FINA Committee Meeting
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STANDING COMMITTEE ON FINANCE
COMITÉ PERMANENT DES FINANCES
[Recorded by Electronic Apparatus]
Monday, November 22, 1999
The Chair (Mr. Maurizio Bevilacqua (Vaughan—King—Aurora, Lib.)): I'd like to call the meeting to order and welcome everyone here this morning. This morning the finance committee has the pleasure to hear from a number of very interesting organizations: the Calgary Chamber of Commerce, the Canadian Association of Petroleum Producers, the Coal Association of Canada, the City of Calgary, the Alberta Urban Municipalities Association, and the Canadian Dehydrators Association.
Many of you have appeared in front of the finance committee before. As you know, you have approximately five minutes to make your introductory remarks. Once the introductory remarks are completed, we will engage in a question and answer session.
I understand the mayor would like to go first. Is that okay? You do have home-ice advantage here. We'll begin with you, so you get the chance to welcome everyone to Calgary. We have His Worship Al Duerr, and Paul Dawson, chief executive officer. Welcome.
Mr. Al Duerr (Mayor, City of Calgary): Thank you, Mr. Chairman. And to the standing committee, welcome to Calgary; bienvenue au Calgary. It's good to have you here. We certainly look forward to this dialogue. Thank you very much for this opportunity.
We have a brief. In a very general way it overviews nine areas that we have an interest in. I'm not going to go over that entire brief, because others are going to be talking about related issues. What I would like to do is focus on some of the principles, the role for federal involvement, and why we're asking for a role for federal involvement in some of these issues the federal government is not actively involved in now.
The federal government, as all governments, is getting a lot of pressure to reduce taxes. There's no question that's very real. We support without question the reduction of taxes. The challenge we face, and the challenge you face, is in ensuring there is some balance between tax reduction and ensuring that the basic services that provide a standard of living and a quality of life that we treasure as Canadians are maintained.
Another important issue with respect to tax reduction...you know, I hear a lot of talk about tax reduction, but I don't hear a lot of talk about smart taxation. What tends to happen—speaking from a municipal perspective—is that we get senior orders of government getting out of certain areas, downloading responsibilities, and we see increasing pressures being put at the worst level of taxation, which is property taxation.
In the case of the city of Calgary, roughly 58% of the taxes collected here go to the federal government, 30% go to the provincial government, and 8% are collected by municipalities in property and business tax. We run the city with the 8%, plus fees and charges. The problem you face is that property and business taxes are fixed costs. The federal and provincial governments deal with taxes that tend to be variable costs. If you're a small business person, the last thing you want to do is increase your fixed costs, because you can't operate if you don't meet your fixed costs. So if you're going to have a taxation system for small business, you'd like to keep your property and business taxes as low as possible, because those are fixed costs.
It's the same issue if you're on a fixed income, if you're a senior living in a house. A property tax has to be paid first before you feed yourself or you can't live in the house. It's a fixed cost. You want to keep those costs as low as possible.
So with the pressures to reduce tax...again, I support tax reduction. Don't get me wrong on this. I support tax reduction and we're trying to do our part, but let's focus on smart taxation. I would really encourage you to work with the provincial governments and local governments. Let's get into this national dialogue so we don't make decisions where we have a reduction at one level that results in an increased cost at another level.
I would also like to mention very briefly that in the document we reference essentially three areas where we see some real opportunity for partnership. One is with respect to the Kyoto accord. The bottom line is that at some point the federal government is going to be accounting for what we've done as Canadians in this area. We can have all kinds of debate on the merit of the accord, the issues surrounding it, or the measurement system. The bottom line is we're going to have to account. What I'm here to say to you is that municipal government would very much like to be a partner in addressing that issue.
One of the key areas that we see playing an important role is in the area of public transit. Right now the federal government collects a national sales tax on fuel. Very little of that goes into any form of transportation. Certainly from the standpoint of major urban centres, which generate approximately 14% of all the greenhouse gases in Canada—that's your private automobile travel—we could have a significant impact on addressing issues associated with Kyoto with a federal, provincial, and municipal partnership focused on public transit. We would strongly encourage that you work with us on that program.
In the brief I talk a little bit about community safety, housing and homelessness, and a children's agenda. With respect to public safety, I would like to thank the federal government for funding for the dedicated court to address issues of family violence. It's a new model here in Calgary. We work extensively with the federal government and your provincial counterparts in justice. This is innovative in the country and it will go a long way to providing alternative forms of crime prevention. We would strongly encourage more working relationships with local government. We're on the front lines. We're addressing these issues everyday. We can be strong partners with you.
With respect to housing and homelessness, the municipalities, the major cities, across the country have worked on a national housing option strategy. The bottom line is that we have everybody at all orders of government speaking very glowingly about the importance of addressing issues of homelessness. It's not putting dollars on the table, and it's not getting units built. We're speaking from a city that has significant prosperity, and with that prosperity has come some significant challenges. People from across the country are coming to Calgary. We're getting a tremendous amount of pressure. There's nothing wrong with that, but we're getting tremendous pressure and we're not in a position to respond appropriately to these needs.
Why a federal government involvement? Well, you don't have a traditional or legislative responsibility for housing. That's primarily your provincial governments. The bottom line though is that many of the issues associated with homelessness—and those include income issues, income security, unemployment, and social and health care supports—are areas of federal responsibility. Homelessness is an outcome of a whole series of other issues that we would hope to be able to work in partnership with you to address. So it's not just the provision of the housing unit—that's a response to a whole series of other challenges we face that aren't just a provincial jurisdictional responsibility. We all share that responsibility.
Finally, with the children's and youth agenda, we would like to support that very strongly. We have done a number of things in Calgary. Last year we injected $750,000 into before- and after-school child care for school-aged children. There's a national debate about day care. We want to reinforce that children and school-aged children need supports as well. We're working with our community groups. We're looking at new models for after-school care. We think a tremendous amount can be done in this area, again, working in strong partnerships with the federal government as well.
My time is probably up. I would like to say we're very pleased to have you here. I have four members of council also here with me. We could almost have a council meeting. But this is your session, Mr. Chairman, and thank you so much for inviting me.
The Chair: Thank you very much.
We'll now hear from the Calgary Chamber of Commerce, Mr. David Smith, second vice-president; Jack Grant, chair, tax committee; and Sean Ballard, analyst, policy and planning. Welcome.
Mr. David Smith (Second Vice-President, Calgary Chamber of Commerce): Thank you very much for meeting with us today.
I'd like to say a couple of words about the chamber and who we are. We have some 3,700 individual members and represent over 2,600 businesses in Calgary. We're the second-largest chamber in Canada, second in size only to the Toronto Board of Trade. We have 23 committees of the chamber, a large volunteer involvement—all of our policy development is done by volunteers at the chamber. Over 16 of those committees are involved in various policy development areas. We don't only focus on tax and fiscal matters. We also have policies on environment, health care, and education. So we are a broad-based organization.
Quite often, policy development comes through the Calgary chamber with some fair balance, after having been debated from various points of view before it hits the streets. For example, if it's dealing with natural resource issues, it will have also been debated by our agribusiness committee and our environmental committee. So we're active in policy development and in making recommendations locally, provincially, and at the national level.
In the federal area, an example of the leadership of the Calgary chamber is embodied in the document, “A Sound Approach to Economic Policy One Strategy - One Voice”, which is a Canadian chamber document. The process is interesting, and I'll just give you a little of the background as to how this was developed.
The Canadian chamber puts together resolutions, based on input from various chambers across the country. This year we found that we had eight or nine chambers putting together separate resolutions on fiscal and taxation policy, all of which differed somewhat and overlapped somewhat. The Calgary chamber led a movement that was quickly taken up by the other chambers to take these various resolutions and put together one amalgamated resolution, so we all spoke with one voice in a sound, coordinated fashion. In fact, the other chambers jumped on board and the Canadian chamber adopted this policy. The Calgary chamber did a good deal of the writing of the policy, and then it was adopted as a Canadian chamber resolution and policy going forward.
I'll turn to my colleague Jack and ask him to give a little bit of the content and background of that policy.
Mr. Jack Grant (Chair, Tax Committee, Calgary Chamber of Commerce): Thank you, David. Before the committee perhaps shudders in fear, I do not propose to go through the documents in detail. We've left some packages for each of you to pick up that have more material than what we've provided to you so far. This should give you some interesting background and the thought process we went through.
The Calgary chamber supports and echoes the positions of the Canadian chambers of commerce and boards of trade. We believe it's extremely important for the federal government to establish an economic vision for Canada. I think it's extremely important that citizens and the businesses in our country have a clear understanding of what the federal government believes is possible if we all work together and get the wagon pulling in the same direction and the horses not going off in different avenues.
We need to provide the vision, so we can ensure a higher standard of living for all of our citizens, provide a bright economic future for our children, and provide the economic support to the various health and education programs we hold so dear in this country. If we do not have a strong, vibrant business community, the economic underpinning of those programs will be highly suspect and the programs will be in danger of not being delivered.
With that in mind, I'll briefly go through the recommendations of the chamber that we think should be important in your thought process and the recommendations you make in formulating economic policy to provide the sound underpinning this country so desperately needs.
The government has done a wonderful job of eliminating the deficits, but we ran up some 20 years of deficits prior to that. Now that we are anywhere from excited to salivating at the prospect of large surpluses, I think the committee needs to keep in mind that probably over two-thirds of the projected surpluses are at the back end of this five-year period that Finance Minister Paul Martin talked about. So in the coming year there will be some surpluses, but the big wins appear to be at the back end. So it's very dangerous to suddenly take that to the bank when it's still coming. It hasn't been realized yet.
To ensure we have the economic employment that will permit those projections to come true, we believe the greatest portion of the fiscal dividend should be allocated to tax reductions in recognition of the need for broad-based tax relief and comprehensive tax reform.
We believe the emphasis should be on personal income tax. It's been well documented in the public media for the last number of months or years that Canada is facing extremely high personal tax rates. The other day I was at a meeting with Pamela, the NDP leader in Alberta. I suggested she should really get on the same bandwagon as Reform, because Canada, for all practical purposes, has achieved a flat tax in personal income tax. When the top federal rate is 29% and the second middle rate is 26% and it kicks in at an extremely low level of income, I suggest to you we have already achieved a flat tax in Canada. The burden on the worker is extremely heavy.
When my son, who just got into the labour force, gets his next pay raise, he will suddenly be in the middle tax bracket. I can assure you, he does not feel particularly well off.
There's a lot of work to be done, and I endorse, and the chamber endorses, Finance Minister Paul Martin's approach to get the personal income tax in line first. That's the most pressing urgency we face in this country.
We also need to continue policy restraint on spending. Our suggestion is to achieve a debt-to-GDP ratio no higher than 50%. Right now, even though we have surpluses, we are extremely exposed to the next economic downturn, when the demands on our programs will be increased and heavy. We need to get our debt level down. That huge black cloud is not over the hill yet; it's still well within sight. We need to get that down to a level that is manageable and does not manage us.
If we do these things, I believe we will start to address, if not stop, the brain drain, the flow of intelligent Canadian workers who have been trained in Canada and move to the United States and other areas of the world.
Just in summary, the Mintz report found that by 2000—when the report came out, that had a distant sound to it; it's next year—Canada will have the highest tax in the service industries in the G-7 and the second-highest tax rates of the manufacturing industries in the G-7.
Other countries are moving to reduce their tax rates. Canada seems to be stuck in neutral. We need to aggressively and urgently address this issue if we're going to ensure that our children have a bright future and that those of us with white hair will feel comfortable in our retirement that the social programs will have the economic underpinning to provide them with secure funding.
Again, I would echo the mayor's comments about welcoming you to Calgary. It is a real pleasure to host a standing committee. I think it's a very valuable exercise to go across the country to ensure that you hear the comments and concerns of Canadians. It's much more difficult for us to travel to Ottawa all the time. Thank you again for coming, and welcome to our fair and wonderful city.
The Chair: Thank you very much, Mr. Grant and Mr. Smith.
We'll now hear from the Canadian Association of Petroleum Producers, Mr. William Friley Jr., vice-chairman, and president and chief executive officer of Triumph Energy Corporation; and Greg L. Stringham, vice-president, markets and fiscal policy. Welcome.
Mr. William A. Friley Jr., (Vice-Chairman, Canadian Association of Petroleum Producers): Thank you. Good morning, Mr. Chairman and committee members. My name is Bill Friley. I am vice-chair of the Canadian Association of Petroleum Producers and president and CEO of Triumph Energy. I am joined this morning by our vice-president of markets and fiscal policy for CAP, Mr. Greg Stringham, who appeared before you last year. I thank you for your time this morning, and again, welcome to Calgary.
To begin, I'd like to point out that I am here on behalf of the oil and natural gas producers who operate throughout this country. The upstream oil and natural gas industry is a significant contributor to the Canadian economy, employing almost half a million Canadians. In 1998, a year of very low oil prices throughout the world, the industry spent over $26 billion. This included $17 billion of capital investment, the second largest of any single industry in the country after housing. The industry is truly national and international in scope. It is a high-tech, globally competitive industry across this country, from Alberta, B.C., and Saskatchewan in the west, Newfoundland and Nova Scotia on the east coast, to the Yukon and Northwest Territories in the north. With developments across Canada, this industry holds the potential for new economic prosperity, new business development, and employment in Atlantic Canada and the north, including our vast oil sands resources.
In 1998, Canada exported $19 billion of oil and natural gas. That accounts for almost half of Canada's trade balance. In addition, some 200 Canadian companies are involved in exploration and development activity in over 120 countries in the world.
It is with this in mind that I must underscore the importance of keeping the industry competitive, both on a regional and international basis. It is of utmost importance that we ensure that Canada can compete in this increasingly global economy.
Thus, CAP has three recommendations for the federal government: the first is to reduce personal and corporate income taxes; the second is to maintain a strong focus on debt reduction; and the third is to stay the course with sound tax and fiscal policies.
Let me explain why each of these recommendations is important. Your handout outlines four financial cornerstones of the oil and natural gas sector in the Canadian and global economy.
The first is the need to be globally competitive. The reality of today's global economy is that investment dollars are being fought over for many projects throughout the world. The need for a globally competitive tax regime cannot be overstated. Canada must build on its advantages and ensure that investment is made in Canada.
The second is a highly skilled and well-educated workforce. The industry is highly dependent on a highly skilled and well-educated workforce; however, companies are struggling to keep their best and brightest from being attracted away due to tax advantages elsewhere. We need to retain this expertise and to train and nurture new expertise in our colleges and universities. Through the new CAP scholarship endowment fund, the industry has helped to develop new engineers, scientists, and business people by providing over 80 scholarships to a wide range of post-secondary institutions.
The third is high levels of capital spending. The oil and gas industry must do something most other industries don't have to do: invest substantially just to maintain prime production levels. To grow Canada's supply of energy, the investment needed is even greater. For every dollar of cashflow the industry takes in on average, we turn around and spend that dollar plus 40¢ more. In other words, we're reinvesting about one and a half times our revenues.
This is one of the highest levels of reinvestment in the Canadian economy. To fund this ongoing search for new supplies, the industry requires a regular infusion of new equity from capital markets. As such, keeping taxes low through competitive fiscal policies is essential for keeping capital markets vibrant.
The fourth is development of new world-class high technology. Canada's upstream oil and gas industry is high-tech. We use it and we develop it. From three-dimensional seismic to guided horizontal drilling, high-tech is the name of the game for this industry. The Canadian oil and gas industry has developed an international reputation of technological ingenuity and drive that has put it in high demand throughout the world.
We recognize that amidst the competing priorities and alternatives facing the government, finding a balanced solution for the entire nation is no small task. The government must be commended for its ongoing improvements in fiscal policy and a balanced budget for the second year in a row. Along with continued low inflation and low interest rates, it has created the right economic environment for this country.
From our own experience, we empathize and support the government's continuing efforts to reduce and control its own costs. Implementing simultaneous tax reductions for both individuals and corporations will benefit all Canadians and industry sectors and will reflect the improvement in the federal government's overall fiscal situation.
In addition, the federal government should continue its strong focus on debt reduction while limiting increased real spending to a few targeted, high-priority areas like education and health care.
Finally, sound tax and fiscal policies should be preserved as a means of supporting new capital investment and encouraging economic growth. This can only help to create a wide range of job opportunities in the new economy. The oil and gas industry holds the potential for economic prosperity well into the 21st century, especially with the recent and promising developments in Atlantic Canada and Canada's north.
To achieve this potential, the industry needs access to the resources, a reduction in regulatory gridlock, and policies that are competitive with those of our trading partners. I'd like to thank you all for your time this morning, and we look forward to entertaining your questions.
The Chair: Thank you very much, Mr. Friley, Mr. Stringham.
We're going to hear from the Coal Association of Canada, Mr. Ken Myers, treasurer of Fording Coal Ltd. Welcome.
Mr. Ken Myers (Coal Association of Canada): Thank you, Mr. Chairman. I'm glad to be before the committee this morning. I would just like to take a few minutes to describe the representatives of the Coal Association and their impact on the Canadian economy.
Coal mining in Canada represents about 70,000 Canadians who are involved in mining, rail transportation, electricity production, port operations, and shipping. Coal contributes to the Canadian economy in a number of ways. It produces about 15% of the electrical power generated in Canada—over 80% in Alberta, 70% in Saskatchewan, and over 70% in Nova Scotia.
In addition to that, though, Canada is a significant exporter of metallurgical coal, which goes into the making of steel production. Metallurgical coal shipped out of Canadian ports represents 20% of the total product shipped out of the ports. It's also the largest single commodity shipped by rail in Canada. So we heavily support the infrastructures of Canada's economy.
Coal mining in Canada is not as many perceive. It's a high-tech industry today. It's large-scale surface mining, and its employees are well paid. A recent study in British Columbia showed that the average mine worker in that province earned over $75,000. So they're high-paid jobs.
The association supports many of the comments made here this morning. Because the industry is competitive in the international marketplace, we are concerned with the high tax structure in Canada. Any dollar taxes that are charged to Canadian companies are generally absorbed, because the industry cannot set prices in the international marketplace.
The industry is also concerned about issues such as education. When we go out to hire new recruits, we find that the top students quite often will receive opportunities in other countries. Take the recent example of recruiting on the campus of one of the Canadian universities outside Alberta, looking for people in the IS area. The students just packed into the presentation room. The company that was making the presentation did not talk negatively of the Canadian tax situation, but it did indicate that their tax rate was 28%. If a student graduating from university looks at the tax rates in Canada versus opportunities elsewhere, if they are the top students and if they get those opportunities, a good number of them will leave Canada. So the mining industry is concerned about the requirement to put funds into education.
We're also concerned about the welfare of the Canadian economy and our social programs. I don't think there's anyone in this room who doesn't want to maintain Canadian social programs. The question is where the money comes from. In today's economy, we're looking at the surpluses that are being generated. Over the last number of years, while the government has generated surpluses, the bulk of those surpluses have come from increases in taxes and decreases in transfers to the provinces. We would support a reallocation of the current expenditures, but we do not support an increase in government program expenditures.
The coal association's recommendations are generally to lower taxes, which will spur economic activity, promote innovation, and create new job opportunities; to introduce a debt repayment program to stabilize Canada's balance sheet while freeing up 26¢ on every dollar of government revenues that goes to pay interest; to improve education and training, as it is brain power that fuels the knowledge economy; to reduce government regulation and inefficiencies; and to enhance R and D.
In response to the specific questions raised by the committee, the coal association has submitted a report, and there's more detail in that report.
Thank you, Mr. Chairman.
The Chair: Thank you very much, Mr. Myers.
We'll now hear from the Alberta Urban Municipalities Association, and Alderman Bob Hawkesworth, Lorne Olsvik, and Ernie Patterson. Welcome.
Mr. Lorne Olsvik (President, Alberta Urban Municipalities Association): Good morning, Mr. Chairman and fellow colleagues. Welcome to Alberta. Welcome to Calgary.
My name is Lorne Olsvik. I'm the elected official from the village of Onoway, a community of 800. I am the president of an organization that represents 80% of the population in Alberta, 286 members from the city of Calgary, to the city of Edmonton, to the summer villages across this province. We certainly are the first level of government. Sometimes when the buck stops with the first order of government, the only place we can go is to our friends and neighbours, the ones who pay property taxes, because that's the last stop on the food chain. And we certainly do try to keep property taxes in line.
We live in a very unique and dynamic province in Alberta. We see growth in this province from all four corners. Yes, we've had some adversity in the agriculture areas in certain places across Alberta, and it certainly affects those small communities that depend on agriculture. We support the Federation of Canadian Municipalities, and we are actively involved with them through our members' participation on the executive and through regular member status.
Part of the Federation of Canadian Municipalities' main endeavour is to create a federal-provincial-municipal infrastructure program. It was very successful on the last go-round, and Alberta was certainly able to participate in managing that. We certainly support the City of Calgary's endeavours, as Mr. Duerr has explained.
This growth across Alberta is very trying on our communities. Last week I was in Calgary and I stopped off in a restaurant where I met people from five provinces who were here to enjoy the growth. Certainly some move their families to Alberta, but they certainly look at garnering their incomes and moving back to their homes. That's fine. We've always been caring in this province, and we really appreciate those resources to help further our growth.
Again, our infrastructure is very important to us, and we really support the Federation of Canadian Municipalities' endeavour to create another one. That's my main issue. My two other colleagues have separate issues, but we support the FCM and we hope you recognize that in your budget process. It's not to invest in skyboxes and it's not to invest in NHL franchises; it's for water, sewer, streets, and public transportation. It's for the core services that we have to deliver as municipal governments. If we can't support those core services, it's a reduction of services that all of the population seems to enjoy.
If we have to provide an increase, there's only one place we can go, and that's to the property owners. I'll tell you, it's tough out there right now. A large portion—50% on average—of our property tax dollars currently go to fund education. It's very difficult to fund education within that area. We support public education, but there's only so much that residents can pay.
With that, my colleague Mayor Ernie Patterson, from the Town of Claresholm, will address an issue as well.
Mr. Ernie Patterson (Mayor, Town of Claresholm): Mr. Chairman, members of the committee, presenters, I am very happy to be here this morning, and I thank you for this opportunity.
In Canada, we can talk about health care and we can talk about education, but one of the key things that comes down to any and every community is the safety of the property and, more importantly, the safety of the citizens of the community. Many communities in Alberta depend on the RCMP for policing services. The AUMA has initiated a task force out of concerns with the governance, management, and fiscal issues as they impact on these local municipal RCMP contracts. We're very fortunate that, through the office of the Hon. Anne McLellan, who is the MP for Edmonton West, we've been able to get a member from the Solicitor General's department to sit on our committee.
More precisely, we can hear about tax cuts; we can hear about this request for spending and that request for spending. Because of the cutbacks that have occurred in the training of RCMP officers, we are currently unable to fill 120 positions in Alberta. We have the funding for them, we are willing to pay for them, but we can't get the officers. That is very serious, because in some detachments that means that 15% of the manpower in that detachment cannot be filled.
Despite everything you have heard here today, I want to emphasize very strongly that on behalf of the Alberta Urban Municipalities Association we are requesting that you restore sufficient funding to train the officers to fill the positions. Worse than that, we need more officers because we need to expand the force, but we are not able to get them.
So, Mr. Chairman and members of the committee, no matter what you've heard today, I hope you will give serious consideration to the restoration of funding to train officers so that we can protect our communities efficiently and effectively.
The Chair: Thank you very much, Your Worship.
Mr. Bob Hawkesworth (Alderman, City of Calgary; Director, Alberta Urban Municipalities Association): If I may, Mr. Chairman—
The Chair: You sure can. We're here to listen.
Mr. Bob Hawkesworth: A third point from the AUMA today, besides infrastructure and community safety, is the matter of decent, adequate, and affordable housing. This is another serious issue in virtually all of the communities in our province. I've had the privilege to chair a housing policy task force on behalf of the AUMA, and we've had members from small towns through to Alberta's largest cities, including Calgary.
The issues are similar and different. In the rural areas, in the smaller communities, housing for senior citizens is a key issue for them. We have growth communities, some of which are towns and some of which are cities. The jobs that are being created are not all high-paying jobs or high-tech jobs. We're relying on a lot of labourers and working people to fuel the growth in our province, and the wages they receive are not adequate to purchase housing in our local market. We're seeing a lot of working people ending up in our homeless shelters here in Calgary or in campgrounds outside the town of Brooks, for example. The mayor of Fort McMurray has also been a member of our task force, and they have unique problems up in their community as well.
This is a serious issue in Alberta, and we really need the federal government to play a role. If there's one message we want to leave with you today, it is that point. We really appreciate the appointment of the labour minister, Mrs. Bradshaw, to the portfolio of homelessness. We think that was an excellent step. She has a passion for this and is a wonderful advocate. I know she got 19 federal departments together to look at a joint initiative to address the issue, and we applaud that. But at the end of the day, we really feel it's important to allocate resources. It comes down to the bricks and mortar, and we think the federal government has an important role to play with the other orders of government in addressing the issue.
So the first thing we need is resources, and the second is flexibility. We're not convinced that you have to go back to the old models of funding. Perhaps we can look at the tax system and provide incentives in that regard. There may be ways to address the issue other than providing capital grants, although those can work very well as well.
A third point is that we think a program needs to be cooperative in nature and collaborative in nature. I know municipalities across this province and across the country are prepared to play their role as a partner in addressing the issue, but we can't do it by ourselves.
The last point I'd like to leave you with is that any new housing program should be focused on outcomes. We need to solve this growing problem in our country and in our communities across the country. Let's set targets on how we're going to do that, how we're going to achieve that. Make sure we have a framework and clear roles for all the parties and the partners. I think you'll find there are a lot of communities that will come to the table provided that there's some leadership at the federal level.
That's the final message we'd like to leave with you today. We think any effort on this front to address the housing issue is very important.
The Chair: Thank you very much.
We'll now hear from the Canadian Dehydrators Association, and Mr. Garry Benoit, executive director. Welcome.
Mr. Garry Benoit (Executive Director, Canadian Dehydrators Association): Thank you, Mr. Chairman. I'm pleased to have this opportunity to participate in the pre-budget consultations. Our association represents about 30 member processing plants in rural Canada. More than 80% of our production is exported, and export sales in recent years have ranged to about 700,000 tonnes annually, with a value of up to $130 million a year. Our plants have been making major economic contributions to rural communities. They create more than 1,000 jobs, more than $13 million in direct wages, and another $67 million in spin-off benefits.
...this...economic success story is in jeopardy. It's no
exaggeration to say that jobs in rural communities are
on the line. The markets we have worked so hard to
develop and grow are threatened by highly subsidized
products from the European Union. International market
prices for processed alfalfa are now well below the
Canadian cost of production.
What is the situation a year later? I can tell you that major plants in Alberta, Saskatchewan, and Ontario have closed, Mr. Chairman. Other plants in eastern and western Canada have curtailed production. The jobs and economic benefits are being lost because of an extremely unfair subsidy situation.
One of the themes you invited us to comment on, productivity, is particularly relevant to the crisis we face today. You asked, “How could the government help to enhance productivity and improve the standard of living of Canadians?” Let's just step back and look at our history.
Over the last 25 years our members built a world-class industry. Their products were top quality, they were internationally competitive, and they developed strong markets, particularly Japan. From 1984 to 1995, our industry did benefit from the Western Grain Transportation Act, a subsidy to the railways. It was the only significant subsidy of benefit to our industry, and it allowed the industry to operate and compete against the much more heavily subsidized European competition.
As you know very well, the WGTA ended in 1995, as part of the government's drive to eliminate the deficit. I can assure you that our members supported deficit reduction or elimination, and they would prefer a world without subsidies. By giving up their share of the WGTA, our members feel they contributed significantly to the elimination of the deficit. But here's where your question about productivity comes in, Mr. Chairman.
Following the loss of the WGTA, our members redoubled their efforts to improve productivity in this industry. Plants installed better processing and field equipment and invested in new technology, new products, multi-car loading slots, improved handling and weighing equipment, and so on. No sooner had the plants made these investments towards improved productivity in an attempt to secure our future than did foreign competitors' subsidies induce surpluses that wrecked our markets. The international price of our products today is lower than the cost of production.
When you ask what the government can do, Mr. Chairman, our answer is as follows. The government can and must provide bridging assistance to allow very successful rural-based industry to survive. We have suggested that even one-quarter of the level of the subsidy of our competitors in Europe would allow us to survive. This would not be required every year, but only in the most difficult two or three years of the current downturn.
Another approach that we have suggested is to apply the AIDA formula to each of our operations. We have many parallels to the grain farming operations, and this could be done with a little creativity. This would help us to retain the productivity gains that we have made in recent years, it would help us to retain jobs in rural communities, and it would help to bridge us until we could get some success in the trade negotiations.
Mr. Chairman, we agree that the long-term and ideal solution is to eliminate export and domestic production trade-distorting subsidies through the upcoming world trade negotiations, but we expect these talks will last several years. We expect it will be more than five years before the results of the new agreement begin to be felt. This is assuming that the talks are successful and government subsidy reduction goals are achieved, but that is by no means certain.
On November 1 and 2, we met with Minister Vanclief's staff, with departmental officials, and with key members of all political parties. As a result of those consultations, we are further strengthening the industry's long-range business plan. We've always invested heavily in market development and we have also invested in new product innovation.
We are planning to return to Ottawa before Christmas. We will present our plan for a world-class alfalfa processing industry in Canada. But because of the competitors' subsidy situation, it will require short-term government participation.
From our industry's perspective, we are doing all we can, to paraphrase your letter, to ensure that Canadians benefit from the new challenges and opportunities. Our submission lists several other handicaps. These are not unique to us, but in light of the crises, they add up to significant additional work on the industry. I am referring to user fees, cost-recovery measures, unreliable and costly transportation, work stoppages, and, in some cases, infrastructure gaps.
We urge members of this committee to lend their support, both individually and as a committee, to the urgently needed made-in-Canada solution to provide short-term bridging assistance to an industry that can be successful and competitive in the longer term. We feel that a partial levelling of the playing field, for even a short period of time, will give us a reprieve from a very unfair situation and will pay big dividends by keeping a deserving industry intact to contribute to the economy in the future.
I'd be pleased to answer any questions of your committee.
The Chair: Thank you very much, Mr. Benoit. Thanks, everyone.
Now we're going to the question and answer session. We'll begin with Mr. Epp. It's going to be a seven-minute round.
Mr. Ken Epp (Elk Island, Ref.): Thank you, Mr. Chairman, and thank you to all of you for your presentations. I'm going to cut quick to the chase because I have a lot of questions.
First of all, to the Mayor of Calgary, thank you for welcoming us here. I have a question for you on something you didn't talk about. EI premiums—you never mentioned it. Is that not a concern to the City of Calgary?
Mr. Al Duerr: Yes, they are a concern.
Mr. Ken Epp: But you didn't mention them because they're lower on your priority list?
Mr. Al Duerr: Well, I was given five minutes and we have a long list of issues.
No, the issue of EI premiums is something that, with an employee count of approximately 10,000 people, is a significant issue for us, without question. So it's not that it's not an issue; we just had a relatively short period of time to make a presentation.
Mr. Ken Epp: Okay. You indicated that approximately 8% of the taxes that taxpayers in this community pay go to your municipality, and everything else goes to the province and the federal government.
Mr. Al Duerr: That's right.
Mr. Ken Epp: I would just like to submit to you that my estimate is that you are sending to Ottawa approximately $4 million a year in EI overpayments, just on your own staff, just on your own employees.
Mr. Al Duerr: That's correct.
Mr. Ken Epp: I would have liked to have seen you help us pressure these guys to bring that thing into line, but anyway, thank you.
Mr. Al Duerr: Just for your information, we have made representations. We have sent letters through to the federal government on the whole issue of overpayments. We watch those things very, very carefully. So we have made representations in the past and we can provide you with copies of them.
Mr. Ken Epp: Okay.
I have next a question about transit passes. You mentioned Kyoto, and obviously we in Alberta want to do our share to reduce greenhouse gases and all those emissions and all that stuff. You talked a little bit about the transit passes and you encouraged the federal government to make them non-taxable. What would be your justification for that, especially in this community, where just about everyone needs to drive a car?
Mr. Al Duerr: Actually we have extremely high take-up rates on public transit and we're trying to encourage a transit alternative in Calgary. We have a major light rail system that's in place right now that we're expanding. We're going to be embarking on about $1.1 billion worth of transportation improvements. The lion's share of those are going to be in the area of public transit.
What the transit pass does is it encourages employers to provide this, to encourage employees to use public transit. The benefits of that and the benefit on Kyoto are without question, but it also has significant benefits in reducing wear and tear on our roads, basically frees up capacity and reduces infrastructure costs. Any time we can get someone out of a private car into public transit, we benefit on a variety of counts. Right now it's a taxable benefit. There isn't a lot of incentive for anyone to provide those alternatives here.
Mr. Ken Epp: Okay. So what you want to do is have both your fellow taxpayers in the province, not in Calgary, and also all of the taxpayers across the country, subsidize your push toward using more public transit, and, by the way, don't assume by my question I'm against that. I'm just trying to find out what all we're thinking here.
Also in terms of this tax, also in terms of infrastructure, I heard you say you support a tripartite infrastructure program. Did I hear you correctly on that?
Mr. Al Duerr: That's right.
Mr. Ken Epp: Okay. Then I want to go over to the Urban Municipalities Association here and ask them, do you have a public transit system in Onoway, and is this going to impact you, or are you quite ready to contribute to public transit systems in the big cities?
Mr. Lorne Olsvik: Yes. As a matter of fact, in most areas we certainly support public transit, whether it be from the cities or towns. And we do have public transit in our communities, where we've found creative partnerships. Certainly the federal government has aided in some of the areas, whether it be through a seniors' bus, a handicapped bus, or a service organization bus to move our citizens to different destinations. It is mostly not scheduled bus lines, but in some areas it is scheduled. But it does work well.
I certainly support public transportation. I think in light of Kyoto and the emissions, potentially public transportation with its aggregation of people to take advantage of that transport certainly should garner some carbon credits, or something along those orders. There are opportunities, and creative opportunities, to look at.
Our association certainly supports public transportation, because you know what? We're the ones who have to build the roads and we're the ones who have to pay for it. So if we can get extra lifeblood out of our infrastructure, we understand fiscal responsibility and reality, and that is part of it.
Mr. Ken Epp: Thank you.
Mr. Al Duerr: I didn't get a chance to answer that one part. I wanted to clarify this.
When you ask for a non-taxable transit pass, you're not taking any tax from anybody. Right now no one does it; no one provides it. What we're saying is if someone is going to provide a transit pass, don't create a new tax. This would be a new source of revenue. People aren't providing transit passes right now. We would like to see companies do that, but not by virtue of that “benefit” have a new tax created.
Mr. Ken Epp: This, of course, was the object of a private member's bill in a previous Parliament, and it had some merit.
We know that some employers give subsidized parking to people; that becomes a taxable benefit. So if that is a taxable benefit and a transit pass is not a taxable benefit, then maybe we'll move more people that way. I need to confess, now that the questioning is over, that I'm on your side; I think that's a good idea. But I never lay my cards on the table face up because then I don't know what you're thinking.
I want to go back to the Chamber of Commerce, if I may. You had a very, very good list of things you'd like to see in the budget next time coming around, and you talked a little bit about EI premiums being at a break-even point. How important is that to you? And don't hesitate to overstate the case.
Oh, I laid my cards on the table face up, didn't I?
Mr. Jack Grant: It's always reassuring not to receive a hint of bias in the question.
EI premiums, at the current level—I think it's well documented—are well in excess of what the program requires. When you get an economic downturn is when you're going to have the drain on the EI program, and whether you're a small business or whether you're a large employer, it's a very significant cost.
Large businesses, if they're in manufacturing, will be doing everything they can to bring in more machines or whatever because there isn't any incentive to hire people. Small businesses, particularly in the service industry, don't have the same opportunity to substitute equipment for people, but that just means their operating costs are that much higher and they are that less competitive.
It's a very serious issue for business.
Mr. Ken Epp: Thank you, Mr. Chairman.
The Chair: Mr. de Savoye.
Mr. Pierre de Savoye (Portneuf, BQ): Thank you, Mr. Chairman. The interpretation system does not seem to be working.
What do I do, Mr. Chair?
The Chair: Well, you have a couple of options. I can come back to you later, and then these will be distributed. Perhaps we can give the floor to Ms. Redman.
Mr. Pierre de Savoye: I think they're being distributed right now, so probably I have the opportunity not to lose my turn.
The Chair: No, you would never lose your turn.
Mr. Pierre de Savoye: Thank you.
I will start talking in French just to make sure you can hear me fine.
Mr. Friley is on the line, and Mr. Grant as well. We are just missing Mayor Duerr.
Mayor Duerr, you know that Quebec City and Calgary have been twin cities for many years. It is a well-known fact that twins generally share the same feelings and the same concerns.
Mr. Al Duerr: Sometimes, yes.
Mr. Pierre de Savoye: Well, I hear you talking about debt reimbursement, employment insurance premiums, health, education, social housing, infrastructure programs and tax cuts, and that tells me Calgary and Quebec City are really twins. The same issues would have been put forward just as urgently in Quebec City, where we once had a chance to meet during the Carnival.
There are two or three issues you did not mention in your oral presentation, but did bring up in your written brief. I would like a little more information on these. In the coal industry's brief, we read:
Payroll taxes should be structured so as to experience
Could you clarify what you mean? I do not quite understand how you would go about this.
Mr. Ken Myers: Mr. de Savoye, the comment refers to the fact that the Coal Association would like to see employers who constantly employ people without laying them off, bringing them back, and laying them off, pay a more favourable rate than other industries that treat their employers on a more sporadic basis. We'd like to see the employment income rate based on the same basis as the WCB rate, where good performers pay a lower rate and poor performers pay a higher rate.
Mr. Pierre de Savoye: That is an interesting and fairly innovative approach. It's the first I've heard of it.
However, there are seasonal industries which have no choice but to hire and lay off employees as the seasons change, particularly in agriculture. What problems might that involve with your approach?
Mr. Ken Myers: I guess each industry has to go through its own planning process. I mean, some industries can't avoid bringing people back and forth, and maybe those factors have to be taken into account, but there are other industries, not in the same program, where there are actually incentives for people to be laid off.
What the Canadian economy is looking for is continuous employment for its people, and maybe the industries have to take into account that there will be low periods and look at what can be done for their employees during that period of time.
Mr. Pierre de Savoye: Thank you.
Mr. Benoit, I'd like to ask you about something you put forward in your brief, a competitive railway system. You're focussing on conditions in our railway system, as they affect transportation of your agricultural products. Could you tell us exactly what problems you are experiencing, and how you think they might be solved?
Mr. Garry Benoit: It certainly is true that dependable rail transportation is important to our sector. We are 85% export-oriented, and about 70% of that goes to Japan.
A couple of years ago, I remember, I was over in Japan with the Minister of Agriculture, trying to explain away some of the problems that were going on at the time. The Japan feed industry association there had written very strong letters to a number of cabinet ministers here in Canada and to the Canadian ambassador saying that they no longer viewed Canada as a dependable supplier because of recurring stoppages and the lack of dependability, I guess, in our rail system.
I think the best answer is competition, the way we have it for telephones or whatever. The tracks are there, and somehow we have to create competition as a way of ever-forcing competitive rates as well as dependable service. If you have a monopoly situation, you're going to have problems.
Mr. Pierre de Savoye: Thank you, Mr. Benoit.
The Association of Municipalities of Alberta raised the issue of funding for the RCMP. This is something I'm not familiar with, since like Ontario Quebec has its own police force. That means I'm unfamiliar with the arrangement between the federal government and the RCMP to keep the peace in the province of Alberta. Nor do I know the problems you are having as the result of cuts in the RCMP budgets.
Could you explain exactly what the problem is, and what solutions you are considering? Could you also tell me whether Alberta is required to pay a portion of costs incurred by the RCMP for policing activities in Alberta?
Mr. Ernie Patterson: In Alberta a large number of municipalities contract, through the provincial government, with the federal government to provide leasing services. The local municipalities pay a good portion of the cost of each officer, the federal government puts in a portion, and the provincial government makes some contribution. The average cost to the municipality for a police officer is in excess of $70,000 per officer.
Now, our problem, at the moment, is that because of the cutbacks that were initiated, we cannot get the officers in Alberta as we need them. In our local detachment, with which I'm very familiar, there's been an officer ill for two years. We have not been able to replace that officer because there isn't a person available.
In another detachment in a community just slightly larger than ours, they have been short four officers. Worse than that, the situation is so bad that not only training, but also the provision of equipment, is not being done. It is very sad, in my opinion, when an RCMP detachment—and the mayor told me this—had a business donate some obsolete computer and fax equipment. The RCMP was so happy to get it because it upgraded their communication facilities. That is really sad.
The interesting thing about this is that these RCMP officers not only provide the local policing but also enforce both the federal Criminal Code and provincial laws, and yet the biggest portion of the cost of these officers falls on the local property owners.
We're not complaining about that, but please, reinstitute the training and upgrade the equipment so that we can have effective policing. That's our request.
You know, I have great sympathy for tax cuts, but when you're faced with crime and property and protection of citizens, I'm not really interested in hearing about tax cuts. I'm interested in service and the provision of safety.
Mr. Pierre de Savoye: Thank you. And thank you, Mr. Chairman.
The Chair: Mrs. Redman.
Ms. Karen Redman (Kitchener Centre, Lib.): Thank you, Mr. Chairperson.
Welcome, gentlemen. Thank you all for your presentation.
In a previous life I was a regional municipal councillor as well as a school trustee, so a lot of what you're saying has a lot of resonance for me.
I'd like to start with a question to Mayor Duerr, if I may.
I found your mention of “smart taxation” really intriguing. It's a fabulous sound bite, and it really excites the imagination. I'm wondering if you can flesh out a little bit what you mean by smart taxation.
Mr. Al Duerr: Certainly. I touched on it very briefly. I looked at the issue from a business perspective or someone who is on a fixed income in terms of the difference between fixed and variable costs. A property tax or a business tax you have to pay regardless of your income. If you're in business, you have to pay your property tax, you have to pay your electric bill, etc., or you can't open your doors. From a business perspective, you only pay income tax if you're making a sufficient amount of income to generate a profit and have a net income.
A similar situation occurs with the senior citizen, someone on a fixed income. Again, our objective would be to keep people in their houses as long as possible. That should be a societal objective. What we're finding is that an increase in property taxation has the effect of pushing many of these people on fixed incomes out of their houses.
There is a role for property taxation, but what has happened, and what we find at the local level, is that our provincial governments—in fact, this is in the case of the City of Calgary—collect more property taxation to pay for education than we collect to run the city.
What we're seeing from the federal perspective is that there has been in the country a significant downloading of responsibilities, federal government to provincial government in the whole issue of transfer payments and the provincial government down to local government. Unfortunately, there's nobody else for us to download onto. This isn't just for Calgary; you'd find the same thing in Quebec City, and you'd find the same thing across this country. We increasingly see the burden being placed onto the property taxpayer.
We have a homeless problem here, and a big part of that homeless problem is the fact that we have people from across the country who are moving here because there aren't jobs in their communities. There's nothing wrong with people moving here, again, but if that's the reason, or if we have people who are homeless because they have medical or health issues, those are not issues....
Income standards, employment, and medical and health issues are not local government responsibilities. But when someone is on our street, ultimately we are the ones charged with picking them up and taking care of them.
We have a wonderful community. We have church organizations and community and other support groups that are doing that. But again, what has happened across the country is that big government has largely taken over all those things, such as gaming. I don't support a lot of that anyway, but even for things like community bingos, the basic supports that community groups and organizations would provide in a community if the local government didn't, they don't have those any more.
In my opinion, we have a system of taxation in this country that is very heavily loaded to senior governments, we have the primary responsibilities for addressing virtually everything that impacts on the quality of life at the local level of government, and somehow we have to get it rebalanced. I would think—and I've said this to our provincial government as well—that until you sort out an appropriate way of taxing, just reducing taxes without looking at whether that is going to result in an increase in a property tax is not a very intelligent way of doing it.
I support reducing taxes. I think we pay too much in taxes. I think there's too much duplication in the country. What I'd encourage the federal government to do is not just, in isolation, go out and say they're going to reduce this or that tax without understanding what the ramifications are—and I make this same pitch to provincial governments—because ultimately, if there's a service provided, somebody has to pay for it, and often we're paying for it with the wrong kind of taxation.
Ms. Karen Redman: So, really, part of smart taxation is looking at the relationship in the flow of money from federal to provincial to municipality.
Mr. Al Duerr: Absolutely. You said it so much more simply than I did.
Ms. Karen Redman: I think smart taxation is kind of an appealing concept. When I was a municipal councillor...certainly you do get moneys flowing; you get taxes in lieu, etc. This government dedicated $30 million to a community safety and crime prevention council across Canada, and I think it does address some of the root causes that Minister Bradshaw has certainly identified in her trek across Canada.
There is also the social union framework agreement that was signed last spring, which allows for all levels of government to be accountable to Canadians, and it strikes me that this may be a wonderful platform to deal with the housing situation.
We had a group of witnesses come last week to address this committee, and it was the Co-operative Housing Foundation of Canada. Nobody here has mentioned the 1% solution. I'm assuming most of you are aware of it. It would call on the Government of Canada to invest $2 billion in additional moneys in social housing. I would ask the Calgary Chamber of Commerce if they are familiar with that suggestion.
There are 2.2 million Canadians who pay at least 50% of their income for shelter. I represent Kitchener Centre, which is a city in southern Ontario about 100 kilometres from Toronto, and we're mentioned in every housing report, as is Calgary, as having an acute need, because we do have many homeless people and we have a social housing crisis in our area. My chamber of commerce is very articulate and has carried forward many of the national themes that I see in your report.
My question is this. Governing is, in a sense, deciding what priorities are, and I'm just wondering how you reconcile housing.... We've had witnesses come before us who suggested that if we raised RSP contributions and lowered taxation at the corporate level, that would immediately translate to a good thing for people who are paying over 50% of their income to housing. I think those are all good things and things that should be looked at, but quite candidly, it's a real resonance for me to hear about the need for social housing. I'm just wondering how you reconcile those two needs, if they're competing or if you can address them at the same time, as a government.
Mr. Jack Grant: Mr. Chair, I apologize, but I'm not particularly familiar with that 1% solution.
I think the approach we would take is to look at the various spending priorities that you have and look at what your revenue targets should be. You have to decide, not only as government but as a society, where your priorities are and how you want to allocate. It doesn't necessarily mean you have to take new money and throw it at this issue or that issue, but rather you have to take the available funds at your disposal and decide how to most effectively allocate those funds to the spending priorities.
I think it's always a bit of a mug's game, but if you can get the tax rates down—and we're initially emphasizing personal taxes—you're going to have more people working and contributing. You could actually have an increase in tax revenue, not a decrease. So you can increase the pie that you have to share.
I agree that it's a serious issue. I agree with our mayor. When you walk on the streets, it's disturbing to see people who certainly every outward appearance would indicate are in dire need of help. We do have a very caring community, but you can't just say, “Okay, we'll up the spending limits; hang in there”, because you're going to drive the economic underpinnings further afield. Other countries are reducing taxes. There are other opportunities out there...which would just exacerbate the problem rather than help it.
So I think it's a question of taking a look at the spending envelope and deciding, okay, this one we may be able to reduce, and we can reallocate it into this area. Or if you can get the revenues up because of higher participation and reduce the attractiveness of the underground economy, then you'll have more government revenues and you'll still be able to achieve.... It will be a win-win situation rather than a win-lose or a lose-lose.
The Chair: Ms. Leung, one question, please.
Ms. Sophia Leung (Vancouver Kingsway, Lib.): Thank you, Mr. Chair.
A few months ago I was in Calgary with the Prime Minister's task force. It's so good to see some of you again.
I have a question for Mayor Duerr. You mentioned homelessness. We were very interested in this. I understand many of them left Alberta with a one-way ticket to B.C., but anyhow, you still have some, and we have our share.
Mr. Al Duerr: I think there is a perception that everybody was getting a one-way ticket. I don't think that ever happened, but it made you think so.
Ms. Sophia Leung: Okay.
Just quickly, you talked about child care services. I'd like to know specifically what you have in mind. Do we need to consider universal child care services or specifically tie them to low-income groups, etc.?
Mr. Al Duerr: I'll try to keep it as simple as possible, because it's a very complex issue. Again, in simpler times we had hoped that child care issues wouldn't be the issues that they are right now, that the family would respond, and that our traditional institutional structures would be in place. The reality is that this is not the case for an increasing number of Canadians, and supports are necessary.
I referenced, for example, an after-school care program where the City of Calgary put together $150,000 into before- and after-school child care for school-age children. We do that because the parents are working and they don't have an option. It's either work, and work at that kind of job, or welfare. So we're providing the supports.
But it's not just to take care of the kids. If you don't do that and if the parents still feel they have to work—and we should be encouraging the parents to be working for a whole variety of reasons: it generates income; it generates a work ethic, a perception within the community—you'll have a lot of kids on the streets because other options are not available.
So the challenge is to work. There are no easy solutions, and they'll vary from community to community, but the challenge is to work and focus on the basics. How do we provide basic supports for our young people? The costs to society of losing a young person are incredible.
We spoke very briefly. We could provide a lot more information on issues of the pilot projects for youth in conflict with the law. There are some initiatives there. Aboriginal youth are increasingly an issue, and urban aboriginal youth, who do not fall within the purviews of the traditional reserves, are a significant issue. I could go on at length.
The Chair: Thank you.
Ms. Sophia Leung: I have a short question for Mr. Friley of the CAPP.
You mentioned that in 1998, $17 billion of capital investment was put into your industry. What was the share of government help in that?
Mr. William Friley: I believe that figure was directly out of revenue from our business. There was no government share in that. That was from industry expansion.
Ms. Sophia Leung: So you're saying all capital investments were private. You also mentioned Canada exported $19 billion of your product. What amount of technical transfers were involved in that?
Mr. Greg L. Stringham (Vice-President, Markets and Fiscal Policy, Canadian Association of Petroleum Producers): If I could answer that one, that's just talking about the products of oil and gas. In addition to that, a number of companies have developed technical expertise here that they use in other countries around the world. Revenue comes back to Canada from that as well. So that's not included in the $19 billion. That's just from the products of oil and gas that are sold.
In addition to that, there is technology that is exported through expertise, people and technologies that have been developed or perfected here in Canada that are taken to other countries.
Ms. Sophia Leung: Do you have a figure on the profits for your industry for 1998?
Mr. Greg Stringham: Do you mean total profits? In 1998 there were very depressed oil prices, so the number we have been looking at is a five-year average. It is probably more representative of the ups and downs this industry goes through. On average, the industry earned a rate of return slightly less than the rest of corporate Canada, so it was somewhere around 2%.
The Chair: Thank you.
Hon. Lorne Nystrom (Regina—Qu'Appelle, NDP): Thank you, Mr. Chair.
I want to welcome everybody to the committee this morning. I'll start with Mayor Duerr, or Mr. Hawkesworth, and Mayor Duerr's concept of smart taxation. I like the idea of what you're saying here. On the flip side of that coin, you might also start talking about smart spending and smart cutbacks, and things of that sort.
In 1995, when the federal government made a lot of cutbacks, I don't think they realized the consequences of cutbacks in transfers to the provinces. Those resulted in cutbacks in transfers and offloading to the municipalities, the health care system, the education system, and individuals, cutbacks in EI, and so on. So I think that might be a concept to look at there too, in terms of who is actually paying for this surplus we have today. It's the ordinary citizen, through all the cutbacks that were made in social programs and the like.
I wonder if you can elaborate a little more on what you think we should do in terms of the dollars going into a children's agenda, social housing, and the homeless issue. We're hearing an awful lot about that as we go around the country. We had a figure the other day in Ottawa from the teachers' federation, I think. They said an investment of $5 billion in early childhood development would pay a dividend down the road of about $10 billion. In other words, it's a wonderful investment even from an economic point of view, let alone the human point of view.
I wonder if you can just tell the committee what you are seeing, in terms of the dollar figure over the next five or six years, in these areas that are so important.
Mr. Al Duerr: With respect to housing, it would probably be better for Alderman Hawkesworth to respond, with his activity in the national housing initiatives and the provincial housing initiatives.
I want to reinforce that the ideal situation would be our traditional supports—the family and all those things—being in place, so we wouldn't need to do this. But we all know that, unfortunately, is not the case.
Smart spending recognizes the full-cost equation. You can deal with children at risk and say “What does it cost to provide a program for kids at risk?” but what does it cost to keep them in jail? If you start looking at $60,000 or $70,000 a year to keep someone in jail, very quickly the costs of the preventative programs and after-school programs look pretty inexpensive.
We spend money in the wrong places in this country. If you go south of the border, you'll see an even more extreme example. There it's survival of the fittest. Unfortunately, the ones who aren't as fit survive too.
I'm optimistic that we, as Canadians, still have a tremendous opportunity, but we have to spend in the right places.
The basic hierarchy of needs includes shelter, safety, security, and basic supports. If we ensure that Canadians have those, then we will save money in areas down the road in things like unemployment insurance, welfare, and health care supports. A healthier, more active, more involved, and more personally responsible population will be a better population.
It's almost the equivalent of pay me now or pay me later. But we're putting our money in the wrong places right now. We're putting far too much money in the justice system and the penal system, rather than into programs up front.
Mr. Bob Hawkesworth: Let me give you a little example of how I think this could all work.
I think you will hear in the next hour from the Calgary Homeless Foundation, which is a partnership of the province, the city, the Chamber of Commerce, and the United Way.
I'll just give you an example of something we've managed to do in the last year through the acquisitions committee of the Homeless Foundation. There is an apartment building not more than ten or twelve blocks away from this building that ended up being purchased with moneys from the Homeless Foundation, through a grant from the provincial government.
It required substantial renovations, which we were able to secure through the RRAP program of CMHC. The building is now managed and being run by the City of Calgary's non-profit housing corporation, CalHomes. It was structurally in good shape, but had been poorly run by the previous owner. We now have 40 units of affordable housing for people with low incomes, with rents in the order of $250 to $300 a month.
Every level had some involvement in creating that housing project. We needed the federal government. We needed a community agency of the city of Calgary. I think we're going to see, in the future, these partnerships between all three levels of government and the community to deliver housing. If we can do that, we can be quite imaginative and innovative in the way we take the resources of each and pull together partnerships.
It's a chance for the federal government to have a presence. We come in, take those resources, lever resources from the province, lever resources from the community and the city, and develop these partnerships to address the issue. I really think that's the model for the future. But we really need the federal government involved.
So it's an investment, yes, but each partnership brings synergy. So it's the creation of not simply housing but support programs, and it's done inside of a community context. So we get better value from the investment. It helps enhance it.
Mr. Lorne Nystrom: I think it does. I go back to Mayor Duerr's comment about the crime in the United States. There was a news story last night that the United States, despite their so-called economic boom, now has the highest poverty rate of any country in the industrialized world. It's a pretty sad commentary on their social priorities south of the border.
Speaking to the Chamber of Commerce, it seems to me you're talking an awful lot in your brief about tax cuts and reducing the debt, but very little about social spending. We've heard all about the housing situation today, social housing, and the children's agenda. We have a tremendous farm crisis because there are subsidies in the United States and Europe, and our farmers are sort of on their own. We have the need to do something about poverty in our country, and so on.
I'm just wondering whether your approach lacks some balance, because you're not talking about putting money into all these problems that are so real. Yet these are the people who have paid for the reduction of the debt and the elimination of the deficit in the first place.
I'm wondering why you aren't advising that more money go into health care, which is in tatters, and more money go into education, which is an investment in the future in terms of building a stronger economy in research and development and training and skills.
I represent the inner city in Regina, with all the aboriginal population and homelessness and the food banks and so on, and some of the things you're talking about in terms of debt reduction are totally irrelevant to their day-to-day lives. I'm wondering why you don't have more balance in your presentation, a bit like the mayor, or the cities of Alberta.
Mr. Jack Grant: We always run the risk when we advocate allocating the fiscal dividends, if we want to use that phraseology, to lower taxes or what have you, but when you talk about a balance, I think we need to take a broad spectrum. For the last two or three years we have had a surplus in government spending, but we still have, in this country, a $600 billion anvil hanging over our heads. If you want to talk balance, we've had all this deficit spending over the years that has created this huge debt and we've only had a couple of years of relatively modest surpluses. The reason we had this huge debt acquired was because there wasn't any fiscal discipline applied during some very good years in the 1970s, 1980s, and early 1990s.
It's not because the chamber or the chambers across the land are insensitive to the downtrodden, the health problems, etc., but you need to have your fiscal engine in order to ensure that you will have those programs into the future. It's trying to get the fiscal balance balanced again so that you have the money to spend on those things.
Mr. Lorne Nystrom: Just so I'm clear, are you advocating a freeze on all new spending? Nothing for the farmers who are in distress, no new social housing—
Mr. Jack Grant: No, we have not said that.
Mr. Lorne Nystrom: Can you tell us where you'd like to see increased spending and how much of the surplus should go into increased spending on education, R and D, homelessness, health care, education, farmers in crisis, the east coast fishery, etc.? You can go on and on. There is the unfairness, as Mr. Benoit said, of seasonal workers in terms of EI. You've talked about cutting back premiums. Yes, premiums should be cut back, but some of that money I think should be spent in terms of bringing back some of the workers into the system who have been cut out. Fewer than 40% now qualify for EI premiums despite the fact that they paid for them. Where would your priorities be in terms of increased spending, in terms of investing in the country's human structure?
The Chair: Thank you, Mr. Nystrom.
Mr. Sean Ballard (Analyst, Policy and Planning, Calgary Chamber of Commerce): If you look at the deductions we've provided, they all say that spending can increase with population growth and inflation—overall program spending. If you're looking—
Mr. Lorne Nystrom: That's with population growth and inflation, but I'm asking are you advocating increased spending in any area that's outside of the cost-of-inflation index?
Mr. Sean Ballard: If you look at what the government spends overall, we're saying it should stay the same. If you decide as a government that more of that money needs to go in various areas, then all the power to you. But as you add things on top, you need to decide what you're going to take out on the bottom, because you can't just keep adding.
The Chair: Thank you, Mr. Nystrom.
Mr. Jim Jones (Markham, PC): Thank you, Mr. Chairman, and welcome. Mayor Duerr, in your presentation you said the automobile accounts for 14% of all greenhouse gases in Canada. I'm aware that Calgary is a very fast-growing city. Can you explain to me how the City of Calgary is planning a transit-friendly city and what involvement you expect the federal government to have?
Mr. Al Duerr: Calgary, right now, would have about 850,000 people. We made a significant investment in light rail transit. Right now the only cities in the country with rail are Montreal and Toronto with heavy rail and Calgary and Edmonton with light rail transit systems. We have one of the few transit properties in North America that has seen a substantial increase in ridership over the last number of years. Even in Calgary, which is largely low-density, single-family homes, that's the preferred mode. We don't have significant artificial constraints that eliminate this possibility. Even in Calgary, there is a very strong public transit focus.
What are we going to be doing with the roughly $1 billion? We negotiated with the province, and after about five years of discussion we received a percentage of the fuel tax that has been collected here, the provincial fuel tax; we get 5¢ a litre. So that's a guaranteed revenue stream, which is absolutely essential if you're going to make significant long-term investments. You have to able to finance those. The traditional provincial-municipal model was one of a three-year grant program, which did not give you that long-term security so you could embark on a $400-million expansion. The final numbers haven't come in, but probably out of that $1 billion that's going to be invested in the next seven years or so, approximately $400 million to $500 million of it is going to be public transit. A big component of it will be in light rail extension, but we're also going to be looking at significant additions within our bus system as well. You need an overall balanced system.
What we're also doing is working with our surrounding communities. Calgary's a uni-city. Essentially when you get to the boundaries of Calgary, you're in the country. We do have smaller communities around Calgary. We're now looking at, on a purely voluntary, opt-in basis, a regional transit authority, and we're having those discussions. So we would tie those communities in as well. We'd do this initially by buses, but those commuters would be coming in. Children in those communities could then integrate into programs that would be happening in Calgary. We think there are some significant opportunities.
Obviously, there has to be a balance. Even in Calgary, we're looking at roughly a 50-50 balance in expenditures. If you get into a smaller community, you could have a greater balance focused on the road system, and certainly not light rail but probably a bus system. I think there's opportunity for all of us, though, to make a significant contribution. In the big urban areas, the problem with greenhouse gases with automobile travel is one that with our road systems—and there is not a good example in North America of a city that has been able to adequately deal with this problem with roads—you end up having congestion, cars driving slowly, much less fuel efficiency. Right now, we generate more greenhouse gases out of private automobile travel than we do with all the industry in the country. That's the big problem, and that's where we have a significant potential for new futures.
Mr. Jim Jones: You mention in your brief that in the absence of a national highway program to fix the highway problem it would take a $17-billion investment. What economic impact has there been on the Province of Alberta, and especially Calgary, by not having a good highway system?
Mr. Al Duerr: When you recognize that we're in an increasingly global environment, and if you look at trade and recognize that we talk about trade offshore, yet the vast majority of trade is south of the border, and getting access to these major corridors.... If you look at a province like Alberta—you could duplicate this in Saskatchewan, Manitoba or British Columbia—you need a good system to get access to the significant north-south corridors and the significant east-west corridors if you're going to be moving product. So from the standpoint of our role in export trade, and certainly from the City of Calgary's perspective, being largely the transportation hub for western Canada and being the access out to other parts of the province and south of the border, a national highway system and investment in that national highway system could pay significant benefits.
We have been arguing that.... In the case of the Province of Alberta, the province collected a fuel tax. I can say, to their credit, that virtually every penny of it goes back into transportation in one way, shape, or form. Federally, I think there's about a $4-billion fuel tax that's collected, a current tax, and I stand to be corrected, but I think about $250 million is being spent on roads or transit systems.
Again, don't misunderstand. I'm not saying a new carbon tax or a new fuel tax; I'm saying you have an existing source of revenue, and like any business, if you have a source of revenue and, in this case, it's coming from transportation, it would be just prudent good business to reinvest in the source of revenue. Again, I think it would pay dividends. A better transportation system will ultimately pay significant economic dividends and will probably raise more money for the federal government.
Mr. Jim Jones: The chamber of commerce in their brief said we need broad-based tax cuts. I know it's probably politically correct to say we should reduce personal income taxes first versus corporate taxes. What should we really reduce first?
Mr. Jack Grant: The reason we don't have any problem supporting reduction of personal income taxes is that there are a number of businesses that are having problems attracting workers. To a large extent that's because of the disparity in the personal tax rates between ourselves and our friendly neighbour to the south. If you can't attract workers, and if you can't retain the workers you have, then you're not going to stay in business for very long.
This doesn't mean corporate taxes aren't still an issue, but when you take a look.... If you're talking about first aid, if you have a broken arm and a cut artery, yes, the broken arm will need to be looked after, but you first need to stop the bleeding from the artery.
That's why we're also endorsing turning the attention on personal income taxes first. That's not to say that we don't think there will be an issue with corporate taxes when countries around the world are all reducing.... As we said, the Mintz report found that by next year we'll have the highest corporate tax rate in the G-7 countries, and the second highest in manufacturing.
The Chair: Thank you.
Mr. Jim Jones: I have one last question. To the Canadian Association of Petroleum Producers, you've said you need policies that are competitive with those of our trading partners. What do you mean by that? What are the policies, and where aren't you competitive?
Mr. Greg Stringham: If I can add to that, really what we're looking at in that is all across-the-board government policies. In terms of the things we've been talking about today, there are policies in all different areas at different levels of government where we think there could be substantial savings. So if we don't have to apply to three different levels of government, municipal, provincial, and federal, but there can be one single-window coordinated approach still meeting all the same standards, then there's a savings to all the governments and there's a savings to the industry, which allows for more taxation. So it's all the way across the board, from the municipal level, provincial level, and federal level, where we need to have that coordinated approach. That's what we're trying to refer to there.
The Chair: Thank you, Mr. Jones.
Mr. Lowther, you have one brief question.
Mr. Eric Lowther (Calgary Centre, Ref.): As the member of Parliament for Calgary Centre, I welcome you all, and certainly I think we've seen a demonstration of why our mayor has been elected for the fourth term, or is it the fifth term? It's one of the two. I think now it's the fourth.
I think he's captured the sentiment of the many common constituents we share here in Calgary in the way he's articulated some of the positions presented today.
I've listened to the questions and answers around the table, including the comment that 58% of the taxes are going to Ottawa out of Calgary. And we've touched on the brain drain issue and the need to encourage innovation and productivity. We've also touched on some of the problems that often are local and need local solutions, like transportation and homelessness, and policing in some cases.
I look again to the mayor and maybe some of the people, the aldermen, and I note that we've seen this downloading of responsibility, but often the dollars don't follow. I myself, and I think members of my own party, support the idea of more community-driven approaches, because they can be tailored to the needs of the community a lot better than cookie-cutter solutions out of Ottawa that often don't work for a large majority of the participants.
So what I'd like clearly stated, if it's possible, maybe from the mayor, is this. Do we support the approach of more community-driven solutions with the funding, without strings attached, from the other levels of government? In fact, we were just toying here on a side discussion with the idea that wouldn't it be interesting if municipalities collected the taxes and then they cut a cheque to the province and the federal government for what they felt it was worth? But maybe that's way too far off the spectrum.
Mr. Al Duerr: I'd be really prepared to talk about that.
I think if the question was posed, we need the partnership of all orders of government. One of the challenges the federal and provincial governments face when you're going to give money is, what is the accountability for that money? Traditionally that has resulted in programs with a lot of criteria and bureaucracies to run programs, so you'll have tripartite programs and the feds will give money to the provinces, they'll give money to local government, which will ultimately work for the community group and get a program delivered in the community.
The bottom line is there has been a lot of money siphoned off through bureaucracy and management to the extent—and that's why I say it doesn't even necessarily have to come to the City of Calgary—that we can understand what the issues are and then target those issues. What you'll find is that solutions to issues of homelessness and poverty vary between Regina and Edmonton and Calgary and Vancouver. A one-size-fits-all doesn't work.
So close work—allocate money, allocate resources, and then work, but don't spend a lot of time developing your bureaucracy around implementation. I think you can ensure that good programs are developed at the local level through participation, through involvement, without having a large bureaucracy around oversight. There are a lot of groups on the front lines, and our communities are doing an outstanding job. You're going to be hearing from some, I think, after us. And I would like to see as much of the support going directly to those groups as possible. It doesn't even have to flow through the city.
The Chair: Thank you very much, Your Worship.
Mr. Lorne Olsvik: I think it's very important that you understand that the federal government are large partners in our communities right now in housing. There is a 75-25 split that we currently enjoy in senior housing programs. Take the message back that this conditional envelope funding on these cookie-cutter models across our rural communities is causing us a great deal of pain, because the rigid standards you have on the transfer of those dollars are not meeting the needs.
The dollars are there. We would love to be able to use those dollars in a creative fashion to satisfy the quality of life, but what is really occurring is these programs need to be adapted so we're able to be creative. We need to have some more unconditional cooperative strategy around this housing. The money is there. We have a problem. The problem is that Ottawa is telling us, this is it, you're not going to deviate from this program, and it's spelled out and you have to meet these four targets. Well, it doesn't work.
Seniors self-contained...where it's lower-income seniors and we want to try to work with health care dollars and regional health care funding and try to match up a program that will suit the needs—it's not there. We have wonderful community support mechanisms that are trying to make these things work.
Elected individuals on the municipal side—we would just love to be able to look after the bricks and mortar issues that we were initially created for. But we care about our neighbours and we care about the citizens who live in our community. God only knows we've seen some of the adverse effects from downloading when it's created, to our seniors, to our children. We want to do something in our communities, but for goodness' sake, you guys have to start looking at what hits home. Calgary and Edmonton have unique needs, but certainly Al, who's been very supportive, understands that we have the Fort McMurrays and the Grande Prairies and the Fox Creeks and the Onoways of Alberta that have citizens, and they do care.
We're not all right in Alberta. Quite a few people are in the middle with the rest of the folks.
Mr. Ernie Patterson: Just briefly, I would like to remind everyone here today that municipal governments have been accountable. We have not run deficits. We can manage, and I would like to re-echo that in my 30 years as mayor, I have never seen so much downloading and so many expectations of municipal government to meet the needs of all of the people, without the funding coming with it. I would like to re-echo what the Mayor of Calgary said: my good friends here at this table, we must take care of our people, and when we care about people, we will do prevention, and that will save us dollars in the long run.
Thank you very, very much.
The Chair: Thank you, Your Worship.
That concludes this panel. This was an excellent panel, primarily because you clearly illustrated that there are some pressing needs we have to take care of, but by the same token you also expressed quite eloquently that the issue of debt and taxes as they relate to long-term growth of the economy are also very important.
We personally believe, I think, in this committee that the two agendas are not mutually exclusive. As a matter of fact, I think they go hand in hand. I think you obviously have added value to the challenge we face as a committee as we make recommendations to the Minister of Finance. Thank you very much.
We are going to take a two-minute break. We're going to come back very quickly. Do not leave the room.
The Chair: I'd like to call the meeting to order.
Many of you have appeared before the finance committee, so you probably know how we operate. You have approximately five minutes to make your presentation. Thereafter we will engage in a question and answer session. During the question and answer session I'm going to ask the members, since we'll be sticking to a strict seven-minute round, to make your preambles shorter so we can get more questions in.
We'll begin with the Council of Canadians with Disabilities, Mr. Laurie Beachell. Welcome.
Mr. Laurie Beachell (National Coordinator, Council of Canadians with Disabilities): Thank you for the opportunity to present. The Council of Canadians with Disabilities is an umbrella association of persons with disabilities. We have members in each province; we have eight provincial organizations who are members and six other national associations.
Our primary purpose is to promote the improved status of persons with disabilities, and we have appeared before the finance committee for at least the last dozen years.
I will be fairly brief in my presentation. I listened to the discussion that preceded this, with the witnesses previous, and essentially what we are talking about here is defining the nature of Canada and defining the nature of citizenship within Canada.
Our membership are significantly disadvantaged. I believe it is clear and understood by all that poverty levels among persons with disabilities, unemployment levels among persons with disabilities, access to services, etc., across this country—that Canadians with disabilities have been marginalized and are living on the fringes of our society.
In days past, or in years past, many were institutionalized, many were actually removed from our society. There have been efforts by all levels of government to improve access to services, improve access to community life for persons with disabilities. However, I have to say that while in Canada we have seen incremental progress over a number of years, that progress has stalled and is actually being reversed. We have now reinstitutionalization of people with disabilities in Canada, we have a labour market that continues to exclude, and we have people with disabilities living on social assistance and basically living in poverty, in greater numbers than we have had previously.
Much of this relates to cuts in federal transfer payments. Much of this relates to what many community organizations said would happen when the Canada health and social transfer was created. While there was a reinvestment, that reinvestment got targeted into health, and the social services, social assistance supports that were the base need for people with disabilities were being cut.
With that as a preamble, let me say, essential to Canadians with disabilities are support services that allow them to participate in communities. These are very broad-ranging—everything from housing to attendant care to sign interpreters to access to communication devices, etc. What is essential, under a social union framework, is a federal-provincial-territorial agreement around disability support.
In this country we have great disparity. In some provinces you even buy your own wheelchair.
Secondly, we have to have a labour market strategy that will include people with disabilities. As the federal government transferred labour market programs to the provinces, there was no attempt within those agreements to define a program for persons with disabilities. Again, the accountability mechanism is how many people you move off employment insurance. For our community we are not on employment insurance. We were not in the labour market; therefore the current agreements with provinces totally exclude persons with disabilities.
Essential to continued employment support, the Opportunities Fund, which Minister Martin created in his budget of 1997, is a three-year fund of $30 million targeted toward persons with disabilities for labour market initiatives. That program comes to an end in March. It is now being shut down. Partnerships with business and labour are being disbanded, people are being laid off, and the supports withdrawn. Unless that program is renewed we have virtually nothing.
Income remains a major problem, and we would encourage the federal government, along with the territorial and provincial governments, to look at ways of improving income support for persons with disabilities. We spend tremendous amounts of money from the Canada Pension Plan, Workers' Compensation, social assistance, tort law, automobile insurance, and private long-term disability benefits. All of these work independently of each other with no collaboration.
Data on persons with disabilities in Canada is now 10 years old. It was 1991 that we last collected data on persons with disabilities. In the census of 2001 we must have data so that we can design programs to meet the needs of persons with disabilities.
Secondly, disability is a horizontal issue. It hits all departments. It hits tax—Revenue Canada, Industry Canada, Department of Justice, etc. There must be a mechanism within government for interdepartmental collaboration. At present, that does not exist. We also believe there have to be significantly fairer taxes for persons with disabilities, and in our report we've included a paper on tax reform policies for persons with disabilities that our council and many others have endorsed.
Speaking of tax specifically, it is dismaying to our community to see initiatives around the child tax benefit that have done nothing to include children with disabilities within that reform—that there is no targeted initiative within that reform for children with disabilities. How long are we going to see social policy initiatives that are positive coming forward that we then have to develop a parallel or an add-on to, rather than considering that in the original design?
I know time is tight, and therefore I'll leave those comments. I look forward to the questions. Thank you.
The Chair: Once again, thank you, Mr. Beachell.
We will now hear from Kids First, Parent Association of Canada, Cathy Buchanan and Christine Scharl-Cornforth. Welcome.
Ms. Christine Scharl-Cornforth (Vice-President, Kids First, Parent Association of Canada): Hi. I'm Christine Scharl-Cornforth. I'm the vice-president of Kids First.
Last night, on CBC's Sunday Report, Human Resources Development Minister Jane Stewart spoke about the importance of prevention, of focusing on children's early years. This has been Kids First's focus for the past 12 years. I'm not going to read the submission, but I want to quickly highlight a few of the points.
We believe that much research, including the national longitudinal survey of children and youth, backs up our position that parents play a critical role in children's well-being during their early years. The more time parents can invest in their children during the ages of zero to six, the better.
The Liberal government is to be commended for extending maternity-parental leaves for up to one year, beefing up the national child benefit for low-income families, and promising a general tax cut to all families with children.
However, our major concern remains that despite the huge fiasco in the House of Commons last March, nothing is being done to address the tax discrimination against families wishing to have a parent at home. Despite the benefits of breast feeding, differing family situations, and the incredible stress faced by two-income families with small children, there is nothing to address the major problem of disallowing income splitting or calculating on a total family income. There is nothing to address the problem of child care expense deductions designed to benefit the wealthy two-earner families.
We'd like to get some answers today. We'd like to know why there's discrimination against single-income families.
If we really want prevention, make it possible for more families to make the at-home choice without having to face poverty to do it. One-income families are strapped to the limit. They can't even maintain their standard of living due to the tax penalties. We have some personal stories to tell you here today.
Ms. Cathy Buchanan (National Secretary, Kids First, Parent Association of Canada): To get personal, at my daughter's high school a couple of weeks ago the teacher informed us that we could claim a sailing trip for these 14-, 15-, and 16-year-olds because there was a child care expense deduction. Then it came to light that this was only available for two-earner families.
The parent who brought this to the attention of the teacher is a neighbour of mine, who for the same length of time as myself—both with three children—has been at home. But during that period of time she chose to run a highly successful home-based business. On the other hand, I chose to volunteer in my community for no pay. I helped build a city park, I offered parenting workshops, I worked on a parents' convention, I ran education programs out of my church, and served on a parent-school council. There's a discrepancy there. Why is her work more valuable than mine? Because she got a paycheque.
In our community—I live in a small city north of Calgary, population around 20,000—I know of two families in particular who are friends of ours who have left the country. Both families, with three children each, made the mistake of having a parent at home for a few years when their children were small.
In the first case, our community lost a qualified nurse, who was back working full-time once her youngest was four years of age, and her husband, a high school teacher. They were volunteers in our community and valuable members of our city. They're now in the United States, where she is working full time as a nurse, making double what she did in Canada, and her husband is at home.
In the other case, we lost an oil industry worker, a BComm, and a lifeguard. It was the same kind of problem. They're now in Africa trying to get ahead.
Neither of these families had what could be called even close to an extravagant standard of living. We're talking about maybe 1,000 square feet with a carport.
I'd also like to address the problem I see now, as I'm an older mom, my youngest child being seven. I watch younger couples now with small children doing tag-team parenting. My 14-year-old daughter has babysat in the last six months for three families, each with two children. She covers the shifts between Mom and Dad. They don't want to place their children in outside care, so they hire her for that hour or two when neither Mom nor Dad are home. She came home from an interview last week with one of these mothers and said, wow, is she ever stressed out. I said, well how old are her children? They're both preschoolers—one an infant, the other four years of age. Of course she's stressed out.
Again, these are families that are middle class and are not living an extravagant lifestyle.
Those are some personal stories I wanted to share with you.
The Chair: Are there any further comments?
Ms. Lynn Ferguson (Individual Presentation): I guess I'm here to bear witness to what Cathy is talking about. I have three children, and my husband works in the oil industry. I am a librarian. I've been home, off and on, for the last 18 years.
Seven years ago when I was pregnant with my third child we realized that my RRSP was gone, we weren't able to pay off the mortgage, and we were getting deeper into debt. We decided to go overseas. We've spent the last seven years in Saudi Arabia raising our children in the manner that we choose to raise them.
I think the child care expense deduction, which is actually only available to 15.8% of parents, is an unconscionable way to support families in our society today. All families make choices, and each family knows what's best for its family.
For the government to stand down and say that working outside the home for a paycheque and paying taxes is more valuable than my caring for my children or my volunteer work in the community, of which I do a large amount, it means they are making decisions for me that I do not wish them to make.
Ms. Judy Arnall (Individual Presentation): My name is Judy Arnall. I am a stay-at-home mom, and my husband makes an average income. What is invisible to the government is that my husband is supporting five other people on that income. Because we're not allowed to income split, he's in a higher tax bracket and he has to pay an income surcharge. I'm urging the government to allow us to income split, or at least find a mechanism that allows his income to spread a lot further.
My other point is that my husband works out of town a lot for his company. We have child care expenses too, even though I don't earn an income. When I'm sick, I need to get child care. I work part-time as a parent educator, so I have to find child care, but I'm not allowed to deduct it. I would like to see if the government could allow the child care deduction on the higher-income earner.
I'm also a home-schooling mom, so I'm not too much in favour of group care, and as a parent educator I see people every day in my work who are trying to balance the stresses of work and family and trying to find more time for their kids. Thank you.
The Chair: Thank you.
Now we'll hear from Ms. Heather Gore-Hickman.
Ms. Heather Gore-Hickman (Individual Presentation): Mr. Bevilacqua, members of the committee, thank you very much.
I have a one-page summary of my submission.
I am heartened by the sensible restraint emanating from the finance department, according to recent media reporting. I commend your efforts to relieve families of the crippling tax burden by resisting jumping on the spending spree bandwagon many departments are clamouring for.
Canada's personal tax burden as a percentage of GDP is the highest of the G-7 nations by several percentage points. Furthermore, current legislation gives rise to inequitable tax collection from Canadian families, because the family's tax burden is unduly influenced by personal choices made with respect to work and child care.
The portrayal of the issue as one that concerns only single-income families is a misrepresentation of the broad discriminatory impact of the tax system. While single-earner families bear the harshest discrimination, the majority of dual-income families are burdened with varying degrees of the same elements of discrimination. Parents should be free to make child care choices without penalty, wielded by policy, that rewards certain choices over others.
The federal government lags behind the corporate sector in responding to the variety of arrangements employees need to balance work and family. Families are not static. During children's formative years, parents usually adjust their work arrangements. Choices include working full-time, working part-time, telecommuting, flexible hours, extended leaves, home-based businesses, as well as one parent spending a period of time in the home full-time. Care arrangements often change accordingly and include tag-team parenting, relative care, neighbour care, taking children to work, cash-only day homes, and receipted commercial care.
Approximately one-third of families earn two full-time incomes, one-third of families earn one part-time and one full-time income, and one-third of families have a parent in the home full-time. In fact by the finance department's own research, the percentage of single-income families is about 44%, because the finance department includes families where the second income is less than $6,456.
The child care expense deduction is claimed by only 17% of families with dependent children. This represents less than 30% of the 60% or so families with two incomes. Further, 83% of families are effectively penalized for their child care choices. In an April conference call I participated in, senior officials of the finance department displayed a disturbing disregard for this problem, citing the motivation that the system as it currently operates is revenue-neutral to the federal treasury. The child care expense deduction paid to the 17% of families submitting a claim is offset by tax collected from the caregiver. Likewise, cash-only day homes are considered to cause no net loss to the treasury.
Solutions proposed by both government and independent sources to rectify some of the inequities have usually had price tags of about $3 billion. A year ago that was derisively dismissed as a laughable amount of money that we could never afford to spend on families and children. Now we almost daily read of tens of billions of dollars bandied about for children's programs, as if it is so much chump change.
I urge you to put the money in parents' hands. Parents are in the best position to make decisions about their children. Parents do not want more intrusive government programs. Give recognition to the costs all families bear in raising children and tie it to the existence of the children, not the activity of the mother. Canada is the only western industrialized nation that gives no universal recognition to the cost of providing for dependent children. Ability to pay should recognize not only the income earned but also the number of people dependent on that income.
Recognize the economic unit of the family. Only 11% of families achieve the optimal tax treatment of two individuals earning roughly equal incomes taxed in the same marginal tax bracket. Most dual-income families bear a differential tax family burden almost as harsh as that of single-income families. Given that 70% of employed women work in lower-paying fields such as teaching, nursing, clerical, sales, and service, most families have no hope of earning two roughly equal incomes. As well, 70% of the part-time workforce is comprised of women, earning on average about $10,000 per year. The decision to pull back from full-time work is often driven by caregiving considerations for both older and younger family members.
The federal government already recognizes the economic unit of the family when paying out benefits. There should also be consistency on the collection side of the equation.
Most of my preceding comments are available in papers prepared by or for the finance department. I ask that you heed the work of your colleagues by nudging Canada towards more fair treatment of the differing choices parents make. Mitigating the inequities requires extending universal recognition of the costs of providing for dependent children and implementing more equitable taxation of comparable family incomes.
Thank you very much.
The Chair: Thank you very much, Ms. Gore-Hickman.
We'll now hear from Mr. Ted Siemens.
Mr. Ted Siemens (Individual Presentation): Thank you, Mr. Chair.
Thank you, members of the standing committee, for allowing me to present to you this morning.
I am Ted Siemens. I am here as a father. Albeit I'm not related to any of these, I certainly endorse the positions they've taken, having been a single-income provider in a family and having suffered some of the consequences.
My call today is a recommendation that Canadians who wish to pursue graduate-level studies in the creative arts be provided means to issue a tax benefit receipt to donors. I have briefly provided you information that defines some of why I've asked for this, but I'll express it in personal terms.
I present here today on my behalf for my son, who is what I would deem a creator. He made a mistake. He studied science, got a science degree, and then went into medicine for three years. He decided that would not satisfy him and has embarked on a career in music composition, especially in the area of opera. He had to take another degree, a bachelor of music degree, at McGill, and is currently embarked on a doctoral degree in Manchester.
In Canada there is not a single scholarship, bursary, or fellowship available in the area of music composition. Canada Council, which is charged with fostering arts, by and large supports art in the realm of performance and in the realm of art service organizations. However, they are not inclined to support the study of composition.
The Social Sciences and Humanities Research Council, on the other hand, spends over $100 million a year in continuing or post-graduate studies. However, a codicil is attached to that: those studies have to be in the realm of research. Composition is in the realm of creativity. Our recent budget has added another $200 million to the SSHRC funding on a five-year basis. However, Trevor is totally excluded from any of that money.
Due to tax legislation, philanthropic foundations, corporations, and individuals fund only charitable organizations. This is compounded by the inability of foundations and corporations to achieve advertising advantage through the sponsorship of education.
I have been engaged in dialogue with a myriad of departments of the federal government, which have directed me on different occasions to go to service organizations and the like. However, service organizations are not equipped to help in these areas.
Further research has found that in 1991, under the aegis of the Canadian government, a report was developed called Art is Never a Given. In this report it has been pointed out candidly that there is a major problem in that creative art is not supported. The recommendation was made nine years ago that that problem be solved.
This past week I was able to also finally extract information on a report that was developed by the Canadian heritage department, called A Sense of Place, A Sense of Being. They start out chapter 2 by saying:
We need creators. We need them because it is the
creators—more than anyone—who shape our cultural
identity and give us our sense of who we are and where
They also support and advocate that more money be made available.
The Canada Council for the Arts, as the main source of federal government support for creators, continues to provide grants to creators that enable them to devote themselves full-time to a creative project. However, further investigation will reveal to you that those programs are not in support of post-graduate education, because they only give a maximum of two years of support and have a very low dollar value. I currently am still searching for a way of paying the £20,000-a-year cost of supporting a student abroad.
I'll close by quoting two other facts.
One, the cultural industry of Canada represents 7.9% of the employed persons in this country. They contribute over $22 billion to our GNP on an annual basis.
Two, in the National Post on October 12, Tamara Bernstein asked, “Where are the great Canadian composers?” She is doing a compilation of great Canadian contributors to culture over the past 100 years, and she can't find a great Canadian composer. Well, it's small wonder. The struggles I have gone through in two years to try to support a son in composition have been very difficult, and we find no support from the government.
I thank you for your time.
The Chair: Thank you very much, Mr. Siemens.
We'll now hear from the Calgary Homeless Foundation, represented by Mr. Brian Olson, Mr. Peter Wallis, and Mr. Mark Phipps.
Mr. Peter Wallis (Acting Chair and Chief Executive Officer, Calgary Homeless Foundation): Thank you, Mr. Chairman, members of the committee. My name is Peter Wallis. I am the acting chair of the Homeless Foundation.
With me today are Mr. Brian Olson, who is a member of the board of directors, and Mr. Mark Phipps, who has volunteered and indeed was the principal draftsman of the brief that was submitted to the secretariat of this committee earlier on, in preparation for this presentation.
The face of the homeless in Calgary doesn't really differ from that in any other city in Canada. We have a wide variety of individuals who find themselves, for reasons not always of their own account, homeless. You have the young people panhandling on the major streets. You have mentally ill people, who constitute about 30% of the homeless on the street. They aren't cared for by institutions. Quite often they're castoffs, and they really need our help. Other faces of the homeless you may see are seniors who are down on their luck or with no family support, or people with addictions to drugs or alcohol.
We also see in this community the aboriginal people, young and old. They drift to Calgary looking for jobs or places to live, often because housing on the adjacent reserves is not available.
There are families—and we'll talk a little bit more about families—who are living in church basements. We have approximately 1,000 people in Calgary every night, homeless people who find their way every day and every night to places like the Calgary Drop-In Centre, the Mustard Seed Church, or the Salvation Army Anchorage to sleep on a mat. This is every day of the year, every night of the year.
What you don't see in this city and in other cities are what we call the hidden homeless. A high percentage of individuals fit into this category. They're basically the working poor. They're single moms who work for a minimum-wage job, who really don't make enough to pay the rent and they're often a couple of months behind. They're young working people living with friends, who can't find a place to live on their own. They're families who move to Calgary, live in motels, and use up a lot of their money trying to find the job that they feel is deserving in this community. There are many people who are just one life crisis or one pay cheque away from being homeless. They're often inadequately housed and often at jeopardy.
The foundation itself is a young organization. It's truly a community-driven organization. It's a partnership between the city, the province, the Chamber of Commerce and the United Way. It was formed last fall basically to address this burgeoning problem of homelessness on our streets in Calgary. We know we have a number of counterparts across Canada. We hope we have been taking some steps that will be of interest to this committee, and we have some observations we'd like to make.
The foundation's vision is that Calgarians will have access to housing where they feel safe and secure, and in implementing this vision the foundation is working directly with the specialized agencies that have been dealing with the challenge of the homelessness for years. We're going to work with them to understand what their needs are from the perspective of shelter. Once these needs are defined, the foundation will work with governments, and more particularly the private sector, to identify funding.
We want to see a specific project through to completion, and we'll work with the United Way in the identification process to ensure that operational funds are available for any given project.
We're now working with the agencies to get a better sense to quantify what I have referred to earlier as the many faces of the homeless. The sooner we have a better understanding of the dimension and the specific characteristics of each sector of the homeless population, the closer we will be to assisting these specialized agencies to identify their specific need for infrastructure.
We outlined some of those views to the Honourable Minister Claudette Bradshaw when she visited Calgary last summer. She asked us for our advice. In turn, we forwarded to the minister a submission dated September 9. As I mentioned earlier, a copy of this submission was submitted to the secretary of this committee in preparation for this presentation.
The brief deals with the need to develop emergency, transitional, and long-term affordable housing. What we would like to concentrate on today is that portion of the brief entitled “Investment in Housing: The Economic Variables”. The demand is quite clear. The Calgary Housing Authority has a waiting list of 700, and Calhome Properties has a waiting list of over 1,200 for affordable housing. Really, the question is one of supply, and that's what we want to focus on.
I'm gong to ask Mark Phipps to take you through some of the suggestions we made in our brief to Minister Bradshaw as to how the tax system could be modified to create for the public good a larger inventory of affordable housing.
Mr. Mark Phipps (Adviser, Calgary Homeless Foundation): Thank you.
Time obviously doesn't permit going into any detail, so I hope to give you an overview over the course of maybe one minute or a minute and a half, and then during the question period we'd be more than happy to answer any detailed questions you have.
In the brief we present four models of public-private partnership for your consideration. I think a threshold question is why the need for the public side of the equation.
Apart from the moral argument, I think the economic argument is, first, our view that the cost of no action is greater than the cost of action. Secondly, the problem outstrips the resources of traditional sources of philanthropy, which are already overburdened with other requirements. Thirdly, the unadjusted free market economics do not attract private investment to the problem. This is why we wanted to present four models for your consideration for federal intervention.
The first of the four models is a low-income housing tax credit based on the U.S. model, which produces 100,000 housing units a year in the United States and accounts for the construction of some 94% of the total low-income housing in the United States. It is a very powerful model. Our review of it indicates that with very little adjustment it could be applied to the Canadian setting.
The second model is tax credits to provide the equity for a project. Tax-exempt bonds could provide some low-cost financing for the project, obviously allowing a lower rate of return threshold through the granting of tax-exempt status.
The third model outlined in the brief relates to credit enhancement. Again, this is lowering the cost of debt financing through pooling projects across Canada, and perhaps through CMHC or other agencies providing a crown guarantee on the pool of debt so that investors can attach a lower rate of return or a lower cost of money to the financing.
Fourth is a reference to the rather large tax-exempt pools of capital in this country, in the form of various pension funds, and the notion that there be a requirement on the part of these pension funds, in return for the tax-exempt status, to provide some portion of their portfolio to debt financing for low-income housing. Being tax-exempt, their rate of return requirements are lower. A lower cost of financing for the project, perhaps tied with a form of credit enhancement from CMHC, could make a very prudent investment on the part of the pension plan and would also provide support for a strong social cause.
The Chair: Thank you. If that concludes your presentation, we'll now hear from MCC Employment Development, Ms. Donette Hjermenrude.
Ms. Donette Hjermenrude (Director, MCC Employment Development): I'm going to try to get through this without losing my voice.
I'm here today representing MCC Employment Development, and with that hat I also represent the Canadian Community Economic Development Network, for which I've submitted to you a framework for draft working policies. I was asked on behalf of the network to talk about our experience in the trenches, dealing with community economic development initiatives and how they work when working with marginalized populations.
I'd like to identify for you a bit about our agency and some of the programs we're involved in and then make some brief recommendations around the policy network. You will see this throughout your tour. We have all been asked as provincial reps to speak to the Standing Committee on Finance. So again, if there are questions I can't answer, I'm sure B.C. will be able to do that.
I'm here to talk to you about translating better finances into better lives. As a service provider of many community economic development initiatives for individuals we would not consider mainstream, I'm here to talk to you about ways government can improve the standard of living, not only in Calgary but in Canada for those who need it most. I'd like to define community economic development for our purposes today.
Community economic development is a multi-faceted strategy that is used for the revitalization and renewal of community economies. If the budding interest is in local development, management and strengthening of community resources, you may know this as community capacity-building. CED creates economic opportunity in communities that are typically marginalized by the mainstream economy. It is based on the philosophy that a rising tide does not lift all boats.
To illustrate further, let's reflect for a moment on the following statistics. Consider that 137,000 Calgarians live below the poverty line, which is about 18% of our population; 38,000 are children. There's a waiting list of 1,400 residents to find accommodations in cooperative housing projects. Out of the 74,000 anticipated migrants into Calgary by 2001, it is estimated that 7,400 will be homeless.
Since 1992 the poverty line has risen in Calgary by 6% and the cost of living by 11%. The average one-bedroom apartment is $511. That is about $6,600 a year. A single worker living in Calgary earning minimum wage and working full-time earns only $11,232 a year. The property line for a single person in Calgary is calculated at $17,132.
Just as a note of interest, last year almost 8,000 people had power disconnected in the city of Calgary. It was the highest level in five years. Of these, 95% were residential homes. So for a city that's prospering, we see much despair.
What are some of the reasons for that despair? First, there are the dramatic decreases in social spending due to the really aggressive need by governments to reduce deficits. Other explanations can be new technologies and the emergence of knowledge-based economies, which are creating a lot of new struggles for individuals. Young people are straining to finance education. All workers face a volatile labour market that is producing fewer well-paying jobs and more insecure, low-paying jobs.
Why should any of this concern us? Because poverty is not an issue of the poor but an issue of the community. Increasing levels of poverty exacerbate a wide range of social issues and problems—family violence, substance abuse, homelessness, crime, dropout rates, and health issues. The list goes on. The more impoverished the community, the more difficult it is to mobilize and revitalize.
We use such external resources as MCC Employment Development and many others across the country for intervention. What does MCC Employment Development do? We have a number of programs. First, we build assets for individuals through our individual asset development accounts. By combining assets-holding with economic literacy, the influence of the programs in Calgary has been incredible. Individuals save a minimum of $15 a month, to a maximum of $45, and complete an economic literacy component. In addition, they must be saving toward one of three goals. They can buy a home, they can further their education, or they can open a small business. At the end of the year, we match their savings three to one. We are one of two programs in Canada.
The success of IDA has been tremendous. Clients are asking to meet and are forming cooperatives to save money on groceries. They feel a better life is within reach. They're motivated to work and save. They see freedom from the poverty they have always experienced.
The Royal Bank is a major partner with us. We provide micro-credit for what are usually home-based small businesses. The loans are character-based and within a $2,000 range. They have enormous impact on the individuals in the city of Calgary.
By the way, our repayment rate is 95%. Who says small business is a risk?
The program gives clients who have poor credit ratings and no hope of securing financing through regular financial institutions a chance to prove themselves, their skills, and their character. We also provide skills-based training for immigrants and aboriginals. We do careful market research before we select the trade we train them for, and we guarantee them an apprenticeship position at the end. Many of them move on to be journeymen—for example, to the Southern Alberta Institute of Technology.
We have a computer lab accessible to the public, and we provide computer upgrading targeted at the working poor. None of our courses exceed $30 in cost. We provide business start-up services and assist budding entrepreneurship through such programs as ABCs of Small Business, Mompreneurs, and Cool Biz.
In addition, we provide business planning, counselling, market counselling, and other necessary functions for business start-up. Our self-employment program works with EI recipients to launch businesses. We launch 24 new businesses a year with our self-employment program. We're moving those people who were on EI.
On December 1, In partnership with the Calgary Homeless Foundation, we're providing security deposit loans and economic literacy training for Calgary's single, working homeless. The goal is to get them off the street within 48 to 72 hours and to work with them in both assessing financial histories and re-educating them in financial management. We will also work with them to rebuild a poor credit history.
Other agencies across the country implement similar programs—welfare to work, low-income housing projects, alternative business creation, inner-city development corporations, and community futures, just to name a few.
Incumbent on all these programs is our holistic approach to working with clients. We work with them to overcome many barriers—addictions, incarceration, and violence. Our programs strengthen confidence, work to rebuild hope, and provide economic security for individuals. Although the individual workers are important, there are broader economic and community advantages in our work.
First, we create a mechanism at the community level that links economic growth to social equity and poverty reduction, we contribute to community wealth and meaningful livelihoods, and we bridge the gap between those in poverty and local labour markets.
It is a cost-effective way of returning the investment of taxpayers' dollars. We are creating taxpayers through our programming. We are also creating partnerships for the government and the private sector. We build community capacity and self-reliance.
What do we need from our Canadian government? We need some attention at the federal level to review our national policy framework, developed by the Canadian Economic Development Network, that will assist us nationwide in scaling up these activities.
We need some advocacy from the federal level to the provincial and municipal levels to promote the value of community economic development. We need money contributed to our core services so we can move from being project-based and short-term financed to a strategic, multi-faceted, long-term solution. We need you to work with us to build community capacity, community capital, and community competence.
In our policy framework here, we underline many different ways the federal government can assist us in such areas as building community capacity, community capital, and community competence.
The Chair: Thank you very much.
We'll now hear from People Empowering Themselves Against the System, whose spokesperson is Susan Bruce.
Ms. Susan Bruce (Spokesperson and Chair Emeritus, People Empowering Themselves Against the System): Hi. I'm going to tell you about People Empowering Themselves Against the System, because a lot of people don't know who we are.
Who is PETAS? We are poor people, disabled people, people of colour, aboriginal people, people on welfare, and anyone who is affected daily by the struggle of poverty.
Now, it was my intention, up until three in the morning, to come here and dazzle you with wonderful statistics, but my learned colleagues have done that, so I don't think it's going to be of much use.
I could tell you that one out of five children live in poverty. Two of those children in poverty are my children.
I could tell you that in Manitoba, 60,000 kids live in poverty, 29,737 of them on welfare.
I could also tell you that if the national child benefit is your best answer on child poverty, you should be ashamed of yourselves as a government. That goes for anyone here who's Liberal. Because the benefit doesn't include me.
Yes, I have a problem with it. I never thought I'd be downsized as a mother. It never occurred to me. I thought, wow, I have a job where I can't be downsized, but by sitting down and not including me, you have downsized me. I think Laurie said it so wonderfully.
Both my kids are special needs kids. That's why I'm at home. No one is qualified to look after a child with schizophrenia. Not even the psychiatrists are qualified. I am, because I have one thing on my side—estrogen. They're mine. I love them. That's what I have. Nobody—nobody—and no amount of PhDs can replace that. I love them. I first knew them when they were in my womb, and I love them.
I could also sit down and give you our UN rating, but what I'd rather sit down and talk to you about, because not a lot of people talk to you about this, is that in my generation I have seen an increase in poverty that I never, ever thought I would see.
I wish the chamber of commerce guy was here, because I'll tell you, the trickle-down effect basically means I'm being rained on. I have yet to see somebody at the higher scale of our economic system, making more money, getting more tax breaks....
I've yet to see that benefit me at the lower end. I've yet to see that benefit children with disabilities. I've yet to see that benefit the man we like to call Jesus of Osborne, a schizophrenic homeless man who hangs around Osborne Street Village.
We need to rethink our whole economic system. If we love the States so wonderfully much, then let's take their poverty statistics? No, thank you; I live their poverty statistics. Yes, I have taken food out of my own mouth to feed my kids for two years in a row because the welfare rates were not right.
Do you know what we have now? I can't believe we're living in a time when we have something called absolute poverty. In the eighties, you would have had to double the amount I made as a single mom in order for me to make the poverty line. Now you have to double the double.
When my children were born and I was married, we made $1,000 a month. It was 1985. We were young and we were happy. We figured, hey, look, it's Canada. We have a safety net. Things can only get brighter.
Several moves later, there's a high rate of divorce among families with children with special needs. Do you know how much I'm making? I'm making $900 a month. How can somebody's income go down in ten years?
I just talked to a man who drives a cab. He said he was making $8 in 1978 and he's making $6 now.
I don't think we need any more solutions that are standard. I'm sorry, paint me radical, but I think the best solutions to poverty are going to come from people who are poor.
I don't want to be studied. The next person who walks up to me and tells me they took their master's degree on me.... Well, I might not be responsible for my actions. It just gets a little sick.
Poverty has been studied to death. Disability issues have been studied to death. I want action.
I realize that sounds really radical. I don't care what my standing is with the G-7. If we have this many homeless, if we have this many kids who are hungry—they're hungry at schools in our country—then enough is enough.
Burn all the statistics! They don't make a difference.
I realize that at this point what I'm giving you is a moral call to action. I'm telling you, I've had enough studies—the Andy Scott study, Senator Cohen, the NAPO representative for Manitoba, the National Council of Welfare. I hear it all the time.
Do you know what annoys me about statistics? It's that you don't see the mother who takes the food out of her mouth. You don't see the homeless person.
A kid goes to school hungry? That's only one in five. He doesn't have the name Johnny, does he? He's not a voice. He's not human. But he is, and there needs to be a call for action. There needs to be some radical thinking.
Thank God the MAI got struck down, because Lord knows, if we thought it was hard now, you might as well shoot me, because it would have been that much harder.
We need to think something extremely radical. Somebody today said something like, “If you put this money into social spending, it doubles.” Well, do you know what? If you put it into special needs, you have somebody who can actually live on their own. You have somebody to whom you've given their life.
For every dollar spent on my children, you don't save $7, you don't save $15; you save more like $50. Think about how much it costs to put somebody in an institution.
Then there's this whole system of taxation that everybody talks about. They all talk about it in numbers. They all make it “out there”. It's not. It's right here.
That is my only point today. As I said, I'm not going to dazzle you with wonderful figures, because I think you've had enough of that.
What I'm saying to you is this: Do something. If you want suggestions, I'll give you suggestions out the yin-yang. I'll fill this room with suggestions from poor people, from people who are living this situation and can tell you again and again.
I can give you one suggestion right now, and that's the one I'll end on. The national child benefit should not—should not—have divided the working poor against those who are on welfare. It should never, ever have excluded children with disabilities.
Is that the best you can do? When I go home and look my kids in the eye, is that what I'm going to tell them? “Oh, this is the best they could do.” That's not the best you can do. I know you can do better. I'm calling you to do better. I'm calling to you think in terms of people, and not just capital. The greatest resource in this country is not coal, it's not money, it's people.
The Chair: Thank you very much, Ms. Bruce.
We'll now move on to the question and answer session. It will be a five-minute round. Mr. Lowther.
Mr. Eric Lowther: Thank you.
Thank you to all the presenters for their presentations. With respect to the chairman's comments, I'll try to have my preambles tight, and I ask that the questions be tight. Maybe we can get a few in here.
First of all, for Ms. Gore-Hickman, you're just down as an individual. Do you have a professional certification of any sort?
Ms. Heather Gore-Hickman: I'm a chartered accountant.
Mr. Eric Lowther: Chartered accountant. Thank you.
There was a comment made by Ms. Buchanan—and maybe both you and she could comment on it—that only 15.8% of parents take advantage of the current child care expense deduction. Are these low-income families? Who is that?
Ms. Heather Gore-Hickman: Actually the current statistic is 17%. Based on 1996 statistics it was 15.8%, and based on 1997 statistics it has moved to 17%. It's across all income spectrums. In fact statistics bear out that the families that are benefiting from the child care expense deduction are predominately higher-income families.
Mr. Eric Lowther: Do you have any comments on the national child benefit?
Ms. Heather Gore-Hickman: I sure do. I applaud your comments. I think it's absurd that this country is simultaneously collecting tax from low-income families and subsequently remitting benefits based on their income that was earned eighteen months ago. Families need the money now.
There used to be a system of family allowance that was completely outside of the tax system. It was tied to the existence of children. We have a shameful situation in our tax system where a low-income family, at an income level between $21,000 and $35,000, pays an effective marginal rate of about 60% to 65%. In fact in certain areas of Quebec the effective marginal rate is something like 103%. It actually costs them money to increase their income.
You had a subcommittee in the spring that heard from an economist in Ontario, Chris Sarlo. He presented information that showed that a family on welfare actually has more discretionary income than a family earning $25,000. These are absurd and perverse problems with low-income Canadians, which I implore you to address.
Mr. Eric Lowther: The report you are referring to is For the Benefit of our Children: Improving Tax Fairness, which came out in June 1999, the parliamentary committee?
Ms. Heather Gore-Hickman: Correct.
Mr. Eric Lowther: Between you and perhaps the people from Kids First, you talked about the need to put money in parents' hands, the parents being in the best position to make a decision about their children. Years ago we used to have a basic deduction for children in this country. Is there any comment on that type of approach? Maybe we should go back to that.
Ms. Heather Gore-Hickman: I completely support that. It speaks to the issue of ability to pay. If someone were supporting dependants, they would have a personal exemption based on the number of those dependants and your tax withholdings would be adjusted accordingly. So it's not an after-the-fact payment. It's a deduction, not a credit, so it doesn't have the problem of bracket creep.
And it recognizes ability to pay, so you don't have the situation we have today, where you have two individuals working side by side, earning say $40,000 or $60,000 or $100,000, one of them with three dependent children and the other a single person, and they both pay the same amount of tax. It's ridiculous. That person with dependants has a moral and legal obligation to spend part of their income raising their children. The single person with no dependants is going to be benefiting from the future tax base of those children in retirement.
Ms. Cathy Buchanan: May I just add to that? At Kids First we've had quite a debate within our organization since we last met with you. Kids First is entirely volunteer-run, and we focused on this taxation issue, as you know, for twelve or thirteen years. It was basically a tactical move: we only had so much manpower and we were going to focus our energy. But we have always had a number of other recommendations, such as extending maternity and parental leave, which your government has seen fit to move toward.
When we did have this little debate going on in our membership, what came back to us was we want more support for parents, that's true. We want that to be recognized. We've had suggestions. For example, a homemakers pension plan has been on our recommendation list for years. But what it came down to was young parents saying “What we really need is a little more money in our pockets”. That's what the problem is, and that is a result of the tax system and the way it's been skewed for the last 20 or 25 years. So that's where we want to see an improvement made. You can put your money in programs, and I know that's a popular thing to do, but it's the money in people's pockets that seems to be the issue for most young families.
Ms. Susan Bruce: Also, I don't know what it is in Ottawa and what it is with some of the agencies around this country, but every time they talk about kids, they don't talk about children with disabilities. An example of that is if you want a national child care benefit, that also has to reflect kids who are ADHD, kids who are CP, kids with autism, and their families.
I applaud Quebec because of their initiative recently in paying moms and dads who are at home on welfare because of a special-needs child. Now they've totally restructured that and they're actually paying for that parent to be home. They're paying it under the auspices of attended care. It's wonderful. I've just heard about the program. I would like to know more. I don't even care if it's sent to me in French, because I have lots of access to francophones in St. Boniface.
Things like that need to be reflected. All children need to be included.
The Chair: Thank you.
Mr. de Savoye.
Mr. Pierre de Savoye: My first comment would be to Ms. Buchanan, Ms. Gore-Hickman, Mr. Siemens, Ms. Bruce and other witnesses who talked about poverty and children. As you know, that issue is extremely important to me and to my Quebec colleagues. We have been talking about it for a long time, but as you were saying earlier, all we see as solutions are programs and more programs that never seem to solve very much.
I just wanted to point out that Ms. Christiane Gagnon, the Member for Quebec, has introduced a private member's bill requesting that the Auditor General also become the poverty commissioner. His mandate would be to monitor poverty and make recommendations that would yield concrete results, perhaps avoiding the necessity for Throne speeches that lead to programs which, a few years down the line, have still achieved nothing.
You also mentioned that Quebec had taken a number of initiatives. Social issues are in fact under provincial jurisdiction, and I am convinced—as are my Bloc Québécois colleagues—that in this matter the federal government has not taken appropriate measures, and that Quebec would have been better served by its own programs.
That said, I share all your concerns fully. You can count on us; we will continue to urge the government to take measures that will make things better for children.
I have one question for Ms. Buchanan. In your brief, you said that we should make it easier for parents to provide appropriate care for their children. I will put my question in English to make sure you understand it properly.
How do you suggest that we facilitate parental care?
Ms. Cathy Buchanan: I apologize: my children are in French immersion, so they'll do better in a few years than I can. It wasn't an opportunity for me.
I think Kids First has always believed that when we're forming child care policy and taxation policy in this country, parental care should be the cornerstone and the ideal. We believe very strongly in our organization that every family, single parent or otherwise, should have the choice to be at home, particularly during their early years. I mean, we're not asking for this forever, but during the early critical years. We've asked this since the late 1980s, when our organization was formed.
The research has been out there. This is the most efficient, cost-effective, and best form of care in the overwhelming majority of cases for children. So that's where we've been coming from since we've existed.
What we've done over the past 25 years is focus exclusively on the outside child care options and we've given incentives to have both parents in the paid labour force, so young people don't feel that parenting work is really critical and important. They feel quite apprehensive about it, which is natural, but they're not getting any encouragement.
I know I spend a lot time in my work telling young parents they're really important to their child. Even when your child is in outside care, nobody can replace a parent. So that's where we think it should be coming from.
From our point of view, this is what prevention is all about. You can spend a lot of money on intervention afterwards. In other work I do with child and family services, we know how expensive that is for all children, for special-needs children as well. I'm a parent of a special-needs child as well. We know the ideal is prevention, and parental care has a lot to say to that argument.
Mr. Pierre de Savoye: Thank you.
This question if for the Calgary Homeless Foundation. On the issue of social housing, you mentioned a number of tax measures that could be implemented, such as a low-income tax credit for housing and low-cost financing. The positive impact of such measures are clear. But generally, when such measures are implemented, the problem lies not in their benefits but in some of the anomalies they may generate. Have you studied these anomalies? Has there been a study carried out? Can you give us any information?
Mr. Peter Wallis: Thank you for your question. I will ask Mr. Phipps to answer it.
Mr. Pierre de Savoye: Thank you.
Mr. Mark Phipps: I'll answer in English,
because I speak very little French.
Mr. Pierre de Savoye: You speak very well.
Mr. Mark Phipps: We have looked at a number of examples of these types of models in use in the United States, principally the low-income housing tax credit. The thrust of that program, along with the others, is an attempt to attract private investment, which wouldn't otherwise be attracted. So it's a partnership.
One easy solution, I suppose, is for the federal government to use some portion of the surplus for a direct investment in housing, without the private sector involved. In order to get the private sector involved, that's what these provisions relate to. In particular, the low-income housing tax credit in the United States model allows federal tax credits to be allocated by state—in our case it would be by province—by population. Then local agencies select projects they think meet their individual needs, and then there's a competition for these credits among the regions and localities in the state for the best projects.
So there's a private market discipline brought to bear on what are the best projects, who are the investors, how best to manage it. Then taxable corporations purchase these tax credits. That provides the equity. That provides the money to build the housing, alongside some debt financing.
As I say, in the United States in total over ten years that's resulted in 800,000 low-income housing units being constructed. So I think there's clear evidence that it can be modelled to attract private investment in a way that actually results in bricks and mortar being built.
The Chair: Thank you.
Thank you very much. You're over your time already.
Ms. Sophia Leung: Thank you, Mr. Chair. I want to thank you all for your very fine presentations. I'm from Vancouver, so I have seen and visited a number of areas, especially the downtown east side. I certainly sympathize with a lot of what you say.
I want to just ask Susan or Cathy specifically, if the government were to look into child care services.... Of course there is a lot of discussion about universal child care services. I'd like to hear specifically what more practical, concrete, realistic ways there are to help working parents.
Ms. Susan Bruce: To quote a good friend of mine, don't tell me how to cook the chicken, give me the chicken. I think it all comes down to this: There's a certain amount of dollars in my hand, a certain amount of skill-building that needs to be going on, but there also needs to be a realization. I realize this is very revolutionary. If you have a child who has gone through an extremely traumatic divorce, and there's been a lot of violence, and that child has known nothing but instability its whole life, you know what? It would save you guys so much money, and that child, for the parent to be home. If that's a single parent, why are you cutting welfare to the bone? Why isn't CAP in place? That's what it all comes down to. You took out the standards. They were so important, and the standards you brought back were inadequate.
You want to do something for our kids? Do you really want to do something for kids? Do you really want to help the poor in this country? Our kids grow up, and if our kids grow up and have schizophrenia.... I'm fighting so that my daughter is never homeless. I'm hoping that never happens. Those standards have to be put back in place.
We signed international agreements. Those were binding laws, like the conventions on the rights of the child. We don't even recognize them. We don't even put them in legislation. Our legislation doesn't even reflect them. Canadian Human Rights Act—there's no social condition in there. That also affects children in poverty. We don't even have a national lobby group, a proper large-scale national lobby group for children with disabilities. We have some for kids, but we don't have a more umbrella group.
Let's put it this way. We all know it. We're not lying when we sit down and say business is more represented at this table than human interest—our children, the disabled—and we all know it. The biggest thing, I think, and I know this sounds so obscure, is to put the standards back. It's ridiculous to hand out money without standards or to have such inadequate standards.
I wouldn't give my son an allowance without standards. Why should you give the provinces money without sitting down and saying, this is what we want done. No, those are not acceptable poverty levels. That alone would make such a big difference, and I know that seems so obscure but it's not. It affects my everyday life. I eat those truths. I live with those truths. So much of what happens in Ottawa we live with.
A witness: I just want to make a quick point about universal child care. I think the Canadian government should look to other countries and the mistakes that have been made in other countries with universal day care. If you look at a country like Sweden, where at one point all women were out in the paid workforce and they realized how detrimental that was to the children, they did a study one time with children in grade one who had 235 different caregivers by the time they got into school. So what they're doing there now is paying one parent, for 18 months, to stay at home with the child before they go back into the labour force.
Also, in Holland they have government, union, and businesses getting together to implement more programs where women and men can work part-time, where they can then stay home with their families and spend more time with the children. They still get all their benefits. It seems to work wonderfully for them.
Let's learn from other countries that have gone through those pains, so we don't have to through it ourselves. Put the money in the hands of the parents and let them decide where to raise the children. We're not saying there is not a need for day care, but there is also a need to look at those parents who are desperately.... I talk to many women who desperately want to stay at home with their children, but they can't. Financially it's not feasible.
Ms. Sophia Leung: I have a question for the Calgary Homeless Foundation. I'm very interested in your proposal of the four models, and specifically you suggested working with CMHC. CMHC is still very involved in housing, and also in B.C. the co-ops request the federal government... [Inaudible—Editor] So we're very interested. CMHC really is still very involved and we're not deserting anyone.
Of the four models, perhaps you would expand a little bit on the third one, the involvement, the low rate for the investors for CMHC support.
Mr. Peter Wallis: Thank you for your question. I think our position is that we would like to see the cap that's been imposed to be removed. I'd ask Mark Phipps to enlarge on that.
Mr. Mark Phipps: There are two elements. First is the rental subsidy program, which is currently capped, for which CMHC provides, as I understand it, in the order of 70% of the financing; 30% comes provincially. Our agencies in Calgary tell us there are people who need that subsidy who, due to the cap, don't have access to it. So that's one area.
The second area relates to building new inventory of low-income housing, and the notion that CMHC, in providing a crown guarantee to new development, obviously provides an opportunity for private investors to come in and make investments against that guarantee and require a lower interest rate. As a result, suddenly the economics that otherwise wouldn't have been in favour of supporting a project suddenly support the project. That's a very interesting way that CMHC or, frankly, any crown agency with this issue under their umbrella could participate, adjusting the economics so the private sector could step in and shoulder some of the solution to this problem.
Ms. Sophia Leung: I just want to respond to what you said. CMHC is already involved. I'll give you an example. There's big housing, and actually CMHC provides the guarantee and involves the private sector to have the loan, but CMHC.... That's another model that's already in practice. Are you supporting that?
Mr. Mark Phipps: Yes. We'd like to see more of it and we think there's an opportunity.... While individual projects are decided at a local level, I think there's an opportunity to pool projects across the country, so the CMHC guarantee can be used to attract private investors to contribute to a pool of debt financing for housing projects across the country, and then the specific projects would be determined on a local basis. So regional diversification allows for a lower cost of funds, and I think that's an opportunity that is before us to exploit.
Ms. Sophia Leung: Thank you.
The Chair: Thank you, Ms. Leung.
Mr. Lorne Nystrom: My question first of all is to the Calgary Homeless Foundation.
In the United States they have what's called a Community Reinvestment Act, which forces banks to reinvest some of the money into communities where they draw their funds from and keep up certain employment standards and open some branches and so on.
Just on Thursday we had the TD Bank announce their humongous profits, $3 billion, the highest profits ever for a financial institution. The Royal Bank followed on Friday with $1.6 billion or $1.8 billion, and I think it's the Bank of Montreal today.
Despite that, they're announcing layoffs and the closures of branches and the unfettered so-called free market that so many people are advocating today. Do you think we should look at the U.S. model of the Community Reinvestment Act as part of the package in terms of directing more money into housing for those who need it? It seems to have worked in that country.
Mr. Brian Olson (Board Member, and Chair, Fundraising Committee, Calgary Homeless Foundation): Thank you.
We've done quite a bit of research, both locally and looking at the U.S. There are three models, one of which you refer to, employed in the U.S. I'd have to say our bias is to bring all elements together, and we don't see a solution that relies as heavily on the banks as they do in the U.S. Canada's quite a different cat, and we think a very strongly community-based approach that permits involvement from the federal government, the provincial government, and city is critical. Any of the parties not at the table won't allow this thing to work.
I'm not so sure that the specific mechanism you refer to is one we would see as powerful as working with CMHC on the basis of the diverse communities you all face in terms of dealing with homelessness.
Mr. Lorne Nystrom: I was just wondering if you saw a role for the banks in the process at all. That is a model some people are advocating. There was a press conference in Ottawa, I think on Friday, where a group was advocating that as one of the possible solutions toward more money into housing.
Mr. Brian Olson: We strongly believe they should be significant corporate givers to the Calgary problem, and they have lined up and will be part of that in a direct contribution sense.
Ms. Susan Bruce: In Winnipeg, a whole bunch of groups were really working on housing, and the problem that happened.... If anyone takes our rent controls away, we're going to have—and we're already having—a problem with homelessness. They went on your model and they found that it only helped this many people. The reason why....
I'm not saying it's a bad model. What I'm saying is that they're now rethinking and they're in the process of restructuring. I wish they were here, because if you are a welfare recipient and you go to your welfare office and say, “Oh, there's a program out there, and it'll help me get a house”, they say, “That's nice, we'll put a lien against it; we don't want you to have a house.” That's the other part of the problem around that. I know right now there's a whole raft of work in Manitoba and also in various other parts of the country that talks specifically around that issue.
Mr. Lorne Nystrom: I have a question for Susan Bruce. First of all, I commend you on your passionate delivery of your comments this morning; it really helps paint the picture of what you and so many people in our country are facing.
You talked about the trickle-down theory of economics. Some people call it the horse and sparrow theory—you feed enough oats to the horse, eventually enough goes through to the sparrows.
I think there are so many people today who think if you prime the pump at the top, it's going to help people on the bottom. We've had people advocate doubling the RSP thresholds from $13,500 to $27,000, when today the only people who contribute the maximum $13,500 anyway are people who make over $100,000 a year. They think this is somehow going to help people in the inner city. I just don't see it. This is what I call the horse and sparrow theory.
I wanted to ask you a question, since I think you're the only Manitoban here. Whether or not you can add a little bit, Susan, to the problem of poor people and poverty in the inner city and people under the poverty line, can you say a few words about aboriginal people in Manitoba? Are they roughly half the poor in Winnipeg and in cities across the province?
I think it's important for the committee to hear. It's often a group of people who tend to be ignored and fall through the cracks. The Federation of Saskatchewan Indian Nations and the Assembly of First Nations represent the first nations on Indian reserves. We have so many tens of thousands of urban poor, and there's lots of crime, there's lots of poverty. There are soup banks, there's violence, there are all kinds of social problems that I see in my city of Regina. I want you to comment about Winnipeg in particular.
Ms. Susan Bruce: Winnipeg is a mess. I don't feel qualified, in a sense, to talk about aboriginal issues, because I'm not aboriginal, and I want to say that right now. However, there are some things I've seen and heard from some people who are aboriginal who've taken me aside and sat down when I've asked them to talk to me.
One of their biggest issues is that they're still considered property of the country of Canada. That's one.
Two, if you look at some of the issues, I know some of that's going to be readdressed this April. As of this April, people who are aboriginal in the city and who are off the reserves are now going to have the right to vote for chiefs on that reserve. A lot of the funding comes down that way. The urban aboriginal has no access to so many programs it's not funny. The disparity there is scary. There needs to be a lot of community-building and things like that.
Mr. Laurie Beachell: I also come from Manitoba. In talking about aboriginals, I would just remind the committee that the incidence of disability among the aboriginal population due to poverty, due to violence, due to addictions, etc., is about double the national average. About 30% of the aboriginal population are people who have disabilities.
The federal government has a clear jurisdictional area for delivery of on-reserve service. Frankly, on-reserve health care services for persons with disabilities are abysmal. There is a great need to look at the issues. Have a look at the aboriginal population and a look at a very marginalized population and then recognize what that does in other areas as well, areas like health status, disability, the incidence of fetal alcohol syndrome, addictions, etc. Underlying issues are basically related to isolation, exclusion from our society, and poverty, which, again, are similar issues faced by community persons with disabilities.
The Chair: Thank you, Mr. Beachell.
A final comment by Ms. Buchanan.
Ms. Cathy Buchanan: I just wanted to put on another hat. I'm not aboriginal, but I am on the Calgary Rocky View Regional Authority for Child and Family Services. I know that's a mouthful.
In Alberta we just reorganized how child and family services are delivered. One of our four pillars is an aboriginal pillar. It's a little early to tell because this is all very new, but there's a huge amount of attention focused on community-based delivery of services, which is another pillar, and on that aboriginal pillar.
I'm not saying it's an ideal situation yet, and I know it's one of my favourite areas to ask questions about on an ongoing basis, but I think there's hope. I think that problem is being addressed actively in Alberta. I can't speak for other provinces. It's not perfect by any means, but we know how many aboriginal kids are in the child welfare system, for example. There are a lot of exciting things happening here.
As well, the three prairie provinces, Manitoba, Saskatchewan, and Alberta, are all cooperating on a fetal alcohol syndrome initiative.
The Chair: Thank you.
Ms. Susan Bruce: Just for a statistic, Winnipeg is the fetal alcohol syndrome capital of Canada. I think everybody knows the problem with it there. The school system is just spinning. They don't know what to do. Child and Family Services is just spinning. They can't educate attendant care teachers' aides fast enough. The problem is staggering in Winnipeg.
The Chair: Thank you, Ms. Bruce.
The final questioner is Ms. Guarnieri.
Ms. Albina Guarnieri (Mississauga East, Lib.): Thank you, Mr. Chair.
Earlier you cited the deplorable fact that 1,000 people seek a net every night in Calgary, if I understood you correctly. You also highlighted for us the hidden homeless problem, the working poor problem that looms before us. Certainly the dimension of the problem is a big one to grasp at first glance, so we're going to rely on your expertise in terms of what the solutions are.
Earlier we heard the argument that we had a bricks-and-mortar problem, but the mayor of this city made an intervention that cautioned us against a one-size-fits-all or cookie-cutter approach. I happen to share that view. I certainly don't believe it's the simple demand for housing. If only it were so, the solution would be imminently clear to us. Certainly there's a need for dental care and for social support, and there are substance abuse problems we have to deal with. I see it as a problem for infrastructure. I've noticed in downtown Toronto, for instance, that people cluster in areas where they can seek care.
So the question I have for you is this: in your estimation, what is the balance between agencies providing care and the obvious choice of providing housing, since your recommendations dealt especially with tax cuts to generate housing? Can you give us some guidance there, please?
Mr. Peter Wallis: I'd like to think that I have all the answers. Between the three of us, we're going to sketch out some possible directions that we should be going in.
First of all, I mentioned in my remarks that the foundation is a partnership among the existing specialized agencies, the United Way, the city, and the province. In that partnership, we recognize that there are a number of aspects. First there is the actual shelter aspect. The foundation really has been focusing on the bricks-and-mortar application, but we also recognize that bricks and mortar won't do it alone. You also need to have programs. Before we even start looking at what the bricks and mortar should look like, we must have an idea of what the needs are.
Brian Olson, besides being on the board, is the head of our fundraising committee. He's doing some excellent work—which I'm going to let him talk about—in the whole area of identifying exactly what the issue is.
Then we can come back, if you like, to talk a little more about some of these financial suggestions we've made to Minister Bradshaw in our brief. Mark may want to expand on those.
I'll turn it over to Brian.
Mr. Brian Olson: Thank you.
It's a good question. It's a daunting task to talk about homelessness and the cause, and frankly, it can't be done in a simple five-minute presentation. If you look at the demographics...and we've done considerable work in Calgary on who is homeless and why, probably the most advanced work in the country.
We have a group of 22 agencies working with us and looking at what we call, for lack of a better term, market segments: why are they homeless and what do we need in order to get them off the street? We have teams looking at the elderly, at families, at women with children and women without children. They're going through all the various aspects and asking what it is going to take to fix that problem. Then they ask what it is going to take to provide the support to keep them off the street and become constructive. Ours will be a multi-year plan as opposed to a quick fix.
Our presentation today highlighted suggestions that we've made to address the working poor. Forty-five percent of the homeless in Calgary have a job. In Canada, we're told by the minister, that's an unusual sort of percentage. It's partially driven by the fact that so many people come here thinking of great economic prospects. You heard earlier that if you're making $8 an hour—and our statistics actually show $650 a month for a single-bedroom apartment—you can't get there from here.
The list of responses actually is far more comprehensive than what we spoke briefly of today. Clearly, though, none of the things we do as an organization will make any difference unless we have a way to get the kids and the women and the others off the rubber mat in a warehouse and into some kind of accommodation.
We chose to high-grade our representation here because it's a long-term structural issue, one that will take a whole lot of collaboration with our community partners. I can assure this committee that we have an unbelievable amount of support from all facets of our community. We are going to deliver results. We just need your help in some selected areas to address the problem.
Ms. Albina Guarnieri: So you'd agree that in the municipalities an infrastructure support is required; it's not simply walls that are required to address the problem.
Mr. Brian Olson: Absolutely.
Ms. Albina Guarnieri: Thank you.
I have another quick question. I know we're running over the clock, but it would be remiss of us not to give Mr. Beachell a chance to elaborate, since most of our questions concentrated on the working poor and the homeless, I think.
Mr. Beachell, you make a very powerful argument about people with disabilities being marginalized and living off on the fringes of society. You highlight a number of government initiatives that help people with disabilities, such as the Canada Pension Plan, disability benefits, private long-term disability insurance, workers' compensation, etc. You highlighted one program that you feel is crucial and is coming to a close very shortly.
Apart from this program, which is coming to a closure very soon, you also stress that we need a strategy to have a labour market that includes people with disabilities. I wonder if you'd be good enough to highlight some of the initiatives we could recommend to assist, initiatives that would provide for a sensible labour strategy that would be an inclusive one for people with disabilities.
Mr. Laurie Beachell: Unfortunately, the federal government's labour market strategy has been targeted for some years at persons who are on employment insurance, and the focus of the labour market debates has been on employment insurance issues—how those dollars are spent, how you define who's eligible, etc.
While that debate has preoccupied government's attention, there are large population groups that do not fit within that framework. Until we acknowledge that, and until we decide as governments at all levels that we are going to address social assistance recipients and those who are not EI eligible, persons with disabilities who have not been part of the labour market, etc., with TIP targeted initiatives, we won't see significant change.
There are initiatives of the federal government for youth and for aboriginal persons. The initiatives for people with disabilities have been very small. Frankly, as the federal government transferred labour market training responsibilities to the provinces, their total preoccupation was EI, and the accountability mechanism the federal government established was how many people you moved off employment insurance. No other indicator is an indicator of success.
Until a labour market agreement between federal and provincial governments has indicators of success other than just moving someone off EI, we're not going to see the people we're talking about generally—people who are homeless, people on social assistance, people with disabilities—become contributors. They will continue to be dependent on a system of supports. For that initiative, we need a national strategy.
I will just say that this whole discussion this morning becomes one of the role of the federal government in ensuring full citizenship inclusion, in ensuring that all citizens can participate. While our organization does not talk about who should be responsible for delivery, we do talk about who should be responsible for ensuring basic standards of living for all Canadians across this country, and that is the Government of Canada.
Without the Government of Canada stating some values, some principles, some vision, and putting in place accountability mechanisms that hold both municipal and provincial governments accountable for how they deliver and what kinds of outcomes we all agree on, I'm afraid that we will just continue to create greater patchwork systems across this country. Some provinces have the resources to be innovative, creative, and responsive to community need. Others do not.
Until we recognize that we all live in this country as Canadians, recognizing individuality, distinctness, value of community input, and all of those kinds of things, but recognizing that people have some basic rights that have to be protected.... The federal government has a program called the court challenges program, which allows community groups to challenge federal legislation that discriminates. I guess if the federal government's going to give away the shop to the provinces, we need a program that would allow us to challenge provincial government legislation as well.
Ms. Albina Guarnieri: Thank you very much for the word of caution.
The Chair: Thank you very much, Ms. Guarnieri.
On behalf of the committee, I would like to express to you our sincerest gratitude for the information we received.
Obviously, as we travel the country, we hear various points of view expressed as to what the priorities for budget 2000 should be, but presentations like the ones we heard today also speak to the fact that we have pressing social needs that need to be addressed, and as we factor that in and try to balance the equation, we certainly have to keep that in mind.
Once again, thank you. You certainly added value to the debate.
We will be back at 1.20 p.m. The meeting is adjourned.