FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, September 23, 1998

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[English]

The Acting Chairman (Mr. Paul Szabo (Mississauga South, Lib.)): Good afternoon and welcome to this meeting of the Standing Committee on Finance. Pursuant to Standing Order 108(2) and 83.1, the committee resumes its pre-budget consultation process.

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This afternoon we are pleased to welcome representatives of the Canadian Cancer Society, the Canadian National Institute for the Blind, the Heart and Stroke Foundation of Canada, the Canadian Association of National Voluntary Organizations, the Canadian Centre for Philanthropy, and the United Way of Canada, Centraide Canada.

Good afternoon, everyone. I understand we're going to start with representatives from the Canadian Association of National Voluntary Organizations. Penelope Marrett will begin.

Ms. Penelope Marrett (Director, Health Questions, Canadian Association of National Voluntary Organizations): Thank you.

The Acting Chairman (Mr. Paul Szabo): I understand you will be making some brief comments as a starting point. We will then hear from the rest of the representatives in the order they appear on the witness list. Then we will be taking the rest of our time for questions and comments from the members of Parliament. Please proceed.

[Translation]

Ms. Penelope Marrett: Good afternoon, ladies and gentlemen. I want to thank you for this opportunity to discuss our brief with your committee this afternoon.

First of all, I'd like to introduce my colleague Ruth Vant, a member of the Board of Directors of the Canadian Association of National Voluntary Organizations. I apologize for my French, which is not the best, but I will nevertheless try and answer in French any questions that are put to me in French.

[English]

Good afternoon, ladies and gentlemen. Thank you for the opportunity to appear before you to discuss the brief that was recently submitted on behalf of national voluntary organizations working in health.

I would like to make a few additional comments in support of our brief. On the second page of our brief, you will notice that we have six recommendations. I would like to highlight some of those recommendations for you now.

As you are aware, the people of Canada rate health as one of the most important issues of the day. In fact, they would like to see the federal government take a leadership role in ensuring that the health system as we know it today is kept. National voluntary organizations working in health are an integral part of that health system. We recognize the desire of Canadians to keep the health system that we have today. We believe we are part of that answer. Our ability as organizations to reach into communities across Canada and engage the citizens of these communities is vast. We work from coast to coast and we are able to ensure that the people of Canada have the ability to not only help themselves and their families but also to help others in their community that need assistance.

The recommendations in our brief are based on what we as national voluntary organizations working in health have seen in the communities across the country. You will note that some of our recommendations do not relate solely to national voluntary organizations working in health. We do believe that the recommendations that relate to the sector as a whole are an integral part of the government's commitment to the voluntary sector as well as an integral part of what we need in order to do our job. We would like to be an active participant working with the federal government in responding to the concerns of the people of Canada about health. We are uniquely positioned to do this and look forward to this opportunity in the years ahead.

One of the important things that has happened with the government is the federal government's decision several years ago to increase incentives for donors across the country. This has had an impact on charities as a whole. However, we believe it is very important for the government to continue to work with the voluntary sector to enhance tax incentives for modest donors. Most of the donors in this country are small donors, those that give less than $100 a year. They are innumerable and they are a very important part for charities.

We also believe the VolNet program, which has begun with this government, is a very important initiative to assist the voluntary sector to connect to the information highway. We believe it is now time to start to plan and implement a second phase of the program.

Another aspect that is very important to Canadians is what is going on as it relates to direct-to-consumer advertising or, as you may have heard, direct-to-consumer education or direct-to-consumer information. It's very important that national voluntary organizations working in health are involved with the government in extensive consultation before any decision is reached.

I'll now turn it over to my colleague. Thank you.

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The Acting Chairman (Mr. Paul Szabo): We will now move to Mr. Ken Kyle, director of public issues for the Canadian Cancer Society.

[Translation]

Mr. Ken Kyle (Director of Public Issues, Canadian Cancer Society): Good afternoon, ladies and gentlemen.

[English]

I'll be very brief.

On average, one out of every three people in this room will develop cancer sometime in their life, unfortunately. The annual direct economic cost of cancer in Canada is a minimum of $13.1 billion a year. We urge you to make a recommendation that a cancer control strategy for Canada be a priority in the next budget.

On health research, in order to reduce the burden of cancer, we believe the federal government must increase its funding for health research. Given that the government has successfully overcome the deficit, it should increase investment in health research, which will save lives, reduce future health care costs, and at the same time create new jobs.

Investment should be made building on our current strengths, especially people, so that we can encourage young Canadians to look to careers in health research and also to forestall good scientists from leaving Canada. We recommend that the federal government invest up to $500 million more a year in health research.

Regarding community outreach, many Canadians rely on organizations like the cancer society for health-related information, support, and services. There are many cancer prevention and early detection behaviours that, if adopted, would prevent cancer. The federal government should engage the voluntary sector on how government can best respond to community health needs.

On charitable giving, we believe the government should improve the tax incentives for charitable giving by more modest donors and donors of moderate means.

A tremendous public policy challenge for this government will be decision-making with regard to our health care system. Demographics and expensive new technologies will create tremendous demands on the system. There will have to be efficiency gains. The good news is that this is one area where the government has a clear option.

Amounts invested in tobacco control will have immediate and longer-term savings for the health care system as a whole, and these savings would be higher than from investment in any other area. At present the government only spends $20 million per year, 67¢ per capita, to address this leading, preventable cause of disease, disability, and death in Canada. This compares poorly with the successful programs that have been implemented in California, $4 Canadian per capita, and in Massachusetts, $8 Canadian per capita.

We believe the federal government should increase the resources allotted to tobacco control by $120 million a year. This amount need not come from the consolidated revenue fund but could be from a special levy on the very profitable tobacco industry, as set out, for example, in Bill S-13, the Tobacco Industry Responsibility Act, before the House of Commons this fall. This proposed levy is not a tax; it is a levy for industry purposes, much like Parliament imposing the recent levy on blank recording tapes to benefit the recording industry. Tax moneys are spent by appropriation; however, Bill S-13 authorizes the establishment of a mechanism, at arm's length from the government, to spend the funds through a transparent peer review process, with a cap on administrative costs.

Resources would be put into the hands of those in the trenches who really know how to deal with the problem. Solving this problem would reduce by one-third the incidence of cancer.

We believe the federal government could also increase tobacco taxes, which is really important to reduce smoking amongst price-sensitive young people, and we have a number of recommendations in our brief on which I will be glad to answer questions. Thank you.

The Acting Chairman (Mr. Paul Szabo): Thank you, Mr. Kyle.

We will now move to Ms. Fran Cutler of the Canadian National Institute for the Blind. May we have your comments, please.

[Translation]

Ms. Fran Cutler (Member, Board of Directors, Chair, Communications Committee, Canadian National Institute for the Blind): Thank you, Mr. Chairman. We are very pleased to be here.

[English]

The CNIB helps over 100,000 blind and visually impaired Canadians thrive in a sighted world. Our mandate, established by Parliament in 1918, is to ameliorate the condition of the blind, to prevent blindness, and to provide sight enhancement services. We work with the private, government, and voluntary sectors to accomplish our goals.

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In speaking of blindness and vision impairment, we mean people who are functionally blind and those with vision loss sufficient to cause difficulty with daily living. We are encouraged by the increased understanding of the needs of visually impaired Canadians shown recently by the government and in particular by the Department of Finance and Revenue Canada.

I'd like to address three concerns that affect the quality of life for visually impaired persons: research, taxation, and support of the CNIB library for the blind. Advances in research allow many types of visual impairment to be treated successfully. For example, cataract surgeries outnumber births in this country, but Canadian vision research spending lags far behind most industrialized countries. Canada spends a total of $9 million from all funding sources. In the United States, the National Eye Institute alone receives $500 million from the U.S. federal government. Vision research is most crucial for high-risk populations, such as seniors, children, and aboriginal people. Investment in research is more than repaid by reductions in health and social welfare costs.

Now let's focus on taxation. The CNIB encourages the expansion of tax credits to offset the costs of disability. We advocate incentives for hiring and we support increased tax incentives for charitable donors. Visually impaired people often incur extra expenses for travel, medication, advanced computer technology, and magnifying equipment, such as these telescopic glasses, which I use. These additional expenses are considered under the disability and medical expense tax credits, but these credits should be fully refundable. They should not be denied to people with no taxable income.

There's a clear disparity in government funding for assistive devices from province to province. Only four provinces—Ontario, Quebec, Alberta, and Saskatchewan—indeed have assistive devices programs and provide financial assistance. This disparity often dictates where Canadians with disabilities can thrive in their own country. National standards would mean equal quality of life for citizens in all provinces.

People who are visually impaired have a labour force participation rate of 45.6%. For people without disabilities it's 81%. Visually impaired people work capably in over 1,000 professions, including medicine and photography, and even as elected representatives. The government should continue to lead through job creation partnerships, such as the recent HRDC-CNIB youth employment strategy. We favour tax benefits for employers who hire employees with disabilities. Government support can lower the cost to employers for workplace adaptations.

The CNIB also urges the government to increase tax incentives for donations to charities, as do many of our partner and colleague organizations here.

The CNIB library for the blind is the principal provider of alternative format materials in Canada. We transform the printed word into Braille, audio tape, and electronic text. The CNIB provides open and direct service to its 90,000 clients. We also make our invaluable collection freely available to all print-disabled people through partnerships with public libraries. The Canadian government provides no direct funding, unlike the governments of the United States, Australia, and Sweden, among others. While tens of thousands of publications are available through the CNIB library for the blind, of course sighted readers have access to millions of printed items. We are encouraged by the news that the government is addressing technological standards for alternative formats. The CNIB will be pleased to work with HRDC and its partners on this project, but it remains our firm belief that the government must contribute financially to our library to ensure accessible information for all.

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Mr. Chair, with the support of your committee and the elected and appointed representatives of the people of Canada, visually impaired and blind Canadians will thrive and become full citizens of Canada.

Thank you.

The Chairman (Mr. Maurizio Bevilacqua (Vaughan—King—Aurora, Lib.)): Thank you very much, Ms. Cutler.

We will now hear from the Heart and Stroke Foundation of Canada, with Audrey Vandewater, president, and William Tholl, executive director.

Welcome.

Ms. Audrey Vandewater (President, Heart and Stroke Foundation of Canada): Good afternoon and bonjour. I'm the volunteer president of the Heart and Stroke Foundation of Canada, one of Canada's largest health charities.

[Translation]

Our mission is to further the study, prevention and reduction of disability and death from heart disease and stroke through research, education and the promotion of healthy lifestyles.

[English]

The foundation relies extensively on the charitable donations of Canadians to fund these research and education initiatives. The vast majority of the $74 million raised last year was received in the form of donations of $5, $10 or $20 from individual Canadians. We receive no core funding from any level of government. Thanks to this support, the foundation continues to be the largest funder of cardiovascular research in Canada, funding over 60% of all heart and stroke research.

Last year we appeared with the Council for Health Research and described the challenges faced by the health research sector. This year we call on the government to work collaboratively with the voluntary sector to meet the health needs of Canadians.

I hope you have all received a copy of our brief, which is in both official languages.

In speaking to our brief, I do want to commend the government on taking some important first steps through indirect and direct means to reinvest in the health of Canadians, specifically by: establishing the health transition fund and the Canada Foundation for Innovation; investing in the Health Services Research Foundation; establishing the Medical Research Council partnership challenge; restoring the core budget of the Medical Research Council; establishing a cash floor of $12.5 billion under the Canada health and social transfer; renewing the Canadian centres of excellence program; and levelling the playing field between charities and crown foundations as they relate to charitable donations.

I will turn now to the upcoming budget and the opportunity presented to set a long-term health plan for Canada.

Canadians have never been more vocal about their priorities, and health care is at the top of their list. Chronic diseases like heart disease and strokes are consuming enormous amounts of resources, estimated to be approximately $20 billion annually. Millions of Canadians are now living with heart disease, and future trends predict an ever increasing burden.

As the major preventable cause of cardiovascular disease, tobacco remains a critical health issue, particularly among our youth. Waiting lists for bypass surgery and diagnostic tests for stroke put significant pressure on the health care system. The picture painted by these facts and numbers is alarming, and the coming wave of baby boomers will only make this situation worse.

The status of our Canadian research enterprise is equally worrisome. Canada lags behind virtually all other G-7 countries in our overall health research effort. In fact, according to the Wellcome Trust, the United States and Britain surpass Canada in the biomedical research effort by a ratio of more than 2:1. We reiterate our statement made last year before this committee: health research saves lives, saves money, and creates jobs.

With these pressing issues facing the government, we offer a solution: work with the voluntary sector and invest in partnerships with health charities to meet our shared objectives. Organizations such as the Heart and Stroke Foundation of Canada have the community ties, the knowledge and expertise needed to engage Canadians. Further, Canadians trust health charities, and 81% of Canadians report a trust level for volunteers second only to nurses.

We call on the government to take action on its red book commitments to “the third pillar of Canadian society and its economy” as part of a concerted health reinvestment strategy.

In speaking to the recommendations set out in our brief, I begin with research, an area of fundamental interest to the Heart and Stroke Foundation.

We recommend an unprecedented federal government reinvestment in the health research enterprise. We support the establishment of a Canadian institute for health research, based on a partnership model with all constituencies, including health charities.

Like other health charities, the foundation depends on the generosity of millions of Canadians who give time and money to support our efforts. We urge the government to set tax policy that will create incentives for incremental giving for all Canadians. We endorse the work to describe such options currently being undertaken by the voluntary sector round table and the finance department. But we're also disappointed by the apparent lack of commitment on the part of the government. We ask this committee to clearly voice its support and put this important subject on the government's agenda.

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We encourage you to work with Canada's health charities to connect with Canadians to improve their health. We can provide both the community connectiveness and the necessary community outreach programs. The foundation has a proven track record of helping Canadians help themselves, a few examples of which can be found in the appendix to our brief.

Finally, we urge the government to reinvest in health. A reinvestment in the health care system must be broad and must encompass the spectrum of health and wellness from prevention through treatment, rehabilitation, and return to community. Health is greater than health care alone. A reinvestment in primary prevention through health promotion and population health approaches is also needed.

In summary, and also in reference to our brief, the Heart and Stroke Foundation recommends that the federal government increase its health research presence through the proposed Canadian institutes of health research by matching current levels of private not-for-profit sector investment—that is, up to $500 million annually, phased in over three to five years, working with health charities.

We recommend that the government allocate up to $100 million worth of new funds over five years, through a combination of outlays and tax expenditures, to support health charities in extending successful community outreach programs and to provide ongoing support for Canada's health charities. This support should be targeted to programs with unutilized capacity that are national in scope and have proven track records.

We recommend that the government increase federal support for health care, including cardiovascular and cerebrovascular health care services, commensurate with growth in the government's revenues in order to address the concerns of Canadians with respect to access and quality of health care.

Finally, we recommend that the government signal its commitment to help redirect the health care system by renewing and expanding the health transition fund with up to $1 billion in new funding over the next five years. We also recommend its refinement to forge linkages with health charities by designating a national component of the fund through national health charities.

The Heart and Stroke Foundation's call for action can be summarized in three broad areas: first, revitalizing the health research enterprise; second, engaging the people of Canada through a strengthening of the health charity sector; third, revitalizing and redirecting the health care system through reinvestment.

I understand that the Canadian Cardiovascular Society, our sister society, shares the same concerns as the foundation, supporting in principle the recommendations made here today and in our brief. A letter of support from the society will be forthcoming.

[Translation]

The top priority of Canadians is their own health as well as that of their health care system. We hope that the committee will take our recommendations into consideration with a view to building a better future for all Canadians.

[English]

Thank you, Mr. Chairman.

The Chairman: Thank you very much, Ms. Vandewater.

We'll now hear from a representative from the Canadian Centre for Philanthropy, Gordon Floyd, director of public affairs. Welcome.

Mr. Gordon Floyd (Director, Public Affairs, Canadian Centre for Philanthropy): Thank you, Mr. Chairman and committee members.

I do appreciate this opportunity to appear before you again as you consider your advice concerning the 1999 budget. I am here in two capacities: as director of public affairs at the Canadian Centre for Philanthropy and as chair of the voluntary sector's round table, the charitable incentives review task force.

You will recall that when I spoke to most of you in June—I know there are some new members on this committee—I said we would be meeting with finance department officials during the summer months to develop specific proposals for tax incentives that will encourage Canadians, and particularly modest income Canadians, to give more by way of charitable donations. We did have some discussions during the summer, and we met as recently as this morning with finance department officials. So far, however, I regret that I have no more specific proposals to share with you. Instead, we are being advised by finance department officials that the voluntary sector is not even “on the radar screen” for the next budget. In effect, we are being told that the needs of the voluntary sector were addressed adequately by a couple of measures in the 1997 budget and will not be addressed again for some time.

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In that context, Mr. Chairman, it would be premature, if not foolish, to spend your time or mine focused on the details of specific proposals.

So I'm here today with a different message from the one we had anticipated in June. Instead of seeking your endorsement for the details of tax incentives, I am asking you to express your clear support for strategic spending by this government in order to expand the capacity of the voluntary sector in Canada.

Now, appropriate strategic spending on the voluntary sector can take several forms that are consistent with this government's policies. For example, the finance minister and the Prime Minister have spoken of their intention to introduce targeted tax cuts. Enhanced tax incentives for Canadians to support charities with their donations are a form of targeted tax cut that will yield generous returns to Canadian society.

The latest research, conducted last year by Price Waterhouse in the United States, concludes that a 10% reduction in the after-tax cost of donating results in a 19% increase in the amount donated.

Here in Canada it would cost the federal treasury about $118 million to reduce the after-tax cost of donations above $200 by 10%. Such a targeted tax cut would, according to the Price Waterhouse findings, produce an additional $560 million in donations to Canadian charities.

That, Mr. Chairman, is a 475% return on investment. That is one indication of what I mean by strategic spending to expand the capacity of the voluntary sector.

If you are wondering whether those Price Waterhouse results would apply in Canada, I invite you to consider the results of a new national survey on giving, volunteering, and participating that was released last month. This survey was a joint project of seven organizations from both the federal government and the voluntary sector, including the Canadian Centre for Philanthropy.

The interviews of more than 18,000 Canadian adults were conducted by Statistics Canada, and the results are astounding. Almost 19 million Canadians, that is, 78% of the population over age 15, make direct financial contributions to charities and non-profit organizations every year. That is more people than turn out to vote in federal elections. Every year 78% of Canadian adults make donations.

In 1996-97 they donated $4.5 billion. More than one-third of those 19 million donors told Statistics Canada they would give more if tax incentives were enhanced. The response from the most generous donors, those who give over $150 annually, was the most pronounced. These people already account for 86% of all donations by Canadians, but almost half of them say they would give even more if the income tax credit for charitable giving was increased.

Mr. Chairman, in this diverse country of ours, there are very few activities that engage four out of every five Canadians. Charitable giving is one of those rare common touchstones that cuts across partisan lines, linguistic differences, and regional grievances. Would it not be good public policy to build on that strength by providing enhanced tax incentives to those Canadians who are investing in their communities and are ready to invest more through their charitable donations?

I am asking this committee to include in its pre-budget recommendations a strong endorsement of additional tax expenditures in the form of enhanced incentives for charitable donors. What's required at this stage is your political commitment to this form of targeted tax reduction, preferably with a recommended amount to be allocated for this purpose. I've already described to you the anticipated 475% return on investment from an additional $118 million in donations tax credit. That amount would be a prudent allocation, representing an increase of 12% from the present level of tax expenditures for this purpose.

As I said to you in June, the voluntary sector round table favours enhanced tax credits that are structured to benefit moderate income donors who were mostly excluded from the measures introduced in the 1997 budget. We remain committed to negotiating the specifics of any additional incentives with finance department officials.

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Let me turn now to another form of strategic spending that would enhance the capacity of Canada's voluntary sector, one that is, again, consistent with this government's stated policies.

Last month, the Prime Minister spoke to the fifteenth biennial World Volunteer Conference in Edmonton, and he said:

Governments have looked upon your sector as—first and foremost—a preserve of high ideals and noble intentions, not as a valuable source of insight and experience.

In my judgement this has been a mistake. A mistake our government is working to correct.

We have invited the voluntary sector to join us in partnership. To share ideas and plans for the future. To make common cause. We have asked for input.

That strong endorsation of the voluntary sector's useful role in the public policy process is most welcome. However, it overlooks the sector's very limited capacity to translate its front-line experience and community-based knowledge into usable public policy input.

Quite simply, most voluntary organizations are consumed with the challenges of filling gaps left by the past four years of government cuts, gaps in programs and services to their communities and gaping holes in the government-funded portion of their own budgets. Many of these organizations are fighting to keep their doors open, to manage the downsizing of their staff, to merge or collaborate with other community groups, and to step up their fund-raising activity. Very few groups have the time, staff or financial resources to engage in public policy activity.

The task of contributing to public policy discussion therefore falls mostly on national bodies or umbrella groups, sometimes referred to as intermediary organizations. All of us before you today represent such organizations.

A core function of intermediary organizations is to collate their members' knowledge and experience and to reflect their views in the public policy arena. Unfortunately, during program review this government's funding to intermediary organizations was cut back sharply and in most cases eliminated entirely. As a result, even at the national level, the voluntary sector's public policy capacity is minimal. We have virtually no capacity to undertake policy research, to engage in policy analysis, or to participate in the kind of useful policy-making partnership envisaged by the Prime Minister.

It may be useful to compare briefly the situation in Canada with that in England, a jurisdiction where the voluntary sector plays a similarly important role.

Here, the Community Partnerships program of the Department of Canadian Heritage is providing a grand total of $27,000 in core funding to national voluntary groups this year, plus another $392,000 for human rights organizations.

In England, the voluntary and community unit of the Home Office is supporting the core costs of national voluntary organizations with grants of £11 million this year, or approximately $28 million Canadian at current exchange rates. Those grants are being provided for three purposes: to increase the effectiveness of the voluntary sector; to promote volunteering and voluntary activity; and to promote community development and self help.

The British National Council for Voluntary Organisations, which performs a similar role to the Canadian Centre for Philanthropy, is receiving the equivalent of $2.3 million in Home Office grants this year. That is almost exactly equal to the entire budget of the Canadian Centre for Philanthropy, to which this federal government contributes absolutely nothing. In fact, during program review—you may recall this exchange with Ms. Torsney at the end of our session in June—it came out that the government reneged on the last three years of its five-year commitment to support Imagine, the centre's and the sector's program to encourage giving and volunteering by Canadians.

Volunteer Canada is another organization that receives no core funding from the federal government. By comparison, the British counterpart organization received more than $2 million from the Home Office this year. In all, the British Home Office supports the work of 45 intermediary organizations in Britain. When those grants were announced in February, the Home Office minister with responsibility for the voluntary sector—they have such an animal in Britain—said:

We see the voluntary sector as our partners—people we work with to shape a new and better Britain, whose strengths complement ours and whose goals we share.... This money will mean better co-ordination of existing voluntary activity and will be the springboard to imaginative and diverse new work.

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Mr. Chairman, in addition to their public policy activity, intermediary organizations support and assist the work of their members, provide training and education to staff and volunteers, support management development, conduct and disseminate research, assist with good governance and accountability practices, and perform many other vital functions. That's why, in its recent discussion paper, the Panel on Accountability and Governance in the Voluntary Sector, which was established by the voluntary sector round table and is chaired by Ed Broadbent, called upon funders to restore and increase support for this vital aspect of the voluntary sector's infrastructure. Last week the governing board of the Canadian Centre for Philanthropy gave strong support to this proposal.

So, Mr. Chairman, I am asking the members of this committee to recommend that the government, in its 1999 budget, reinstitute and increase core funding of intermediary associations and provide significant additional support for the organizational infrastructure of voluntary organizations, the core costs. An initial allocation of even $5 million would be a good start and would certainly be well used. This government has recognized the benefits and leverage of investments in other aspects of Canada's infrastructure. An investment in the infrastructure of Canada's voluntary sector is another example of what I mean by strategic spending to expand the sector's capacity.

Finally, Mr. Chairman, I want to comment briefly on the government's stated intention to allocate new spending in the 1999 budget for health care. I've read and listened closely to recent comments by the minister of finance and the Prime Minister but have so far heard no hint of extra support for the important role the voluntary sector plays in Canada's health care system. That role has been described in some detail by my colleagues. I would only add that while we're all conscious of the need to repair medicare and related government programs, let's also remember that voluntary organizations also fund health research, assist patients in their homes, address environmental health concerns, prevent illness through social service delivery, and support healthy communities in many other ways.

For almost 20 years governments have paid lip service to the goal of expanding community-based health care. We need look no further than the hostels filled with former psychiatric patients to know how hollow that rhetoric has been. Most recently, from coast to coast governments have been closing hospitals and restricting access to health coverage. Always there are new promises about more support for lower-cost community-based alternatives. It's time for governments to deliver on those promises, and where better to begin than in this government's 1999 budget by allocating a significant part of the increased funding for health care and health-related programs and services to voluntary organizations?

There's growing evidence that we get extraordinary value added for every dollar spent in the voluntary sector. A new study by economists at University College in London, England, concludes that charities produce $1.40 worth of good work for every $1 they spend. Some charities, such as those serving the homeless, add value at a rate of 200%. I doubt that any programs delivered directly by government yield comparable savings or returns.

To conclude on this point, Mr. Chairman, I ask the committee, in its recommendations concerning expenditures on health care, as on other programs, to remember something else the Prime Minister said last month to the World Volunteer Conference, and I quote:

[A]s the world prepares for a new millennium...[i]t is a momentous time. Of change. Of opportunity. Of a new beginning. And, for government, a time to reform and re-think. To accept that we cannot do everything.... [T]he days in Canada when the volunteer sector is over-looked and under-rated are over—for good. Working together we can accomplish so much more than working apart. The only limit is our imagination.

Thank you, Mr. Chairman.

The Chairman: Thank you very much, Mr. Floyd.

Now we'll hear from the representative of the United Way of Canada, Mr. David Armour. Welcome.

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Mr. David Armour (President, United Way of Canada): Thank you very much, Mr. Chairman and members of the committee. It's great to be back after the meeting we had in June, which many of you were at under difficult circumstances, having had to work late the night before. It's great to have a chance to speak with you again.

My co-workers have covered the territory very well, so I will be brief. I'd like to start by thanking this committee for the work you've done in the past few years in recognizing the role of the voluntary sector and in recognizing the importance of increasing the capacity of the voluntary sector to help all Canadians help all Canadians, to create more caring communities right across the country, and to work together for social justice, for fairness, and for caring communities.

My comments in speaking to you today are from the perspective of a co-funder, not as a significant recipient of government funds. As an organization across the country—and you probably don't know this—we're the next largest funder of non-mandated health and social services, after the federal and provincial governments in most provinces. As a co-worker, I'd like to speak to you briefly about two things and reinforce what's already been said.

First is the whole issue of charitable tax incentives. Please do not think your work is over. We've made a great start together, but the key issue now is what areas we can explore together to look at enhancing and supporting the generosity of Canadians of modest means, of modest incomes, to support all of the charities across Canada.

We fund, in Canada, over 4,000 member agencies and an additional 10,000 organizations through donor-directed giving. All of those organizations are involved in fundraising from the grassroots. Anything we can do to increase the charitable tax credit, as you've heard, will have a leveraged impact in supporting those organizations right across the country.

The latest research, as Gordon said so well, from the national survey on giving, volunteering and participating, and research that United Way of Canada did a number of years ago, has shown very clearly that donor behaviour is linked to the charitable tax credit, and it's a leveraged impact. We're well on the road together in terms of what we've explored in the last few years.

Our charitable incentives review task force of the voluntary sector round table—as you know, Gordon chairs it and many of us are involved in it—will be exploring with finance department officials specific ways of working. We need to hear from this committee your ongoing support to explore areas that make sense for the federal government and that are seen by yourselves as a wise investment.

The other point I'd like to make is on the issue of funding for health services and health care. Again, as a major funder of health care services across the country and a co-funder with you, we were delighted to hear the thoughts of the federal government about enhancing funding in this area in the next budget. We would strongly support this, and we would strongly support not just restoring funding but working through the Department of Health with the officials there to look at creative ways of working with the voluntary sector and producing health programs and services across Canada that meet the shared objectives of Canadians.

The federal government can get a leveraged impact here again, not just in direct funding, not just in the kind of important funding that you've been doing for years and restoring some of that, but also in exploring through the Department of Health some creative areas through the voluntary sector that will get leveraged results at the community level right across the country.

Thank you for hearing us and for once again having a special hearing with the voluntary sector. We've had meetings in the last week with a number of ministers of the federal government—cabinet ministers—and I've heard a renewed sense that society is made up of three pillars—first, government, the public sector; second, the private sector; and third, the voluntary sector. Our role here, our ability to come and speak with you and evolve Canadian society together, is important recognition on your part of the role of the third sector. Thank you very much.

The Chairman: Thank you very much, Mr. Armour. Thanks to the panellists.

Indeed, we are living in an era when we must redefine the relationship between all partners in our society. This particular discussion is very helpful in assessing the new situation.

Mr. Ritz, we'll begin with you.

Mr. Gerry Ritz (Battlefords—Lloydminster, Ref.): Thank you, Mr. Chairman. Thank you, ladies and gentlemen, for your presentations here today.

I just have a couple of quick points I'd like some discussion on. I will not direct the questions to anyone in particular.

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Certainly a stronger and sustainable health care system is on the minds of Canadians today. We hear that all the time and polls are telling us that and so on.

There are a couple of points.

You're collectively talking about an increase in spending of almost $2 billion a year—I did the addition quickly here—so how do we safeguard the taxpayers that we serve against overlapping costs on programs? There's the federal government, the provincial governments, and the voluntary health charities. How do we co-ordinate those resources to get the best bang for our buck? That's my first point.

Second, you are all talking about tax incentives for donors. Do you have any specific recommendations?

Mr. Floyd talked about a 12% increase in some of his literature. How do we get there? What do we do? Any recommendations you could give us would be much appreciated.

Ms. Audrey Vandewater: Perhaps I could start. I'm not an accountant, but I am a volunteer. Building on what seems to be a common theme around this panel—volunteerism and the value that volunteers bring to Canadian life and the health and well-being of Canadians—when you're talking about tax incentives, let me say that one of the proposals we brought up last year was a “stretch” proposal, where the rules would stay in place up to a certain amount and if an individual went beyond that by another $100 or $200, then that individual would take a giant step towards a much greater tax benefit for that little extra stretch being made.

When we talk about overlapping programs, I think another common theme we're hearing today is the theme of partnership, collaboration, leveraging. I think it's going to be in the best interests of all of us to continue dialogues. We have to be very diligent about talking to one another and making sure we are not overlapping, that we aren't duplicating. We all have a great responsibility to be stewards for the moneys we are collecting. Whether you are a charity or a government, you are the stewards of the taxpayers' dollar and it's very important that it be spent wisely.

From the health charities' perspective, I need to tell you that it was just last April when representatives from various health charities and various sizes of charities had a meeting with Mr. Rock to again discuss common ground, what we wanted to achieve together and where the value-added would be.

And it sounds like there was another round table going on in June that you people here were attending.

We also had the first ever health charities round table in June. Again, we were trying to determine what the priorities were and how we can best work together. I think that's what we need to continue do in the future: we need to work together.

Mr. Gerry Ritz: Thank you.

The Chairman: Mr. Armour.

Mr. David Armour: If I may, I'd like to add just a couple of things in terms of co-ordination. First of all, I'd say that a lot of the co-ordination is already going on.

I think that at a community level a lot of people would see a person going into hospital and coming out of hospital. But I would like to remind everyone of what you already know: there are the services that the person receives before going into the hospital and after coming out. There is the kind of preventative work a person can receive from the Heart and Stroke Foundation of Canada and the Canadian Cancer Society in reducing their risk factors. Maybe somebody trained by the St. John Ambulance, the Canadian Red Cross, or the Canadian Cancer Society looked after the person before the ambulance got there. Maybe the person in hospital received visits from social workers. And maybe when out of hospital the person received home visits from the Victorian Order of Nurses, from the Red Cross, or from a number of organizations. We're already working very well together at the community level.

My other point in terms of co-ordination is that perhaps when the federal government meets with the provincial governments about health funding, the government might include the third major health services player in those discussions so that it isn't a case of two levels of government working everything out and then afterwards having the voluntary sector perhaps involved by one of those two levels in terms of our role. The whole thing meshes together at the community level, and I'd suggest that the programming, planning, and policy levels have to mesh together as well.

In terms of the second part of your question about a charitable tax credit, if there's a strong interest from this committee in exploring options, I think Gordon and his team will work with finance officials and we'll come up with some good strong options that do in fact make sense for government, for the voluntary sector, and for taxpayers. As Gordon said, there aren't specific options now, but really, the targeted area of attention is strategic ways of increasing giving for modest donors. That is not as easy as what we have done so far.

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The Chairman: Thank you, Mr. Armour.

Ms. Wasylycia-Leis.

Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): Thank you, Mr. Chairperson.

I'd like to thank all the presenters for presenting us with a very clear idea of what is in fact a double-whammy that has hit Canadians in recent times. With the combination of deep government cuts in health and social services and the elimination of funding to voluntary organizations in our society today, it seems to me that in terms of the people I've talked to, this has put an incredible burden on families, particularly women who are left to pick up the pieces. It has really had a serious impact on the quality of community life everywhere.

As one of the questions I have, from your personal experience and your work with your organizations, if we don't come to grips with this problem, this double-whammy, what will it mean in terms of the health of our communities today and for families everywhere?

The other point I wanted to make, or the other question I wanted to raise, is that yesterday we heard groups from all sectors of the health care field in Canada saying with one voice that we need a reinvestment on the health care side. They say we need a minimum injection of $2.5 billion in terms of health transfers. I haven't heard that directly today, so I'm wondering how you feel about that.

Related to that, how would you break down your recommendations vis-à-vis direct funding for cash transfer payments versus funding for health research, versus funding for smoking cessation programs, versus funding for voluntary organizations? Can you give me an overall sense of how we put all this together? What kind of pressure should we put on the government leading up to the 1999 budget?

I'm sorry that it's very general. It's not directed to anyone in particular.

The Chairman: Mr. Armour, would you like to start? Would you like to respond to that?

Mr. David Armour: Sure.

For the last few years, the United Nations has rated Canada the number one country to live in. It wasn't by accident. It wasn't just the beautiful, natural country that we have. It has a lot to do with the way the government, the voluntary sector, the private sector, organized labour, and small business have together created civil society, community by community. I think the simple answer to your question is that some of this is at risk. Some of that infrastructure that we have created community by community is at risk if we don't ensure that the voluntary sector has the capacity it needs.

A lot of what you have heard from my co-workers concerns issues around capacity. You've heard the issue of the capacity of national offices, of the capacity of organizations, of the capacity of assisting donors. As I've said before to this committee, it's not really ensuring that we make up for the cuts made by government over the years, because that's not on. It's really determining how we have the capacity to restructure and to provide the services that are most needed in every community across Canada.

I don't have any doomsday scenarios about how things will go if that doesn't happen, but I'd say there are some areas in other countries to which you could look for some really concrete examples of what happens when that community capacity goes. There are some areas in the United States, there are some areas after the major cuts in New Zealand, and there are a number of areas around the world where you could look at some fairly horrifying case studies.

As for the second part of your question, the one around the prioritization of health funding, we probably all have different answers to that, but I think it's “(e)”, all of the above. I think it's important to strategically invest in every one of those areas. Whether it's those you mentioned—the transfer of funds, the support to research, programs like smoking cessation—or the piece I was speaking about, the strategic investment and voluntary organizations to create new programs in health care, all of those are needed. By exploring and working in each of those, you'll know where your investment makes the most sense next year, the year after that, and so on.

The Chairman: Mr. Tholl.

Mr. William Tholl (Executive Director, Heart and Stroke Foundation of Canada): Thank you very much, Mr. Chairman. I have what is perhaps a three-part reply to the double-whammy question.

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In terms of what effect government downsizing has had on organizations such as the Heart and Stroke Foundation of Canada, when the MRC budget was reduced, our application shot up by 10%. So there is a squeezing out effect. We were very pleased to see the restoration of the MRC's core budget, but interestingly, despite this, our application stayed up 10%. That's one kind of effect government policy has had on us.

Another longer-term effect is what happens to those young scientists, those mid-career scientists, in the event we don't keep up with our G-7 competitors, particularly the United States. You'll hear all sorts of numbers, ranging from 9:1 to 2.5:1, regarding the U.S. outspending Canada on biomedical research. By the way, the lower mark is backed up by the Wellcome Trust, which has been doing this for 20 years or more. Whether it's two and a half times or ten and a half times, the reality is that unless something is done, Canada's young scientists will go to the United States. They are just awaiting some indication that Canada has a long-term interest in investing in their careers in the health sciences.

We've done some work to back up the statements I'm making, and we'd be glad to provide that information through the clerk of this committee.

Second, we are aware of the HEAL presentation that was made yesterday regarding the $2.5 billion. We were consulted in the course of preparing that brief. Because of the short timeframe, our volunteers haven't had a chance to decide whether or not we would support that number.

Regarding replenishing the funding for health research to the 1993-94 level, we certainly support in principle the idea of putting back what the federal government had to take in order to balance the books. We understand that $2.5 billion of the $6.2 billion that was taken out would be allocated to health, and if that's the case, then we would support that in principle. Why? Because contrary to public statements about waiting lists not being meaningful, I can tell this committee that in the area of cardiovascular sciences and access to cardiovascular services, the waiting lists do hold up under scrutiny. I was disappointed that the media did not pick up on the incredible efforts that have been made in the area of access to cardiovascular surgeries, angioplasties, and coronary pacemakers, particularly in the province of Ontario with the Ontario coronary care network but also in places such as Alberta. Somehow that got missed.

Third, we say in our brief that strategic reinvestment ought to be in areas with proven efficacy. With respect to the $100 million over five years for community outreach programs, the two parameters that would be placed on that would be, one, that you can point to external evidence that would indicate the programs work, and two, that with strategic reinvestment the programs could grow in meaningful ways.

So I think that answers part of the question here, and I think it also answers part of the question from the other honourable member.

The Chairman: Are there any further comments? Mr. Kyle.

Mr. Ken Kyle: Ms. Wasylycia-Leis, you raised the issue of tobacco. When we look at the health care system, we should be sure to look at strategic investments in prevention in order to prevent these terrible diseases. We urge you to support a measure, which will be of no cost to government, entitled the Tobacco Industry Responsibility Act, which will raise $120 million a year without raising taxes. It's a levy on the very profitable industry.

I would like to commend this committee for recommending a tobacco tax increase in your last report. It was gratifying. There have been three of these increases since the major rollbacks in 1994. However, these increases have been very modest. While the tax increase you recommended did take place, cigarette taxes in Ontario and Quebec remain about $16 per carton lower than before the 1994 tax rollback. Current cigarette taxes in Ontario and Quebec, for example, are actually lower than neighbouring states such as Michigan and New York, thus making the case for a tax increase in Canada all the more compelling, especially with the difference now in the Canadian and American dollar. The tobacco industry in the U.S. has increased prices to cover the payouts of the huge tobacco settlements.

So there is room for some further movement this year, and we request that you include this in your report again this year. Thank you.

The Chairman: Ms. Marrett.

Ms. Penelope Marrett: Thank you.

I'd like to respond a little bit more to the question on the quality of life. I think most of us don't recognize that in most communities not only are there large organizations increasing the quality of life but also there are some very small ones. I'd like to give you an example of what can happen to organizations.

• 1640

About a year ago Reader's Digest did an article here in Canada on sleep-wake disorders. There are many people in this country who suffer from sleep-wake disorders. A very small organization that has a part-time individual working for them received, in less than one month, 10,000 requests for information. They couldn't handle it. They don't have the capacity to handle it, and yet they did handle it. It almost tore apart the organization, the volunteers and the staff member. I don't think we would want to see that organization and the support groups they have in the communities across the country actually disappear. People need them, and we need to find a way in which we can support them to be able to continue.

There are many stories like that. I think sometimes when we look at organizations in our communities, we always think of the more established organizations. They are very important. Without them we wouldn't be able to continue with much of the work that is done. However, when you look at the smaller organizations, many of them don't have the same capacity, and they try to work with the larger ones to achieve things. But it's not always possible for the large ones to be able to work with the small ones at every turn. We need to ensure that the services provided by the smaller groups, which are just as important in many ways, are actually there for the people in the communities that need them.

The Chairman: Thank you, Ms. Marrett.

Mr. Floyd.

Mr. Gordon Floyd: The task this committee faces every year is not an easy one, because part of what you're trying to do, as the government is trying to do, is to prioritize, and setting priorities in a time of constraint is no fun.

I know that because in my volunteer life I chair the allocations process for the United Way in Toronto. Recently, because our agencies lost so much in government funding, we have had to do a very hard-headed priority-setting exercise ourselves. We developed our new priorities with two fundamental objectives: to target our money to places where the need was greatest and where the impact is greatest. Need and impact were the two things we looked at.

For governments, I think the challenge is very much the same as for an organization like the United Way. Any additional dollars that get spent should be spent where they will yield the biggest bang. I think this is where the case for expenditures in the voluntary sector really takes on some resonance. This is a sector that operates efficiently, in a way that governments cannot. In the voluntary sector we're able to target services to the people who actually need them, in a way that universal programs cannot be targeted. We're able to leverage every dollar by adding to it the efforts of volunteers from across the country and turn those dollars into more good work than they can buy in any other part of the economy.

I think if you look at expenditures within the voluntary sector itself, there are some areas where the leverage is particularly apparent. This is why I was talking earlier about investing in the infrastructure of this sector. That's the approach we've taken when we try to get the biggest bang for our buck.

In other parts of the government's budget, invest in infrastructure. Ensure that these organizations are well managed. Ensure that they have strong volunteer managers. Ensure that they have good technology. Ensure that they have the kinds of resources at the core that will enable them to deliver the kind of impact that only this sector can deliver.

Finally, Mr. Chairman—and this is a point that I alluded to when I spoke to the committee in June—I think everybody is concerned about the state of Canada's social safety net in the wake of the last few years of retrenchment.

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When we think about what that social safety net is, we should think beyond medicare and publicly funded educational institutions and social security payments to individuals. And we should think about the mesh in that social safety net, which is made up entirely of organizations in the voluntary sector. If we're truly concerned about people falling through a frayed social safety net, then we have to look at repairing that mesh, which has been badly torn by the funding decisions of the last few years.

The Chairman: Thank you, Mr. Floyd.

Mr. Armour.

Mr. David Armour: This is just a brief additional point. In addition to your looking at health and reinvestment in terms of transfer funds, research, and funding the voluntary sector, another way for the committee to look at it quite strategically over the next few years, and at the way you would like to evolve essentially the rebuilding of the safety net, would be in terms of target populations. The question we ask ourselves at the community level is whether we are doing everything possible for seniors, in all areas—in research, in prevention, in crisis intervention, in all program areas.

Right now a particular concern of ours is youth in society. Are we doing everything possible? There's incredible research now that shows what we thought for many decades, which is that the quality of people's life is basically laid in by the time they're five or six—some would even say by the time they're three. Are we doing absolutely everything possible in all those areas, from how we spend our money, from research right through to crisis intervention for youth? And how can we start really strategically targeting our dollars?

The same holds for the disabled. Looking at slicing it differently that way, in ways that we can be strategic, we can measure the outcome. We know the results from programs that are already existing and we can use these as a model to go into other areas over future years.

The Chairman: Thank you, Mr. Armour.

We will go to Mr. Szabo.

Mr. Paul Szabo: Mr. Armour, your last comments are very appropriate. I know that many members of Parliament and indeed the cabinet have been informed extensively about early childhood development issues, about brain neural development, etc., and investing in children has been a significant discussion point among all members of Parliament, I'm sure.

It does raise the issue, though, and it's something that came up yesterday with our health panel, of what you have phrased as targeted, focused spending. I believe over here we've had the issues of measurability. We've got to make sure we get results. We want to have good value for the dollars invested.

I guess the question really comes down to this. If that's what we believe, is there really a comfort level in supporting an across-the-board increase in the CHST to the provinces without strings attached, without any guarantees that it will get to the places where I think you've identified targeted measurable and necessary programs should be achieved? It is a dilemma, and as you know the federal government is a partner not only with the provinces but with the health care delivery system and with all Canadians, and with the volunteer sector, who are all the support groups.

I may be throwing this out to you but certainly also for the comment of others: do we have support for simply writing a cheque, giving it to the provinces, letting them do their thing? Or are you telling us, and I think it's important you tell us today if you feel this, that if we've got limited resources and if that's the situation the finance minister feels we will be in, that we've got to look carefully and maybe, just maybe, that across-the-board CHST increase is not going to be a dollar well spent?

The Chairman: Mr. Armour, would you like to start?

Mr. David Armour: Yes. I think that's largely a political question. I think it's a good question and it starts as a political question.

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My instant reaction would be that you may want to do both; that certainly an increase in CHST raising the water level will raise all the boats. We'll then go to the provinces, and through the provincial funding to the municipalities, and talk about how it's being vested and how we can work in partnership. They'll also continue to do the great job they're doing at the provincial and municipal levels in terms of targeting their funds, increasing funds broadly to services, and increasing hospital funds.

My sense would be that we work in partnership at all levels. You have largely a political question before you, and if you do anything, you might want to do both. Again, the percentage of those two—I think there are other people who would know a lot more about that than me.

The Chairman: That's a pretty good political answer.

Mr. David Armour: Why, thank you.

The Chairman: Ms. Vandewater.

Ms. Audrey Vandewater: Just from what was said earlier, too, I would agree that this seems to be a dialogue that belongs in the political arena. A couple of words sprang to mind when you were posing the question, and I guess number one was accountability. Whenever you are steward of other people's money, there's always accountability.

It was mentioned earlier that, with the connectedness volunteer organizations—from my perspective health charities—can bring because we are national in scope, it may be advisable for all levels of government to consult more with them, to get a real sense of exactly where the need is, and to help them prioritize.

The Chairman: Mr. Tholl.

Mr. William Tholl: If I could just add to my president's comments two others.... One, in the context of the CHST reductions, the $6.2 billion I referred to earlier, the government said less money, fewer strings. It seems to me, if you're going to be reinvesting any amount of money, more money equals more strings. The question is how you put those strings on it in terms of accountability.

Speaking personally, I was impressed by the idea of a health report card, which the Minister of Health spoke about in the Yukon at the CMA annual general meeting recently. Canada is the only country in the world that does not have a health policy goals document to which, even if you miss the goals, you can be held accountable for how much you missed them and for what the reasons were behind not meeting your targets. It seems to me the idea of health report cards warrants more attention.

The corollary of that is, who does the report card? The federal government does it on the provinces. Governments do it on the doctors. It seems to me you ought to be looking at some third party who might do a report card on everybody, maybe including the health charities.

The Chairman: Mr. Kyle.

Mr. Ken Kyle: I've been to a lot of meetings in the last little while with the Canadian Cancer Society, which is the largest charitable organization in the country, and I've heard no opposition to CHST, but I have heard that top priority has to be given to more support for health research, and particularly the kind of research that will evaluate the health system as a whole. There are strategic investments that could be made in health research that would assist in what all of us want to accomplish.

The Chairman: Ms. Redman.

Mrs. Karen Redman (Kitchener Centre, Lib.): Thank you, Mr. Chair.

In a former life I sat on a district health council and I sat on a hospital board. There are a lot of things happening in health care right now, not the least of which is groups like you, and everyday Canadians, coming to us and saying it needs more money.

I'd like to pick up on Mr. Floyd's point about the expertise that exists in the volunteer sector as it relates to health. I keep asking the question, is there a model out there that we could avail ourselves of? I mean, partnership has been mentioned before, and certainly we're in partnership with the provinces. But is there a model that we could look to that would focus on one of the trends that I see happening—certainly in my community and I think across Canada—and that is, moving from the treatment of illness to prevention and education?

Certainly part of it is the research that Mr. Kyle talked about. But are there models that exist in other programs or in communities that we could adapt as a federal government, whether it's in partnership or going directly to the community that's going to help tap into those resources?

The Chairman: Who would like to answer that question?

Mr. Floyd.

Mr. Gordon Floyd: There's a very good model within the government now, and it's the model that has been developed around the national AIDS strategy. It's a good model, because setting priorities for the expenditure of dollars through the national AIDS strategy has been a collaborative exercise in which leaders from volunteer organizations involved in AIDS service delivery are sitting down with Health Canada officials and actually working out what the priorities are in their communities and translating that into a national context.

• 1655

What they have determined, as you may know, is that research is a very high priority for those dollars and that preventative work is the other really high priority. The process there is the first part of the model that I would perhaps like to recommend to you. I think that because it's a good process it's yielded some very good results.

The Chairman: Ms. Vandewater.

Ms. Audrey Vandewater: You were just talking about a model and I immediately thought of the government's models. We at the Heart and Stroke Foundation have had some very successful prevention models in health care, and I guess the most prominent one is CPR. That program, which we began, has saved hundreds of thousands of lives over the years. Certainly we have a tremendous focus on prevention programs now, from our “Heart Smart” cookbooks right down to “Heart to Heart” programs for advising heart patients when they get out of hospital. We also have prevention programs, including supportive tobacco cessation initiatives.

The Chairman: Thank you.

Ms. Bennett.

Ms. Carolyn Bennett (St. Paul's, Lib.): Thank you.

When you talk about a health report card or even when you use the words “proven” and “track record” with regard to where we should be sending our money, one of the common themes I hear is that charitable organizations have enough trouble delivering services, let alone tracking what they're doing in outcomes. It's a very difficult thing.

We asked yesterday's health panel about technology and the ability to track outcomes and whether that would be competitive dollars with regard to direct health care delivery, and we asked about how the panel would put a priority on the government helping to start keeping track of a report card. It's very difficult to set goals and targets if none of it's being measured. So that would be my first question. Before we start setting goals and targets, do you think we have to help measure?

Ms. Audrey Vandewater: There's an old saying: if you don't know where you're going, any road will take you there. So yes, I would see establishing those goals as an objective. And I'm not quite sure how you would go about establishing them.

Ms. Carolyn Bennett: It does cost money to measure, though. I guess that's my problem.

Ms. Audrey Vandewater: Yes.

Ms. Carolyn Bennett: Yet it wasn't in any of your proposals today.

The Chairman: Thank you.

Mr. Tholl is next, then Mr. Floyd, and then we'll go to Mr. Gallaway.

Mr. William Tholl: In regard to a proven efficacy—and there are various layers to the question—not all health charities are involved in the service delivery business. The Heart and Stroke Foundation of Canada is not in the service delivery business. We're in the patient support business, the self-help, mutual aid type of business. Other charities, like the Cancer Society and others, are in the service business, and for them that double-whammy effect is perhaps more acute than it is for the Heart and Stroke Foundation.

Second, in regard to outcomes research, we mentioned in our brief the $65 million that was set aside for the Health Services Research Foundation. That's up and running, and its principal aim and objective is to zero right in on those shortfalls in terms of translational and dissemination research. Now that they've actually started the fund's projects, I believe you're going to see some results.

In many cases, I guess, my bottom-line point would be that outcomes research is part of it and process research is another. When we talk about proven efficacy and proven track records, the kinds of programs that I think about in addition to CPR are things like the heart health initiative, which started in 1986. It was a collaborative venture cutting right across Canada, with federal and provincial governments, supported by the Heart and Stroke Foundation across Canada and in every part of Canada, looking at preventative programs through to rehabilitative service programs and what we could do from a process evaluation point of view to demonstrate their utility.

• 1700

So there are various layers to the question. I think we can demonstrate efficacy, but it may not always be outcome evaluation.

Ms. Carolyn Bennett: On disease prevention, health promotion, and health care delivery, in terms of health care systems like CPR....

Ms. Audrey Vandewater: I guess the real evaluation is the mortality rate of the particular disease you are addressing. Certainly for heart and stroke, over the last 20 years we have seen it go from 50% down to 39%. So if that were a report card, you would have to say, well, we must be doing something right.

The Chairman: Mr. Floyd.

Mr. Gordon Floyd: Briefly, most definitely the answer to your question as I understand it is yes, it does cost to measure outcomes and to figure out what are effective outcomes.

The panel on accountability and governance in the voluntary sector, which I referred to during my remarks, has recommended a number of steps that would enhance the outcome measurement and reporting by voluntary organizations but has noted that this all costs and that funders now are not providing funding for that purpose, whether they're private funders or government funders.

That is another aspect of what I'm referring to as core costs and infrastructure costs. In order to be run effectively, an organization has to be able to measure the results of its work, yet since program review we have an environment here where the funding for that type of activity has been locked off all of the contract-type arrangements that voluntary organizations have with the government. So, yes, this is important. Yes, it must be funded. It's an aspect of the infrastructure funding I was speaking of earlier.

The Chairman: Thank you, Mr. Floyd.

Mr. Gallaway.

Mr. Roger Gallaway (Sarnia—Lambton, Lib.): Thank you. I have a few very brief questions, Mr. Chair.

Mr. Kyle, I believe you raised an issue at the beginning of your presentation that is probably going to, and in fact may have, enter the House of Commons now. That is the question of a dedicated tax with respect to education involving tobacco, prevention of use.

I saw a news report the other day—and I actually obtained some information from your association this morning with respect to the use of tanning salons, that in fact the frequent use of tanning salons elevates the probability of skin cancer, which is a growing problem in this country. In fact, we have a very high incidence of skin cancer in this country.

The idea of a dedicated tax is a rather novel concept in Canada. Would you also then endorse that there be perhaps a tax on each visit to a tanning salon?

Mr. Ken Kyle: First of all, we don't see the proposal inside the Tobacco Industry Responsibility Act as a dedicated tax. This is a levy to assist an industry that said publicly they want to help kids not to start smoking. It was ruled as not a tax but a levy by the Speaker of the Senate. We're hoping the Speaker of the House of Commons will rule that it's a levy and not a tax. It doesn't go to government; it goes to an agency at arm's length from government. People in the trenches can actually decide how to use this. So we're not advocating dedicated taxes. We see this as quite separate.

The question could arise, when does the next example come along where you need a levy? We would say there has to be a standard, and if there is something that is killing 40,000 Canadians a year, then perhaps there can be a levy to deal with that. But we have a very special situation here and an ideal opportunity for members of Parliament to support a solution that does not involve a tax as we see it.

Mr. Roger Gallaway: Okay.

Mr. Floyd, you have indicated that you were having problems with the Department of Finance. In the last budget there were a number of provisions or sub-provisions that were intended to cultivate and spur additional or enhanced giving by Canadians. What do you think the effect of those has been to this date?

Mr. Gordon Floyd: It was actually in the 1997 budget that some significant measures were introduced. In the last budget there was a clean-up of one that they got wrong in 1997.

• 1705

The major incentive that was introduced at that point was in effect a halving of the capital gains tax on gifts of appreciated publicly traded securities. That only came into effect with the 1997 budget. As of this morning I was advised by the finance department that they don't have any statistics at all for 1997 yet. So the only evidence we have right now on the effectiveness of that is anecdotal.

What it appears has happened is that a relatively small number of larger charities have been able to take advantage of this new tax incentive. In particular, it's been helpful to hospitals, universities, some of the larger arts organizations, and some public foundations, community foundations, and some United Ways have been able to make this work well. It's not an incentive that's doing much except through the community foundations and the United Ways. It's not an incentive that's doing much for the smaller charities. As I say, at this stage this is all anecdotal, but that's also the impression that the finance department has of it to date.

Mr. Roger Gallaway: If I might conclude and wrap it up, would it be fair to say that it's perhaps early to form a conclusion?

Mr. Gordon Floyd: To form a conclusion on the effectiveness of that? Yes, I think it is. In fact, what I expect we're going to see is that there were some pretty big gifts of shares made to charities in 1997, that they've been tailing off pretty rapidly in the latter part of 1998, and that we probably won't see many at all next year. I think we're going to in fact need to look at a two- or three-year period.

We've been working out with finance exactly how they're going to assess the effectiveness of that, and I think we've got a very thorough process in place to do that, but we're not and they're not going to have any empirical information on this until late 1999 at the earliest.

The Chairman: Thank you, Mr. Gallaway.

Mr. Loubier.

[Translation]

Mr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ): First, I have a comment. I also have three questions that I will ask in turn, to give those organizations that wish to do so a chance to respond.

First, my comment. Mr. Armour mentioned that for the past few years, the UN has rated Canada as the best country in which to live, from a social standpoint. I wish you had talked about this year and not just past years. This year, in fact, Canada lost some ground, primarily because of the increase in the national poverty rate. Had you extrapolated further, you would have conceded that the increase in the national poverty rate is not tied to anything artificial, supernatural or surreal. It is the direct result of cutbacks announced in the 1995 budget brought down by the Liberal government's finance minister. This budget announced that between 1995 and the year 2003, transfer payments to the provinces would be slashed by $42 billion. Social programs, for the most part health related, are funded through transfer payments.

I would also have appreciated the witnesses addressing the impact these cutbacks have had on voluntary organizations. When there is a shortage of official funds to support social programs, voluntary organizations ultimately are left to take up the slack. People increasingly look to them as regular government programs suffer as a result of Mr. Martin's cuts.

I find you very sympathetic toward the government. The people whom I've talked to in my riding, much like my colleagues' constituents, the people whom in some respects you represent as well, are crying foul because the cuts are continuing unabated. A plan is already in place to cut funding and here you are demanding action which, to say the least, is very limited.

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As I listened, I was wondering if you were merely being cautious. I'm wondering if one day, representatives of the most disadvantaged members of society will come here to voice their frustration, because that is what people out there are feeling. That was the comment I wanted to make.

As for my three questions, the first relates to something Mr. Floyd said about cuts within his own organization. What have these cuts meant to an organization like yours?

One of the witnesses cited the example of England where the voluntary sector has received grants totalling «11 million. For my second question, how would you compare this amount to the funding currently provided to our national voluntary organizations?

My third question relates to the Calgary Declaration on Canadian social unity issued by the provincial premiers. Do you endorse this declaration? Do you have some concerns about this unanimous declaration or are you opposed to it?

[English]

The Chairman: Who would like to begin? Mr. Floyd?

Mr. Gordon Floyd: Sure, I'll tackle the first couple of questions. I'm not going to touch the Calgary Declaration with a barge pole.

The first question was about the impact on our organization of what I characterized as the reneging on the government's commitment to support Imagine for five years. Imagine is a national bilingual program to encourage Canadians to give more and to volunteer more.

Largely as a result of the cancellation of government support for that program, we have had to entirely abandon the aspect of the program that was aimed at the Canadian public, at individual donors. Whereas five years ago you would see public service announcements, full-page ads in Maclean's, transit shelter ads, a very high-profile public campaign, we now are only able to focus, with our limited resources, on corporate giving, which is only one-tenth as important for charities in terms of the dollars it produces as individual giving. We just don't have the resources to do that kind of marketing. That was the effect on the Canadian Centre for Philanthropy of that cut.

You asked for a comparison with the £11 million the U.K. provides for the core cost of national voluntary organizations. The best number I have been able to come up with from the federal government for comparable funding is $27,000—virtually nothing. Lots of other funding, of course, flows from the federal government to voluntary sector organizations, but not to support the core costs and not to support the core costs of national organizations.

On the third one, as to the Calgary Declaration, I'm going to pass.

The Chairman: Does anybody want to comment on the Calgary Declaration? Does anybody want to comment on the other two questions? Mr. Armour.

Mr. David Armour: If I understated the level of pain, suffering, and anguish out there, I appreciate your comment, because this committee needs to know and Canadians need to know. Every tax dollar that's spent supporting services in the voluntary sector is well invested. There are incredible organizations out there grappling with incredible situations.

Part of what Gordon talked about in priority setting is going on across the country. We've had to look at services. When we've had a number of years of this so-called jobless recovery, the pain in the community gets deeper and deeper—the need for food banks, the need for unemployed help centres, the need for family and individual counselling, and the need for crisis intervention. Not only are the waiting lists longer, but those on the waiting lists are in much greater difficulty and require much more assistance.

The United Way of Greater Toronto has been working on homelessness. It's a massive issue in that community. What Canadian would have thought 15 years ago that Torontonians would have walked to work past homeless people and accepted it? Who would have thought? Who would have thought that all 18 Centraides in Quebec would now see their number one priority as the issue of poverty and the impact of poverty on society? So I think it's important that we not understate the importance of what's going on out there and the kind of suffering....

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At times we may speak in code when we talk about strategically investing in programs or supporting infrastructure. This is really code for the incredible work that's going on in voluntary organizations by staff, by volunteers, leveraged by armies of volunteers all across the country.

I would appreciate your comments. I think that's really important, and that's the main response I would like to give. Every leveraged dollar that is spent here that provides donors with an opportunity to roll up their sleeves will have an impact.

The other thing we know, confirmed by the latest survey, which Gordon spoke of, is that those who donate are a lot more likely to volunteer as well. So we think it's a greater leverage to impact than we realize.

The Chairman: Thank you, Mr. Armour.

Ms. Marrett, followed by Mr. Floyd.

Ms. Penelope Marrett: Thank you.

I think one of the issues that relates to impact can be seen with some small and medium-sized organizations. Many of these organizations have funding not just from government but, like everyone else, from the private sector.

One of the differences, though, that I have seen with organizations is that when the federal government decides for financial and fiscal restraint reasons that they will not fund a particular program or they will not fund the national office, the private sector no longer has what they would see as the peer review of that organization. These organizations—and I am aware of several of them—have received letters from the private sector saying that because they are no longer being funded by the federal government, they will no longer receive funding from that particular private sector organization.

That presents a real challenge for that organization. Many of these organizations are not household names to most of us, but they provide a real valuable service in their community. It's really important for us to remember that those organizations are an integral part of ensuring that the people in the communities are actually receiving the programs and services they need in their communities.

The Chairman: We'll move on to Mr. Brison.

Mr. Scott Brison (Kings—Hants, PC): Thank you, Mr. Chairman.

Thank you for your presentations. We listened to a lot of presentations, but I found it particularly valuable, partially because it helped me to crystallize some of my own opinions on the role of government in the delivery of public services, particularly at this juncture, as we're always trying to seek a greater return on societal investment and in an era where that societal input is significantly reduced.

Public services with standards do not necessarily have to be delivered by government agencies. Arguably, if there is a more co-ordinated approach, we can achieve a lot more with this type of co-ordinated approach.

It's very analogous to the trend in some governments, and I think almost all governments have worked with some elements of privatization for certain delivery, recognizing the efficiencies therein, even private-public partnership...perhaps it should be philanthropic and public partnership, another three p's, as long as we keep out the fourth, which is patronage. We can achieve a lot more if there is an acknowledgement of the efficiencies you're capable of and the leveraging and all this sort of thing.

I was very heartened to hear a few months ago the report on volunteerism that indicated that Canadians, particularly young Canadians, are volunteering. I'm at the high side of the generation X group, and I was glad to hear us finally getting some positive press. But there is significant potential.

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The co-ordination side of it and the need for some type of concerted effort to co-ordinate between government and the volunteer sector is absolutely essential, it strikes me. If in fact we acknowledge that the volunteer sector can do more or may be able to achieve more than the same amount of money spent in a government program, then there has to be some type of evaluation done, as Mr. Ritz pointed out, to ensure that there isn't overlap and that in fact the priorities are chosen.

Does Imagine have that capacity, or what would be the best vehicle through which to develop that co-ordinated approach, which I think is essential? That would be my first question.

The Chairman: Mr. Floyd, followed by Mr. Armour and then Ms. Vandewater.

Mr. Gordon Floyd: That sort of co-ordination doesn't fall within Imagine's terms of reference, but I think the point you're making is a fundamental one. It speaks to the way in which we are going to meet social and other needs in this environment of smaller governments, in this world of smaller governments, and how we're going to make the allocation decisions and how we're going to set priorities and how we're going to design the programs to meet those needs.

I think we are hearing increasingly the word “partnership” thrown about from this government and other governments. I have not seen evidence that there is yet a clear understanding that partnership must involve joint decision-making, collaborative priority setting, and collaborative program design. That does not mean asking for input after all the decisions have been made, but sitting down at the beginning of the process to ensure, as you and your colleagues have pointed out, that there is no duplication, to ensure that the needs are in fact real needs and that the dollars are being well targeted.

This will require a major culture shift for governments who have always been in the position of making policy on their own and providing funding out there. A partnership that consists of providing a cheque to a voluntary organization from a government department is not a partnership. I think it's going to require a major cultural shift to get the policy wonks to let go of a few things that they are holding on to tightly and to actually use the kind of model that I referred to with the national AIDS strategy, bringing people in at the beginning. That's why I cite that model. It's so rare, but it's one where people sat down and did the work collaboratively in the voluntary sector and in government to ensure there wasn't overlap, to ensure the dollars were going to the right places.

The Chairman: Mr. Armour.

Mr. David Armour: I think that's the key point, and that's why a few of us created the voluntary sector round table. The purpose of that is to increase interconnection between the voluntary sector and the federal government. We just had a meeting this week with ministers Martin, Pettigrew, and Gray and a number of their senior staff and talked about your exact question. The simple point is that the taxpayer is the voter, is the donor, is the volunteer. We're working for the same Canadian public and we're using their funds to do work for the Canadian public in communities all across the country, so we really need to be working together a lot more.

If anything, the third sector for the last few decades, for some, has been the invisible sector. Government has often consulted with business and organized labour but has not consulted with the voluntary sector. Our clear sense is that there literally need to be thousands of points of interconnection two ways, between the voluntary sector and the federal government: when staff are looking at creating policy, when policy is being looked at, when policy is being approved, when programs are being designed, when programs are being implemented, and when they're being evaluated. It's important on the side of both the government and the voluntary sector. We ought to have members of the federal government involved in our committees in communities all across the country in order to use your expertise and knowledge, and vice-versa.

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As Gordon was saying, it's not simply that we've made a decision and what do you think; it's really that kind of interconnection. Where we're doing that, it is really proving to be incredibly valuable. There is incredible knowledge at the grassroots level of the voluntary sector, information you can't get from other sources. It's a way of getting insights from Canadians who are working on the issues, which is incredibly valuable.

My little fantasy is that five years from now when I read in the media that the government consulted with leaders of business and labour, the sentence won't end there but will include on every issue “and the voluntary sector”.

You've started it by meeting with the voluntary sector over the last number of years and spending a specific session hearing what our issues are, including if our thinking is your thinking. You're modelling it here. We need to have this kind of work done throughout the federal government, at the bureaucratic level, the staff level, the policy level, and the political level.

The Chairman: Ms. Vandewater.

Ms. Audrey Vandewater: Picking up on this theme of dialogue, I would just like to go back to the April 3 meeting we had with Minister Rock. Several of the health charities met with him to discuss issues common to all of us. The minister expressed at that time a desire to be able to do one-stop shopping. On an issue we were all involved in, rather than have 15 health charities knock on his door with the same message, there was a desire to be able to do one-stop shopping.

As a result of that meeting, a senior liaison committee is being set up, which will include senior staff from Mr. Rock's office and representatives of various health charities. Terms of reference are being developed for this committee to enable the volunteer health charity sector, Health Canada, and the minister's office to identify and prioritize some of the issues that are common to all the health charities and to determine what solutions are available for some of the problems.

It is meant to be a true partnership. One of the first things you have to do in a partnership is nail down the rules, include them in the terms of reference, and make them very meaningful. So we are just in the process of doing that. I think that's going to be a very good model for other sectors to follow.

The Chairman: Ms Cutler.

Ms. Fran Cutler: Accountability and the measurement of outcomes are crucial for all those who provide funds, whether it be governments at the federal and provincial levels, United Ways, or private foundations. Even though there are better ways of doing this, such as by using computer programs, it does take the time of people, particularly in a service delivery agency.

As Gordon Floyd pointed out, if there is no money for core funding—and private and not-for-profit organizations don't like providing core funding any more than government now does—it means you take money away from service delivery, which is usually donated by individuals. I must say that even though I'm with a rather large agency, we feel guilty about that because it may mean that a client doesn't get service this month but rather next month or six months from now.

The Chairman: Thank you very much.

We have a vote in approximately one and a half minutes.

Mr. Scott Brison: Do you know the time of the vote?

The Chairman: It's at 5.30 p.m.

We would like to express to you our sincerest gratitude. This is always a very interesting round table. It also speaks to a transition we're in right now. I think that recognition of the fact that in the new society this so-called third sector is emerging at a very fast pace is something we as members of the finance committee are quite mindful of as we make representations to the Minister of Finance.

However, I would like to leave you with a very small assignment, because it's very important for us to begin to engage in a discussion about the future of this country. I would like your sector to put a paper together that speaks to the things you think will happen five or ten years down the road, including how you see your sector evolving and taking into consideration what is going on in the public and private sectors, so that we can begin actually to start defining the future. As I often say, we can't predict the future, but we certainly can help shape it.

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On behalf of the committee members, thank you once again.

The meeting is adjourned.