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37th PARLIAMENT, 2nd SESSION

Standing Committee on Finance

EVIDENCE

CONTENTS

Wednesday, October 29, 2003

0845

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

Dr. Jeremy Mouat (President, Confederation of Alberta Faculty Associations)

0850

0855

The Chair

Mr. Graeme Feltham (General Supervisor for Mechanical Services and Natural Gas Vehicles, ATCO Gas; Member, Society of Citizens for Better Transit)

The Chair

Mr. Graeme Feltham

0900

The Chair

Ms. Karen D. Beliveau (Vice-President, External Relations and Alliances, Alberta Research Council)

0905

0910

The Chair

Mrs. Beverley Smith (As Individual)

0915

The Chair

Mr. Tom McIllfaterick (Chief Executive Officer, Canadian Snowboard Federation)

The Chair

Mr. Tom McIllfaterick

0920

Mrs. Alexa Loo (Athlete Representative, Board of Directors, Canadian Snowboard Federation)

0925

The Chair

Mr. Greg Stringham (Vice-President of Markets and Fiscal Policy, Canadian Association of Petroleum Producers)

The Chair

Mr. Greg Stringham

0930

0935

The Chair

Mr. Greg Stringham

The Chair

Mr. Greg Stringham

The Chair

Mr. Rick Casson (Lethbridge, Canadian Alliance)

Mr. Tom McIllfaterick

Mr. Rick Casson

Mr. Tom McIllfaterick

0940

Mr. Rick Casson

Dr. Jeremy Mouat

0945

Mr. Rick Casson

Mr. Greg Stringham

Mr. Rick Casson

Mr. Greg Stringham

Mr. Rick Casson

The Chair

Mr. Rick Casson

Mrs. Beverley Smith

The Chair

Mrs. Beverley Smith

The Chair

Mr. Nick Discepola (Vaudreuil—Soulanges, Lib.)

The Chair

Mr. Tom McIllfaterick

0950

Mrs. Alexa Loo

The Chair

Mr. Nick Discepola

Mrs. Alexa Loo

Mr. Tom McIllfaterick

0955

Mr. Nick Discepola

Dr. Jeremy Mouat

Mr. Nick Discepola

Dr. Jeremy Mouat

1000

The Chair

Mr. Nick Discepola

The Chair

Ms. Sophia Leung (Vancouver Kingsway, Lib.)

Mrs. Beverley Smith

Ms. Sophia Leung

Mrs. Beverley Smith

Ms. Sophia Leung

1005

Ms. Karen D. Beliveau

Ms. Sophia Leung

Ms. Karen D. Beliveau

Mr. Keith Salmon (Chief Financial Officer and Corporate Secretary, Alberta Research Council)

Ms. Sophia Leung

Ms. Karen D. Beliveau

Ms. Sophia Leung

1010

Mr. Tom McIllfaterick

Ms. Sophia Leung

Mrs. Alexa Loo

Mr. Nick Discepola

Mr. Tom McIllfaterick

Ms. Sophia Leung

Dr. Jeremy Mouat

1015

Ms. Sophia Leung

Mr. Graeme Feltham

The Chair

Ms. Sophia Leung

The Chair

Ms. Sophia Leung

Mr. Greg Stringham

The Chair

Dr. Doug MacRae (Executive Director, Alberta Association of Colleges and Technical Institutes)

The Chair

Ms. Debra Gillett (Chair, Edmonton Transit System Advisory Board)

The Chair

Mr. Les Higa (President, Alberta Real Estate Association)

Mrs. Janet Poyen (Director, Government & Industry Relations, Alberta Real Estate Association)

Mr. Les Higa

The Chair

Mr. John Keating (President, Canadian Hydro Developers Inc.; Clean Air Renewable Energy Coalition)

The Chair

Dr. W.A. (Sam) Shaw (President, Northern Alberta Institute of Technology)

The Chair

Dr. Patricia Clements (Past President, Canadian Federation of the Humanities and Social Sciences; Professor of English, University of Alberta, As Individual)

The Chair

Dr. Patricia Clements

The Chair

Mr. Rick Casson

Ms. Debra Gillett

Mr. Rick Casson

Ms. Debra Gillett

Mr. Rick Casson

Dr. W.A. (Sam) Shaw

Dr. Doug MacRae

The Chair

Dr. W.A. (Sam) Shaw

Mr. Rick Casson

Mr. John Keating

Mr. Rick Casson

Mr. John Keating

The Chair

Dr. W.A. (Sam) Shaw

The Chair

Mr. Nick Discepola

Dr. Doug MacRae

Mr. Nick Discepola

Dr. Doug MacRae

Mr. Nick Discepola

Dr. W.A. (Sam) Shaw

M. Nick Discepola

The Chair

Mr. Nick Discepola

Mr. Les Higa

Mr. Nick Discepola

Mr. Les Higa

Mrs. Janet Poyen

Mr. Nick Discepola

The Chair

Mr. Nick Discepola

The Chair

Ms. Sophia Leung

The Chair

Dr. Patricia Clements

The Chair

Dr. W.A. (Sam) Shaw

The Chair

Dr. Doug MacRae

The Chair

Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP)

The Chair

CANADA

Standing Committee on Finance

NUMBER 090

2nd SESSION

37th PARLIAMENT

EVIDENCE

Wednesday, October 29, 2003

[Recorded by Electronic Apparatus]

¾ (0845)

[English]

The Chair (Mrs. Sue Barnes (London West, Lib.)): Pursuant to Standing Order 83(1), we are in pre-budget consultations in Edmonton.

It's a chilly day, but we are going to keep these presentations on time, and we are very, very happy to have with us for this first panel of the morning the Confederation of Alberta Faculty Associations, Jeremy Mouat, president, and Alan Meech, executive director. So welcome to you both.

From the Society of Citizens for Better Transit, we have Graeme Feltham, member and general manager, mechanical services of ATCO Gas. Welcome.

And from the Alberta Research Council, we also have Karen Beliveau, who is vice president of external relations and alliances, and Keith Salmon, chief financial officer and corporate secretary. Welcome again.

The Canadian Association of Petroleum Producers are apparently on their way, and when they get here we will introduce them.

Beverley Smith, welcome to you again. Thank you very much for joining us.

From the Canadian Snowboard Federation, we have the chief executive officer, and Alexa Loo, the athlete representative on the board of directors. Welcome.

Bienvenue à tous. Maintenant nous allons commencer in the same order as the agenda. If you can keep your presentations to about seven minutes, that would be useful.

So to the Confederation of Alberta Faculty Associations, the floor is yours. Go ahead.

Dr. Jeremy Mouat (President, Confederation of Alberta Faculty Associations): Thank you very much, and good morning to everyone.

I suspect it's an odd experience to sit on the finance committee. My hunch is it must reduce Canada to a country populated by two sorts of people: those of us looking for tax breaks, and the rest of us requiring more funding, with desperation.

It won't require much imagination for you to figure out which of these two things someone like me, as president of the Confederation of Alberta Faculty Associations, is after. Yes, Canada's universities are desperately seeking and desperately require more funding.

The Confederation of Alberta Faculty Associations submitted a formal brief, and my purpose this morning is really not to reiterate the points in that submission but to underline only one single point that we make--that is, the overall trend in recent federal funding to universities and the way in which it fails to meet the principal need of Canadian universities.

By way of conclusion, I want to offer a way around our problem.

The last federal budget in February of this year did deliver more money to universities, and we're grateful for that, but--and there is a “but”--this money was in keeping with a recent pattern of sending money to specific targets and specific programs.

Much of the federal money is being sent to aid research and innovation--in particular to Industry Canada's innovation strategy. Obviously we're not opposed to these sorts of initiatives, but I want to draw your attention to the less glamorous but fundamental need of our universities: the job of providing quality undergraduate education to a wide range of Canadians.

These undergraduate programs are the heartbeat of our universities. What they deliver to undergraduate students will be the major university experience for the large majority of Canadians who attend universities.

These undergraduate programs are not helped by the current increases to research and innovation. Indeed, it sometimes seems to me that these sorts of increases to boutique programs are in fact counter-productive.

You have to bear in mind that university administrations have been strapped for cash for many years now, and if they've learned anything, it's to follow the money. The more they believe that the money is in research, the more emphasis they will put on that research.

To some extent, there's nothing wrong with this, but consider the example of Alberta's two largest universities. They're currently making no secret of the fact that they're committed to expanding their highly specialized research programs at the same time that they're restricting access to undergraduate programs in arts and sciences.

Universities need to be able to educate our children and their children for the demands they're going to confront in this, the 21st century. As any parent will tell you, Canadians want to know that their children will have the opportunity to pursue an undergraduate education, and they want that education to be high quality, accessible, and affordable.

If universities are to be able to provide that sort of education, they must be funded adequately. Universities need to know that funding for basic undergraduate education is secure, that hiring the best teachers for undergraduate programs is as worthy a goal as holding onto the best engineering researchers.

I would plead with you not to imagine that universities are simply an instrument of economic policy or that their only significant goal is to prepare people for their special slots in the global economy. As a number of economists have pointed out, these sorts of ideas are simply wrong.

Even CEOs have gone on record as valuing in very real terms those possessed of an undergraduate arts education. Data from Statistics Canada shows very clearly that the much-maligned BA is as good a meal ticket as any on offer at a Canadian university.

¾ (0850)

Is there a problem? You bet there is. Despite having the most robust provincial economy in the country, Alberta ranks dead last in terms of the percentage of the provincial GDP directed to university education.

Over the 10 years from 1988-89 through to 1998-99, Alberta's funding of universities per capita dropped nearly 25%, compared to an overall national decline of under 6%.

If we take a longer view from 1980-81 to 2000-01, the percentage of the provincial budget directed to universities' operating grants has fallen a whopping 42%--not that the national picture is especially rosy either.

If we step back and situate Canadian universities in international terms, or at least if we compare them with our neighbour to the south, the news is equally depressing. As Paul Davenport, an economist, formerly president of the University of Alberta, now the president of the University of Western Ontario, pointed out in a chapter on universities and the knowledge economy in a book published last year by the C.D. Howe Institute, Renovating the Ivory Tower: Canadian Universities and the Knowledge Economy, university budgets across Canada have declined while those of state-funded universities south of the border have grown. He calculated that “during the past two decades, real public operating funding per student in public universities has fallen by 30% in Canada and increased by 20% in the United States”.

When the British Chancellor of the Exchequer, Gordon Brown, announced a 6% increase to the education budget last year in the House of Commons, a British newspaper editorialized gloomily that “Since the 1970s, funding per student” in higher education “in the U.K. has halved, while funding in the U.S. has doubled”.

I return to my brief. On the last page you'll see the actual federal transfers to Alberta, broken down into three categories: health, social services, and post-secondary education from 1996-97 to 2002, along with the estimates and targets for the years until 2005-06.

As you can see, there's good news for the beleaguered health care sector but a disturbing trend for universities.

We need to be able to do our job, and to do this we require adequate and secure funding--not simply boutique funding, but regular funding so that post-secondary education remains affordable to Canadians. We need a commitment from the federal government that universities will be adequately funded, and we need a mechanism that commits both the federal and the provincial governments to ensure that this happens. That's the message I would ask you to take back to Ottawa.

Thank you very much.

¾ (0855)

The Chair: Thank you very much, and you'll be happy to know that Dr. Davenport is in London, Ontario, and he reminds me of this message every single time he sees me. So you have an effective advocate also in my hometown.

Now we will go to the Society of Citizens for Better Transit.

Go ahead, Mr. Feltham.

Mr. Graeme Feltham (General Supervisor for Mechanical Services and Natural Gas Vehicles, ATCO Gas; Member, Society of Citizens for Better Transit): Good morning, everyone. Thank you for allowing me to speak today.

My name is Graeme Feltham, and I'm speaking on behalf of the Society of Citizens for Better Transit.

StatsCan, from 1996....

I should have had this photocopied.

The Chair: It's okay. Just leave a copy and it will be circulated afterwards. Thank you.

Mr. Graeme Feltham: StatsCan, from 1996, showed that 78% of all Canadians lived in urban areas. This percentage has steadily increased and is most certainly higher today. The most extreme example of urbanization is in Saskatchewan. The provincial population is shrinking, but both Saskatoon and Regina continue to grow.

Cities are the places most Canadians call home. The opportunities and conveniences of the urban lifestyle are key reasons that cities are so popular, but urbanization also brings challenges. Growing congestion, deteriorating air quality, and urban sprawl are but a few of the issues facing municipalities today. These are issues that have high-cost impacts and threaten to erode the quality of urban life.

Public transit can be a powerful solution to these challenges and is a national solution that will directly benefit all Canadians, both urban and rural populations. The benefits of quality public transit are many. It can reduce traffic congestion, improve air quality, and reduce greenhouse gas emissions.

Regarding traffic congestion, as cities grow, there is pressure to increase the carrying capacity of existing roads, particularly roads leading to the core areas of the city. Existing developments and the rising price of land not only make adding roads difficult, but the process of continually adding roads is itself not sustainable. A better solution to increasing the capacity of urban transportation systems is improved public transit.

We often hear that one full bus is equal to 40 cars in terms of road space, but consider that an articulated transit bus can remove double that number of single-occupant vehicles from the road, and a full five-car LRT train about 600 single-occupant vehicles.

The deterioration of urban air quality is largely a result of the automobile. Different forms of transit offer a variety of opportunities to achieve cleaner air, in turn lowering health costs and improving the quality of life. Trolley buses and light rail transit effectively provide clean transportation that doesn't add harmful contaminants to our streets. The growing investment in alternatives to diesel buses, such as natural gas and hybrid vehicles, bodes well for transit's ability to improve air quality.

The transportation sector emitted 27% of Canada's greenhouse gas emissions in 1997. Finding greenhouse gas reduction solutions for the transportation sector is a challenge because of the sheer number of tailpipes. It's hard to get a handle on such a diverse and scattered emission source.

Public transit, however, provides a realistic solution to produce transportation greenhouse emissions. In fact, data from the Canadian Urban Transit Association show that transit users emit 65% fewer greenhouse gases than car commuters.

The benefits from transit are relative to ridership. To maintain and draw ridership, we need funding to renew transit infrastructure. We also need investments in quality public transit that can improve transit service, fund trolley and LRT extensions, and maximize transit use.

Who should pay? Well, those who benefit.

In Edmonton, 45% of transit operating costs come from the fare box. Clearly, transit riders benefit from transit investments, but so does everyone else. The car commuter who experiences less congestion because his neighbour rides the bus benefits from transit. Air quality benefits accrue to everyone in urban areas--in other words, 78% of all Canadians.

Greenhouse gas reduction benefits everyone. The gains in urban mobility that benefit Canadian business and the economy are pluses for all Canadians. Everyone benefits from transit, so everyone should help pay for transit.

The Canadian Urban Transit Association reports that Canadian transit systems will require $13.6 billion between 2002 and 2006. Of this, $4.8 billion is needed just to renew outdated facilities and rolling stock, and $8.8 billion to expand infrastructure and vehicle fleets. Of this, only $6.8 billion, or half, is available in existing budgets. Unless this need is addressed, some transit systems will deteriorate and others will fail to meet growing demands. New sources of sustainable, predictable funding are required to ensure transit can continue its benefits to Canadians.

In terms of solutions, some provinces are allocating a portion of fuel taxes to transit or simply to municipalities. Currently, only $300 million out of an annual $4 billion in federal fuel tax revenues is reinvested in transportation. Reallocating two to four cents per litre of the federal fuel tax to public transit would create a $1 billion to $2 billion per year investment stream that could help resolve this infrastructure funding deficit.

¿ (0900)

There's been much discussion about how we can achieve both current and future greenhouse gas reduction targets. One of the most promising solutions for greenhouse gas reduction identified by the Government of Canada's transportation climate change table was providing tax-exempt transit benefits--another way the federal government can support public transit.

Employer-provided parking can, in effect, be tax exempt under the federal Income Tax Act. This provides an incentive to use private automobiles over public transit. If we leveled the playing field, we could realize more of transit's benefits.

Simply put, allowing employers to provide tax-exempt transit benefits would make transit more attractive to employees. Increasing transit ridership would reduce the number of peak-hour single-occupant vehicles on the roads and reduce greenhouse gas emissions while increasing fare box revenues. Employers would get a tax deduction for the expense and save on payroll taxes. Thus, the transit benefit would be cheaper than increasing the employee's salary. Simply allowing the employees to participate would convert existing wages into the benefit and allow employees to buy transit passes with pre-tax dollars. This plan could create a win-win situation.

In conclusion, I would like to emphasize that the benefits from transit are well-documented and certain. What is uncertain is how municipalities will be able to address the transit infrastructure debt. Predictable and sustained federal support is needed for Canada to capture all the benefits that can be made available by transit systems that are as vibrant as our cities.

Thanks.

The Chair: Thank you very much. You'll be interested to know that yesterday we heard from Vancouver on their transit issues also.

Now we'll go to the Alberta Research Council.

Ms. Beliveau, go ahead.

Ms. Karen D. Beliveau (Vice-President, External Relations and Alliances, Alberta Research Council): Thank you, and good morning. My colleague Keith Salmon and I appreciate the opportunity to appear before you this morning as part of your pre-budget consultations.

My remarks will speak directly to the Alberta Research Council's experience in working with universities, government, and industry to turn research results into economic outcomes, new processes, new products, new businesses, employment growth, and wealth creation. It provides input on how federal policy and funding mechanisms can be used to strengthen Canada's innovation system, and it requests your support to make that happen by creating specific programs targeted to applied research and technology commercialization and by extending the eligibility of existing programs to organizations like the Alberta Research Council.

First, let me introduce ARC. We are an innovation corporation focused on developing and commercializing technology to give our customers a competitive advantage. Our culture and behaviour drive an industrially relevant, market-oriented approach to our work. Our multidisciplinary expertise is firmly aligned with the federal and provincial priorities in the areas of energy, life sciences, sustainable development, and new product development to support small and medium-sized enterprises.

ARC employs just over 500 highly skilled workers and has an annual operating budget of around $80 million, up by about 40% from five years ago. Third-party contract revenues have tripled over the same period and are now about 60% of our gross revenue. In addition, the corporation has realized over $12 million in revenue from our commercialization activities over the same period of time.

The Alberta Research Council has an impressive track record in working with industry and government to convert ideas to marketable products and services and to provide solutions globally to the energy, life sciences, agricultural, and manufacturing sectors.

An example includes our product development program, where we work with industry, universities, and government labs to add value to emerging ideas and develop them to the point where they are near-market-ready and they can attract feed or venture capital investment for commercialization.

On energy systems and process development, this is a program to develop technologies and production processes to recover higher levels of energy resources more efficiently and with reduced environmental impact.

Technological advances made by ARC have helped make Canadian companies the most advanced heavy oil producers in the world. Our integrated resource management program is where we work with both government and industry to provide science-based knowledge and expertise related to the sustainable development of our natural resource industries that safeguard the environment and protect our social and economic values.

Improving Canada's performance and innovation in commercialization requires us to build on the diversity and strengths that exist across the innovation spectrum. Significant progress has been made in Canada to strengthen fundamental and university research. However, Canada's record in generating wealth from this knowledge is still weak. This area requires specialized expertise, facilities, and equipment focused on commercialization. Canada's innovation base is thinly distributed and there are a number of large Canadian companies able to act as receptors.

Every successful innovation economy in the world has intermediary organizations filling the gap between early stage R and D and commercialization, doing contract work, assisting small and medium-sized enterprises with their R and D and technology needs, and performing research that supports the public interest. Strategic outcomes from these agencies include highly skilled jobs, growth of knowledge-intensive industries, increased industry R and D, increased economic impact, regional community development, and support to our small and medium-sized enterprises.

ARC and its counterparts across Canada are uniquely positioned to address the innovation gap between university and government research and the marketplace. In Canada many of the specialized facilities and expertise for product and process engineering, prototype development, and commercialization are located in provincial research organizations such as ARC. Such organizations are currently excluded from direct participation in federally funded innovation programs such as the Canada Foundation for Innovation and Sustainable Technology Development Canada.

ARC recommends that the federal government provide support to establish Innovation Canada--j'Innove Canada, or I-CAN. This national network will link ARC and other specialized applied research and development partners across the country and create a critical mass comparable to SRI and Battelle in the U.S., TNO in Holland, and Fraunhofer in Germany.

¿ (0905)

I-CAN will facilitate access to specialized facilities and expertise across Canada and strengthen the technology commercialization process to benefit industry, especially our small and medium-sized enterprises.

The network will also increase synergy with universities and colleges through retained commercial interest in returns from intellectual property management and innovation activities. The result will be stronger, more focused innovation clusters in various parts of the country.

Federal contributions to such a network would be funding and hopefully formal links with the IRAP program and the Canadian Technology Network.

There is growing support across Canada for the concept because it offers many benefits. It provides easy access for small and medium-sized enterprises from anywhere in Canada to critical technology development and commercialization infrastructure. It makes our industry increasingly competitive and more productive, and it also facilitates partnering with industry and increases industry's investment in R and D.

Creating such a network across Canada requires investment and a supportive policy framework. ARC therefore recommends the following.

First, make organizations such as ARC eligible recipients of CFI, STDC, and other federal programs.

Second, establish an I-CAN national innovation grant program to support product and process engineering, prototype development, testing, early stage production, and commercializations at organizations like the Alberta Research Council.

Third, fund an innovation infrastructure program similar to CFI but applicable to organizations such as ARC to support the development of specialized larger-scale testing certification and early stage production facilities.

Fourth, expand IRAP funding for industry productivity and competitive enhancement.

Fifth, consider a formal linkage between IRAP and organizations like ARC to provide our small and medium-sized enterprises with additional resources to access our capabilities for product and process development.

Sixth, create a distinguished applied scientist program to recruit globally recognized and industrially oriented engineers and scientists to organizations like ARC.

I-CAN and our associated policy recommendations sit well with the major objective of the Canadian innovation strategy. Indeed, they represent one of the great opportunities for Canada to turn knowledge into wealth and thus create prosperity and improve the quality of life for all Canadians.

Thank you.

¿ (0910)

The Chair: Thank you very much.

Now, as an individual, we'll hear from Beverley Smith.

Go ahead, Madame.

Mrs. Beverley Smith (As Individual): Thank you.

Paul Martin says social issues, health care, and children will be the priority for any government he forms. John Godfrey is trying to catch his ear, promoting universal day care, so the issues I've been working on are coming to a head at last, but we must look at them wisely.

In the past four years, Canada has increased tax revenues 12%. We aim at a productive society where all adults work. In that, we are like a person joyfully driving over a bridge whose foundation, which we took for granted, is cracking.

What makes Canada great are two things: paid work and unpaid work. Tax practice favours paid work, but its goals do not. I urge you to look at some assumptions of the Income Tax Act. They cite good goals that current practice violates.

One, we tax people to get adequate revenue. We need enough money to pay for services, but are we ensuring we'll get adequate revenue? Making sure women and men work full-time outside the home creates the immediate tax revenue, but parents with little time for kids are having fewer kids. Our birth rate has gone from 2.4 to 1.4, well below the replacement rate of 2.1. We will not have adequate revenue in a generation.

Two, the Income Tax Act aims at neutrality. People should not decide how to act simply to get a tax deduction, but current policy not only dictates behaviour but intends to do so. It creates disincentives for women to work in the home.

Three, tax laws should treat men and women equally, but the Kelly Lesiuk case argues changes to the UI program have had a disproportional impact on women. Justice Roger Salhany ruled that a mother should not have to qualify for maternity benefits the same way a man has to qualify for unemployment benefits because government has no legitimate interest in expecting a mother to change her status of primary caregiver to get equal treatment.

Four, tax laws should not discriminate based on culture, but many cultures traditionally prefer family based care of their young by a grandmother to ensure exposure to the language and heritage that parents have a charter right to instill. The tax practice doesn't give tax breaks for that style of child rearing, only to day care in a dominant language and culture.

Five, tax should be based on ability to pay. Current practice ignores the fact that children reduce the ability to pay tax. Since we eliminated family allowance and child-dependent deductions, a couple with children and a couple without children often pay the same tax. A single-income household can pay 42% more tax than a dual-earner household on the same $60,000 household income.

Six, the Income Tax Act aims at consistency, yet present practice is inconsistent. We are taxed based on individual income, but benefits are reduced according to family income. Canada tries to justify its lack of neutrality with several excuses. One is the assumption that the single-income family is richer than the one with two incomes, that it has fewer expenses. But we all have to pay for clothing, transportation, and meals. Does the state assume that women taking care of children never go anywhere?

Erma Bombeck found moms were the taxi drivers of the nation. The Dodge motor company ran an ad recently with the slogan, “What idiot coined the phrase, 'stay at home mom'?”

Taking kids places is crucial to their education. The Income Tax Act permits deductions for cost of earning income but for some reason assumes the care of a child is a business expense, yet there is no job that requires you to have a child. You may have decided to have a child, or buy a horse, but those are not job-related expenses; they are personal costs.

Once the state intervenes to help only business people with those costs, it enters a tricky domain. It gives child care money on condition you already have money. Tying maternity benefits to pay means they're not about maternity. Allowing deductions only for some kids and not others plays favourites.

A GDP tally makes it look like a two-income household is more productive because it pays more tax, but the unpaid caregiver works free, saving the state replacing her. The state's net benefit is her entire salary sacrifice. She is a heavy payer of tax in that light, and because the caregiving years deprive her of pension, she will pay that penalty all her life.

The Income Tax Act says it does not tax imputed income, yet we do tax it. The contorted reasoning is this: a mother who cooks dinner for the family and doesn't pay a restaurant is cheating the system. Were she paying a waiter, he'd pay tax. By this logic, Cinderella is rich for not paying someone else, so she should pay a tax penalty. That is what we are doing.

In the feminist movement we say, examine your privilege. Men were challenged to examine how society valued men and ignored women. They were asked to reconsider if excluding women from some paid jobs was fair. I extend that argument. We should also examine our privilege benefiting from the unpaid labour of women in the home, providing free care of the young, sick, elderly, handicapped, and dying, saving the state money and enduring personal hardship to do so.

¿ (0915)

Your goals and mine are tax fairness, neutrality, and equality. I ask you to look at present practice, because it does not meet those goals.

The Chair: Thank you very much.

Colleagues, we will now go to the Canadian Snowboard Federation. Go ahead.

Mr. Tom McIllfaterick (Chief Executive Officer, Canadian Snowboard Federation): Good morning. My name is Tom McIllfaterick, and I am the chief executive officer of the Canadian Snowboard Federation.

We don't have a submitted presentation, so you won't find it there.

The Chair: We'll get it from you afterwards, if that is okay.

Mr. Tom McIllfaterick: Thank you. Yes, indeed.

I'd like to introduce Alexa Loo, one of our active national snowboard team athletes and an athlete representative on our federation's board of directors.

The Canadian Snowboard Federation is one of roughly 65 national sport-governing bodies. Together we represent 35%, or more than one-third, of the volunteer hours donated by Canadians each year. The sport extends to every part of Canada.

In September, this committee received a presentation from the Sport Matters Group, setting out a rationale for increased investment in sport and offering recommendations as to how this could be achieved most effectively. We support the Sport Matters Group's presentation and endorse its recommendations.

We want to take this opportunity to give you a ground-level or, perhaps more appropriately for us, a snow-level perspective as to why an increased investment in sport is so vital.

Alexa will address the situation of one Canadian high-performance athlete in one sport, but I'll first identify three major reasons why such an investment is so important, not just to sport but to all Canadians.

The first is the Olympic Winter Games in 2010. The awarding of these games to Vancouver has not only established a very high set of expectations for that community, but it has also established a very high and constantly increasing set of expectations for Canadian sport and Canadian athletes.

Canadians are passionate about sport, and they get particularly passionate about the Olympics. We all remember the excitement generated in Salt Lake City in 2002. Canadians will want and expect us to do well. They will not want the dubious distinction of a three-peat, of Canada, for the third time, being the only country to host the Olympics but to not win a single gold medal.

Frankly, we are not yet ready for the task. Despite the increased funding provided in last year's budget, for which we are very grateful, we do not yet have the resources necessary for Canada to be a serious Olympic contender across the board. The cost of getting an athlete from 5th place to 1st place in the Olympics is often greater than the cost of getting from 100th place to 5th place. Canada currently has many athletes ranked between 10th and 5th.

The second reason for an increased investment in sport is that the current investment is not sufficient for sport to meet the objectives of its own participants, and, frankly, the objectives set for it from time to time by governments. These change, and these continually increase as society changes.

Thirty years ago, the Canadian government made a major investment in sport in both dollars and ideas. That far-sighted investment made Canada a leading sports nation in many regards. It was maintained for 20 years, but it was severely affected by the funding cutbacks of the 1990s.

Sports have tried to maintain their infrastructure with diminished resources, but, as one can expect, with diminished results. Meanwhile, the expectations and obligations continue to increase.

The third reason an increased investment in sport is valuable is that sport is a valuable tool for the Government of Canada to use in addressing other issues—role models for anti-smoking campaigns; obesity in Canadian youth; self-esteem in adolescents, particularly young women; diversion programs for youth at risk; entry paths into the community for new Canadians; and that other GNP, great national pride. Sport can assist the government in achieving all of these objectives or in working towards them.

Finally, to reiterate the recommendation of the Sport Matters Group, we believe the Government of Canada should be investing in sport an amount no less than 1% of its overall spending on health. In dollar terms, that works out to roughly $180 million a year.

Alexa.

¿ (0920)

Mrs. Alexa Loo (Athlete Representative, Board of Directors, Canadian Snowboard Federation): Good morning.

[Translation]

My name is Alexa Loo and I am a member of the Canadian Snowboard Federation.

[English]

We have a world championship in Whistler in 15 months. In the following year we'll be sending athletes to an Olympic Games. Both events will be your athletes going off to a slaughter, unless we make some changes.

The Canadian national snowboard team has some of the best riders in the world, yet you support our development with one coach, shared across the men's and women's teams for alpine, who is also expected to look after the men's and women's boarder-cross athletes.

We are the only team on the World Cup circuit with such a low support staff to athlete ratio. Our top female cannot raise her left arm above her shoulder because we can't afford to have a physio on tour to look after our chronic and acute injuries while we're on the road. She crashes in training and is still stiff on race day. What a shame.

Granted, we could track down and pay a local physiotherapist when we're on the road. Consider, for a moment, finding good physio in a small Austrian town. Then imagine booking a same-day appointment, seeing a physiotherapist for the first time, bringing this person up to speed on your medical history, and receiving treatment. Remember, all of this is happening in an Austrian dialect, not the German you learned in school, for those of you who took German in school and are comfortable discussing your medical history in German. Tomorrow you'll be in another country, with the same ailment, and have to go through the same exercise again, possibly in Italian or Slovenian. For sure, you probably didn't take Slovenian in school.

Now imagine that you're the coach, the one single coach, trying to organize the physio treatment for six athletes, as well as organizing hotels, car rentals, on-hill training, etc. Our one coach, who has the most schooling of any snowboard coach in Canada, is still below the standards of any national team ski coach--one coach spread across six alpine racers and at least as many snowboard-cross athletes.

He is expected to be coach, organizer, travel agent, chauffeur, confidant, mental trainer, physical trainer, equipment tech, and videographer for two World Cup teams. Even if he were a super-mom, this is too great a role for any one person.

We need to support our national team riders. We have the talent. We have won an Olympic gold medal. We've won a world championship and numerous World Cups. Why are we still having to qualify ourselves individually for Sport Canada funding?

We are committed. We work hard and we have what it takes to win. We need some help. We need a strong technical coach. We need two coaches at least. We need to be able to use our time on the hill as effectively as possible in order to be in a position to shine at the world championships in Whistler and to have our athletes anywhere near the podium in Turino in 2006.

Using our time effectively means that a coach should be setting a course while another is monitoring technical warm-up sessions. Effective training means having an extra set of eyes helping us to detect and correct our mistakes. Effective training means having a second way of describing how to make changes when we don't fully understand the first time. Effective training means showing up for training, limber and with enough dexterity to perform the movements the coach is telling us.

We need help keeping our bodies working properly. A full-time physiotherapist is not considered a luxury item in the world of elite sport. Time is of the essence. The world championships and the Olympic Games are coming soon. If you want success in 2012 after the Whistler Vancouver Olympics are over, we're on the right track.

Help us speed up the journey to the podium. Provide us with the funding to hire an Olympic-calibre coaching staff, and we will meet your commitment with our blood, sweat, and tears and our commitment to be number one and make Canada proud.

It is time for us to do more than just host world-class events; it's time to win them.

¿ (0925)

The Chair: Thank you very much.

I'm very pleased that, from the Canadian Association of Petroleum Producers, we are now joined by David Daly, the manager of fiscal policy, and Greg Stringham, the vice-president of markets and fiscal policy.

You're just in time. Who would like to do the presentation?

Mr. Greg Stringham (Vice-President of Markets and Fiscal Policy, Canadian Association of Petroleum Producers): I will start, if that's okay, Madam Chair.

The Chair: Certainly. You have up to seven minutes. Go ahead.

Mr. Greg Stringham: Thank you very much.

I apologize for being late. As you probably heard, there is over an hour and a half delay in Calgary with the snowstorm coming, so I think it's appropriate that we follow the snowboard association. I think there will be lots of training. At least there was on the highways this morning.

It's our pleasure to come before you today to be able to build on the presentation we previously sent. We have appeared before you over the last several years and really are very appreciative.

I think one of the requests we have made to you over the last several years is to move forward with Bill C-48. We are indeed grateful that it has moved through your committee and has been approved by the House of Commons. It is now, as I understand, moving into the Senate and will go to committee on Thursday.

From that perspective, one of the recommendations that is in our submission to you has been fulfilled. Thank you very much. We really appreciate it.

Let me lay out the context, for a few minutes, of what I will be suggesting that we move on in a go-forward basis.

With me today, whom you've already introduced, is David Daly, who is our manager of fiscal policy.

As you probably know, the Canadian Association of Petroleum Producers represents about 140 of the oil and gas companies that produce oil and gas in Canada, and about 125 additional associate members, which can range from service companies, to consulting firms, to pipeline companies. It represents about 97% of all the oil and gas produced in Canada, some very small companies to very large companies.

I think one of the most important things to recognize in those companies, as we see in the media with all of the quarterly reports coming out today, is that there is a very strong investment of capital by our member companies in Canada. This year we expect to be investing probably $27 billion across Canada.

From the days of when it started back here in the origins of western Canada, this industry has really expanded significantly beyond the routes of western Canada into eastern Canada. It is now pushing into the frontiers of the north and even looking at new types of resources like coal-bed methane—natural gas from coal, that is—and other types of resources that really weren't part of the conventional industry when it started.

It goes now beyond the capital investment. We are the largest single, private sector capital investor in Canada. Also there are operating costs that we spend money on. When you think of costs to us, it's about $14 billion this year on hotels, restaurants, chemicals, transportation, and all kinds of things that are needed to support our industry. It does have an impact across Canada.

That's what we're doing. The changes we will be recommending today, and the ones that have already happened, will be beneficial and I think will be felt across Canada.

One of the interesting things that is important about this industry over the last couple of years has been its national as well as international scope. It's a very high-tech industry in a global marketplace, with investment and activity from coast to coast to coast.

The Canadian companies that we are dealing with are active in 12 of Canada's 13 provinces and territories. I'll let you guess which one we're not in yet, but we'll eventually get up into Nunavut and try to find some oil and gas up there as well. We are active in all of the other jurisdictions.

We are also very active internationally. I think one of the things that's different in coming before you this year than in previous years is that for the first time this year—we have told you in the past that we rank as the third largest natural gas producer in the world—we are the ninth largest producer of crude oil in the world. Now with the world recognition of the very strategic Canadian resources of the oil sands that are north of here, we are actually number two only to Saudi Arabia in the amount of oil that is contained in a country. Canada is the second largest in that way.

This year, for the first time, it was recognized in the prestigious Oil & Gas Journal that there are Canadian resources of 175 billion barrels of oil in the oil sands. That moved us from a very low ranking up to being number two only behind Saudi Arabia. It has attracted international attention. It has brought attention from, of course, our neighbour to the south, in the United States, but also around the world, as to how they could be involved in helping develop that resource.

Not only that, but other countries, like Australia, Venezuela, and the United States, that have similar oil sands resources have come to us and asked how they can make their resources economic, as we have done. There's a very exciting technology story behind it that is now allowing our companies to become more active internationally as well.

One of the things that goes along with international development, of course, is that Canadian companies have grown from very small companies into larger companies. They are now looking internationally as well for investments.

¿ (0930)

They need to find competitiveness wherever they can, and this year we will be producing about a million barrels a day of oil equivalent--Canadian companies, that is. This is not the American arms of some of these oil companies. This is truly Canadian companies that will be producing about a million barrels a day of oil equivalent in countries outside of Canada. That provides opportunities for investment there and really puts the foundation for why we feel we need to be competitive, but it also provides opportunities for us to have international trade both coming in and out of Canada, and we are very much a country of traders.

So from that perspective it is very important that we maintain a competitive base for what this industry is doing.

In addition to the money we spend in Canada, we account for about 6% of this country's gross domestic product. So it has a big impact as far as our economic growth going forward is concerned.

As I mentioned in the very beginning, we really are very grateful to this committee, as well as the others that we were involved in, for moving forward Bill C-48. And for those who may not be aware of this, we have been working since February 2000, I believe, to try to take the tax rate for the oil and gas and the mining sector, the whole resource sector, and bring it down to the similar rate that other companies are paying in Canada. I think the movement we have had here has really been a great step in that direction. It will be phased in over the next few years.

One of the residual recommendations that comes out of that--and I don't want to take away from the progress we have made so far--is that there really is still a small concern that we would like this committee to recommend to the minister we move forward on, and this is that right now we have a gap. In 2002 there was a gap in the tax rate between us and the rest of the industry of about 3%. As you know, their tax rate was coming down and ours was staying, and it's now started to come down.

With the passage of Bill C-48, if it gets through the Senate here in the next few days, the tax rate for our industry will come down by 1%, but that of the other industries is coming down by 3%. So while we are going to eventually get to the same tax rate over five years, we would like this committee to consider recommending to the minister that we take that 3% gap, where we were 3% higher than everyone else, and just keep it the same as we phase down until that's gone. The way it's proposed right now we will actually increase from a 3% gap to 4% this year, and then to 5% before it starts coming back down.

So we are very pleased with the end goal. Really, we have a small recommendation to ask of you, which is if it could be changed in future budgets such that it could come down in step-wise fashion. The reason we ask for that is because if the gap gets too far between us, then the ability for us to attract capital into our industry to invest in all of these billions of dollars we are spending in oil sands plans or offshore east coast becomes more difficult in competition with other sectors in the industry.

So don't let me take away from the great progress we have had. I just wanted to highlight that we would appreciate a simple recommendation on a go-forward basis to try to maintain that gap as it was in 2002 rather than having it increase before it decreases.

The other thing I wanted to mention in our recommendations as we go forward here is the need for us to continue to deal with the issue of climate change. Before I turn to that, though, there's one other residual issue you should be aware of. In the discussion of natural gas and oil production on the east coast of Atlantic Canada, when we moved forward with Bill C-48 we realized it was going to be generally good for the whole industry but it was not necessarily going to be good for absolutely every part of the industry.

With the struggles and difficulties that the industry is having offshore in Atlantic Canada right now...we have drilled probably seven or eight unsuccessful wells in offshore Nova Scotia and have not found enough gas there to be able to be producing. Those wells are costing in the range of $60 million to $80 million apiece compared to a well in western Canada that may cost half a million dollars to drill.

What we are discussing with the federal finance department right now that you should be aware of--and we're not asking for a recommendation of this committee. We are asking them to take a look at the Atlantic investment tax credit in place right now at 10% and to move it up to 15%. We want to make sure this committee is aware of that. That would apply to all industries in Atlantic Canada. That is not a specific request for the oil and gas industry.

¿ (0935)

The Chair: Thank you.

Mr. Stringham, we have the rest of your brief here. This committee worked very quickly, and we interrupted our pre-budget when that bill came to us in the House to make sure we got it through.

Mr. Greg Stringham: We appreciate that. We were in attendance and we saw how very quickly the committee dealt with a bill that may have otherwise had a long time in discussion. We are very appreciative of that.

Thank you very much.

The Chair: I think the committee, from the testimony then, appreciated that there were some discrepancies that were not ideal, but we did move forward.

Mr. Greg Stringham: Thank you very much. I appreciate it.

The Chair: I do want to go to rounds of questioning, and I will give up to 12 minutes.

Mr. Casson, please start.

Mr. Rick Casson (Lethbridge, Canadian Alliance): Thank you.

Thank you very much, everybody, for your presentations. They were all very interesting and very well done.

To the snowboarders federation, I would say that the thing I always think about when I think about our amateur athletes and how they struggle to be medal winners is how little they make in comparison to what the pros make. To me it's unbelievable. It's obscene, actually, how much some of the pro sports people make, in the millions and millions of dollars a year, and our amateur people are struggling to get a massage therapist to go on tour with them. It doesn't seem right somehow.

On the 1% that is spent for sports in comparison to what's spent on health, why did you use that as a platform or as a comparison?

Mr. Tom McIllfaterick: There are two reasons. The first is it caught your attention, and that's really what we're trying to do. We're trying to focus on a level of spending that is appropriate for sport. It should be considered, in our minds, as part of Canada's spending on health, because we can address so many health-related issues.

The other reason is that the number takes us to a point that is comparable to other similar nations. When you take a look at the investment in sport for Australia, for Great Britain, for Germany, for France, however you want to slice it, and everybody niches it a little bit differently, on a per capita basis it more or less works out that this would be the right benchmark level for Canada if we are to try to be competitive on a sustained basis internationally.

Mr. Rick Casson: Did you base that on any kind of cost analysis as to the number of people you need, the number of coaches, trainers, that type of thing, and the number that are involved?

Mr. Tom McIllfaterick: No. To some extent, trying to build up that way, how long is a piece of string?

We know there is a finite amount of money. We know that what we have now is woefully inadequate. We know that based on experiences of other countries, putting us up to roughly two and a half times where we are now at least gets us into the door to be competitive with the Australians, with the British, and so on.

How does that money get allocated? Any number of people and various groups inside and outside the sport will make the argument as to how much of that should go for coaching, how much of that should go for physiotherapists on the road, how much of that should go for grassroots development of sports so we can get more kids off the sofas, off the video games, and out onto the playgrounds, so we have a healthier society, and not coincidentally it will also give us more younger, talented athletes, fit kids who become talented athletes.

One of the challenges we definitely face is that Canadians are not very healthy, particularly the younger generation. I don't know if your committee has heard presentations about this. I think you did yesterday, maybe from Active Living. I know in the news recently there have been concerns about obesity, concerns about the sedentary lifestyle related to computers and video games and so on. That affects our Canadian athletes, because unfit kids don't make good athletes. Maybe we are the front of the wave on this and other countries will be seeing this come, but right now we see that in European countries and many Asian countries kids are fitter; their lifestyle is much more active. Austrians ski to school. For a country of I think 4 million people, they have as many active skiers and snowboarders as Canada does.

¿ (0940)

Mr. Rick Casson: I appreciate that. I guess it all comes into the whole health situation: if we are healthier we will be better athletes. There's no doubt about that.

I want to switch to Mr. Mouat now, if I can. Mr. Mouat, at the end of your presentation, and I think you expanded on it in another submission you gave, you state that we need a commitment from the federal government that universities will be adequately funded and we need a mechanism that commits federal and provincial governments to ensure that this happens. I'd like you to expand on how you feel that mechanism should be structured.

With respect to your comment on tuition fees, I think there was a discussion or something on the news only yesterday that you are taking the cap off tuition fees in the province. What is the proper level or what percentage of the total cost of university should tuition fees cover, in your opinion?

Dr. Jeremy Mouat: Thanks for the questions.

Starting with your first question about a mechanism to transfer funds federally-provincially for post-secondary education, thus far, my colleagues in the Canadian Association of University Teachers, we here in Alberta and British Columbia, and those in Ontario are interested in pursuing something analogous to the Canada Health Act that would provide for specific targeted sums to go to the university sector.

It seems churlish to argue against getting funds from the federal government for specific programs, but our sense is that things like the innovation strategy or the Canada research chairs to some extent give the wrong message to university administrations.

We want to have star researchers. We want to have people who are able to contribute to the good work of the Alberta Research Council, but we also want to have the universities and the whole post-secondary sector as vibrant places where young people and not-so-young people have educational opportunities. Boutique funding doesn't guarantee that. We need to have sustainable funding. So something analogous to the Canada Health Act is the only mechanism we can see that's going to guarantee we receive the sorts of funding we require to be able to plan rationally.

We know we're going to face.... Here in Alberta, the MLAs' review committee of post-secondary funding recognizes there's going to be a huge challenge to retain and recruit trained academics over the short to medium term. In order to meet those sorts of challenges, we have to have secure funding, not just for research related to the high-tech industry, but for a general undergraduate education.

So it would be something analogous to a Canada Health Act, which of course raises some constitutional issues. And you can argue with your provincial colleagues over those. I'll leave that for you.

On the issue of tuition, if you look around North America and across the oceans, you'll see very many models. In Scotland, university students don't pay tuition. In one university I was visiting in the United States, they paid a whole lot of tuition.

So what's an ideal percentage in Canada? We have, by and large, an almost totally public post-secondary system. It would be great to see a public debate over what constitutes a fair and adequate level. The assumption in Alberta has been around 30%, and that's the cap. I think it's too high, myself. I would rather see it lower. To me, it's an issue for public debate.

I think in Canada there is an expectation that our public universities need to be accessible and affordable. Going above 30% gives students and their parents a significant debt load. And if you talk to undergraduate or graduate students today, it isn't very long before they start talking about their fears. Their fears are largely fiscal, largely to do with whether it is a rational economic choice to assume this level of debt. They're very anxious about that. I think if you increase tuition, you increase that anxiety. People will not want to go to university, and that will be bad for us as a country.

¿ (0945)

Mr. Rick Casson: I'd like, Mr. Stringham, to go to you now.

In regard to this tax reduction proposal and keeping it within certain percentage points of the other sectors, what does 1% reduction in this tax mean to your industry in dollars?

Mr. Greg Stringham: We have just received the latest data for the last tax year from Stats Canada, and our industry overall paid about $2.2 billion in tax, although if you had read the Globe and Mail headlines today, which may be around here, EnCana, one of our largest companies, says that next year, with the acceleration of what's happening, they will probably be paying close to $1 billion in tax.

So to different companies it means different things, depending on where they're at.

Mr. Rick Casson: You claim if there's that amount of spread in the tax between the other sectors and your sector it affects your ability to invest. Are you talking about expansion, R and D? What is being hindered by this present structure?

Mr. Greg Stringham: The investment will continue to move forward. It may not move at the same pace, though. All we're suggesting is that if the gap gets too wide in the interim, it may be delayed for a couple of years until the tax rate gap comes down. Like I said, the proposal that's now in place and in motion in Bill C-48 does get it to an end point in five years, so it is equal. So that's fine. From that point it may just be a delay in that investment, rather than a stoppage of investment.

The oil sands plants that are planned to go ahead, the offshore east coast, which is struggling, but in very strong projects out there, and in particular the consideration for things like a northern pipeline are all things that are on the table under consideration this year and next.

Mr. Rick Casson: Do I still have some time?

The Chair: You have 45 seconds.

Mr. Rick Casson: Beverley, I'd like to perhaps address some of your comments.

Going back to my particular situation, I was one of nine children. My mom never worked outside the home, but she worked 15 hours a day inside the home raising nine children. Are you suggesting that the work that gets done inside the home by either parent be recognized in some way through the tax system? What are you trying to get at here?

Mrs. Beverley Smith: I understand. I don't have time to reply, do I?

The Chair: He knows I'll give him the time.

Mrs. Beverley Smith: Okay. It's quite an itemized list, but I didn't have time. It's my typical argument: increase the spousal deduction to a full personal deduction; have child care deduction for every child; have maternity benefits; have pension benefits for homemakers who want to contribute; and level the playing field so we're taxed based on family income, not individual income.

I'm sorry I didn't make that clear, but I'm doing a different thing this year.

The Chair: Okay, and now we're out of time.

We'll go to our government vice-chair, Mr. Discepola, for 12 minutes, please.

Mr. Nick Discepola (Vaudreuil—Soulanges, Lib.): Thank you, Chair.

This is for the Snowboard Federation. You seem to imply in your presentation that if we invest more dollars we are going to get more gold for our dollars. I'd like you to elaborate on that, because I'm not sure that is the case when we take a look at the demographics of our country, the training facilities available, etc.

I'd like you to elaborate on your response to Mr. Casson, because I was reviewing some information that was sent to me, and I may have missed one portion of your response. Out of the $180 million that you are asking for for funding, how much of it will actually go to targeting the elite program and its needs, versus getting some of that money down to the lower levels for young up-and-coming athletes?

The Chair: Mr. McIllfaterick.

Mr. Tom McIllfaterick: I indicated in my presentation that the cost of getting from fifth to first--or basically, if you want it more generally, from the top eight to an Olympic medal--can exceed the cost of getting into the top eight. That is a function of the extremely rarefied air you are in at that level: to move up, to make that marginal increase in performance, it requires a very considerable investment in the whole range of resources that are now applied to elite sport.

Alexa talked about coaching, about physiotherapy, about massage therapists, about sport conditioning, about mental training, about health support services, about technical innovations.

One of the greatest things that happened in speed skating prior to 2002 was the innovation of what they called the clap skate. It was a new form of skate that was accepted by the international federation. The sports groups that had invested in that technical innovation had a lead time of about two years, and that two years was worth seconds off their performance. That resulted in a whole slew of medals in 2002. By now the rest of the sport has caught up, so now you have to try to find the next thing.

On the level of investment, if I can look at the oil and gas industry, the cost of getting the last barrel out is a lot more than the cost of getting the mid-range barrels. So it is a much greater investment in elite sport to get there. One of our Canadian challenges is that we have a lot of athletes in from tenth to fifth place at the Olympic level. How do we get them on the podium?

On the other question, there would clearly need to be a discussion with sport and without sport. We need some direction from government. Do we want these funds, this $180 million, largely invested..? And some of it is strategic. Do you invest in youth now partly to address other issues, the issues of smoking, self-esteem, and so on, because ten years from now you will have fitter Canadians, some of whom will become elite athletes? How much do you put directly into the high-performance program now? How much do you look at the fact that we have to do a crash program, because we are going to be centre stage in Vancouver in 2010 and we don't want to embarrass our country? This is really what the Australians did, and what the Japanese did prior to 1988. There are obviously trade-offs there. There are obviously the choices.

That discussion has gone on. Right now it's been a rather academic discussion, because we simply don't have enough money to do what we're trying to do, let alone grow that.

Do you want to add to that, Alexa?

¿ (0950)

Mrs. Alexa Loo: Unfortunately, we don't have the specific numbers on how that $180 million would be spent individually, in each individual sport and in each individual grassroots program. As you support each national team, within each national team the mandate of their federation is also to support grassroots levels and to look at their own growth in future years to make sure they're going to maintain and grow that. But it's also having your top athletes supported so that it motivates others to become one of those top athletes. So you're also motivating the eight million Canadians who do participate in sport to continue participating in sport, to increase their participation in sport, and to have more Canadians join that eight million number.

The Chair: Mr. Discepola.

Mr. Nick Discepola: That's where I would concur. I think if we could encourage younger Canadians to partake in various sports, we might end up with an elite athlete at one point, because I'm not convinced that just putting money and money and money is the solution to getting more and more medals. If that were the case, I guess the United States would have invested an awful lot more in sums of money and had dominance over the world.

We've seen many cases where some south African countries, for example, can win medals, and I think that's where we have to really reassess where we want to be headed as a country.

I don't want to put undue pressure on our athletes, to say “We've given you the funding; now you have to perform also.” Do you see where I'm coming from?

Mrs. Alexa Loo: I think it is fair to ask your athletes to perform when you are funding them, but when your athletes are having to rub their back on a post for their massage therapy, when they have to pay for their own flight to the race, when they have to work hard all summer to support that, I don't know how you can then come back and say “We've supported you; we expect a medal.”

Mr. Tom McIllfaterick: I would add, you're very correct; it's not a simplistic solution. That is one of the things that I believe has been overlooked by the government: the value of sport in addressing many of these other issues and helping other departments of government carry the load on some of these things.

I don't think the government has used sport very well for that. To effectively use it obviously requires resources. I would think in the long term that's going to reduce the demand for resources in the health budget, because healthier people cost less to support.

¿ (0955)

Mr. Nick Discepola: Thank you.

I'd like to ask Dr. Mouat some questions.

One of your recommendations is that we must be very cautious about expansion in the research programs. That may, to quote you, “contribute to the further lopsided development of our universities”. I'd like you to elaborate on that, because I think one of the challenges facing our government is to make sure that we emphasize, more and more, R and D and innovation, and it seems to me that the starting point is with our universities. So if we've skewed some results, I'd like you to elaborate and help us correct that.

Dr. Jeremy Mouat: Thank you.

If you look across the river, through the snow, you'll see there are a series of cranes at the University of Alberta campus. Among other things, they're building new labs, in part funded by the federal government. At the very same time, they're beginning to restrict undergraduate enrollment.

I think that's the gist of my concern, that it's great to see—to use the analogy from my colleagues to the right with snowboarding—the elite professor getting a new lab, but our concern is also with the vibrancy generally of universities. Undergraduate degrees are, or should be, the major business of many universities, and we need to have adequate funding to ensure those undergraduate degrees are accessible, affordable, and of high quality.

I don't want to sound like a broken record re-emphasizing that, but boutique funding of particular research programs will no doubt pay specific benefits, if you're going to commit money to say medical research or engineering research, but it's not going to assist the general quality of the undergraduate education provided for by all universities across the country. Let's not lose sight of that major objective.

The petroleum producers will tell you that up in Fort McMurray, the source of probably great wealth over the 21st century, half of the workers of Syncrude and Suncor have undergraduate degrees, and in some cases graduate degrees.

We require an educated Canadian workforce, not simply a small elite of specialized researchers.

Mr. Nick Discepola: I'd also like you to comment on another thing.

Yesterday we had a great suggestion of breaking out the CHST component into health, education, and a social transfer component. I was very excited, as I thought it was the way to overcome this impasse we have between the federal and provincial governments as to accountability, which is a longing cry across Canada—but there is a lack of political will among the provinces, for example, to give that up. I thought that by doing it that way, we would get all of the provinces to come on board and have transparency, and then the population could judge whether each provincial government had responded well in those three areas.

I'm glad to see your charts, and to see that the Alberta government is already doing it, so hopefully we'll have no problems with them. But I also notice that despite the fact that they are transparent, they're still not spending enough on education and social programs. As a matter of fact, they've cut them back.

So how do we ensure, or what mechanism can we use to ensure, that any dollars transferred to the provinces are actually spent in those areas? One suggestion yesterday was that there even be a penalty clause invoked, if the provinces don't justify their expenditures. I'm just wondering if it's feasible.

You've perhaps said inadvertently that it's your problem to negotiate with the provinces. It's a serious problem. I read today in the Globe and Mail about a study saying that Canadians expect and are demanding that the three levels of government cooperate more. So we do have that challenge, and I think it's a serious challenge. If you have any recommendations or comments, I'd appreciate them.

Dr. Jeremy Mouat: As I mentioned to Mr. Casson, our colleagues in the Canadian Association of University Teachers have suggested a Canada post-secondary act analogous to the Canada Health Act. We support the initiative. Obviously, as the Canada Health Act required, in order for such an act to be successful, there would need to be consensus among the provinces and the federal government.

We would hope that forging such a consensus would be possible. I would like to think that all levels of government would get behind adequate funding for post-secondary education, in the same way that they've done so for medicine and for the health care industry.

One of the challenges, I think, for people involved in universities is to persuade or to continue to highlight the significance of post-secondary education. It's not an easy task for us. I mean, K to 12 gets an awful lot of attention and post-secondary does not. Certainly that's our experience here in Alberta, making the plea that the provincial government sit down with the federal government and bring in a level of transparency so that funds can be seen to be transferred, not only to things like CRC or Innovation Canada, but generally to universities.

We feel that we need something like a Canada post-secondary act to guarantee it.

À (1000)

The Chair: Thank you very much.

Mr. Nick Discepola: Don't I have 45 seconds?

The Chair: You've already had your 45 seconds.

I will go to Ms. Leung.

Before I do, I'll just say to Mr. Mouat that hopefully I'll have a chance to put to you the concept of what indirect costs of research we're supposed to accomplish. Maybe you'll think of that, and we'll get a couple of minutes to discuss it.

Ms. Leung, go ahead.

Ms. Sophia Leung (Vancouver Kingsway, Lib.): Thank you, Madam Chair.

I want to thank you all for your very good presentations. Each one made a very strong point.

First, I'd like to commend Ms. Beverley Smith. She has been a very strong advocate for the family, stay-at-home moms, and parents. I have met her many times.

Good to see you here, Bev.

You already answered some of my questions, but what would you suggest for the government to compensate the caregiver who stays at home? Do you think it should be in the tax credit form, or perhaps more precise and easier?

Mrs. Beverley Smith: There are a number of items. I don't just argue for stay-at-home mothers, as you possibly know. I argue for women having choices—part-time or whatever. I argue for equalizing the deduction between spousal and personal deductions. Some provinces do it; the federal government doesn't yet.

I argue for child care expense deductions being made into a universal tax credit that is available just because of the child's existence; then the parents can spend the money however they want.

I argue for pension benefits to be accessible to homecare workers such as homemakers. Right now, we can't even get our own RRSPs or have full Canada Pension Plan benefits.

I argue for the benefits you have being based on a consistent policy. If you're going to tax us on individual income, then return the child tax benefits and those other things based on individual income. If you're going to return benefits to a family, which you do, then tax on family-based income to remove the penalty against arrangements that are anything other than two equal incomes.

Basically, the federal government spends a lot of money on one style of raising children, and there is a very strong argument that you're doing good stuff for those kids, but you're completely ignoring the other kids. So I would suggest that the money be taken away from those programs and be put in the hands of parents; then let them choose the arrangements that best suit their needs.

Does that help?

Ms. Sophia Leung: We're assuming a lot of the child tax credit does go to the parents. Because a lot of children are minors, the parents will look after—

Mrs. Beverley Smith: That is a small amount; it's cut back at a low level. it's based on family income, and many people can't access it at all.

I'm talking about a universal equal benefit per child that doesn't discriminate based on any qualifications of the parent. So I'm talking about removing the child care expense deduction, which can be up to $7,000. We are talking about a lot more than the child tax benefit. I'm talking about changing it to whatever the government can afford but making it universal, so that it might end up at $4,000.

Ms. Sophia Leung: Thank you for your suggestion.

I'd like to go to the Alberta Research Council, Karen. You indicated that your group do not qualify for CFI or STDC, and I'm just wondering whether they qualify for the TPC program, which you have probably heard about it. They usually give very big support.

À (1005)

Ms. Karen D. Beliveau: No, we do not qualify for the Technology Partnerships Canada program, but we can work with industries that do qualify for that program. Perhaps I'll have Mr. Salmon talk a little about our corporate structure and governance, which restricts us from being eligible for many of these federal government programs.

Ms. Sophia Leung: But you say you can work with industry to qualify for TPC.

Ms. Karen D. Beliveau: The industry would qualify. The Alberta Research Council does not.

Mr. Keith Salmon (Chief Financial Officer and Corporate Secretary, Alberta Research Council): The Alberta Research Council in 1999 was removed one further step away from the Alberta government. It was incorporated under the Business Corporations Act of Alberta. We have one share, and it's owned by the provincial government. Our board of directors is mainly made up of private sector people who are familiar with R and D and can provide us input from different industry sectors.

Because of our ownership by the provincial government, we're ineligible for almost all federal programs on a direct basis. We are currently making about 60% of our revenues from the private sector, and those numbers are growing. We feel we need to have the ability to access those programs so we can benefit not only the research council but our partners and the customers we work with on a daily basis.

Ms. Sophia Leung: Karen, you wanted to say?

Ms. Karen D. Beliveau: Perhaps I could expand on the comment. My colleagues to my left have talked about the significant investment that has been made into research in the universities. We feel that it's important for the government to now take a look at how you turn those investments in research into commercial activity. Organizations like the Alberta Research Council are a very important link to make that happen. That's why we feel that the investment now needs to be increased on more of the downstream applied research and commercialization activities.

Thank you.

Ms. Sophia Leung: To the Snowboard Federation, you know I'm from Vancouver, and we share a lot of interests. You mentioned the Olympics several times, and I think we all know it's really a great prize for Canada to get these Olympic Games. I was in Prague to experience that.

I'm very confident that Canada is going to make these Olympic Games one of the best, to make history. Of course, I want to congratulate Ms. Loo, who made a very strong plea. I think the kinds of things she can tell us are excellent, and I certainly support her and sympathize with what they're not getting.

Also, I am aware that many other countries have a lot of programs to really train athletes when they are very young. They literally nurture professional athletes, shall I say. I guess we are not doing that. The value is different here. I certainly support helping the talented athletes, but I think it's also important to say that the games are really trying to educate the competition among the young from all the countries.

The medal is one thing, but I think to take pride in delivering a wonderful games is very important. I think we don't want to be so overwhelmed by the medals that we sacrifice everything for that. I think it has to be balanced. But certainly I can see we need to give more thought on how we're going to cultivate and train the young ones. We have another seven years, but that's actually a short time.

I think you have some of our support here. Perhaps you should continue the same message to us, whenever you can. Another thing you should try is to elect a few more representatives to send to Ottawa. That's another very practical way, especially in Alberta.

À (1010)

Mr. Tom McIllfaterick: I'm not sure I referred to the roughly 65 national sport organizations, but we may include politics and make it the 66th. But it is a very different game.

Ms. Sophia Leung: It is, but in the meantime, it's very important. I represent the west, federally.

Mrs. Alexa Loo: Actually, what we would like to see is our own minister for sport, not just a secretary of state. We would like to see a full minister and a full ministry.

Mr. Nick Discepola: We had that in the past.

Mr. Tom McIllfaterick: We did. In fact, we had more than that. I believe the Sport Matters Group also mentioned this. We had a minister responsible for fitness and amateur sports. That was key; it addressed your previous issue, and it let us extend that continuum, and it let us work more closely with the Coalition for Active Living.

We all suffered cutbacks in the 1990s. We know the reasons, and we accept them. It hurt the infrastructure, but one of the changes that was made in the early 1990s wasn't a financial one; it was the splitting of that unit into separate fitness and amateur sport units. That hurt us, and I believe it hurt sport and active living in Canada more than any of the financial cutbacks did. That is one key, non-financial message we would deliver to you, and that perhaps you could pass on to your colleagues.

Ms. Sophia Leung: Thank you.

Dr. Mouat, I think you know we have a secondary education committee. Do you know that? That's another very strong.... I am on that. We are very interested in supporting secondary education. As my colleague already mentioned, we had several discussions with many other universities.

Just last week I think we had a group of undergrad students come. They were very strong. They tried to tell us what they think.

I think certainly we have a concern because of the decrease of your support in your province. B.C. has strong support for the needs. They were asking about 40% of indirect costs. But you know last year this committee recommended $225 million annually for the indirect costs. So I think that was very strong support for the next three years.

I think we hear you, but I think that a lot of it is interrelated, with many reasons, not just one deal. I think we also discussed perhaps having a separate secondary education fund, separate from the transfer CHST, and that maybe would almost force the provincial government to have to designate. Do you want to comment on what you think of the idea?

Dr. Jeremy Mouat: That's the idea the CAUT has put forth with the post-secondary act, and it's something we support.

Don't get me wrong, we're very grateful for the support for the indirect funding of research costs and the beef-ups to the various research councils, which I know this committee supported. I don't want you to stop that; it's great. Our concern is that, as I say, the undergraduate university experience is the heartbeat of any university, and increasing funds to SSHRC, NSERC, or the Canada health researchers is great. I've been the beneficiary of those research dollars. But it's the undergraduate education experience that is at risk at the moment.

In 1994, here in Alberta, when a student paid a dollar in tuition, the provincial government put in $10 to match. Now, in 2004, the coming year, it's a dollar from the student, and $2.40 coming from the province. We've seen that kind of erosion of provincial government support.

That's why any kind of mechanism that will make--I can say this in this room--the provincial governments honest in terms of delivering targeted post-secondary dollars to the university sector would certainly earn undying gratitude and support from faculty associations and students across the country.

À (1015)

Ms. Sophia Leung: I want you to know that you have our support for post-secondary education.

Now I'll go to better transit. We were in B.C. As you heard, a few of us in the B.C. caucus lobbied really hard. We got some support.

I think equally I hear you really strongly pleading that, but I think at the same time you need to have a stronger voice in your province. And if B.C. can do it, perhaps you should try. We're going to pass that, but in the meantime I think the infrastructure is clearly a part of it. I don't know what share of the infrastructure you, in Alberta, are getting from that for your transit. Can you answer that?

Mr. Graeme Feltham: I don't think I can, not accurately. The provincial government certainly helps, and there's federal help that comes through ICAP, I believe, occasionally, but it's not directly for transit, so you have to apply on a piecemeal, project-by-project basis.

I think what's needed is just some sustained predictable stuff you can plan for, funding to come down to just address that gap. As the cities have grown, the transit systems haven't grown with them, and then you have as a result all kinds of transportation problems, which these two from Calgary would certainly be well aware of. I'm not sure of the exact percentage, so I don't want to say. But the Alberta government does kick in dollars, yes.

The Chair: Thank you very much.

Ms. Sophia Leung: Can I just make a last comment?

The Chair: I'm feeling generous.

Ms. Sophia Leung: We're working very hard. We've been working for days.

For the petroleum producer, I'm very encouraged to hear about the potential we have in Canada. This is Suncor. It's very impressive, yes. That really opened my mind to how strong we are.

I was thinking that your presentation was very good. You ask for a gradual reduction of 3%, not going up. Certainly we do hear you. That's a definite part; it's important. In the meantime, I think as a nation we have to look at what is the balance.

You're the big producer, right? You're a good contributor. Now, we have to be fair, because we also look at Ms. Smith, and we have a lot of concern for our social programs.

Mr. Greg Stringham: Oh, absolutely.

I guess to answer your question, we too have that concern. Research and development, education, all of those things need to happen. There are a number of demands.

I think we're asking you to make this recommendation because you will be receiving extra dollars from the oil and gas industry, simply because oil prices have been higher, which is beyond our control. But you could afford to do what we're asking and still have the money to do these other programs.

We're not asking you to take from one to give to us. We would not do that.

The Chair: Thank you very much.

Mr. Mouat, you have indirectly taken care of what I was going to raise to you, because this committee in its past report, Canada: People, Places and Priorities, very strongly recommended moving to 40% of indirect costs. One of the rationales we agreed on was that we didn't want the universities having to basically take the support out of their undergraduate programs, because most of us do have undergraduate degrees that are more liberal arts before we go into those specialized fields, and we appreciate that need.

I do just want to say that in one of his presentations to me, Dr. Davenport told me that those countries, especially some of those European countries that give free tuition, don't actually get a significantly higher percentage of their population going into post-secondary education. But the reality is in one generation we have moved as a country from taking a much lower percentage of the cost of post-secondary education out of the students' pockets to a much higher one--in fact, up to 50% in some cases, depending on your faculty--and perhaps we need to be examining that.

But so many of these issues are linked to the jurisdictional issues between the provinces, and cooperative federalism is a goal I think this country is now ready to embrace. I hope we're getting there.

Madam, with your research, I think commercialization is absolutely right. Your government is going to be looking...and we on this committee have been very supportive, both through our opposition members and our government members, of doing the R and D, but at some point the translation to commercialization has to develop.

With our social programs and support, we have to as a government not just look at our fiscal situation. We have one side of the interests in this country very correctly saying control your spending, and at the same time, we are not just a bottom-line corporation. We're running something that is for citizens of Canada, and they have other needs. Sometimes the economic and the social do blend and are the flip side of the same coin.

So I thank you for your input to this committee. I assure you all of your briefs will go back to the colleagues from this committee who are working in Ottawa. Last night, as you know, they voted that the money continue flowing, so we will be rejoined by some of those who had to leave us yesterday to do the voting.

I want to say that this part of the outreach for this committee is incredibly important. What is interesting for us, as we go over a two-week period from one end of the country to the other, is the echo of the same chorus that we hear, and that's good to see. So thank you very much for your input today.

I will suspend for about six minutes and then set up our next panel.

À 1022)

À (1031)

The Chair: We will go to panel two in Edmonton on our pre-budget consultation.

We have with us the Alberta Association of Colleges and Technical Institutes. Doug MacRae is the executive director. Welcome to you, sir.

From the Edmonton Transit System Advisory Board, we have Debra Gillett, who is the chair. Welcome

From the Alberta Real Estate Association, we have Les Higa, president, and Janet Poyen, director of government and industrial relations. Thank you.

From the Clean Air Renewable Energy Coalition, we have John Keating, who is the president of Canadian Hydro Developers Inc. Welcome to you also.

Patricia Clements is appearing as an individual, but I recall last year she was the president of the Canadian Federation of Humanities and Social Sciences Council, and is a professor of English at the University of Alberta here. I understand that at around 12, you have to go out. Simply absent yourself whenever necessary. Welcome to you.

We will start in the order on the agenda and allow up to seven minutes. We'll start with the Association of Colleges and Technical Institutes.

Commencer, s'il vous plait.

Dr. Doug MacRae (Executive Director, Alberta Association of Colleges and Technical Institutes): Thank you.

First of all, thank you for the opportunity to address the important role colleges play in Canadian society. On behalf of Ron Woodward, I pass on his apologies for not being able to make it. He's in Red Deer and not able to join us because of the weather.

My purpose is to make a few overarching comments with regard to addressing the questions you've posed, but also a little bit to introduce you to the Alberta Association of Colleges and Technical Institutes and the institutions we represent.

We represent 16 public colleges and the two technical institutes in Alberta. Our institutions in fact have 168 campuses or learning centres in 106 communities throughout this province. We register annually 131,000 credit students and over a quarter of a million non-credit students. Over 50% of the post-secondary students in this province attend colleges and technical institutes.

Total revenue for our institutions is $935 million annually. However, less than half of that comes from Alberta Learning. Of course, that's part of the reason we're here to talk to you.

What I'll try to do in the limited time I have is address the questions you've posed. Of course, you have the paper as well. With regard to the economic growth and job creation question that you pose and the role of the federal government, I can tell you that our colleges and institutes play a very significant role in the economy of this province.

As a matter of fact, our institutions, through spending of our graduates as well as our institutions themselves, account for more than 4% of the total provincial economy. We graduate more than 17,000 students each year, who then go on to employment, with an employment rate exceeding 90%. So more than 90% of our graduates are employed within six months of graduation.

In addition to that, we do a great deal of work with the workforce development. This means providing training for current employees of the employers. We also are involved in applied research and innovation. Earlier today, I think you had the Alberta Research Council visiting with you. Our institutions are only now getting involved in applied research and innovation, and we have formed a partnership with the Alberta Research Council to undertake that activity.

You posed questions about investing in Canadians. Of course, we're very proud to point to the return on investment that our graduates and the taxpayers receive. Our association conducted a major socio-economic impact study for our institutions and found that our graduates receive a return on investment of 14%. That includes the lost wages and so on that they may have made while attending our institutions. In addition, the taxpayers in this province have a return on investment of 16%. Investing in college education, technical institute education in this province, is a good investment for all Canadians.

Finally, you asked a question about enhancing Canadian communities and you had a focus on rural communities. Of course, our institutions, being in over 160 communities in this province, impact those local communities a great deal, particularly in the rural areas, where we provide facilities and services that go way beyond our teaching responsibilities and provide important support in community development for those communities.

In the last few minutes, I would like to address the recommendations that we have for your group. Like everybody else, I'm sure we will be talking about money. We're interested in seeing increased transfer payments, but targeted. We support federal involvement in post-secondary education in a targeted way. We don't challenge that.

We have a great deal of need in the area of infrastructure requirements, maintaining what we have today as far as current facilities, but also expansion because of the tremendous access issues we have in this province. I'm sure some of the faculty representatives probably talked about that earlier. The issue surrounding moving this economy forward in this province certainly requires an educated workforce. We're turning away thousands of students annually who simply cannot come into our facilities.

We are also interested in having you continue to support research and innovation, but at the college level. We think that we have something to offer because of our connections with business and industry, partnerships that we've formed over the years. We feel that their additional support would be very beneficial to this entire country.

We have funding from the western diversification program and are currently mounting a number of pilot programs in our colleges.

Finally, we feel that enhanced funding for our institutions supports those rural communities that are so important to Canada. We feel that the kind of work we do in those communities--beyond, as I say, the teaching responsibilities that we have--supports aboriginal people in small rural communities in northern Alberta and throughout this province. We play a very important role, and additional support is necessary in those areas.

Thank you, Madam Chair.

The Chair: Thank you very much.

Now we'll hear from the Edmonton Transit System Advisory Board. We'll go to the chair. Go ahead.

Ms. Debra Gillett (Chair, Edmonton Transit System Advisory Board): Good morning, and thank you for this opportunity.

I am Debra Gillett. I'm the current chair of the Edmonton Transit System Advisory Board. We are 12 citizens appointed by Edmonton City Council. We're volunteers and we meet on a monthly basis.

My message is simple this morning: Public transit benefits all citizens. Whether you choose to climb on board a bus, walk, ride a bike, or drive your car, you benefit if efficient, reliable public transit is available.

Ensuring the provision of public transit is a critical part of the competitiveness of Canadian cities. Good public transit promotes a reduction in traffic congestion. Goods move faster, people save time, and those on transit can use the time as productive working time. Where there's good public transit, property values increase.

Transit service is a measure of the vitality of a community. A transit investment ensures the creation of jobs, access to labour forces, and job opportunities. There are also health, safety, and environmental benefits with good public transit. We all win with the provision of efficient, reliable public transit.

However, cities are faced with many challenges, and one of those is aging infrastructure. In Edmonton, our population is increasing, and of course there is expanding demand for municipal services. Central to these challenges or possible opportunities are dollars. Our civic government has direct control over two funding sources: property taxes and user fees.

In Edmonton, transit users pay 45% of the operating costs of transit. Transit has to compete with other community projects, ranging from recreational facilities to sewer repairs, libraries, and police stations.

Canada's future is one in an urban environment. We have to develop policies and programs that will achieve sustainability. The concepts of user-pay, competition, and private delivery of services are incompatible with urban transport.

All modes of urban transportation are subsidized, and the least efficient and the most environmentally damaging mode, the private automobile, is subsidized the most. Sustainable urban transportation policies and programs must attempt to create a level playing field among all modes and, importantly, acknowledge the public and environmental costs of our transportation choices.

The federal and provincial governments are important in the establishment of policies and programs that will promote and support sustainable public transit.

We have three recommendations. Our first recommendation is implementation of the Federation of Canadian Municipalities' request to adopt a fuel-tax-sharing strategy of five cents per litre on an annual basis. Take this five cents per litre from the existing tax revenue, as opposed to adding more fuel taxes.

Our second recommendation is the provision of infrastructure grants targeted to sustainable forms of public transportation, with a strong focus on public transit. We need to promote public transit choices that are attractive to citizens and time-competitive with the private automobile.

Our third and last recommendation is to encourage and promote cost-sharing mechanisms with the provinces that sustain tax-sharing arrangements, like the five cents per litre fuel tax share that Edmonton and Calgary currently receive from the Alberta government.

As citizens, we too will meet the challenge by reminding all levels of government of the importance of committing to strategies that promote our quality of life and acknowledge the complexities of an urban environment.

We will encourage cooperation between neighbouring communities. We will seek opportunities to discuss service and funding options. Importantly, we will reach out and talk to our neighbours to ensure that our urban environment is a place where a smile, a nod of the head, and a helping hand is expected.

Thank you for this opportunity to speak on behalf of the Edmonton Transit System Advisory Board.

The Chair: Thank you very much.

Now we'll hear from the Alberta Real Estate Association. Please commence.

Mr. Les Higa (President, Alberta Real Estate Association): Madam Chairman and members of the committee, my name is Les Higa. I'm the president of the Alberta Real Estate Association. With me today is Janet Poyen, our director of government and industry relations.

The Alberta Real Estate Association, known as AREA, is a provincial arm of organized real estate under the umbrella of the Canadian Real Estate Association, which is known as CREA. AREA represents approximately 8,500 realtors, belonging to 11 boards across the province. While its primary focus in government relations is the provincial government, AREA supports the endeavours of the national association, as well as the local boards, in their approach to other orders of government.

We appreciate this opportunity to speak with you today about two issues, the first being affordable housing, and the second being brownfield development and redevelopment. These issues also have been addressed by CREA as being of concern to realtors across the country.

First, on affordable housing, AREA is currently wrapping up a three-year project, called the affordable housing initiative, or AHI, which has resulted in 19 projects underway or in the planning stages in 15 communities across Alberta. The projects have varied considerably. We have new construction, renovations, rental market, and home ownership all taken into account. What the projects have in common is that realtors and local boards need to be involved, and as well they need broad community support, municipal support, the need for federal and provincial funding, and a target clientele of singles or families that would not otherwise be able to access suitable housing.

Our experience gained through working with the various projects over the past three years has led us to a number of conclusions that we wish to share with you in your pre-budget determinations.

First and foremost, we believe the concept of encouraging cooperation and collaboration among the three orders of government, the private sector, and the not-for-profit organizations is gradually proving to be a workable model. Funding from senior governments provides the catalyst, and planning, decision-making, and fundraising at the local level ensure that public funding is being used appropriately.

A number of national associations are committing resources to finding solutions to the affordable housing problem. Provincial or local non-profit and charitable groups are donating time, expertise, and money to specific projects.

Examples of the projects that have been successfully completed using this model are found in our attachments.

AREA strongly supports current federal government programs aimed at increasing the supply of affordable housing. These include initiatives through CMHC, such as the residential rehabilitation assistance program, or RRAP, the proposed development funding, or PDF, and relaxed criteria that CMHC has put into place for mortgage loan insurance on these projects.

As well, the new CMHC seed funding of up to $20,000 per housing project for feasibility studies has been of benefit. This model follows what our program has done with funding through the real estate foundation.

Other government programs include the surplus federal real property for homelessness initiative, or SFRPHI, and supporting communities partnership initiatives, SCPI.

The federal-provincial affordable housing partnership initiative, a five-year bilateral agreement administered by the provincial government, is contingent upon matching funds. This funding is crucial to the success of many community-sponsored projects.

Speaking to the Alberta experience, I regret to say that the province has been disappointingly slow in advancing funds, and the criteria for approval have been somewhat less than transparent. There's an obvious need for active lobbying by municipalities and community groups if this important program is to achieve its purposes.

AREA therefore strongly recommends that the federal government support funding programs currently in place and give consideration to augmenting the programs that prove to be the most effective.

A review of AREA's AHI project will show the need for greater coordination among the programs that make federal-level funding available to community groups, whether the funding is delivered directly or involves provincial government administration and matching funds. Numerous projects that have firm plans and other funding in place are on hold because of policy decisions, or lack of them, at one of the levels of government. These timing problems indicate the need to streamline the process for approving applications and not unduly delaying projects through lack of coordination of funding sources. Conflicting policies and inefficiencies due to lack of coordination are causing frustration and undermining the spirit of partnership that is being fostered through the federal initiatives.

An outside consultant would identify roadblocks as well as possible opportunities for greater collaboration among the various participants in the affordable housing movement. AREA therefore recommends that the federal government hire a consultant to evaluate pertinent programs and act as a facilitator in coordinating the efforts of the three orders of government and organizations involved in affordable housing initiatives.

During last year's pre-budget consultation meetings, the committee heard from AREA, CREA, and other organizations that new tax measures were needed to stimulate investment in rental property.

The proposals outlined in both our written brief and CREA's submission regarding the tax treatment of small rental investors are critical to a long-term affordable housing plan and to creating a level playing field, which is currently slanted away from these investors.

AREA joins our national association in recommending that the federal government review tax measures related to investment in the residential rental market in order to stimulate badly needed investment in rental properties.

Mrs. Janet Poyen (Director, Government & Industry Relations, Alberta Real Estate Association): Madam Chairman, I'll speak to the brownfield redevelopment.

In our 2003 pre-budget submission, we joined CREA in recommending that the cost of remediating brownfields be treated as a deductible expense in computing income. Your committee's final report went beyond this to recommend that, “Consideration should be given to tax incentives, loans, grants and mortgage guarantees, with such initiatives funded through a reallocation of existing government expenditures”. This indicates that the committee supports the National Round Table on the Environment and the Economy in its call for a national strategy to help turn brownfields into revenue-generating properties. The initiatives listed are consistent with strategic direction number one of the round table report.

Although the 2003 budget contains no such provisions, it is to be hoped that the federal government met with the round table and that an implementation plan has been developed for the upcoming budget year.

Each of the recommendations is accompanied by the proviso that the funds will be expended for projects that would not otherwise be built. Safeguards would be in place to prevent abuse of the system. Assuming that financial incentives are applied judiciously, investment in or tax relief from the upfront remediation costs would be repaid over the long term through increased tax revenue for all orders of government.

Tax measures are often a blunt instrument, subject to failure if not applied in conjunction with local management and/or stakeholder organizations. In supporting these recommendations, we strongly agree with the stipulation that applicability criteria must be carefully designed.

For loans and grants in particular the criteria must be flexible enough to suit local circumstances—and indeed may have to be applied on a project-specific basis, a term that arises frequently in this section of the round table report.

The recommendations could be implemented quickly if the political will were there. Except for mortgage guarantees, the proposals apply to provincial governments as well. In some cases, the municipal government has a role to play.

It is, however, necessary for the federal government to set the wheels in motion. Therefore, AREA recommends that the federal government adopt strategic direction number one of the report of the 2003 National Round Table on the Environment and the Economy, with appropriate controls in order to address upfront remediation costs of redeveloping brownfields.

The challenges of brownfield redevelopment go well beyond the question of upfront costs. Strategic direction number two of the round table report addresses the need for effective public policy for environmental liability and risk management. Indeed, liability protection is referred to as a “cornerstone” of the proposed brownfield redevelopment strategy.

Establishing effective public policy will be a challenging longer-term undertaking, as it requires revisions to existing provincial and territorial legislation. It will require stakeholder and interest group input at this level, in addition to national coordination.

In a current review of provincial environmental legislation, AREA is identifying the liability issue as a major deterrent to the redevelopment of contaminated properties in Alberta.

Other provincial associations have had input into policy in their province. Sharing information and strategies will help us work with the other orders of government, but we believe that leadership must come from the federal government. We recommend that the federal government take a leadership role in working with the other orders of government to establish an effective public policy regime for environmental liability and risk management, as outlined in strategic direction number two of the round table report.

Mr. Les Higa: Madam Chairman, to conclude our presentation, we'd like to address the broader issue of funding for municipalities.

We are all aware of the current debate over funding for our large urban centres and the need for urban sustainability that is being addressed by the National Round Table on the Environment and the Economy. Because of a lower profile, smaller municipalities are not receiving as much attention in this debate, but they also are struggling to survive.

To quote from CREA's submission, “Canadian municipalities are facing a financial crisis”. Downloading responsibilities without ensuring the revenue to fund these responsibilities at adequate levels is unacceptable and irresponsible. It only leads to a heavy reliance on property taxpayers already burdened with high rates in many regions of the country. Property taxes also have a negative impact on the affordability of home ownership, particularly among new home buyers and seniors.

Therefore, in addition to targeted programs for affordable housing and brownfield redevelopment, we strongly urge the federal government to take a leadership role in providing stable funding to municipal governments.

Finally, let me say that realtors care about their communities, and the goal of a vibrant community and adequate shelter for everyone in their community is a natural fit with their line of work.

We thank you for the opportunity to speak with you today, and we would welcome questions later.

The Chair: Thank you. Thank you for submitting the brief, which also had some local examples.

Now we will go to Clean Air Renewable Energy Coalition. Mr. Keating, the floor is yours now.

Mr. John Keating (President, Canadian Hydro Developers Inc.; Clean Air Renewable Energy Coalition): Thank you, Madam Chair.

On behalf of the CARE Coalition, I would also like to thank the committee for the opportunity to speak to you today and to present the CARE Coalition's vision for a low-impact, renewable energy future for Canada and for Canadians.

The CARE Coalition is an acronym for the Clean Air Renewable Energy Coalition. Our coalition consists of a counter-intuitive group of strange bedfellows, basically a confluence of major corporations, environmental organizations, and Canadian municipalities.

On page 2 of the brief that I've presented to you there is a list of our members. Some of the major corporations are not only large utilities, like B.C. Hydro, Ontario Power Generation, and Hydro-Québec, but also other industrials like Suncor and Dupont, as well as smaller corporations like my own Canadian Hydro.

Canadian Hydro, by the way, is an independent power developer. We've been building, owning and operating, and producing low-impact environmental, low-impact power plants, utilizing wind, water, and biomass since 1990. We are publicly listed on the Toronto Stock Exchange.

Before I get into specific recommendations, I'd like to outline what we think is necessary for moving forward.

We think the federal government needs to assist the industry in defining a comprehensive, renewable energy vision for all of Canada. Specifically, in doing so, we need to establish a comprehensive renewable energy resource assessment.

There is a need for R and D money for early-stage technologies. There is also a need for differentiated guaranteed prices for technologies that have left the demonstrations phase and have entered the market, but cannot yet compete with the least-cost alternatives of traditional technologies, and also to emphasize the important role renewable energy will play in a carbon-constrained economy in the decades to come.

Once the comprehensive renewable energy vision has been set, we need to set long-term targets. We need to commit to a package of long-term broad market and government initiatives. We need to develop partnerships between the federal government and provincial and territorial counterparts to provide incentives or measures to increase renewable energy investments in Canada. We also need to emphasize the potential for renewable energy in a carbon-constrained economy.

In the package that we have handed out is also a document called “Vision for a Low-Impact Renewable Energy Future for Canada”. A considerable amount of research has been brought to bear on this very brief document. It's a very easy read. I would recommend that everybody on the committee, in their spare time, take the opportunity to read it. It's very progressive in taking you through the discussion.

The bottom line is, Canada is a country that has terrific natural resources, as we all know, from coast to coast. We are known for our flowing water, our high mountains, our windy prairies, and our arboreal forests. Our forestry industry is known internationally as well, obviously.

We have opportunities, rural, urban, and from coast to coast, in communities where there are mountainous regions, prairie regions, and forested regions, to utilize those resources for energy production. In a carbon-constrained world, which we all know we are headed into in an increasing way, we have to catch up with the rest of the world in terms of providing frameworks that will enable these technologies to make some headway into the mix.

With that, I will briefly jump into some of the specific recommendations.

In terms of setting long-term targets for renewable energy in Canada—and remember, this is a coalition of environmental groups as well as municipalities and corporate interests—the coalition supports a low-impact renewable energy target, accounting for a minimum of 7% of Canada's electricity production by 2010 and going to 15% by 2020. In order to get to 7% by 2010, approximately 30% of new electric-generating capacity between 2000 and 2010, 30% would have to be constructed as low-impact renewable energy. We think that's quite achievable.

For background on that, Canada produces approximately 1% of our electricity consumption from low-impact renewable energy sources. It compares very unfavourably to most other industrialized countries around the world.

The second specific recommendation is to commit to a package of long-term broad market and government initiative incentives. The federal wind power production incentive was established a year ago to provide an incentive to wind power producers to try to bring that technology onto a more level playing field with traditional technologies, such as coal and natural gas. That incentive is one cent per kilowatt hour. The United States has an incentive that totals 2.7¢ per kilowatt hour. What we're asking for is to increase the federal wind power incentive to the level of incentive that is provided by the United States, our major trading partner to the south.

Second, and equally important, this type of incentive should be extended to other renewable energy technologies at the pre-commercial level—other technologies being biomass from forestry wood waste, urban wood waste, and municipal landfill, wave technologies, as well as run-of-the river, low-impact hydro, using the river as it moves rather than large-storage hydro. All of those technologies should be entitled to a level of incentive equivalent to the federal wind power incentive, perhaps not in dollar amounts but adjusted based on the stage of commercial preparedness of each of those technologies.

The federal climate-change-related money that has already been allocated should also, in our view, be used to expand the existing market incentive program funding from $25 million over five years, we feel, to $30 million per year extended to 2012, and along with this should go consultation with the provinces and territories to develop broader-based green energy rebates as well as education programs for consumers.

Our third specific recommendation is that the federal government develop partnerships with the provincial and territorial governments to provide incentives and measures to increase renewable energy investments in Canada. Specifically, the coalition recommends that those three levels of government commit to the purchase of a minimum of 30% of their own electricity needs from low-impact renewables by 2010 and increase that to 80% by 2020.

The provincial or territorial governments, because they rather than the federal government are responsible for electricity policy, should be encouraged by the federal government to mandate or provide clearly identifiable minimum levels of electricity production within their grids from low-impact renewable energy, as is done in many other jurisdictions in the world.

The United States is targeting a national 10% target. We are suggesting a 7% target. Denmark is already at 17%. The European Union has passed a law that targets 22% by 2010. Canada is currently at 1%.

The federal, provincial, and territorial governments should also collaborate to do a comprehensive assessment of Canada's full potential for low-impact energy.

Finally, the vision we've outlined emphasizes the potential for renewable energy in a carbon-constrained economy. The proposed rules for domestic emissions trading that are currently being crafted, and the offset system, do not recognize the potential contribution from zero-emission renewables to avoid greenhouse gas emissions from the energy sector.

There is a program that has been worked on recently—there was an announcement just a week ago from the federal government—outlining the principles for a carbon market in Canada. We call it the large carbon emitters program. It outlines that the domestic emissions trading system will be one of the most important tools. It is targeted, with an agreement among large final emitters. There's no provision made in that program for the contribution renewables will make. It is the large final emitters—in other words, only people who are currently emitting large amounts of pollution—who will be allowed to trade on credits based on the amount of emissions they reduce. So there's really no room in there for existing renewables.

The final slide, Madam Chair, shows the “Benefits Associated with Governmental Investment in Low-Impact Renewable Energy”. They include investment in innovative and sustainable renewable energy technologies, diversification of the economy, support for new industrial developments, the evolution of made-in-Canada manufacturing, regional economic development from coast to coast, new capital investment and job creation, competitiveness, clean air, and reduced GHG emissions.

Finally, the vision we've outlined here is a comprehensive document that could be incorporated as a subset to an overall economic and competitiveness and innovation strategy for Canada.

Thank you, Madam Chair.

The Chair: Thank you very much for your presentation.

We are pleased to now be joined by Mr. Shaw, who is the president of the Northern Alberta Institute of Technology. I'm glad you could make it, sir.

Dr. W.A. (Sam) Shaw (President, Northern Alberta Institute of Technology): Madam Chair, thank you. Welcome to Edmonton and to the snow, which was very delightful this morning.

Our message is simple. We believe the federal government needs to support applied research, apprenticeship, innovation, and some programs for aboriginal peoples to access technical education.

In terms of productivity, Canada is lagging other countries in employer-sponsored training. We're lagging behind the U.S., we're lagging behind the U.K., and yes, we're lagging behind Japan. We believe there need to be incentives for Canadians to pursue lifelong learning in concert with employer-sponsored training.

We've been very fortunate and blessed to have receive some federal, provincial, and business funding for our fuel cell initiative. It's the first of its kind in Canada. I think this time Canada leads the U.S., and President Bush wants to have the U.S. look at alternative energy sources. Well, we're leading.

There's a tremendous resource in Canada that is going untapped. I'm sure my colleague Doug MacRae talked about it. The resource I'm talking about is the colleges and technical institutes and their ability to do applied research; that is, to help business answer today's problems today. Again, I think it's an untapped resource.

Concerning capital funding, institutions such as mine, colleges, and universities are sadly lacking the capital equipment to do quality training. Quality training relates to productivity. We need to look at some incentives for business, either better tax credits or matching funds, so that we can get up-to-date equipment into our institutions.

We've requested federal government support to look into working with the provinces with respect to apprenticeship. That was certainly one of the key themes in Knowledge Matters respecting innovation.

We have a national skills shortage. Whether you're looking at economic development or at the quality of life, there is no other single matter that will affect them more than a skills shortage. We are in a global economy. Some of our clients—Exxon Mobil, BP—can go anywhere in the world for their investments. We're working and training people from Chad and from Angola. They can develop other jurisdictions; we need to have a skilled workforce.

The last item is around aboriginal peoples. We believe there needs to be more of a focus on getting aboriginal people into technical education. The math, science, and technology are critical to get into technical training. I'll give you one quick example. We are the first to bring the Think Big program to Canada. That Think Big program is in concert with Caterpillar Inc.—they have a number of programs in the U.S.—and Finning (Canada). In order to get into the program—we're talking about a heavy equipment mechanic program—you need math 30, English 30, and yes, physics 30. How many people are coming out of K to 12 with physics 30? Just think how many people are actually coming out of some of the aboriginal K to 12 systems with those three components. It's not very many. Again, I think there has to be a renewed emphasis on this.

Finally, 42 years ago the federal government, in looking at the vocational and technical training agreement, provided the funding to create NAIT. I can honestly tell you there was never more of a need than now to look at tackling the national skills shortage. We need to be focused on that.

Thank you so much.

The Chair: Thank you very much. You'll be pleased to know that yesterday we heard from Fuel Cells Canada, and in just one year the number of companies as world leaders involved in that inside Canada has grown tremendously. We're very heartened by that.

Now our final presenter of the morning is Dr. Patricia Clements. Go ahead.

Dr. Patricia Clements (Past President, Canadian Federation of the Humanities and Social Sciences; Professor of English, University of Alberta, As Individual): Thank you very much, Madam Chair.

I should say that I am a professor of English at the University of Alberta, but I also used to be the dean of arts. Life is easier since. And I'm past president of the Canadian Federation for the Humanities and Social Sciences, which represents about 30,000 researchers in Canada--I think the largest community of researchers.

I want to begin with two warm thanks. One is to the committee for coming here to conduct this consultation with those of us who have an interest in the next federal budget. I think this is a terrifically important part of the budget process, Madam Chair, and I thank you very much for coming. And Sam already mentioned the snow.

The second thanks I want to express are these. Last year the federal budget provided for the establishment of the Canada Graduate Scholarships, earmarking 60% of these for graduate students in the social sciences and humanities. I want to say that this is a tremendously needed injection of funds and it's an outstanding investment in the future. It's going to make a major difference across the full spectrum of science in Canada, including those areas that my two colleagues are interested in, and it's going to make a special difference in the human sciences. It has tripled the ability of the Social Sciences and Humanities Research Council to fund the training of excellent graduate students, and given the massively and rapidly increasing need for new PhDs, it's going to have a long-term impact in our universities, in government, in business, and in industry. This is going to have a huge cumulative impact.

We are gratefully aware that the finance committee's recommendation last year for an asymmetrical funding increase to the Social Sciences and Humanities Research Council will have powerfully influenced the government in its decision-making around that program.

I'm here to say that I hope this funding for graduate students in the human sciences is a sign that the federal government will continue to close the remaining critical gap in the overall funding of research in Canada. In what I have to say today I won't speak about what I think is needed now to maximize the contribution of the social sciences in humanities.

In the last few years I think we've learned a lot about the sensitive ecologies of knowledge. We are now acutely aware that our country depends in many critical ways, and some have been mentioned this morning, on the excellence of our knowledge production, on our innovation, and on the competitiveness of our education systems. In these new circumstances the Government of Canada has established an extraordinarily effective set of measures to support the development and management of knowledge in this country, measures that have truly changed the environment here.

For instance, the CFI, the Canada Foundation for Innovation, of which I'm a particular fan, and the Canada Research Chairs have both demonstrated innovation and creativity in the incubation, support, and management of research.

Even as these developments have unfolded over the last four or five years, we begin to understand some of their other impacts. As with any ecological system, the ecologies of knowledge are intrinsically linked with any endangered part, risking the overall health and sustenance of the entire system.

In other words, the process of innovation and invention itself depends on strength across the full spectrum of the sciences, including, importantly, the human sciences.

First, let me emphasize how important it is to have a strong human science capacity in this country.

Sociologist Rogers Hollingsworth has done research on the social characteristics of institutions that have produced what he calls “paradigm-altering science”, that is, science that gets nominated for big prizes like the Nobel Prize. The first characteristic of such institutions, he says, is a rich multidisciplinarity with strengths across the full range of knowledges. He says creative ideas occur at the interface. And I was struck by John Keating's comment about counter-intuitive groups having strange bedfellows. That may be where the greatest creativity occurs.

We also understand now that knowledge has its real impact in circulation. Research in the human sciences has its impact in widening circles. Out of the library and out of the lab it moves into the economy, the society, the health care system, culture, the communications industry, international relations, public policy, and so on.

We talk a lot about knowledge transfer these days, but more and more knowledge transfer is taken to mean exclusively commercialization. To put the contribution of the human sciences into this commercial terminology, let me talk about our key product as education.

In 2001 Canadian universities granted 81,000 undergraduate degrees in arts, law, business, education, and the social sciences side of health, which is so important, and granted 17,400 graduate students with MAs and PhDs.

The classrooms and the labs of these students are the largest single scene of knowledge transfer in this country in the university system, and this transfer has enormous ultimate impact. Our key product, then, is by far the largest percentage of Canadian undergraduate and graduate students, young Canadians who will very shortly--more shortly than some of us would wish--be running all of those other systems I've mentioned.

It's interesting that it was the CEOs of high-tech companies, of whom Doug and Sam will be keenly aware, who gave the first loud clarion call to the need for the work they will do.

As I said earlier, ecologies of knowledge are imbalanced at the moment. At present, we continue to lose capacity in our universities as we live with the consequences of depleting core budgets, which are disproportionately borne by faculties of arts and social sciences and education and so on.

I was dean of arts here in the mid 1990s when Alberta universities took a 21% budget cut. As we approach the midpoint of the next decade, we are still losing capacity. Two years ago this faculty of art, which is one of the largest faculties of art in one of the largest universities of Canada, lost its Canadian studies program. Last year capacity was cut in some areas of international study--bad timing.

Across the whole country we feel the consequences of the inability of the Social Sciences and Humanities Research Council of Canada to meet the needs of a new generation. What is required here is an act of the imagination of the scope and boldness that produced a CIHR and the CFI, which have really changed the environment.

What we need is a partnered act of imagination involving the council itself, the community researchers, the Government of Canada, and very many other stakeholders in those communities I've mentioned, to whom the research in the humanities and social sciences is vital.

Last year Dr. Martha Piper gave the Kiliam lecture, which galvanized us all, I think, to think big about what the social sciences and humanities could contribute to this country and about putting our shoulder to the wheel of reforming. She argued that the work is fundamental to our country's health, to our sense of a civil society, and she called for a transformation of the existing Social Sciences and Humanities Research Council.

Over the years that council has been an outstanding instrument for the encouragement and support of human science research, but it is a new age and we need a transformation that will enable the council to meet the new and expanded needs of the country.

Shortly after Dr. Piper gave her talk--she is an epidemiologist--the general assembly of the Canadian Federation of the Humanities and Social Sciences voted, I think unanimously, to press forward with this issue and to support the idea--to go full steam ahead on the idea of transformation.

My first recommendation to the finance committee, Madam Chair, is that you support the project of creative transformation of the Social Sciences and Humanities Research Council of Canada with a view to strengthening the contribution that the human sciences can make to the country we live in.

I have two other recommendations. One is that the government continue to address as a critical priority the budget of the council and that it provide an asymmetrical increase to enable the council to meet the urgent needs of the new generation of researchers already in the chairs, and every year there are more.

I counted my own department the other day: 42 members of the department I left to become dean are no longer present. Not all of them have been replaced, alas, but many of them have been replaced by new scholars.

All around us, Madam Chair, we have the accelerating impacts of the generation shift we've been talking about for the last while. In our universities, the replacement of the boomers is proceeding, and it's perfectly clear that the quality of the system will depend on the availability of the young scholars to establish effective research careers.

My final recommendation is that the Government of Canada address the stress capacity of Canadian universities by establishing a Canada post-secondary education transfer to create transparency and accountability to the Canadian public for the federal government's investment in the future.

In closing, Madam Chair, I want to urge committee members to continue to press for asymmetrical funding for the humanities and social sciences to allow our ecologies of knowledge to flourish.

Thanks.

The Chair: Thank you very much. We happened to have SSHRC in Ottawa a couple of weeks ago, and I think the committee was very open with its support for this transformation.

Dr. Patricia Clements: It could be very exciting.

The Chair: Yes. That's good.

We'll start 10-minute rounds. Mr. Casson.

Mr. Rick Casson: Thank you, Madam Chairman, and thank you all very much for taking the time to come to committee and express your views in areas you're concerned with and involved in.

Debra, you have a unique qualification. You're an appointed volunteer. I hope you volunteered to be appointed.

You make a statement that the private automobile is the most highly subsidized form of transportation. What do you base that on?

Ms. Debra Gillett: It's based on a 1991 study. It's part of the Transport 2021 technical report. It was a study done by KPMG and it was specifically the cost of transporting people in British Columbia's lower mainland.

Specifically, they derived that $2.7 billion was spent on private automobiles, $360 million on public transit, and $2 million on non-motorized transport.

Mr. Rick Casson: You were ready for that question. You had the---

Ms. Debra Gillett: I was ready.

Mr. Rick Casson: To Mr. Shaw and Mr. MacRae, the shortage of trained and skilled people that we're going to face in Canada is huge. The facilities needed to train and to educate are one thing, and you mentioned infrastructure needs, deferred maintenance problems, all of that. One of the things we will need to do is rely on immigration to a large extent to supply the people needed to be trained to move forward. How are you--I guess, Mr. Shaw, your institution, and maybe Mr. MacRae has a broader base--equipped to deal with people, the language issue, the culture issues? Are you addressing these types of things? Are you gearing up for that prospect?

Dr. W.A. (Sam) Shaw: It's project by project. We are working with the Edmonton Mennonite Centre. This year that centre has students, probably from 15 different countries, who are trained in engineering. We are introducing them to the standards here in Alberta.

The language barrier is certainly something we have addressed, both with ESL and something we call ESP, English for special purposes, that's very dedicated to some of the areas, whether it's the high-tech system or whether it's looking at some of the technical side. So, yes, we are doing it.

However, it's project by project. We do not have a national strategy about how to do that. As we start looking at the qualifications around the world, we find that those qualifications are sadly lacking, even in the trades area, and we will bring them on. Then we start looking at some of the cost overruns. It is costing us significant dollars as well.

I think what we are learning to do, and certainly our Minister of Learning has been working with Minister Coderre in looking at some of the immigration policies around whether we can do some pre-testing in some of the different jurisdictions before they come. Again, language is a barrier. Certainly on-the-job-site language is a barrier. I think we need to expedite that.

Again, in Alberta the minister has dedicated in the new budget, hopefully soon, some resources on multi-languages on the K to 12 side. Again, I think that will also help.

Dr. Doug MacRae: From the provincial perspective, just to underscore what Sam was talking about, we have institutions throughout this province, particularly in large urban areas—and I would point to NorQuest College in Edmonton, and Bull Valley College in Calgary—who are providing English as second language training for thousands of students annually.

You've touched on a major issue. We have quality trained people coming into this country; however, their basic language skills are not there to make the transition into the workforce, so people are being underemployed.

I guess the other thing we would point to are recent announcements in this province to enable students from other countries to have easier access into our post-secondary education system, and then to allow people to stay in this country for an additional period of time, even after they've completed their training.

That's the other thing, to not only talk in terms of immigrants who are coming into Canada and providing them with skills training or language training, but also to attract students from other countries. We have an effective provincial body—which I see Dr. Shaw is cheering—with regard to student recruitment and the provision of training from Canada into other countries.

Did you want to talk about ACIE for a second?

The Chair: Dr. Shaw, did you want to comment on your export of educational training? It's a good opportunity.

Dr. W.A. (Sam) Shaw: Yes. Again, just picking up on what Doug indicated, we lag other countries in terms of international students, and some of that has to do with the visa situation.

But the other component is our actual presence. Certainly in Southeast Asia.... Australia is heavily committed in terms of looking at international students. I may have my stat wrong, but the third largest industry in Australia is actually recruitment of students into Australia. We lag in that.

The other component in terms of looking at the international presence is that we do not look at promoting ourselves in terms of the knowledge transfer, and I think we need to do that, and we need to be targeted to do that.

Unfortunately, the language barrier is a very real component. In fact, I will be teaching my class tonight on organizational behaviour. I would say that at least a third of that class is international students.

Looking at the social sciences component, it's very difficult to get across those concepts, even with ESL. In looking at some of the skill sets in the School of Business, we need to do a lot more work on the conceptual framework we deal with. Just having one or two courses in ESL is still not enough. When you translate that onto a work site, the issues of safety are very, very important to take a look at.

So, yes, immigration may be one of the strategies to use as we look at the stats for 2011, but I think we must do a better job in looking at how to encourage those individuals to get the kind of language acquisition that will give them the success tools for the workplace, as well as for our educational programs, as well as considering which jurisdictions we're going to be looking at. If you start looking at the jurisdictions, the same countries that are looking at skill shortages are the ones from which we would want to encourage emigration. So we've got some issues around that.

Mr. Rick Casson: Mr. Keating, if I could turn to you for a second, you commented on emissions trading in the energy sector and the fact that if it does get to be an industry of its own, your concern is about investment dollars leaving Canada to go elsewhere.

Can you address that a little more clearly?

Mr. John Keating: With respect to the large emitter program, there is the risk that companies will buy credits from offshore and not from Canadian renewable energy producers, to the detriment of all of Canada.

We were very disappointed to see the federal government endorse the large emitter program proposal, because it basically excludes zero-emissions producers from the picture. So you get a large emitter who puts up a wind plant, reduces his electricity consumption from the grid, and claims credits internally--and can sell those credits. You get an independent power producer like ourselves who puts up a wind plant, but we don't have credits to sell because we are not an emitter to begin with. We have to be an incumbent emitter in order to participate in the proposed emissions trading scheme.

That said, this program is now becoming a reality. Then the framework for encouraging renewal energy developers nationally.... This is not a small industry, and it is not large. I spoke about pre-commercial. A lot of this technology is commercial; it's just a little higher-cost. The wind energy industry is a commercial industry today. It's just a little bit higher-cost.

The biomass, for example, is commercial technology. We are building a large plant in Grande Prairie, here in Alberta. The Alberta government is supporting that project by buying power from it for 20 years. Without that contract, the project would not happen.

So the Government of Alberta is actually leading by example, by buying green power to a very large extent. They will be buying certified green power for the next 10 or 20 years, depending on the supplier, for over 90% of their supply.

But with respect to the large emitter program, it was a very disappointing development on the one hand, but on the other hand, perhaps an opportunity for the federal government to work towards other initiatives, such as working with the territorial and provincial governments to set a renewable portfolio standard or target.

The 7% target that we fixed, for instance, can be legislated by individual provinces in cooperation with the federal government, maybe in conjunction with a wind power incentive kind of program for these other technologies, or a green consumer rebate or green consumer tax credit. We have all kinds of ideas that we have brought forward in past years.

Mr. Rick Casson: I'm from southern Alberta, and there has certainly been an investment in wind power in that area in the last number of years. It's incredible to see the number of windmills going up.

Mr. John Keating: Yes, it is. Across Canada we now have 317 megawatts of installed wind capacity, which is pretty substantial, but there are 130,000 megawatts of installed generating capacity in the nation. So whatever that percentage is, it's a pretty small fraction of a 1% share, whereas if you look at a country like Denmark, it's 17%. It's a coal-based generation country as well, just like the province of Alberta is, and they've been able to achieve that.

The Chair: Thank you very much.

Dr. Shaw, you alluded to the 2011 statistics, and since that has not come up in evidence, it's an important point.

As a point of information for our record, I invite you to state what those statistics are all about.

Dr. W.A. (Sam) Shaw: What I was referring to is the fact that in 2011 the demographics indicate that every job needs to be filled through immigration, as opposed to by Canadians. That is very, very significant as we start looking at those statistics 5, 10, and 15 years from now. What I was saying earlier is that our whole quality of life, our social fabric, is dependent upon having a skilled workforce, so we need to attend to that in many ways.

Again, I think immigration is one strategy, but I also think utilizing aboriginal people, people with disabilities, and so forth, has to be factored into our strategies.

In the aboriginal communities, as you know, the population is increasing at 25%, and we need to encourage some strategies around getting access to technical education. It's critical for us.

The Chair: We tried, as a finance committee, to make that point in our report last year, but I don't think most Canadians still understand that.

Thank you very much.

Now we'll go to Mr. Discepola.

Mr. Nick Discepola: Thank you, Chair.

One of the underlying themes for the past three days has been that more has to be done in the way of transfers to the provinces. If I analysed what has happened in your province since fiscal year 1996-97 to the projected fiscal year 2003-04, of the roughly $800 million increase in transfer payments to the province, the totality--if not more than that--went directly into health care funding and education, and social programs have lagged far behind.

I think one of the ensuing debates over the next little while with our government is going to be how to ensure accountability when that money is transferred to the provinces. The idea has been floated here, which I fully endorse and plan to elaborate on, to break down the CHST not only into the health and social cadre component, but also the education component.

What guarantees would you have, even if we did that, that the provinces would actually spend the targeted amounts of money in those pre-defined areas? What measures should we be looking at, at this stage, to ensure that happens?

Dr. Doug MacRae: Of course, we can't speak for the province of Alberta.

The point I would make is that I think we are starting to have success in this province in making the point that while health care is important to all Albertans and all Canadians, it's almost an endless demand for resources in the health care field.

We also make the point that a better educated population in fact is a healthier population. In the paper that we distributed I referred to a socio-economic impact study that our colleges and technical institutes undertook.

One of the findings, interestingly enough, was that as you increase your educational background, your dependence on the health care system, the possibility of incarceration, and the possibility of unemployment in fact go down. We were able to demonstrate that. It's intuitive. We all believe that. But we were able to demonstrate that and talk in terms of return on investment to taxpayers and return on investment to student graduates as a result of post-secondary education.

We're starting to make some inroads in the province particularly, talking in terms of the investment and the return on that investment. Therefore, you have reduced costs associated with health care.

Our premier, for example, is starting to talk in terms of the year 2004 about moving into an era where we're focusing on education, not to the detriment of health. Education, post-secondary education particularly, is taking on a much more important role and therefore needs to be funded more appropriately.

It's always difficult. We don't try to make the case that you take money away from health and put it into post-secondary education. We really believe--and, as I said, we've made some headway in convincing decision-makers in this province--that the future of this province is very much dependent on the resources that are put into post-secondary education, whether at the university level or at the level of colleges or technical institutes.

I think you posed the question, how can we have guarantees from the province? I don't know.

Mr. Nick Discepola: Well, I say that because around Ottawa circles most of my colleagues talk about the need for more health care funding to the tune of $2 billion, which is what the Prime Minister undertook with the condition that we still meet our surplus target.

No one's talking about more in education funding or transfers. You're going to have to lobby a little bit harder if you want to get that.

Dr. Doug MacRae: Well, nobody was talking about funding in post-secondary or in education generally in this province either until three months ago, when the premier started to talk in terms of the importance of post-secondary education. I'm encouraged.

I know that certainly when premiers get together and talk to the Prime Minister there is a lot of talk about the $2 billion additional funding for health care.

As I say, I guess I'm encouraged. We're starting to see it in this province. We believe the premier's address to the province in February will focus on education. We've gone through a major review of our K to 12 system here, with a call for significant additional resources both in capital and operating costs. Our association is making the same claim for the needs in post-secondary education.

I think, though, that the key is coming back to the other argument about this being an investment. Health care, generally speaking, is an expenditure. We're talking in terms of an investment. If you invest in education, you are also reducing your expenditure ultimately in health.

Mr. Nick Discepola: I would agree.

Mr. Shaw, you've revealed a startling statistic, and I would like you to elaborate, possibly for my personal edification.

By 2011, you're saying that most of the skilled labour will have to be filled through new immigration policies. If we invest more in education, can we see less of that requirement? Or do you still feel that in certain areas...? I'd like you to elaborate in which areas you feel it can only be done through stronger immigration policies.

Dr. W.A. (Sam) Shaw: It's a good question.

Again, I would say that the sad state of affairs is that we have approximately 30% of the K to 12 students going on to post-secondary. If we increase that percentage, the universities, colleges, and technical institutes do not have the infrastructure to handle those increases. So we need to be working in concert with the continuum of K to 12 and post-secondary.

I would say again that we need to do a better job on the K to 12 side to get those students completing. If you look at aboriginal communities, the completion rates are significantly less than those you would find across Canada.

I'll be a little more blunt than my colleague. I would say that the reason Canadians talk about health is because we have a national promise. The reason we don't talk about education is because we have a provincial promise.

We need a national promise around education. If we are going to tackle the skills shortage, if we are going to become competitive in a global economy, we need a trained workforce. We need to have that national debate around what is the educational promise in Canada. What is the educational promise we have for our K to 12 students? What is the promise we have for post-secondary students? I don't think we have that promise on a Canadian scheme. Therefore, the debate is usually provincial. I think we need to start tackling this as a national issue, and then have the debate and look at where we go as a country.

I think the other component to this is that you do see various provinces doing different kinds of things on the educational side, K to 12, post-secondary, and so forth. Again, I think we need to raise that debate to a national level so that we start tackling it.

If we made a national promise to say we want 50% of our K to 12 students to go on to post-secondary, what would that do to our consideration of the skills shortage? But we have yet to set those targets.

I would like to say to the federal government that the reports on Knowledge Matters were excellent. They established some targets. We need to meet those targets. Again, if we did the same thing with K to 12 and post-secondary, I think you would find that Canada would go to the top in terms of being a global competitor in regard to not only knowledge but also in terms of attracting economic development.

M. Nick Discepola: Thank you.

Do I have any time?

The Chair: You have two minutes--actually, a minute and a half.

Mr. Nick Discepola: For the Alberta Real Estate Association, one of your recommendations calls for hiring a consultant to evaluate their current programs. Isn't that the role of the Auditor General of the country? Where do you see that role not being fulfilled by the Auditor General for you to make that recommendation?

Mr. Les Higa: Actually, that has to do with more direct contact with the stakeholders we have been involved in with our affordable housing initiative across the province. We found that one of the significant challenges to bringing projects to fruition was to get all the parties together in one room and have them stop trying to define the problem and actually come up with solutions that we could put into effect.

So to say that it's an Auditor General problem...I don't know whether they would have the resources to do that, to be on the spot in these various communities to meet with the stakeholder groups and keep people on line and try to help streamline the process.

That's where we are coming from in terms of our recommendation. The last three years under our affordable housing initiative we hired two consultants in the province, one for northern Alberta and one for southern Alberta, to fulfil that role. We attribute a lot of the success we have had across the province to those parties and what they were able to accomplish.

Mr. Nick Discepola: Another area I want to tackle, because I want to get it in, is your assertion that we should be looking at tax measures in order to stimulate housing. Has your association any position on using a GST tax holiday or some form thereof, and would that stimulate enough demand to fulfil the need?

Mr. Les Higa: Can I refer that to Janet?

Mrs. Janet Poyen: We know that one of our other associations is promoting that.

We've sort of held back on it because there are studies out there that show that tax measures aren't as effective as actually providing grants.

I think it was the TD Bank that did a massive report, and we are really concentrating more on their recommendation that granting funds for projects works better than a lot of tax relief, although we are proposing tax changes for small investors in rental housing as an immediate thing.

Mr. Nick Discepola: Thank you.

The Chair: Thank you very much.

Before we go to Ms. Leung, I want to welcome Judy Wasylycia-Leis back from Ottawa from the votes last night.

Mr. Nick Discepola: Do you have to welcome her back?

Some hon. members: Oh, oh!

The Chair: We are an all-party committee, Mr. Discepola.

Go ahead, Ms. Leung.

Ms. Sophia Leung: Thank you, Madam Chair, and thank you all for your presentations.

I just want to make a comment following my colleague here. Health care is very important to all Canadians, but for me, education is equally important. I think you all know we have a secondary education committee in Parliament. I've been on the committee for five years, so that's a very high priority for me. I just want you to know that.

As a matter of fact, last week we had a big discussion--at least for me--on education, and a lot of my colleagues were on the same level of thinking. We discussed different things on secondaryeducation funding, and also...actually, I'm not supposed to tell you about what goes on in caucus, but I will go further and suggest that maybe we should have a cabinet committee on education, because we all know that education is such a dicey area because of the accountability. We always question that, but we feel it's increasingly important--just to follow on your comment.

I want to ask a question on immigration. It's very important. I would just comment that we recognize the increasing need because of the aging population. It's inevitable. As a matter of fact, the committee went to Europe and exchanged some ideas.

I have to say one thing. All of the European countries--six countries--are telling us they have a lot of problems. We have an equal share, but they were surprised. Only Canada seems able to absorb many immigrants and still manage to live in harmony and under peaceful conditions. They look at us, and it's really something to admire and to ask how....

They actually have a lot of problems now with illegal migrants. That doesn't mean we don't, but on the other hand, there are a lot of things for us to know. It's really a plus for us, but in the meantime, it is quite a concern.

The skilled workers list is another area we could discuss for a long time, but I just want to say that there is a lot of debate on the skilled workers. Perhaps preparations should be made and more orientation should be provided to them before they come here--on language, on cultural and social adaptations, and all that. In the meantime, I also stress that there is a strong role that government can play in the settlement project and in the employment area.

In Vancouver, where I'm from, we have very strong community groups trying to face this to find some solutions in this area. For example, we'll have employment fairs. That's something I'm really trying to encourage in other areas. It's essentially a partnership of the government, the community organizations, plus whoever wants to join, to have a big fair or conference. It's not really a discussion, but it's to invite a few dozen companies, private companies or government agencies, whoever has jobs for the newcomers.

I was there to cut the ribbon and give speeches. I was amazed. Thousands of people came, and I can see that it's really representative of the diversity.

But I acknowledge the concern. In the meantime, I think there's a way. I suggest a partnership with business.

I spoke to our board of trade, the leaders there. Maybe they should enter, to bring them all together. I've been told that there are many jobs, but they're not filled by appropriate applicants, and somehow this kind of match should be initiated.

But to go back to the concern on the skills, I think you have to know the other side equally.

I have a chance to talk to new immigrants. They feel very frustrated, very disappointed. They feel that they came here with skills, with education--we hear that all the time--but then they become orderlies in hospitals or engineers driving taxis.

This is the way with training and education. It's not just the government's responsibility, but I think it's equally everyone's, all of us, to try to come to a plan.

I want to ask some of you for suggestions about how we can prepare to fill this gap or shortage of skilled workers in Canada.

You mentioned that we need to encourage aboriginal persons. Yes, we have a lot of human resources not being tapped.

So I want your comments on that.

The Chair: Dr. Clements, and then Dr. Shaw.

Dr. Patricia Clements: First of all, I think every issue you've raised is absolutely critical and a marvellous demonstration of what we need to do in deploying our knowledge and research resources.

Immigration, integration, training, the recruitment of foreign students, the integration of foreign students when they get here, all of that is exactly the sort of thing that should be in hand, using the resources of the Social Sciences and Humanities Research Council.

I don't want to make this a self-serving thing. This is, however, the case. Every issue you raised is a social issue, a public policy issue, and an issue relating to the expertise on the social side of research.

Your question was, how can we do this? I thought the answer was in your question. It is in partnering, and in partnering the research with the problem. I think that has to be the answer to the question you've raised about how to deal with those current and impending issues.

And incidentally, the Government of Canada has partnered with the Social Sciences and Humanities Research Council in a program on immigration and integration. There is a major centre for the study of immigration and integration at the University of Alberta that is doing extremely interesting work with any number of communities in Edmonton.

There just needs to be a very great deal more of that, in my opinion--and that's only a small fraction of the answer to your question, I'm sure.

The Chair: Dr. Shaw, go ahead.

Dr. W.A. (Sam) Shaw: I guess I'd say a couple of things. One is that I think we need to be a lot more strategic.

Currently, NAIT is operating in 19 countries around the world. Countries like Vietnam, Cuba, or Egypt have good universities, but what they're missing is the technical education. So when some of the immigrants come to Canada, they do not have the skills, but they have been trained in other disciplines.

So when we work with community organizations like the Mennonite Centre, we actually try to give them the skills to work in that area.

You know, Peter Adams' group does a very good job in regard to post-secondary education. I just want to laud the efforts of Peter and his colleagues such as you. But we need to look at the transparency of some of our other policies, and I would bring up CIDA, for example. We're putting investments strategically in different parts of the world, and the priorities are in basic education. I think we need to start prioritizing technical education.

We've been the recipient of numerous CIDA projects, and again, they are very good. But we now need to start looking at how we look at those projects in relationship to our skill shortage.

The other component is working with business. So often when we work with business they say there is a skill shortage. Okay, let's quantify that skill shortage. They say it may not be right now, but they need to have this project approved--and I'm thinking of the oil sands and so forth.

We need to blend some of that approval process into looking at our immigration strategies so that we're working hand in hand. Right now it's a bit of a disconnect. We need to do a better job of that and then start targeting what we need in terms of skill sets.

The Chair: Thank you very much.

Mr. MacRae, a final word on this point.

Dr. Doug MacRae: This will be very brief. Both of the last two committee members talked about accountability. I don't think we addressed that very effectively.

In this province it is public policy.... About six or seven years ago our post-secondary department put together, in conjunction with the institutions, measures of performance. They're okay. They're not great, but they're okay.

I think that's the kind of thing that needs to be done to the satisfaction of decision-makers like yourselves but also of the general public. Where is their money going? We talked about health earlier. Am I satisfied that I have good quality health care as a result of the billions of dollars that are expended? I'm not so sure.

In post-secondary education, what we've done in conjunction with the department is outline at least some of the factors that we're interested in as far as accountability, and we assume the general public is. How many students are coming in to your institutions? Are you growing or not? How many students are you graduating? What are they doing when they graduate? How are you utilizing your facilities? How much money do you spend on administration as compared to instruction or whatever? So we have about 7 or 8 or 10 measures.

There is a number of measures of that kind that I think are appropriate. I think it satisfies the general population that their tax dollars are being used in some kind of an effective manner. We are also measuring that. So you're comparing one institution to the others in some ways, but you're also comparing one institution with itself. Last year you graduated x number of people. This year you graduated so many more. This is what is happening with your graduates. NAIT talks with great pride about 93% or 95% of their graduates going on to employment within six months.

Okay, I'm finished.

The Chair: Thank you very much.

Judy, I'm going to give you one minute if you want to say something.

Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): I wouldn't mind making a brief comment or putting a question. I am sorry I missed all of your presentations, but it sounds as if it has been a very interesting discussion.

I guess I would like to ask, not to disappoint Nick, whether or not you think, besides looking for partnerships, as Patricia Clements suggested, or accountability, as Mr. MacRae suggested, or for transparency, as Mr. Shaw suggested, that we also need to look at shifting the present government's fiscal and economic policies so that there is a commitment to allocate from within existing capabilities, wealth of the nation, for such priorities as education, environment, and public transit?

It seems to me that for all the time we've had a fiscal dividend, for the last three or four budgets of the surplus, we've been promised that that should be split 50-50: 50% on public spending, 50% on debt reduction and tax cuts. Most independent analysts will say it's been a 90-10 split, with only 10% on spending in the areas you're talking about.

It seems to me, given the news last week of another $7 billion surplus in last year's fiscal budget, notwithstanding the contingency fund and the money set aside for prudence, that we have some flexibility if we can convince the government, especially Paul Martin, given some of his statements, that we have to shift the balance back toward investing in education and transit and environment.

The Chair: Actually, we can't do a question and answer because we're over time and I promised people they'd be out of here. We also have another panel in an hour. But I will tell Ms. Wasylycia-Leis that sitting here in Alberta this morning, no one on the two panels this morning has addressed debt reduction as a priority item and no one has addressed tax cuts as a priority item. But we've had a lot of requests and interest in using the tax policy as strategic investments, whether it's for brownfield, affordable housing, or education, our institutions, and especially our educational partnerships.

Perhaps later today we'll revisit some of those issues. I know that's a big question and all of you could help us answer it, but we'll be doing this for a few more weeks yet so we'll have some time.

We all like hearing your presentations, but the interaction is invaluable to us, and I thank you for participating with us in this today.

We are adjourned. Thank you very much and have a safe journey home.