become a serial disappointment that is limiting capital per worker and may weaken productivity growth. The latest Conference Board business confidence survey showed that one-third of businesses felt that government policy was hampering investment. Reducing the regulatory burden and improving regulatory approval times for new investments could be advantageous.

One measure that might improve business confidence is clear guidance on how and when the federal government will return its finances to balance. Without such information, Canadian businesses will worry about future tax increases. I would stress that Canada needs to maintain its currently competitive corporate tax rates. Canada is a trading nation, and it needs to lean against the rising protectionist sentiment that we see abroad. Policies to facilitate and expand trade are obviously critical.

The bottom line is that there is scope for fiscal policy to improve Canada's economic and productivity performance. I believe many of these themes were present in the last budget and align well with the comments I made. Key investments in infrastructure and people can make a difference, but I also would stress that you have to keep your expectations realistic.

Much of the economic weakness is being imported from abroad, and domestic policy cannot change that. Stimulative monetary and fiscal policy can help support growth by adding a few tenths of a percentage point to the national growth rate, but I would stress that in the current environment even a few tenths of a point matter. Running temporary deficits at a time when the economy is struggling and adjusting to lower commodity prices is acceptable, but sound policy also includes returning to a fiscal balance over a reasonable time frame.

With respect to budget 2017, I would like to suggest that the debt-to-GDP ratio is a poor fiscal anchor. While the government may have some control on the numerator, it has very little control on the denominator.

I've covered a lot of ground in a short period of time. I look forward to your questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

Turning to Canada's Building Trades Union, we have Mr. Blakely.

[Robert Blakely, Canadian Operating Officer, Canada's Building Trades Unions]

Thank you very much.

Chris Smillie from my office is here to make sure that I don't undo any of his good work. I'm getting graded for this.

I'd like to thank the committee. The last time we appeared, you made a recommendation to support worker mobility from place to place. I would suggest, with respect, that what was vital before is more vital now.

As well, you recommended $85 million for skills training for some of the stuff we do in the building trades. Thank you very much for that. We won't let you down.

The building trades represents 500,000 men and women who make their living in the construction business. It's half of the construction workforce. We're a group that works in politics but isn't partisan. We hopefully are here to represent ideas and not things.

We build everything, from the greatest plants being built anywhere in the world through to your garden shed. Our workforce is in a pool. That is because every construction job comes to an end. Our work is transitory for workers and it's transitory for employers. When the work ends, people move on to another job.

One of our issues is that workers and workplaces aren't always co-located. In Alberta and Saskatchewan, over the course of the last few years, we've seen a significant number of fly-in, fly-out jobs. They're still there; there are a lot fewer of them. Where some of the work is going to be won't necessarily be in those locations.

The infrastructure spend that the Government of Canada recommended in the last budget will be the construction marketplace in a number of places. You need to make sure that we get a workforce to build the bridge over the Saint John River or to build the hospital in Brampton. We need to be able to move that workforce.

You have invested in skills training. The last Government of Canada invested in skills training. Skills training is something we can deliver. Tie skills training to the infrastructure spend.

The fact is that we did a bunch of research in the days of the Construction Sector Council. Not having the money to travel is a major factor in people not moving towards the work. The current relocation tax doesn't work for construction workers, and no one is going to uproot their family to take a two-month job at the other end of the country. It has worked, and it is useful, that the communities across the country have been able to stay in existence with people who work away.

We're here asking for help. I said before that now is more important than any other time. We do get some help from owners occasionally moving across the country. However, the truth is that the people we represent, the welder who doesn't get to deduct anything for travelling...if he were the welding rod salesman selling the product that he's burning, he would be able to write it off. The person doing the work can't.

We don't care how we get there, whether it's an EI pilot—and maybe that is the easiest way—or whether it's a tax deduction or a tax credit, we will ease unemployment levels in hard-hit regions and support local communities and take skilled people to where the work is.

You heard the chamber talk about skills. You heard the Conference Board talk about skills. To be a dentist, you need a Doctor of Dental Surgery. To be a lawyer, you need an LL.B. To be an apprentice, you need a J-O-B. If you don't have a job, you're not an apprentice. We need to find a way to make sure that the young people coming into our business have a place to learn on the job. No job, no apprenticeship.

According to the studies done by BuildForce Canada, we are going to lose 25% of the construction industry, and somewhere in the range of 35% of superintendents and supervisors, as the baby boom generation fools people and actually retires. That's over the next five to six years.

In an industry that's highly competitive, and in fact combative, on the idea of support for a mobility program, the National Construction Labour Relations Alliance, Progressive Contractors, the Christian Labour Association, and the Canadian Construction Association will all support the idea of mobility. Mobility equals jobs. Jobs equals paying taxes, not being on pogey.

On a program to defer the cost of travel, a pilot program—however we get there—the payback according to the professionals we've consulted is five to one. The Government of Canada does five times better than having someone on pogey at home. We would support any monitoring or compliance programs that might be developed.

Those are my submissions.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

With the Canadian Taxpayers Federation, Mr. Wudrick, welcome.

[Aaron Wudrick, Federal Director, Canadian Taxpayers Federation]

Good afternoon.

Thank you, Mr. Chair. Thank you for the invitation to appear before the committee today.

My name is Aaron Wudrick, and I'm the federal director of the Canadian Taxpayers Federation. For those of you who aren't familiar with it, the CTF is a federally incorporated, not-for-profit citizen's group that has over 429,000 supporters nationwide.

The CTF is dedicated to three main principles, namely, lower taxes, less waste and accountable government.

We were pleased to make a set of recommendations before this committee in February prior to the last federal budget. For the sake of the record, I will recount those recommendations briefly. We recommend government balance the budget, create a legislated debt reduction schedule or budget line item, end the double taxation of gasoline, reduce the political party donation tax credit, resist demands for any new sugar or fat taxes, pass truth in budgeting legislation, undertake a core review of all government spending, put an end to corporate welfare, control public sector pay and benefits, and finally, and it's a small one, overhaul the employment insurance system. Those are just a few small items to chew on.

Turning to this year's budget, the questions put to witnesses on how to best move Canada forward by maximizing economic growth is, of course, a proper and commendable goal for any government to have. The debate is about just how well placed governments are to steer that growth. This government, like its predecessor, is fond of taking an activist approach of selecting preferred companies or industries, and then subsidizing them with tax dollars. I cannot stress enough that it does not matter whether it is General Motors, or Bombardier, or a small green technology startup, this approach is fraught with perverse incentives and unintended consequences. I understand that the intent of such subsidies is to help businesses, and more specifically to protect private sector jobs, but an unfortunate hard reality of private sector jobs is that they either exist because they make economic sense, or they no longer exist.

Throwing tax dollars at a company to save private sector jobs means they cease to be private sector jobs. There is no getting around this. This is not to say that government should stand idly by when people are thrown out of work. There is a role for governments to assist people who are affected by economic change, but helping the people affected is not the same as simply throwing public money at companies that are no longer sustainable in the marketplace.

The finance minister has asked Canadians to think big. I should point out this need not always mean spend more. I appreciate that the government does not share the Taxpayers Federation's view on balanced budgets, but the government must still be mindful of the fact it is already running a deficit three times the size it promised during the election. It has also abandoned its timeline to return to balanced budgets, as well as its commitment to reduce the debt-to-GDP ratio.

Earlier this week, the minister also seemed to be foreshadowing that the forthcoming fall economic update will not bring good news. I would caution the government against drawing the conclusion that even more stimulus spending is the solution, and remind him of Einstein's wise adage that the definition of insanity is doing the same thing over and over again and expecting different results.

Perhaps the single biggest way the federal government can create new opportunities for Canadians is to expand access to new markets and remove the barriers to entry that exist in many industries. Some protected industries may not like this and will no doubt protest, but the government's responsibility must be to the broader economic well-being of all Canadians and not just industry incumbents that are afraid of healthy market competition. In particular, trade agreements should include provisions that seek to reduce or eliminate harmful subsidies that end up costing taxpayers of all countries, and yet ultimately only serve to cancel each other out.

In closing, we would like to reiterate our basic message to the government that it is important to balance the understandable desire to help with the recognition of the limits of government intervention and the finite resources at your disposal.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

With the Canadian Nurses Association, Ms. Pullen.

[Dr. Carolyn Pullen, Director, Policy, Advocacy and Strategy, Canadian Nurses Association]

Thank you for this invitation to present on behalf of the Canadian Nurses Association, which represents 139,000 registered nurses and nurse practitioners in Canada.

Like Mr. Blakely, I'd like to thank the committee for previous recommendations related to home care and to an accountability framework around the proposed new health accord.

Our recommendations for budget 2017 align with the federal government's priorities related to a multi-year health accord and to home care. Today I offer four recommendations to address equitable and improved access to high quality integrated health services for all Canadians.

First, we are calling for the new health accord or related provincial-territorial bilateral agreements to include a robust accountability framework or reporting system. Such a framework, which this committee supported in 2016, will benefit patients and taxpayers by showing causal relationships among inputs, activities, and population health outcomes. The framework would include reporting on health and social outcome measures derived from existing national data sources.

Provincial and territorial governments would report to the federal Minister of Health annually. Plain-language reports could be made available to the public via Health Canada's website and social media platforms.

Our second recommendation builds on the proposed investment of $3 billion in home care. Such an investment is urgently needed as there is persistent inequality in access to high-quality, publicly funded home care across Canada, while the demand for home care continues to increase.

It is well known that home care is the preferred and cost-effective option for patients and families, costing a fraction of what hospital care costs. In 2013, over 1.8 million Canadians received publicly funded home care services. The majority of these services, over 70%, were provided to seniors over the age of 65.

We recommend home care funding be allocated on a needs-based formula that accounts for demographics and population health. This approach will address the inequalities in regions such as Atlantic Canada, where currently one in five Atlantic Canadians are senior citizens. Economists at the Savoie institute at the University of Moncton have studied the aging crisis specifically in Atlantic Canada, where they estimate the number of senior citizens will be one in three within the next 20 years. They predict the rising number of seniors, many with complex care needs, will lead to economic consequences for regions that already allocate upwards of 40% of their budgets to health care.

Next month, CNA, along with our partners in the Canadian Home Care Association and The College of Family Physicians of Canada, will release a national report outlining specific actions for the federal government that build on those I am describing today. These actions, focusing on scaling and spreading promising practices, on recognizing caregivers in a variety of manners, and advanced care planning, were generated through extensive pan-Canadian consultations.

Third, CNA calls for a national caregiver strategy to provide Canadians with flexible respite care and workplace options that afford job protection for working citizens. More than 8.1 million Canadians perform caregiving duties. Over six million concurrently balance this role with employment. The cost to replace unpaid caregivers with paid care providers would exceed $25 billion annually. In 2017-18 the federal government can take a first step in implementing a caregiver strategy by engaging with employer stakeholders to develop a federal tax measure to protect workers' incomes while providing supports and guarantees for workplace leave protection.

Our final recommendation calls for the creation of a commission for integrated health care. The commission, which would have a 10-year mandate, would support the federal government's various interconnected, health-related initiatives ranging from home care, palliative care, seniors' care, indigenous health, mental health, and others. As part of its mandate, the commission could establish guiding principles to achieve better health care for all and lower per-capita costs. The commission, which would complement the new accord, could be modelled along the lines of the Mental Health Commission of Canada.

With that, I thank you, and I look forward to any questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Pullen.

With the Childcare Resource and Research Unit, we have Ms. Friendly.

[Martha Friendly, Executive Director, Childcare Resource and Research Unit (CRRU)]

Thank you very much for having me here today.

I'm going to keep this as brief as I can. You already have my brief.

I think the main point I want to make is that the government has already made some commitments to a national policy framework for early childhood education and care. I want to argue that it should be done in concert with the right architecture in order to get the best results for children and families, for the economy, and for Canada.

I'm going talk about a Canada-wide early childhood education and care system that has programs that are designed and managed by provincial-territorial governments and indigenous communities, and how this could play a number of key roles for Canadian families in society.

I'm just going to shorten my brief and conclude with a couple of proposals we're making regarding the budget and the national policy framework.

I don't think I'm going to go into descriptions of how dire the child care situation is for families across Canada. You can read that in the brief. I write this all the time and speak about it to the media. I think we know there are shortages. People can't afford it, the quality isn't good enough to be educational, and so on. This is a real pressure on young families.

This government made a number of commitments that were quite encouraging on the issue of child care. It was framed under the rubric of hope for the middle class, and the government, in coming in, committed to developing a national early learning and child care framework, noting that “every Canadian child deserves the best possible start in life”, which many of us agree with. The funding is under the social infrastructure fund that includes a number of other important social issues such as housing.

The other important commitment that I really want to flag is the government's commitment to the policy framework being developed based on research- and evidence-based policy-making. This is very consistent with other directions of the federal government, including those of the finance minister.

I want to talk about what child care could do if the architecture were right. It could be an opportunity for Canada. It could play a role in combatting inequality between men and women, in increasing productivity in the long term, and in combatting tension between social classes and between generations. Few people would disagree that Canada's support for families, women, and children is inadequate and has negative implication for today's young adults—like my daughter now—and in the future, as Generation Squeeze struggles with employment, debt, housing, and family time.

A national child care program would be a key piece in remedying Canada's women's equality record. As many have noted, the right answer to why Canada should have a universal child care program is because it's 2015, or it's 2016. I also should remind you that early childhood education and care is considered to be a human right, not only for women but for children.

I just want to talk a little bit about the first steps and what a policy framework could look at, and then I'll come to the recommendations.

Currently, the government is working with provinces and territories—not yet with indigenous communities—taking what could be the first steps toward transforming the current child care patchwork into an early childhood education system and has included funds for 2017 in the 2016 budget.

Last year a number of us who work in this area joined together to develop a shared framework and presented it to the federal government and to provincial and territorial governments, trying to show what an evidence-based policy framework could actually look like. We framed it with three key, long-term aspirational principles, and I think these are really important.

The first one, universality, sounds a lot like health care. The second one is high quality. The third one is comprehensiveness, which means it is not one-size-fits-all; it has to be varied to fit the needs of different families and different communities.

I guess the second thing this shared framework calls for is a plan for long-term sustained funding so that policy and system development could be shared by federal, provincial-territorial, and local governments, and indigenous communities, with the participation of key stakeholder groups such as myself.

With all this in mind, I'm pleased to put forward the following recommendations for consideration, and this is in the context of the negotiations that are already going on.

First of all, we want to recommend treating the funds that have already been allocated for 2017 in the last budget as the first step toward an evidence-based comprehensive system. We propose transferring these funds to those provinces and territories that have developed plans consistent with the kind of shared framework that we are proposing, that can be achieved over time so as to meet the objective.

Second, and this is where I'll wrap up—using the 2017 budget process to commit to the long-term sustained approach to federal funding that needs to happen over about a decade to develop the kind of child care system that we need to support all families and children. I think it needs consideration of earmarked funding; the money needs to ramp up over time. It can start out small but over time it is an expensive program, I won't deny that, if you do it right and make it affordable.

I think it's important to recognize that this could really bring Canada a lot of benefits economically, socially, in terms of what happens in our society.

I just want to put those recommendations forward, and I look forward to your deliberations.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Friendly.

We're going to four-minute rounds.

Mr. MacKinnon.

[Steven MacKinnon, Liberal, Gatineau, QC]

Thank you, Mr. Chair.

Four minutes is not enough time to explore with the witnesses all the topics they generously shared with us today.

Since it's the first issue in our pre-budget consultations with the stakeholders, I will address what I consider a key aspect of the next budget.

We heard from Mr. Brakel, Mr. Alexander and Mr. Blakely. There is the dilemma of people without jobs and jobs without people. Growth is slow and national productivity is lagging. The government is facing a historically low labour market participation rate. People in my constituency and across the country are unemployed, and there is also the challenge of training the future workforce.

Mr. Brakel, Mr. Alexander and Mr. Blakely, can you share your views on the subject? Please be brief because we have only four minutes.

[Hendrik Brakel]

Thank you for the question.

That's Canada's biggest challenge. There are 1.3 million unemployed people. How can we help them enter the labour market?

I think a very important component of it is certainly in the training. One of the things that we'd really like to emphasize is work-integrated learning, and having those co-op jobs to pull people from training programs, colleges, and universities, and give them those temporary positions working in government. We would like some sort of incentives to create more of those intern and temporary positions to give people that experience.

[Steven MacKinnon, Liberal, Gatineau, QC]

It's a version of apprenticeship.

[Hendrik Brakel]

Back to the apprenticeships and working and learning, as we talked about.

[Craig Alexander]

I would concur. Apprenticeships and training programs are absolutely critical to developing the skills that workers need. I would also highlight the fact that we need better labour market information. We are making some progress on this file, but we haven't reached a point where we have the labour market information that businesses need. If we had superior labour market information, we might be able to better address the skills mismatch that you mentioned in your opening comment.

I would also stress that we need to understand the nature of the changes in the labour market. For example, when it comes to temporary workers, there's a knee-jerk reaction that all temporary jobs must be poor jobs; there's a negative connotation. Many temporary jobs are jobs being taken by older workers who are choosing to work in a temporary position. Sometimes apprenticeship positions can get classified as temporary jobs because you're only going to be in that position for a period of time.

We need to understand the vulnerability and the weaknesses in the labour market. In my mind there are two issues. Number one, we need to help displaced workers, who aren't working today, re-engage in the labour market. Number two, we need to help put in place the measures to support workers who are vulnerable like temporary workers, even if they're doing it voluntarily. Number three, we have to get the skills and education system right.

[Robert Blakely]

The Government of Canada is a significant employer. It employs a few tradespeople. It employs no apprentices except in the dockyards where the navy has decided they're going to try to grow their workforce, and we happen to be the union.

There are huge opportunities to promote the skilled trades in this country. The Government of Canada is going to spend $125 billion. Tell the people who are going to do the work, you can have this job, but you will guarantee us you'll train apprentices on the work. A number of sophisticated owners—Shell, Nalcor, Syncrude, Suncor—don't have a problem doing that, and if you don't want to train people, take a hike.

[The Chair, Liberal, Wayne Easter]

You are at time; we're a little over time, but it's been a good discussion.

Mr. McColeman.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Thank you, Chair, and thank you, witnesses.

If you could answer very concisely, I'd truly appreciate it, only having four minutes.

Mr. Alexander, you commented the following on weak private investment: we've had reports that most companies have chosen to invest elsewhere other than Canada, the ones that are located here are thinking of expansion, government policy is a hindrance, lack of confidence, returning budgets to fiscal balance is key to keeping the investments in Canada because that ultimately leaves the fear of rising taxes.

Did I hear you correctly in saying all those points?

[Craig Alexander]

Yes.