FINA Committee Report

LIST OF RECOMMENDATIONS

RECOMMENDATION 1

The federal government continue to implement the five-year tax reduction plan announced in the February 2000 budget and the October 2000 Economic Statement and Budget Update. (p. 36)

RECOMMENDATION 2

The federal government continue to focus on a balanced budget, with any surplus used to pay down its market debt. The government should consider the extent to which savings realized as a consequence of lower debt-interest costs should be spent on existing or new programs that have been identified as priorities for Canadians. Moreover, the government should undertake an ongoing review of federal expenditures with a view to monitoring continuously the activities that are priorities for Canadians in order that appropriate reallocation of spending occurs. Finally, spending increases should be limited to the rate of inflation and population growth. (p. 38)

RECOMMENDATION 3

The federal government consider further personal income tax rate reductions as a source of economic stimulus and for reasons of competitiveness, as resources permit. (p. 42)

RECOMMENDATION 4

The Department of Finance report to Parliament annually on the extent to which corporate rates of taxation in Canada are competitive with rates in the G-7 nations, especially the United States. (p. 45)

RECOMMENDATION 5

The federal government eliminate the capital tax in the next federal budget. (p. 47)

RECOMMENDATION 6

The federal government, in the next budget, raise Registered Retirement Savings Plan and Registered Pension Plan contribution limits to $19,000 in order to allow those in the top income tax bracket to shelter 18% of earnings. Moreover, contribution limits should be raised in accordance with the inflation rate beginning immediately.
(p. 50)

RECOMMENDATION 7

The federal government increase the Canada Education Savings Grant contribution for low- and middle-income families to 30% of the first $1,000 contributed annually to a Registered Education Savings Plan. Moreover, the Income Tax Act should be amended to permit the provinces and territories to set up contribution programs similar to the Canada Education Savings Grant. Finally, the government should amend the Bankruptcy Act to provide protection for Registered Education Savings Plan funds. (p. 50-51)

RECOMMENDATION 8

The federal government reduce the Employment Insurance premium rate. Moreover, the government should immediately commence a public consultation process regarding the setting of the premium rate, with additional rate reductions considered in accordance with the new premium rate-setting process following the consultation process. The rate should be set to ensure, to the extent possible, sufficient revenues to cover program costs and fund an appropriate reserve that would enable relative stability in the rate over the business cycle. (p. 52)

RECOMMENDATION 9

The federal government amend the Employment Insurance Act to create a yearly basic exemption. The amount of the exemption should be determined following consultation with stakeholders. This change should occur concurrently with a reduction in Employment Insurance premium rates. (p. 54)

RECOMMENDATION 10

The federal government, as a priority, undertake a comprehensive review of capital cost allowance rates to ensure that they accurately reflect the pace of technological change, the ever-shortening economic life of many pieces of modern machinery and competitiveness concerns. (p. 55)

RECOMMENDATION 11

The federal government lower the federal excise tax rate applicable to small breweries to achieve parity with rates in the United States.
(p. 56)

RECOMMENDATION 12

The federal government, in the next budget, consider changes to the size and manner of calculation of the Air Travellers Security Charge. The government should have regard for the consensus reached in the public consultation process and the actual costs of providing air security. Moreover, a mechanism should be established for ongoing review of the manner of calculation and amount of the charge in order to ensure that revenues collected are just sufficient to cover the reasonable costs of air security. (p. 58)

RECOMMENDATION 13

The federal government increase funds for the federal granting councils and, in so doing, ensure that the Social Sciences and Humanities Research Council of Canada receives an appropriate share of the allocation. Moreover, the federal granting councils and the Canada Foundation for Innovation should consider the concerns of smaller universities and colleges when disbursing funds, and should ensure that they do not face discrimination. (p. 64)

RECOMMENDATION 14

The federal government, in the next budget, provide a permanent program for financing the indirect costs of federally funded research. (p. 65)

RECOMMENDATION 15

A permanent program financing 40% of the indirect costs of federally funded research be implemented in the next budget. (p. 65)

RECOMMENDATION 16

The federal government simplify the process by which firms access the Scientific Research and Experimental Development investment tax credit. Moreover, a change should be made that would allow the credit to be better utilized by a company during periods that are not profitable so as to act as a continuing incentive to invest in research and development. (p. 66)

RECOMMENDATION 17

The federal government create a commercialization office within Industry Canada. The mandate of this office would be efforts leading to the commercialization of research undertaken in Canada. (p. 67)

RECOMMENDATION 18

The federal government ensure that the rights embodied in patent and copyright protections are vigorously defended. (p. 68)

RECOMMENDATION 19

The federal government develop a mechanism by which existing and future policies and programs would be assessed to determine their impact on productivity and the incentive to undertake research and development in Canada. Particular attention should be paid to the impact of regulations in these areas. (p. 69)

RECOMMENDATION 20

The federal government expand funding for the National Literacy Secretariat and increase its role in supporting English/French as a second language. (p. 71)

RECOMMENDATION 21

The federal government re-evaluate the criteria for its student debt relief initiatives to determine if they are too stringent. Consideration should also be given to expanding student loan limits to assist students in financing rising tuition fees. (p. 73)

RECOMMENDATION 22

The federal government work with the provinces, territories and relevant professional associations to make it easier for foreign workers with the necessary level of expertise to practice their trade in Canada. (p. 74)

RECOMMENDATION 23

The federal government immediately implement any changes necessary to ensure that recognized refugees are treated in the same manner as Canadian citizens and permanent residents for purposes of qualification for student loans. (p. 75)

RECOMMENDATION 24

The federal government meet with the provinces and territories with a view to developing accountability and transparency mechanisms related to the expenditure of funds on post-secondary education by both levels of government. (p. 76)

RECOMMENDATION 25

The federal government work with provincial and territorial governments, and other stakeholders, to ensure that the Canadian healthcare system of the future respects the following principles:

Moreover, as resources permit, the government should consider the one-time funding of initiatives that would yield significant benefits for relatively little cost. (p. 84)

RECOMMENDATION 26

The federal government adopt the proposal made by the Prime Minister’s Caucus Task Force on Urban Issues for the creation of an “urban lens” that would require federal government departments to consider the implications of major government policies on urban communities. Moreover, the government should consider the creation of an urban counterpart to the Rural Secretariat and the Canadian Rural Partnership within Industry Canada. (p. 88)

RECOMMENDATION 27

The federal government ensure that adequate attention is paid to the needs of rural and remote communities. Moreover, the government should focus resources on working with remote communities in Northern Canada to advance their economic development efforts.
(p. 90)

RECOMMENDATION 28

The federal government, along with other stakeholders, expeditiously develop and implement a long-term, adequately funded infrastructure plan, with an initial focus on transportation and water and sewage deficiencies. (p. 92)

RECOMMENDATION 29

The federal government ensure that the infrastructure plan developed in collaboration with stakeholders incorporate an allocation mechanism that is not limited to population but recognizes the unique strategic and development needs of communities. Moreover, economic development and need, rather than a strictly per capita funding formula, should determine the level of funding allocated to rural and Northern communities. (p. 92)

RECOMMENDATION 30

The federal government meet with stakeholders in order to develop a plan for brownfield redevelopment. Consideration should be given to tax incentives, loans, grants and mortgage guarantees, with such initiatives funded through a reallocation of existing government expenditures. (p. 95-96)

RECOMMENDATION 31

The federal government take immediate action to ensure the sustainability of our Great Lakes. (p. 96)

RECOMMENDATION 32

The federal government examine the policies and measures needed to promote the development and use of alternative sources of energy.
(p. 96)

RECOMMENDATION 33

The federal government meet with stakeholders expeditiously, with a view to reaching sectoral agreements for the implementation of greenhouse gas emission reduction targets.  In implementing the measures that will be adopted to reduce greenhouse gas emissions, the government must take all necessary steps to protect and enhance investment levels, economic activity and employment in Canada.
(p. 96)

RECOMMENDATION 34

The federal government amend the Income Tax Act to eliminate the capital gains inclusion rate applied to donations of publicly traded securities to charitable organizations, including private foundations.
(P. 99)

RECOMMENDATION 35

The federal government study the feasibility of extending the provisions regarding the capital gains inclusion rate applied to donations of publicly traded securities to donations of real estate and of land. This study should be undertaken with a view to phasing in the application of the change when feasible. (p. 99)

RECOMMENDATION 36

The federal government encourage active dialogue between relevant departments and the voluntary sector regarding how the sector might best participate in the policy-making process without risking their charitable status. (p. 99)

RECOMMENDATION 37

The federal government allocate appropriate resources to maintain Canada’s stock of historical buildings and to fund Canadian museums. (p. 102)

RECOMMENDATION 38

The federal government continue to support the Canadian Tourism Commission. (p. 102)

RECOMMENDATION 39

The federal government review existing expenditures in the area of housing and homelessness with a view to reallocating funds in order to increase support for the National Homeless Initiative. (p. 107)

RECOMMENDATION 40

The federal government work with the Canada Mortgage and Housing Corporation to increase the affordable housing stock in Canada.
(p. 107)

RECOMMENDATION 41

The federal government establish mechanisms to ensure accountability and transparency with respect to the expenditure of funds allocated to the alleviation of housing problems and homelessness in Canada. (p. 107)

RECOMMENDATION 42

The federal government continue to increase incrementally the National Child Benefit. Moreover, the government should ensure the existence of mechanisms to make certain that monies are spent appropriately, with accountability and transparency. (p. 111)

RECOMMENDATION 43

The federal government, along with provincial and territorial governments, recognize the urgent need for affordable, high-quality child care in Canada, and take actions to alleviate this problem.
(p. 112)

RECOMMENDATION 44

The federal government implement programs that adequately address the governance, health, education and other infrastructure needs of Aboriginal Canadians. These programs should contain sufficient flexibility to meet the divergent needs of Aboriginal Canadians. As well, any future infrastructure initiatives announced by the government should contain an allocation targeted to Aboriginal communities, but not based strictly on population. (p. 116)

RECOMMENDATION 45

The federal government study the feasibility of a refundable disability tax credit, enhanced tax assistance to disabled Canadians and their caregivers, and options for providing enhanced labour market supports to disabled Canadians. Moreover, the government should consult with organizations representing those with a disability regarding a federal/provincial/territorial National Disability Strategy and a Labour Market Agreement. (p. 118)

RECOMMENDATION 46

The federal government initiate a public consultation process on the changes that are needed to the three pillars of Canada’s retirement income system: Old Age Security/Guaranteed Income Supplement/ Allowance/Allowance for the Survivor; the Canada Pension Plan; and Registered Retirement Savings Plans/Registered Pension Plans. In the short term, and pending the completion of the review, the government should consider increasing the amount of the Guaranteed Income Supplement to assist those seniors most in need.
(p. 119)

RECOMMENDATION 47

The federal government incrementally increase the foreign aid budget until it reaches 0.7% of Canada’s Gross Domestic Product. A timetable for achievement of this goal should be developed. (p. 120)

RECOMMENDATION 48

The federal government provide an increase in funding to the Department of National Defence to meet the most urgent needs. The government should also immediately initiate a defence and foreign policy review, with a re-examination of funding requirements occurring at the conclusion of the review and mindful of the priority to avoid a budget deficit. Funding should also be allocated to ensure a Coast Guard presence in Canadian waters. (p. 121)

RECOMMENDATION 49

The federal government allocate sufficient resources to the management of Canada’s relationship with the United States. Priorities should include adequate personnel and funding directed toward the resolution of trade disputes, and the creation and staffing of additional consular and trade offices. (p. 122)