FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, October 24, 2001

• 0900

[English]

The Chair (Mr. Maurizio Bevilacqua (Vaughan—King—Aurora, Lib.)): I'd like to call the meeting to order and welcome everyone here this morning.

As you know, the finance committee is travelling across the country seeking input. We welcome the panellists for this morning's first panel. We look forward to your input. Some of you have actually appeared before the finance committee before. You know you have approximately five to seven minutes to make your presentation. Thereafter, we engage in a question and answer session.

We have the following organizations represented this morning: the Canadian Association of Petroleum Producers; as an individual, Beverley Smith; and Acupuncture and Traditional Chinese Medicine Associated. We're awaiting the arrival of the representative of the Small Explorers and Producers Association of Canada.

We'll begin in the order in which the names appear on our agenda. We'll proceed with the Canadian Association of Petroleum Producers, Mr. David Daly, manager, fiscal policy, and Dan Swift, vice-president, finance. Welcome.

Mr. David Daly (Manager, Fiscal Policy, Canadian Association of Petroleum Producers): Good morning, Mr. Bevilacqua and members of the Standing Committee on Finance.

My name is David Daly. I am the manager of fiscal policy for the Canadian Association of Petroleum Producers. With me is Dan Swift, who is the vice-president of finance for Anadarko Canada Corporation and a member of CAPP's fiscal executive policy group. Thank you for your time this morning.

The Canadian Association of Petroleum Producers, CAPP, represents 150 companies that explore, develop, and produce over 95% of Canada's natural gas and crude oil. CAPP also has 120 associate member companies that provide a wide range of services to support the upstream oil and natural gas industry. Together, these producers and associate members are an important part of the $52-billion-a-year national industry active throughout Canada that affects the livelihood of more than 500,000 Canadians. With exports last year of $26 billion, and domestic capital expenditures this year expected to be $27 billion, the oil and gas industry is one of Canada's most important economic sectors.

The industry is both national and international in scope. It is a high-tech, globally competitive industry across the country from Alberta, British Columbia, and Saskatchewan in the west, to Newfoundland and Nova Scotia on the east coast, to the Yukon and Northwest Territories in the north. With investments across Canada, this industry has inspired thoughts of new economic prosperity, new business development, and new employment in Atlantic Canada and the north, including our vast oil sands resources.

Canada is also a major player in the global oil and gas industry. Canada is the third-largest natural gas producer and the second-largest exporter of natural gas in the world. Canada's crude oil production ranks thirteenth in the world, with supplies that continue to grow. Some 200 Canadian companies are currently involved in exploration development activity in over 120 countries around the world. The industry is capital-intensive and employs a highly educated workforce.

The recent international events that started last month have pushed the global economic condition closer to recession. Canada's economy is no exception. Concerns about stalling consumer demands and depressed business confidence are leading to calls for the federal government to revamp its fiscal expenditure and revenue programs, with calls for more spending on national defence and social safety nets, and suggestions to stall previously announced tax cuts.

In our view, a radical departure from the sound fiscal initiatives of deficit elimination, debt reduction, and prudent spending that have been responsible for Canada's economic prosperity over the past decade should not be engaged in lightly. Even before the events of September 11, economic analyses pointed to the possibility of economic slowdown or recession. The February 2000 budget and the economic statement of last October included sensitivities to these possibilities.

Although the short-term economic picture may have darkened, the medium and long-term prospects remain robust. In order to manage the steeper economic decline in the short term, Bank of Canada Governor David Dodge believes the combination of easing monetary policies with the entrenched social safety net stabilizers can manage the incremental decline.

As such, it is essential that the federal government not jeopardize the hard-fought fiscal health of the nation by sidelining the deficit elimination, debt reduction, and prudent spending initiatives that have not only brought Canada to its current state of economic prosperity but have also laid the foundation for future growth.

• 0905

The government needs to ensure that fiscal policy accomplishes the three objectives that the committee is stressing today: ensuring that Canada remains a major player in the new economy; providing Canadians with equal opportunity to succeed; and creating a socio-economic environment where Canadians can enjoy the best quality of life and standard of living.

In our written submission of August 20, CAPP outlined a number of taxation and spending initiatives, all geared to increase Canada's fiscal competitiveness in order to ensure Canada continues to attract high levels of investment activity.

Maintaining international fiscal competitiveness should continue to be a top priority. In this regard, maintaining the announced schedule of corporate income tax rate reductions is essential for shoring up business confidence and capital investment. As one of the few sectors of the economy that is generating economic growth, the oil and gas industry needs to be included in the announced schedule of rate reductions, the same as the rest of corporate Canada. This is of utmost importance to ensure that Canada does not lose out in maintaining and attracting significant amounts of globally mobile, job-creating investment capital.

Recent domestic and international policy developments have the potential to place Canada's oil and gas exploration and production activity at a significant disadvantage.

Here are just three examples I'm going to cite. The first one is that within Canada, excluding the resource sector from the announced corporate rate reductions has tilted the playing field for capital investments away from oil and gas towards other sectors of the Canadian economy. The ability to raise capital on a competitive basis with other industries is absolutely necessary for the high capital investment needed by our industry.

Canada's support of the Bonn climate change agreement threatens to increase costs to Canadian business. This will also increase Canada's cost relative to the U.S., our largest trading partner, as well as to Mexico and Venezuela, who are significant trade competitors of Canada, none of whom support this agreement.

The U.S. national energy policy makes a number of recommendations, including incentives to increase and enhance domestic oil and gas supplies. Just very recently U.S. George Bush hinted that cuts to corporate income taxes may also be in the offing. These initiatives will increase the competitiveness of the U.S. oil and gas industry vis-à-vis Canada.

The Canadian oil and gas industry is a strong part of the national economy and wants to remain so. The Government of Canada needs to set the competitive foundation for our investments to rank favourably alongside other investment opportunities in Canada and elsewhere in the world. Foremost in this foundation is the inclusion of the oil and gas industry and the announced reductions in corporate income tax rates.

This will ensure the oil and gas industry is able to continue to contribute strongly to the three objectives set by the standing committee: first, to ensure Canada remains a major player in the new economy by continuing to drive the development and implementation of high-tech solutions to resource development; second, to provide Canadians with equal opportunities to succeed by continuing to provide high-quality jobs throughout Canada; and third, to create a socioeconomic environment where Canadians can enjoy the best quality of life and standard of living.

The oil and gas industry is one of Canada's most important economic sectors. The federal government should support continuing investment in this globally competitive business, and include the oil and gas industry in the announced corporate tax rate reductions.

Thank you for your time. We look forward to addressing your questions.

The Chair: Thank you very much, Mr. Daly.

Now we'll hear from Ms. Beverley Smith. Welcome.

Ms. Beverley Smith (Individual Presentation): I understand that yesterday you heard an impassioned plea for national day care. I can imagine the arguments. They would be saying something like we have to have all women out there in the paid labour force to increase national productivity, and so on. This will be a different view.

Several children died at the World Trade Centre September 11. Another 1,500 lost parents that day. Since this tragedy, Canada's budget will fund a war, but ironically the same event reminds us to rethink our values.

Most people's last thoughts were of those they love. A full life encompasses career and family. Yesterday's Globe and Mail revealed a CPRN study that found career and family stress is higher than ever. Though budgets deal only with career, the term “economics” comes from oikos, meaning home. It's an incomplete budget if it just values paid work or thinks a person is productive only according to money.

[Translation]

I ask the government to recognize the importance of the family.

[English]

This government says it values children, but it doesn't value care of children, or care of the sick or the elderly. It took away the child dependant deduction. It made Canada the only G-7 country lacking universal tax recognition of kids.

• 0910

[Translation]

It does not give any pension to those who take care of others. It adds up to the feminisation of poverty while considering that to take care of others is not a real job.

[English]

While Norway funds care of children across the board, while Tony Blair in England suggests a cash allotment to kids at birth, while the U.S. tax is based on family income, Canada tilts its financial support to value most spending time away from the kids.

[Translation]

It harms parents and even more children.

[English]

Ironically, you've had warning signs that you're missing something. Your own courts are now ruling in divorce cases that caregiving has financial value. Sociologists are telling you the ethic of care is what makes a society work. It's not just the money chase.

[Translation]

Economists are telling you that in taking care of others, you have reduced capacity to pay taxes. But, till now, this government ignored these opinions.

[English]

It ignored the call for universal tax breaks for kids from its own income tax subcommittee in 1998. It only views caregivers as dependent, not interdependent, though some provinces have seen the light and raised spousal deduction to full personal deduction.

This government ignored calls by the Canadian Home Care Association, Mothers are Women, and the National Association of Women and the Law for pensions for caregiving time. It ignored caregiving in the tally of work done in the country.

[Translation]

In fact, it ignores one third of the economy.

[English]

In 1978 John Kenneth Galbraith said that economists would get a very sudden increase in the GNP by discovering and including the unpaid labour of women.

Canadian youth in Senator Landon Pearson's survey this summer said their main concern is poverty. They've noticed that a lack of money is often what determines family decisions, crucial decisions that force people away from those they love.

We have countless studies that showing kids need a constant caregiver for the first three years, the same person, dependably. It need not be the parent, but your tax policy prefers it not to be the parent. It's that preference that violates free choice.

[Translation]

As for maternity, the allocations you provide are not based on having a child, but on earning money.

[English]

My husband, cycling to work last month, was clipped from behind by the right mirror of a vehicle going 80 kilometres an hour and thrown into the ditch. He was lucky to roll on impact and broke only his shoulder and four ribs. Not wanting pity, he now walks to work, since he can't drive or bike.

What your tax policy has done to caregivers is similar. You have struck us out of the blue, from behind, withdrawing support. We're struggling to cope, and all are broken in some way. Some cope by earning two incomes, but sacrificing crucial time with family. Others cope by standing by the kids in the home, telecommuting, doing part-time paid labour or tag-team parenting, but those choices pay an opportunity cost for all. One group feels guilty, the other is poor.

[Translation]

We need more choice.

[English]

We need a win-win scenario so with adequate support we can make our own decisions.

Ironically, though much care of the young, sick, and elderly is done for free, if it is not valued at all, it will be very expensive for the nation. Paying professionals for this care could break the government. Also, if you don't value kids, the birth rate will continue to fall.

[Translation]

We need the taxes these children will pay when they'll get to the age of 20 to maintain our education and health programs and our pensions systems.

[English]

We already see that tax base dwindling.

Churchill said that the best investment a society can make is to put milk into babies. We need healthy, educated, well-adjusted kids, even if there's a war—especially if there's a war. The UN Convention on the Rights of the Child says “States shall render appropriate assistance to parents to perform child rearing”.

Now is the time to restore confidence, to bring in a balanced budget in all senses of the word. Balancing the recognition of paid work with the recognition of unpaid work will make the consumer feel better, and in this crisis time that's what they need.

[Translation]

The New York tragedy showed us some people in situation of crisis. These persons thought of their families.

[English]

You ask us what opportunity the state can give for citizens to succeed. You can give us support and choice, balancing paid and unpaid commitments. This is your opportunity.

The Chair: Thank you very much.

We'll now hear from Acupuncture and Traditional Chinese Medicine Associated, Dr. Bayrock.

Dr. Roman Bayrock (Vice-President, Acupuncture Society of Alberta; Acupuncture and Traditional Chinese Medicine Associated): On behalf of the Acupuncture Society of Alberta, we would like to thank the House of Commons finance committee for allowing us to speak.

Our main issue here is that there is an inequitable application of the GST tax towards our profession. I understand in the correspondence we were given here on this committee that one of your objectives in a pre-budget report is to provide Canadians with an equal opportunity to succeed. We do not feel we are given this opportunity to succeed by virtue of this GST taxation.

• 0915

In the language of our profession, we have two levels of training: focus training and comprehensive training. A medical doctor, a physiotherapist, a chiropractor, a nurse practitioner, and even an occupational therapist are allowed to learn how to apply acupuncture techniques within their scope of practice. That is considered a focus-trained practitioner.

A comprehensively trained practitioner is one who practises acupuncture exclusively. This training involves 2,100 hours minimum. They have to pass a rigorous program, which includes both western medicine and eastern medicine, and they also have to pass a very rigorous provincial exam for the provinces that are regulated.

Our big issue is that a medical doctor, chiropractor, nurse practitioner, or other primary health care practitioner can charge for those acupuncture services and be GST-exempt. On the other hand, we are required to charge GST. We feel that this is a two-tier taxation system that is grossly unfair toward our profession.

With regard to the handouts I have given you, the one entitled “Understanding Acupuncture” will give you some background on our profession. The second handout is the Excise Tax Act, where all the health care practitioners are mentioned as being tax-exempt except for acupuncturists. We have a situation where a medical doctor can apply an acupuncture service. Down the road a registered acupuncturist can apply the same service. In one instance the service can be GST-exempt, while in the other instance we are required to charge GST. We feel this is unfair.

We've contacted the Honourable Paul Martin on a number of occasions, and we have been quite unhappy with his response. His response dated September 30, which I have distributed here, basically provides us with his criteria: firstly, if a service is covered by a health care plan in a given province, it is exempt in that province. Unfortunately, in all provinces acupuncture is not covered by any health care plan. Secondly, if a service is covered by a health care plan in two or more provinces, it is exempt. We're not covered by any health care plan. Finally, if a profession is regulated as a health care profession in at least five provinces, the services of that profession are exempt in all provinces. We have consistently asked the Honourable Paul Martin why he has required five provinces. In this country we have only three provinces—British Columbia, Alberta, and Quebec—that are regulated, and it is unlikely that any other provinces will become regulated in the near future, as it's a long and arduous process.

When we pursued this point further, the Honourable Paul Martin gave us correspondence dating back to 1996 on replacing the goods and services tax. If you were to peruse this, you would see that nowhere is there a provision or even consideration of a provision to do with two health care practitioners providing the same service with one charging GST and one not charging GST.

The reason we're here before you is that in his latest correspondence to us, dated September 19, 2000, he referred us to two committees: the House of Commons finance committee and the Senate Standing Committee on Banking, Trade, and Commerce.

The Senate committee has already addressed this issue in their ninth report. I've made a copy for you as well. In the conclusion of this report it says:

The Committee believes that, in light of new medical developments here and in foreign jurisdictions, the government should reconsider the underlying principles that determine what constitutes medical care exempted from the GST.

So the Senate has addressed this issue and has made recommendations toward a more equitable application of the tax.

The reason we are here before you is because of this letter that directs us to contact your committee and ask for the same privilege. We're not asking for anything special. We believe that all Canadians should pay tax, but this tax should be applied fairly and equitably. So we ask this committee to give consideration to the equitable application of the GST tax.

Thank you.

The Chair: Thank you very much, Dr. Bayrock.

We'll now proceed to the question and answer session. We'll have a six-minute round for every member.

Mr. Ken Epp (Elk Island, Canadian Alliance): Thank you very much, Mr. Chairman.

I would like to thank you all for coming. As I mentioned to several of you beforehand, this is my home country. My riding is just east of Edmonton, so I drove in from home this morning. It's rather nice to be able to do that.

• 0920

I'd like to begin with the Association of Petroleum Producers. One of the things we hear over and over again in the House of Commons in the context of the budget is that tax incentives and tax breaks for oil producers, gas producers, and all those fossil fuel guys are bad for the environment and we need to soak them more so that they'll stop working. Then the others will come into play, so we'll have a better, cleaner source of energy and it'll just be a lot better for us. How do you defend against a charge like that, or do you?

Mr. David Daly: CAPP is a member of the National Round Table on the Environment and the Economy, and through that we've addressed a number of issues that have come up about environmental taxation and initiatives around improving the impact of the industry and of all industries on the environment.

We look to our environmental record. We have a stewardship program, which we recommend all of our members be signatories to, that establishes certain operating standards for an environmental footprint in their operations in the field in Alberta or anywhere else they're operating in Canada. I think the charge is a little bit mislaid. Our members have as much concern about the environment as any other sector of the economy, and we have participated in a number of initiatives.

Mr. Ken Epp: Mr. Swift, do you have anything to add to that?

Mr. Dan Swift (Vice-President, Finance, Canadian Association of Petroleum Producers): I think the industry has been proven to comply with the standards set out by the provincial government, and I think to some extent this is driven by the provincial government. Some of the oil and gas companies actually go beyond those guidelines. I'm like David, in that I don't feel it's fair to single out the oil and gas industry from an environmental standpoint. When you look at Canada versus some of the other oil and gas operations throughout the world, Canada's environment is quite clean.

Mr. Ken Epp: You also mentioned in your presentation that you want included in the budget, since this is a pre-budget consultation and we're getting advice to give to the minister for that next budget, which will probably be brought forward in December, according to what I heard on the news.... Did you hear that?

Mr. Roy Cullen (Etobicoke North, Lib.): According to the National Post.

Mr. Ken Epp: Yes, and they always get it right.

A voice: And the CBC as well.

A voice: And The Globe and Mail as well.

Mr. Ken Epp: Anyway, we're getting input for this budget. You're saying do not go back into deficit. That was one of the messages you had. What happens if the economy takes a bit of a dive? Obviously, the bank is reflecting that by a very dramatic decrease in the prime rate. The general consensus is that we're going to have some financial troubles ahead. Yet you're saying reduce the debt and don't go into deficit. Is that a realistic recommendation?

Mr. David Daly: Maybe I should clarify what I meant by that. What we're recommending is that the government not plan on a deficit in order to go forward, that they still plan on being prudent with spending initiatives. But there are social safety nets in place right now that may, of course, become larger in terms of their expenditures, and that may lead to less of a surplus or it might even tip the accounts into a deficit. We're recommending that should not be a planned process, that the planning should still be looking at the medium to long term and at the economic prosperity of the country and what's best for the country looking down the road.

According to most economists, including the Governor of the Bank of Canada, David Dodge, and the chairman of the board of governors of the Federal Reserve System, Alan Greenspan, economically the prospects still look very good in Canada, the U.S., and around the world. Most of them agree that monetary policy—and certainly we've seen it with the large rate cut yesterday by the Bank of Canada—can have a stimulating effect on the economy in and of itself. At the same time, we do have the programs in place now to accommodate high levels of unemployment and other social safety nets that can handle adverse times.

Mr. Ken Epp: We could keep on talking about this for a long time, but my time is running away.

I want to talk to Ms. Smith as well. I appreciate your coming again to our committee. We remember you from previous years, at least one year that I recall when I was at the place where you were giving your presentation.

• 0925

When you say recognize caregivers—and we're talking here again specifically about budget—if you had the right to really twig the finance minister's pen when he's doing the next budget, what specifically would you put into that budget to recognize caregivers?

Ms. Beverley Smith: I would increase the spousal deduction to full personal. I would make the child care expense deduction universal for all children, or have some other universal recognition that flows with the child. I'd give pension rights to people who would like to use their own money to contribute to their own pension plans, to contribute to RRSPs and CPP on their own, give them that ability, and also include them in Statistics Canada's designation of working in order that they could access other benefits—for example, life insurance.

Mr. Ken Epp: Would you favour the ability to split incomes, or to have other provisions in the Income Tax Act that would give the equivalent results?

Ms. Beverley Smith: Certainly I think that's important to look at; I know that Mr. Martin doesn't, but I do.

The United States and many countries do allow an option of income-splitting—that or the single-rate tax. Alberta is doing some good stuff to eliminate the discrimination between the single-income and the dual-income family. Something should be done, because that's a major irritant.

Mr. Ken Epp: My last question to you has to do with the many, many single-parent families now. There are, unfortunately, many men—boys in some cases—who have the biological ability to produce a child and after they've done that they run away and disappear, and there seems to be very little done in order to get them to carry their share of the responsibility of having brought a child into the world.

Do you have any ideas on what we could do to make things better for the children who are in families where there is only a lone parent? It is a big problem in our society.

Ms. Beverley Smith: Well, first of all you chase the absentee parent. You can do some powerful stuff, like garnisheeing wages, not just taking away the hunting licence, but taking away the driver's licence. Make it serious. Alberta has a program in place that is more this way.

As a school teacher, I see a lot of troubled kids. When you—and you do—have a policy that says, “Ah, you're a single mom; you have to leave the kids and use day care”, that says to the kid, “Sorry, your dad left—and by the way, mom's leaving, too”. This is the worst thing you could do to that kid. If there's anybody who needs mom around, it's the kid for whom mom is the only one around.

I don't see why we consider welfare moms to be such objects of scorn, because they are doing some important work. And if you want a less troubled kid, it is not necessarily true that single moms should all be out in the paid labour force away from their babies.

Mr. Ken Epp: Thank you very much, Mr. Chair.

The Chair: Thank you, Mr. Epp.

Mr. Nystrom.

Mr. Lorne Nystrom (Regina—Qu'Appelle, NDP): Good morning to all the witnesses.

I'd like to ask Mr. Daly, first of all, about the petroleum industry and the Kyoto agreement. What are your thoughts on that? We've had a lot of people very critical of the Americans for not signing on. Our government is moving towards signing on. The Europeans of course are very aggressive about signing on to Kyoto. What are the complications of this for the petroleum industry?

The other thing, in terms of the environment, the internal combustion engine obviously pollutes the environment greatly around the world. There's a great move now to finding alternative energy sources. We had the David Suzuki Foundation before us yesterday in Vancouver. What responses do you have towards the push that I think should be coming from our federal government to put more and more money into finding alternatives to the petroleum industry?

These two questions often come up regarding your industry, and of course we have your industry in Saskatchewan as well, which is important to our economy, too.

Mr. David Daly: Definitely.

Well, on the first one, our opinion about the Kyoto accord and Canada's compliance with it, our concern is mainly in terms of how complying with the Kyoto agreement is going to affect the competitiveness of business here in Canada versus business elsewhere in the world, especially when we're competing with industries around the world not just for oil and gas, but any industry in Canada. So our concern is about compliance and how it will affect the cost structure of doing business in Canada and how it may hurt our competitiveness.

With regard to being a signatory to the agreement and complying with the recommendations, we would look to what our major trading partner and competitor, the U.S., is doing as to how we should be basing our position with respect to Kyoto.

• 0930

Mr. Lorne Nystrom: Now the second question, about renewable sources of energy. I'm just....

Mrs. Sue Barnes (London West, Lib.): I'm not clear on that answer. I'd like to hear it clearly.

Mr. David Daly: I'm not sure what you mean.

Mrs. Sue Barnes: Neither am I, from what you said. Sorry.

The Chair: I think you've already made your point there, so—

Mr. Lorne Nystrom: Do you want to elaborate a bit more in terms of where you think the petroleum industry stands precisely on Kyoto? Bush has said they will not be signing. Would you support our government signing Kyoto?

Mr. David Daly: We've registered our concerns about how it would increase the cost of doing business. From this perspective, it may put Canada at a disadvantage. From our perspective, we'd be hesitant to support the federal government going ahead and continuing to support the Kyoto accord.

Mr. Lorne Nystrom: Yes, that makes it clearer. You'd be lobbying against the signing if the Americans were not signing on.

Mr. David Daly: That's right.

Mr. Lorne Nystrom: In terms of alternative energy, there's a great movement toward finding alternatives to petroleum because of all the pollution by the internal combustion engine, which is a great polluter, probably the greatest polluter in the world. What are your thoughts on that?

There are a lot of us in the country, not just us politicians, but Canadians, pushing the federal government and the provinces to put more money into alternative energy. We heard this yesterday in Vancouver from the David Suzuki Foundation as well.

Mr. Dan Swift: I don't know that the oil and gas industry is opposed to alternative energy sources. As a matter of fact, some of the major oil and gas companies are probably doing some research in that vein. One of the things the oil and gas industry has tried to focus on, particularly in North America, is gas. It's a cleaner fuel than oil. Propane might be an alternative for vehicles, which may help to some extent. As time goes on we'll see more and more companies trying to move to alternative energy sources. In the meantime, many of the companies are going to focus on gas as well as oil, particularly in North America.

Mr. Lorne Nystrom: Dr. Bayrock, have you done any costing as to what the cost of your proposal would be if Paul Martin were to agree with you and bring it into the budget in December? What would the cost to the treasury be?

Dr. Roman Bayrock: Honestly, we haven't considered that aspect.

The main concern we have is that the application of GST towards our profession is two-tiered. We feel there isn't a sensible reason why one practitioner can be exempt from the same service as the other. We are registered. We have shown our credentials. We have shown that we are responsible citizens, responsible practitioners. Our average practitioner has training far in excess of the average medical doctor in this aspect. We feel that either we all pay tax, or we all don't pay tax. And, no, we haven't considered the financial implications.

Mr. Lorne Nystrom: My follow-up, then—and pardon my ignorance in terms of your profession—is how many people does this affect and who does it affect? It affects acupuncturists. Which other professionals are affected as well? I'm not sure. Jim Pankiw is a chiropractor. I'm not sure chiropractors are treated the same as medical doctors in terms of GST. I think they are. That's my understanding. So who does it affect besides acupuncturists, and roughly how many individuals across the country?

Dr. Roman Bayrock: I myself am a chiropractor as well as a practising registered acupuncturist. I know of two other health care professions, one being psychoanalysts, in the same situation. They are the ones who have given presentations to the Senate committee. Also, individuals who privately practise hyperbaric medicine are in the same situation: in one instance GST is applied, and in the other it isn't.

A voice: Do you want to elaborate on this question?

Dr. Roman Bayrock: My colleague is a professor of acupuncture at the college here in Edmonton.

Mr. Marc Raedschelders (Acupuncture Program Coordinator, Acupuncture and Traditional Chinese Medicine Associated): First of all, as to how it would impact finances in Canada, I really doubt it would be a costly thing. If anything, it may save taxpayers a lot of money, since we could take away the two-tier system and more patients could benefit from the services of regulated practitioners.

• 0935

In Alberta alone, there are not more than 150 registered acupuncturists, so the cost for Alberta would be very minimal. In B.C. there are more registered acupuncturists, but definitely not more than, let's say, three or four times more than Alberta. In the other province where it's regulated, Quebec, there are probably a few more registered acupuncturists. So in the whole country, where acupuncturists are regulated, the number of practitioners is so minimal that it would hardly affect taxpayers' money.

Mr. Lorne Nystrom: I also assume that you're not just speaking on behalf of the Albertan practitioners, but for your profession across the country as a whole.

Mr. Marc Raedschelders: Yes. We have contacts with other provinces where acupuncturists are regulated.

Mr. Lorne Nystrom: I have one more quick question, to Ms. Smith, if I may.

What do you think the role of the federal government should be in terms of education? Many years ago we decided that education is basically the jurisdiction of the provinces. In our Constitution, through the spending power, we have some cost-sharing of post-secondary education. Do you think there should be a greater role for the federal government in general in terms of education, in terms of more uniform standards across the country or more funding commitments and agreements?

That's a very sensitive area because of the jurisdiction of the provinces, but we are federal Parliament and it comes up from time to time. You're concerned about children and education, and so on, so I want to ask you that general philosophical question, which has a bit of a constitutional twist to it.

Ms. Beverley Smith: I would never turn down money. Sure, why not? But it is a grey area, because if you have the federal government stepping in up to kindergarten, and then the provinces, kindergarten and up.... Isn't that the general division? People are starting to call preschool, age three and up, early childhood education, so that becomes a grey area. It's tricky.

The thing I'm concerned about is that whatever funding governments put into it, they will want to regulate, so they will tend to define education only as happening in certain buildings, and we all know that babies learn wherever they are. To call a child care institution an early childhood education thing, when the person who is trained there has a certificate in how to change diapers.... Pardon me, but I'm a professional teacher, and I really do not think these people are teachers, so I would make the distinction. I would think the federal government should put more money into education in general, but that pre-school is not really an educational area for you.

The Chair: Thank you very much, Mr. Nystrom.

Mr. Cullen.

Mr. Roy Cullen: Thank you, Mr. Chairman, and thank you to all the presenters.

I have a question for the petroleum producers. I guess Mr. Alvarez couldn't make it today.

When we talk about the reduction of the corporate tax rate from 28% to 21%, the petroleum producers, in my estimation, make it sound as though the federal government just forgot to reduce the rate for those sectors. Of course, that is not the case, as you know.

The rationale for it—and I guess that's where the debate starts—is that in the oil and gas industry, you have other allowances. You have the resource allowance, accelerated CCA, the exploration tax credit, and so on, the resource allowance generally being larger than the royalties you pay.

How have your discussions gone with the finance department? Are you making any progress, or are you taking the view that it's just 28% to 21%, without any further discussion?

I met with CAPP when I was in Edmonton this summer, and they made the point—and I thought it was a good one, if it can be supported—that there are in fact other sectors that got the reduction, that do have other types of tax—I call them gimmicks, but that's not the right word—tax breaks, but I'm still waiting for the list. How is it coming along? Are you still taking the pretty hard-line position that it's 28% to 21% with no concessions, or is there any kind of movement on either side?

Mr. David Daly: We've had a lot of ongoing discussions with the Department of Finance over the last year and a half or so, since the February 2000 budget, and I think those discussion are progressing quite well. We would hope that with the next budget we might be included in the corporate tax rate reduction, but we'll have to see.

• 0940

There are discussions around, as you talked about, some of the other elements of tax structure, like the resource allowance and what may or may not happen with that. I don't think the other tax structure elements, like Canadian exploration expenses or Canadian development expenses, are really a big issue from the Department of Finance's perspective right now, from what we've heard over the last couple of weeks, but we've had some encouraging discussions.

Our view is still that if you're looking specifically at the resource allowance, that's a good proxy for the amount of crown royalties that we do pay. Historically, over the last 25 years that it has been in place, the resource allowance has tended to average at about the same level as the royalties have been paid. One versus the other, we don't see that as a benefit to the industry, in order to have a resource allowance.

Mr. Roy Cullen: If you have any evidence—

Mr. David Daly: If I could just clarify what I said there, we don't see that the industry gets an unusual benefit from having a resource allowance.

Mr. Roy Cullen: Okay, that doesn't add up to the information I have, but what do I know?

If you have any information about sectors that have tax advantages and they got the break from 28% to 21%.... I know there are a few floating around, like the film industry, and so on. I think that one was cited specifically, but I was under the impression that your sector felt that there were a lot of them out there. If you have a list of them, maybe that's something that would be useful to the committee.

Just shifting gears for a moment, regarding economic instruments, tax incentives, many oil and gas companies are moving to call themselves energy companies as opposed to oil and gas, and some companies are moving more aggressively. What's the general feeling of the oil and gas industry about moving tax incentives from the traditional sectors to renewable energy? Obviously if we could do both, that would be great, but if we have to make choices, given that many companies are moving into renewable energy options as well, wouldn't it make some sense to move some economic instruments, tax incentives, from the traditional to the emerging energy sources?

Mr. David Daly: I don't think the federal government should be in the business of picking winners and losers in terms of which industries should and which should not benefit in the economy. I don't think it really needs to boil down to an either/or situation, but we do think renewable resources and renewable energy sources are a good industry and should be treated separately. It shouldn't be a matter of trading off something to help one industry and hurt another.

Mr. Roy Cullen: Okay. So you'd like both.

Ms. Smith, I'm surprised that in your brief you talk about the federal government not recognizing children. It seems to me that we have a very generous provision in the tax system, the Canada child tax benefit, and I think, once fully implemented, the increases that the federal government put in place are going to be in the order of $7 billion a year on a budget of $115 billion or something, and that's just the beginning in terms of what we do for children.

In fact, in the 2000 budget the Canada child tax benefit for low- and middle-income Canadians was raised effective July 2001, with maximum benefits for the first child rising to more than $2,500 each in less than four years, and then, for other children, it rises accordingly.

There has also been the early childhood development agreement, and so on. But in terms of the tax system directly, do you just discount completely the Canada child tax benefit, or do you recognize that as anything that's worth while at all?

Ms. Beverley Smith: Of course it's worth while, but you have to look at 365 divided into $2,500. That's not much money per child per day, and you're giving, for example, that it becomes less for certain family incomes. So making the criterion of that the family income doesn't recognize that the caregiver's personal income is sometimes zero. So the basis of the benefit is somewhat flawed.

It's a wonderful idea. It's probably not enough money, and it's given based on family, which forces women to be dependent, which women don't like to be seen as any more. So if you did it on the basis of the independent caregiver's income, I think it would be fairer. We're also concerned that it's clawed back in many provinces.

• 0945

We're also concerned about the inequality, because isn't this the one that works out to about $200 if you keep your kid at home and $7,000 if you put your kid in day care? The inequality is what concerns us. We would like to see a universal benefit that would be equal for all children.

Mr. Roy Cullen: Thank you.

Mr. Bayrock, I have one question for you. Would you argue with the principle enunciated here by Minister Martin that basic health care services are GST-exempt and then by inference non-basic health care services are GST-inclusive? Do you argue with that basic principle? Often the devil's in the detail, and that's I think what you're arguing. Do you agree or disagree with that basic principle?

Dr. Roman Bayrock: I'm not sure I would entirely agree. I believe the Canada Health Act allows for all Canadians to have basic medical services, however the Income Tax Act and Excise Tax Act specifically mention various professions. And unfortunately for us, we are not mentioned in here, and there are many services here that are not considered by many people to be basic. I would think that if there could be inclusion of other professions that are not basic, certainly we should be included as well, as a matter of fairness.

Mr. Marc Raedschelders: I would like to add that it's not very clear what basic services are. If I see that chiropractic is considered a basic medical service, then I think it's fair to say that acupuncture would also be a basic medical service, since a lot of our Canadians from Asian descent depend for a large part of their health care on acupuncture services.

Mr. Roy Cullen: Mr. Romanow is conducting a whole review of health care. Do you think that in his report he should...? I have never talked to the man, and I don't know what his scoping is, but concerning this whole debate around what should be basic health care services and what shouldn't, do you think he should include your practice and others in what is basic health care? If I were a betting person I would say that if he's going to make any recommendations in that area he would probably be removing certain health care services as being basic services. What are your views on that?

Dr. Roman Bayrock: One of the questions we have is that we feel we're in a little bit of a unique situation because we have practitioners who provide our services. There are practitioners out there who have limited training in acupuncture care, and they can apply acupuncture techniques within their broader scope of practice, GST-exempt. If they were in a situation that when they applied acupuncture they would have to be charged GST, I think our argument would be a lot less strong.

The question here is more of fairness. In basic health care medical doctors, physiotherapists, chiropractors, occupational therapists, and nurses can all compete with us. This is a question of taxation, I believe, not a question of providing health care services. They can provide the same service in perhaps not as good a manner, we feel, because our training is higher, and they don't charge GST.

Mr. Roy Cullen: Thank you.

The Chair: Thank you, Mr. Cullen.

Mrs. Barnes, and then we'll go to Mr. Pankiw, and then for a final question, Mr. Epp.

Mrs. Sue Barnes: Thank you.

I believe there is a place for acupuncture in health care, but I also think it's important to regulate the health care professionals. You've been told very clearly over a number of years that once you get five provinces where you are a regulated health care professional, you will get the GST exemption.

First of all, I don't understand why there is a reluctance to aggressively pursue this. I'd like to know how close you are to five provinces at this time and what you're doing, because I believe that is the right track to go on.

Dr. Roman Bayrock: We agree wholeheartedly. We would love to see all provinces be regulated. The process of regulation is long and arduous. We do not have the funds or the numbers or the political clout to expedite this process very quickly. Right now Ontario and Newfoundland are aggressively pursuing this registration process, and we have given them our support.

Alberta has become a leader in this profession. We've received tremendous support from our government here. Unfortunately, this process takes many years. Alberta initially started in the early eighties, and the acclamation of a registration process wasn't until 1994. That's about a 14-year process.

The question we've always had, and we've put it to the Honourable Paul Martin a number of times, is where he determines five provinces is fair. We consider that it penalizes the three that have worked so hard. We've even offered a compromise suggesting that the provinces that are regulated should be GST-exempt. But we do not have a clear reason why he's chosen five. He has consistently referred us to both your committee and the Senate committee for his rationale without giving any further explanation.

• 0950

Mrs. Sue Barnes: If it's an unregulated profession, I could call myself—

Dr. Roman Bayrock: Absolutely.

Mrs. Sue Barnes: —an acupuncturist and go out and start doing things that I'm sure would be dangerous to people. So I really believe that is the only way to go, and I'd encourage your organization to be making this their national program and project.

Dr. Roman Bayrock: We've tried very hard in that respect. The people who have succeeded in a registration process have worked very hard, and we feel penalized by the fact that—

Mrs. Sue Barnes: I can understand that, but I think it's your work.

Mr. Marc Raedschelders: The service of acupuncture is regulated in all provinces. In all provinces of Canada acupuncture is practised by medical doctors and physical therapists. So the unfairness is that the service is only GST-exempt if it's done by medical doctors, who have, in a lot of cases, inferior training. So there is an unfairness toward the patient as well.

Mrs. Sue Barnes: I think my point is made. There is a process for you to follow, and I'd encourage you to follow that process.

I'd like to make a comment because of something I heard earlier today. To be qualified as a teacher across this country you go and get a BA, then you do a year of training for teaching, and then you get paid as a teacher. One of the unfairnesses in our system is that the people who get an early childhood education certificate from a community college after many years of work, totally concentrated, end up working in industries, for the most part licensed day cares, where they are not paid comparably to teachers. But in fairness, I think they are teachers.

Certainly when I put my kids in licensed day care they were taught by these trained teachers. I want to put that on the record, because I thought that was a very unfair comment. That's all.

The Chair: Mr. Pankiw, then Mr. Epp.

Mr. Jim Pankiw (Saskatoon—Humboldt, PC/DR): Actually, in the provinces where acupuncture is not recognized as a self-regulated profession, you can't just call yourself an acupuncturist. There are still associations in each province. You still have to pass exams to become licensed. I can't speak for all seven, but I know in Saskatchewan the acupuncture association has looked at the possibility of pursuing self-regulation.

As you point out, Mr. Bayrock, it is a long and arduous process. There are up sides and down sides for the profession in doing that. There's good and bad that comes with it. I know in Saskatchewan the association's looked at it, examined it, but there's not a great desire necessarily to really put a lot of effort into pursuing it.

I think it gets down to your point of you can have one acupuncturist in one building and one across the street, and one has to charge GST and the other doesn't. Or in fact they can even be in the same office sharing the same overhead, having the same receptionist, and yet one would have to pay GST and the other not. I think that gets to the inherent unfairness, or the arbitrary nature of five provinces. Where does that number come from? Why isn't it three, or two, or six? Those are just comments about that.

The other thing is the concept of what is a basic health service came up, and I think Mr. Cullen, probably accurately, pointed out that Mr. Romanow's report might recommend that the public health care system fund a smaller scope of service than it currently does. But I don't think that's really the point, because again that's just an arbitrary thing as to what you would fund. It doesn't mean that somebody who uses acupuncture to care for a condition they have, or for pain management or whatever, and has a choice between drugs or acupuncture, shouldn't use acupuncture if it's working for them just because the public purse isn't paying for it. I don't think that has any connection to whether or not it should be GST-exempt.

Those are just a few comments. I don't know if you have anything to add there.

• 0955

Dr. Roman Bayrock: We have never received a satisfactory reply on why the Honourable Paul Martin requires five. Again, he consistently refers to your committee and the Senate committee, basing his decisions on the advice forthcoming from these committees. We've never been given anything clear.

Mr. Jim Pankiw: I suppose to be fair to him, he's a finance minister, not a health minister. What does he know? So he has this five, and he's saying it's the provinces.

As Ms. Barnes said, go get yourself regulated. In reality, though, when you're in these provinces, in these professions, that's not realistic. It is very arbitrary and creates this unfairness of where one practitioner is subject to it and the other is not for exactly the same service. Hopefully, the committee can include some type of recommendation to the finance minister, and that could be fixed up.

Dr. Roman Bayrock: If we were allowed more time, I could describe in detail the process that Alberta has to go through in the regulation process. It is monumental for a small profession such as ours. It would be far too easy to say go ahead and go out and get regulated. We well appreciate your elections of many members in Saskatchewan.

Mr. Jim Pankiw: It's also very costly.

Dr. Roman Bayrock: Yes, you just do not want to aspire to that huge amount of responsibility and work.

Mr. Jim Pankiw: I was going to ask Ms. Smith something, but it's not that important.

The Chair: No, go ahead. You have time.

Mr. Jim Pankiw: I agree with most of the things you've said. You've certainly pointed out the unfairness of the tax system by its failure to tax families. By taxing individuals it discriminates against single-income families.

Of course, you referred to the preference for a single tax rate. This point was made yesterday as well. Marginal tax rates, putting people into increasingly higher tax brackets...it's a discouragement or a penalty for success. If you apply yourself harder, work overtime, go back and get a better education, put yourself into a higher income, now you have to pay a disproportionately higher share of tax. That's a counterproductive measure. Hopefully, those types of things one day will be corrected.

One thing you said that had me scratching my head a little, thinking about single parents who were on welfare. I think your point is a good one. We have a welfare system that needs to be reformed—and some provinces are taking the lead on that—because when you have able-bodied people using it as a lifestyle, that's a problem. On the other hand, there are people who are in legitimate need, and we as a society should be willing to support them. In fact, cleaning up the abuse of the system would probably free up more resources to help people who legitimately need it.

Perhaps this is unfair, but I've heard people say some single parents are using the system. They don't fall into the unfortunate circumstance of being suddenly a single parent and now in need of the support, but in fact they have one, two, three, four, five children and plan to be on the welfare system, so they're using that as a select.

Perhaps you can never have a perfect system, so you have to turn a blind eye to such things and say we still think that single parents, regardless of the process they took in getting there....

Ms. Beverley Smith: It's a really touchy issue, you're right. I would like a universal deduction for children. This would enable some women to make choices like working part-time rather than full-time outside the home, to prioritize some time with the child. Single parents would have all the options that everybody else has.

I recognize that if you have a 14-year-old mother, you don't want her to think this is going to be the way she earns her money now. I understand that. That's also an agenda the government has of her life, and we have to be very careful when we have agendas for other people's lives.

Unfortunately, there's a tendency sometimes for people to say that if you have children and you keep having more children, you're just pumping babies out, whatever, therefore you're not doing anything. There is a problem with not recognizing that taking care of a child is very hard work. Part of the women's movement is to recognize that. Because she's on welfare doesn't mean she's not killing herself every day.

Mr. Jim Pankiw: Yes, that's a good point.

The Chair: Final question, Mr. Epp.

• 1000

Mr. Ken Epp: Thank you very much, Mr. Chairman. I have some questions for the acupuncturists, and thank you for giving me a second little round here.

Are you telling me that currently the acupuncturists are not funded by the health care system in any provinces? In two provinces? How many?

Dr. Roman Bayrock: To my knowledge, no acupuncture services are provided in any province, regardless of who applies it. A medical doctor applying acupuncture cannot bill the health care system for it, to my knowledge.

Mr. Ken Epp: In order for that to happen, would you be looking at changes to the Canada Health Act so that your profession would be included in their definitions, or would you be happy with just changing the Excise Tax Act, the schedule that you gave us a copy of where practitioners are listed here? We have chiropractic, optometric, physiotherapy, chiropodic, podiatric, etc. Would you be satisfied with having your group included in that definition only, or do you look for changes to the Canada Health Act as well? What are you looking for?

Mr. Marc Raedschelders: I think there is a lot similarity, as far as that goes, between our profession and what is happening in the dentistry service, because they also are not covered for their service by health care, at least not in Alberta. They opted out of coverage. I think that would be a comparable situation for acupuncturists as well, where they would have the option of opting out.

Mr. Ken Epp: Did the profession opt out, or did the province opt you out?

Mr. Marc Raedschelders: We have addressed this to the province, and they maintained that this is a federal matter and the province has nothing to do with it.

Mr. Ken Epp: So the Province of Alberta and every province in this country has said you cannot bill the health care system of the province for your services.

Mr. Marc Raedschelders: That's correct. Yes.

Mr. Ken Epp: Is that because you're not recognized as true medical practitioners?

Mr. Marc Raedschelders: I have no idea why that is, because when we look at other countries, especially in Asian countries, acupuncture services and traditional Chinese medicine is definitely covered. If you look at Japan, a lot of herbal products are covered by their health care system. If you look at our neighbours to the south, in the U.S., where of course everything is based on private insurance, private insurance does cover it.

In Canada as well, private insurance companies do cover acupuncture services because they see the benefits, and the National Institutes of Health in the United States have definitely shown the validity of this health care system. So it's not because it's not a valid health care modality that it's not accepted.

Mr. Ken Epp: Just to focus this totally, if you were to get one sentence in our report to the finance minister, what should that sentence be? What should be the words in that sentence?

Dr. Roman Bayrock: The issue we are here before you on is taxation. We do not feel we should be charged GST. That is the sentence we would include.

The issue of health care coverage for our services is another issue we could get into. We're pursuing that provincially here at this moment.

The reason we are here now is because of the direction of the Honourable Paul Martin to approach your committee to give him advice and recommendations on this issue. We do not feel GST should be applied to our profession.

Mr. Ken Epp: Thank you.

Mr. Jim Pankiw: I want to say that they're two separate issues. Whether or not a provincial acupuncturist association wants to lobby their provincial government to be included under the Canada Health Act.... As Mr. Raedschelders pointed out, dentistry, for example, isn't covered. There's no desire by dentists to be covered, but they are GST-exempt. So they are two separate issues.

The Chair: Thank you, Mr. Epp.

Ms. Barnes.

Mrs. Sue Barnes: Actually the point I was going to make was made by the presenter, and it was that there are private health insurers that do cover the expenses of going to acupuncturists. So the inequity, in my mind, is for the ones who don't have those coverages, like a self-employed individual, or an unemployed individual who doesn't get that covered. But that is a different point, different from the one you're making. I'm glad you clarified it.

The Chair: Thank you.

• 1005

Thank you very much, witnesses. I want to express to you our sincerest gratitude for your input.

We always rely on Canadians to give us sound advice. Today we heard some perspectives that we'll have to factor in as we get ready to write the report. If what we hear on the news is right, we're going to have to write it a lot faster than we thought.

Once again, thank you very much for your contribution.

We'll suspend for 25 minutes.

• 1006

• 1032

The Chair: I call the meeting to order and welcome everyone here this morning for the second panel.

We have the following organizations: the Clean Air Renewable Energy Coalition; the Women Warriors of Sahtu; the Canadian Worker Co-operative Federation; Private Foundations Canada; and Canadian Parks and Wilderness Society, Edmonton Chapter.

So we're clear on how this presentation process is going to work, you have five to seven minutes—I'm sure you've been told that already—to make your presentation, and thereafter the members of the committee and yourselves will engage in a question and answer session.

We'll begin with the Clean Air Renewable Energy Coalition, Ms. Marlie Burtt, director of taxation, Suncor Energy. Welcome.

Ms. Marlie Burtt (Director of Taxation, Suncor Energy; Clean Air Renewable Energy Coalition): Thank you, Mr. Chairman.

Honourable members, ladies and gentlemen, we're making a presentation today on behalf of several entities that have formed a coalition in support of renewable energy. I've given you a handout of my speaking notes. On the cover sheet you'll see the organizations, which consist of energy corporations, power corporations, NGOs. The Federation of Canadian Municipalities, the Pembina Institute, and Suncor Energy are the initial sponsors or founders of the coalition.

You will also have been provided with two handouts. There is one glossy one that's two pages that basically has everything that's contained in the speaking notes, and then you have a six-page backgrounder, which contains more detail and information on the initiatives.

With respect to renewable energy and why it makes sense, there's kind of a convergence of the benefits of supporting renewable energy at the current time with respect to a lot of Canadian public policy initiatives. Of course renewable energy provides for energy source diversification, and distributive energy also provides strategic defence benefits, of course.

• 1035

There are new capital investments, the creation of a new industry, regional jobs. Technology advancements in the area of renewables is an important field that's undergoing a lot of research at the current time, as you know. There's an opportunity for domestic manufacturing and project management know-how; improved air quality and related benefits; and of course greenhouse gas emission reduction, which is consistent with Canada's initiatives with respect to the Kyoto accord.

In an international context, Canada lags very far behind most other developing countries in the world. We have only about 140 megawatts of wind energy produced from renewable sources in Canada. Compare that to the U.S., which is at 2,800 megawatts and growing; Spain, which is at 3,500 megawatts; and Germany, which is at 6,500 megawatts. Incidentally, Spain and Germany have created substantial renewable energy manufacturing facilities, and they export technical know-how as well with respect to construction and management of renewable energy projects.

The challenges we have to overcome in Canada have to do with the fact that there's low demand for renewables. They are expensive. They are bulkier to handle than one-source energy power generation. As a result, there is limited market access. There's limited consumer choice. And all of those are obstacles to having renewable energy take off in Canada.

With respect to the low supply, it's also because of the higher costs of equipment, the exchange rates, the and marginal economics. All of these projects require long-term power contracts in order to go forward, and no one wants to lock in that kind of long-term pricing with current costs of other alternatives.

This is Gord Lambert, my colleague from Suncor.

What we've proposed as a coalition is some short-term action until a full domestic emission trading system is implemented, and we expect that within the next two to three years. We know work is under way through the domestic emission trading working group and a number of other cross-governmental or intergovernmental bodies.

We're proposing a consumer green energy credit and an incentive for the producers on the supply side. The two of them working together we consider are very fundamental to actually giving a sustainable kick-start to the renewable energy industry. We have a situation where a lot of the provinces own the utilities and this initiative is not precluded from those provinces, because they also purchase power from various sources, whether they own it or whether it's from independent power producers.

On the supply credit, you'll see in the speaking notes there are three alternatives we're proposing: a broadening of what's called the CRCE expense, which is a 100% deduction and renounceable to investors; an investment tax credit, which most of you'd be familiar with; and a production tax credit, a production rebate, which is what's used in the United States. They currently have a 1.7¢ per kilowatt-hour production credit for the first 10 years of any renewable project.

The fundamental difference with these is that the first two, the CRCE and the ITC, involve the incentive on the full capital from day one, whereas the production credit provides for an annual amount based on what's actually produced. From initial discussions we've had with various departments in the government, I think their preference may be toward the production credit, because it's less expensive at the front end; it can be terminated when replaced with a domestic emission tax credit; and it's understandable in terms of our friends south of the border.

• 1040

With respect to the consumer energy credit, this is an area we feel is absolutely critical to the initiative, because currently consumers do not have a choice. In order to get a behavioural change, we really need to have initiatives that engage them in the process of selecting green power. The increase in demand is critical for sustainable renewable energy production. You can have credits by themselves, which create a supply, but if you don't have the market, you won't get the response.

In the U.S., for example, they're offsetting the production credits. There are a number of initiatives within various states, from renewable production standards to performance standards for a certain percentage of green energy. There are net metering initiatives. There are a number of initiatives to deal with the demand side in the U.S. There are also tradable green credits in the U.S.

In Canada, we need some initiatives on the demand side. We're saying for the short term let's get it going, because we can't respond in 2005 or 2008 with instant offsets for alternative energy. The capital stock turnover in the investment takes time to kick up.

The Chair: Thank you very much, Ms. Burtt.

We'll now hear, from the Canadian Worker Co-operative Federation, Hazel Corcoran, executive director. Welcome.

Ms. Hazel Corcoran (Executive Director, Canadian Worker Co-operative Federation): Thank you. Good morning, everyone.

My name is Hazel Corcoran. I am executive director of the Canadian Worker Co-operative Federation and also a volunteer board member of the Conseil canadien de la coopération, the national francophone organization of co-operatives in Canada. It's primarily in my role as director of the CCC that I'm here. I've provided a couple of pamphlets about the co-op sector to the committee.

First of all, I wanted to thank you for the very positive supports to the co-op sector that the federal government has undertaken recently, one being the new federal co-op act and the other the worker co-op fund, which my organization is managing. But the reason I came here today is to speak in support of the national co-op development partnership proposal, which has been put forward by the Canadian Co-operative Association and the Conseil canadien de la coopération.

I hadn't planned to come to speak to the committee, but I guess you could say I changed my mind shortly after September 11 because of my concerns that with the new focus on security and the military, which are very understandable, this sort of domestic initiative might be forgotten. Of course the whole government's priorities shifted at that point, and I think that's justifiable, of course. But we have to remember that the Prime Minister has said that Canadians must go on with our ordinary lives and continue to be concerned with the needs of ordinary Canadians.

Just to give a little bit of background—and I'm not sure how much the committee knows about co-operatives—they are democratically controlled, member-owned businesses or non-profit organizations, and their purpose is to meet the economic and/or social needs of their members.

There are about 10,000 co-ops, credit unions and caisses populaires in Canada, with about 15 million memberships, almost half of which are in francophone communities. Examples included Federated Co-ops, Mountain Equipment Co-op, the Caisses Populaires Desjardins, Calgary Co-op, the Multicultural Health Brokers Co-op here in Edmonton, Arctic Co-operatives Limited in the north, and on and on.

The co-op development proposal I'm discussing today is for a partnership between the CCA, the CCC, and the federal government, whereby all the partners would make investments in a program to encourage the development of co-operatives. The investment sought from the federal government is $32 million over five years. I understand the proposal has been under active consideration by the cabinet in the past year, but its current status is uncertain.

Why is it important to develop co-ops? First of all, they are very effective vehicles for socio-economic development. Their purpose is to meet community need and not to maximize profits, although they are operating as businesses in most cases. The model is very flexible and can be used effectively to meet needs as diverse as health care, child care, banking services in rural and other communities, employment, utilities, and on and on.

Secondly, their approach of mutual self-help means they can help to mitigate the effects of hard economic times, which, unfortunately, we may be heading into.

Thirdly, the existing so-called established co-op sectors are under considerable pressure because of both an aging membership, in some cases, and the challenges currently faced by all businesses from globalization and the current economic realities.

Lastly, the co-op movement helps to build links among people around the world. For example, the Co-operative Development Foundation, which is run by the CCA with assistance from CIDA, brings co-operators from Canada into the developing world and creates great links.

• 1045

Why is this proposal needed? First of all, the existing co-ops and credit unions simply lack the resources to develop new co-ops all on their own. Their focus is on meeting the member needs for which they were established. They already can and do contribute significantly to new co-op development but will not be able to mount a program on their own, at least of this magnitude.

Secondly, the proposal would help to level the playing field with other business models, as the federal government simply does not give much support for encouraging co-op development compared with other business development.

Thirdly, co-ops can effectively help the government meet its objectives, including those for health care, the knowledge economy, services in rural communities, etc.

In summary, I would say that federal funding for this initiative would allow communities to use the co-op model to respond proactively to economic or social opportunities and challenges. Co-ops are quiet achievers. They are unique and powerful engines to meet community needs. Unfortunately the engine usually doesn't get going unless it's kick-started.

In decades past this role was often played by churches and more recently by provincial governments. But except for Quebec and to a limited extent Saskatchewan, the provinces are no longer effectively playing that role.

The federal government, as mentioned, does fund co-op development assistance in developing countries in partnership with the Canadian co-op sector through a proven program, and I hope you continue that important work. But within Canada, too, the co-operative movement represents a powerful ally for citizens to collectively seek to empower themselves in this changing environment and for governments looking for ways to effectively partner with communities.

Thank you for your time. I look forward to answering any questions.

The Chair: Thank you very much, Ms. Corcoran.

We'll now hear from Private Foundations Canada, Dr. David Elton, chair of the government relations committee. Welcome.

Dr. David Elton (Chair, Government Relations Committee, Private Foundations Canada): Thank you very much.

It's my privilege to represent a relatively new organization that's been set up in the last couple of years to promote the growth and development of philanthropy through the creation and growth of private foundations.

As you probably know, there are well over 1,300 foundations in Canada, 80% of them private foundations. They have been and are being created by people who want to share their success in accumulating wealth with other Canadians, through the granting of funds to Canadian charities.

Private Foundations Canada currently has 53 members who provide over $100 million each and every year to hundreds of charities throughout Canada.

The purpose of our presentation to this committee is very simple and straightforward. We'd like to encourage this committee to join with a broad section of people in the charitable sector to recommend that the government extend the capital gains tax incentive related to the donation of publicly traded charities to include gifts of such shares to private foundations.

We are aware that several organizations have made presentations to your committee on this issue, the Canadian Centre for Philanthropy among them. They know—as we do—of the substantial benefits that flow to charities and to Canadians from an increase in the number and size of private foundations.

The benefits, we think, are very obvious. Gifts to private foundations are made up of primarily individual wealth, with or without the capital gains tax incentive we're talking about. The foregone tax on this particular issue is a very small portion relative to the benefits that charities and Canadian citizens receive, not simply in the first year, but for years and years thereafter. I will refer to that in a moment.

The evidence, in sum, from decades of experience with private foundations, is that any incentive to encourage the creation or growth of such entities pays huge dividends to all Canadians.

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Let me give you a concrete example. I've had the privilege of working for the Max Bell Foundation over the last four years. This is a foundation that was endowed by one of Canada's more famous entrepreneurs in 1972 with a gift of $17 million of FP Publication shares—the very kind of thing we're talking about here. Over the past 29 years, this foundation has gifted over $60 million to hundreds and hundreds of charities, from McGill University to handicapped riding associations, from the Stanley Park Aquarium to neuroscience research.

The foundation now has an endowment of $60 million and makes charitable donations in excess of $3 million per year. Put that over however many years you wish to go out in the future, and you can see the huge benefit that has been created by this original $17 million endowment of publicly traded shares.

Let me then draw a very quick conclusion to all of this. If the capital gains tax incentive of gifts of publicly traded shares encouraged even one individual to create a foundation like the Max Bell Foundation, the benefit to Canadian society would be many times greater than the benefit Canadians would realize from the imposition of that relatively small capital gains tax. We believe extending this incentive will send a message to dozens, even hundreds, of Canadians that the Government of Canada values the creation and growth of private foundations.

Thank you.

The Chair: Thank you very much, Dr. Elton.

We'll now hear from the Canadian Parks and Wilderness Society, Edmonton Chapter, Mr. Sam Gunsch, executive director. Welcome.

Mr. Sam Gunsch (Executive Director, Canadian Parks and Wilderness Society, Edmonton Chapter): Good morning. Thank you for the opportunity to speak.

You have a copy of the Green Budget Coalition summary with regard to national parks. That's what I'll be speaking to. That's my concern. My emphasis will be protecting the ecological health and integrity of our existing park system of 39 national parks.

In summary, the budget for Parks Canada has been cut 25% since 1993, and there are significant negative consequences from that budget cutting. In poll after poll, Canadians have supported spending on environmental protection, and they don't accept the trade-off between environmental and economic concerns. Both are important, and in fact, in their minds, they recognize that our economy depends on the environment.

The specific consequences to Canada's national park system are that we are taking from existing budgets to pay for new parks. There isn't enough money to take from existing budgets to accomplish that. So we have parks in the north where local communities have been involved in negotiations with the federal government for a long time.

Those negotiations, as you will be aware, can be quite sensitive. Basically, when things stall out, there's a loss of trust in the negotiations, and we may be losing opportunities simply because of that. These opportunities are often one-time. When parks don't go ahead, as we've seen around Nahanni National Park, with a proposal on the books for years to expand it, often there are development proposals moving ahead.

Parks generate significant economic benefits for our economy. Our organization doesn't lead typically with arguments for that for national parks, but we do want to point out the bottom line. A study in B.C. found that for every dollar in spending by governments on parks, nine were spent by the private sector, by visitors and through support services. In Alberta, for example, parks per hectare generate more economic benefits and more jobs per hectare than forestry and agriculture.

You don't save money by putting off repairs to our existing parks, to the infrastructure that Canadians rely on to use them safely. If you don't repair the shingles on the roof of your house, you're going to have a rotten roof and you're going to have a lot more expense. The same principle applies in many cases to roads, bridges, and the like, in parks like Jasper.

To speak to my region, an independent poll last year, not funded by either the development interests or protection supporters like ourselves, found that three-quarters of Albertans value parks primarily for the opportunity to experience wilderness, protect wildlife habitat, and protect those ecosystems for future generations, rather than intense recreational development such as ski hills or golf courses.

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So there is a strong Canadian base, and right here in Alberta. In fact here in Alberta, I'd argue, the federal government has a significant profile because of our national parks like Waterton, Banff, Jasper, Elk Island, and Wood Buffalo. We're fortunate to have the biggest share of western Canada's national parks here in Alberta.

Specifically, I shall deal with three of those parks, beginning with Wood Buffalo. I've been involved since 1990 with the issue of disease, tuberculosis, and brucellosis in the bison in that park. I served for five years on a committee with the first nations around the park, the Government of NWT, and the Government of Alberta.

There was a lot of goodwill and a consensus recommendation on the research necessary to address this issue—which, according to the government of Alberta and the cattle industry, threatens our export markets. That recommendation for research to manage the issue has been stalled out. A lot of goodwill and a lot of trust in investing for years in processes is being lost for want of $1.2 million in research.

Some of you may recall that in 1990 a proposal to slaughter all those bison met with international outcry. We have a very significant issue being held up, in which people have invested a lot of their own time locally.

Jasper National Park is an older park with a lot of bridges and roads falling into disrepair. The park doesn't have the funding to participate in Alberta with cross-border issues. It's the only agency that doesn't have the funding to participate in the foothills model forest in the upcoming budget years. We have a park ecologist position that's just unfunded.

The government committed in the spring to implement the recommendations of the ecological integrity panel. The Green Budget Coalition summarizes the $328 million over five years to implement that. That includes things such as I have mentioned in Jasper.

Elk Island National Park near Edmonton, Canada's only fenced national park, has no predators. The elk and bison population have to be reduced by us, since we don't have wolves there. They have slaughtered in the past, but for some time now—for decades, I believe—they've rounded up and auctioned off bison and elk. They literally don't have the certainty of funding to be able to handle that process—just the literal, physical handling of those animals. They're running the park on the goods and services budget. They've run out of capital budget.

There are some serious consequences to not funding our existing parks and robbing them to produce the new national parks. Both agendas are supported by Canadians. They're not new agendas. They've both been committed to for years through various red-book commitments and government speeches from the throne.

Thank you.

The Chair: Thank you very much.

We're now going to hear from the Women Warriors of Sahtu. Chief McCauley, welcome.

Chief Cece McCauley (Women Warriors of Sahtu): Good morning. I am Chief Cece McCauley from Norman Wells, Northwest Territories. We are here with a proposal for the extension of the Mackenzie Highway from Fort Ridley to Inuvik.

I think you all received a package from us a few months ago and also a five-page condensed report on what we want. I hope you all read it. We come now with a proposal. What we want to do is begin slashing the right of way from Fort Ridley to Inuvik this fall and winter. The machinery and manpower is all in place along the little settlements on the route. We are asking for $6 million to do 832 kilometres, 200 feet wide.

The federal government moved into the Northwest Territories in the late 1950s and early 1960s. Before that it was a wilderness up there with no government, only RCMP. The government has been up there for 45 years. It's done a lot of good, but they missed out on a lot also.

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What I want to point out is that the small, isolated communities have not improved in the last 45 years, because of isolation. We have been waiting for the last 30 years, or maybe longer than that, since the Honourable John Diefenbaker started the Mackenzie Highway, calling it the road to resources. They got as far as Fort Simpson, then to Fort Wrigley, and they stopped there in 1957, I think. I can't see the date, but you have the report.

We've been waiting since 1976 for them to finish the road from Fort Wrigley to Inuvik. In the meantime, the delta highway went through there from Whitehorse, and the people in the Yukon put in the Dempster highway, because they knew there was a lot of money to be had in the delta.

The Sahtu region is the largest of the five regions in the western territories, and we are isolated. Everything seems to be mobilized around Yellowknife and Hay River in the southern part of the Northwest Territories, close to the Alberta border, and then the Beaufort Sea to the Yukon, Whitehorse, and the Beaufort. We're in the middle so we're still isolated. We still don't have any roads and everything has to be flown in. The only time we can get freight is maybe two and a half to three months in the summertime, and the high cost of living is terrible.

You know, the government has a per capita mentality, and we're hoping you won't look at us in that light. Every time we ask for anything we're told the population is so small up there. But look at the region and the richness. Just look at the revenues taken out of the Northwest Territories on a per capita basis. We contribute more dollars per capita than the rest of Canada. For the last 45 years, in minerals, there's been gold, and now diamonds. One of the biggest diamond mines is in the Northwest Territories. There's also oil...you name it. Our Sahtu region hasn't even been touched or looked at, and we're the biggest region. What we need is mobility and access to resources.

If the federal government would help us to slash this fall, it would show the people of the Northwest Territories the federal government is committed to the north. People feel left out. We just don't seem to count, but we really are contributing a lot of money to the federal government. We're simply asking to have that road from Fort Wrigley to Inuvik finished, which will save us 500 miles—instead of having to go around the Yukon to the delta, going straight to Alberta.

The high cost of living in the Sahtu region is something we just can't live with any more. Even in the delta, with the road there, a big truck can cost anywhere from $4,000 to $7,000 by the time it leaves Edmonton and lands in Inuvik, and that's added on to the food and everything that we have. It's cheaper to buy food in Inuvik than in Norman Wells, and we're south of them. The women have decided we just can't live with that any more.

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Isolation creates a lot of frustration and violence. The Sahtu has been known, especially Fort Good Hope, as having the highest crime per capita in Canada. It's still like that. It's just from isolation. We have suicides. The young people see life on TV, as I said in my brief.

I think I gave good arguments in my presentation, including the Beaufort Sea, where we're going to lose sovereignty of the ocean. There are ships coming in there, and submarines. The Beaufort area is going to become busier than ever. It's going to boom up there, because there's not only oil, there's the huge find at Paulatuk, right on the Arctic Ocean, where there are diamonds and you name it—every mineral there is.

They need a highway. In the Sahtu region, we can't do anything about tourism. If we had the highway, the tourists could come, make the loop, come down the Mackenzie and go around Whitehorse, on the Dempster. That's what they always ask us: “Why don't you have a highway?” The highway stops at Wrigley. We're all waiting. The people have been waiting for years and years for money.

The studies have been done. There are so many studies done on that highway. The last one came out two years ago, and it's a done deal. All we need is money. But the first thing we want to do now is the slashing, this fall and this winter. That will open the door. And then we'll do the second phase—we'll maybe come back to you for the second phase later on. But if we do the slashing, that would create a lot of jobs. We need the highway. We cannot live like that any more.

Malnutrition is bad. Children can't get fresh milk. Two litres of milk is almost $8. An orange and a grapefruit cost $4. Ten pounds of potatoes are $17. In Edmonton, you can buy 20 pounds of potatoes for $3.99. The people see that, and they're frustrated. I have had young people come to me and say, “Before I die”—and this is a young man—“I would love to take my family in a car and drive down the highway to Yellowknife or Edmonton”.

It's a dream we have. We've waited for 30 years—27 years from when they stopped the highway at Wrigley. The territorial government says it's a federal responsibility. New roads are a federal responsibility, we know that.

I don't know what else to say. It's all in my report, the arguments are all in there.

The Chair: Thank you very much for your presentation. I'm sure you'll have questions during the question and answer session, so you can perhaps elaborate on some of the points you've raised.

That's where we're going now, to the Q and A. We'll start with Mr. Epp. It's going to be a five-minute round for everybody.

Mr. Ken Epp: Thank you very much, Mr. Chairman.

Thank you all for being here. I appreciated your input.

I have a question for the Clean Air Renewable Energy Coalition. If I were, for example, to put up a wind generator on my place—I could do that, the winds howl out there sometimes—there's no direct benefit for me, other than the fact that I might save some electricity. But to hook that thing up costs more than 25 years of my electricity bills. I don't know whether you're looking at that end of it.

I think you are probably looking more at the commercial production—you know, have a wind farm, a wind-charger farm or whatever you call them, like they have down at Pincher Creek, and put that into the grid. But for individuals, there is no economic benefit at this stage. It's just not viable. Is that not accurate?

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Ms. Marlie Burtt: You're absolutely right. It currently isn't viable. These proposals address commercial economies of scale to get the industry started. The concern you have is something we've encouraged the provinces to consider with respect to net-metering initiatives and access to the transmission grid.

When you have provincially owned power generation across Canada at varying stages, it becomes difficult, because the person who owns the power generation facility also controls access. The provinces are getting more proactive in trying to encourage renewables, but we really need to make those kinds of concerns and the consumers more aware and to give them the choice to buy green power or to produce their own.

Mr. Ken Epp: I have many more questions for you, but I need to rush on, because the chairman of this committee is just brutal in imposing time limits.

I want to ask a question to the co-operatives. You say you want federal funding for your initiative. I listened very carefully, but I think I'm getting old and my hearing is bad. I don't really know exactly what initiative you're proposing, how much it's going to cost, and what the line item in the budget will be.

Ms. Hazel Corcoran: I apologize if I wasn't clear. Perhaps I was assuming the committee had heard about it before, because it has been before the government for a couple of years. I have the executive summary here, and I could get copies made for you.

Basically, it's a proposal that would have both the federal government and the co-operative sector contributing over five years to encourage the development of new co-operatives in various sectors of the economy. There are certain sectors laid out as priorities, including the knowledge economy, youth, rural, and so on.

I could answer other questions. I just wanted to give an overview.

Mr. Ken Epp: Okay. I was just wondering about this, and I have a question about it. When I think of my own situation.... I grew up in Saskatchewan, and as you know, co-operatives were sort of the mainstay there because people had to work together just to survive, and that developed very naturally into co-operatives. My dad was a great co-op supporter all his life. So I agree with this. But I think what's going to happen is that people, when they see that it's to their advantage to form a co-op, will form a co-op. All it takes is a little initiative from some of them to do that.

I would like to know how much federal funding you want. Are you really sure that you need a line item in the federal budget in order for this to happen? It seems to me that it will happen of its own accord if it's a really good idea.

Ms. Hazel Corcoran: I think one just needs to look at what's happening now across the country in terms of co-op development. There's not all that much of it going on. I think people from Saskatchewan and some other parts of the country where application of the model is really huge understand it very well. But certainly, in most of the cities of Canada these days you can say “co-operative” and people don't even know what you're talking about. That's why they don't pursue the model, because they don't understand. Part of what the program would do is promote and educate. A lot of that knowledge has been lost over time.

Mr. Ken Epp: Thank you.

I want both Dr. Elton and Mr. Gunsch to realize that I hear you well, and the reason I'm asking questions is because I think I understand what you're saying, and basically I'm supportive. I want to get to Ms. McCauley, chief of the Indian group there.

I thank you for coming here. It's a great thing to hear from you. When I read your report and some of the things that happen in your communities, it sort of wrenches the heart to realize that you have such difficulties. Your young people, I'm sure, are frustrated like anything.

I have a couple of other questions. You say, for example, that if you get this road, you can get tourism. Yet you say that the adult world is bad and that gambling, alcohol, and drugs are flourishing. Very often we hear that it was the coming of the white man that made the situation for natives even worse in some of those areas. If you open up a highway and bring these things into your community, will not that make your situation even worse?

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Chief Cece McCauley: No. It can't get worse than it is.

If we bring the roads in, then the young people will have some other things to do, and they'll spread their wings. We want to be self-sufficient and do things. It's about what the young people do. They're isolated in these towns with no roads and nowhere to go. They can't afford the airlines, and some of them have never been out. I've had women tell me that they've never been out of their towns. All the vices are everywhere in the world no matter where you are, but mobility will help them to forget that and to go and see the rest of the world. Do you know what I mean? It will open their eyes.

Mr. Ken Epp: Do you not have widespread satellite TV up there?

Chief Cece McCauley: Yes, that's another thing. They see life on TV. There's a beautiful world out there that's not accessible to them. They just see it on TV.

Mr. Ken Epp: I hate to disillusion you, but sometimes it's not that pretty down here. There's a lot on TV that.... We shut the TV off in our house because we don't want our kids to see it. Anyway, that's a whole other point.

How many people live in Inuvik right now? What's the population of the area?

Chief Cece McCauley: In Inuvik there are probably 4,000 now, with the oil exploration going on up there.

Mr. Ken Epp: Do you have reasonably good access to freight hauling and other things in winter with the winter roads? Is that not right, or am I wrong there?

Chief Cece McCauley: It takes about a month or two to build a road, because you have to depend on the weather. Then, by the time it's finished, spring is around the corner, so you're lucky to have a road for a month. With all the money that's wasted on the winter roads, we might as well put it into a highway.

Mr. Ken Epp: Is the terrain there suitable to sustain a road? We hear of things like the muskeg. If you were to put an all-year road into some of those areas, it seems to me that the costs would be immense, that the road quality would be very difficult to maintain, and that it would have considerable effect on the ecology.

Chief Cece McCauley: The muskeg is mostly in the delta region in the Arctic. Where we are, it's beautiful. It's beautiful for agriculture.

Mr. Ken Epp: Go ahead, Don. We're all a family here.

Mr. Don Sandercock (Women Warriors of Sahtu): Thank you very much.

That's a very good question, and it is a perception. The territory between the Mackenzie delta and Wrigley is actually in what they call a discontinuous permafrost zone. It is really just rock and forest. As Cece said, the muskeg is mostly in the delta area.

Mr. Ken Epp: So when you speak of slashing, you're just talking about taking up some of the underbrush, are you? It's not completely wooded up there, is it?

Chief Cece McCauley: Yes, it's timber and trees. It's just like out here.

Mr. Ken Epp: So if you had a road, would you get into the timber or lumber industry as well?

Chief Cece McCauley: In some places you could. You could make toothpicks. But seriously, there are a lot of things we could do with that wood.

That's why we want to be self-sufficient. We're looking at our raw materials, and we're looking at the best clay in the Mackenzie River. It's so pure. We're looking at all the trees, even the scruffy ones. We can open factories and be self-sufficient. We want to be self-sufficient and make money, not be on welfare. The highway will help us open doors.

Mr. Ken Epp: My time is up, but I have one more question, Mr. Chairman, if I may.

I want to ask about the resources. You've talked about the natural resources and said that you have contributed so much per capita, and I believe your numbers are accurate. I have a specific question with respect to gold and diamonds up there. This is a pretty good wealth-building industry, yet you claim that you need to have money from the government to build a road. Why don't you just use the money from the wealth you're producing?

Chief Cece McCauley: That's one of my biggest arguments with the territorial government. They were just talking about putting a toll on the highway, but I hear the people killed it the other day. They were talking about the tolls because the road from the Alberta border going to Yellowknife, Hay River-Yellowknife, is all ruined because of the heavy equipment the diamond companies bring in. Maybe you should tell the territorial government that. Get the diamond people to help fix the roads. But the new road is still under federal jurisdiction. We want a new road.

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Mr. Ken Epp: Who gets the money from the diamonds?

Chief Cece McCauley: You do.

Mr. Ken Epp: I don't. I haven't had a cheque.

Chief Cece McCauley: The federal government takes all the royalties from the Northwest Territories. We don't get anything.

Mr. Ken Epp: But they must spend way more than what they take in.

Chief Cece McCauley: Oh no.

Mr. Ken Epp: You don't think so?

Chief Cece McCauley: They take out billions and billions, and I think they spent about $760 million last year. That was our....

Mr. Ken Epp: We'll have to check those numbers.

It's been very pleasant talking with you.

I'm sorry that my time has elapsed, Mr. Chairman. I've gone beyond my limit.

The Chair: It was a long five minutes.

Mr. Ken Epp: It was. My apologies.

The Chair: Mr. Nystrom.

Mr. Lorne Nystrom: Welcome to everyone this morning.

I have just a quick follow-up question to the chief or Mr. Sandercock. You say the prices are outrageous up there—$7.60 for two litres of milk, $4 for an onion, and so on. Have you or has anybody done any studies on what would happen to prices if you did have a highway? That might be useful, in terms of making the argument to spend money to build a highway. I assume if there were a highway there, transportation costs would drop and food costs would drop a little, but do you have any idea what the result would be?

Mr. Don Sandercock: There have been cost-benefit studies done. In fact, they've shown that the economics of that are not there.

The fact is—and I think this is what Chief Cece McCauley is saying—the roadway is the big picture. She would like to get it started. It's just one piece of the puzzle to get it going.

The roadway can benefit food prices, and that's not the only measure. There are other measures, in terms of resource access, helping people in their communities feel more involved with the territory, and better accessibility and mobility. There are other economic opportunities in tourism, and there are new opportunities on the table, as we speak, in terms of the pipeline.

It should be realized that the Mackenzie pipeline, if it is approved, would basically run parallel to any highway going there. This would be an economic benefit, through the highways, to the pipeline companies, as well.

To answer your question, the food component of that is just one small portion of it.

Mr. Lorne Nystrom: I'd like to ask a question of Dr. Elton. I remember his work with the Canada West Foundation, and in many conferences and studies over the years. The argument he makes today about the capital gains incentive for charitable donations makes a fair amount of sense. If I'm not mistaken, the U.K. government just moved in this direction a year or so ago. Am I right on that?

Dr. David Elton: I'm not familiar with what the U.K. has done. I'm familiar with the circumstances in the U.S. on capital gains, which are quite different from here. I'm not familiar with the U.K.

Mr. Lorne Nystrom: I think the Blair government did the same thing in Britain. I'm not quite sure of that, but that's my understanding.

You're saying this would have a tremendous impact, in terms of sending a message to Canadians. Do you have any idea how great that impact would be, in terms of what happened when the Americans did it? I was going to ask you what happened when the British did it, but I guess you weren't aware of that. Maybe you can just flesh it out a little more, in terms of what the impact would be.

Dr. David Elton: We know that the Americans don't have a capital gains tax on publicly traded shares that are donated to charities. It's the same for private foundations as it is for any other charity in the U.S.

We've made that available to all charities in Canada, except private foundations. The question is, why the differentiation? There's a real concern a message is being sent by the Government of Canada that there's something about private foundations that doesn't meet the requirements. I think that is very disadvantageous, very unfortunate, and needs to be changed.

To answer your question on the U.S., there is one private foundation in the United States whose assets exceed all of the assets of private foundations in Canada by twofold. I'm speaking now of the Ford Foundation, but there are many others.

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We know that the private foundation community in the United States is many times greater than it is in Canada. The donations that are made there are many times greater now. Because of the complex issues that surround a decision by an individual to share his wealth with the larger community through the creation of a private foundation, I don't know anyone who could say that this particular provision would generate x number of private foundations.

We do know, from people who are in the business of planned giving and encouraging people to invest in charities, they are very supportive and they are convinced that this incentive would add to the number of other factors that lead people to share their wealth with the larger community. I don't know of any way one could quantify that by saying if we did this we would create a certain number of foundations.

Mr. Lorne Nystrom: Do you know what the cost to the federal government would be, Dr. Elton?

Dr. David Elton: Because we don't know how many would be created, we don't know exactly what the cost would be.

We do know that the forgone taxes over even a five-year period would be recuperated by the investments those foundations would make in charities. But we know more likely, with regard to the experiences in the Max Bell Foundation, they're orders of magnitude greater when you put them over a longer-term period.

When someone creates a private foundation, they almost always create it with the intention that it will be there forever. So its contributions simply increase as those investments grow in size. They are, of course, regulated by government to provide a minimum 4.5% each year of their total assets to charities.

So when you take a look at the example I gave you of the Max Bell foundation, they're orders of magnitude greater than the forgone taxes. Of course, in this instance there were no taxes to be paid, back in 1972.

Mr. Lorne Nystrom: I have one question on the Canadian Worker Co-operative Federation to Hazel, if I may.

I come from Saskatchewan and I have a background in the co-operative movement, the Wheat Pool, the credit unions, and so on. It's a very big co-operative province, particularly in the rural areas.

Can you tell the committee what the difference is between the worker co-ops and the traditional co-ops, such as the local co-op store, the credit union, and the wheat pool? The wheat pool, of course, is now traded on the Toronto Stock Exchange, so there's a big difference there. But with the worker co-op, per se, what is the difference? I think of worker co-ops in Spain, for example, and in different parts of Europe. How large is the worker co-op movement within the co-op movement?

Ms. Hazel Corcoran: Thanks for your question.

The worker co-op model is basically a co-operative where the employees own the co-operative instead of another stakeholder group, which would most typically be the consumers, but could be the producers, farmers fishers, or what have you.

Mr. Lorne Nystrom: The farmers originally owned the Saskatchewan Wheat Pool, the Alberta Wheat Pool, and the Manitoba Wheat Pool. It's still a bit different from that, isn't it?

Ms. Hazel Corcoran: Because they're actually employed.

Mr. Lorne Nystrom: Yes. The farmers didn't actually work in the pool. The employees did the work in the elevators.

Ms. Hazel Corcoran: That's right. They weren't members of the co-operative. But in a worker co-operative, the employees actually own it.

In Edmonton, the best-known example would be the co-op taxi here. It's the largest taxi co-op. About 600 drivers own that company.

The size of the worker co-op movement relative to the co-op movement in Canada is minuscule. There are about 250 to 300 worker co-ops in Canada, compared to 10,000. So we are really dwarfed by the broader co-op movement.

In Europe in some places, as you mentioned, the worker co-op sector is much larger. I think there are about 40,000 employed in just a couple of regions of Italy, who work the co-ops.

Mr. Lorne Nystrom: In Spain as well.

Ms. Hazel Corcoran: In Spain it's huge. In U.K., France, Brazil there are many...and Asia. There are pockets all around the world, but certainly Canada is not known for it.

If you look at the U.S., through the employee stock ownership plan movement—they're not worker co-ops, but they're analogous in some ways—about 10,000 firms are using that program and have some portion of employee ownership. Canada isn't really doing anything comparable there.

The Chair: Thank you, Mr. Nystrom.

Mr. Cullen.

Mr. Roy Cullen: Thank you, Mr. Chairman.

Thank you to all the presenters. I have questions for all the presenters, if we can get to them.

I'll go quickly first to Mr. Gunsch. I think you make a strong case for investing in parks and creating parks in Canada. Presumably the economic numbers you have there are supported by some independent work. Maybe if you haven't already supplied the committee with that, you could.

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I was just wondering, in terms of user pay, you talk about the significant increase in user-pay numbers. How do we stack up against other jurisdictions—let's say the United States—in terms of the percentage users pay? In Canada, as in other countries, we have this thing, it seems to me from time to time, where Canadians want parks or a national railway but never seem to use them. Can you put that in some context for me?

Mr. Sam Gunsch: I don't have specific numbers from a study with regard to the United States or elsewhere that I could quote. To my knowledge, in the last three years there's been significant debate in the U.S. about user fees. The public generally is organizing to reject them for access to national forest lands, where there are camp sites much like those in our national parks. My general sense is their national parks fees are less than ours, from what I'm reading on the Internet, but that isn't something I've compared.

To speak to your point about Canadians wanting things but not being willing to pay for them, the people I talk to about national park fees, which have rapidly increased through the 1990s, make the point that they are paying for them through general taxation and that the user fee is essentially a double taxation. Moreover, it's not a progressive approach. It becomes a larger proportion of income of low-income and modest-income Canadians, because it's just a flat fee.

Mr. Roy Cullen: I guess it comes down to whether it's a public good. If it's a public good that benefits all Canadians, then it should be supported by the general tax base—as it is partially, of course. Sometimes we create parks and wilderness areas and national train systems and no one comes to use them. I think clearly there's an element of a public good in parks, but the main benefit is to the people who use them.

Mr. Sam Gunsch: We'd make the case it's an intergenerational benefit as well. If we don't look after them now, we won't have them for access by future generations.

The Banff-Bow Valley study, which was a federal initiative, comes to mind. The chair of that, who is now vice-president environment for TransAlta, Mr. Bob Page, once told me that if we charged the cost of the roads related to wear and tear from the transportation industry—if we recovered that indirect subsidy to Canada's transportation industry for just the Trans-Canada through Banff—we wouldn't have a deficit problem with national parks budgets. So to go to the point of the public good, in discussing railways versus transportation and making people who use them pay for them, some of the really big costs are being subsidized by Canadians as a whole to the private sector.

Mr. Roy Cullen: Okay. Thank you.

Ms. Corcoran, I've been a big supporter of tax policies that encourage the formation of employee share ownership plans. Tell me, does a worker co-operative have to be entirely owned by the workers? I'm wondering how you finance growth in that case. Employee share ownership plans are incorporated into the general share mix of a company, and growth can be financed in a number of different ways. How do you finance growth, other than in an equity sense, in the case of worker co-operatives?

Ms. Hazel Corcoran: Strictly speaking, a worker co-operative does have to be owned 100% by its workers. But there are hybrid models. I spoke about the model being flexible, and this is an example. You see multi-stakeholder co-operatives coming up where workers, consumers, and other supporting groups can combine together.

Another model that I think is more interesting in some ways and is really growing rapidly in Quebec is the worker-shareholder co-operative. It's very much like an ESOP except that the corporation holding the shares of the workers is actually a co-operative within, and owning shares in, a company. So it's very similar except that there's a co-operative aspect. There are, I think, about 40 or 50 of those in Quebec, including some really large companies that are going that way.

So to finance growth is definitely challenging in true worker co-ops, but those other models are finding ways to grow.

Mr. Roy Cullen: Thank you.

If I have a little bit of time, Ms. Burtt, let me ask about the consumer green energy credit, which has some appeal to me. I'm just wondering how you define green energy. Maybe there are definitions around. There are obvious examples that come to mind: wind, turbine, solar. I'm wondering about areas such as co-generation, let's say, using biomass, or—this may be a dumb question—electricity from water power, or electricity generated from methane or municipal solid waste.

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Is there a well-accepted, defined list of what green energy is? Presumably it would have to be developed if the government went with the type of credit you have described.

Ms. Marlie Burtt: I'll ask Gord to answer.

Mr. Gordon Lambert (Director of Environmental Health and Safety, Suncor Energy; Clean Air Renewable Energy Coalition): I'm Gordon Lambert. I'm also representing the Clean Air Renewable Energy Coalition.

There has been work done in this area, particularly by the EcoLogo program, setting out guidelines for green energy. It does consist of areas you have mentioned, with small hydro, or run of the river, as opposed to large hydro. It does include energy from biomass, given that feedstock is renewable. There are, of course, the typical ones of wind power, solar power, and photovoltaics.

Mr. Roy Cullen: If the government were going to move in that direction, you could get a consensus around how to define it. You'd have to define green energy if you were going to give consumers a credit. Right?

Mr. Gordon Lambert: Yes. I actually think the discussion is quite well advanced.

Mr. Roy Cullen: Okay. Thank you.

Chief McCauley, I can understand the significant challenges you face up there. Often citizens don't really care about jurisdictional issues that are federal versus territorial. Typically, the federal government involves itself in highways that are part of what we call the national highway system. Maybe there are exceptions as well. I don't know. Is the roadway you described considered at least conceptually or technically to be part of a national highway system in Canada?

Chief Cece McCauley: Yes, of course. The highway from Fort Wrigley to Fort Simpson connects to the Trans-Canada Highway. We want to be part of it. Then you'll have a highway from ocean to ocean.

Mr. Roy Cullen: Yes, but the national highway system is a defined item. It represents only 12% of the highways in Canada, but it's defined. Do you know if this roadway is part of the national highway system, and been defined and agreed to by all the provinces and territories?

Chief Cece McCauley: I think so.

Mr. Roy Cullen: It has been?

Mr. Don Sandercock: I don't know the answer to the specific question, but it's easy to find the answer.

Who funded the extension from Fort Simpson to Fort Wrigley in 1984? It was the federal government. Therefore, we could, by extrapolation, say it's a federal responsibility. We've been told by the territorial government it is a federal responsibility for this infrastructure.

Mr. Roy Cullen: You've been told by whom?

Mr. Don Sandercock: We've been told by representatives of the territorial government.

Chief Cece McCauley: We have a letter from the federal government.

Mr. Roy Cullen: Yes, I'm not surprised. It was the case for the first stretch in 1984. A lot of things have changed since 1984.

It would be useful if you have some legal opinion or some definition as to whether it's part of the national highway system and whose responsibility it is. It's a starting point. If it's strictly territorial, we'd be hard-pressed as a federal government to build a highway that's a territorial responsibility.

Chief Cece McCauley: There's a letter in the package.

Mrs. Sue Barnes: Which letter is it?

Chief Cece McCauley: A letter was written to our Minister of Transportation, John Todd. It was answered by someone in Ottawa saying it is the responsibility of the federal government.

Mr. Roy Cullen: Our federal government has acknowledged it is our responsibility?

Chief Cece McCauley: Yes.

Mr. Roy Cullen: Is it in the brief?

Chief Cece McCauley: It's in there, yes.

Mr. Roy Cullen: It's one thing for the territorial government to say so.

Chief Cece McCauley: No, it's a letter.

Mr. Roy Cullen: We get a fair bit of that.

Chief Cece McCauley: It's the first thing I got when I started this.

Mr. Roy Cullen: Yes. Okay, thank you.

The Chair: Thank you very much, Mr. Cullen.

Ms. Barnes, then we'll go to Mr. Pankiw as the final questioner.

Mrs. Sue Barnes: Chief, I know you spent a month in Ottawa lobbying for this last year. I can tell you I didn't get this in preparation for today's meetings. Our clerk tells me he didn't get it for distribution. I think it would be wise, before we write our report, for you to get this to us. I know Mr. Cullen didn't get it either. Maybe you could get one copy of this to the clerk. Then it can be distributed again. There are a lot of things in here that would be useful to read.

Chief Cece McCauley: Yes. I was in Ottawa a year and a half ago. I sent one to every senator and about 80 MPs.

Mrs. Sue Barnes: Yes, but that wasn't this finance committee. I'm sorry.

Chief Cece McCauley: This spring I sent 20 copies to the finance committee.

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The Chair: We got a brief and a small package.

Chief Cece McCauley: I phoned and they said they'd received them. We sent them from the territorial office to Ottawa.

Mrs. Sue Barnes: My message to you is that we have to write a report now. It's a good idea to get this to members of the current committee before they write the report.

Chief Cece McCauley: We'll do that.

Mrs. Sue Barnes: Now, the Department of Transportation of the Government of the Northwest Territories in October 1999 basically came to the conclusion that the construction of the Mackenzie Highway extension road can be a tool for regional economic development. It would provide income and employment opportunities during construction and operation and would contribute to the further development of the tourism industry in the region. The project is not attractive from a strictly economic perspective; its strengths are in the redistribution rather than in the creation of wealth.

Is there an update, or is this the last update on the issue done by NWT that you're aware of?

Chief Cece McCauley: That's the last one.

Mrs. Sue Barnes: Now, things have changed since then. I know that the diamond mines have to stock up by using the winter roadways. I've talked to various representatives of the mines up there. I was in Nunavut this summer, where the weather was over 30 degrees for the first time in 15 years. Global warming is seriously affecting the climate.

One of the issues for you to consider is the fact that these winter roadways have a shortened period. With respect to the development of these new, major industries that are possible, like the diamond mines in this area, they're going to have less and less time to stock all the things they need to operate year-round. These winter roadways are becoming passable for shorter periods, and we're down to weeks, as I understand it. I'd like you to comment on that, as to whether it's a relevant issue.

The other thing, quite unconnected, that came up during my travels in Nunavut was a healthy foods initiative. That was a system where people up in Nunavut could order their groceries from a Montreal supplier. The federal government subsidized part of the cost of flying them up, but the cost of the groceries to the consumer was actually that of the Montreal distribution outlet. I'm wondering if that type of program also exists in the Northwest Territories. I just have those two questions for you.

Thank you.

Mr. Don Sandercock: I can respond about the winter roadways. I think the observation is quite correct. With regard to the winter road from Wrigley to Norman Wells, it takes about two months to build this for a six-week operation. In fact, they have bridges spanning quite large rivers, bridges that are already built, yet they actually build the winter road around them because the approaches haven't been built. This is ludicrous. It doesn't seem to be the best way to spend dollars.

In reference to the diamond mine supplies, again, the observation is quite correct. This last winter, with the delays in the approval of the Diavik mine, the transportation industry had a wonderful challenge to supply about six thousand truckloads of materials to the Diavik mine in a matter of two months to keep it going. There were literally caravans of trucks leaving every five minutes out of Yellowknife, and of course that had a very interesting impact on the roadway system, not only the hard one but also the winter road. They had to do that because there was such a short window of opportunity as a result of the warming. So your observations are correct there.

I'll let Cece comment on what we normally call food mail, which you were referring—

Mrs. Sue Barnes: Yes, that's the name of it. I couldn't remember.

Chief Cece McCauley: You were talking about Montreal. Montreal deals with the Inuit, with Frobisher Bay. We deal with Alberta. I got a letter from Mr. Nault's department, and it said, oh well, you have that food mail. But it doesn't work, because the majority of people who need it in the little towns can't read or write, or half of them, and they can't understand. They sent me a whole package, and you have to have boxes exactly the right size to send food. Now, who is going to do that in a grocery store?

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Now we have Buffalo Air, a private airline, who does this with a dealer, and people can order food from Yellowknife. But then again, after they land, some frozen food might sit there too long because of the way things are in the north. So the frozen food is melted, and anything that's frozen is melted. It's just not working. Only people who have the necessary smarts and the right connections with the pilots might make it.

The big thing in the north is that when people go down south, they don't go shopping for fineries; they buy food. Cheese. I bring more cheese to my friends than.... And you have to roll it up with meat in your suitcases. That's how people get a lot of their food. It's just terrible. This mail thing doesn't work.

Mrs. Sue Barnes: I hear what you're saying. My experience in Nunavut was that a lot of government employees use this, people who, as you say, understand the system and have no problem dealing with it. They use it on a weekly basis quite successfully.

Is there a way the government can make that program easier so more people can use it, maybe by using menus with pictures as opposed to whatever? Is there some way we can redesign it so more people can utilize it, or are people just not interested?

Chief Cece McCauley: It will just never happen. You have to know the area, the people, and the system. It just won't work.

Mrs. Sue Barnes: Okay. Thank you very much on that one.

With respect to charities and foundations, do foundations ever fund things that would not qualify as charities under Canadian law as it now exists?

Dr. David Elton: Not legally. Foundations are like any other segment of society. There are people who choose to use them for nefarious purposes, but the existing set of rules and regulations prescribe very carefully what foundations can do, and there are provisions in the tax act and in the Criminal Code to deal with those foundations that are not dealing with it properly.

Most people don't understand that foundations have an obligation to, on an annual basis, make grants using 5% of their asset base. When I said to you that the Max Bell Foundation has $60 million in assets and that it gives away $3 million a year, that's just slightly over what it's required to do. For most foundations the requirement in Canadian law is for 4.5% of the previous two years' average asset base, so for $60 million it's roughly $3 million.

Most foundations actually grant somewhere between 5% and 6% or 5% and 7% per year rather than the minimum 4.5%. It's all fixed by law, and if they don't abide by that, they lose their charitable status. It's that simple.

Mrs. Sue Barnes: Just to be absolutely clear in my own head, I'll ask if the press release that went out on October 12, basically about extending the sunset that would have occurred, is what you're asking to apply to foundations.

Dr. David Elton: I've been in the foundation world on the granting side since 1997. I've been on the other side forever in terms of seeking grants from foundations. Now, the thing that frustrates me the most is the fact that I have heard no one give a reasonable or thoughtful reason as to why private foundations were excluded—not a soul.

When we talk to people throughout the charitable sector—it doesn't matter where they're from—they can't understand it either. For some reason there's somebody someplace who's got this idea that somehow private foundations aren't as good an investment as any other kind of charity. We don't know where it came from. We simply know it's there, and we think that it's very detrimental to the entire charitable sector and to Canadians generally to keep this discriminatory condition in place.

Mrs. Sue Barnes: You've never had a direct answer from the finance department?

Dr. David Elton: No.

Mrs. Sue Barnes: And you've put this to them?

Dr. David Elton: I've been in conversation with the finance gurus in Mr. Martin's office, and they really don't have a reason.

Mrs. Sue Barnes: We'll pursue that.

I'll go on to the next point. According to your own papers, your proposal, Marlie Burtt, is going to cost the treasury about $28 million to $40 million. Where are you in terms of getting the finance department officials to look at that?

Ms. Marlie Burtt: We've talked to finance, EnerCan, and Environment Canada. The Department of Finance is very supportive of the production tax credits. They have some concerns about the consumer credit, and I think those were the basis for a somewhat cynical comment I received to the effect that it was a pretty expensive education program.

Mrs. Sue Barnes: Let's just talk about one they're interested in. How far along do you think they are on that, the production tax credits?

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Ms. Marlie Burtt: I think they've looked at the U.S. rules and we're hopeful they're actively considering both measures. We have heard they're very interested in the production credit. We haven't been told that there are major issues with the consumer credit. We've given them the message that the two should go together.

Mrs. Sue Barnes: I have a comment to our Canadian parks fellow. I'm supportive of financing our parks sufficiently so that when people visit them they can be used. I've actually been in interpretive centres in some of our parks where the VCR doesn't work, so they can't show you the film on the park. That's a little counterproductive, so I hope we can do a little repair work at least.

Thank you for all the presentations.

The Chair: Mr. Pankiw is our final questioner.

Mr. Jim Pankiw: Mr. Gunsch, you're saying, first of all, that funding of our national parks system by the federal government is inadequate even to maintain the parks. Are you going further than that? What about the parks that haven't yet been developed? I know there's a national parks plan. So what exactly are you requesting? Are you saying that not only does the base funding for maintaining the parks need to be increased, but what about also opening these new parks?

Mr. Sam Gunsch: My summary is taken from the Green Budget Coalition presentation that was made September 25, where the details are laid out. And $165 million has been identified necessary to fund the negotiation, creation, and operation of eight new national parks and four new national marine conservation areas over the next five years. The remainder of the total $493 million identified in my summary would go toward implementing the recommendations of the ecological integrity panel that the minister commissioned and the federal government committed to follow through on, which filed its report in the spring. That would address the ecological health of the parks and the decline in infrastructure to support Canadian access.

In reference to an earlier question about Canadians' use and what those who use it need to pay, much of the expenditure we've collected information about from given parks is not related to impacts caused by users. It's related to the scientific capacity, the monitoring capacity of park staff needed to do those functions, and the related expenses. Unfortunately, we've had some penny-wise, pound-foolish decisions come about, inadvertently almost. We're spending $40 million on the RCMP instead of $4.5 million on wardens, over a gun issue.

To put that home, a number of the expenses on managing and maintaining our existing parks don't relate to expenses caused by Canadians who use them. They relate to expenses to the scientific function and the monitoring function we need to do with our parks.

Mr. Jim Pankiw: In the current environment the finance minister is obviously going to have to make some decisions about prioritizing federal spending. And if the financial support for the management of the parks isn't adequate, would it make any sense to perhaps postpone or defer trying to open up new parks and expand the national park system in favour of giving adequate support for the ones that currently exist?

Mr. Sam Gunsch: The result of that would essentially be an ecological deficit, in the same way we run economic deficits. If you put off what you can pay for today at this cost, in the future it may not be there or we may not be able to afford it, or the cost will be this high because the development interests aren't being forestalled. No moratoriums are going on in these places, particularly in the north. We're having a diamond rush, an oil and gas rush. We're losing a lot of the opportunities.

So it's a question of the public good, and if you throw this one out to save that one, the lifeboat mentality so far hasn't been endorsed by Canadians. Poll after poll right here in Alberta—independent polls, not ours—say Canadians really support the environment. Even during the recession, in the early nineties, the federal environment minister round table did a series of polls. When people were asked whether or not they wanted to trade off economic development for protecting the environment—i.e., to have more economic development to save money—people said no. It was never below 68% on that question. They don't believe we have to sacrifice the environment to save money. We can do both; it's a good investment.

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Mr. Jim Pankiw: If, at the end of the day, the finance minister has a limited amount of money left for the national parks system, it could come to a decision between supporting existing parks or opening new ones. At what point do you say that the trade-off has to be made? In other words, would you be prepared to say that level of financial support for the management of existing parks isn't really what we need, but I'd sooner have it funded at this lower level and see the other parks open? Or would you say let's forgo opening a new park so that we can get...? If you can't have your cake and eat it too, which one would you pick?

Mr. Sam Gunsch: It's the responsibility of the cabinet to decide which public good should be traded off. I don't see a basis for saying that we'll lose money by investing in either. In fact, the numbers show that if you create parks they're good for real estate value.

Mr. Jim Pankiw: I understand your argument. At the end of the day, if there is a certain amount available and it's just not enough to do everything you want, where would you make the trade-off? Would you underfund existing management, or forgo opening new parks?

Mr. Sam Gunsch: If you underfund existing management you raise costs in the future. If you don't fix the roads now it's more costly. Therefore, there's a relatively costless approach with regard to the new parks.

If I had to pick.... I don't accept your framing necessarily. Around new parks, if we put in place moratoriums on development proposals so they aren't staked for mines, so they aren't staked for oil and gas, there's a level playing field, no company gets in. So then you could potentially identify national park opportunities in northern Canada that you can hold for the future.

If you want to cut back on establishing those new parks, the only way you're not going to increase costs in the future to get nature protected in key areas, where local people support it, is to put moratoriums on development around all the sites. That's not being done right now, and we're losing opportunities as we speak.

By the way, I just worked with some first nations to create a 6,000-square-kilometre park in Alberta. There was very strong support for it.

Mr. Jim Pankiw: So that would be a way for the finance minister in an atmosphere of limited resources to try to accomplish both objectives and at the same time perhaps save some money that he just doesn't have to spend right now.

Mr. Sam Gunsch: Yes. You have to keep those new park opportunities in place. If you're going to cut the money for them, you need to put complete moratoriums on all the best sites until such time as there's money to establish them.

Mr. Jim Pankiw: Okay. Thank you.

The Chair: On behalf of the committee, I want to thank you very much for your input.

As you probably noticed, with just this panel here, there are various needs and demands to be placed on government. One of the challenges we as a committee face, of course, is to make the best decisions, and we also have to have trade-offs during that process.

We're very mindful of the fact that all of you have the quality of life and the standard of living of Canadians really at heart, and for that we're very grateful.

The meeting is adjourned.