Finance Committee on Oct. 19th, 2016

[The Chair, Liberal, Wayne Easter]

I call the meeting to order.

We're a nice little crowd here around the table. We're here as the federal finance committee, pursuant to Standing Order 83.1, which is pre-budget consultations in advance of the 2017 budget.

As all the witnesses know, we're doing the pre-budget consultations, but we're also trying to emphasize how to achieve better economic growth in this country. I know a number of groups sent in briefs in early August. It seems a long while ago now. We have all those briefs, and they're still coming and being translated, but they're all on your electronic media or iPad, so if you see people on an iPad, they're likely looking at the briefs that have been presented.

Just before we start, so the witnesses here know who they're dealing with from the parliamentary side, I'll ask each of our members to introduce themselves and say where they come from.

I'm Wayne Easter. I'm a member of Parliament for Malpeque, Prince Edward Island, which is central Prince Edward Island, and I'm a member of the Liberal Party.

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

Good morning, everyone. Good morning, Chair.

I'm Francesco Sorbara from the riding of Vaughan—Woodbridge, which is across the street from the city of Toronto. The area I represent is in York region.

[Steven MacKinnon, Liberal, Gatineau, QC]

Good morning.

I'm Steve MacKinnon, and I'm the member of Parliament for Gatineau, Quebec, across the road from Ottawa.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

I'm Ziad Aboultaif, member of Parliament from Edmonton Manning, which is the northeast side of Edmonton. I'm with the Conservative Party.

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

I'm Dan Albas. My riding is Central Okanagan—Similkameen—Nicola, part of the interior of British Columbia.

I'm very happy to have you all here today.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Good morning.

My name is Pierre-Luc Dusseault. I'm the member of Parliament for Sherbrooke, Quebec, and I'm a member of the NDP.

[The Chair, Liberal, Wayne Easter]

I have one other announcement. Peter Haydon, who is with the Naval Association of Canada, was on our agenda, but he is ill and cannot attend. Just for the record, we have his presentation, and it will go into the record as such.

Welcome, witnesses.

We'll start with Ms. Pasher, from the Atlantic Canada Airports Association. We've heard a fair bit about that in Fredericton and Charlottetown.

Go ahead, Monette.

[Monette Pasher, Executive Director, Atlantic Canada Airports Association]

Thank you.

Mr. Chair, ladies and gentlemen, thank you for the invitation to appear here before you as part of the pre-budget consultations.

Airports and air travel are so important to trade and economic growth here in Atlantic Canada, so I'd like to touch on that, as well as discuss some of the challenges the airports in our regions face.

While we have a relatively modest population base in Atlantic Canada at only 2.3 million people, we welcome more than 5 million visitors to our region annually, which means tourism is an important sector and economic generator.

Our airports move nearly eight million passengers per year, and that's more than three times the population of the region. That number has grown by 21% over the last decade. We're not only moving a substantial number of passengers and cargo in and out of Atlantic Canada, but we're helping to grow our economy. Our airports generate over $3 billion in economic activity every year.

Today's businesses, as you know, compete in a fast-paced global economy, and while our companies no longer have to be located in large international centres to compete, they do require efficient access to regional, national, and international destinations. Our airport organizations remain committed to providing this vital service, and it is because of this that we have grown. With that growth, it is imperative that we continue to maintain, improve, and invest in infrastructure at our airports, and we will need partnerships with the federal and provincial governments to meet that challenge.

The creation of the national airports policy back in 1994 resulted in the transfer of financial responsibility for our airports from the Government of Canada to the community. This financial model has resulted in a net transfer of funds from aviation to the Government of Canada—for example, in 2015 it was $323 million in the form of airport rent—but only a small fraction of those funds contributed to government are going back into the aviation system. In fact, in 2015, only approximately 12%, or $38 million, was invested through the airports capital assistance program, and that's across the entire country.

Since 2000 the funding in this program has not changed, while the cost of doing business over those last 15 years has risen considerably. A lot has changed since 2000. Flying is no longer considered a luxury mode of transportation. It has increasingly become a necessity in order to conduct business across the country and connect people and goods to the global market. As well, a new market of fly-in, fly-out workers has contributed to the growth of aircraft movements at our regional and local airports here in Atlantic Canada.

The airport capital assistance program needs a dramatic increase in funding to support small airports across the country. The fact that small National Airports System airports do not qualify for airport capital assistance funding also presents a challenge. They are small regional airports with fewer than 600,000 passengers annually, and four are located here in our region. They have significant capital expenditures, and revenue collected from their traffic volumes is not sufficient to fully sustain their capital needs.

In addition to the support that is required for safety-related projects, airports also require economic development infrastructure funds. Infrastructure projects in Canada have focused on the rehabilitation of assets such as water, waste water, public transit, highways, roads, ports, ferries, harbours, parks, and trails. They're all worthy of investment, but we have to ask ourselves this: what about Canadian airport infrastructure? Are these assets, which stimulate billions of dollars in economic activity a year, important to our economic prosperity and also worthy of investment?

Instead of receiving investment, air transportation plays the unique role in Canada of subsidizing the government purse. Canada's airports, as I mentioned, pay $323 million a year in airport rent.

In 2015 in Atlantic Canada our Halifax Stanfield International Airport paid $6.2 million and the St. John's International Airport paid $2.4 million. This year, in 2016, five additional airports in our region will begin paying rent, creating an additional financial burden on these small airports.

We are recommending that the government eliminate rent for all airports with fewer than three million passengers and also put a cap on rent for other airports so that it no longer continues its upward climb. Airports are closed-loop systems; any reduction in rent would be passed on through lower airport charges and debt requirements.

As gateways to the communities they serve, Atlantic Canada's airports have an integral role in furthering the economic prosperity of this country. In order for them to remain competitive, federal policies and programs should aim to facilitate and foster growth in this important sector.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

Next we turn to the Atlantic Institute for Market Studies and Mr. Navarro-Genie.

[Marco Navarro-Genie, President and Chief Executive Officer, Atlantic Institute for Market Studies]

Good morning, Mr. Chairman and honourable members of the committee. Thank you. I am grateful for the chance to appear before you this morning on behalf of the Atlantic Institute for Market Studies.

Canada is a country with a wealth of resources and possibilities, but it is often impoverished by its own policy choices. There are a few federal actions that would assist Canada's businesses to meet their expansion, innovation, and prosperity goals and to contribute to economic growth in the country.

The most fundamental, perhaps, is the respect for jurisdictional lines and constitutional limitations. To this effect, we are delighted to see that an Atlantic Canadian from Newfoundland and Labrador has been appointed to the high court. As the first voice that rose in this region against putting fresh ideological imperatives before the Constitution, we welcome this development, and we hope for similar outcomes when it comes to taxing carbon.

The second and perhaps most important, in keeping with the sentiments of our Prime Minister, is that policies and regulations be adopted for the sake of the public good, avoiding politicking as much as possible, the case in point being perhaps the EI file in this region. Policies that make it easier for people to work, or, rather, not work, promoting a 14- to 16-week work cycle, when businesses and consumers operate on a 52-week cycle, is certainly detrimental to businesses, individuals, and the community as a whole.

Third, the notion that governments control economies the size of Canada's is simply pure fantasy. A $30-billion infusion into an economy the size of perhaps this region might get things moving, but trying to get the national economy moving, or perhaps preventing it from sliding back, with such careless spending is like trying to jump-start a jumbo jet with a AA battery. It just doesn't work. Economies are autonomous sets of relationships. We would do better to keep away from such grand designs to improve them. The best way to improve economies and foster growth is to promote the right conditions by removing as many barriers to growth as possible and allowing the private decisions of entrepreneurs, investors, and customers to choose what is best for them without state distortions.

Trying to cajole all innovation towards a single market sector, for example, such as the current attempts with clean tech and environmental development, leaves other areas wanting. It does not ultimately advance greater development or growth and leads to further collapses when policy-makers make mistakes—and we often do—or when market conditions change.

Last, perhaps in the interests of time, this Parliament would do well for this region and this country not to impede privately funded projects that have time and time again proven to foster tremendous growth through development and employment.

The provincial governments and federal government must not let themselves be controlled by interests that stop the development of private infrastructure that can provide jobs and economic growth for Canadians, in particular Atlantic region residents, who really need those things.

The Energy East pipeline coming from Alberta through New Brunswick is a vital necessity for our economies and must not be allowed to remain suspended interminably. If there is an immediate economic priority in this country, it ought to be the liberation of this economic factor, with its high-tech jobs, its research and innovation, its air and environmental cleanup capability, and its ability to foster greater economic independence for native and rural communities. Greater energy autonomy for Canada will also mean more affordable energy for those who are most in need.

I think Energy East sums up the core of the recommendations: to stick to the Constitution, to make public decisions with higher goals in mind than ideological dreams or electioneering, to let private enterprise have more economic oxygen through less intervention instead of more and more subsidies, to create wealth and more jobs through native and rural communities, and to avoid favouring any one economic sector to the detriment of others.

Merci.

[The Chair, Liberal, Wayne Easter]

Thanks very much, Marco.

We turn now to the Atlantic Provinces Economic Council and Mr. Poschmann.

[Finn Poschmann, President and Chief Executive Officer, Atlantic Provinces Economic Council]

Thank you, Mr. Chairman, and thank you to members of the committee for the invitation, and welcome to Halifax.

When appearing before previous iterations of this committee, I would have been ready to talk about the need for measures to ensure a stable and efficient housing finance system in Canada. I'm not going to do that today, because it is not immediately on our agenda, but it is in the air. If we can come back to that, then it would be a very good discussion to have.

I would like to address questions that were put to us in the context of pre-budget consultations quite directly.

The pre-budget consultations asked three questions: How should the federal government help Canadians generally—and the unemployed and indigenous peoples and so on—to maximize their contributions to economic growth? How do we help businesses in all regions and all sectors do the same? How do we ensure that urban, rural, and remote communities make their best contributions to growth? Those are really one question posed three different ways: how do we best boost growth?

We used to call this the productivity agenda. Now we call it the innovation agenda. That's okay; whatever we call it, the generic description remains. We perform best when government finances are stable; when Canadian's job rates aren't being swamped by government indebtedness; when taxes are low and stable, and do not stifle growth; and when our social supports are consistent and generous, but not so generous as to build dependence and complacency.

I'll add open markets for goods and services, and free flows of labour and capital, and I would read in everything that Ms. Pasher said about the importance of airports to trade, people, and goods. Free flows of labour and capital and free exchange rates permit competitive markets to do their work, and individual Canadians can steer their efforts to where our work is most valuable.

This points more than anything else to the value or the importance of trade, especially for the Atlantic economy, where access to markets is crucial. We have two pending trade deals, the Canada-European Union Comprehensive Economic and Trade Agreement and the trans-Pacific partnership. Each of these deals is at risk as they head into their respective ratification processes. Canadians and the government should be aggressively promoting them in every possible forum.

Trade is not only international; it is also domestic. Trade barriers across provinces are too common and too high. The Atlantic provinces are working collectively to harmonize and lower their barriers. Other provinces are making their own efforts. The federal government should aggressively support these initiatives, and it should use its jurisdictional powers to help them along and to lower the barriers that lie within the federal realm. This means a hard look at our agricultural and agrifood policies in particular. International and domestic restrictions on agricultural trade and supply management in Canada restrict growth and innovation across sectors and regions, and we can fix this.

When it comes to innovation and the innovation agenda, the most powerful tools rest firmly in the hands of the federal Department of Finance, and I am referring to the tax system. Canada has generous tax supports for research and development by way of generous deductions and credits, and even refundable credits. There are issues with the way we do it, such as favouring spending on labour as opposed to capital investment, which is needed for serious R and D, and favouring spending by small businesses as opposed to the larger or growing ones.

The biggest issue is that the supports we have are targeted on spending and on R and D, which is different from rewarding innovation. Innovation is what happens when ideas are adopted and commercialized in new ways.

We could do much better by rewarding innovation more than spending on R and D and by lowering the income tax rates applied to the fruits of innovation. The mechanism for doing so is known as the patent box, or the innovation box, and models exist in the U.K. and elsewhere in the EU.

The process is simple. Firms track the share of their incomes that can be traced to eligible intellectual property, such as patents, spending on R and D, and know-how. The income traced to eligible IP, intellectual property, has been taxed at a lower rate than other income.

Recently the provincial governments in Quebec and Saskatchewan put the innovation box squarely in their budget plans, and these are admirable initiatives. They would work even better if they were nested within a similar federal plan. A federal innovation box system would limit balkanization across provinces and across provincial tax systems. More to the point, it would strengthen Canada's international tax advantage and attract the most productive sort of foreign investment, namely spending on innovation, which generates spillovers that benefit all of us.

One key message is that there is a very short list of useful things that a federal budget can do, and supporting trade and innovation is firmly on that list.

With that, Mr. Chairman, I think my time is up, and I thank you very much for yours.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Finn.

We turn now to Ms. Poduska and Mr. Sarty, from the Canadian Association of Physicists.

[Dr. Kristin Poduska, Director, Science Policy, Canadian Association of Physicists]

Thank you very much.

As a committee, you're asking for expert consultation to develop an economic strategy for 2017. You've asked Canadians what federal measures in relation to education and training would maximize our country's economic growth.

I, Kris Poduska, and my colleague Adam Sarty represent the voice of physics in our country, which is the Canadian Association of Physicists, and our organization has recommended boosting funding in two specific areas: first, in funding for merit-based fellowships to students and trainees through the Natural Sciences and Engineering Research Council of Canada, or NSERC, and their post-graduate and post-doctoral fellowship programs; and second, in funding for discovery-driven fundamental research, which is through NSERC discovery grants.

Now I'd like to explain why these two measures will help achieve your goals as well as ours.

First let me introduce you to the Canadian Association of Physicists.

With over 1,700 members, we're Canada's national association for physicists who work in industry, academia, and government. The CAP is recognized and respected for its science and technology expertise. We've testified before other House of Commons committees, including last year, at the request of the Standing Committee on Industry, Science and Technology, for a study on the state of disruptive technologies.

Adam and I are both university professors. Adam is based at St. Mary's University here in Halifax, and I'm based at Memorial University in St. John's, Newfoundland. We're here today to help promote the importance of physics, both as a fundamental science and also as a necessary component of Canada's technology-driven innovation economy.

The reason that we're making these specific budget recommendations are that attracting and retaining Canada's best talent will develop a strong base, which is essential for building a resilient and innovative workforce that will help drive Canada's entrepreneurs and businesses.

Canada's international competitiveness and capacity for sustained innovation depend on balanced support of research, including discovery-driven fundamental research. This kind of support gives freedom as well as flexibility to researchers, so that we can really push the limits of existing knowledge. In doing so, we find unexpected and sometimes even unimaginable phenomena.

Discovery research is really critical for Canada to be competitive in identifying and developing technologies that are transformative. These are sometimes called disruptive technologies. Examples of these kinds of transformative technologies include the internal combustion engine, lasers, solid-state LED lighting, and GPS, the global positioning systems. The trick is that by the very nature of these kinds of technologies make it very difficult to anticipate when and how they're going to emerge. If Canada wants to be a leader in this field, we have to do two things: we have to able to generate new knowledge, and we also have to have the people who are able to identify what pieces of that new knowledge can work together to be transformative.

The most effective national strategy is to have discovery-focused funding that's both sufficient and stable to support the broadest possible base of researchers at all stages of their careers. Now, the reason we're making that recommendation this year is that Canada is losing ground on the world stage.

As an example, the Secretary-General of the United Nations has a scientific advisory board that suggests that national research and development funding should be at 3.5% of GDP. Canada has been very far below this level, and slipping. Our R and D funding fell from 2% to 1.6% of GDP in the years between 2005 and 2014.

This year there's a federal review of fundamental science that's part of the larger innovation agenda. This exercise is supposed to be targeted to help address this very issue. The recommendations from this review panel will be out later this year. Undoubtedly they will have budget items similar to what we're requesting in terms of money for training as well as for fundamental discovery-driven research. The greatest impacts will be realized if the budget can address the panel's recommendations.

In closing, I'd like to thank the committee for this opportunity. We'd be very happy to answer any questions you might have later on.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

From the Halifax Chamber of Commerce, we have Mr. Sullivan and Ms. Conrad.

[Patrick Sullivan, President and Chief Executive Officer, Halifax Chamber of Commerce]

Thank you very much, Mr. Chair, and ladies and gentlemen.

My name is Patrick Sullivan. I'm the present CEO of the Halifax Chamber of Commerce.

The Halifax Chamber of Commerce is a best-practice business advocacy organization that continuously strives to make Halifax an even more attractive city in which to live, work, and play.

The Halifax Chamber of Commerce has been around since 1750, whether it has been the chamber of commerce or the board of trade, so it has been a very long time. We represent more than 1,600 local businesses and more than 65,000 employees and act as a powerful voice in promoting local business interests.

Halifax is one of the most economically dynamic cities in the country. The Conference Board of Canada projects that Halifax will have the second-highest GDP growth in Canada in 2016, and this puts us on track to achieve the chamber's strategic goal of having Halifax among the top three highest-growth economies in Canada by 2018. With strong transportation links and emerging clusters in ocean technology and financial services, our city is well positioned to succeed in today's economy.

We certainly appreciate the opportunity to address the House of Commons Standing Committee on Finance today and will address your questions in order.

The maritime region is facing a rapidly aging population and a serious decline in the size of our region's labour force. Ensuring that Canadians, particularly those from under-represented groups, have the skills they need to participate productively in the modern economy is a critical part of building the labour force in our region to succeed in the future.

The federal government plays an important role in skills training in Canada, and it's important to ensure that existing programs provide effective training for Canadians. As well, Nova Scotia has struggled to retain its youth and recent graduates in recent years, compounding our demographic challenges. To address this, the federal government could increase support for youth and recent graduates so they can take part in experiential education opportunities, such as internships or co-op programs. This would help better prepare them for the workplace and would increase labour force attachment and retention.

When we speak to our members, we hear that the overall tax burden is a constant source of frustration. In recent months, the federal government has taken action, such as planning to raise the CPP and introducing the concept of a price on carbon, both without consultation. Both of these will have a significant impact on business costs in the years to come. Going forward, we'll be looking for the federal government to take action to make business in Canada more competitive, not less.

Lowering corporate income tax rates or reinstating the planned decrease in the small-business tax rate would help in this regard. As well, reducing regulation, providing timely customer service, and consulting the business community early in the regulatory process would help make life easier for business.

Immigration is also an important avenue for the region to help manage its demographic transition. Fortunately, the federal government has taken recent action in this area and will provide the Atlantic region with a pool of over 2,000 more provincial nominees, which we certainly plan to take advantage of. More immigration will only be effective if they stay in the region, and while Nova Scotia's, particularly Halifax's, rate of retention has improved dramatically in the past few years, we can still do better. The federal government can help in this area by providing more funding for settlement services and by ensuring that immigrants have the skills and language training needed to succeed in the local labour market.

Finally, ensuring that Canada has the transportation and information technology infrastructure required to participate fully in the global economy is critical for economic growth. Investing in trade-enabling infrastructure should be a top priority of the federal government's infrastructure program, as should, as has been mentioned, concluding the major outstanding trade agreements to help open up new markets for businesses. Improving the ability of companies in our region to export their products and services around the world is a key economic goal for business and will help communities and Halifax.

That's it. Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Patrick.

We'll go to Ladies Learning Code and Ms. Sariffodeen.

[Melissa Sariffodeen, Chief Executive Officer, Ladies Learning Code]

Thank you, Mr. Chair.

Good morning, members of the committee. Congratulations to you all for celebrating your first electoral anniversary today.

My name is Melissa Sariffodeen. I'm the co-founder and CEO of Ladies Learning Code, which is a Canadian not-for-profit organization empowering women in the use of technical skills.

We run anything from a one-day workshop teaching a woman to make a website to a summer camp for kids. Most recently, we drove across the country in the computer lab teaching kids through pop-up workshops.

Research suggests there'll be a shortage of more than 200,000 ICT workers in Canada by 2020, and right now there's a huge under-representation of women and other groups in this field. As a nation, how will we thrive and prosper, both socially and economically, when only a small portion of Canadians have the skills we need in our increasingly digital world?

I'm here today to make the case for investing in digital skills and coding education. This is absolutely critical to future prosperity in our country. That success is undoubtedly compromised by the fact that only a small portion of Canadians actually have the skills necessary to fully participate, let alone innovate, in this increasingly digital economy.

Over five years ago, a group of women, myself included, hosted a workshop in Toronto on coding. It sold out in seven minutes. A month later we hosted another. It sold out in 30 seconds. After that, we hosted another, and another. This demand has propelled us from a single workshop for adult women to a national not-for-profit organization. We now run programs in more than 29 communities across the country, in places like Charlottetown, Cape Breton, Vancouver, and Quebec City. We've taught over 50,000 women and youth to code. We've had over 3,500 new volunteers who have taken our programs.

All this is because of a key few factors. One is that we have this really strong community-driven model, and in every city we're in we have individuals who understand their community. The programming we run in Cape Breton is different from what we use in Lethbridge, Vancouver, or Toronto.

Also, for every four learners in any of our programs, we have one technical volunteer. That person comes from industry—they might be a developer at Microsoft or Google—and they support women and youth in learning. What that means is that these individuals go back into their workplace with an understanding of how women learn, how beginners learn, and they take that with them as a professional development opportunity.

More and more, we also employ a pay-what-you-can model to ensure accessibility. Year over year, we've almost doubled our operating budget, and definitely our reach. We've had no government funding to date, aside from a small translation grant. It's all private sector funding from Google, Microsoft, Telus, Scotiabank. This underscores their desire to invest in an organization that is scrappy and lean like ours and is focused on impact and has built a mechanism that can scale up.

While these numbers might be impressive, what I'm most proud about is the impact we're having on Canadian women and youth. I think of Nancy, who came to us in 2012 with a music degree and no job. She learned to code with us and now runs our programs in Montreal. She is a developer on her way to a very lucrative and rewarding career. I think of Lauren, who's 11, from Calgary, who took our girls' program and was then inspired to create a company called Robots are fun!, which creates educator kits for teachers. She's not even in high school, but she is running a business effectively.

We believe that coding education is the next necessary step we need to take as a country to usher in a new era of Canadian innovation. I know Canada is uniquely positioned to rise to that occasion. We have the expertise, the infrastructure, the resources, and I think the political will to do what it takes to become a world leader in digital skills. At Ladies Learning Code we have the experience and the delivery model to scale up and do that.

Our funding ask to the Government of Canada is to help us offer our programming in more places, to do more programming in the places we're already in, and to expand the pilots we've been working on for other under-represented groups, such as indigenous communities, newcomers, and people with disabilities. Therefore I ask the Government of Canada—all of you here today—to help address our current challenges by setting out a bold and thoughtful plan to usher in a new era of Canadian innovation by investing in digital skills, in coding education, and in women and girls, so that we can give these under-represented groups an equal opportunity to build our future together.

Thank you so much. I welcome any questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Melissa, and thank you all for your presentations.

Turning to the first round of questions, we have Mr. McKinnon.

[Steven MacKinnon, Liberal, Gatineau, QC]

Thank you, Mr. Chair.

It's wonderful to be in Halifax, and thank you all for being here.

One of the things that strikes this committee as we go across the country—and we have been in western Canada and we're now making our way through the Maritimes towards central Canada—is the constant refrain about skills, people without jobs, and jobs without people.

I was struck by how Ladies Learning Code could possibly constitute one of the solutions to this very confounding problem.

I want to ask a very general question. Perhaps we'll start with you, Mr. Sullivan, but I'd invite anyone who wants to weigh in.

You talked about immigration. That's obviously one of the solutions to this problem, certainly in this region, as we butt up against the one thing that doesn't lie—demographics. That imposes a sort of natural cap on growth.

Have you thought beyond immigration or within the immigration category about the kinds of solutions that the federal government could be part of, either in partnership with provincial governments or acting on its own? What are the solutions to this demographic issue in terms of training and attracting people, and how do we make sure that there continues to be a more vibrant labour force in this region?

[Patrick Sullivan]

As you've correctly stated, Nova Scotia is expecting a decline of about 10,000 people between the ages of 18 and 65 over the next five years or so. It's a significant decline. People are going to age out of the workforce. We definitely need more people. We have had the increase of approximately 2,000 people in the provincial nominee program. That is open to all Atlantic provinces, so we don't want them all to go to P.E.I. We'd love to get our proportional share in Nova Scotia.

What can the government do? I believe Dominic Barton is about to present some time this week. Certainly The Globe and Mail is reporting today that he's going to recommend an increase of between 50% and 100% in the number of immigrants.

We would agree with that. We need to have those people stay in this community, which means we need to encourage the local business community to hire these people. A program in Nova Scotia called the graduate to opportunity program provides 25% to 30% of the first year's salary to those employers. That would be a great incentive for employers.

Language training would be very helpful. We need to offer opportunities for entrepreneurs from around the world to come to Nova Scotia with tax credits, or some opportunity to examine Nova Scotia as a destination or Canada as a destination, frankly, and again, hopefully we'll get our share of those business leaders if we offer them particular opportunities for investment in Canada.

[Steven MacKinnon, Liberal, Gatineau, QC]

Mr. Poschmann, do you care to comment?

[Finn Poschmann]

I agree with much of what Mr. Sullivan said, especially with respect to increases in allowable immigration or immigration targets into Canada. We have a regional, geographic, and demographic mismatch with skills, and this is especially striking in the Atlantic region. Different tools are needed over time to address that. Immigration is one long-term mechanism.

When it comes to jobs that don't have people, relaxation with respect to the temporary foreign worker program would help, and I know that the current immigration minister is strongly in favour of tuning that program so it responds better to regional needs with respect to the range of skills covered.

When it comes to the very long-term success in Canada's regions, much of the heavy lifting is needed at the regional and provincial levels, and I'm referring in particular to primary and secondary education. Our rural areas do not meet the education standards that we should be meeting collectively, and we see some of that in the larger centres as well. These are in the provincial domain to address, and they do not need any more money. It's more a matter of curriculum, and when we do a better job at the provincial and regional levels of delivering curriculum, then our public school and post-secondary graduates will be much better placed to take advantage of the jobs that are available and to develop, for instance, their coding skills later on and fare well in the world that we will meet.

[Steven MacKinnon, Liberal, Gatineau, QC]

Before I ask you to comment, Mr. Navarro-Genie, let me ask specifically about the position of AIMS. We've heard what you might call some market-distorting suggestions about how to retain immigrants, how to better prepare a workforce for the jobs of tomorrow. Do you agree with those sorts of measures?

[Marco Navarro-Genie]

I do, to some extent. We are very much in favour of immigration, of course. You cannot grow an economy unless you grow the population. Where it becomes a bit of a chicken-and-egg thing is that while we are working very hard to attract more people from outside—the gloom outside notwithstanding, this is a very beautiful place to live, and it doesn't need much to attract people—the issue is to retain them. We have not been that successful at retaining immigrants, and there is a reason. As Bill Clinton used to say, it's the economy. People may not come here because we have great health care, and people are not likely to come here because we have great restaurants. People will come and will stay because there is a stable economy that promises something to their children, so the issue is the economy.

We are essentially making a thousand little fixes around the economy that don't address the very core of the issue. We pay some of the highest taxes in the kingdom. We have heavy regulatory burdens. We have an aging population and a sicker population. The education standards, as has been pointed out, are slipping. Our youth, the very people who are born here, who are attached to that ocean, keep leaving, and with them leaves a high level of skills. We have low productivity. We have higher energy prices. All these things combined are essentially the culprits for seeing people leave. If we are unable to retain our own children, I think we are going to have difficulties retaining newcomers. The economy and all these things need to be addressed.