Finance Committee on Oct. 6th, 2016

[The Chair, Liberal, Wayne Easter]

I call the meeting to order.

This is the Standing Committee on Finance, and we're doing pre-budget consultations in advance of the 2017 budget. For those witnesses who are here, we sent out a number of questions related to economic growth. You could try to touch on some of those points as well.

We like to try to hold the presentations to about five minutes so we can get into some questions from members.

Before we start, what we typically do when we're on the road is to ask members to introduce themselves so that you know who you're dealing with, what part of the country they come from, and what party they're with.

I'm Wayne Easter, chair of the committee. I'm a Liberal member of Parliament from Malpeque, Prince Edward Island.

[Raj Grewal, Liberal, Brampton East, ON]

My name is Raj Grewal. I'm the member of Parliament for Brampton East.

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

I'm Jennifer O'Connell. I'm the member for Pickering—Uxbridge, just outside of Toronto, in Ontario.

[Steven MacKinnon, Liberal, Gatineau, QC]

I'm Steve MacKinnon, Liberal member of Parliament for Gatineau, Quebec, just across the river from Ottawa.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

I'm Ron Liepert. I'm the Conservative member for Calgary Signal Hill, and I found out five minutes ago that I'm Janet's member of Parliament.

[The Chair, Liberal, Wayne Easter]

You can tell us all your complaints if you like, Janet.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

There are none.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

I'm Ziad Aboultaif. I'm the Conservative member of Parliament for Edmonton Manning. It's on the northeast side of Edmonton.

[Niki Ashton, NDP, Churchill—Keewatinook Aski, MB]

I'm Niki Ashton. I'm the member of Parliament for Churchill—Keewatinook Aski, and I join you in welcoming the rest of the committee to our province.

[The Chair, Liberal, Wayne Easter]

Thank you all.

We will start with presentations. Again, thank you for coming. We'll start with Ms. Rosales—and I don't know whether I pronounced that right or not—from Supporting Employment & Economic Development Winnipeg Inc.

Go ahead. The floor is yours.

[Carinna Rosales, Co-Director, Supporting Employment & Economic Development (SEED) Winnipeg Inc.]

Good morning, everyone. Thank you for the opportunity to present today.

Supporting Employment and Economic Development Winnipeg, or SEED Winnipeg, is a not-for-profit charitable community economic development organization that offers business development training and services to support business creation and expansion. We support co-ops and social enterprises as types of business models.

SEED also offers a microloan program as well as financial literacy support and training to skilled immigrants for qualification recognition. As well as financial literacy programs and matched savings, we offer intensive supports for accessing benefits and tax credit programs.

Vulnerable groups such as the unemployed, underemployed, indigenous peoples, those with disabilities, newcomers, and seniors are often the most marginalized and are systemically prevented from contributing to the local economy because of poverty. Prior to being able to meaningfully contribute to this economy, these groups need equitable access to wraparound supports that contribute to stability, overall well-being, and physical and mental health. No person can envision their life moving forward through employment or self-employment if they don't have a safe home each night.

SEED Winnipeg recommends the creation of a 10-year national housing plan. No person should be faced with choosing between basic needs such as food, clothing, or shelter costs. Our recommendation is a commitment to reducing poverty rates to ensure that every person in Canada has an income that reaches at least 75% of the poverty line within two years. Co-create among governments and the community sector a detailed national action plan that includes regional representation and analysis.

To address the problems of skilled immigrants facing barriers to having their qualifications recognized in Canada, SEED Winnipeg operates Recognition Counts, a microloan program for skilled immigrants. It also provides financial literacy coaching and counselling. We have undoubted numbers that demonstrate its success, and the government's rate of return on investment clearly exceeds the cost of the program. The average annual household income improvement for participants who have been through this program is over $40,000.

We recommend that the federal government reinvest in qualification recognition programs, publish the national pilot program evaluation, and work with pilot site delivery organizations to improve programs based on that learning. Dedicate approximately an additional $2 million per pilot site, pro-rated to populations served across Canada, to be used for both the loan fund and operations. Fund the development of a national community of practice.

Immigrants who have arrived in Canada as refugees often have no financial assets and face significant challenges with economic integration. We recommend—and it is our hope—that you will be attentive to the many voices from the settlement sector who have been calling for an end to the burden of transportation loans for all refugees.

The mandate letter for the Minister of National Revenue provides direction to ensure that the CRA is a client-focused agency that will enhance access to entitlements. SEED and our partner organizations launched a pilot in 2013 supporting financially vulnerable families to access over $10 million in government entitlements and benefits. The demand to access these benefits and supports is overwhelming, and far exceeds our capacity. This is particularly an issue for Manitoba's indigenous communities, who also face barriers to accessing necessary forms of identification.

We recommend that the federal government invest in supports to ensure that financially vulnerable community members have access to government entitlements and benefits and that the government reinstate in-person CRA services so that community members have more individualized supports, not just reliance on a phone number.

We recommend the expansion of the CVITP to operate throughout the year, not just during tax season. Expand that program to include assistance with determining eligible benefits and assistance. Fund programs, including full-time staff in local agencies who have significant levels of knowledge and expertise regarding taxes and benefits and programs and entitlements. Provide additional support and funding to agencies hosting these clinics.

We request and recommend that the government provide knowledgeable and accessible tax resources for tax preparation to benefit the volunteers and have them available on a year-round basis.

Supporting community economies and resiliency is imperative. We recommend the federal government develop neighbourhood revitalization programs, with multi-year core and project-based funding to enable comprehensive community-led approaches.

Current legislation on federal small and medium-sized enterprise support programs currently allows non-profits and hybrid business models to access them, but the access is typically limited in this sector due to current practices, lack of awareness and understanding of the hybrid business models, and differing mandates.

We recommend the expansion of the capacity to access existing SME services through the Canada Business Network and other federal business development programs to enhance business supports and readiness for investment by social enterprises, co-operatives, and non-profits, and investment in community-based projects that inspire social entrepreneurship.

We further recommend that the federal government implement community benefit agreements in federal development projects and the implementation of social value weighting in all federal RFPs and contracts, and the development, coordination, and robust funding of a national CED policy framework and lens modelled on the one currently used in Manitoba and the best practices of other regional models.

We recommend the co-creation of policy and the development of funds with social finance and social enterprise developers, together, to assist the social economy sector in addressing socio-economic issues.

We recommend the creation of affordable financing packages available to communities and project developers, including but not limited to federal loan guarantees.

Finally, we recommend the provision of training dollars for social enterprises at all stages in the development process, recognizing that they're likely having financial limitations, but that their contribution comes in kind from the wraparound supports and environment that is provided to those facing barriers to employment.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Rosales.

We'll turn next to the Canada West Foundation and Ms. Lane.

I might say to witnesses as well that you will see members using their iPads from time to time. All the briefs and documents for the committee are on the iPad, so they're not playing games. They're trying to find some information.

Go ahead, Janet. The floor is yours.

[Janet Lane, Director, Centre for Human Capital Policy, Canada West Foundation]

Thank you, and thank you to the members of the committee for inviting me to present today.

I'm the director of the Centre for Human Capital Policy at the Canada West Foundation, based in Calgary. The Canada West Foundation is a non-partisan think tank.

Given the time constraints, this submission is aimed primarily at question number two, although my comments will be relevant to the other two as well.

Safety, quality, productivity, and cost, and whether an employer wants to expand, to innovate, or just to meet its current goals—all of these depend upon the quality of its workforce, and that quality depends on how competent workers are to do their jobs. We've been engaged in a fascinating case study involving a firm, its union, and their focus on competencies as distinct from credentials. The results are striking, as you will hear.

On the whole, employers in Canada have accepted credentials to be a proxy for competence. They shouldn't. We've all heard stories about highly qualified people who are incompetent at what they do. While we would never say that credentials do not mean anything, we can say that they do not guarantee competence. Knowing something is not the same as understanding it. Knowing theoretically how something should be done does not mean you can do it. Knowing how to do something under normal conditions does not mean that you can do it when things have changed, and things change all the time.

Knowing, doing, and being able to adapt how you do a task according to the circumstances: that is competence. Competence can be built and it can be assessed, and Canada's workplaces would be safer, produce more quality products and services, and be more productive if we switched to educating, training, assessing, and deploying people on the basis of competencies.

What do I mean by competencies? Think of Lego. Standardized, modular, stackable competencies are the knowledge, skills, and attributes required to perform the tasks of each job. They become the building blocks of a career. Competency profiles show workers which competencies they need to perform their current job, or do it better. A competency framework is the pathway between jobs and occupations.

This isn't just theory. I am working with a steel fabricator in Edmonton and the ironworkers union that represents its workforce. Just over four years ago, one of the workers was almost killed on the job, and the firm decided that it would never happen again. Since then, it has moved toward assessing and training for competencies in its workforce. When someone is assessed by the foreman to be not competent to do a particular task, he or she is not assigned to be responsible for it. An assessment of “needs training” in a particular competency is a signal that the company and the union will invest in training. Formal training is offered, or a coach or mentor is assigned to help the workers increase their competence.

The results speak volumes. They are working more safely. The company now has had four million hours of loss-free time on its job sites. It had never exceeded half a million hours before. It is also hiring throughout the downturn in Alberta, and has just had its second-best year ever, while in a recession. It did this with the full co-operation of the union.

This company's experience does not have to be a one-off. Canada is well behind other countries in moving to competencies. We can and should move more quickly to encourage more businesses to hire, train, assess, and deploy their workforces on the basis of competencies. It is the norm in many countries. We need it to become the norm here if we are to be more competitive in the global economy.

While education is a provincial responsibility, the federal government invests hundreds of millions of dollars per year in workplace training through the Canada job grant and other labour market development funds. Reporting for these programs is more about outputs than outcomes. Certificates earned are assumed to be proxies for what has been learned.

This government should require that these federally funded training programs report on the competencies actually gained by participants in the programs, not the number of certificates earned. Employers benefiting from these programs could be encouraged to recruit on the basis of competencies, rather than assuming that people who have earned a certificate are actually competent to do the job for which they are hiring.

If the federal government does this, individuals, businesses, and communities will meet their goals and better contribute to the economic success of the country.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Lane.

Next we have the Association of Manitoba Municipalities. Mr. Groening and Mr. Krawetz, go ahead.

[Ralph Groening, Vice President, Association of Manitoba Municipalities]

Good morning. My name is Ralph Groening. I'm the vice-president of the Association of Manitoba Municipalities. We are the one organization that represents all third levels of government in the province of Manitoba, including the City of Winnipeg.

We're pleased to be here to present a few policy items that are of importance to us. You have the information, so I will move ahead with my comments.

The AMM made a federal budget submission in February of this year that outlined five priority items: infrastructure funding, and I'll comment on that further; community policing, which has become a major part of municipal expense; housing; disaster financial assistance, which I will also add a few comments to; and wireless communications and broadband Internet connectivity. While all of these items are of extreme importance to Manitobans and Manitoba municipalities, in the interest of time I am going to only touch on two of them.

One item is the federal disaster financial assistance funding.

Extreme weather events suggest that we can expect that disaster events will cost Canadians $5 billion by 2020. Manitoba is the second-largest recipient of disaster financial assistance. We are not proud of that particular title, but a strong federal program over the years has helped municipalities recover from some of these disasters. The flood of 1997 is one that I think quickly comes to mind and that we're all too familiar with.

Unfortunately, federal changes came into effect in February 2015 that resulted in the downloading of these responsibilities to the provincial governments. There was no consultation whatsoever, either with the province or with us. As a municipal organization, we were not consulted prior to any of these significant changes coming into effect, which have tripled the deductible and had a major impact on our communities.

The AMM is concerned that these downloads will make their way to the municipalities, and they already have. This new formula will impact our ability to recover from future disasters. We ask that these changes be reviewed and ultimately reversed to ensure that the safety of Manitobans, in the event of a national disaster or extreme weather event, is not compromised. We think it is also important to give consideration to a national disaster mitigation policy, and I think there's been some previous discussion about that.

The other item that I will provide some detail on is infrastructure funding.

The AMM is the only municipal association in Canada—the only association—that is working alongside federal and provincial partners to help select projects financed under the new Building Canada fund. I emphasize that we're the only municipality, the only organization, that is and has been able to do that.

We certainly appreciate the opportunity to work with federal and provincial governments. Working together is absolutely key to any successful infrastructure program, and with 80% of infrastructure funding in the budget of 2016 still to be allocated, there are many opportunities to build stronger partnerships. The Federation of Canadian Municipalities has called for full contributions from all three partners, and that includes 50% federal, a full one-third provincial contribution, and the remaining 17% or so from our organizations.

We believe it is important that federal investments benefit all Canadians, from city dwellers to those who live in rural, remote, and northern communities.

Finally, we hope that phase two of this infrastructure program will include predictable, flexible funding models that will allow local decision-makers, such as people on the ground and people who know best in many cases, to direct funds to the projects that are most needed.

I thank you for the opportunity to emphasize two of those points and the opportunity to speak on behalf of my organization.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Groening.

Next, from the Canadian Foodgrains Bank, we have Mr. Hagerman.

[Paul Hagerman, Director, Public Policy, Canadian Foodgrains Bank]

Thank you.

Let me take a minute to tell you about the Canadian Foodgrains Bank, in case you're not familiar with us. We're a partnership of 15 Canadian churches and church agencies that are working together to end global hunger.

Across Canada, that means hundreds of growing projects, raising money by growing crops, making pies, holding cattle auctions. From coast to coast, there are several thousand volunteers who care deeply about ending hunger, and they give their time and money to support the Foodgrains Bank. We use that money in about 40 countries around the world. We provide food assistance after disasters. We make sure that pregnant women have good nutrition, and we help small farmers to improve their productivity.

We are honoured to be one of the Government of Canada's key strategic partners in the delivery of Canada's aid. We've been receiving core funding for our program since the Foodgrains Bank started over 30 years ago. We also work to get Canadians thinking more about global hunger, and we carry out research and dialogue aimed at improving public policy.

As you reflect on world events over the last year, I'm sure you can think of many examples of those who want to slam the door on the rest of the world. Canada is an exception. We continue to look outward, knowing that such engagement is good for the world and good for Canada. Our ideas and our aid are contributing to global prosperity, reductions in poverty, more opportunities for women and men, and increased peace and well-being. Stability and prosperity in other countries is good for Canada and Canadian businesses, not least through increased opportunities for trade.

As other global leaders talk about closing down, Canada is demonstrating leadership through openness and global engagement. However, we are falling behind. Canada's current aid levels, as measured by percentage of gross national income, are only about half the average of our peers, the G7 countries and other mid-sized economies. To demonstrate global leadership, we must increase our budget for aid. If we want to make a meaningful contribution to the global development agenda, Canada should set a timetable to double our aid in 10 years or less. That would bring us up to the average of our peers, and then we should further commit to meeting the UN target of 0.7%.

We believe that an increase in Canada's development aid would be supported by Canadians across the country. A public opinion poll in 2015 found that 94% of Canadians agree that aid is important, and 62% agree that Canada should be one of the leading countries in providing international aid. Another poll from 2014 found that most Canadians believe Canada should contribute more aid to poorer countries than it currently does.

One of the questions that arises is where Canada should invest aid money. What could we focus on that would drive economic growth, provide opportunities for women and youth, and help people to deal with climate change and other environmental problems? Is there any area of work that could deliver all those benefits and build on Canada's strengths? In our view, the answer is yes: a focus on small-scale women farmers.

Agriculture is the biggest source of livelihoods in most developing countries. The typical farmer is female and has five acres of land or less. She is grappling with poor soils, unpredictable weather, bad roads to market. However, these problems have solutions. Through our own work at the Foodgrains Bank, we have enabled thousands of farmers like this to move out of poverty and into the marketplace, and lots of other Canadian efforts, through other organizations, have made significant contributions to improving agriculture livelihoods. There are lots of opportunities for scale-up in this area.

A recent study compared countries in Africa and looked at those countries that invested early in their own agriculture. They found that they reaped multiple benefits. Not only did agricultural productivity increase, but there were economic gains for the country as a whole. The GDP of those countries that invested early grew twice as fast over 10 years, compared to the GDP of countries that did not focus on agriculture. Those countries that invested in agriculture were also more effective at reducing poverty and malnutrition.

I want to thank the committee for joining us in Manitoba. This is the heart of the Canadian prairies. This is a place that understands the contribution of agriculture to a growing economy. An increase in aid and investments in food producers is something that aligns with Canadian values from coast to coast.

We at the Foodgrains Bank encourage the government to increase its investments in international assistance, with the focus on agriculture, women, and the most vulnerable. This would enable Canada to move from a laggard to a leader and enhance our reputation as a country capable of playing a vital and constructive role in the world.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Hagerman.

We will turn now to Mr. Hicks from the Council of Canadians with Disabilities. The floors is yours. Welcome.

[James Hicks, National Coordinator, Council of Canadians with Disabilities]

Hello, everybody.

The Council of Canadians with Disabilities is an organization of organizations. We have a number of national organizations that are a part of our makeup that include specific disability groups. Then we have provincial organizations that are cross-disability and provide support at the provincial level, so we have a pretty good idea of what's going on across the country.

I'd like to bring your attention to a document that I'm going to refer to for most of the presentation. It's called Disabling Poverty, Enabling Citizenship, which was done through what's called a CURA grant. It was done by a combination of academics and organizations of persons with disabilities who were looking at what needs to happen. I'm going to stay mainly in the area of the first one, but I will touch a bit on the idea of helping businesses as well.

It's interesting that you identify a number of different groups of people who may need to have some support: unemployed, indigenous, people with disabilities, seniors. Actually, all of those groups include people with disabilities. Disability crosses everything. It's not one group by itself; it moves across every single group in the community. The numbers are quite high. As you'll see in this document, if you look at the number of people with disabilities who are living underneath the poverty level, it's astonishing.

One of the things that sometimes government gets wrong is it brings in programs and it doesn't look at what the outcome is going to be. I'm going to talk a bit about the disability tax credit, which is a credit for people with disabilities who can get the taxes that they've paid reduced based on their needs and what sort of support needs they have in living day to day.

The difficulty is that most people with disabilities don't earn enough money to benefit from the disability tax credit, but they're still responsible for those costs, so they're not getting anything out of that program. In fact, I would say that more than three-quarters of the people with disabilities in Canada don't really benefit from the disability tax credit, which is unfortunate.

The disability tax credit is a great idea to transfer money to people who need a bit of extra support because of something they can't control. However, if the disability tax credit were actually changed to a refundable credit, as opposed to tied to what taxes you pay, then it would provide the opportunity for every Canadian with a disability to cover off some of their costs around disability and move forward. There's information in this document about how that could happen, what the costs are, and those sorts of things.

When the government looks at employment—we've heard a lot about that—and the transfers to the provinces around employment, it should be looking at making sure there is adequate money for people not just to go to courses, which is what most of the labour market agreements do, but also for employers. A lot of the smaller businesses often cannot afford some of the accommodations that people might need, so again it's an ongoing struggle.

If you're an employer, you may want to provide an opportunity for someone with a disability, but they may need to have a screen reader, which unfortunately goes out of use very quickly, and you would have to buy a new one. Then that's an extra cost to the business. Therefore, providing supports to businesses in order to accommodate people with disabilities—not necessarily by giving money to the people with disabilities, but by actually distributing it among small and medium-sized employers so that they have the capacity to hire people with disabilities—would seem more realistic than some of what's going on now.

A lot of that is a federal-provincial issue, so it would be through the labour market agreements that go into the provinces and looking at the sorts of supports and how that program could develop things.

Again, I just want to identify that in the latest document from Minister Duclos, it's the same thing. I don't know if you've seen it, but he is looking at poverty. There are all these pictures of different groups and what percentage they are. It's the same thing; disability goes across.

As our population ages, there are going to be more and more people with disabilities. If we want them to participate fully in the community, which certainly Minister Qualtrough is moving towards—and there's the fact that they're looking at a Canadians with disabilities act and ensuring that people have the opportunity to get involved—then there's going to be a need for more money invested in disability supports. I'm not talking about just giving money to the people, but in the supports that they need in order to participate in the full extent of Canadian citizenship, not being left behind because they're living in abject poverty.

I'll leave it at that.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Hicks, and thanks for the document. There are more recommendations in there than you mentioned.

We'll turn now to Mr. Davidson with the Manitoba Chambers of Commerce. Welcome, and the floor is yours.

[Chuck Davidson, President and Chief Executive Officer, Manitoba Chambers of Commerce]

Thank you for the invitation to address the committee today.

The Manitoba Chambers of Commerce has been around for 85 years in Manitoba. We represent 69 chambers of commerce, which represent close to 10,000 businesses in the province, and our role is to provide support to those chambers and those businesses to ensure they have a strong business network in the province. We are an advocacy organization acting as the voice of business in Manitoba, which means we develop public policy through a grassroots process on behalf of the business community but also communities throughout Manitoba.

As an organization, our mission is to champion sustainable economic growth, leading to greater prosperity for business and communities in Manitoba. A big part of my job is to ensure that I have a good understanding of the challenges facing businesses in Manitoba, so I spend a lot of time meeting with business owners and community leaders around the province. When I talk to these leaders, I typically hear two main challenges in Manitoba.

The first challenge I hear about is economic competitiveness. These are issues related to taxation, regulations, and ease of doing business in Manitoba. Second, I hear about workforce. Being able to find employees and also finding employees with the right skill sets are big challenges for businesses in Manitoba.

My comments today will be focused on and consistent with what you would hear from our national organization, the Canadian Chamber of Commerce. I will outline three areas where the federal government can focus its efforts in the upcoming budget to address the challenges I hear from business and from community leaders.

The first area is trade opportunities.

Canada has to do better at exporting if it's going to grow the economy. The top priority is to diversify our trade into more fast-growing markets. Canada has been aggressive in pursuing new trade agreements over the past few years, highlighted obviously by the trans-Pacific partnership and the Comprehensive Economic and Trade Agreement with the European Union, but business continues to face substantial barriers to expanding abroad.

Canada must be more strategic in supporting its trade in highly sophisticated and competitive world markets, especially for new high-value services. Canada must help growing businesses scale up internationally. It must do more to engage in influencing international standards and it must ensure trade commissioners and other supports remain highly competitive. They are often the key difference-makers for Canadian firms seeking to break into new markets.

Our organization advocates that the federal government ratify and implement the TPP and the Comprehensive Economic and Trade Agreement with the European Union. We call upon the government to engage with Canadian businesses and develop more comprehensive, fair, and strategic international trade strategies that accelerate economic growth for Canada. We call for expanding trade and investment promotion services, increasing engagement on international standards, and establishing a national development finance institution that helps Canadian businesses deploy technology and capital in emerging markets.

We also call for investing now in trade-enabling infrastructure, because rail and port, those vital export corridors, will be sorely needed when the global economy gets back on track.

The second area is internal trade barriers.

Our organization welcomes the conclusions of a recent report released by the Senate Standing Committee on Banking, Trade and Commerce, which revealed that internal trade barriers account for a loss of potential revenue in the Canadian economy ranging from $50 billion to $130 billion annually. The Canadian economy remains divided by artificial barriers to trade and labour mobility that frustrate business investment and cost consumers billions of dollars every year.

Highly competitive national economies are characterized by speed and flexibility. The free flow of people, goods, and services throughout the country allows competition and high levels of service while helping to address shortages in skilled labour. Unfortunately, the patchwork system of regulations within Canada significantly hinders its productivity and competitiveness.

Our organization calls for the measures that follow.

The federal government should take a leadership role in continuing to move barriers to internal trade forward through pro-liberalization pressures in procurement, regulation, and direct negotiation with the provinces and territories. It should continue to promote stakeholder engagement through AIT negotiations, which is essential to ensuring political considerations do not frustrate the movement toward liberalization. Further, it should expand the right of private parties to seek redress in court, as the market is the only force capable of driving reform.

Finally, the third area is innovation strategy.

Innovation, invention, disruption, and the creation of intellectual property and higher-valued products and services are the essential ingredients that will drive further economic prosperity across Canada's business sectors, yet despite countless studies, reports, and recommendations, Canadian business continues to be challenged on productivity, an essential measure of Canada's ability to compete with both advanced and emerging markets. In Canada, many businesses and public institutions have failed to invest or partner in innovation at the rate required to drive success. Since 2010, federal R and D expenditures have fallen 12%. If economic forecasts are borne out, federal R and D expenditures as a proportion of GDP will have fallen 26% in just five years.

Our organization will advocate and work with the federal government to foster a more innovative economy through the following measures: creating a focused strategy to bring innovative, technology-based Canadian start-ups to competitive scale; fostering improved relationships and partnerships between business, government, university, and public research institutions; leveraging R and D investments by improving the integration into the innovation ecosystem of companies and institutions that focus on the commercial application of intellectual property; and finally, creating more effective tax or grant strategies to foster R and D for both process and products.

Our organization believes that if Manitoba is to achieve the level of prosperity needed to take our provincial economy to the next level, we strongly encourage both the federal and provincial governments to increase their focus in the budgeting process to ensure that economic growth is the driving force behind decisions that are being made.

Looking at key economic indicators would be a part of that, including GDP per capita, government spending levels, debt indicators, labour force growth in both the public and the private sector, and increasing wages in Manitoba. If government is focused on increasing economic opportunities and prosperity, these indicators will be positively influenced.

Again, thank you for inviting our organization to provide comments on the budget process. We hope that as the government continues this process, it will focus on outcomes that will benefit all Canadians.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Davidson, and thank you, all.

I think we have time for a first round of seven minutes, and then we'll go to five.

Mr. MacKinnon, go ahead.

[Steven MacKinnon, Liberal, Gatineau, QC]

Thank you, Mr. Chair.

It's a great honour to be in Manitoba this morning.

I thank our colleague Ms. Ashton for her hospitality in her home province.

As we go across the country, some themes emerge everywhere we go. As Mr. Davidson just correctly identified, finding ways to achieve growth in this economy—inclusive growth, growth that maximizes the potential of Canada's economy but also of all Canadians—is certainly at the forefront of our challenges.

One of the key themes I heard.... I heard some very pertinent local things, and I was intrigued on the disaster financial assistance front, but I want to focus my section of questions on the issue of skills. Ms. Lane, I think you called it competencies and not certificates.

It has been a long time now since the federal government fundamentally devolved labour market training to the provinces and co-funded it. I'm sure there are lots of very pertinent measures in place to ensure that funds are spent in the manner in which they are intended.

What we hear all the time is that there are jobs with no takers, and there are people who are unemployed and have no reasonable prospect of finding a job with the competencies they have. This is very true in our immigrant and aboriginal communities, and it seems to be true throughout all sectors and across all regions of Canada, and certainly in the case of people with disabilities.

Mr. Chair, I would ask Ms. Rosales, Ms. Lane, Mr. Hicks, and Mr. Davidson to all comment briefly on where they think labour market training, and training generally, is falling down. What are the quick fixes that could be applied, and what are the more long-term fixes?

[The Chair, Liberal, Wayne Easter]

Ms. Rosales, do you want to start?

[Carinna Rosales]

Thank you.

One of the things I see most regularly in working with newcomers and indigenous folks is systemic racism as a long-term issue that needs to be addressed. I think it's difficult when newcomers come here, perhaps with different names that are difficult to pronounce. That creates fear in employers, who wonder how they will possibly interview this person. Often their resumés are outstanding and they appear to be overqualified, so they get tossed off the pile. These are difficult challenges to address.

Quick fixes could involve supporting local organizations that are on the front lines within settlement sectors, as well as supporting job creation and labour market support services agencies that work directly with folks.

Another challenge is fixing the many loopholes in agreements so that different low-income or barriered individuals can fit the criteria in order to access services or support. I think that can be corrected through local collaboration and co-creation of circumstances, documents, and programs that support this target group.

Thank you.