EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, November 28, 1995

.1512

[English]

The Chair: Order. The finance committee is continuing its pre-budget hearings, and we're very pleased to have with us this afternoon, from CHO!CES, Mr. George Harris; from the International Institute for Sustainable Development, Art Hanson and Stephan Barg; from the Manitoba Association of Friendship Centres, Jim Sinclair - and I could be wrong here - and appearing as individuals, Martha Owen, Chris Shannon, Keith Doan, Robert Johannson, and Arthur Trapp.

I've missed somebody: Joan Johannson.

Ms Joan Johannson (Canadian Association for the Non-Employed/National Anti-Poverty Organization): I'm with the Canadian Association for the Non-Employed.

The Chair: Good. Thank you very much. Glad you're with us.

Our format is to start off with opening remarks of about three minutes, outlining your basic concerns and where you want to see us go. After that we'll open it up. We're very pleased you're with us.

Who would like to start? Art, would you like to kick off?

Mr. Arthur J. Hanson (President and CEO, International Institute for Sustainable Development): Sure. I'd like to come directly to the questions, if I can. I'll give you just a few points.

Our concern, obviously, is sustainable development, linking things such as jobs, environment, and economy. First of all, the question about deficit reduction, as far as I'm concerned - and I speak personally here as well - stay the course, send a signal of commitment. From an environmental perspective, a weakening dollar, a deficit out of control, in this country would likely be translated into excessive exploitation of natural resources and ultimately a reduced capacity to manage environmental conditions, because so much of the budget goes towards financing debt.

If we get into this next question, which I consider very central, how may budget measures be used for jobs and growth, I have several points I'd like to go through very quickly. One is that we should try to eliminate subsidies and tax breaks that work against a level playing field and act as disincentives to emerging technologies and approaches. The energy sector of course is one where this can occur, and does occur.

Secondly, and a major point, which we bring out in this book, Green Budget Reform, which I will leave with the committee, is that we should tax environmental bads, not economic goods. If we remove and reduce payroll taxes and other taxes perceived to be holding back employment, we can bring in new taxes that help to control pollution and also really do tax environmental bads.

A lot of work has been done on this. In the United States, for example, it's estimated this could amount to $40 billion to $50 billion in shifting over the tax base. Probably it's even much larger than that. In Europe it's already starting to happen.

The next point would be on subsidies, which is something we're very interested in. I'm going to leave with the committee a paper we recently produced for OECD called Eliminating perverse subsidies: What's the problem?

We see lots of these subsidies. They seem very difficult to get rid of. But the point is that there's a need in some cases for positive environmental subsidies to promote sunrise industries. In some cases these have related back to the environmental sector, which is becoming very strong internationally.

We need to invest much more aggressively in new opportunities rather than in passive income support programs. This requires a lot more coordination than we yet seem to have in government. I would highlight the TAGS program, for example, although I would say I am impressed with the prairie Crow rate removal. We seem to be moving in a direction that is hopeful, and that is towards adaptation strategies and putting in place transition policies over a period.

Finally, I'd like to make some other points on this subject.

I did feel we must do more to foster community-based initiatives; and I have some ideas on that. We could come back to them in discussion. I'd like to see us in a position, by using budget signals, to discourage practices that are likely to create unsustainable forms of development and resource use, particularly in things such as forestry and fisheries. This is one of the really critical ways in which we can protect jobs - not just create them but protect what we have.

.1515

I also believe we must look much more carefully at some of the links with trade and sustainable development. Where we have perceived unsustainable practices and we invest in making these practices sustainable, we're very much more likely to maintain good trade relationships and also to build export-oriented environmental industries, as an example.

My final point on jobs is that I would like to ensure that more money is in fact put into infrastructure for the environment and pollution control. I believe this in the future should be based on private-public sector partnership as opposed to simply public investment. I give as a couple of examples, of many in the country, the pollution control into the Halifax harbour and the Victoria waters. But it must bring in the private sector efficiency.

On the third question, in terms of federal activities that should be considered for further cuts and commercialization devolution, in terms of commercialization, the support for environmental infrastructure that I just mentioned is an important one. I would like to see the potential for devolution of natural resource management explored more, where there's likely to be an advantage in doing so. It's a very difficult issue. I feel that, for example, community-based management approaches being taken in the north are good and interesting models. The east coast fisheries is a case that is clearly begging for this.

Another important thing that should happen is that we should apply the user-pay principle wherever possible. We've seen this successfully applied with Environment Canada in its commercialization of weather services. But user-pay and polluter-pay principles are very important ways in which we can put the financial burden on the user rather than as a general matter.

.1520

On further cuts, maybe I could come back to that in the discussion. I have some ideas there.

I would finally say that there'll be a very strong temptation, I'm sure, in this year's budget to take another hard cut at foreign development assistance. I think we should be very cautious about such cuts if they're likely to influence Canada's role internationally. We have a respected role and we should try to keep that.

On the other hand, I think we should still continue to seek improved ways of conducting these activities, and that's something that IISD is very concerned about.

Thank you very much.

The Chair: Thanks very much, Mr. Hanson. That was a very comprehensive report.

Mr. Harris, from CHO!CES, please.

Mr. George Harris (Co-Chair, CHO!CES): About these consultations, my position and that of the organization I represent is that this process is a sham.

There has been inadequate notification of the public at large. People discover these consultations by accident. The government really does not want advice. There's a predetermined agenda, and the predetermined agenda is shown in the questions that limit the discussion. It doesn't ask us what kind of a country we want to live in. It just wants to know how much and how hard we slash.

We have been hearing a mantra for many years now.

The Chair: I'm quite surprised that you would want to participate in a sham.

Mr. Harris: If I didn't participate, you'd say we were given an opportunity. You're in a catch-22 position.

The Chair: Did you participate last year, Mr. Harris? Did CHO!CES participate last year?

Mr. Harris: In the consultations?

The Chair: Yes.

Mr. Harris: Not that I'm aware of.

The Chair: Where you not aware that our consultations are a part of the annual pre-budget process and that before every budget we do it?

Mr. Harris: Before every budget?

The Chair: Yes.

Mr. Harris: It's been in place for how long?

The Chair: This is the second year.

Mr. Harris: The second year.

The Chair: That was announced last year, and I'm announcing this year that you're invited for next year. So you can't say that you didn't have adequate notice.

Mr. Harris: Do you want me to leave?

The Chair: No, I'm delighted to have you.

Mr. Harris: Well, I'm just....

The Chair: But I want to make sure that I give you a year's notice for next year so that you can't say that you didn't have adequate notice.

Mr. Harris: Okay, the second thing is that the questions also limit our participation.

The Chair: Sorry, they don't. They have not limited any other witnesses. You can talk about anything you might wish, and we're happy to have your agenda on what type of world we want to have.

Mr. Harris: Okay. We are currently in the process of building an alternative federal budget, one that respects people and doesn't bash poor people. It doesn't launch an all-out assault on those who are vulnerable.

This government, as well as the provincial government - and I would say it even goes as low as city-level governments - is launching an all-out assault on those who do not have. These budgets serve the interests of international financiers, serve the interests of the wealthy, and do not serve the interests of the average citizen. But we do have within this country a mantra that constantly tells us what we ought to think is the problem: the problem is people who are on social assistance; the problem is people who are on UI, and so on.

So I'm saying that this process is not designed to get from us true alternatives.

The Chair: I'm sorry, but you have an opportunity to put forward the alternatives you want, Mr. Harris.

Mr. Harris: We will be releasing our budget in February. This is one we released last year prior to the government budget that was brought down. We are in the process of consultation.

.1525

The Chair: I welcome having whatever input you can give us, because as you know, budgets are very complicated processes. This is why we're out here in advance. We welcome your alternatives, and please don't wait until February to publish them because it will probably be too late then. You could miss your input into the budget if you wait till February.

Mr. Harris: It's not just me; there are many other people who contribute to this.

The Chair: We know that; that's why we're crossing the country, sir. That's why we're delighted to have your views on behalf of the people who are the most disadvantaged in our society. We're glad there's somebody who speaks on behalf of them and we welcome your views. My caution to you is please don't wait till February to publish your alternative views.

Mr. Harris: Have you looked at our last year's budget?

The Chair: Yes.

Mr. Harris: There are many alternatives in there that I would urge you to take a strong and serious look at. I'll leave my comments at that point.

The Chair: Thank you.

Ms Johannson.

Ms Johannson: I'm the chairperson of the Canadian Association of the Non-Employed. I am also a board member of the National Anti-Poverty Organization.

I just came back from 5 days in Aylmer, Quebec, where 60 poor people gathered to talk about what was happening in this country. In this country, the faces of the poor are being smashed into the ground. We are weeping together in our pain.

The budget you brought down last year where you got rid of the CAP agreement meant that over the next three years $7 billion will be taken out of health, education and social assistance. It meant that our rights - the right to welfare, the right to an adequate amount so we can live, the right to appeal, and the right not to have to work for welfare - were all taken out when you brought in the Canada health and social transfer program.

None of us were consulted. Nobody asked us if we wanted to lose our rights. The poor in this country are devastated. We're hungry and we have no rights. I cannot for the life of me understand how the people who run this country can shut their eyes to those of us who are poor and hungry.

We are well-educated people. In my organization, at least half the people have university degrees. We did the things we were told to do. We have no jobs, and now we will not have enough to eat.

I cannot understand. You are our leaders. Do you not care? You say to us that there's no money, but we know it's a lie. The reason we know it is that there are people like Neil Brooks, who teaches taxation law at Osgoode Hall law school, who come and talk to us. He said to us that the people who tell us there is no money are telling us bullshit. I can't prove it, but somebody like Neil Brooks who teaches this shows us there is money.

Why don't you take the money from places like banks that earn billions of dollars of profit through interest? Why don't you take some of their money? Why do we and our children not have enough to eat?

The Chair: Thank you, Ms Johannson.

Martha Owen, please.

.1530

Ms Martha Owen (Individual Presentation): Thank you.

Last year no one listened to me. Perhaps I said the wrong thing, so I'll try again this time.

On the first question, don't reduce the deficit. Eliminate it, and the sooner the better. How? Be more business-like and much tougher. Stop catering to special interests. Eliminate all disincentives to self-sufficiency. Provide more incentives to get off unemployment and welfare. Don't tolerate misuse. Don't subsidize the greedy and the undeserving. Don't give overly generous contracts. And don't compensate the whiners. Back down for no one. You were elected to govern. Do so.

Now, I don't have time in my two-minute sound bite to elaborate on that, but I'll give you my answer to the third question and then go to the second one on how to do things. I have eight documents here, and I'll see how much of the information I can get to.

On the third question, I have an anecdote with a moral or two. A farmer with a horse and an attitude wanted to be leaner, meaner and more efficient and to do more with less. He phased in reforms gradually. Each day he fed his horse a little less and worked it a little harder. The horse became leaner and the farmer became meaner, and the farm became more competitive - he exported more. Just as the horse became entirely self-sufficient and he was about to declare the experiment a complete success, the subversive beast died. It was no good for meat. It was too tough and too lean anyway - there wasn't much on it - so he had to discard it. He realized that he hadn't pursued his goals vigorously enough, and he determined to be much tougher in the future.

The next time he cut back on the rations and increased the workload much more sharply. He kicked the horse out of the barn to toughen him up and to give him some initiative. He gave the horse more choices. For instance, it was now free to find its own shelter.

He's gone through several horses now. He hasn't succeeded yet, but his single-minded determination has made him the envy of the nation. Both provincial and federal governments have instituted the same reforms, each hoping to be the first to succeed. Dead horses litter the countryside, but governments just keep right on flogging them.

That's my answer to your third question, and if these two answers seem very inconsistent, I trust I will be able to fill in the gaps to make them fit together later on.

The Chair: Thanks for your opening comments, Martha Owen.

Robert Johannson, please.

Mr. Robert Johannson (Individual Presentation): First, I'd like to submit a few opening remarks. One is that last year I didn't bring a presentation. This year I've got one page. Maybe next year I'll be as good as Art and bring a book.

Whether this is a sham or not, I'm not sure. I certainly think you're coming here to hear our opinions, and I think it is our duty to express those opinions and to tell you what we think is happening. In the situation of the prophet, if the prophet speaks, then the responsibility lies with the listener. If the prophet keeps silent, the responsibility is with the prophet.

Now, I first want to apologize to the francophone members because I don't have a translation of my presentation.

The Chair: Don't worry about that. That's our responsibility.

Mr. Johannson: Anyway, the concerns I have are essentially concerns of outlook and concerns of how we look at the economy. The budget is one of the major levers of power that the federal government has in order to determine what happens in the Canadian economy. If we look at it in the wrong way, and if we don't understand how it affects the economy and how the economy works, we're going to do disastrous things. I think one of the tragedies right now is that we're taking a business-oriented attitude towards the budget.

Business thinking is simple, and it is appropriate in a business. A business is linear. You have revenue, you have expenses and you have profit. You have to increase your revenue or reduce your expenses in order to generate that profit. It's very simple, very straightforward.

.1535

The Canadian economy doesn't work that way. It's important to realize that it doesn't.

I drew a small systems diagram, which is very simple and elementary. The Canadian economy is a system. It has producers and consumers, and it works in a cycle. Producers produce goods, which they sell to consumers. As consumers buy more, more is produced. More people are hired. More people have more money to buy more goods, and so on. The cycle, if it is a positive one, gradually increases the wealth of the system.

The problem with that cycle is that if it is a negative one, it goes downhill. If there is less consumer money, fewer goods are purchased. Fewer people are employed. There is less money to buy goods, therefore fewer goods are bought and fewer people are hired. In goes in a downward spiral until it hits what are the limits of the particular system.

The system goes in cycles. It goes up and down. The nature of the cycle depends upon the limits to the particular kinds of growth.

Consider the limits to the specific growth we're seeing. With the cod stock, for example, there are environmental limits. There is sustainable growth, and there's unsustainable growth. In a country that bases most of its wealth on the exploitation of natural resources, it is essential to consider the environmental limits, or we're going to end up with the cod situation repeated again and again and again in one resource sector after another.

Unless we have some respect for environmental limits, then we're going to get into real trouble. We're already in bad trouble, but it's going to get an awful lot worse.

The bottom limit, the limit to how far down a depression will go and how serious it will be, is the limit of consumption. What level of destitution are we willing to tolerate? How far are we willing to starve people? That's the limit.

The hardest thing to grasp really is that we're all related. You can't follow a beggar-my-neighbour policy and expect it to work. If my neighbour is in trouble, I'm in trouble. If we beggar large parts of the Canadian population, the Canadian nation is in deep trouble.

The Chair: I'm sorry to cut you off. Could you just wind up your opening comments? Then we'll give you all the time in the world that you want afterward. I just want to be equal with every participant.

Mr. Johannson: Okay, the main points I've made are essentially those.

The Chair: Thank you, Mr. Johannson. We'll come back to you.

Last, Arthur Trapp, please.

Mr. Arthur Trapp (Canadian Executive Services Organization): Mr. Chairman and committee members, thank you for the opportunity for me to appear before you.

I come before you as a private citizen concerned with the affairs of our country. I also come as a member of a volunteer organization called Canadian Executive Services. We have two programs. One is the international services program, and the other is the aboriginal program.

As a private citizen, I'm concerned with the horrendous revenue leak, namely the GST tax evasion. It's rampant in the country.

I don't generate much business, but with the little bit I do generate, I find very frequently that somebody asks whether I need a bill. You know what that means. I'm sure I wasn't singled out for this kind of treatment. I'm sure this goes on and on. I think Mr. Anderson, our minister, should really bear down on this to a greater extent and see what can be done to capture that revenue.

.1540

The Chair: You wouldn't concede that it just might be that you looked extremely suspicious, Arthur? I don't know of anybody else who's been offered this type of -

Some hon. members: Oh, oh!

Mr. Trapp: It could well be!

However, failure to do so only encourages more and more people to evade, and we stand the chance of becoming a banana republic where nobody respects the law. I think we have to pay some attention to this.

As a member of CESO, let me explain who we are, what we do and so forth. Our international program sends volunteers as advisers to Third World countries to advise on ways to develop business and improve social conditions there, and to help develop linkages that will hopefully lead to international trade. I'm sure many of us are familiar with that.

Our aboriginal services program makes volunteer advisers available upon request to assist in developing business structures, retail outlets, organizational structures and economic and social development and so forth.

My concern is that somewhere between the two there isn't an equal balance. I would just like to point out that in the preamble to what the annual report said, CESO International will make available vital information gathered by our volunteers on projects to interested Canadian companies, while helping to lay the groundwork for international sales, joint ventures, exchanges of information and contract work between foreign companies and Canada.

We're not only helping our clients but are also stimulating Canadian prosperity which results in tax dollars for Canadians and aid programs. We are confident this service will generate greater support for CESO from the Canadian business community. I have here a list of the many countries we have people in.

In reference to the aboriginal services program, there are only about two or three lines, which is directly comparable to the amount of financial aid that is given through the CESO aboriginal program as opposed to foreign programs.

Those are my remarks for now, except to say that our aboriginal program is a home-grown one and we should be looking after that one first. I want to get to that one at a later time.

The Chair: Thank you, Mr. Trapp.

[Translation]

Mr. Brien, please.

Mr. Brien (Témiscamingue): I have no very specific questions and I would like Mr. Trapp to continue his presentation. He was going to address aboriginal programs. Since this issue seems to account for a large part of his presentation, and as I have not read the documents, I would like him to be permitted to set out his views on the budgetary approach the government should take toward support programs.

[English]

Mr. Trapp: I don't hear the translation.

[Translation]

The Chair: Could you briefly restate your question, please, Mr. Brien?

.1545

Mr. Brien: Mr. Trapp, you were coming to the end of your presentation and you said you would have more to say about the aboriginal program. So I would like you to explain to us briefly the budgetary approach you would like to see the government take with respect to the native service support program.

[English]

Mr. Trapp: Indian Affairs has a program that deals with community requirements and so forth.

We in CESO are a volunteer organization that offers our services as individuals with a lifetime of experience in certain fields. We go into the community upon request and assist by advising on education, organization, how to develop businesses, tourism development, and so forth. That's what we do as CESO, and that is apart from the regular business of Indian Affairs in relation to its community.

[Translation]

Mr. Brien: Ultimately, you are helping people become more independent. What amounts do you think you will need in future? Additional amounts, less or the same? How do you see your program's future?

[English]

Mr. Trapp: What we are doing is assisting the native people, especially in the remote communities, to become more self-sufficient in their own communities so there won't be the urge to move to the urban centres because there's nothing at home. We're helping them to become more self-sustaining and self-sufficient in their own community. That's what we're trying to do. It can be in the form of resource development, such as developing tourist lodges. It can be in the area of forestry, for instance.

.1550

I myself am a volunteer. I work in the tourism and forestry areas. I work with fourteen different communities. There was a request from fourteen communities, asking for help in developing sawmills. They want to produce their own lumber for their own housing needs. Right now only one is successful. The others, for various reasons, are not.

What we see is a future for our program, and that is why I'm here. I'm saying we as a volunteer organization would like to have some free money, some money with which we could develop a proactive team that could go out to the communities, sit down with them, and look at the potential in the communities. Then our team would help develop that potential to its ultimate.

[Translation]

Mr. Brien: You say you are here to request the resources to help them or to intervene more freely with them. How long has your program been in existence, and what do the people you work with have to say about it?

[English]

Mr. Trapp: The aboriginal program has been in existence for 26 years, I believe, and the international one for 28 years. We've always operated on a sort of reactive basis. We're asked to come in.

Until several years ago we were quite free with how many times we would go in and so forth. In recent years the money that has come directly to CESO has been split up and it went to the various native bands. Each one has a little pot, and in most cases it isn't enough to carry through on the various kinds of projects that should be dealt with.

That is our problem. I am here because I think we don't have enough money to be proactive. We don't have enough money to develop a team to go into these communities and help them develop their resources and so forth.

The native people are there. The resources people are there. The indigenous people have the resources at hand. Why should we cut lumber in Mr. Grubel's area and then haul it all the way through Saskatchewan, Alberta, Manitoba, then all the way around to Sioux Lookout, and then all the way north into northern Ontario, for housing needs, when the material is right there and the jobs are needed there?

There are so many things we could accomplish with that. We could eliminate welfare dependency to a great extent. We could show people they can be self-sufficient. This is the kind of stuff that is needed...plus the fact that this material could be produced a lot more cheaply than they're paying for it now.

If there were no sale for this lumber directly south or wherever, I'd say we're not gaining that much. But there is a market for lumber on the U.S. side, if not on the Canadian side. Our Canadian producers would be developing a resource that is new money. That is money right at home here. We're doing it without government money. So we're not being dependent on welfare, then, in that respect.

.1555

That is my response to you, sir.

The Chair: Thank you, Mr. Brien.

Mr. Grubel, please.

Mr. Grubel (Capilano - Howe Sound): Thank you, Mr. Chairman. I would like to address a question to Ms Johannson.

I'm really deeply puzzled and I hope you can help me.

I know the members of the government party individually; we have travelled together. While I disagree with many of the things they do, I can tell you one thing: they're all very caring individuals. It breaks their hearts to hear stories like yours. Mr. St. Denis once said in public that in private conversation he finds that even though I'm a Reformer and have a bad reputation, I care as much.

I also have met Mr. Martin, whose father helped create this wonderful social welfare program. And you cannot but be impressed by the sincerity with which Mr. Chrétien cares about keeping this country together, healthy, with nobody suffering. Would you agree with this as a general description?

The alternative is to say these people sitting here, Mr. Martin and Mr. Chrétien are mean-spirited. They have gotten into public life, have left profitable jobs and their families to do things like we're doing here - and I can tell you, it's no pleasure sleeping in a different hotel every night - because somehow they have a mission to hurt Canadians. If this is your view, Madame Owen, you couldn't be more wrong.

The puzzle I have is this. People such as Neil Brooks have appeared here and have written papers, telling the story every time, every day, that if only, starting with Mr. Chrétien, Mr. Martin and all of us around here, we saw the light and took that money that is sitting there and can be taken away without hurting anybody and gave it to the needy, there wouldn't be any more problems.

Ms Johannson, these people are not only not mean, but they are kind and caring. They're also smart. They are not dumb. If they want to do all these good things, wouldn't they jump at the opportunity to take these ideas of Mr. Brooks and have everybody happy? I can tell you personally that if it were possible to have such simple solutions to the problems of Canada, I would go to Mr. Manning and he would take them the next second. He believes me on some of these matters.

Please, Ms Johannson, tell me what is the answer. Are these people mean? Are they dumb? Or is there an alternative that maybe, just maybe, Mr. Brooks doesn't have it quite right?

Thank you very much. I really look forward to having your answer to that question. It comes from the bottom of my heart. It's a real puzzle, I'm telling you.

Ms Johannson: Well, I am sure you are all very kind, caring people. I never said differently. However, the results of what you do mean that my friends, my children and I are hungry and live in despair.

.1600

You have to look at the results of your actions. You cannot say, ``I'm a very kind person, and I'm very sorry that what I've done means you are being destroyed''. You have to take responsibility for the actions you do. You are the people who are responsible - all of you.

There is a difference of opinion on how this country could be run. It's not that anybody is stupid. None of us are stupid. However, we have a different value base, a different way of looking at life, and out of that we have different responses. We have to acknowledge that there are choices that people make. None of us can say, ``I have no choice''. That is just not true. There are choices.

Neil Brooks has given you one choice. You choose to say you do not accept what he says and the people who say that. There are many very smart people. He's not the only one. He happens to be one who says there's a different way of doing things, that we are responsible for each other.

There are not enough jobs in this country for a number of reasons. One is the technological revolution we're going through. We have to make major changes. We need a thirty-hour work week so work is distributed. We need all sorts of things.

I could go on to the things we could do. We need to change the tax base. We need to change the number of hours people work. But you would look at that, or rather you have looked at that and said, no, we're not going down that path.

Mr. Grubel: Madam, may I just respond to this?

I have been teaching economics for a long time, and these are examination questions. I don't expect you to accept the answers, but with respect to the thirty-hour work week, we heard that in order to work-share, the people will have to work only thirty hours at the same pay.

For an owner of a factory who increases his labour costs by 50% by going in for time-sharing the way Mr. Brooks or you are recommending, in this world of ours - and I wish with you that it wasn't like that - whatever that factory is producing will no longer be able to sell at a profit. It will lose money and will go bankrupt, and within a very short time all of the jobs will be gone.

This is why I, if asked to vote for that recommendation, will say, ``I am sorry, but I am concerned about all the workers in that factory.''

Ms Johannson: I will go home and tell the children you are sorry. I will say, ``I am very sorry. The leaders of our country.... It's too bad that you don't have enough to eat and you don't have a place to live''. I can say to the children, ``I'm very sorry that you don't have enough to eat'', but that's not good enough.

I am sorry, too, sir. You have taken a certain route, and the route you have taken means that a quarter of the population of this country is living in destitution, and it's not good enough.

You might have an economics degree. Other people have economics degrees also. You can argue with me all you like, but I appeal to the people who make the decisions to say we have to care about this country and its citizens or we are going to be dead. There are going to be riots in the streets. There are going to be more and more people on the streets without homes.

You can make a difference. You will not agree with me, and I cannot change your mind. You have taken one path that results in my children being hungry. Do not say to me there is no choice. There is a choice, and you have made it.

.1605

Mr. Grubel: Madam, you're entitled to your view and I'm glad to hear it. I suggest that we just conclude the argument, the discussion, by saying that maybe you can see where we're coming from, where I'm coming from.

If we do this, we will bankrupt that company. That company may have 500 employees, all of whom have children also. All the people who buy from these workers and who supply what these workers need will be in trouble because we have followed Mr. Brooks's or your recommendation of trying to share the work by having the work week decreased with the same pay.

Thank you very much, Madam.

Ms Johannson: We used to work 12 hours a day, 7 days a week; we now work 40 hours. There are many people writing about this. I recommend Bruce O'Hara's book, Working Harder Isn't Working, to anybody who's interested.

The Chair: Thanks, Ms Johannson.

I noticed that Mr. Johannson wanted to respond to that as well.

Mr. Johannson: I'd like to address that question too, because I think it's one of the issues. Do we have people who really, actually care about this country? I think everybody on this committee does. Do we have people here who really care about the problem of poverty in this country? I think you really do. Are you dumb?

The Chair: Don't answer that question, please.

Mr. Johannson: I don't think it's a question of being dumb; I think it's a question of a specific mindset. It's a refusal to look at things from a systems point of view and a focus on linear points of view.

If you look at Mr. Grubel's example, instead of looking at the system as a whole, he immediately talks about this specific factory and what problems that would raise and what this does to the bottom line. It is that kind of thinking that is going to destroy us, but you can't change that kind of mindset overnight. We have to learn to think of systems instead of arithmetic.

Mr. Grubel: I assure you, Mr. Johannson, that I have written books on that subject. It's called general equilibrium analysis. We have to look beyond the immediate consequences of matter, of policies. I was simply engaging in the kind of rhetorical analysis, superficial analysis, that we hear here all the time from certain segments of witnesses who believe there is a solution to the problems in Canada by a simple throwing of the switch. Their attitude is ``if only we could see the light'', à la Mr. Brooks.

Mr. Johannson: I don't think there's a simple solution. We're dealing with really complex issues.

Mr. Grubel: Thank you.

The Chair: Thanks, Mr. Johannson.

Ms Owen.

Ms Owen: I would like to address the second question on how we can improve the economy and jobs. I have eight documents here. I won't try to read them all; I'll give you a highlight from each one.

This one is Canada's Economic Dilemma: The Problems and a Set of Solutions, by Jack Biddell of the Committee on Monetary and Economic Reform. He proposes job creation through greater emphasis on Canadian content in goods and services, shorter working hours, keeping interest rates low, and replacing the GST and sales taxes with a Tobin tax, which is a financial transaction tax. I see that Mr. Grubel is disapproving of this, but even at 0.1% it could generate $17 billion a year. That's one.

The second document is by the Canadian Centre for Policy Alternatives, which describes the negative impact of cuts to the Canada assistance plan and goes into considerable detail about that.

The third is from the Bank of Canada for Canadians Coalition, which includes a prominent Liberal, Paul Hellyer, and Professor Pierre Fortin of Quebec. It claims that we do not need to attract any further foreign inflows of capital, that we can finance our own. There are many prominent Canadians on this committee; they are not amateurs.

.1610

This paper by Professor Pierre Fortin, also submitted to this committee last year, was entitled ``A Strategy for Deficit Control through Faster Growth'' and was supported by Mike McCracken and David Crane, among others. It says that in order to deliver $10 billion to the economy, the Bay Street bond dealers should be treated as just another special interest group and we should override the global obsession and improve the welfare of all Canadians.

This is a lengthy submission by the Ontario Teachers Federation, which argues that spending cuts will magnify our debt by diminishing economic activity and the generation of taxes. This is the alternative federal budget for 1995 earlier referred to, which was supported by no less than 50 economists from one end of the country to the other.

This is my own presentation from last year, which proposed a 15% green tax on all junk mail. I thought it was a rather good submission, but nothing has been done about it. In addition to that, these are not documents but things I've gleaned from news items: Liberal MP George Baker would cancel corporate deductions for luxury entertaining and save $200 million a year; the National Council on Welfare would abolish seven inequitable income tax loopholes and raise $10 billion annually. It said in this news item - and Mr. Discepola can elaborate on that later if he wishes - that Mr. Discepola proposed taxes on gas and lottery winnings and a temporary surtax on rich individuals and corporate profits. That's what I have as news items; I don't have proof.

It says the Canadian auto workers propose a surtax on bank profits. Diane Francis, certainly no bleeding heart socialist, advocates stiff inheritance taxes. Ruben Bellan of Winnipeg and many other economists who reject the cut and slash solutions recommend that governments do what good businesses do - spend money to make money.

Collectively, all these proposals represent the views of a very large percentage of Canada, many of them experts in their field, from many different perspectives. Some of them are repetitious. Some of them even contradict each other, as imaginative thinkers are bound to do. What they all have in common is that they deal with revenue problems and they all offer positive suggestions. I do not like the idea that we should think that only cutting is going to do it.

Mr. Paul Martin rejected out of hand any positive objections. This is a paragraph from Confronting Canada's Deficit Crisis, and it sounds terribly patronizing:

While the Committee wants to see lower interest rates, it is concerned that engineering a reduction through monetary measures runs the possible risk of appearing irresponsible, even if it were not, and of thereby worsening our deficit problem. Accordingly, it cannot recommend such a course.

This whole document first acknowledges that there have been many people who differed with the government's prevailing attitude of cut and slash. It had to acknowledge it, there were so many of them, and then it dismisses them all out of hand and says the only thing we can do is to cut spending. There is no alternative. And to the credit of the Bloc, they were the only ones whose dissenting opinion made even a little sense. Thank you.

The Chair: You've given us about three months of homework to do. I think I would like to turn the question over to Mr. Walker.

Mr. Walker (Winnipeg North Centre): I would like to ask the witnesses some questions, but the deficit issue does hang over all of us. If I could just bring it home to Winnipeg....

I'll just use an arbitrary figure. If you take the deficit to be around $30 billion now, and we have around 4% of the population, it works out to be about $1.2 billion. If you take Winnipeg as being 60% of the population, that works out to $800 million in this city. If you didn't raise taxes at all, just kept the current budget, you'd have $800 million.

I'll give it some comparisons. We signed an agreement with the Winnipeg Development Authority, our biggest deal in the city, and we were able to contribute from the federal government $5 million a year over the next 5 years, a grand total of $25 million. I came up, in other words, $795 million short if I didn't have a deficit. That has hit me more than anything else I've done in my life, to think that I came up that short because of the deficit I have to deal with.

.1615

I don't have to tell you, because we're from the same constituency, what that means every year. You talk about children; I don't want my pre-schoolers to be sitting here telling their schoolmates the same story in 10 or 15 years. I want them to say I have $759 million and I'm really happy. I honestly will do what I have to do to get those kids that money, and that's my determination.

Arthur, in your -

Mr. Johannson: Even if you have to starve them during it.

Mr. Walker: No, I don't think -

Ms Johannson: Can I respond to that?

The Chair: Sure, please feel free, Ms Johannson.

Ms Johannson: I recognize you care about your children, but then I say what about the children who are hungry now, right today? The things you're doing, you're doing so that in 15 years your children will not have a debt, but right today, now, children are hungry. You can't just dismiss that. There are other ways of going about getting rid of the debt. Maybe I'm stupid, but I don't understand why you insist that there's only one way of getting rid of the debt.

Mr. Walker: I'm not sure what you think the one way is.

Ms Johannson: Cut, slash.

Mr. Walker: The hard edge of it is that we haven't cut anything this year and the cuts come in next year.

Ms Johannson: I know.

Mr. Walker: It represents 3% of provincial revenue in this country. That's the last thing we're doing after many other cuts in many other areas and some tax increases and so forth.

Each and every one of us should consider whether or not that 3% is going to push some people into starvation, is going to hurt people. It's not the sort of thing where you make a decision one February and you never look at it again.

We are constantly concerned about the need to maintain a social safety net in this country, and as you know, we have redefined what we think we want to do. But that's in no way, shape or form a question of walking away from these responsibilities.

Between the tax and the cash, we still put several billions of dollars into it. It's not as if the federal government, as of last year's budget, has all of a sudden never put a penny into poverty. In fact, we're trying to make a considerable cash contribution, and we make a very significant tax contribution in this area.

Arthur, just before I run out of my time, I want to -

Mr. Johannson: But we are moving to zero.

Mr. Walker: No, we are not moving to zero, Bob, and you know better. The budget stated the projection for next year and the year after; we have stated several times consequently that we will stabilize the cash. That's been said by Mr. Chrétien, by Mr. Martin and by Mr. Walker.

It is the commitment of this government that we are not moving to zero. It's a creation of people who wish to undercut these changes to say that. It's a straight political response to what is in fact not there.

Ms Johannson: I don't care what you're moving to.

Mr. Walker: You make the point that we are going to zero; that has been said several times. I'm saying that's not what the budget said and that's not what the government has said.

Are we making some cuts? Yes. Are those cuts significant? Yes. Are they the last cuts we will make in the system after doing other things in Ottawa? Yes.

The Chair: Please, we'll give you lots of chances to come back, Mr. Walker. We'll also give you his home phone number.

Arthur.

Mr. Walker: We are obviously, in the context of this discussion, having considerable problems with what we should do in the international scene.

One of the areas that's considered is international development and our presence overseas, including our military presence. On the one hand, we are a community that has a long history in international development and in military affairs through NATO and through the United Nations. We have had a strong presence.

.1620

I'm wondering if it's a time when we have to step back because of our domestic problems and say that despite these long-standing arrangements, we can't afford them - if we should just take a deep breath and say that we can't afford the large military operation we have and we can't even afford the network we have in environmental fields, in which I know you're very active and very well respected, and we can't afford international development and the projects we have.

Where's the line for you and what's the strategy? You must confront this on a day-to-day basis. In our testimony I don't think we've had to deal sufficiently with this issue of what we should do internationally at this time.

Mr. Hanson: I was in Ottawa last week and the Deputy Prime Minister addressed the group that was to honour the presence of Boutros Boutros-Ghali, who was there. I was struck by the difference between the rhetoric of the occasion, which was one almost of expansion of international interests, the point being that we're going to do it better and better and better, and the reality of the situation, which is that we're shrinking, shrinking, shrinking, primarily for budget reasons.

It is very difficult. As a nation we're caught very much in a vice on this, because Canada has played a very significant role. In my own opinion, if we look at the future, as our economic growth will never match that of some of the economies of Asia, for example, economically we're going to be a shrinking force in the world. Somehow we have to look at the overall offerings that we have to keep our place at important bargaining tables and to present a point of view about Canada that is important to the rest of the world.

When we do that, I see that we have a few things going for us very much. One is - and I feel this right now in the case of environment, for example - that we really become the key North American voice, at least. When things shrink in these areas south of the border, people turn to Canada; they come to us. I see it happening in my own work all the time. Americans come and say, we want to have the assistance of Canada, in one way or another. So it's important to recognize that there are some expectations in the world about our role.

.1625

The second point, though, and the one that troubles me a lot, is if we are going to have a strong position, it seems to me it's going to be based on our peacekeeping and so on, in military operations - I don't oppose them, either - on that side, and also on the side that deals with much more of what we can call the civil society, in dealing with environment and international development, sustainable development concerns, now.

There are some cost trade-offs there. For me, the dramatic trade-off was the intervention in Somalia. The cost of that as a military operation was in the hundreds of millions of dollars. It far outstripped anything that could be thought of in either humanitarian assistance or development assistance.

One of our concerns in relation to the international development side is to be in a situation where we're trying to make the world a better place, obviously, and not having as many of those kinds of total breakdowns of society which require a military presence. The military option, the disaster assistance option, both of which we engage in, are very costly, usually an order of magnitude or two greater than development assistance. So I see a real trade-off between what I would call the ordered response approach of a defence budget and international development assistance.

I would say it is dangerous for us to deny international obligations. If we try to do so, we'll only be forced in at a much higher price at a later time. The second thing, though, is can we do it better? Can we do it more cheaply? Can we work through the synergies of others? Can we do more through very good organizations such as CESO, for example?

It seems to me there are a couple of principles we have to keep in mind here. One is that there is a very real interest on the part of Canadians, and commitment and involvement, on the international development side. We have to draw upon that, for sure.

Secondly, if we look at the way obligations are developing in the world, much of it surrounds environment. If we talk about something like global climate change, carbon taxes, forestry policy.... Forestry is such a huge export industry. The future of that industry is tied into environmentalism now. So we can't ignore those. That's the other aspect of it.

I see commitment on the part of Canadians. How we can marshal that commitment at a lower cost is very important. I think we should keep trying for that.

Secondly, we should be redirecting some of what is going into rather traditional forms of development now into ways that might be much more cost-effective. I'm not a great supporter of many of the huge development projects. Sometimes they're necessary. A lot of times they come out as being less than great projects. If there are ways of mating the interests of Canadians and assisting them in in their own development efforts, that should also be a priority.

Finally, if I were looking for cuts, I would tend to make them on the defence side still, even though I know there's a lot of pain there because there have been severe cuts. I would tend to preserve what I would call the international preventive development theme.

The Chair: Mr. Fewchuk, please.

Mr. Fewchuk (Selkirk - Red River): Good afternoon. Thanks for coming.

My question is to George Harris. George, do you have a proposal in your mind to save some of these programs; where we shouldn't cut or what we should do? What would be your recommendation to us here? Where we should proceed?

Mr. Harris: This is presupposing cutting. The kinds of proposals we are hearing on a regular basis are for cutting social programs. The social programs disproportionately affect those who are the most vulnerable in our society.

.1630

I'll illustrate. I made a presentation to the provincial government on their balanced budget legislation. Don't get me wrong; I'm not against balanced budgets. But the provincial government wants to put themselves in a position where they will say, well, when those transfers come down, and when they come down smaller than they did in the past from the federal government, we will have no choice but to do whatever damage we want because it wasn't us, it was them. They will want to blame you folks at the federal level.

Mr. Fewchuk: That's right.

Mr. Harris: Now, to give you some idea of this, in Canada, in the 1993 figures - and you can look this up for yourself because it's Canada figure - for income, the top 20% of the population made more than $37,700, somewhere in that range. That's for individuals, not for families. I'm talking about figures for individuals. The bottom 20% made less than $8,100 or so. Again, that's for individuals.

Mr. Fewchuk: Well, where do you think we'll get this money from? What is your recommendation? Where do we get it from?

Mr. Harris: Look to where the money is. It's a revenue problem.

Mr. Discepola (Vaudreuil): Mr. Chairman -

The Chair: Mr. Discepola.

Mr. Discepola: - can I pick up on that? I've heard twice already that we could do like Mr. Fortin says and just lower the interest rates and magically, all of a sudden, we'd be able to get it down to the right interest rate level. If you were to lower the interest rates by 1%, we would save roughly $5 billion. We're talking about a deficit in excess of $30 billion, so you have to lower the interest rates an awful long way if you're going to achieve the deficit-cutting measures that we must have.

So when you say it's a revenue problem I have a hard time. When I take a look at the choices - and this is what we're talking about, and you're right, Mr. Johannson, it is about choices - I, as a human being, above and beyond being a member of Parliament, would never target a particular group. That's not how you make choices. That's not how you budget. You look at the overall aspect of it.

Unfortunately, you're right in an awful lot of your comments, but they've nothing to do with the deficit. What you have mentioned today has shown the light to me and to an awful lot of my colleagues. It's shown us that the problem in this country is child poverty. What we should be doing is addressing measures to that, regardless of the budget measures we have to take into account.

But we can't possibly expect to grow our way out of the deficit problem. So where do you look at it? Even with proper economic growth, we'll never be able to get the $30 billion in additional revenue. So it doesn't take anybody, even a common housewife, like my wife tells me.... When you're spending more than you're taking in, you have an expenditure problem. It's not a revenue problem and it's not as simple as just reducing the interest rates.

Ms Owen: Are you saying it's not a revenue problem? Are you saying there's no money there to get? Is that what you're saying?

Mr. Discepola: Yes. Let me tell you, when your marginal tax rate today is about 52%, you certainly can't suggest that we go ahead and tax the middle class, for example, and even the rich, who are more mobile. They've already paid 52%. What is fair? Should we bump it up to 60%, knowing full well that our big neighbour down south has a lower marginal tax rate in the order of 30%? One corporation has already paid 50% on their profits. You're saying to hit the corporations. How much more do you hit? Even though the banks made $4 billion in profits, they paid $4 billion in taxes and sundry additional expenses, like property taxes, etc. They contribute to the employment factor.

It's not just an easy question of hitting one group or targeting one group and going and getting $30 billion.

Mr. Johannson: Last year, you had a beautiful suggestion. Tax the interest on RRSPs.

Mr. Discepola: Who had that suggestion?

Mr. Johannson: You didn't go ahead with it. I think you're irresponsible not to. I think that could have done a lot more for the deficit than the cuts you've made. I think the cuts will turn the economy downward and hurt the whole economy. I don't think that would have happened with the tax on RRSP interest - not RRSPs, just the interest.

.1635

Mr. Discepola: If we had taxed the interest or the growth in RRSPs, how much do you think it would have generated?

Mr. Johannson: The number I remember from your documents was about $15 billion.

Mr. Discepola: It was $5 billion, and we're targeting $30 billion. You see, it's not just an easy question of -

Mr. Johannson: Fine, it's a lot of money, and it will go a long way toward solving a lot of program problems.

Mr. Grubel: People who have saved all their lives for their retirement will be very happy to know that suddenly, when they wake up the next morning, 15% of their money will have been confiscated. Don't you worry about that?

Mr. Johannson: I think if they knew it was going to the deficit, they'd be willing to help.

Mr. Grubel: I'm glad you've spoken for all of us.

Ms Owen: All these different alternatives are being put forward, and every time somebody comes along, we can't just do something. We can't just tax the system, we can't just lower this, no one is saying we have to do just one thing.

I just presented you with eight different things that had been proposed. For the most part, they would all work together and each would bring in $1 billion, $2 billion, $10 billion, or whatever. It is not as if we are so simplistic as to think we should just do one thing. I'm afraid that's the cut and slash mentality that is so simplistic. There is no vision, unless you call tunnel vision some kind of vision.

If you're saying we have already paid our taxes, Paul Martin was confronted last year by seniors at the Lions centre with the fact that one of his companies, the CSL Group, with a profit of $19.7 million, paid absolutely no income tax in one year and received a $400,000 tax credit that same year. That is our Minister of Finance. He did not dispute the facts at all. His only response was that company had created a lot of employment. But the benefits are reciprocal. Without that company the people wouldn't have had the jobs, but without the workers he couldn't have run that company, so he benefited enormously from them.

Mr. Discepola: Are you not worried that same company could establish itself in Mexico or anywhere else?

Ms Owen: If our Minister of Finance has the kind of loyalty to Canada that he would rather do that, then it's time we vote in somebody else. But in the meantime, all his employees were paying their taxes and he paid none. He had far more benefits from us than any one of them did. That is unfair and heartless. It is a conflict of interest to be finance minister and rip off the economy like that.

I have some documents that say that in four years during the 1980s the banks paid 2% income tax or less, and in four years they got $2.8 billion in tax breaks, while they laid off 12,000 employees. That's the trickle-down effect for you.

Think what the treasury could do with all that misused welfare - that's welfare to Mr. Martin and welfare to the banks. They are the welfare bums. Don't try to tell me that cutting welfare or programs is going to get us out of the deficit. You say we can't spend our way out of it.

Mr. Discepola: My only comment, Mrs. Owen, was that I do not agree you can grow your way out of a deficit problem.

Ms Owen: Neither can you cut your way out of it.

Mr. Discepola: I do not agree you can reduce interest rates, and I do not agree you can increase revenues. It is an expenditure problem, and the choice for us is to see where we can hurt the most vulnerable the least. That is the problem.

Ms Owen: You're basing your choice on an ideology that happens to be the opposite to my ideology and that of all the people whose documents I have here. Ours is not less important or less true than yours. You're seeing it from one way, and you will not look at any other solutions. That's why we're in the mess we're in.

Mr. Discepola: Could you make a recommendation to this committee how much we should increase corporation taxes or personal income taxes by?

Ms Owen: No, I can't say by how much we should increase them, but there have been many recommendations, all of which have been dismissed.

Mr. Discepola: I haven't seen any that have said to increase taxes.

Ms Owen: Yes, you have seen them and you've read them. There are many such recommendations.

The Chair: Thank you. Mr. Harris wanted to add something to this too.

Mr. Harris: I was going to say, increase my taxes.

Ms Owen: Mine too.

.1640

Mr. Harris: I am in that top 20% of incomes, and I know Joan here as a person who is from the Canadian Association for the Non-Employed. I'm in that top 20% as an individual. I'm telling you to increase my taxes.

Two-thirds of the income of that bottom 20% is from transfer payments.

Mr. Discepola: I might tell you that if we had not done what we have done, then the cash portion of that transfer payment would have been totally evaporated, especially for the province of Quebec, within seven or eight years. We would have had no say at all in establishing national standards.

We will maintain the cash portion of our social and financial programs, so we'll be able to have a say.

In the past, Mr. Harris, we've given money for education and some provinces used it wisely. Others put that money towards paving roads. Where do you draw the line? If we're going to give money, then we should have some say in its use. If we had withdrawn totally, then we would have had no say at all in the future.

Mr. Brien: I would like to jump into this debate, because what they are telling you is that we can make a choice.

Mr. Grubel, when he talked about RRSPs, said that we cannot hurt people who have prepared their retirement, but when we have the choice between hurting them or hurting people who cannot eat breakfast in the morning, it's an easy choice to make. What they are telling you here today is that we can make a choice.

When you are saying, Nick, that we cannot touch the revenue, you have to look at the spending problem but there's also a revenue problem because there's fiscal spending. We can look seriously at that. As far as we're concerned, the Bloc has been saying for two years that we can look at the fiscal spending. It's not the only solution, but part of the solution is right there.

Mr. Discepola: We cut defence by 25% last year; we cut other main programs by 20%. We're looking at it.

Mr. Brien: There's room to touch the revenue side, not only to do that.

Mr. Discepola: Give us one example.

Mr. Brien: When you said that the marginal rate of taxation is 52%, you have a problem. It's the last dollar that you want that is taxed at this level, because the effective rate cannot be 52%. If it's that, then I will help you to do your income tax return. I'm not paying 52% income tax personally.

Mr. Discepola: What are you paying? Do you want to raise personal taxes? Is that what you're recommending?

Mr. Brien: The effective rate is between 35% and 40%, not more than that.

I very much respect Mr. Harris, who said that he can pay more right now if it can help the 20% at the bottom of the pyramid. As far as I am concerned, I also can do more. As members of Parliament, we also are in the top 20% of the people. We can do more. Everybody in our social level can do more.

They are telling you that there's an alternative that we can look at seriously. I'm not a socialist; I'm counselled by my colleagues on the right wing of the Bloc. However, sometimes you have to look seriously at the options. In the debate right now, as a member of Parliament I don't want to be seen as being in the same category as you today, because you are off-track, and I would like to tell them that there are people who understand their concerns.

Mr. Discepola: All I'm saying is that I do not agree that the solution is on the revenue side.

Mr. Brien: You can look at both.

The Chair: You will find great disagreement among all of us. We're all part of the debate. I hope that until we'll have completed our hearings all members will be open to constructive suggestions from our witnesses on all aspects. I'm sure that they are.

[Translation]

Mr. Crête.

Mr. Crête (Kamouraska - Rivière-du-Loup): For a debate like that, we need a kind of mutual trust.

.1645

We need to have indicators, signs. Each of the parties concerned - a moment ago, we were talking about banks, people who are affected by RRSP and other sectors - must be able to take part in the debate by saying, from the outset, what contribution it is prepared to make to solve the problem.

To do that, there must be a basic trust; there must be a minimum social consensus. It's not an issue of figures, but rather an issue the present government should reflect on very seriously so that we can stop playing this cat-and-mouse game and so people will feel that justice is seen to be done because the arguments we are hearing now about bank profits we heard last year during the social program reform review. Once again this morning, one bank reported profits up 27 p. 100 from last year.

No matter whether it is justified or whether it is within the law or whatever, the responsibilities of each party, the responsibilities of governments in our system are not currently clear enough. I would like to hear your views on the minimum conditions under which you would be prepared to trust the rules of the game, under which we could reach a kind of compromise and everyone would do his share.

This may seem pretentious, but we have already gone through a period in Quebec when there was a concerted effort among the labour federations in programs such as EQUERRE. That was a program in which employees invested a percentage of their salary in order to build low-cost housing or something of that sort for themselves.

We don't see that anywhere in Canada today. Everyone is out for himself and I wonder who is going to rebuild a consensus on this issue.

[English]

The Chair: Who would like to respond?

Mr. Harris, would you like to add anything to that?

Mr. Harris: Not just now, thank you.

The Chair: Okay.

Ms Owen: I 'm sorry, I heard just a very small part of it.

The Chair: Please, if you have a problem with the translation, let me know immediately and we'll stop debate. We insist on that.

Will you respond, Ms Johannson?

Ms Johannson: I think it's a very good question. I think that's what we have to do to have some social consensus. I come to talk because the people who we've elected...I am assuming we elected them to serve us, the people. I come and say that people are hungry; our children are hungry; we look to you. You say to us that it's not your responsibility. That's what you're saying to us. You're saying that you have no choice.

I can't find a place, a consensus. If we all agreed that we have to do something about this problem, then maybe we could say, okay, how can we do it? But I don't even hear our leaders saying, you're right; we have to make sure that people aren't hungry.

To me, that could be a starting place if we all at least could agree. Then we could say, how do we do it?

The Chair: I recall Mr. Discepola saying, let us admit that we do have a problem of child poverty.

Mr. Grubel.

Mr. Grubel: I'd like to return to one topic I hear so often from people like Mrs. Owen about the solution to the problem.

I think when we have discussions like this maybe we can agree on some common facts. With all due respect, I am now going to give you information - which I am happy to send you a copy of - in print, and this is correct.

In Canada, if you make over $50,000 a year as an individual, there will be 90% who make less and only 10% who make more. Okay?

.1650

Now I would like to test you and ask you what percentage of all personal income taxes are paid by those in the top 10%, who are making more than $50,000? What do you think, Mr. Trapp?

Mr. Trapp: I don't know.

Mr. Grubel: Mr. Johannson.

Mr. Johannson: I have no opinion. I haven't studied those tables recently.

Mr. Grubel: Ms Owen?

Ms Owen: I don't know either, but I think you are going to tell me it's a very small percentage; and I would like to -

Mr. Grubel: I beg your pardon. It's a fair question, don't you think?

Ms Owen: All right, fair enough.

Mr. Grubel: We're talking about raising taxes on the rich, right?

Ms Owen: Yes, okay.

Mr. Grubel: If you wish, give me a letter, and I will show you the top 10% are paying 50% of all personal income taxes, madam. Now, what we hear here is, damn it, they should pay more.

Ms Owen: Maybe they should.

Mr. Grubel: Now, having established that fact, I have a question. What has happened to the provincial governments that based their policy outline, of the sort you have given, on that ideology, in British Columbia and in Ontario? They all came in with the idea that all it took was enough compassion and goodwill to carry out the policies that are recommended there. What happened? Could you please summarize for me?

Ms Owen: I don't think it's necessary for me to summarize. I know what happened and you know what happened. But the provincial governments do not have the same authority over the taxation system and the monetary system as the federal government has. They have choices, but they don't have as many choices.

We are dealing with the federal government here. The federal government controls the monetary policy and the interest rate policy. Therefore it's up to the federal government to take a strong stand and do what needs to be done in that; and we do disagree on what needs to be done.

Mr. Grubel: The Bank of Canada told us, madam.... We were very interested in the solution that was brought forward by Mr. Brooks and by Mr. Fortin. They said we cannot do anything but increase overnight interest rates. He said we can push those down to zero, but the next day that will go over the wires of the world to all the trillions of dollars of investors around the world, and they will say the Bank of Canada has just begun to engage in the kind of policy that ruined Weimar Germany, Brazil, Hungary, and other countries.

.1655

Now, madam, this is what we were told. I'm just telling you. Don't argue with me. This is what all economists are saying.

Ms Owen: No, not all economists are saying this. Half of them are.

Mr. Grubel: Anybody can call himself an economist. Just tell me what step of the analysis is wrong.

At the moment these people out there are saying now we're getting 10% on our Canadian bonds. We know when countries start pushing down their interest rates the way it's recommended, inflation inevitably follows.

Therefore, when we want to get back the money we have lent to Canada, we will in about 20 years get only 25% of what we have lent to them in real terms. We want 100%. And we're not going to take this any more. And immediately, the next second they hear this, they will dump their bonds; and when you sell goods, prices drop. And when prices drop, the coupons on them will immediately shoot up and the interest rate will go through the roof.

Madam, there is all kinds of empirical evidence that this is what happens in nation states that begin to try to finance whatever good causes they have by printing money and trying to depress the low interest rate. Now, this is the step-by-step analysis the Governor of the Bank of Canada gave us in the mainstream economy.

What these gentlemen said is we don't care. Let the exchange rate go down. It will be great for exports. They are talking easily since they don't have the responsibility. Even when there is 10% unemployment, 90% of all people are working, and we have to look after them as well.

I don't expect you to accept this, but please listen. We are doing our homework. We have thought through those ideas and have given them very careful consideration. We had many hearings on that subject.

Ms Owen: Yes, I know you have had many hearings on this subject, and you have given very careful consideration and thought through one side of it very carefully. You have not given consideration to any of the arguments on the other side except in ways to put them down.

The Governor of the Bank of Canada is subject to the laws of Canada and the Government of Canada. The Government of Canada can tell him what to do. He does not have the legal authority to tell the government what to do, and taking his advice is not necessarily a good thing. When they replaced Crow, they replaced him with a clone who again has this very same attitude that we have no choice but to go along with all these things we've been doing until now, and there is no other possibility. As long as you take this attitude, there won't be any other possibilities.

The Chair: Okay. On the same issue of the monetary policy, is it that we have an easy fix and it won't cost us anything and all we have to do is lower interest rates? Or is it that there is a price to be paid but we're anxious to pay the price and we can lower interest rates? Is this the argument I heard? Maybe I'm wrong. If I am wrong, tell me. Excuse me. I just heard you say that -

Ms Owen: You're talking a very simplistic view -

The Chair: Oh, I'm sorry.

Ms Owen: - of everything that has been presented to you.

.1700

The Chair: No, just a second. Either our monetary policy is right or it's wrong.

Ms Owen: It's wrong.

The Chair: If it's wrong, then interest rates are too high and we should lower interest rates.

Ms Owen: Yes.

The Chair: Good. That's what I heard. I don't think any of us -

Mr. Johannson: Since Mr. Grubel presented one serious factual error, I think it's tremendously important to correct it.

The Chair: Please.

Mr. Johannson: He said if there is 10% unemployment, it means 90% of the people are working. He knows, on thinking about it, that's not true because 10% unemployment is 10% of the labour. It is not 10% of the population, as you know.

Mr. Grubel: Well, I mean, the babies don't work.

Mr. Johannson: That's right.

Mr. Grubel: Did you expect me to include the babies or the 90-year-olds? We're talking about the labour force.

Mr. Johannson: Okay.

Mr. Grubel: If you have 10% unemployment, 90% of those willing to work are working.

Mr. Johannson: The key thing you have to look at is that the people being measured in the labour force are only the people who, in the survey, have been looking for work within the survey week. You know this, too.

Mr. Grubel: Yes.

Mr. Johannson: So it invariably understates, because it does not take into account the number of discouraged workers.

Mr. Grubel: That's great, but the unemployment rate is still 10%.

Mr. Johannson: The other important thing to point out here is that the unemployment rate as a whole includes everybody who is working at anything, so it includes part-time and full-time workers as the same number.

Mr. Grubel: You have the figures on this?

Mr. Johannson: They present breakdowns. Statistics Canada provides the figures. They're there.

So what has happened is that we still have not got back - unless it's been in the last short while - to the levels of full-time employment we had in 1989.

Mr. Grubel: How many jobs were created in the last three years in Canada in the private sector? Just give me a rough number.

Mr. Johannson: At the beginning of the recession, we had 1 million people unemployed and roughly 12 million people working. Now, we have 1.5 million unemployed and roughly 12 million working.

Mr. Grubel: How many of those jobs were created in the last three years in Canada?

Mr. Johannson: We've gone down and we've come up.

Mr. Grubel: How many have been created?

Mr. Johannson: We haven't created enough jobs to recover from the recession.

Mr. Grubel: Canada has -

Mr. Johannson: You can give me any number you want, but we haven't -

Mr. Grubel: We have created 700,000 jobs, but the impression is always given that this economy is failing and there are no jobs being created. In fact 800,000 have been created in the private sector and 100,000 have been lost in the public sector -

Mr. Johannson: Okay, why -

Mr. Grubel: - just for the record.

It's never enough, I understand that. But let's just have a few basic facts on what's going on. There were 800,000 new jobs created in the private sector in the last three years.

Mr. Johannson: Right. We have been recovering from the recession.

Mr. Grubel: That's correct.

Mr. Johannson: Okay. But unemployment during the recovery has still increased by half a million, and the reason for this is the population increases. There are no jobs for young people.

The Chair: In the spirit I think some of the witnesses asked for, we could maybe agree on some issues.

I don't think there is anyone at this table who feels we've an ideal level in terms of unemployment or those who want to work but are not considered officially unemployed. We have an incredible problem of either unemployment or underemployment in our economy and we all accept it. Let's get about the business, when we have the opportunity, of finding some solutions, okay?

Mr. Johannson: Okay.

The Chair: Let's turn to Art right now, please.

Mr. Hanson: One of the things that concerns me is that there hasn't been very much discussion about further elimination of subsidies as one means of cutting deficits. We've seen, in the last year, the elimination of the Crow rate. Everybody, I think, had the feeling maybe the whole of the prairies would dissolve after it went. But clearly what has happened in reality, I think, is that it's opened up some new economic opportunities. I'm quite impressed.

We work with the Keystone Agricultural Producers here, for example, in Manitoba, who are very -

The Chair: They presented to us this morning.

.1705

Mr. Hanson: Oh, they did. Okay.

There are interesting potentials emerging that I think would be important for the future. We can look at something like the TAG income support subsidy program on the east coast. What's concerning me very much there, and I know it's concerning you people in government, is that longer-term alternatives are not emerging very clearly. Somehow the investment that should be made is not being made effectively, although I know there are attempts being made there.

As an example, the sunrise industry of aquaculture is a new emerging thing that could mean a lot of jobs for people. It's going very slowly. It seems to me it is not being effectively coordinated through the existing redeployment of government funds.

If I look at some of the other things of interest out there, many of them seem to come around to the notion, which Arthur Trapp was introducing, of what I would call community-based initiatives. Somehow, again, government tries to foster these, but our existing programs and subsidy programs don't seem to be terrifically effective.

I'm actually drawing a lot of my own ideas on these things from looking at other countries, not necessarily those in the ``developed world'' but from developing countries. The Royal Bank, for example, has set up a large fund now based on the Grameen Bank model of Bangladesh. The Aga Khan Foundation has worked very effectively in India. And there are some very interesting ones in the United States. The South Shore Bank in Chicago is an example.

The essence of these models is all the same. You provide seed money, which goes into the community itself, and the community reinvests the money and continues to reinvest it through individuals, producer groups and other groups. In doing so, it often reaches out to the very poorest in the community.

I think in many ways this is very close to what Arthur Trapp was referring to in dealing with the northern communities here. This kind of model is one I would like to see more ensconced in the kinds of financial programs we have in Canada.

The Chair: If you have any literature on that, could you get it to us?

Mr. Hanson: Yes, I'll do that.

The Chair: Thank you.

Mr. Hanson: I lived for a number of years in Nova Scotia. There are a number of good and bad examples in Cape Breton. The good examples seemed to follow this kind of model as opposed to the model where you bring in a large number of outside people who come and go and unfortunately take a lot with them. So the notion here is of being able to foster independence and not dependence.

I'd like to come back to this notion that again is tied into various kinds of subsidies of taxing the environmental bads and not the economic goods. Not just in Canada, but in other parts of the world as well, they are trying to look at this. They are really looking at ways in which you can reduce the payroll taxes and the other taxes holding back employment generation and actually recognize two problems with one.

One is that there is an inherent environmental subsidy. If you could put a figure on it - probably in the billions of dollars - you could create pollution tax systems. That's what we've been trying to look at in our work here, which we call Green Budget Reform. I'll leave a copy of this book.

If you actually look at job creation and new livelihood in this context, then we can turn to things like the environmental industries in Canada which now, over the last decade, have produced actual employment in Canada that's about equivalent to the pulp and paper industry. Not many people realize that. But anywhere between 80,000 and 150,000 jobs are tied up in one way or another in this industry. It's another example of what we could call the sunrise industry.

So what we would initially like to see is how we could eliminate some of the subsidies that first of all really act as a drain on the public purse; secondly, create environmental problems; and thirdly, really inhibit the growth of alternative livelihood.

In fact, we try to put the notion of sustainable livelihoods forward so one deals with this kind of long-term thing so important in a society. Jobs are going to be transient. We know that. Even employment strategies are very hard to create as a permanent sort of thing. But the notion is of living in a community, accepting responsibility for local resource management, which is one of the problems we've seen in spades on both coasts in fisheries and to some extent in forestry as well, and creating a different kind of management system that puts much more responsibility not on the public purse but on the resource users.

.1710

I think there's a lot to be commended. It's not the overall solution to our deficit problems or our problems with unemployment. If one takes the roughest sort of approximation, we can probably address 10% or 20% of those problems by taking into account these ideas of greening budgets and of environmental technologies and environmental industries.

The Chair: Thanks, Arthur.

I just want to get some sense of how you people would like us to conduct the rest of these hearings. Just by way of intervention, I would hope each of you would have a brief time to summarize at the end - say, a maximum of one minute. I certainly don't want to cut anybody off. I want everybody to have as much say as they want here. So I leave it in your hands. If you want to go immediately into that round of summing up, we can. But if you have something to add before that, feel free to do so.

Would any of our witnesses like to say anything before we sum up?

Mr. Harris first, and then Ms Owen.

Mr. Harris: I have to take my leave. I have to run somebody to the airport.

The Chair: Mr. Harris, I want to thank you for coming. You have an invitation to be with us next year. And if you want us to take a look at anything, send it to us in writing, okay?

Mr. Harris: You will be receiving it.

The Chair: Thanks a lot.

Ms Owen.

Ms Owen: I just wanted to say something about taxing the environmental bads. I made a submission last year that has gone nowhere except to being printed in the books. We should put a 15% green tax on all junk mail. The calculation was that it would raise $1 billion a year, based on the premise that the junk mail would then be cut in half. I had it all figured out, although I didn't do that myself. I got it from a newspaper editor. But I think that would be one way of doing it.

The Chair: That's not a bad idea. The only flaw in that as a revenue-raising measure is that it might cut junk mail to zero.

Mr. Johannson: No, that's not possible.

The Chair: Oh, it's not possible? Please tell me it is. Maybe we could put that tax up to 100%, then.

Mr. Johannson: As a believer in junk mail, it wouldn't even be good to do that.

The Chair: Oh, okay.

Mr. Trapp, did you want to add anything before we conclude?

Mr. Trapp: Yes, but my remarks are nothing new. They just top off what I started with. When I started my remarks here, I didn't know they would resonate with anyone. I'm glad to hear there's been some feeling for this subject.

The point I am trying to make is that we need additional money for a team to be developed to go into the community to awaken the spirit of economic and social development so that we do, to the extent that it's possible, eliminate the poverty, the suicides, if you will, and all the other kinds of despair that you find out in those communities. We can do it, because the resources are there and we have to do it.

Now, as to where the money comes from -

The Chair: That's our problem.

Mr. Trapp: - if there's money somewhere else, fine. If it has to come from the international programs, that's fine, too. I can tell you I made a presentation to Dan Haggerty, the president of our organization, several weeks ago. I don't know what the results of it will be, but we're following up on it. We will be pushing that subject because we, as Canadians, have a moral responsibility to eliminate this blot on our character. We are basically volunteers - we get $25 a day - and we are willing to go out to help. So we're asking for some help from you people. We want you to take that message to our people who dole out the dollars.

The Chair: Mr. Trapp, you're compelling. And you're not just asking us; you're a person who's prepared to give your time to it.

Mr. Trapp: I thank you.

The Chair: I would like to see our committee carry it forward. This has been a very constructive offer of assistance in an area that has a claim on the conscience of all of us.

Thank you very much.

Mr. Johannson.

.1715

Mr. Johannson: I would like to thank you all for the privilege of appearing. I've found it to be very enlightening in many different ways, and I certainly enjoyed the interchange. Some of the issues are identified, and much of the heat over the issues is due to the question of social consensus. Are there certain things on which we have a social consensus? The problems that are coming up are because this is being thrown into doubt.

Do we believe that child poverty is a real problem and has to be solved and are we committed to solving it? Do we believe that unemployment and underemployment are a real problem and are we committed to doing something about that? Are we committed to looking at an economy that takes the environment responsibly, that doesn't just assume that we can produce more and more and more and grow and grow and grow and the devil take the hindmost? Do we have that kind of consensus?

I think the Canadian people do have a consensus. I think the Canadian people want us to solve child poverty. I think the Canadian people want reasonable levels of employment, full employment if possible. If not, then they want adequate income security measures so that nobody will be driven to total destitution, so that we will not have people who are starving in one of the richest countries in the world.

Second, I think we have a growing consensus that we have not been serious about the environment, that we have not taken our environmental limits seriously and it's time for us really to start listening to that.

Ms Owen: I really take exception to the comparison of the ideas of Jack Biddell, Pierre Fortin and Neil Brooks - and Paul Hellyer and Warren Allmand, for that matter, although they weren't cited earlier - that we should compare them with the German Reich, where you had to have a barrel full of money in order to buy a loaf of bread. It proves that the committee has not seriously studied any of these proposals, because there is nothing in them that would suggest that we create money at random or irresponsibly. There are methods -

The Chair: The committee did not say that, please.

Ms Owen: People around the table said it, then. I'm sorry if I did not differentiate.

These submissions should be seriously studied and considered. They are not irresponsible. They have given account of all the possible scenarios, and there are definitely alternatives. I wish that the government could be convinced there are alternatives.

On the scenarios you cite - this would happen and that would happen - yes, they would happen if we go along the same direction and then make certain drastic changes all of a sudden. We assume that if we didn't get to where we're going on this road, then it's because we didn't run fast enough and we must run faster down the same road, without ever considering that there might be other roads that would get us to where we were going.

That's the thought I'd like to leave with you.

The Chair: Thank you, Martha Owen.

Joan Johannson.

Ms Johannson: This has been a chilling experience for me. On the issue of social consensus, I thought I lived in a country where the leaders of our country said, ``We care, but more than that, we are responsible for seeing that people have at least a minimum, enough to eat and a place to live''. But I didn't hear that from the people who asked us questions or spoke. I heard a lot of economics. I heard a lot of people arguing about figures and numbers, but I didn't hear anybody say, ``Well, maybe I don't agree with how you think we should tackle the problem, but maybe we should do something else''.

Unless our leaders say to us, ``We know that this is our responsibility. You are the people; we have a responsibility to see that you don't go hungry''....

It chills me to the bone that I don't hear this from my leaders.

.1720

The Chair: Thank you, Joan Johannson.

Arthur.

Mr. Hanson: I'd like to leave you with two thoughts. The first is that earlier this fall the World Bank tried to look at a new way of calculating the wealth of nations. Canada came out as the second wealthiest in the world, and I think that's fair. Maurice Strong, who many of you of course would know, points out that the world really is at its wealthiest state ever at this point in time, so to say we don't have the resources or the wealth is probably a wrong thing to say.

By the way, the World Bank with its crude calculation puts the wealth per capita in Canada at $800,000 U.S. per person based on a calculation of four different elements, and this is the interesting part of it. The elements are the natural resource base, in which Canada has about 70% of its wealth tied up; human resources; social capital; and then the kind of infrastructure we do with capital.

The important point of that study is that when they looked at all the nations of the world, the successful ones tended to be those that invested in human capital, which was much to their surprise, because the bank had spent all its time investing in infrastructure capital. We shouldn't lose sight of that. I think that's very central to this whole discussion.

The second point is much more something that I think I can just toss back to the committee, and that is that in chapter 4 of the famous red book there was this commitment to do a program review within government of all government programs from the point of view of sustainable development. That review has never been done in a systematic fashion. Those of us who are working in this area feel that is central to answer some of the questions that have been brought up this afternoon.

I think the Department of Finance, as it prepares its own accounting for the new commission on environment and sustainable development, whenever that comes about, will have to have the framework for that program review. There are a lot of people in the international round table, IISD and others, who are certainly prepared to help in that, but I'd like you to take the message back that the review is still badly needed.

Thank you.

The Chair: Thank you very much.

If I can be presumptuous enough to attempt to summarize - and I'm not sure I can very adequately - I didn't hear anybody say that we don't have a responsibility to deal with the deficit and the debt. I take it as a given that we have to deal with this problem. We have been given various alternative routes for dealing with it.

We have those who have said there is no room for taxation or revenue measures. We have those who have said the cuts they have taken are already hurting those who are most vulnerable in our society. There are others who have said we have not considered the full gamut of revenue measures, from taxing the environmental bads and not economic goods to green taxes to a spate of ideas put forward by Martha Owen from people we know and have studied and read. I don't intend to get into a discussion of the pros and cons of each one of those authors you've presented to us.

We have heard from Arthur Trapp, who is an example to us. He's not only saying give us a little bit of help here; he's saying I'm prepared to go out and do the labour myself for free and I can give you a very good return on your investment in this area. I think it's that type of example that we're going to have to take more and more into the economy of the future.

I will take certain words with me right to the tabling of our report. Joan Johannson is the person who's touched me the most. She asked us if we are saying that Canada does not have either the wealth or the ability to ensure decent, humane treatment for those who are most vulnerable. It's our job to find out the way to do it.

.1725

I don't find that Martha Owen's simplistic approaches - and she grimaces, but we've studied them - about simply lowering interest rates are that pot of gold we're searching for and that will cure our economic and fiscal ills with absolutely no pain.

Ms Owen: Excuse me. I never said it would happen with absolutely no pain.

The Chair: Then could you explain to us the pain you anticipate if we go that route of lowering interest rates?

Ms Owen: We don't think any of the things that are being proposed will be easy. There will be so much -

The Chair: Okay, fine. I've misinterpreted you.

There will be pain. I can assure you there will be pain from printing money, or from a devaluation, or from attempting to lower the interest rates without affecting our long-term interest rates. From all the experts I've talked to, the pain would be enormous and it would be very risky.

Ms Owen: Then you don't consider experts -

The Chair: We've heard from a lot of them, with all due respect. But maybe I'm wrong. okay?

Let me say this. The problem with thinking there's a magical quick fix - you don't have to agree with what I'm saying - with saying there's a monetary fix, where the Bank of Canada has been misleading us and is wrong and is deliberately having higher interest rates than we need, which is what you are saying -

.1730

Ms Owen: I'm not saying that. I'm saying -

The Chair: In saying there's a conspiracy to impose deliberately high interest rates -

Ms Owen: It's not a conspiracy. I didn't say that.

The Chair: - or through idiocy and stupidity -

Ms Owen: That's so. Yes.

The Chair: Okay. In imposing higher interest rates than we need when the biggest portion of our expenditure, over $40 billion a year, is the interest on the federal debt -

Ms Owen: You're creating more of it every time you borrow.

The Chair: I understand that, Martha. I've heard this before. But maybe you're the only one who understands this issue. You've obviously studied it. You obviously know it yourself, because you're advocating it. I'm just saying that I'm prepared to debate that with you.

Here's the problem. If you, or anyone, thinks there's an easy, painless approach to resolving our problems, then they will be unwilling to take some of the tougher measures that I feel years of extravagance have cost us. They've cost all of us.

If we had regulated our deficit years ago we would be in a surplus position today rather than cutting program spending.

I will go on searching for this pot of gold or pot of revenue, this magical fix on the monetary policy that will solve our problems painlessly, or less painfully than cuts or tax increases. I haven't found it yet.

I want to thank each one of you for your presentations to us today.

Ms Owen: Mr. Peterson, I find this totally insulting. You've been standing there telling me that I'm implying things that I never said. I never talked of a magical, painless fix.

Now you ask me, at the very end of the day, as it's not painless, where will the pain be? We could go through another hour, or two or three, to discuss that one, but we clearly aren't going to do that. You have no right to stand there and imply that I said things that I never said or implied.

The Chair: I apologize to you, Martha Owen, if I implied that, but I am going to be very blunt. A lot of people have come forward, maybe not you, who have said that all we have to do is lower the interest rate to solve our problems.

If you didn't say this, then I apologize to you. If I thought that would work, I would do it immediately.

So we will keep looking, and we'll be looking in the wrong directions and we will be looking in.... If you have a study on this - including Mr. Fortin and Michael McCracken, who have appeared before us, and others who feel that our interest rate policy could be changed without having long-term, horrendous implications for us - please get those people to us. I undertake to have them to appear before our committee, Ms Owen, under your aegis. You can bring them, we will listen to them publicly, and we will have the experts debate it.

Mr. Grubel: We've done it.

The Chair: We've done it, and we'll do it again. I look forward to that. I hope you'll take me up on that invitation, because it's a lot less painful than increasing taxes or cutting programs.

Thank you.

The meeting is adjourned.