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37th PARLIAMENT, 2nd SESSION

Standing Committee on Finance

EVIDENCE

CONTENTS

Wednesday, November 6, 2002

1315

The Chair (Mrs. Sue Barnes (London West, Lib.))

1320

1325

Dr. John Metson (President, Canadian Housing and Renewal Association)

1330

The Chair

Mr. James D. Bowman (Chair, Apprenticeship Tax Credit Committee, Canadian Tooling and Machining Association)

1335

1340

The Chair

Mr. Stewart Chisholm (Manager, Capacity Building and Education, Evergreen Common Grounds)

Ms. Barbara Heidenreich (Manager, Land Trust, Evergreen Common Grounds)

1345

The Chair

Ms. Deanna Groetzinger (Vice-President, Communications, Multiple Sclerosis Society of Canada)

1350

1355

The Chair

Mr. John Lounds (President, Nature Conservancy of Canada)

1400

The Chair

1405

Ms. Kira Heineck (Public Education Coordinator, Ontario Coalition for Better Child Care Network)

Ms. Cheryl DeGras (Executive Director, Ontario Coalition for Better Child Care Network)

1410

The Chair

Mr. Charlie Penson (Peace River, Canadian Alliance)

Ms. Deanna Groetzinger

1415

Mr. Charlie Penson

Ms. Deanna Groetzinger

Mr. Charlie Penson

Ms. Deanna Groetzinger

Mr. Charlie Penson

Ms. Deanna Groetzinger

Mr. Charlie Penson

1420

The Chair

Mr. Pierre Paquette (Joliette, BQ)

The Chair

Dr. John Metson

Ms. Deanna Groetzinger

1425

Mr. Pierre Paquette

Ms. Cheryl DeGras

The Chair

Mr. Bryon Wilfert (Oak Ridges, Lib.)

1430

Ms. Kira Heineck

The Chair

Mr. James D. Bowman

The Chair

1435

Mr. Tony Valeri (Stoney Creek, Lib.)

Mr. James D. Bowman

Mr. Tony Valeri

Mr. James D. Bowman

Mr. Tony Valeri

Mr. James D. Bowman

1440

Mr. Tony Valeri

Mr. James D. Bowman

Mr. Tony Valeri

Mr. James D. Bowman

Mr. Tony Valeri

Mr. James D. Bowman

Mr. Tony Valeri

Mr. James D. Bowman

Mr. Tony Valeri

Mr. James D. Bowman

Mr. Tony Valeri

Mr. James D. Bowman

The Chair

Ms. Maria Minna (Beaches—East York, Lib.)

1445

Ms. Kira Heineck

Ms. Maria Minna

Ms. Kira Heineck

The Chair

Mr. James D. Bowman

1450

Ms. Maria Minna

Mr. James D. Bowman

Ms. Maria Minna

Mr. James D. Bowman

The Chair

1505

Ms. Julie White (Chief Executive Officer, Canadian Cancer Society)

1510

The Chair

1515

Mr. Milfred Hammerbacher (President, Spheral Solar Power Inc.; ATS Automation Tooling Systems Inc.)

1520

The Chair

Mr. Ian Bacque (Director, Government Relations, Canadian Institute of Public and Private Real Estate Companies)

1525

The Chair

Ms. Fiona Chapman (Executive Member, Health Charities Council of Canada)

1535

The Chair

Ms. Carolyn Brooks (President, Heart and Stroke Foundation of Canada)

1545

The Chair

Ms. Robin Campbell (Executive Director, Ontario Non-Profit Housing Association)

1550

The Chair

Mr. Donald Johnson (Individual Presentation)

1600

The Chair

Mr. Charlie Penson

Mr. Ian Bacque

Mr. Charlie Penson

Mr. Ian Bacque

Mr. Charlie Penson

1605

Mr. Ian Bacque

Mr. Charlie Penson

Ms. Carolyn Brooks

Mr. Charlie Penson

Ms. Carolyn Brooks

Mr. Charlie Penson

Ms. Sally Brown (Executive Director and Chief Executive Officer, Heart and Stroke Foundation of Canada)

1610

Mr. Charlie Penson

The Chair

Mr. Pierre Paquette

1615

The Acting Chair (Ms. Maria Minna)

Mr. Pierre Paquette

The Acting Chair (Ms. Maria Minna)

Ms. Julie White

The Acting Chair (Ms. Maria Minna)

Ms. Sally Brown

Mr. Pierre Paquette

Ms. Sally Brown

The Acting Chair (Ms. Maria Minna)

Ms. Fiona Chapman

1620

Mr. Pierre Paquette

The Chair

Mr. Pierre Paquette

The Chair

Mr. Pierre Paquette

Ms. Robin Campbell

The Chair

Ms. Julie White

Mr. Pierre Paquette

The Chair

1625

Mr. Bryon Wilfert

The Chair

Ms. Carolyn Brooks

Mr. Bryon Wilfert

Ms. Sally Brown

Mr. Bryon Wilfert

Mr. Ian Bacque

Mr. Bryon Wilfert

1630

The Chair

Mr. Chris Higgins (Director, Health Charities Council of Canada)

Mr. Bryon Wilfert

1635

The Chair

Mr. Chris Higgins

The Chair

Ms. Maria Minna

Mr. Milfred Hammerbacher

Ms. Maria Minna

Mr. Milfred Hammerbacher

Ms. Maria Minna

1640

Mr. Milfred Hammerbacher

Ms. Maria Minna

Ms. Sally Brown

1645

The Chair

Ms. Julie White

The Chair

Mr. Chris Higgins

Ms. Maria Minna

The Chair

CANADA

Standing Committee on Finance

NUMBER 020

2nd SESSION

37th PARLIAMENT

EVIDENCE

Wednesday, November 6, 2002

[Recorded by Electronic Apparatus]

· (1315)

[English]

The Chair (Mrs. Sue Barnes (London West, Lib.)): Pursuant to Standing Order 83(1), pre-budget discussions, we are in our first panel of the afternoon, which will go till 2:45.

From the Canadian Housing and Renewal Association, we'd like to welcome Dr. John Metson, president, and Reid Rossi, executive director; from the Canadian Tooling and Machining Association, James Bowman, vice-president, and Robert Cattle, who is a director of this association; from Evergreen Common Grounds, Barbara Heidenreich, manager of the land trust, and Stewart Chisholm, manager, capacity building and education; from the Multiple Sclerosis Society of Canada, Deanna Groetzinger, who is vice-president, communications; from the Nature Conservancy of Canada, John Lounds, who is the president, and Thea Silver, who is the director of government relations; and from the Ontario Coalition for Better Child Care Network, Kira Heineck, who is the public education coordinator, and Cheryl DeGras, executive director.

· (1320)

Welcome to all of you. We have six groups, so we will have eight-minute rounds. If you watch my pencil, at seven minutes it'll go up and you'll have about one minute. If you're hitting eight minutes, I'll wiggle it, and after that I'll say thank you.

We'll go in the order of the agenda. We'll commence our eight-minute presentations before the question period of the members with the Canadian Housing and Renewal Association, Dr. John Metson.

· (1325)

Dr. John Metson (President, Canadian Housing and Renewal Association): I want to preface this by creating the human story that's out there across our country. At a minimum, there are 14,000 Canadians who have no place to call home today. Half of them live in Ontario, but the need is across the country and it's a reality everywhere. Those are only the numbers. There are others who are hidden. In particular, what we do know is that there are 42% of those, and those of us who are parents and have sent children off to university realize that in that age group 20% to 29% are living at home. So when they flood out on to the market, there's a very real need impending, if not currently present in our country.

CHRA, the Canadian Housing and Renewal Association, has a long-standing involvement across the country. It's a non-profit organization that promotes access to affordable and secure housing for the low- and modest-income households. It acts to increase the awareness of affordable housing issues through research, through professional development, through stakeholders and networking communications.

We have a SUFA agreement in this country, and from the set of principles outlined in the SUFA framework, which is, of course, very germane to the work of the finance committee in this country, I quote: “The health and the well-being of our communities and our country depend on everyone in Canada having access to appropriate, secure and decent affordable housing”. So within that framework there are opportunities for the appropriate transfer of funds to meet those needs.

Last year we were able to help to develop Canada's capital grants initiative, which you recall is $680 million approximately, to be shared across the country and to be matched by the appropriate provinces or territories. Most of them have signed at this point, but there's still the implementation. What we do know is that there is a need to increase that amount, because we really do have to address, and I think the finances of Canada have to accommodate and develop, a national housing strategy. It is integral to health, life, and the communities we live in. We need to push this expansion further. We need a time period for affordability that's in the agreement that increases from 10 years to at least 35 years.

We need to be identifying and analysing what need really means across our country. There's a very real danger in meeting the needs of only the poorest, the most disadvantaged, because ultimately, it will come back to haunt us, because we've marginalized. We need to be able to build the capacities of municipalities, provinces, and territories to address housing needs through the development and putting in place of affordable housing. At present CMHC, that's the Canadian Mortgage and Housing Company of CHRA, are discussing a Canada-wide effort to increase local community capacity building. Our association urges the Government of Canada to lend its support to that development, which arises out of looking at those areas of affordability and the mutual concerns of the growth of sustainable communities.

We would recommend that the RRAP program, which you know is for renewal, be extended for at least three years. My guess, if we look at the statistics, is that we need to be able to incorporate that into our governance and social responsibility right across the country. We also need to look at designing SCPI so that it moves from just addressing homelessness to preventing homelessness. We're conducting an evaluation in consultation on RAP, and CMHC is presently doing that, and we hope it will address it for the immediate future.

My submission would be that we need to increase to $135 million minimum--we always like figures here--the capital grants initiative the government has initiated as of this year. We need to be very aware, I'm sure, as you are as the government of our country, that we must reverse the slide of our cities, we must address sustainable communities, not just with stand-alone housing, but with reference to what it means in the context of it all. My colleagues who are here representing other jurisdictions are clearly expressing the same thing. We know housing is an economic stimulus and provides impetus for our economy. We want to improve Canada's socio-economic environment. So we would look for SUFA to be helpful, but clearly we need other initiatives in this country and we need a national housing strategy.

There's been dialogue, and this is a welcome representation of how we are involved in communicating with government and government with the citizenery. We need this with all Canadians in order to achieve accountability, in order to achieve transparency, in order to give meaning to the decisions we make as a society. With the capital grants initiative, we are on this new path of heightened awareness, we're recognizing that there's a need to invest in Canadian society, we're recognizing that it is to create a vibrant community, and we recognize that there's a need for the government to commit sufficient funds and resources to enable our cities, our towns, our rural and our remote communities to grow and to prosper.

Housing is a very vital component of this path, as I've said. The commitment to funding has historically been quite inadequate, as we all know from experience. I see people at this table who've been part of that housing initiative and concern. I believe the government is, in fact, turning that corner in its approach to housing in this country. It has recognized the significance of housing as a component part. The government, we believe, must make a sustained and substantial investment in affordable housing. Obviously, it must happen now and not 10 years down the line, not 20 years down the line. It will catch us, it is haunting us, and it will haunt us even further if we don't. It must increase significantly its spending levels in the creation of new housing and the preservation of existing renewal stock.

So I think we must recognize sustainable communities, the integral part housing plays, the investment in the creation of affordable housing and the community. Extend the affordability of capital grants, encourage the systemic targeting of high risk populations, the facility for local capacity building. Encourage the provinces and territories to participate fully and equally with new funds and new units. Continue the RRAP program. Continue and develop a new SCPI approach. Expand the capital grants program to $136 million minimum.

We have members across the country in every territory and province. Our members are individuals, our members are provinces, our members are municipalities. We encourage and urge you to take our message of this need for an increased and ongoing fund for affordable housing to Ottawa and to the governance decision-making of our country.

· (1330)

The Chair: Thank you very much.

Now we go to the Canadian Tooling and Machining Association, Mr. Bowman.

Mr. James D. Bowman (Chair, Apprenticeship Tax Credit Committee, Canadian Tooling and Machining Association): Thank you, Madam Chair.

I would like to begin this afternoon by thanking the committee for inviting us, the Canadian Tooling and Machining Association, to address you once again regarding the immediate need for tax credits to employers training apprentices in Canada. We welcome this opportunity to share with you our input in regard to how the federal government could help end the systemic shortage of skilled trades people in Canada. Since our last presentation to you another year has been lost and Canada's fallen further behind in developing a sustainable pattern of growth for this critical ingredient in the Canadian ecomony.

Our proposal making a case for apprenticeship training tax credits is national in scope and involves all accredited apprenticeship training across the country, not just those in the metalworking industries. As you know, we have historically relied on the immigration of skilled people to help supplement our needs for skilled labour. However, as this is a global problem, we can expect this practice to become less successful, as all countries are looking to do the same.

Both the federal and provincial governments acknowledge the gravity of the situation, yet neither seems properly prepared to address it. Representatives of all levels of government have stated that they would like to increase the number of apprentices in the system, some say as much as double. May we just ask a simple question: How?

On September 27, 2001, the Honourable Dianne Cunningham, the Ontario Minister of Training, Colleges and Universities, speaking to the Toronto Board of Trade, said:

The problem is that employers face a key barrier to realizing a fair return for their investment and training--namely, that employees can move to other firms after training. When a firm's human capital gets up and walks out the door, employers become reluctant to invest in training

I suggest that the federal government should consider taking a look at skills development tax credits to encourage employers to train.

This problem is not going to go away on its own. It is increasingly affecting all Canadians. It is resulting in higher prices for consumer goods and decreasing the income to federal income tax coffers due to the loss of above-average income for most skilled tradespeople. For example, let's say there are 100,000 apprentices in Canada--that's just a guesstimate--each earning a conservatively estimated average annual income of $26,000, that's a combined income of $2.6 billion. Of that the federal government collects $577 million in annual income. This income tax revenue is decreasing as I speak.

The problem is no longer due to a lack of awareness or social attitudes to the skilled trades, as it once was. As a matter of fact, we believe the majority of Canadians are well aware that skilled trades offer an above-average income and job security. Employers across the country are approached regularly by youth who are looking to start an apprenticeship. So if private industry needs skilled tradespeople and there are now ample Canadians willing to enter the skilled trades, why is this not happening?

Quite simply, those who are doing the training cannot afford to train any more people than they currently do. The financial cost to train an apprentice is great. A recent third-party study done on behalf of and funded by Human Resources and Development Canada entitled The Cost of Apprenticeship Borne by Employers, conducted by R.J. Sparks Consulting Inc. and WGW Services Ltd, appendix E in our proposal, estimated that the net cost to an employer training its own die apprentice is $125,910 over a four-year period. The majority of the costs are front-end loaded and incurred solely by the employer. The study also found that it takes an average of five years for the employer to fully realize a return on this training investment. Adding to the problem is the fact that companies that do not train skilled trades poach from those that do. This is a substantial loss to the company that has trained the skilled individual. The company that poaches can afford to offer higher wages because of the savings from not training.

Apprenticeship training is the third pillar of our educational system. In an apprenticeship the employer provides 90% of the training, while the college system provides 10%. Currently, a company that's training skilled tradespeople does not have any vehicle for recovering any of the costs incurred by the training. Yet the federal government subsidizes the college segment of the apprenticeship process. If governments see the need to subsidize private colleges and universities, then why not private industry? The apprenticeship system is the only educational system in Canada that has the student earning a living and contributing to the federal income tax coffers while receiving their education. Also, when training is completed, the newly skilled tradesperson has a higher probability of being employed, as well as having a high standard of living. On the other hand, students following a more academic approach to learning employable skills do not have the same level of employment certainty upon completion.

· (1335)

We believe that in order to stimulate an increase in apprenticeship training across the country, an incentive program must be administered under the Income Tax Act. This would create a stimulus at the corporate level and encourage firms to increase the number of apprentices in training. Firms that are not currently training would see the financial benefit and be encouraged to do so.

To summarize, the proposal put forth by the CTMA is that any company that trains as part of a provincially or federally accredited apprenticeship program should be entitled to a federal tax credit of up to 75% of the apprentice's basic wage during each taxation year. We would like to point out that this would only provide some relief. If we use our previous model of $26,000 per year as an average wage for an apprentice, with a 75% credit on that wage over four years, that's $78,000. If we subtract this from the average net cost to train a tool and die apprentice of $129,510, the employer still has a remaining $51,510 investment in the apprentice. Although the employer remains with a significant cost to train, we believe this tax credit would provide appropriate recovery of some of these costs, as well as providing incentives for companies across the country to train.

The tax revenues gleaned from individuals employed as a result of this proposal would quickly return the initial investment to the government and provide a sound foundation for future tax income. It would help Canadian companies compete with companies that operate in jurisdictions that provide training incentives. It would help Canada remain competitive in a global economy, because work goes to where skilled people are. It would be an investment in the long-term goal of sustaining our skilled trades, and it would be an investment in Canadians and their youth, as well as raising the Canadian standard of living.

I would like to thank you for your time and attention.

· (1340)

The Chair: Thank you very much.

Now we'll move to Evergreen Common Grounds, Mr. Chisholm.

Mr. Stewart Chisholm (Manager, Capacity Building and Education, Evergreen Common Grounds): I'll begin, and then I'll turn it over to Barb.

I'd like to thank the committee for the opportunity to address it on what we and the Government of Canada have identified as a priority issue, the need to build stronger, healthier cities.

First I'll give you a little bit about ourselves. Evergreen is a national, federally registered non-governmental organization with a mission to bring nature to our cities. We work with community groups, municipalities, senior levels of government, and the corporate sector to promote the protection, restoration, and stewardship of public open spaces in settled areas across Canada. To plan and build our cities in a more sustainable, ecologically sound manner, we are proposing a national urban greening strategy that provides innovative, consensus-based solutions to the economic, social, and ecological problems our cities face. Supporting this strategy provides the federal government with a meaningful presence in Canada's urban regions.

Our national urban greening strategy is consistent with a message in the throne speech:

Competitive cities and healthy communities are vital to our individual and national well-being.... They require new partnerships, a new urban strategy, a new approach to healthy communities for the 21st century.

Our urban greening strategy supports that notion. A key element of the strategy is a proposed amendment to the Income Tax Act. In its current form, the act provides financial disincentives for those wishing to donate gifts of land for conservation purposes. Such donations to conservation charities are a key tool for protecting ecologically sensitive lands and important cultural landscapes. The revisions Evergreen is proposing are consistent with income tax provisions in other jurisdictions, notably the United Kingdom and the United States. They also build on revisions already made to the act in 1995 that provided greater tax incentives for the donation of ecologically sensitive lands.

The areas we'd like to focus on as part of our revisions are changes to capital gains provisions, changes to classification of inventory lands, and bargain or discount sales. We're also proposing a revolving loan fund that will support the acquisition from the community of local greenspaces.

Ms. Barbara Heidenreich (Manager, Land Trust, Evergreen Common Grounds): Briefly, in just a little more detail, Canada does have the opportunity for owners of ecologically sensitive land to donate those lands and receive some tax relief. Currently, however, they still are taxed on 25% of the deemed capital gains associated with their donation. This does act as a disincentive for potential donors. What Evergreen would like to see is the exemption of those donations of conservation lands from capital gains tax in their entirety. We'd also like to see relief of capital gains tax applied to gifts of urban lands that may be of limited ecological value, but provide important social benefits, such as public open space or the conservation of urban heritage.

As Stewart said, most of our interest is in lands in settled areas and urban areas. Most of those lands are owned by developers and are deemed inventory under the Income Tax Act. A developer can donate the lands and receive a charitable receipt for the value of the lands, but he then has to pay 100% on the capital gains deemed on those lands, even though they were a gift. So what we would like to see is an amendment to the Income Tax Act that allows the donation of inventory lands, having them treated in the same manner as land held as capital property, and so not subject to capital gains tax when donated.

We'd also like to see what they describe in the United States as bargain sales, but we view as part donation, part sale. That is allowing landowners of ecologically sensitive or land of cultural value to donate part of their land and receive cash for that part, also receiving a tax receipt for the balance of what the fair market value is of that land. That kind of opportunity for land trusts to purchase lands and also give a tax receipt for the balance of the value of the land would provide a tremendous incentive for owners, especially those on fixed incomes, to receive some cash, but also see their land preserved.

We also see as an important part of this urban greening strategy the development of a revolving loan fund that could be used by land trusts operating in settled areas to receive a loan that would allow them to immediately move in to preserve particular sites that are under threat, and then have the ability to raise the funds, as most of them are able to do, over a longer term and pay back that loan for other groups to use. It's a vehicle that's been used very successfully in the United States to preserve ecologically sensitive lands around other settled areas. It's a vehicle we think we need federal support to achieve, and it would be an excellent vehicle for land trusts.

There are about 180 land trusts in Canada, of which the largest is here today to talk, as well as Evergreen, the Nature Conservancy of Canada, but there are about 180 that either look after small individual parcels of land or have a broader, national strategy. We've surveyed them and found that many of them find access to funds and capital one of their most pressing problems. The concept of a revolving loan fund would make a significant improvement, I think, to their ability to function successfully.

We're extremely supportive of the federal government's announcement on expanding the national parks system, and we feel this needs to be complemented by an urban greening strategy that would enable groups like Evergreen to bring parks to where people live. On May 24 Mr. Wilfert said at a meeting Transport Canada had in Pickering that cities are known by their parks. We thoroughly agree with the statement he made and feel these amendments to the Income Tax Act would greatly facilitate the non-profit private sector's ability to bring parks to people where they live.

Thank you very much for this opportunity.

· (1345)

The Chair: Thank you very much.

Now we'll move to the Multiple Sclerosis Society of Canada, Ms. Groetzinger.

Ms. Deanna Groetzinger (Vice-President, Communications, Multiple Sclerosis Society of Canada): Thank you very much.

Good afternoon, and thank you very much for inviting the Multiple Sclerosis Society to present here today. I'm appearing on behalf of Susan Murray, who, unfortunately, because of illness, is not able to make this presentation. She's typical of many MS Society volunteers, in that she devotes a considerable amount of time as chair of the national social action committee and as a member of our national board of directors.

The MS Society is the only national voluntary organization in Canada that supports both MS research and services for people with MS and their families. In addition to the national headquarters here in Toronto, there are seven regional divisions and more than 120 chapters across Canada. The MS Society strives to ensure that people with MS have the opportunity to participate fully in all aspects of life, so in addition to addressing such matters as workplace education and public attitudes, we also work towards changing public policies that unfairly or negatively affect people with MS.

It's with these concerns in mind that I would like to discuss the disability tax credit, the Canada Pension Plan, research in Canada, and charitable tax donations. I would also like to note that we understand that the Department of Finance has difficult choices ahead regarding program spending. Minister Manley has been clear in expressing that our country faces tough fiscal challenges. It is particularly in these difficult times that I think our representatives in Parliament need to consider maintaining and even strengthening support for those most in need.

As many of you may know, the disability tax credit, or DTC, provides some small tax relief for people with disabilities, including people with MS. As people of this committee are no doubt aware, Canada Customs and Revenue Agency undertook a massive mailing to more than 100,000 Canadians in 2001 demanding that they reapply for the DTC. As a result, many people with disabilities, especially people with unpredictable and recurrent conditions such as MS, were no longer eligible for the DTC. We can't believe it was the intention of members of Parliament to exclude a person who, on a good day, struggles to walk 50 metres on level ground, but ordinarily cannot climb stairs unsupported or walk a block in less than 30 minutes.

The Department of Finance's definition of disability is centred on the inability to perform basic tasks 90% to 100% of the time. While we certainly see the relevance of this definition in most tax-related instances, the MS Society, as well as many others in the disability community, find that the definition does not have practical application with people who are disabled. Canadians and Canadian courts share our perspective. Determining income tax based on the amount of income earned is a fairly straightforward activity. Determining the severity of the disease and subsequent impact on a given individual is a good deal more difficult and requires basic medical knowledge and understanding of disability issues. We do not argue that DTC should be available to everyone with a disability, only that the department's current interpretation of severity lacks relevance in the context of real life. Therefore, we would recommend that the Department of Finance examine its current treatment of disabled Canadians under the Income Tax Act. The current process lacks equity and is not reflective, we believe, of the intentions of the act itself.

On a related note, we are happy to inform you that we feel we have made some gains in our efforts to educate Canada Pension Plan officials on the circumstances of people with MS. As with DTC, many eligible applicants for CPP are denied benefits through misunderstanding of the nature of MS. Through informative and educational materials, we are striving to change that, but work remains to be done. That work includes encouraging CPP officials to give due consideration to young adults disabled by MS. The current 15% drop-out rule excludes them and their young families in some instances and denies them an adequate level of disability income. Current policies also lack flexibility and result in discouraging recipients from working part-time or on an occasional basis, as they risk losing their benefits. This stance does not serve either recipients of CPP or the government. Similarly, on an administrative level, we believe efforts should be made to expedite review processes, so that there are no more than 60 calendar days following any submission. In keeping with our advocacy role, we will continue to provide input into the consideration of CPP disability benefits currently under way with the Subcommittee on the Status of Persons with Disabilities.

Because of the growing reliance many Canadians have on charitable activity, I would also like to discuss briefly the tax treatment of charitable donations. The MS Society receives almost no funding from the federal government and very limited support from provincial governments. The society is proud that in the last year we provided $8 million in service programs and $6 million for MS research. More than 80% of the MS Society revenues are from donations by Canadians. The vast majority of our donations are between $25 and $50. Currently, the tax treatment of charitable donations provides an incentive for donations by individuals with modest incomes. We hope this can be enhanced. Therefore, we would recommend increasing the income tax benefit for individual charitable donations by people whose total donations are $3,000 a year or less. This would benefit charities and would recognize charitable giving as a feature of Canadian life.

· (1350)

On another related issue, in the United States charitable organizations are not required to issue receipts for income tax purposes for donations under $250. Clearly, the IRS there has determined that fraud relating to claimed donations of less than this is well below the cost of tracking these smaller donations. Also, this saves an enormous burden of time and expense for charitable donations. We therefore recommend that the Government of Canada consider adopting the donation tax receipt model used by the U.S. Internal Revenue Service.

Finally, I would like to turn to the topic of research. The MS Society was very pleased to note that the government's innovation strategy includes a commitment to have Canada rank among the top five countries in the world in research and development performance by 2010. Considering that Canada currently contributes a smaller proportion of public funds for research than other G-7 countries, this is a significant step in the right direction. To facilitate this goal, we would recommend further enhancement of government investment in the Canadian Institutes of Health Research, and we would also encourage fostering the dissemination of health research results to policy-makers and health care providers to enhance evidence-based decision-making.

The issues we have raised with you today do not represent all the concerns or needs of people with MS. We have focused on these particular issues for three reasons. Health and health research are vital concerns of people with a chronic and as yet incurable disease. A secure and adequate income is a foundation for the ability of people with MS to fully exercise their rights as Canadian citizens. And despite future challenges, the recent success of the federal government's fiscal policies has created important opportunities for it to lead in the fair treatment of people with disabilities, while at the same time remaining conscious of the need for fiscal responsibility.

We thank the committee for its time and consideration of our views.

· (1355)

The Chair: Thank you very much.

Now we have, from the Nature Conservancy of Canada, John Lounds.

Mr. John Lounds (President, Nature Conservancy of Canada): Thank you, Madam Chair and committee members, for this opportunity to once again present to the committee.

We've put before the committee our proposals to improve the effectiveness of government expenditures on conservation priorities and to engage all Canadians in conserving Canada's natural heritage.

The government itself has made strong commitments to protecting national parks, species at risk, and natural heritage. We agree that a significant conservation investment is needed at this time. The panel on the ecological integrity of Canada's national parks concluded that the ecological integrity in our national parks was in peril and presented a crisis of national importance. The Canadian Wildlife Service's 143 national wildlife areas and migratory bird sanctuaries are managed on an annual budget--and we're talking about 11.6 million hectares of land--of $1.9 million, or 16¢ per hectare. This compares with $9 per hectare for Canada's national parks, $12 per hectare for the U.S. National Wildlife Refuge Network, and $52 per hectare for a U.S. national park. Canada's list of species of risk on the COSEWIC list continues to grow. In 2002 the list stood at 402 species, up from 380 the year before.

Canada, unlike many countries of the world, has the opportunity to address its ecological integrity issues at a modest cost, and it should do so before incurring a much greater expense later. As an example, 40 years ago the Army Corps of Engineers and others in Florida determined that land should be reclaimed for housing, transportation, and other uses, and they spent millions of dollars reclaiming that land and cutting back on the waters that flowed from Lake Okeechobee to the Everglades. After many studies they have recently embarked on a program to restore the Everglades, because it's a mess, and that restoration effort is going to take 30 years and $8 billion to complete. Investing in conservation now and protecting what we have is the right thing to do.

How do we do this in the most efficient and cost-effective way? We're here to say non-government conservation organizations--I'm pleased to have colleague organizations at the table here today--are eager to work with the government to help finance national conservation programs. We at the Nature Conservancy of Canada have a strong record of delivering such programs. Every year we work on more than one hundred properties right across this country in every province. We're prepared to raise funds in the private sector to match up to $20 million per year to invest in land conservation across the country. Not only have we put that offer forward, other conservation organizations, such as Ducks Unlimited Canada, World Wildlife Fund Canada, and the Canadian Nature Federation, are prepared to engage in similar programs.

In respect of land conservation in this country, focusing on ecologically significant lands, it would allow Canada's landscapes to be conserved at half the cost or less to the Government of Canada. We're recommending that it is time to move forward in setting out such a cost-effective agenda, matching private sector investment and government investment together to conserve the best of what's left in this country.

Our second set of proposals relate to means of enabling all Canadians to participate, because working with private landowners to protect private land is essential to meeting government commitments. Over 50% of Canada's species at risk are found on private lands. These lands are under development pressure right across the country, because they're also the places where we all live, work, and want to be. As I mentioned, the panel on the ecological integrity of Canada's national parks has stated that conserving habitat on private lands around parks is essential to maintaining the ecological integrity of our national parks.

The Government of Canada has taken important and positive steps to encourage private landowners through the ecological gifts program, where capital gains tax is reduced by half, which puts it on the same level as donations of public securities, and a process has been put in place to value lands, an appraisal review and certification process to ensure the integrity and fairness of the valuation. However, there are really three things left to do to make this program truly effective and fair to all Canadians--and these have been mentioned before by Evergreen. The first is recognizing the donation portion of a part sale, part donation as a tax-receiptable gift. The second is removing the remaining capital gains tax from gifts of ecologically sensitive lands or conservation easements. And the third is to include donations of ecologically sensitive lands held as inventory, as mentioned by businesses, in the ecological gifts program.

To emphasize it, I'd like to spend a minute on the first point, the part sale, part donation. If you have a property worth, say, $100,000, you're conservation minded, and it's ecologically significant, the current program allows you to donate that property in its entirety and receive a tax credit receipt for it. But if you're in a financial situation where you can't afford to donate your entire property, maybe you can only donate $50,000 worth of it, you cannot donate $50,000 worth, sell the other portion for $50,000 to a charity like the Conservancy, and receive a tax credit receipt for your donation. Revenue Canada rules at this time say gifts have to be made free and clear and have to be made on a voluntary basis, so you can't have related transactions. We allow this for charities holding charity events, where you sell a ticket to somebody, they come to the event, and a portion of it is a tax creditable donation. So with the panel in place and valuation issues being put aside, there should be no reason we can't move forward on this particular issue.

So in summary, we think there are great opportunities to have cost-effective programs established in Canada to do conservation work, and we would encourage removing the three remaining barriers to a full and fair ecological gifts program in Canada.

Thanks very much.

¸ (1400)

The Chair: Thank you very much.

Now we'll move to our final presenter for this panel, Ontario Coalition for Better Child Care Network, Kira Heineck.

¸ (1405)

Ms. Kira Heineck (Public Education Coordinator, Ontario Coalition for Better Child Care Network): Thank you very much.

I want to thank you all for the opportunity to come and speak with you here today. I would like to thank you all also for taking the time out of your own busy schedules to come and listen to Canadians across the country who want to share their voices with you.

The Ontario Coalition for Better Child Care was founded in 1981. Our members include education, rural, first nations, francophones, social policy, child welfare, anti-poverty, professional student, and women's organizations, just to name a few. We also serve community-based child care programs and many local coalitions across the province. Altogether, we speak for about 400 organizations.

The OCBCC presented a submission to the standing committee in the fall of 2001 situating the problems confronting child care in the federal context. Simply put, our message then was that there had been no direct funding for child care from this government in over five years. Now we can say there's been no direct federal funding for child care in Canada in seven years.

Despite the stated intentions of the federal government's early childhood development agreement, child care in Ontario has not received a single benefit. In Ontario Mike Harris' Progressive Conservative government chose to exclude child care from its early childhood development investment strategy. We are no more hopeful under the leadership of Mr. Eves. Not one cent of the federal money allocated in the ECDA, not the $114 million in 2001, not the $300 million in 2002, is being spent on child care in Ontario. The situation in Ontario is particularly unacceptable when regulated licensed child care is available for fewer than 10% of the children who need it. Canada must now move beyond the early childhood development agreement and develop a real national child care program.

We are aware of the current social pressures in Canadian communities and the many priorities they present to the governments. In this context, it is clear that attention to the early years is absolutely critical to the development of healthy, secure, productive Canadian citizens. Substantial and highly regarded research supports this position, and much of it is referred to in the presentation we submitted earlier. Specific conclusions are that child care is beneficial for children's development, it facilitates workforce participation for parents, it provides social inclusion opportunities for marginalized immigrant populations, it promotes life-long learning opportunities for all Canadians, and a comprehensive child care system offers a $2 return to children, parents, and society for every dollar invested.

We are aware that a quality, affordable, and universal early childhood education and care system needs a substantial investment of money, time, and cooperation. Without designated federal funding, currently lacking in the ECDA, there can be no Canadian system of early childhood education and care. Without built-in accountability for the way provinces spend the ECDA, regional disparity will increase. The federal government must take the initiative and become a leader in early childhood education and care.

Therefore, we call on the federal government to take the following steps. First, increase funding for early childhood education and care services to $2 billion a year in each of the next four years, so that ECED services can truly begin to meet the needs of all Canada's children. Second, extend funding services beyond the five-year period of the ECDA agreement. There must be an ongoing commitment to provide designated funding of at least a cumulative level of funding at the end of the current agreement. Third, increase provincial and territorial accountability. Future funds must be available to the provinces and territories in designated envelopes. Fourth, include those who deliver the services in decision-making. Planning and decision-making processes under the current ECDA and any future agreement must include participation from community-based groups and those who deliver the services. This process must be open and inclusive, built on strengths, collaborative, and respectful of family and community diversity.

Thank you.

Ms. Cheryl DeGras (Executive Director, Ontario Coalition for Better Child Care Network): I'm going to give a small snapshot of what child care looks like on the ground here in Ontario. Until last April I was the supervisor of the Pat Schultz Child Care Centre in the riding of Toronto-Danforth. Although it's an example of one, we believe it's representative of most regulated child care centre experiences.

The centre opened in 1989 and is now 13 years old. It was born at a time when bilateral partnerships were encouraged among community groups. Our funding partners for the centre's development were the provincial government, the municipal government, a local community organization, and the then Toronto District School Board. We provided services for young and old students returning to school, new Canadian parents in need of education across the Greater Toronto area, and local community parents. In other words, it was a heterogeneous group of people who met each day and helped each other through their child rearing experiences.

The life blood of the centre was the Canada assistance plan, along with the provincial and municipal cost-sharing net. The centre was always full, we had a waiting list, and in fact, we expanded to meet the need in the community. Since the mid 1990s, however, shift in cost-sharing agreements and the disappearance of the Canada assistance plan have resulted in negative funding impacts, specifically for regulated child care programs in Ontario. One common impact is that the tightened eligibility criterion for parents applying for subsidy has forced the low- and middle-income and student parents out of regulated spaces. Lost subsidies result in advantages to full-fee parents using the regulated care system, while other parents must go in search of care in their communities they may not feel is exactly what they want and meets their needs.

Further, the funding to improve and maintain early childhood education and care environments has dried up. We have no more major or minor capital grants, and buildings and supplies have deteriorated and caused health and safety concerns. Many such problems have resulted in provisional licences for day care centres. The cutbacks to the education system have eroded in-kind service and support offered by the schools. Again, this causes health and safety concerns for parents and boards of directors and puts liability insurance in jeopardy.

Staff salaries have been frozen, and benefits yearly have been whittled away to keep the centre's doors open for the children in the community. Offering quality early childhood education and care becomes impossible. The pride in my work I felt every day gave way to apologies and long explanations of government cutbacks. I left my job last April to focus on advocacy, because I felt the growing risks on a daily basis. The little hope we had in 2000 with the federal ECDA has become a very expensive branding exercise in Ontario. No new services for parents and no new child care services have been created with that money.

We know quality in early childhood education and care for all children, not just for disabled children or other at-risk groups, is possible. Quebec is a homegrown model that provides us with vision. You've heard our recommendations. It's time for Canada to address its need for a family policy with child care at its core. We had promises that turned out to be just words. Children in Ontario and Canada need true champions in political leaders. The Canada we want includes a national child care program that is publically funded and entirely not-for-profit.

Thank you.

¸ (1410)

The Chair: Thank you very much.

Now we'll go into rounds of questioning. Six minutes each, please--I know that's not a lot.

Mr. Penson.

Mr. Charlie Penson (Peace River, Canadian Alliance): It's not a lot, but I do want to get started, Madam Chair. I'd like to welcome everybody here today.

To the MS Society, Ms. Groetzinger, I certainly have heard a lot about the disability tax credit problem, and in fact, we were talking at a panel earlier this morning about that difficulty. My understanding is that tens of thousands of people have lost their disability tax credits. I know most members of Parliament have received a lot of mail on this, and I can't understand why it continues to be a problem. It should be resolved.

You're saying people with MS can be functioning well in some instances, but then not in others?

Ms. Deanna Groetzinger: Exactly. Multiple sclerosis is a disease that in many stages is quite unpredictable. It's called a relapsing-remitting disease, in which people can have attacks, they can become quite disabled. They may recover to some extent, but go on to have another attack and slowly get worse. Over time most people with MS will become disabled. Another major problem for people with the disease is invisible disabilities, the most pronounced one being an extreme fatigue. I'm sure at the end of the day here you're all quite fatigued, but this is a profound fatigue that will not allow someone to work, to really carry on the activities of daily living.

The problem people with MS have is a question on the form that basically says to a doctor, can your patient walk 50 metres on level ground? I tell you, life does not happen on level ground. The disability tax credit, which is a tiny credit, is to help people who are disabled overcome some of the extraordinary costs of being disabled. A person with MS probably would not be able to take public transit; it would just be much too difficult for them to do so. They might have to take taxis, they might have to take specially adapted taxis. There are extraordinary costs to this and other diseases with these fluctuating problems.

¸ (1415)

Mr. Charlie Penson: With the disability tax credit, it's my understanding that if individual can't use it, they can transfer it to people who are helping them in their daily lives to make an improvement.

Ms. Deanna Groetzinger: Yes. And there has to be income there for people to gain from the credit. It's not a credit that's payable, but it is a credit that can reduce taxable income.

We too cannot understand, like you, what some of the issues are with CCRA. We think we're making some strides, and thanks to many members of Parliament, we are actually making some difference here. We will continue to work on this and hope we make some difference.

Mr. Charlie Penson: Thank you.

To follow up a little bit further, you talked about the difficulty with Canada Pension Plan disability insurance as well. I'm sure other members have the same experience, but I have a lot of people come to my office who are trying to qualify for it. It seems to me that it's almost a rule of thumb that they get turned down once and have to reapply, and on the appeal, they sometimes get it. Is that your experience?

Ms. Deanna Groetzinger: It is our experience, and I actually think it's an administrative problem built into CPP that is costly. If someone has insurance, the private insurer will tell the person who is trying to go on long-term disability to first apply for CPP disability insurance, knowing full well that the criterion is different, you have to be more severely disabled to receive CPP. That's all well and good, but still there is an administrative burden on HRDC, and many people will be turned down. We know there is an agreement between the federal government and the insurance industry that this will take place, but I personally think it's an insult for people with disabilities. I also think it's probably administratively costly to the federal government.

Mr. Charlie Penson: And it's time-consuming.

I didn't understand the point you were making about young families that were having difficulty with CPP disability. Can you explain that a little bit?

Ms. Deanna Groetzinger: Sure. It's actually in the brief we have put before you. I couldn't go into a lot of the details there. There is a four out of six contribution rule for CPP. Because the average age of diagnosis for multiple sclerosis is 30, someone may have just finished school, finished training, just started in the workforce, so they may not actually have qualified for enough years of work. There is another provision that would take care of that.

Mr. Charlie Penson We'll check it from the brief.

Thank you.

¸ (1420)

The Chair: Thank you.

Monsieur Paquette.

[Translation]

Mr. Pierre Paquette (Joliette, BQ): First of all, I would like to tell the representatives from the Multiple Sclerosis Society of Canada that I fully support the recommendations. I myself met an individual from my writing who suffers from multiple sclerosis, and who has problems getting around. This person was denied the disability tax credit by the federal government because his attending physician had been asked whether or not he was capable of walking 50 metres, with assistance, taking his time. The gentleman can walk 50 metres, but it may take him 45 minutes to do so. The doctor responded in the affirmative, and as a result, the gentleman lost his disability tax credit. I think that you are right and I have no difficulty supporting your recommendation.

I will ask all of my questions one after the other and then you can respond.

I have a question for the people representing the Ontario Coalition for Better Childcare Network. I'm always a little bit concerned when provinces and territories have to be accountable. I would like you to tell me to whom these people should be accountable, whether we would be dealing with provinces or networks. I will give you an example. There is a great deal of unfairness in terms of the federal government tax system in the case of the Quebec non-profit daycare network. If these organizations have to be accountable to the federal government, which itself is insensitive to Quebec's undertaking, I have serious reservations.

I will give you another example. I have three children; two of them currently benefit from the $5.00 daycare service. Last year, I sent my little boy to a private daycare because, unfortunately, I was unable to fin a spot for him in the public system. This system is new and there are not enough spots; that's where our problem lies. I had to pay $20.00 per day and I was entitled to a deduction of approximately $4,000.00. This year, because I had access to a $5.00 daycare spot, the federal government will give me a deduction of only $1,000.00. This represents a deduction of $3,000.00 less for me, but I am not the only one with the problem. This represent a $3,000.00 deduction for Quebec, which does not receive any financial assistance for this daycare network. Consequently, we are being penalized by the federal tax system for undertaking such an initiative.

I want to draw your attention to this fact and you may wish to comment on it.

I will conclude by directing a question to the representatives from the Canadian Housing and Renewal Association. In your fourth recommendation, you said that when a province or territory had not managed to strike an agreement with the federal government by January 1, 2003, ... you invite the federal government to unilaterally implement the program with municipalities and non-profit organizations.

Who is going to pay the provincial contributions? What kind of guarantee will these organizations and municipalities have that the federal government will not behave as it did in the past, namely, opt out?

I can tell you that, in my riding, municipalities have made significant efforts in the area of social housing and now they are paying the cost because the federal government has withdrawn. If I were a municipality, I would not agree to your fourth recommendation.

These are a few comments that I wanted to make and I would now invite the respective associations to respond.

[English]

The Chair: Merci.

Dr. Metson, would you like to start?

Dr. John Metson: Sometimes necessity is the mother of invention. We're quite conscious of the agreement and the transfer of funds. We're also aware that municipalities facing this need find they very often have to take that initiative anyway. I happen to come from the province of Ontario, where I have my domicile, although I'm representative of interests across Canada with CHRA. The Province of Ontario is counting money municipalities are already putting in. So we in the city of Toronto, for instance, are looking forward to being able to participate in this program, because the need is so great in the municipalities around the GTA and in Toronto itself.

I'm also on the board of the Toronto Community Housing Corporation and its past president. I go from here to chair a meeting of their investment committee. Then I tie that into CHRA's capacity building arrangement and cooperative venture with CMHC and say, we want to build capacity across the country that's not totally reliant on a federal or a provincial dollar, but rather has the partnerships that exist in the private sector, the non-profit sector, the municipal non-profit sector. It's a tremendous array of resources that exist in this country, but it does need some kick-starts, some self-starts, and it does need an investment, because it's an investment in the cities, their sustainability and their health in the future. Not to do it is pretty drastic for this nation.

Ms. Deanna Groetzinger: Thank you very much for your comments, and I can tell you that your experience as a member of Parliament being approached by constituents is not unusual. In fact, we've been told that the disability issue is probably the one issue members of Parliament hear most about. Hopefully, through the joint efforts and the support we're receiving from members of Parliament, we will actually be able to make a difference with CCRA. We are in a dialogue now, and hopefully, it will make a difference.

¸ (1425)

[Translation]

Mr. Pierre Paquette: As I said this morning to other intervenors, Mr. Manley said yesterday that he was prepared to personally meet with the groups that are working on these issues. I would therefore invite you to write him so that he can meet with you.

[English]

Ms. Cheryl DeGras: The accountability we were talking about was the accountability of the provinces in spending the ECDA money on child care as part of the early childhood development initiatives that were created in that agreement. Only one in 10 children in Ontario is in regulated child care, and we have over 70% of mothers working in this province. So what we are talking about with accountability is that when the federal government gives money to a program for the development of early childhood education, there should be some piece built into it so that we are assured that all four areas recommended in the ECDA are being addressed.

The Chair: Thank you.

Mr. Wilfert.

Mr. Bryon Wilfert (Oak Ridges, Lib.): Thank you, Madam Chairman.

I thank everyone for coming. One of the great difficulties we have is that in trying to work in a federal system, we have some provinces that are unwilling to fulfil their obligations. I'll just make some general comments, and then anyone can make a comment.

To the Canadian Housing and Renewal Association, on a national housing strategy, it takes more than the federal government to participate. The Prime Minister's urban task force has recommended that we have a national strategy. We put $680 million on the table, and you know what the Province of Ontario has done.

Yes, I support the continuation of the RRAP program, but again, unless the private sector, in my view, and municipalities deal with development charges and all those other things.... We are not going to be able to do it alone, and I hope you're putting the others' feet to the fire.

To the Canadian Tooling and Machining Association, we have been involved in various programs with various trades on training. One of the problems, as you know, is that we turned over training in this country to the provinces, except in Ontario. I'm sure, for three members here, it would be over our dead bodies that we would make an agreement with the devil, because we've seen what's happened in Alberta and British Columbia, and it has not been successful. I'm sure we can take a look at your proposal, but again, all these things cost money, and what would the implications be?

To Evergreen Common Grounds and the Nature Conservancy of Canada, as you know, with the Oak Ridges moraine, near and dear to my heart, we, as a federal government, put 7,500 hectares of land into no-development in perpetuity. We need more national urban parks. Ontario has very few. I would agree, anything we can do with the development industry or landowners through tax incentives is important. The difficulty is in the actual value of that land, which is a problem. You know some of the developers up my way. I won't say much more than that it's obscene what they're now looking for in respect of these dollars. They hold you to ransom. And it's not just on conservation land, it's the same with cultural properties, historical properties. We need to do more from a tax perspective.

On child care, we gave $2.2 billion in 2000 for EDCA, and I'd cancel it tomorrow. We're not getting any value for it, in the province of Ontario for example. It's the biggest waste of money, in my view. We won't get a national child care program as long as the provinces are responsible for delivery. Some of them are very good, and you mentioned Quebec, but the fact is that with the provinces, it's the same old song: give us the money and we'll take care of implementation. It hasn't worked. I'm sure you're giving the same message to them. You talk about direct funding, but we in this federation are supposed to work with our provincial counterparts, and yet--and I say this all the time--we're being blackmailed in many areas by the provinces, Kyoto, health care, child care, because they say, we will not enter into an agreement unless.... They have these loopholes, and then you come to us and say, we're not getting anywhere with province X, what can you do? We can't do it alone. We just don't have the dollars for it.

Part of it is our fault. I will acknowledge that we made some pretty poor agreements, in part because it's the only way we can get them to the table. When we get to the table, we find these loopholes. Housing is a fabulous example of that. Child care is another.

The chair didn't give me credit the other day when I finished early. You didn't give me the extra time. Anyway, I'll turn it over.

¸ (1430)

Ms. Kira Heineck: Thank you for your comments. We agree that it's a very difficult situation we're in. I also want to remind you that the vast majority of our work is aimed at the provincial government, but we would be remiss if we didn't come and speak to you as well. We are looking for leadership, and if it can come at this level, and I think it can, we're happy to promote it here.

You are the greatest power in Canada. You can take that leadership, and you've done it before. In fact, I would suggest that in 1995 ending CAP and replacing it with the CHST was a radical move that was something different, that took leadership. I think you can take radical leadership initiatives again. I agree, you can't do it alone, but if we can work together to push the province, we're stronger, and that's why we're here today to talk to you about that perspective. Nothing will change in child care, housing, the environment, and other issues if everyone just keeps being frustrated by the constraints in the federation and not trying to find creative solutions to move forward and to make a difference.

Thank you.

The Chair: Thank you.

Mr. Bowman.

Mr. James D. Bowman: I first want to say that the position we've brought forward to your committee over the last few years isn't about a bunch of businessmen sitting around saying, how can I increase my.... Well, that does have a bit to do with it, but it's about the big picture, it's about the economic health care of the country. I'm sitting here and hearing about MS and endangered species, and it makes what we're talking about seem a little less important, but if you look at the big picture, the Canadian standard of living and the economic impacts our manufacturing base has, it is as important.

The comment Mr. Wilfert made about all these things costing money is a very good point, but if you don't train, you don't get any benefit and credit. Not only that, but the way I understand it--and I could be proven wrong on this--the only way to really capitalize on that credit is if you report a profit. So would that include--you know how books can work--more companies suddenly performing better, with higher profits, to get a tax training credit? Probably not, but the training that is completed, the wages that are earned, and the taxes that come from there would more than pay for it.

The Chair: Thank you.

Mr. Valeri.

¸ (1435)

Mr. Tony Valeri (Stoney Creek, Lib.): Thank you, Madam Chair.

To pick up on that last comment, I understood your proposal to be looking for a 75% credit on the cost of training, much along the lines of the R and D credit, not on the profitability of the company. So perhaps you can clarify that. In your brief here, the National Tooling and Machinery Association in the United States says, after an employee has become a certified journeyman, they must be hired for a minimum of one year before the employer receives a tax credit, and the tax credit would be 80% of wages and would crank out at 20% increments, beginning in the sixth year. So in essence, the industry front-end loads this thing and a percentage of the costs is reimbursed over an amortized period of time. Is that what you're suggesting as well?

Mr. James D. Bowman: It's much along the same lines. Where we came up with our percentages was just a matter of opinion and discussion. We looked very closely at what the American proposal was, but we thought, to be honest, we would keep it simple and put forth an idea that is more conceptual. But obviously, we're open to any kind of help at all along these lines.

Mr. Tony Valeri: Could I get your reaction to a possible model where we involve the EI premium itself? Part of your argument here is that it is very unlikely that your membership would be going to the EI pool, given the skills they have and the fact that they'd be pretty well employable. What would your reaction be to basing the EI premium based on companies' training records, so that you could get to a point--hypothetically, I guess--where your company would have very low EI premiums, so you'd eliminate that fixed cost, because you're actually engaging in training? So you're contributing not only to the productivity of your firm, but to a larger societal productivity pool. If these people leave your company, they're obviously going to be contributing through some other means to society and to the economy. How do you react to tying training to EI experience rating?

Mr. James D. Bowman: That's a fantastic idea, but the amounts of money we're talking about aren't in the same neighbourhood with costs versus compensation. On a separate issue, I think we would support that without hesitation. It also addresses the issue of those who are training having some type of acknowledgment for it. Those who are not contributing, in that they're not training, would have to pay some type of price for that.

Mr. Tony Valeri: Those not training would be paying the stated EI premium, while those who are would be paying a lot less. That would make a substantial difference in people becoming engaged in that. You're really looking for some bottom-line impact with training costs, right?

Mr. James D. Bowman: Exactly. The ability for a tool and die maker to lose a job one day and have a job by the end of the week, if they're not trying too hard, is still here, even in this economy, especially down in Windsor, but throughout other parts of the country. They're in desperate demand, and they just don't use the EI system. We feel we're doing the best we can to increase the number of people who won't be going back there. We're giving employable skills to them so they won't fall back on the social safety net.

Right now we're bearing the brunt of that, and we have been for years. The mom-and-pop shops, the small to medium-sized businesses, continue to do this, just to lose somebody once they get the magic ticket to go and work for larger corporations for an hourly wage the mom-and-pop or small to medium-sized business shops just can't afford. Then they go back to square one again. That doesn't happen every time. When you get to hold one, it's not that over time you don't recoup your costs, it's just that every now and then, when one does go, that's a huge investment to a small to medium-sized company.

¸ (1440)

Mr. Tony Valeri: Can I just switch gears for a second? There has been a lot of discussion about immigration being a source of skilled labour. How difficult is it for immigrants who come to Canada with a basis of training, or perhaps certification in their own country, to become accredited in your industry?

Mr. James D. Bowman: I can speak from personal experience. Their accreditation is what they can do with their hands. Their accreditation, from an employer's point of view, is how they get the job done.

Mr. Tony Valeri: I understand that. You bring them in, they're on the shop floor, they're working.

Mr. James D. Bowman: We will pay them accredited wages.

Mr. Tony Valeri: You will?

Mr. James D. Bowman: Yes, of course we do. We have to, because it's a competitive market. If we don't, he will.

Mr. Tony Valeri: Outside the language skills, you're not sure what they would have to go through to get the ticket you're describing.

Mr. James D. Bowman: There's an exam in Ontario you can take that is a pre-exam to find out your level. If you achieve a certain score on that, you can write for your ticket. If not, there's some schooling. To be honest, I'm not 100% sure.

Mr. Tony Valeri: So immigrants are a source of skilled labour for this sector of the economy.

Mr. James D. Bowman: Sure. As a matter of fact, the Government of Canada right now has the temporary foreign workers program under way. Yet we represent 180 companies, primarily in Ontario, but we do represent all of Canada, and we haven't seen any of this. Most of us are business operators, owner-operators, or upper management, and we haven't seen any huge influx from this. It hasn't been noticeable.

Mr. Tony Valeri: Huge influxes of immigrants?

Mr. James D. Bowman: Yes.

The Chair: Thank you.

Ms. Minna.

Ms. Maria Minna (Beaches—East York, Lib.): Thank you, Madam Chair.

I'll start out with Mr. Bowman as well. I sympathize with what you're saying with respect to especially small and medium-sized businesses and training, but I must say that Canadian companies are probably among the worst for training and upgrading their labour forces when compared to other countries as it is. I really would like to see them put some of their own power behind it. The construction industry is really good at it, but others are not terribly good.

So what I would like to suggest is that the companies who poach and don't train be penalized with a training tax, and the companies that do train should receive the incentive. Then we could use the EI program in a different way, but not in the way my colleague was suggesting, because that takes away from the collective risk approach. You were saying it doesn't really answer your issue anyway. It was suggested by another presenter a few days back that instead of lowering the EI premium further, the percentage could be lowered, but left in to use it for training, to assist companies.

I'll come back to you, as I'm going to go to child care. You can hold your thought and let me know what you think of those things, because I would like to see us being proactive. I'd like to kick those companies that poach and don't train, because I think there's a responsibility there.

Child care is an issue I've worked at for years. The early childhood development program was the one I presented in June of 1999 to the Prime Minister, and child care was very much a part of it. I don't see them as two separate things. Unfortunately, when we negotiated, we allowed cherry-picking, for the reasons my colleague was saying, because they blackmailed us: if you don't let us do it this way, we won't agree on the health care, if you don't let us do it that way, we won't agree on the Kyoto, whatever. Quite frankly, I think we made a major mistake.

I met with some of your members in my office last week, and they were basically saying to me, we would rather you'd negotiated nothing with Ontario and let the citizens of Ontario realize that Ontario is not participating, rather than doing it badly. Maybe they're right. Would that be a strategy to follow? It's been a long time for us to get it in the throne speech, now it's there. I want to maximize the opportunity we have. Early learning is an economic investment. Kids who don't learn and who don't have a start turn out to be problem kids in health, they don't study well, they don't get the skills, and all of the other things you and I can talk about. That's an investment in our economy. You've got to start at the right time. We say early learning and care, they've taken early learning and put it over there by itself, they've taken care and they've deducted the number of kids who are unsubsidized in child care, which is ridiculous, and we're duplicating structures.

Renegotiating SUFA, for instance, I think requires six provinces, not all the provinces. We probably should negotiate a national child care program with six provinces, and if Ontario doesn't bite, too bad, because they didn't bite with medicare at first, they came later, dragging and kicking and screaming. Would you agree with approach? Because I'm just frustrated.

¸ (1445)

Ms. Kira Heineck: I'm glad you mentioned that you can renegotiate SUFA with only six provinces. I believe they must represent 60% of the population. I think, with the six that come together, there's a balance there as well. You're absolutely right, we did medicare without Ontario, and they came in last.

Ms. Maria Minna: I don't think SUFA refers to population, actually, just provinces.

Ms. Kira Heineck: All right.

I actually brought with me the brochure of the ECDA. It's a really instructive map that does show you the provinces that are using these funds for child care, and Ontario, very conspicuously, is not. So you're right, that could be one option.

The other option our colleagues would have mentioned to you last week is one we consider out of a sense of frustration. It's strategic in many ways, because if the province can't say, well, the feds are doing it, we have a clearer fight with them. But again, with Ontario having a third of the country's population, we feel it really needs to be a national program, also to make sure regional disparities across the country don't grow and citizens who move into Ontario from somewhere else can expect the same access to services they have in other provinces.

The Chair: Mr. Bowman.

Mr. James D. Bowman: You had some very good ideas there, exciting, actually. We represent small tooling shops and very large tooling shops, some that train and some that don't, and we're here representing them all. My first reaction is that the idea sounds very positive, but we don't believe an incentive to do something through taxation is necessarily the proper answer. However, a tax disincentive accomplishes the same objective as a tax incentive. People would, I imagine, be open to reduced EI premiums. However, the amounts we're talking about are really fractional compared to the cost we're talking about here. But if that disincentive satisfies the problem of reducing poaching, it serves the same purpose.

¸ (1450)

Ms. Maria Minna: I just want to clarify that. I'm not saying we would reduce EI by however many percentage points. What I'm saying to the government is, we're planning to reduce EI by 15¢ or 20¢, but instead of reducing EI, we could keep it and have a portion dedicated to assisting companies to train as a collective approach.

Mr. James D. Bowman: I see. I misunderstood.

Ms. Maria Minna: The money has to come from somewhere, right?

Mr. James D. Bowman: Without a doubt. However, the point I'm trying to make is that in the big picture, there is a cost, but you are going to get an employable Canadian citizen making a half-decent buck.

The Chair: Thank you very much.

On behalf of all the members of the committee, both those here today and those who are in other cities hearing other witnesses, we appreciate the time you've put in preparing your briefs. We appreciate, especially, the fact that you brought them to us early, so they could be translated and distributed. We thank you for your time in coming before us to present and answer questions. We wish we had hours to explore everything with each one of you, but we do have a mandate to hear as many Canadians as possible.

Thank you very much.

We are suspended for about 15 minutes before the next panel.

¸ (1446)

¸ (1459)

The Chair: Welcome, everyone. We will start our second panel of the afternoon. We're doing pre-budget discussions, pursuant to Standing Order 83(1).

Our witnesses this afternoon are, from the Canadian Cancer Society, Julie White, chief executive officer; from the Canadian Institute of Public and Private Real Estate Companies, Ian Bacque, director of government relations; from the Health Charities Council of Canada, Fiona Chapman, an executive member substituting for co-chair Edward Pennington, and Chris Higgins, director; from the Heart and Stroke Foundation of Canada, Carolyn Brooks, president, and Sally Brown, executive director and CEO; from the Ontario Non-Profit Housing Association, Robin Campbell, executive director; as an individual, Mr. Donald Johnson;and representing ATS Automation Tooling Systems Inc., Milfred Hammerbacher, president of Spheral Solar Power Inc.

Welcome to you all. Thank you very much for joining us.

We'll start with the Canadian Cancer Society, and we'll give you eight minutes.

¹ (1505)

Ms. Julie White (Chief Executive Officer, Canadian Cancer Society): That would be great. Thank you very much.

The Canadian Cancer Society appreciates this opportunity to participate in the Standing Committee on Finance pre-budget consultation process. We believe such an open and constructive dialogue benefits all Canadians.

The Canadian Cancer Society strives to eradicate cancer in all its form and to ensure a better quality of life for those affected by cancer. This devastating family of illnesses continues to be a growing concern for Canadians. It continues to be the leading cause of premature death in Canada. In 2002, there will be an estimated 137,000 new cases of cancer and 66,000 deaths. Tobacco-caused cancers will be responsible for about a third of those.

Cancer poses an enormous economic burden on Canadian society. According to a 1998 Health Canada study, cancer costs a staggering $14.5 billion to our health system. This figure, significant in and of itself, does not measure the productivity lost through premature death and the economic burden on families supporting cancer patients. With the aging of the Canadian population, the numbers of Canadians diagnosed with cancer will continue to increase sharply.

Many cancers are preventable. The Canadian Cancer Society believes in prevention to reduce the costs of chronic disease. A small investment of 1% of the more than $30 billion a year spent on chronic diseases would be more than adequate to cover the implementation of a chronic disease prevention and health promotion strategy.

The Senate Standing Committee on Social Affairs, Science and Technology found evidence that investing in more human and financial resources in promotion, prevention, protection, and population health can significantly improve the health outcomes for a given population. In the end, this can reduce the demand for health services and the pressures on the publicly funded health care system. Investing in prevention would ultimately alleviate financial pressure on the acute care system and would align with government objectives as outlined in the Speech from the Throne delivered on September 30 of this year.

At the beginning of its third mandate, the government stated in its January 2001 throne speech:

In leading Canada into the new millennium, its overarching goal will continue to be to build a stronger, ever more inclusive Canada and secure a higher quality of life for all Canadians.

We cannot presume to ensure a better quality of life without addressing the range of services needed for optimal recuperation of health. To do this, we need to expand and refine the definition of “insured health services” in the Canada Health Act so that those patients can receive life-saving drugs and proper care at home, rather than in hospitals. The Canadian Cancer Society supports the proposed expansion of post-acute home care as proposed by the Senate social affairs committee, and believes any move to a national palliative home care program would enhance the quality of life of cancer patients, their families, and caregivers.

At the present time, there are no national standards for cancer treatment. We need to provide consistent and comparable responses across Canada to relieve the suffering of cancer patients and alleviate the burdens upon their families. To ensure a more consistent national approach, cancer control organizations from across the country joined forces to develop and implement the Canadian Strategy for Cancer Control. This national strategy was created to address the application of evidence-based practices across the disease continuum, from primary prevention through diagnosis and treatment, to supportive care and palliative care.

The Canadian Strategy for Cancer Control also addresses issues of health system infrastructure, including health human resource planning, disease surveillance, and information gathering and research. The cancer system can be viewed as a microcosm of the health system as a whole. Therefore, many evidence-based solutions identified in the Canadian Strategy for Cancer Control could be applied to the larger system.

A very critical area in preventing future cancers is controlling the tobacco epidemic. Tobacco use kills one in two smokers and approximately a thousand non-smokers every year. We congratulate the federal government for its two most recent tobacco tax increases, as well as its substantive export tax increase, which assists in controlling smuggling. Higher taxes are an extremely effective means of discouraging smoking, especially among teenagers. A health-based tobacco policy would see tobacco taxes increase faster than inflation, along the lines of the U.K.'s longstanding policy of increasing taxes by 5% per year over inflation.

The Canadian Cancer Society is concerned with the present price imbalance between manufactured cigarettes and roll-your-own. To eliminate smokers moving to roll-your-own, the federal government needs to equalize the tax rates on tobacco sticks and fine-cut. The existing loophole allows the dramatically lower price for certain products to undermine public health and public revenue objectives.

Health research improves the health of Canadians, offers a real opportunity to contain health care costs, and contributes to the creation of knowledge-based jobs and economic growth. The Canadian Cancer Society congratulates the government for its creation of the Canadian Institutes of Health Research. This innovative approach is contributing to the better health of all Canadians and to a strengthened health care system. Moreover, public investments in health research are driving the outstanding growth in Canada's biotechnology sector. New research is translated into an improved quality of life for many Canadians, as well as a more efficient health care system.

Research is a long-term proposition. Clear, long-term plans require stable funding. The Canadian Cancer Society joins with the Senate social affairs committee and the rest of the health research community to recommend a five-year commitment to CIHR's budget, ensuring a 20% budget increase each year. A predictable and stable planning environment will ensure that Canada achieves its full potential as a world leader in health research, and will enhance the quality of life of Canadians.

The Minister of Finance has recently credited this committee's deliberations as playing a key role in establishing the government's fiscal and economic agenda. The Canadian Cancer Society asks the committee to clearly define the needs of Canadians in their struggle against cancer, and asks the committee to recommend that the government: implement health reform to ensure that all Canadians receive the same level of care and treatment wherever they may live in Canada; promote primary prevention in order to reduce the long-term burden of chronic disease; support the implementation of a community care program by extending the services covered in the Canada Health Act, to improve the quality of life for cancer patients and their families; implement the Canadian Strategy for Cancer Control as a prototype for controlling chronic disease in Canada; reduce the burden of preventable tobacco-related cancers by increasing tobacco taxes by at least $3 per carton and increasing taxation on tobacco sticks and fine-cut so that they are equal to the tax on cigarettes; and ensure long-term, stable funding for health research by increasing the research budget of the Canadian Institutes of Health Research by 20% annually for the next five years.

Thank you for your time. I will be pleased to answer any questions you might have.

¹ (1510)

The Chair: Thank you very much.

We'll now hear from Mr. Hammerbacher, from ATS Automation Tooling Systems Inc.

¹ (1515)

Mr. Milfred Hammerbacher (President, Spheral Solar Power Inc.; ATS Automation Tooling Systems Inc.): Madam Chair, members of the committee, thank you for inviting me here today. I am pleased to be participating in these pre-budget discussions, and I will be focusing my remarks on enhancing an important component of Canada's renewable energy industry: photovoltaics, or electricity from sunlight.

Photovoltaics—I'll call it PV, because it rolls off the tongue a little bit better—is a technology that has been providing electrical power to satellites since the 1960s. It is evolving into a technology that will provide electricity for your homes and businesses in the near future. I've brought two samples here today, one of a conventional PV technology—a nice, rigid, heavy-glass structure—and one of a technology we will be commercializing next year—a flexible, lightweight, and much lower-cost one—but I'll talk a little bit more about that later.

Before going further, I should tell you a little about myself and the company I work for. I have over fifteen years' experience in the photovoltaics industry. I've managed businesses in the U.S., France, and now Canada. I'm currently president of Spheral Solar Power Inc., which is a subsidiary of ATS Automation Tooling Systems. Both of our companies are headquartered in Cambridge, Ontario. ATS is a world-leading producer of turnkey automated manufacturing equipment. It is traded on the Toronto Stock Exchange and is listed on the TSE-100 index.

You might ask how an automation company got involved in photovoltaics. Actually, ATS has invested close to $100 million in the last five years, and it is the seventh-largest producer of PV in the world today. Why did we get involved? We believe PV is one of the few cutting-edge industries that offer rapid, long-term growth potential. This is not some secret that only we know about. Many believe PV could be the next semi-conductor industry. Indeed, countries like Japan and Germany have targeted PV for massive investments. They want the next Silicon Valley or “PV Valley” to be in their countries. That is also why we believe PV can be and should be used as an integral part of Canada's national energy strategy.

ATS firmly believes the growth potential and innovation of the country's PV industry can play a critical role in leveraging our desire to maintain the highest quality standard for Canadians. Indeed, it can play a central role in leveraging the development of new business and infrastructure opportunities through the expansion of energy-efficient commercial and residential buildings across the country. ATS is committed to this technology and the belief that it can help Canada meet its international environmental commitments while positioning it as a global leader and supplier of this sustainable energy resource.

I do want to make it clear to the committee members that our company is not advocating solar technology as the perfect alternative energy source that will solve all of our current and future environmental challenges. Meeting the country's growing energy needs while preserving the environment for future generations is a very complex problem. There are no easy or singular solutions to this problem.

Solar does not represent a quick, low-cost fix that everyone would so dearly like to see. As a result, and based on my personal experience, policy-makers and decision-makers alike have been reluctant to adopt deployment programs necessary for PV without directly correlating solely to the size of immediate greenhouse gas reductions. While we understand this position, we don't accept it as being right—and let me elaborate on that.

ATS and other supporters of solar deployment understand the economic challenges we are still facing. Equally, however, we understand that if, as a nation, we look to Canadian innovation and technology as drivers to alternative cleaner fuel sources, then PV can and should be an important component of our national energy strategy. Moreover, it should be looked at not only in the context of environmental benefits, but also importantly within the context of what our industry efforts mean toward investment, jobs, and competitiveness.

As a growth industry, PV holds significant potential for Canada. ATS understands the potential of this growth and is nearing completion on its latest technology development, Spheral Solar Technology, which will see over $1 billion in investment in Canada over the next 10 years and upwards of 900 new jobs for Canadians. Moreover, it will reduce the costs currently associated with conventional solar technologies by as much as 75%, making this Canadian technology truly a global leader.

While our leadership strategy includes completion of our first 20-megawatt facility in Cambridge next year, the majority of our product will be directed toward export markets. ATS notes that Canada is quickly falling behind its European, North American, and Asian counterparts in effective deployment of this viable energy source. As Canadian communities and municipalities are finding themselves with increasing burdens to address environment- and health-related challenges, the federal government can assist in part by leveraging the significant economic and technological strength it holds in its own backyard. ATS urges the government to direct support to deployment of PV systems into our rural and urban centres across Canada.

You can see in our submission that we are making three specific recommendations to which the federal government, in its upcoming budget, can lend support. The first is to support the residential rooftop program proposed by Natural Resources Canada. Secondly, support the deployment of PV systems on high-visibility government buildings in order to enhance public awareness. Finally, champion guidelines to facilitate the interconnection of small residential and commercial energy sources into the Canadian utility grids.

This support can be very important, as it was with other conventional energy sources like the oil sands, a source that required significant support of government programs in its early stages of growth. The oil sands have now developed and prospered into a major strategic asset for Canada. PV holds similar potential as an emerging renewable energy source that can have a significant role in the country's future national energy strategy.

Increasingly, legislators from all levels of government are recognizing the potential of PV. We welcome the Liberal caucus working group on environmental technologies, and its recommendations that were delivered late last year. Moreover, bipartisan reports and recommendations, like that of the Ontario government's committee on alternative fuels, are now calling for forward thinking and very progressive policy-making in support of renewable energies. This is welcome news, and it demonstrates the willingness of our country's legislators to work together. We must capitalize on this momentum.

Finally, we believe the upcoming federal budget can be another signal, both domestically and internationally, that Canada is prepared to strengthen its position as a leader and innovator in the development and supply of sustainable energy.

Thank you for listening.

¹ (1520)

The Chair: Thank you very much.

From the Canadian Institute of Public and Private Real Estate Companies, Mr. Bacque, you're next. Go ahead, sir.

Mr. Ian Bacque (Director, Government Relations, Canadian Institute of Public and Private Real Estate Companies): Thank you very much for the invitation to be here, Madam Chair.

CIPPREC was founded in 1970 by, at the time, thirteen public real estate companies listed on the Toronto Stock Exchange. The primary focus at that time was to set uniform accounting standards for the commercial real estate industry.

On page 5 of our submission, you'll see a chart outlining, by category, our now 44 members in the real estate business in Canada. Our members own, manage, and invest in approximately $70 billion worth of assets in all major urban centres across the country. We provide Canadians with office space, shopping centres, apartments, industrial plants, nursing homes, and hotel rooms.

As I mentioned, in 1970, one of the original purposes of CIPPREC was to set accounting standards. We still do that today, publishing the CIPPREC accounting standards handbook, which is endorsed by the Canadian Institute of Chartered Accountants.

Beginning on page 9 is the detail of the five items we're making a submission on for the next federal budget. Thirteen CIPPREC members are real estate investment trusts, or REITs. They're mutual fund trusts under the Income Tax Act, they're all listed on the Toronto Stock Exchange, and there are two main tax areas in which they're not on a level playing field with corporations in the real estate business or, indeed, in any other business.

Currently, corporations are able to be exempt from the withholding tax to non-resident lenders on loans of a term of over five years. This is not available to business trusts. In addition, trusts must pay GST on financing costs and are not able to avail themselves of an input tax credit for that. We think both of these are actually unintended legislative anomalies, and we ask the committee for its support in seeing them changed.

The second part of our submission deals with multi-residential properties and the current tax disincentives for new construction. Canada really needs new construction of multi-residential properties. I know the committee has heard this from other organizations, so in the interest of time, I'll simply state our strong support for GST, income, capital tax, and also like-kind exchange incentives, so that the private sector can get building again.

I mentioned like-kind exchanges. It's very important that the committee consider the concept of a like-kind exchange, which allows the sale of an asset and the deferral of capital gains taxes. It's not an exemption that we're seeking, it's simply a deferral as long as the capital gain is reinvested in a like-kind asset. This program is in full flourish in the United States, and it puts us at a competitive disadvantage in terms of attracting investment—and, indeed, debt capital—to Canada's real estate industry. As I said, it's not an exemption we're seeking, it simply involves a deferral, and it's also strongly supported by the Canadian Real Estate Association.

On urban issues and public transit, our members own large assets in downtown centres. In the city of Toronto, property taxes are causing urban sprawl. This isn't good for the environment, and it's not good for greenland and agricultural development either. We would like to see a commitment by the federal government and the province to stable, long-term funding of public transit—in particular, the TTC—which would allow the city to unburden itself of this program—or at least two-thirds of it—and reduce what we see as a punishing property tax burden that is contributing to urban sprawl in the commercial context.

I should note for the record that we oppose the idea of granting new taxation powers to municipalities, because if we again look at the example of the city of Toronto, when a tenant is looking at where to locate, property tax is at $14 per square foot in the city, versus $4 per square foot in the 905 belt. As a result, 83% of new office construction is occurring outside of Toronto. If you add another layer of income or sales tax burdens to businesses operating within a given municipal boundary, we have very serious concerns about the voting-with-your-feet or urban sprawl scenario that this would exacerbate.

Finally, with respect to capital taxation. We're members of a group you heard from on Tuesday, the group called AACT, the Association for the Abolition of Capital Taxes, so I'll again say we support that submission. In a real estate context, it's a very capital-intense business. The capital for capital tax or LCT purposes is still there even if the building is 20% or 30% vacant, so it is a punishing tax for the real estate industry in particular.

Once again, those are the five issues that I am pleased to bring to you today. I think this is our first time appearing before you, and we're very happy to be here. Thank you very much for your time.

¹ (1525)

The Chair: Thank you very much.

We'll now move to the Health Charities Council of Canada, and Fiona Chapman.

Ms. Fiona Chapman (Executive Member, Health Charities Council of Canada): Madam Chair, thank you for the opportunity to appear before the committee this afternoon on behalf of the Health Charities Council of Canada. My name is Fiona Chapman. When I wear a different hat, I'm also the executive director of the CanadianFoundation for the Study of Infant Deaths. I'm joined today by Chris Higgins, who is the director of our secretariat.

The Health Charities Council of Canada represents national health charities of all sizes, small, medium, and large. Our member organizations bring together a wealth of knowledge, expertise, experience, and resources, all of which we hope will improve the health of Canadians and strengthen our health system.

Across the country, national health charities comprise thousands of staff and millions of volunteers, all of whom serve Canadians in their communities year-round. Formal volunteers contribute approximately 93 million hours per year. Informally, volunteer time is estimated to total 2.3 billion hours. We think we represent an important and significant human resource in the Canadian health system.

The HCCC provides a strong voice on common interests. It acts as a resource for our member organizations and facilitates networking opportunities. Because of the close ties between national health charities and Canadians, the HCCC also provides an important channel for policy- and decision-makers to learn of the views and concerns of people of Canada.

In our formal presentation, we actually make seven recommendations. At the risk of boring you silly, I've decided to in fact just focus on three, if I might, Madam Chair. The first is leadership in health research, and to a degree, I will echo the comments made by the Canadian Cancer Society.

We genuinely believe the federal government should continue to provide strategic national leadership in health research. The government should invest aggressively through the Canadian Institutes of Health Research, the CIHR being the preeminent vehicle for health research in our country. Specifically, this entails a commitment to a planned increase of the A-base budget, the budget that flows through directly to researchers. This commitment would support a program of predictable increases in federal government investment in research, and that would send a strong signal to both researchers and other research funders. We believe it would allow for effective planning in advance that supports systemic research campaigns; that it would ensure that talented scientists and researchers know they can pursue their important work here in Canada; and, finally, that it would create more opportunities for important synergies among researchers. It would also create funding leverage for research that would result in increased investment by other sectors and funders. On a very personal note, we hope it will one day help put most of us out of business.

The second recommendation is an investment in health information services. We recommend that the federal government increase its direct federal investment in health information systems in order to improve the effectiveness of health policy, planning, and services. We now have significant gaps in our capacity to track standardized health information in a timely way, and it's costing us huge amounts of money. We do not have the ability to monitor risk factors, interventions, and outcomes, and we're therefore forced, on a daily basis, into reactive health system management rather than proactive planning.

We believe we need national information and surveillance capacity that will inform and support policy and the planning of the delivery of health promotion and prevention activities and actual health care delivery. This information will also assist with the managing of critical human resources and the challenges that we know, hear about, and read about daily. In October of this year, the Auditor General's report recognized that there were significant gaps remaining in the surveillance of most chronic diseases. The Auditor General recommends—and we support her—that Health Canada should be taking the lead in efforts to improve national health surveillance. We also support and will echo one of the recommendations that will be made by our colleagues at Heart and Stroke somewhat later. The federal government must provide leadership in the critical area of creation of a national chronic disease and risk factor surveillance system.

In the recent Health Care in Canada survey that we conducted jointly with Pollara and other partners, we confirmed that there is strong support for greater use of health information systems to plan and provide health care services by the general public, health care professionals, and system managers and planners.

My third and last point—you'll be glad to know that—is with regard to the future of health care in Canada. As a council, we participated in making recommendations to the Romanow commission. Specifically, we recommended that the federal government fund a broad range of health promotion, prevention, care, pharmacare, rehabilitation, and personal care services outside of the CHST, based on new or what we describe as companion legislation. We know 90% of the Canadians who were surveyed in the Health Care in Canada survey agreed that government should fund all health services proven to improve health and quality of life, with the range of covered services broadened to include areas such as wellness and quality of life. These would include health promotion, prevention, and care, community-based physical and psycho-social rehab, home care, some form of pharmacare, palliative care, and personal support services.

Madam Chair, the current health paradigm places most of our resources downstream or in tertiary care, better known as doctors and hospital-based components. While these are absolutely critical to our health care system, this paradigm has not proved adequate. If we are to overcome the current challenges in the area of health, we must help Canadians be healthy and stay healthy, by adding more capacity in the areas of disease and injury prevention, through the promotion of good health, and even by addressing the broader determinants of health, such as income, education, and physical and social environments.

On a personal note again, I think all of us who sit at this side of the table might well argue that such a strategy would, in the long run, save significant funds that are currently flowing through the CHST. When disease- and/or health-related disabilities emerge, we need to focus more on pre-empting catastrophic, acute episodes, with community-based health care services that mediate the negative impacts of such conditions. We believe we must also provide supports such as case management, home care, and palliative care to people to enable them to maintain a very high quality of life, living independently in the community as participating citizens.

To sum up, the government has an opportunity to take a strengthened leadership role in these three areas. It can do so with the support and cooperation of the national health charities. From these strategic investments, Canadians will gain an outstanding medical research capacity, and therefore expertise; timely, high-quality health information with which we can all direct our efforts; and an expanded health paradigm that will support Canadians to be healthy, stay healthy, receive world-class health care, and live well in their communities.

Thank you very much.

¹ (1535)

The Chair: Thank you very much.

From the Heart and Stroke Foundation of Canada, Carolyn Brooks, go ahead.

Ms. Carolyn Brooks (President, Heart and Stroke Foundation of Canada): Good afternoon, Madam Chair and members of the committee. I'd like to begin by reminding you of the mission of the Heart and Stroke Foundation of Canada. It's to improve the health of Canadians by preventing and reducing disability and death from heart disease and strokes, through research, health promotion, and advocacy. We and the Canadian Cancer Society are actually leading members of the Health Charities Council of Canada. In that membership, we address cardiovascular disease.

I'd like to begin by commending the federal government for its leadership in health, including its throne speech commitment to the national healthy living strategy and its investments in the Canadian Institutes of Health Research. In our brief, we address three needs that we believe the federal government should be addressing. They are themes you've heard before at this table, in the last few minutes: the need to further strengthen our health research enterprise; the need to enhance Canadian health promotion and chronic disease prevention; and the need to have adequate health information available to guide the decisions of the government and ourselves.

Over recent months, Canadians have said they feel the health issue is the primary issue facing us right now. Some 59% of them think it is a very high priority and that it's something that we should be dealing with in the next five years. About 82% feel we need long-term, sustainable funding to improve our health system. And 87% feel it's time to not listen to anymore studies, but to actually get on with the business of fixing our health system so that we're all happy with the renewal of that system.

Cerebral and cardiovascular disease inflict a terrible toll upon Canadians. These diseases are the leading cause of death in Canada, with 80,000 Canadians dying annually. That represents 36% of all deaths. They're the leading cause of hospitalization, accounting for 450,000 hospitalizations in this country every year. And they're costly, responsible for almost $20 billion annually in direct and indirect health care costs.

If we're going to combat this burden of chronic disease that includes cardiovascular disease, there are a number of areas in which we feel the federal government can play a major part. The first one is the one I mentioned, health research. It's one of our core competencies. We support $41 million worth of peer-reviewed cardiovascular research annually, which makes us the largest single source of funding in Canada for cardiovascular research. The foundation is supporting research by developing the CVD research capacity in young scientists. It's important to grow this business for the sake of Canadians. Recently, we've partnered with others, in partnership with CIHR, to increase the resources available for heart health research in Canada.

We recommend that the CIHR be adequately funded, as you've already heard twice at this table. This funding is across the continuum of research in Canada, from basic biomedical through to population health. Through its institutes, strategic multi-disciplinary research is funded in these needed areas. We endorse—as does CCS and HCCC—a 20% annual increase in the CIHR's base budget over the next five years. This will make huge first steps to improving Canada's ranking as an international research facility.

The second area that requires federal leadership is the health promotion and disease prevention field. Heart disease and stroke have many risk factors that are shared with other chronic diseases such as cancer, diabetes, and obesity. Action on these risk factors is critical. If we can manage tobacco use, improve poor nutrition habits, increase physical activity, and maintain healthy body weight, we can truly begin to address the burden of chronic diseases such as cardiovascular disease.

And these risk factors are also prevalent throughout the world, so it's not just a Canadian issue. In fact, last month, the World Health Organization released a landmark report in which it identified how these risk factors and actions around them can increase healthy life expectancy worldwide by five to ten years. They noted that if Canada moved on these risk factors that I mentioned, plus a few others, we would actually increase our healthy life by six and a half years. We think we're doing a pretty good job in Canada, but we could each have six and a half years more if we'd made a few changes. It's noteworthy that, in Canada, 65% of Canadians have at least one of these risk factors around chronic disease, so most of us have to be aware.

The Heart and Stroke Foundation of Canada does much in the area of health promotion and prevention. It has a terrific partnership with the Canadian heart health initiative. The Canadian heart health initiative is a terrific model around effective federal and provincial partnerships. It's co-funded by Health Canada and by the provincial departments of health, and it's viewed by many public health advocates as an excellent model upon which a chronic disease strategy could be built.

As you've heard before, we currently place a lot of focus on our downstream activities around health. We're stressing the same things you've already heard. We need to get our attention upstream. If we make a difference upstream, then we're not going to have the huge costs, the disability, and the quality-of-care issues that we have downstream now. We want to have upstream components to our health system, including disease and injury prevention, promotion of good health, and even broader determinants of health, such as social and physical environments, income, and education. On the downstream side of the house, we strongly encourage the government to consider increasing home care and palliative care.

The value and cost-effectiveness of health promotion on disease has been demonstrated over the years. Unfortunately, until now, Canada has under-invested in the area of health promotion and disease prevention. We do endorse Senator Michael Kirby's committee report with respect to the need to invest significantly in the creation of a national chronic disease prevention strategy, in our national public health infrastructure, and in other health promotion efforts. The foundation strongly recommends that the federal government play a leadership role in carrying through with such investments, and that it build a chronic disease prevention strategy like the Canadian heart health initiative model.

The third area in which we would like the federal government to assume leadership involves tracking and monitoring the status of the health of Canadians in the health care system. Currently there are gaps. We don't know precisely how many Canadians suffer a heart attack every year, or how many have a stroke. We don't have timely, standardized data. We do not have any kind of national monitoring of risk factors, interventions, and outcomes. We have no way to integrate whatever data we do have. What is clear is that we need to build on and integrate across these diseases, building on the systems that are already available to collect information on heart disease and stroke through the existing diabetes and cancer information systems.

We have made some progress, but it's very difficult to develop an accurate picture of chronic disease in Canada. To that end, of course, the Auditor General mentioned in her report that we have fallen behind in having a proper national surveillance system for other chronic diseases. She particularly mentioned cardiovascular disease. It has been estimated that we could do this for about $35 million a year.

In conclusion, by acting on and taking a leadership role in these three areas—the strengthening of our health research enterprise; the enhancement of Canadian health promotion and chronic disease prevention efforts; and ensuring that there is adequate health information available to guide our decisions—the federal government could, in cooperation with voluntary and health professional sectors, make progress toward reducing the burden of these chronic diseases in Canada.

Thank you so much.

¹ (1545)

The Chair: Thank you very much.

We'll now go to the Ontario Non-Profit Housing Association, and Robin Campbell.

Ms. Robin Campbell (Executive Director, Ontario Non-Profit Housing Association): Thank you very much for the opportunity to speak to you today, Madam Chair.

Our association represents about 150,000 housing dwellings owned and operated by non-profit housing organizations, both municipal and private. In the brief time that I have with you today, I won't repeat a lot of the background material that's included in our brief. Rather, I'd like to focus in on our recommendations and then say a few words about some of the larger policy and context issues facing housing policy in 2002.

First of all, I would like to say that the federal government should be credited for keeping a watchful eye on the housing file. This has been an important period when other issues such as the environment, health, and foreign affairs have tended to swamp the policy agenda. We know how easy it is to focus on today's headline issues while other issues get little attention and gradually turn into crises, so we in the housing sector commend the federal government for its refocus on housing issues. However, that being said, we're still losing ground in the national effort to prevent homelessness and create a productive housing sector. And when I say that, I'm referring to the combined efforts of all three levels of government, the private sector, the non-profit and co-op sectors, and those special agencies that devote countless working and volunteer hours assisting those most in need.

We in the non-profit sector also are grateful that the federal government has continued to be mindful of the essential support that volunteerism in the non-profit sector plays in supporting this country's initiatives. This is a time when the policy focus tends to be on the need to maximize the productivity potential of the private sector, and that's a good thing. However, in the process, we should not once again try to put all our policy apples in one basket, particularly if we're trying to address the affordable housing issues of those most in need.

For countless years the non-profit and charitable sectors have played a mainstay role in affordable housing. In fact, charitable housing was there before the government was—and I think you'll find that this is the case throughout the western world. It is vital that you continue to nurture this fundamental role while at the same time trying to create the conditions for increased private-sector production. It's not an exaggeration to say the affordable housing sector starts to limp if any one of the key sectors starts to flag. Again, I want to emphasize how particularly important this is if we're talking about more than a trickle-down approach to dealing with affordable housing needs, especially the immediate ones.

I would like to just summarize some of our key recommendations. I would first like to address the homelessness initiatives, including the SCPI program, as well as RRAP, the residential rehabilitation assistance program. We made a recommendation that both SCPI and RRAP be extended for, in the case of SCPI, at least three more years.

The development of permanent supportive housing for those at risk of homelessness should be a new emphasis in the SCPI program, and we were heartened to see that the throne speech did say SCPI would be extended. Our concern is that there really be a focus not on homelessness initiatives writ large—in particular, hostels—but that we really look at permanent supportive housing.

The word “transitional”—and we've submitted briefs to the social union framework agreement... When we talk about transitional housing for the homeless, the question is where it transitions to. What we see is that people who need support, those who are being taken off the streets—they are the hardest to house—need to be in transition sometimes for many decades before they can enter a housing environment without support.

I also want to commend the government on the success of the SCPI program. This program was absolutely fabulous in Ontario. The way in which it partnered with the municipal sector and the community-based agencies to create housing for the homeless really was, in our opinion, one of the best programs the federal government has put in place. It has been phenomenal.

The second issue I'd like to speak of is the mortgage insurance program. The federal government should provide CMHC with the mandate and resources to develop affordable mortgage insurance programs customized for non-profit housing developments. You may or may not be aware that the CMHC is actually projecting a surplus of over $3 billion by 2006. Surely some of that money should be used to help to manage the risks in a more affordable insurance program for more affordable housing projects, as is done in the United States. I can't tell you how many projects find that one of the most serious barriers they have is getting mortgage insurance from CMHC. It makes absolutely no sense, and it doesn't take much to correct it.

I want to now address the third issue, the new federal housing programs. The $680 million over five years is gratefully received, and we're also very pleased with the throne speech commitment to extend the government's “investments in affordable housing for those whose needs are greatest”.

I just want to speak for a moment about what has happened in Ontario. Of that $680 million, $240 million is targeted to Ontario, supposedly to be matched by the provincial government. The matching is $20 million, leaving the non-profit sector, the private sector, and the municipal sector to pick up the difference. You also will note that the provincial government hasn't announced the program yet. Quite frankly, they haven't announced it because of the concern that the municipal sector has about being able to deliver a program as it has been conceived by the provincial government.

In my concluding remarks, I want to draw your attention to one other issue we didn't put in our brief. I'm referring to the billions of dollars the federal government will save over the next thirty years as its existing funding contracts expire as a result of devolution to the provinces. By signing these agreements, the federal government distances itself from the immediate pressure of ongoing funding, but it will accumulate savings over the next thirty years that will be in the billions, and even in the tens of billions of dollars. There has been no national discussion of this issue. I said earlier that volunteerism is one of the mainstays of the system, and that the current annual funding of almost $2 billion is the monetary basis of this system. I draw your attention to this because a commitment to develop a national consensus on how these accumulated savings could be reinvested in housing is probably the singular leadership gesture the federal government could make in the housing area.

I think I'm reaching the end of my time. Thank you again for the opportunity to speak to you today.

¹ (1550)

The Chair: Thank you very much.

Mr. Donald Johnson, we have your brief here. You're presenting as an individual, and you can go ahead.

Mr. Donald Johnson (Individual Presentation): Madam Chair, thank you for inviting me to participate in your committee's pre-budget consultation hearings. I'm here today representing a number of not-for-profit organizations in different areas of the charitable sector. These include the Toronto General & Western Hospital Foundation; the Richard Ivey School of Business at the University of Western Ontario; the Council for Business and the Arts in Canada; the Toronto Foundation for Student Success; and, as a volunteer, the United Way of Greater Toronto. I am not here representing either BMO Nesbitt Burns or the Bank of Montreal.

First of all, I'd like to congratulate the federal government on its commitment to fiscal responsibility and a balanced budget. Both Finance Minister John Manley and Prime Minister Jean Chrétien have reaffirmed this commitment in recent weeks. However, with the constraints of a balanced budget commitment, the likelihood of a shrinking budget surplus, and the urgent need to increase health care funding, our country faces a number of major challenges in funding our vital not-for-profit organizations. These realities leave the government with little room to increase funding in a number of these sectors.

What, then, can the government do to assist our universities, hospitals, arts organizations, social service agencies, and research centres to access greater funding from the private sector? How can it do so with minimal cost to its tax revenues? The answer is simple and can be implemented in the upcoming budget: eliminate the remaining capital gains tax on gifts of listed securities. This is the single most tax-effective step the federal government can take to enable our vital not-for-profit organizations to access greater donations from a broader base of prospective donors.

We can look to past history as confirmation of this fact. The 1997 budget reduced the capital gains tax on gifts of listed securities by 50%. This initiative resulted in a flood of incremental donations to Canada's charities. Prior to 1997, the value of such gifts was nominal because donors were not prepared to give shares and incur major capital gains taxes on their gifts. The 1997 initiative reduced this barrier to giving. An appendix to my submission to your committee lists gifts of shares of over $5 million received by charities since 1997. These total over $800 million. Including gifts of shares of less than $5 million, the aggregate total would be well over $1 billion.

Speaking on a personal note, I would not have pledged $1.3 million to the University of Western Ontario had it not been for that reduction in 1997. I have been challenged to increase it if you finish the job in the next budget.

With the positive reaction to the initial budget measure, we can predict a very positive impact at a time when donors are contributing less because of the stock market collapse. I've met with officials in the Department of Finance, and they understandably have raised certain objections to the proposal. I'd like to address each of these major issues. There are four points.

First, one year ago, the Department of Finance completed its analysis of gifts of listed securities since 1997. This analysis confirmed that the experiment in 1997 met the criteria for both extension and enhancement. It had resulted in significant increases in donations of shares to both large and small charities in every area of the charitable sector. A year ago, the 50% reduction introduced in 1997 was made permanent, and we thank you for that. The criteria established for extension are the same as the criteria established for enhancement or a complete elimination. Consequently, no further analysis is required to make a decision on a complete exemption.

Second, in 1997 the government decided to add its 73% share of a donation of stock—i.e., the foregone tax revenues with a zero-cost base under a 50% reduction in the capital gains tax were acceptable at that time. The government's share of such donations under a complete exemption under today's tax rates would be 69%, compared to 73% five years ago. This is due to the significant reduction of both capital gains tax rates and income tax rates during the past five years. So if a 73% government share was acceptable in 1997, then surely a 69% share under today's tax rates, with a complete exemption, would also be acceptable today.

Third is the cost-benefit analysis. The proposal's potential tax revenue cost to the government needs to be factored into your upcoming budget projections. The surge in gifts of securities during the past five years was a function of both the 1997 capital gains reduction and the stock market boom. The stock market peaked in 2000. The dramatic decline in the stock market during the past two years has resulted in a significant drop in stock donations, particularly during the past few months. It is therefore reasonable to assume that the foregone tax revenues to the government under a complete exemption today would actually be less than the tax revenue cost experienced in 2000, because of the significant stock market decline. Consequently, the impact of the tax revenue in the upcoming budget should not be a cause for concern. Total donations of securities in the short term, even with a complete exemption, will likely be less than they were in 2000; however, they will certainly be more than would otherwise be the case under the status quo.

The final point is that the proposal now has the unanimous support of the entire charitable sector. These include the people who work for our not-for-profit organizations and the volunteers who serve on the boards of directors and are active in fundraising as well as in making donations personally. It's obviously supported by the philanthropists who are motivated to donate a portion of their wealth, in the form of securities, to worthy causes. It also logically has the support of millions of Canadians who benefit from the services provided by our vital charities.

The people who serve as volunteers on the boards of directors of our universities, hospitals, arts organizations, United Way/Centraide, and community foundations, are the leaders of our country. They would all be very grateful if Finance Minister John Manley were to take the final step in the upcoming budget, so I urge the House of Commons Standing Committee on Finance to include this proposal as one of your major recommendations in the pre-budget report to the finance minister, as you did last year.

Thank you for your attention. I would be pleased to answer any questions.

º (1600)

The Chair: Thank you very much.

We've now come to the part where we get to ask the questions. We have 45 minutes, so I will allow 10 minutes each.

Go ahead, Mr. Penson.

Mr. Charlie Penson: Thank you.

I would like to ask my first question to the Canadian Institute of Public and Private Real Estate Institute.

I certainly support your suggestion for getting rid of the capital tax. I think it's a huge drag on investment in Canada. But on the capital gains tax problems that you're having, am I not understanding this? I thought that if a property was sold and a reinvestment was then made in the same type of property, the capital gain did not occur or there could be a deferral. But that's not what you're telling us, is that right?

Mr. Ian Bacque: You may be referring to what's called a section 85 rollover. There are complicated rules under the Income Tax Act and the regulations under that act, but if you roll an asset into a joint venture or certain defined partnerships that you have an interest in—not a 100% interest and not a 0% interest, as I understand it—you can defer the capital gains tax. However, speaking for one of our members in the multi-family or apartment building business, they have assets that have been in the family for decades. If they were to simply sell it outright, that would attract capital gains tax.

Mr. Charlie Penson: What about the argument, Mr. Bacque, that you could eliminate capital gains tax altogether? It isn't a huge source of revenue for the federal government, yet we've seen movement from 75% to 66% to 50%. Maybe that's the way we're going, so maybe we should just get rid of it altogether.

Mr. Ian Bacque: In an ideal world, absolutely, we would support the elimination of both capital tax and capital gains tax. Investment in Canada creates jobs, it creates liquidity, and it creates tax revenue at the end of the day, so I would actually agree with what you've just said.

Mr. Charlie Penson: People like Jack Mintz, from the C.D. Howe Institute, are advancing the idea that the types of taxes we should have are those that do not prove to be a disincentive to investment or saving or increased work. Therefore, he says, things like the capital tax and capital gains tax are largely hurting our economy more than they're helping it.

º (1605)

Mr. Ian Bacque: Absolutely. We would agree with those assertions. We're aware of the Mintz report and would agree with you, sir.

Mr. Charlie Penson: I just want to shift the focus a little bit, to Ms. Brooks.

I've seen the profile of what the Canadian population is going to look like in the next 20 years in terms of it being an aging population, but you've raised the spectre of us living quite a bit longer. You have to wonder who's going to pay the bills, because the profile that's showing up shows us that, without a huge immigration shift, we are going to be facing a very much older population with a lot fewer people to pay the bills. Maybe increased productivity can make up that gain and we can all live happily ever after, but we also may not be going down that road. Facing an aging population must have a lot of significance for organizations like yours. What are your thoughts in that regard?

Ms. Carolyn Brooks: One of the things we're proud of is the fact that, because of our research and because of our ability to affect when people have heart attacks, they're not dying prematurely like they did 30 and 40 years ago. People are surviving their heart attacks. The downside of this, if you can call it that, is that they're living 20, 25, and 30 years into the future, with some of the contra-indications of their heart attacks. On that side of the house, then, what we feel is that, morally, we've done a lot of really good work in making sure people don't die from their heart attacks.

The next step is how to work with our society so that people can fund a good health system and live a productive and capable life for the extra 30 years or even 35 years that they may get after that initial heart attack or stroke. That's the next step in what we need to do. How to fund it is obviously the big bugaboo everyone's talking about now.

Mr. Charlie Penson: Isn't part of the solution—I guess you've raised it, and I think Ms. White and others have has raised it as well—that we have to be looking at healthier lifestyles so that we don't have those huge bills coming at us down the road in the same way we do now?

Ms. Carolyn Brooks: We're paying the price now for our inattention to health promotion and disease prevention thirty years ago. Ideally, I would have known thirty years ago about some of the changes I'm making in my lifestyle now. I'm hoping my children and my grandchildren are going to know that so that when they come out the other end and are 55 or 65, they're healthier Canadians at that end of the spectrum. That's why we're encouraging that we put the money upstream now. It may not help you or me or anyone at this table, but it sure will help our kids, and it will definitely help our grandkids.

Mr. Charlie Penson: I don't know if anybody else wants to jump in, but it seems to me that we have a huge problem coming here, in that one of the solutions is to increase our immigration. Western Europe has an even bigger problem than we do, although the United States is not as bad. But we are all going to be competing for immigrants if we're going to be doing this in order to have people coming in who can be productive and have jobs that pay the bills for the rest of us who are going to want to be retired at that point. I don't know if anybody has any solution to this, but I just see it as a huge implication that's going to cost us a lot in the future.

Ms. Sally Brown (Executive Director and Chief Executive Officer, Heart and Stroke Foundation of Canada): Just to add a couple of points to that, first of all, when we talk about prevention and promotion in relation to tobacco, for example, the Canadian Cancer Society has taken the lead. If people stop smoking in their forties, they're still going to be healthier when they're older. In other words, we're not talking about starting with children. We can do a tremendous amount right now for the immediate generation of coming seniors. I think there's a myth that health promotion and prevention are things that won't affect our age group. They certainly can, and I think we have to invest in them.

When you talk about immigration, some of the reasons people want to come to Canada are that we are seen as having a healthy population and that we have a public health infrastructure that will support them. But one of our key messages is that the public health infrastructure isn't very well supported. It is a matter of how we are going to get people to come to this country and be productive citizens, but we have to realize that part of the attraction to them for coming here is the public health infrastructure and a lot of the health provisions and coverage that we have. If we're not careful, we're going to erode that infrastructure. If you look at what we invest in this country in the public health infrastructure that will benefit the exact same people you're talking about needing to attract, it's a pretty paltry investment at the moment.

So I think what we're saying is that this kind of investment needs to continue or we're not going to deal with the problem.

º (1610)

Mr. Charlie Penson: Therefore, you're suggesting that it's a chicken-and-egg scenario. Which one do you do first? I would put it to you, then, that part of the job that we have to do as a committee and as government is to set our priorities and what's important. Canadians have a limited ability to have more tax increases, so maybe we'll have to look at some of the things being offered and say what is not a priority for Canadians and what is. We'll have to do a proper rating.

Thank you, Madam Chair.

[Translation]

The Chair: Mr. Paquette, please begin.

Mr. Pierre Paquette: Thank you, Madam Chair.

I would like to continue pursuing this line of thought, although I am no alarmist when it comes to matters concerning the aging population. We have to remember that, right now, Italy, Japan and several other countries are experiencing the situation that we will be facing 20 years down the line. Obviously, we have to be concerned about this, but I do not think that we should be making decisions in a panic. We have the time to see how things are going to unfold.

I would like to go back to the comments made by the Heart and Stroke Foundation of Canada, the Canadian Cancer Society and the Health Charities Council of Canada. I think that we all agree that we need to convert our health care system into a health system. Up until now, we have really been emphasizing the cure and we have not put enough emphasis on prevention. In Quebec, the Rochon Commission proposed a whole series of recommendations that would transform our treatment-based system into a prevention- based system. However, the federal government unilaterally reduced the Canada Health and Social Transfer.

This is what surprised me in your recommendations. You talked about prevention. I agree with those who believe that prevention is the best way to go, but, given the emergency that currently exists in terms of health funding, the provinces are in no position to free up funds to make the transition towards a real health system. I was expecting you to recommend that the federal government reinvest in the Canada Health and Social Transfer so that provinces would be able to make adjustments and develop what we refer to as the front line and a certain number of services.

I will go a little bit further. The Health Charities Council of Canada has gone so far as to say that these investments should be made outside of the Canada Health and Social Transfer. I thought that this must be a poor translation, that you probably meant to say that this should be done in addition to what the government is currently investing in the Canada Health and Social Transfer. In Quebec, for example, in the area of prevention, we have set up what we refer to as CLSCs, local community health centres, which work with the hospitals, as well as a health insurance system. All of this is, to a large degree, funded by the Quebec Department of Health and Social Services and, to a much lesser extent, by the federal government.

I would therefore like you to explain how we would ever be able to go from a treatment-based system to a prevention-based system, without the federal government reinvesting a bit more money in the Canada Health and Social Transfer.

I will ask two other questions, and then I will turn the floor over to our witnesses. That was my first question. We must not forget that the amount of the transfer is currently at the same level that it was when the Liberals arrived. They began to cut back drastically. They have put more money back into the transfer recently, but nine years later, we find ourselves with exactly the same level of funding, namely, approximately $18 billion.

The Cancer Society talked about increasing cigarette cartons by $3. I'm in full agreement with that. Since I am not a smoker, this will not have much of an impact on me. However, every time we have got into this debate, we faced the argument that this would increase contraband cigarettes which, at the end of the day, would simply deprive the government of revenue and people would make their cigarette purchases in the Indian reserves around Montreal, which is common practice in our region. I would like to know whether or not the Cancer Society has given any thought to that particular aspect of the issue.

My final question is for the people who deal with affordable housing. Housing can be made affordable by offering tax credits to small owners, by providing assistance to tenants or by developing social housing, whether this be low-cost housing or cooperatives. I would like to know what type of balance we should be aiming at. What role should the State, be it the federal or provincial government, be playing? Should we be promoting the development of what I call social housing or should more investment be made by the private sector?

Those are my three questions, Madam Chair. Since we have very little time, I took the liberty of...

º (1615)

The Acting Chair (Ms. Maria Minna): You've got six minutes left.

Mr. Pierre Paquette: I've got 10 minutes, Madam Chair.

The Acting Chair (Ms. Maria Minna):Yes. I said that you've got 6 minutes left.

Mr. Pierre Paquette: Okay. Over to you ladies and gentlemen.

[English]

The Acting Chair (Ms. Maria Minna): Ms. White, please go ahead.

Ms. Julie White: I'd like to make a point on your first question, because I think it's an incredibly important point, in that prevention is something that happens at all levels of government. I would also like to add, though, that in looking at prevention—and you're quite right—in the movement from a health care system to a health system, we need to look at prevention even more broadly than health. For example, one of the risk factors for chronic disease is physical activity, yet schools in Ontario have virtually eliminated the potential for children to have physical fitness in the schools. There's a disconnect between what's actually happening in terms of what kids are getting fed and the degree to which they're having physical fitness.

We at the Canadian Cancer Society feel it's our obligation not just to inform people of the risk factors and not just to encourage proper allocation of our health funding, but also to work in an advocacy capacity throughout the organization, looking at the determinants of health and in addressing the systemic variables that relate to those. So I completely support your point of view on that.

The Acting Chair (Ms. Maria Minna): Ms. Brown.

Ms. Sally Brown: I'd like to add as well that all of the groups at this table that are representing the health charities would agree that there needs to be significant reinvestment. Some of it might be through the transfers, but we certainly feel some of it needs to be directed. If it all goes through the transfers but doesn't end up on the upstream work, we're no further ahead. We do believe the federal government has a significant role in this, but it's not all about money. A lot of it is about money, but the government also has a number of policy instruments at its disposal.

[Translation]

Mr. Pierre Paquette: Which policy instruments are you referring to, because we're talking about education here. Education is entirely under provincial jurisdiction.

[English]

Ms. Sally Brown: Your colleague spoke about the individual's responsibility to lead a healthier lifestyle. While that's true, a lot of that also needs to be that individuals need policy instruments and a policy environment that will make those choices easier. Many federal regulatory roles and federal policy instruments can be used, and there are also ones the provinces can use, but they are not being used. Those can help Canadians to choose a healthy lifestyle.

The Acting Chair (Ms. Maria Minna): Go ahead, Ms. Chapman.

Ms. Fiona Chapman: Thank you, Madam Chair. I actually wanted to just quickly make a comment with regard to Mr. Penson's statements.

I think the additional piece of information that we've lobbied for is that it's not enough just to say we're getting old. Having information about our health status and our very risk factors would really allow us to do a lot more forward planning, rather than just suggesting, for example, that immigration will solve that.

With regard to the question from Monsieur Paquette—why we are recommending that the funds not go into returning the CHST to previous levels—we argue for companion funds and companion legislation. Quite frankly, the issue is the downstream funding, as was referred to by Sally, and our belief that we need to really rethink where we're putting our funds and our priorities in terms of health systems.

The second is the issue of discrepancies in funded services from province to province. I am very familiar with the CLSC system. I think it is admirable, and I wish it were emulated in many other jurisdictions. The fact of the matter is that many of us represent national health charities, and what we hear on a consistent basis is about inconsistency. That's very difficult, but that is the rationale. While we might look at one particular province as having best practices, what we recognize is that things vary from jurisdiction to jurisdiction. Quite frankly, that is not acceptable to Canadians when we talk about a health system.

º (1620)

[Translation]

Mr. Pierre Paquette: I'd like to add something to that. We have the Canada Health Act, and that hasn't stood in the way of the federal government pulling out. It's an act which affects a whole series of measures which already exist in the provinces. It won't necessarily result in the federal government investing more. I've got a great deal of difficulty understanding why you are asking the federal government to take on a leadership role when you never make it account for its own contradictions. The law lists five conditions regarding health care, but that hasn't stopped the government reducing the CHST in all provinces and creating problems for provinces. If you ask me, the problem didn't start in the provinces' backyard but in the federal government's backyard. The government hasn't respected the obligations it has towards Canadians and Quebeckers, obligations outlined in its own law.

[English]

The Chair: Does anybody else wish to add anything?

[Translation]

Mr. Pierre Paquette: I had two other questions. I've already asked them.

[English]

The Chair: Your time is up, because they answered another question.

[Translation]

Mr. Pierre Paquette: I had a question on smuggling and another on affordable housing.

[English]

Ms. Robin Campbell: Could I respond on the housing issue? It's a very interesting question, and there were two parts to it. First, what's the role of the provincial governments versus that of the federal government? And what balance would you make between private and social housing or shelter allowances, or some other way of addressing the need?

In terms of the first question, I agree absolutely—and I'll blend them together—that you need to create the conditions for increased private-sector production of rental housing, which also affects non-profit housing or any kind of housing production writ large. We're all for things such as those that colleagues mentioned, like building codes, more favourable taxes, and removing regulatory impediments.

But when you're talking about affordable housing, you cannot, through those mechanisms, bring down the costs enough to make it, in most parts of the country, a business proposition to create really affordable housing. Frankly, when you talk about affordable housing in Toronto, it's $1,039 a month by CMHC standards. In my terms, that's not affordable housing, because you're talking about a different segment of the population.

I'm talking about people of low to moderate income. For those, I think the federal government's role is to set those targets. It needs to create some kind of a grant system in order to lower those initial costs, in addition to dealing with those impediments. Frankly, what I would love to see is a look south of the border, at what they do in terms of tax credits.

Coming to your question about the federal role versus the provincial role, I'm telling you that if I was in Quebec, I would say, terrific, set those targets and give them to the province to work with, and work with the community sector. You have done a brilliant job in Quebec, for example, in dealing with the federal program.

In Ontario, we have no commitment to dealing with this issue, so I would say there has to be a mechanism for the federal government to set those targets and to really deal with the level of government or with partners who are interested in getting the job done. In our province, in Ontario, those are the municipalities, the community-based sector, and the private sector. But it's not going through the provincial government. That doesn't work.

In terms of the balance between social versus private, they need to work hand in hand. You need to have housing development, but let's not kid ourselves. We're not going to get really affordable housing development without particular targeted programs. Quebec has some wonderful ones, and I only wish those were spread across the country.

[Translation]

The Chair: Is that everything, sir, or did you have another question?

[English]

Ms. Julie White: With regard to your concern about smuggling, our research indicates that taxation has a very direct influence on the number of people who smoke. As I mentioned in my points, we'd like to applaud the government for increasing the excise tax, which we think will go a long way to reducing the concern about smuggling.

On your concern about the reduction in taxes as a result of the decrease in utilization of tobacco, I think it's important to remember that one out of two smokers will die a premature death. When you look at the lost productivity related to that, and when you look at the health care costs, there's no question that it certainly far outweighs any loss in taxation resulting from a decrease in utilization.

[Translation]

Mr. Pierre Paquette: Thank you.

[English]

The Chair: Mr. Wilfert, go ahead, sir.

º (1625)

Mr. Bryon Wilfert: Thank you, Madam Chair.

Thank you for coming, everyone.

I had three grandparents who died of heart attacks, a father who died of aggressive carcinoma of the lungs, and I have high blood pressure, so I'm apparently a great candidate for everything, or so my mother keeps telling me, anyway. So I'm in the wrong business, I know.

I have a number of things.

To the Canadian Cancer Society, I was glad to hear again about the very important initiative that we've taken on the CIHR. Anything we do to get to the $900 million is extremely important, and I do believe taxes play an important role in the issue of smoking.

I don't know whether you can answer this. The duty-free stores were in, and as the Parliamentary Secretary to the Minister of Finance, I've been battling with them for the last few months about the fact that we applied the tax increase to their stores. They're very unhappy and say it doesn't make any sense. Can you respond to that?

The Chair: Who would like to start?

Ms. Carolyn Brooks: Are you familiar with that issue, Sally?

Mr. Bryon Wilfert: They don't want a tax increase on cigarettes at duty-free stores because of who they say buys them. They say it's not a deterrent because young people make up a very small portion of those who would buy at duty-free stores.

Any thoughts?

Ms. Sally Brown: I can't even imagine that we wouldn't all say every cigarette should have taxes on it and that we need to increases the prices. Duty-free or non-duty-free, it's not even an issue. They should all be taxed.

Mr. Bryon Wilfert: I knew you'd say that, but I thought I'd ask you, just for the record.

On the issue raised by the Canadian Institute of Public and Private Real Estate, as you know, the Prime Minister's task force—of which I'm a member—has called for a national transportation strategy, but we will not fund the operating costs of public transit.

I would disagree with you on one point. As an old president of the FCM, I would say I'm all for municipalities having more taxation authority, i.e., more accountability. If Mel Lastman and the City of Toronto want to have a hotel tax, let the province give it to them. But if he then uses it, he has to be accountable rather than coming to us—as my favourite expression here is—as his ATM machine. He wants us to give him the money, but he doesn't have to be accountable? I don't buy that.

As far as capital taxation and eliminating the large capital tax is concerned, can you briefly explain that a little more in terms of its impact on the national treasury, since we're not going into deficit in order to pay for all these good things we've just heard about today?

Mr. Ian Bacque: I would support your intention not to go into deficit. Our members would put that over and above a capital tax reduction or elimination. That's the most important thing. Don't go back into deficit, and keep paying down debt. The government should be congratulated for its record since 1993.

On the capital tax impact, I would say that if you were to start now, I would have to admit that we have not studied it at our institute. I believe AACT is in the process of doing that or has done that, so I would have to defer to that association, of which we're a supporting member.

On the urban affairs issue, we strongly support the report of your colleague Mr. Grose. We're very concerned about the disconnect between funding responsibilities, taxing powers, and accountability if the City of Toronto were to receive increased funding on an ongoing basis. That's why we've added this caveat. We want to make sure the property tax burden is correspondingly reduced. Our members, or at least businesses in the real estate community in Toronto, for example, represent 20% of the assessment base but pay over 40% of the taxes. It's completely out of control.

Mr. Bryon Wilfert: That's because property taxes are probably the most regressive form of taxation ever invented, and they are now being used for purposes for which.... They're supposed to be derived for services, but they are not. That's why they add education on there, as well as a lot of other things that are not very useful. Of course, a lot of municipal governments, including my own, had no tax increases for years. Lo and behold, they now have a problem. So that's the difficulty.

On the issue of the charities and just generally about the Cancer Society and the Heart and Stroke Foundation, I used to be president of the Canadian Parks and Recreation Association, so I absolutely agree. It reminds me of that old commercial with the oil filter: you can pay me now or you can pay me later.

We should be front-ending as much as we can on prevention. I've spoken across the country on wellness, on active living. I look better now than I did a month ago. I'm down 14 pounds so this is good, you see. I'm practising active living. My wife wants to know why it is that you wear the same suit size when you put on weight, and why you wear the same suit size when you lose weight. This is something we should look at. Women can't do that. I don't know how that works, but for men there's apparently not a problem.

I think investing up front is important, because we spend too much time on patients coming out of the hospital, rather than looking at trying to prevent them from going into the hospital.

On your issue of health research and on health information services, again, those are important initiatives. Unlike my friend across the way, I believe the provinces are mismanaging the health care funds that they get from the federal government. I would therefore like your comments on the unbundling of the CHST. If we give them one dollar for health care, one dollar for social services, or one dollar for post-secondary, then we need more accountability and transparency and we need it to be properly monitored.

Part of the problem is ours, by the way. We make these wonderful agreements with the provinces, and they then wiggle out of them or they have certain caveats—and I will get to housing, which is another bugaboo of mine. Anyway, we tend to make these agreements and then they say they'll use the municipalities in housing, as they did in Ontario. It's just enough to drive you to drink—and I guess it's good that we don't have anybody here from the Liver Foundation right now. But that would be my next complaint.

Do you have any comment on the unbundling of the CHST?

º (1630)

The Chair: Mr. Higgins.

Mr. Chris Higgins (Director, Health Charities Council of Canada): I think there's an overall trend toward making sure health spending is effective and knowing how much we're putting in and what we're getting out.

I'm not sure how easy it would be to unbundle the CHST. That's part of the reason why we're talking about targeted, alternative funding streams for some of the services that would create a paradigm shift in health care. If we could wave a magic want and unbundle it, we ought to consider doing so, but I doubt that wand is available to anybody.

Also, I know that the provinces will argue, with some justification, that they need to have some flexibility in how they conduct their business. Having been in part of the provincial service system, I can understand that argument. I may not entirely agree, but I can understand it.

For us, then, rather than getting into a very difficult area in which the prospects of success are not that great, we felt that if we articulate the funding streams in the way we have recommended, then we can accomplish many of our goals and incidentally provide some relief to expenses that are currently paid out of the provincial tax base. They could then reapply that money to other things.

Mr. Bryon Wilfert: Well, I hope Romanow does recommend unbundling. I don't know that it would be all that difficult, because the provinces play a shell game with those dollars in the end and are not accountable, in my view. I hear you, but I think it is something we can probably.... If we did the one, we may not need the other, but it's something we need to really, seriously look at as a government. In order to do that, though....

It's not simply a question of money. It's how the money is utilized and how it is delivered by the provinces, not by the federal government. As you know, when we delivered money for MRIs, for example, they were spending it on chainsaws, bed pans, and other goodies. Those are not exactly what I would consider to be appropriate uses.

To the gentleman here from Automation Tooling Systems, I like your recommendations. I think this is a very important area. As one who chaired district energy systems for seven years at the FCM, I think we need to think outside the box in terms of meeting Kyoto. We need to think outside the box in terms of how we deliver energy in this country, and I hope we would seriously consider those recommendations that you made.

On the housing front, Ms. Campbell and I have talked on a number of occasions. I agree that we need to extend the RRAP and SCPI. I'm also sure my colleague will talk about CMHC and that $3-billion surplus. That's interesting.

Affordable housing depends on where you are in the country. It's much more affordable to live in Saskatoon than it is in Toronto or in my neck of the woods in Richmond Hill. On the other hand, the problem again is that we make these agreements with the provinces, in my view, and then Ontario has the audacity to say they're going to use the municipalities on the housing front. That was just ridiculous.

I think we have to do a better job of negotiating. Unfortunately, none of us here negotiate it, it's done by others, and you've seen the results. We need a national housing strategy, but we need NGOs, non-profits, the provinces, the cities, and the federal government working together, because we are not going to be able to do it alone. Or should we do it alone? I invite any comments on that

º (1635)

The Chair: We'll get a brief comment from Mr. Higgins, and then we'll go to Ms. Minna.

Mr. Chris Higgins: We know environmental protection or the lack of it has a direct effect on the use of health care and health care services or the non-use of them. To paraphrase something Sally Brown said earlier, in the health care system, we are now paying for the lack of environmental protections in our country across the board. The Ontario Medical Association has done some excellent work identifying in very real terms the number of people who die in the GTA simply for the lack thereof.

One of the things I would say is that the costs that we're currently paying for in health care now, for all that we're doing, are directly related to the failure to protect the environment years ago, in the same way that we bear the costs for failing to work on pre-emptive strategies and health maintenance strategies. Oddly enough, then, we make common cause to think about alternative energy sources as an important part not only for our economy, not only with respect to energy, but with respect to health.

The Chair: Ms. Minna, you have the last ten minutes.

Ms. Maria Minna: Thank you, Madam Chair.

I want to start off with ATS, because I think this is an area that needs to be addressed, that needs attention. I want to ask you something specifically because I have done work in and have been involved with developing countries for a few years. Quite frankly, it's an area that interests me a great deal.

Have you or anyone else done any particular work to see how much it would cost or what the expense would be to provide, say, schools with solar energy? I've travelled throughout Africa, South America, Central America, and other places. Children cannot go to school if it's a cloudy day, because there are no windows. In some cases, they're being taught under a tree, so that doesn't help. But even when they are in school, even in South Africa, they're in tin rooms and there are no windows. Basically, solar energy would help tremendously. And obviously they can't operate any computers, because there's no....

Is it exorbitantly expensive at this point? Say we want to power a school—and when I say a school, it's nowhere near as big as the kinds of schools we have here. You're looking at about two or three rooms, or maybe four or five rooms, and maybe sometimes a bit bigger.

Mr. Milfred Hammerbacher: You'd be surprised at how little electricity it actually takes to do something like a school in a developing country.

Ms. Maria Minna: What would it cost?

Mr. Milfred Hammerbacher: It could be as little as a few thousand dollars. The issue is that, in a lot of those regions, they don't even have the few thousand dollars needed to afford that in a school, or even in medical clinics. One of the issues with getting medicine to some of the developing countries is not whether the medicine is available, it's how to keep it preserved and refrigerated. Right now, in most of those applications, photovoltaics is the lowest-cost way to get electricity to power the refrigerator or to power lights in the school. It's just a matter of how they finance that. That has been a struggle from the beginning of time, almost. The World Bank now has several programs to help in that area. The UN is also championing some programs. A lot of interesting work is being done there.

So in terms of the cost, it's pretty nominal. It's just a question of where the financing comes from.

Ms. Maria Minna: The reason I raise it is that we all have a commitment to education for all, for instance. All of the countries have signed on to that, but you can't have education for all if you don't have the equipment, the training of teachers, and what have you.

If this type of power were to be integrated as part of the educational funding structures in the developing countries, through the departments like CIDA in Canada and through others, and if it were to become an integral part of the planning of education for all and is powering it, that might go a long way toward assisting both. It does two things. It trains the local people in the technology. That's a skill transfer, which is important. At the same time, it provides the power for the computers and for the lights.

The technology divide is one of the huge, major problems that's happening in the world vis-à-vis the developing world and the developed world. If we go beyond where we are now and do nothing about it, it's going to be practically next to impossible for the developing world to ever catch up to where we are. To use any means that we have at our disposal to bring some of this kind of stuff into the lives of these people would be fantastic.

I was just intrigued because I wanted to understand the costs. Otherwise, is it doable in that sense?

º (1640)

Mr. Milfred Hammerbacher: It certainly is what motivates me to put in the hours that I do at work. There's probably nothing more rewarding than seeing a kid drink his first glass of clean water from a solar water pump that was installed in Africa, or something like that. I think that's how government and businesses should be working together to do things like that.

Ms. Maria Minna: Thank you. And please give me your business card at the end of the session.

To go over to the health situation, quite frankly, I agree with my colleague that we need to unbundle the CHST. I was totally devastated when we eliminated the CAP, because we did have definite funding streams that we don't have under the CHST. I think we need to have those streams, because they're one way of getting accountability in the system.

There are two different kinds of accountability. There's accountability on the outcomes, but there is also accountability in terms of where the money goes and where it's spent. That's important.

On all of your recommendations with respect to preventive health, I think they're a given. I would say that, in my own life, in my own entourage of friends and relatives, there are far too many of my friends and relatives dying of cancer. We're paying the price of not having done the pre-emptive or preventive work, both in our environment as well as in our living behaviour, so I think that's extremely important. I would just get rid of cigarettes completely. Let's tax them to the hilt.

Part of the prevention, though, has to also permeate into the medical schools. Maybe that's happening. I'm not sure, but you might be able to tell me. In terms of the doctors I've had so far, though, I don't think they know a great deal in terms of nutrition and preventives. Because I wanted to lose weight—I'll be honest with you—I asked my doctor about a nutritional program. She said to go and see Weight Watchers. I'm not suggesting that there's anything wrong with Weight Watchers, but the issue is that I was asking for some information in my visit to her. I think there's a need for that kind of stuff. Are you talking to the schools? Are they doing anything?

On immigration, Mr. Penson is gone now, but he was talking about it earlier. Do you know what? The reality is that we do need immigrants in this country. I was an immigrant at the age of nine. That's how a good chunk of our country was built, and there's nothing wrong with it. In fact, it's important. We should go to 3%. We try to pick what we call the best of the best, the cream of the crop of the immigrants, and when they get here, they're the perfect citizens the moment they step off the boat, so to speak. But that's not reality, so I think we ought to increase it, deal with it, get on with life, and really build this country.

Europe hasn't caught on to it. They're still dealing with their own problems of integration, because they don't have citizenship in Europe. They don't have landed immigrants. They don't treat their immigrants like first-class citizens like we do. They don't have a citizenship act, they don't have multiculturalism, and all of this stuff that we have. We're way ahead of them, so let's get out there and really, aggressively do it. That's my position. If anybody wants to disagree with that, by all means, go ahead.

Ms. Sally Brown: I would make a comment and ask a question with respect to your comment, if I could. I suspect that we all agree with you on the messaging around health promotion and who gives it. Certainly, one has to look at the incentives in the system. The medical funding model does provide incentives to do transactional interactions with the patient and not the kind of discussion and guidance that we know leads to changes in behaviour and therefore to healthy living. In other words, the first place you should look is at the financial incentives in the system, and where they are. I think we'd all agree that's the place to start.

I think we've had much support in this committee, not just this year but in past years, on the issues of prevention and promotion. Carolyn and I just spent time at a cardiovascular congress last week, at which the leading speaker said the worldwide evidence for the benefits of investments in promotion are incontrovertible now. If we're looking at whether or not we want an evidence-based health care system, one would put a whole lot more of our resources at the upstream end, yet we're not doing that. I guess the question we're starting to ask is, why? We come to this committee and you all say, yes. Policy-makers inevitably support what we say, but we haven't changed where we're investing our money. So it's a huge question that we're starting to ask, because it used to be that the answer was that there was no research. Well, now there is.

º (1645)

The Chair: Ms. White.

Ms. Julie White: I agree completely with what Sally has just said, but I'd also like to make the point that this is part of a much larger issue that we're observing at the National Cancer Institute of Canada, with the growing gap between what we know in terms of science and what we actually do in terms of clinical practice and outcome. We're starting more and more to take a look at the knowledge transfer capacity of the systems that we're operating in. There's no question that there's no simple answer to that, but the more we learn about the science....

The science is rapidly moving, yet the practice is not. At the National Cancer Institute, we're moving from the mantra of research to policy to practice, from research to policy to outcomes, because we really need to take a look at all of the systems that influence the way we handle our health care system.

The Chair: Mr. Higgins.

Mr. Chris Higgins: In the U.K., there is a model for primary care that is called a physician practice group. It involves a number of physicians working together with a minimum, capitated group of clients—patients, if you will—and they employ a range of other practitioners in that business model. It's a model in which the incentive for the business unit in question is to keep people who are on their capitated list as healthy as possible for as long as possible, because the healthier they are, basically the more profit they make.

It's a very different model from what we use here. It's multidisciplinary and the physician has the support of a number of other practitioners in order to deliver the necessary kind of nutrition advice. If you add to that the potential for technology, health information, electronic records, and reminders that are just calendared in, with phone calls that happen automatically to remind people it's time to come to an annual check-up, you have a very powerful model that is a good alternative to the kind of fee structure that gives people the incentive to come in, do that procedure, then go out the door.

Physicians do not have an incentive to do the other things, nor do they have the means to pay for the other things in our current model. When we think about different ways to articulate funding, having ways to articulate funding such that other practitioners are part of the responsibility and such that the responsibility is treated more holistically would mean the physicians would be practising what they are best at and what they are paid the most at. At the same time, other practitioners who are equally excellent in their fields could practise and do those other things, like health maintenance activities and so forth, at lower rates. We would be using the right people to do the right things and maintain our health.

Ms. Maria Minna: One thing I wanted to say was that I put forward a motion—you can put forward a motion in the House of Commons, but they unfortunately have to be drawn; mine didn't get drawn—basically asking the government to allow for the health care system to cover the cost of two visits a year to a doctor, to a nutritionist, or a specialist in nutrition and physical health, to recommend proper, healthy living and exercise. That was just one motion; five or six other motions actually dealt with this area.

I was thinking much along the same lines in terms of covering the cost of getting that type of advice, that type of monitoring, that type of support, which most citizens don't have today. I was trying to build that into the system. Again, though, my motion unfortunately wasn't drawn from the big hamper.

The Chair: Thank you, Ms. Minna.

Before we close this meeting, does anybody else have anything they'd like to say? No? Okay.

I want to thank you for preparing your briefs, and I want to thank you in particular for preparing them early, as that allowed us to translate and distribute them to all members of our committee.

As you know, some of our committee members are in a different province today. In a very short, abbreviated time, we are getting done what's normally done over many weeks. Thankfully, we started on this last spring.

As I sit here as chair, I often hear echoes of the same themes. After a while, things do coalesce and strengthen arguments. I think that brings us into a different thought process as we work toward putting our papers together in the next couple of weeks. I think we can see tabling toward the end of November. That might be ambitious, but it is what we're working toward.

I want to thank you on behalf of all the members of this committee. The fact is that you take time out of your schedules—every single one of you is busy, I know—to come in to present and answer our questions. It is a great contribution, and I'm glad to have had you here.

Thank you very much. We are adjourned.