FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, September 25, 2001

• 0907

[English]

The Chair (Mr. Maurizio Bevilacqua (Vaughan—King—Aurora, Lib.)): I'd like to call this meeting to order and welcome everyone here this morning.

As everyone knows, we are presently engaged in pre-budget consultations pursuant to Standing Order 83.1.

This morning we have the pleasure to have with us representatives from the Business Council on National Issues: president and chief executive, Thomas d'Aquino; senior vice-president, policy and communications, David Stewart-Patterson; and Sam Boutziouvis, vice-president, international trade and global economics.

I think you know by now how this committee operates. The floor is yours, Mr. d'Aquino.

[Translation]

Mr. Thomas P. d'Aquino (President and Chief Executive, Business Council on National Issues): Good morning, Mr. Chairman.

[English]

Good morning, Mr. Chairman and members of this committee. It's always a pleasure to be here. We always take time to come before this committee because we know of the extremely important work that you do. We also know that you happen to be influential. So for those two reasons we're delighted to be here this morning, in times that are truly extraordinary.

The work of the Standing Committee on Finance has always been about more than just money. You know that. Debates over revenues and expenditures are no mere accounting exercises. The choices that are made have a real and enduring impact on the lives of all Canadians. There often are disagreements about the best means of making progress toward the goals we share as a society. But for all the resulting discord, we are really privileged as a nation—I know you'll all agree with me—and we must never take for granted the foundations of our shared prosperity.

Two weeks ago, Mr. Chairman, we all watched in horror as thousands of people, engaged in the day-to-day struggle of building better lives, were crushed and incinerated by those whose only goal was to destroy. This was an assault not just on the powerful symbols of enterprise and military might but on the core values for which we in Canada stand. It was an attack on freedom, openness, optimism, decency, tolerance, and trust.

On the surface the terrorists might seem to have succeeded. Thousands of people lie entombed in rubble in New York City and Washington. Millions more now fear for their safety wherever they go and whatever they do. The instinctive and necessary responses to aggression sap our energies by inhibiting travel and commerce. Shaken financial markets reflect expectations of falling profits and a rising toll of layoffs. The possibility of a deep and global recession now looms large.

• 0910

No matter how successful we are in fighting back against the global scourge of terrorism, there's no doubt in my mind—and you know this to be true—that more pain and sacrifice lie ahead. As Prime Minister Chrétien said in the House last week, Canada is now at war, and it is a war against an elusive enemy who moves from place to place, making diabolical use of the very freedom and openness that Canadians cherish and must protect.

The process of waging war against such an enemy is filled with uncertainty and ambiguity, but our duty as Canadians is crystal clear. As opposition leader Stockwell Day said in the House:

“It is not a matter of shades of grey when it comes to these barbarous acts of evil. This is not a time for moral ambiguity. It is a moment of moral clarity.”

As Minister of Foreign Affairs John Manley observed, this also is a defining moment for Canada and for the kind of world we live in. Responding effectively will require, as he put it so well, “steady judgment, unerring conviction and extraordinary courage.”

I'm confident, Mr. Chairman, that our values will prevail, and not by force of arms alone. Rather, we will win by ensuring that hope vanquishes fear and that optimism triumphs over despair. It is always easier to destroy than to build, but the fact remains that the vast majority of human beings are relentless builders. Progress can be interrupted by the designs of a few evil men, but human ingenuity and determination will never be defeated in the end. Our economy may slow for a while, as it is certain to do, but the medium- to long-term fundamentals have not changed. Canadians have been shaken, but we have not lost and will not surrender our quintessential qualities of tolerance, diversity, openness, and shared prosperity.

The determination not to surrender our core values does have practical consequences. In the short term at least we must face new restrictions on our ability to move freely and new intrusions into the privacy of our business and personal affairs. More lives, sadly, will be lost, and more jobs will be lost. We must do all we can to minimize both kinds of losses. That will require a single-minded focus on our core goal. We face hard choices between what we want and what we need. In the public and private sectors alike, there is no more room for frills.

This brings me back more specifically to the role of the House of Commons and of this important committee. There are many divisions between parties on matters of policy. Indeed, a healthy representative democracy requires such disagreements even within parties. But we have entered a period in which unity of purpose as a country is absolutely essential. This does not mean that everyone must agree on every detail. Elected governments here and in provincial capitals must in the end make the choices and bear the responsibility. What all of us must do, however, is set aside partisanship and ideological rhetoric. We must work together as a nation and as a society to defend the principles and values we all hold dear.

In the face of great crises and national challenges over the past century, business leaders have worked closely with governments to ensure that our country makes the most of our collective resources, and we are ready to do so again. We also are committed to keeping our economy strong, for it is the engine that must sustain our country's efforts through the protracted struggle that we believe lies ahead. Many individual companies face daunting challenges in the months ahead. Some will have to retrench and restructure. Some may fail. But I want to remind everyone that free markets are amazingly resilient.

We may indeed be entering a global recession as well as a global conflict, but we must not let ourselves be blinded by today's fog of economic uncertainty. However grave the short-term challenges may become, we must keep our sense of perspective. Markets always find a bottom and then grow to new heights. Even a global recession would only be a pause in the long-term march of human progress.

It is in this spirit that I would like to talk briefly about our views, as the Minister of Finance prepares for the next federal budget.

• 0915

The Business Council on National Issues has been consistent in its support of policies that will drive innovation, competitiveness, economic growth, and incomes. The members of this committee in turn have been a powerful force in shaping and putting in place the policies that helped build Canadian prosperity so dramatically over the past decade.

The BCNI has focused on two themes in recent years. First, we have called for aggressive action to eliminate the federal deficit and then to begin paying down the accumulated mountain of public debt. In revealing that the debt was reduced last year by a record $17.1 billion, Finance Minister Paul Martin noted that in just four years the government has freed up $2.5 billion a year that is no longer needed to pay interest. This represents important progress in reducing Canada's exposure to external shocks and ensuring the sustainability of core social programs.

Second, the BCNI has been a vigorous proponent of policies to improve the competitiveness of the business environment, ones that will attract greater investment, spur innovation and productivity, create new jobs, and raise the incomes of Canadians. The single most effective vehicle for encouraging such progress continues to lie in reducing the burden of taxation, and Canada has made important progress in this respect.

As the member chief executives of the BCNI indicated in a memorandum to the Prime Minister on September 7—which is in your kits, ladies and gentlemen—last October's decision to accelerate tax cuts was not only good policy, but superbly timed from a cyclical point of view. The personal tax cuts in particular helped to sustain consumer confidence by putting more money into the pockets of Canadians just as equity markets tumbled and business investments slumped.

The BCNI therefore suggested a threefold approach going forward: a high degree of prudence in fiscal planning, combined with continued aggressive reductions of public debt; a revival of program review as a continuing and rigorous feature of fiscal management, including reviews of each program and tax expenditure at least once every five years; and highly selective tax reductions to the extent revenues permit, combined with creative changes to the tax mix that would improve competitiveness without reducing overall revenue.

These remain our priorities today, Mr. Chairman. The fiscal outlook has changed since September 11, and so have the nation's immediate needs. But the principles of sound fiscal management have not changed and will never change.

The terrorist attacks had an impact on short-term economic prospects globally. One result has been a spurt of calls in both Canada and the United States for massive fiscal stimulus—a wave of tax cuts and new spending to chase away consumer and business gloom, even at the expense of going back into deficit. We think these suggestions are ill-advised. It is certainly far too early to make such a decision. As the United States Federal Reserve chairman, Alan Greenspan, has noted, the long-term prospects for the economy, in his words, have not been significantly diminished by the short-term disruptions of the terrorist attacks.

The reductions and interest rates already announced by central banks around the world are having and will continue to have a powerful impact. And while further monetary and fiscal stimulus may indeed by required at some point, we agree with Mr. Greenspan's view: “It is far more important to be right than to be quick”.

Prudence in fiscal planning is more important than ever. In the past, the Minister of Finance has built prudent assumptions and contingency funds into every budget. To the extent that these contingencies proved to be unnecessary, the government was able to balance its books faster than expected and to make an encouraging dent into the mountain of accumulated debt. But let there be no doubt, even when planning prudently, surpluses have never been assured. There has always been a possibility that a severe slowdown could have driven the government into deficit in any given year.

Today the risks, you will all agree, are greater than ever. It is therefore vital to continue setting aside more resources than the government thinks will be needed. A deficit in any given year still remains a possibility, but it is not one for which we should deliberately plan. If we do our best work within the means we have, a small deficit will have no lasting damage. On the other hand, if we intentionally budget for even a modest deficit, we could easily find ourselves saddled with a major shortfall that would spill into succeeding years.

• 0920

We concur with the Governor of the Bank of Canada, David Dodge, who stated on Friday that monetary policy, supported by the automatic stabilizers already built into our social safety net, remains the best tool for coping with the short-term impact of the events of September 11. As the governor added, it would be, in his words, “absolutely foolhardy” to rush to put ourselves back into the box of spiralling deficits and rising taxes from which Canadians struggled for a decade to emerge.

If we truly care about the long-term health of public programs and infrastructure that support Canada's way of life, we must not let short-term panic become an excuse for renewing the sad cycle of fiscal despair. To paraphrase a former Canadian Prime Minister and war-time leader, “a deficit if necessary, but not necessarily a deficit”.

There can be no doubt that the war against terrorism will require additional spending. Such new costs, however, should not be simply loaded on top of a business-as-usual approach to all government activities. Finding the money needed to ensure the security of Canadians will require determined efforts to chop less essential spending and to defer other proposals for new initiatives. Even so, it is possible that total spending may rise at the same time as a slowing economy reduces federal revenue.

Mr. Chairman, in choosing among priorities in the weeks ahead, we must remember that any net increase in current consumption driven by Canada's security needs will reduce public investment in future growth. Perhaps these costs will crowd out important long-term initiatives such as increased investment and research and infrastructure. Perhaps they will prevent progress towards more and new competitive tax rates. The BCNI believes, however, that further new tax cuts and new proposals for non-essential spending must take a back seat to national security in the next federal budget.

The council is not suggesting that the government reverse or delay any of the tax reduction measures already announced by Finance Minister Martin; these are essential. That would be unnecessary and counterproductive. Despite the significant tax cuts of recent years, the competitiveness of our tax regime remains, of course, a serious concern. It's a view we've expressed before this committee many times.

In due course Canada will have to resume progress toward lower personal and corporate tax rates, especially as planned American tax cuts take effect in the years ahead. Deferring the new tax cuts will have consequences. In particular, delaying and eliminating taxes on capital and in further reducing taxes on corporate income and on capital gains will also delay badly needed business investment, job creation, and economic growth. In that sense, all Canadians will pay a price, just as all Canadians have benefited from the growth encouraged by previous tax reductions.

But wars, Mr. Chairman, require sacrifices, and in the conflict we face today, the security of Canadians and the survival of our values must take precedence over short-term improvements in our standard of living and quality of life. Deferring tax cuts in the overall burden of taxation does not mean we should ignore the potential for improvements to the tax system, especially when money is tight. We must make the most of what we have.

It is unlikely that the government can afford to give up any significant revenue in the short term, but there does remain plenty of room for trade-offs within the tax system. We put forward a number of such options in our September 7 memorandum for the Prime Minister, and we would be happy to discuss them in more detail with you at your convenience.

Just because there's no money to spare does not mean there's nothing we can do. There are creative ways to improve our tax system. There are also opportunities for innovation and spending. For instance, many commissions, committees, and organizations, including the BCNI, are looking for better value for the money Canada spends on public health care. The government could renew efforts to reform the employment insurance system. And it is vital to make the huge sums invested in aboriginal people more effective in improving economic and social outcomes.

Regulatory reform provides another powerful tool for improving the business environment without the need for increased public spending. For instance, it would cost governments nothing to stop quibbling and embrace the full spirit and letter of the agreement on internal trade. What makes us strong as a country is the ability of all Canadians to live, work, trade, and invest wherever they find opportunity within our borders. In time of war, the continued existence of barriers that sap our energies and diminish our potential is no better than sabotage. It is time to put Canada first.

• 0925

We must be equally vigilant in avoiding regulatory or legislative action that discourages investment or adds to business costs. In particular, Canada should not make any decision on the ratification of the Kyoto protocol on climate change without, ladies and gentlemen, a clear understanding of what additional costs consumers, industries, and governments would have to bear. Especially at a time of falling prices for many of Canada's energy-intensive exports, we must be careful not impose new burdens on Canadian companies that would not be faced by competitors abroad.

This brings me, Mr. Chairman, in conclusion, to our most urgent national challenge today, and that is dealing with the future of our relationship with the United States. The BCNI, as you know, was an early proponent and strong supporter of the original free trade agreement with the United States. The resulting integration of our economies has brought huge benefits to all Canadians. On the other hand, major disputes, such as that over softwood lumber, continue, and the very degree of integration has encouraged complacency, not just in government circles, but in business circles as well. The huge lineups at the border following the attacks of September 11 highlighted the folly of such complacency.

The BCNI began to work more than two years ago on what we saw as the next big step in the Canada and United States relationship. Even then, it was clear that the growing list of trade disputes was becoming inextricably intertwined with important non-trade issues, such as defence and security, illegal immigration, and drug trafficking. The key question, in our minds, was this: Should Canada simply proceed incrementally, tackling each issue on its own merits as it came to the fore, or would it be better to take a more comprehensive approach? More fundamentally, the strategic questions that we posed were whether Canada should attempt to position its side inside the American tent, the North American tent, or outside it, and to what extent we could pursue a strategy of distinct advantage while maintaining uninhibited access to the United States market.

These questions, Mr. Chairman, have become immediate and central. In the global war that was unleashed by the attacks of September 11, there will be no neutrals, as President Bush so clearly said. This does not mean that allies must always march in lockstep, but the fact remains that Canada faces real and pressing demands for action. In particular, as United States Ambassador Paul Cellucci suggested last week, we may be unable to ensure an open southern border unless we are able to convince our American allies of the integrity of our external perimeter.

How Canada chooses to handle such issues as defence, policing, customs, and immigration will have a powerful impact on our relationship with the United States and on Canada's economy. Action to improve the integrity of our borders would not be a surrender of sovereignty, as some people are suggesting; it would represent a powerful commitment to protecting the security of Canadians and our way of life. In developing Canada's strategy, we will need to consider where the security of Canadians can best be enhanced through greater cooperation and collaboration with the United States and where we should engage in more fundamental harmonization and integration.

Canadians have chosen freely to join Americans and other civilized countries in waging war on those who would tear down in an instant what generations have built. Last week a participant in a televised town hall discussion on CBC argued, to my dismay, against Canada's involvement, saying that this is their war, not ours. I and my colleagues at the BCNI disagree profoundly. This is not a war between a group of terrorists and the United States of America. This, as President George Bush put it in his address to Congress, is a war between freedom and fear. Canadians have fought for freedom before: in Flanders field, on the beaches of Normandy, on the merciless waves on the North Atlantic, on frozen hilltops in Korea, and in the skies over Kosovo. Here and in other places and times, Canadians have stood proudly between their loved ones and war's desolation, and many have paid the ultimate price.

Two weeks ago terrorists attacked people, airplanes, and buildings in the United States. But Canada's freedom, Canada's liberties, Canada's democracy, Canada's prosperity, Canada's openness, Canada's diversity, and Canada's tolerance are every bit as much a target of these terrorists as were the World Trade Center and the Pentagon. This is Canada's war too, not because the Americans say so, but because we dare not betray our own heritage and values.

• 0930

We should have no illusions, Mr. Chairman, about the odds of a quick and decisive end to the struggle. Indeed, it is far from clear that we will ever be able to declare unequivocal victory. But the measure of our victory will be the extent to which we remain a society based on openness and optimism, on tolerance and diversity, on building and sharing prosperity.

In conclusion, let me say this: Canada now faces urgent new priorities. There are real fears about the prospects of our economy. There are hard choices to be made. To recover and forge ahead as rapidly as possible, we must be prudent. But we have to be creative and we must be determined, and above all, we must work together. The road ahead will not be an easy one for anyone. But just as the human spirit has triumphed relentlessly over adversity in the past, Canadians and other freedom-loving people will overcome this latest challenge.

On behalf of all the members of the BCNI, the chief executives of our 150 largest companies, let me assure you that we, as our country's business leaders, will do our part in ensuring that Canada and Canadian values emerge stronger than ever.

Thank you very much, Mr. Chairman.

The Chair: Thank you very much, Mr. d'Aquino.

We'll now proceed to the question and answer session, a five-minute round. Mr. Kenney.

Mr. Jason Kenney (Calgary Southeast, Canadian Alliance): Thank you, Mr. Chairman.

Thank you very much, Mr. d'Aquino and associates, for your excellent presentation.

Mr. d'Aquino, you challenge us, I think appropriately, to think in this new environment, to really fundamentally reconsider our priorities in the new imperative national security. I also want to note and concur with your suggestion that this should be done in a non-partisan and non-ideological way.

I would point out, for instance, that it's not just the conservative administration of President Bush that has emphasized this new western imperative for security, but even the nominally socialist government in the United Kingdom has done the same. This is something that people across the partisan spectrum I hope share in common.

Mr. d'Aquino, you suggest, I think again quite appropriately, that the top priority in terms of our fiscal plans for the foreseeable future should be on increasing our capacity to protect the integrity of our borders and to defend and advance our national security. You avoided specifics in the presentation today.

I want to give you a couple of statistics to suggest to you, and perhaps to Canadians generally and my colleagues here, how enormous a challenge we have, should Canada set out to invest as much in national security as many of our allies do.

Just as an example, our budget for CSIS constitutes about 0.2% of GDP, whereas the United States spends 2% of GDP on intelligence, ten times as much as Canada does. My understanding is that the United Kingdom spends about six to seven times as much on its intelligence structure as does Canada.

Similarly, in the area of national defence, Canada, with the second lowest expenditure as a percentage of gross domestic product in NATO, at 1.2%, falls behind the 2% average of defence expenditures in NATO. In fact our American friends spend about 3.5% of GDP. Were we to simply raise our defence expenditures to the NATO average, and arguably then be in a much better position to meet those treaty obligations, that would be an additional fiscal load of about $8 billion or $9 billion on the federal treasury. So I think we're not just talking about tinkering at the edges or at the margins here.

I'm wondering if you could give us a sense of how much of an emphasis we need to place on investment in national security, the magnitude of it, and the degree to which we must rethink priorities of the federal government.

Mr. Thomas d'Aquino: Mr. Kenney, you are raising an issue that is extremely important to the country, and let me tell you how important it is.

We in the BCNI, for over a decade, until the fall of the Berlin Wall, had a very active task force on defence policy and security. We produced many reports, which are part of the public record, and we appeared before relevant parliamentary committees, repeatedly arguing that the deterioration in Canada's security capability was an enormous liability that one day would be put to the test.

• 0935

So the deterioration we have seen has gone on now for a long time, 25 years. What a crisis of this kind underscores is the wisdom of all those individuals, many of them in this House, who over the years have argued that we have to do more.

The challenge we now face is that you cannot restructure and refinance the armed forces in six months. That will require time, probably five years or more. What I would strongly urge this committee to do is to raise the priority and importance of doing so as part of the use of Canadian taxpayers' money for in fact what is a good use, and again, not just to make our NATO allies happy, to walk taller in the world, or to make the Americans happy. This is absolutely essential to Canadian security. If there is any doubt about that, just talk to Canadians on the street today. This does require significant expenditures over time. But you also know that defence planning takes a heck of a lot of time, more time than I think it should. Therefore, this will be a buildup over time. But this should be the trigger that says let's do it, and we should be making allocations over the next three, four, or five years to do that. Not to do it would be irresponsible.

Secondly, we have also been of the view that the Royal Canadian Mounted Police force is very significantly underresourced. I've been of that view for a long time. I know it is shared by many of my colleagues. You cannot fight cyber-crime, protect our borders, and deal with all of our internal challenges with an underfunded police force. These are very fine men and women, as are our soldiers. They deserve support. Again, that's something that can't be ramped up in six weeks or six months, but we should commit ourselves to that over the next three, four, or five years.

Insofar as security intelligence is concerned, I'm aware of the comparable figures. Obviously, we have to do more in that area as well. That is why in our statement, Mr. Kenney, we've said over and over again that this is a time for no frills. We should be examining all areas where we can save spending. We should be reallocating resources. But let's keep in mind that we are not going to do it in Mr. Martin's next budget alone. This should signal a very significant change in thinking.

I'll leave you with one last idea. One military commander after another has said to me, with great sadness, we have no champions at the cabinet table. The reason we don't have champions at the cabinet table is because very few Canadians seem to care about defence. Building up and ramping up our capability is going to require public support. If that public support is not there, our political people are not going to respond. So it's a national challenge. It's not just a challenge for the Minister of National Defence.

The Chair: Thank you, Mr. Kenney.

Mr. Loubier.

[Translation]

Mr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ): Good morning, Mr. d'Aquino. I would like to hear what you have to say about the many requests that are currently being made by companies such as Air Canada and Air Transat as well as various companies involved in trucking and tourism. These companies are asking for government assistance because, ever since the tragic events that occurred in the United States on September 11, they and many other industries whose representatives have already spoken on the issue are going through some very tough times. I would like to hear what you have to say on the matter. Do you agree that the federal government should intervene to help them get through this crisis?

Mr. Thomas d'Aquino: Thank you, Mr. Loubier. That is a very good question and I know that my colleagues have opinions on this issue as well. I would just say this.

[English]

Early this morning I read a very interesting lead editorial in the current issue of The Economist. The Economist, which John McCallum and many of you, I'm sure, read on a regular basis, sometimes offers very wise advice. What The Economist said is something that I think this committee should take to heart, and that is we've always known crises. There have been many huge crises in this century. What often happens is that the economy suffers a shock. Some industries do well and some do badly. The biggest mistake of all, though, is to assume that all bets are off, that the market no longer works, and that what we must do is rush in with massive amounts of government help.

• 0940

The danger there is the following: first of all, as you begin dispensing support—you all represent people in your ridings—you will have a long, long list of people who will say, I've been affected collaterally; I need support. Where does it all end? So I think we should be extremely careful about the use of public funds to bail out people who are in trouble.

Should there be any exceptions to that rule? Where matters of national security are involved, I think there should be exceptions. In the collective wisdom of many legislators, beginning in the United States—and we'll see more of it in Europe and, I have no doubt, in Canada—there is a view that airlines are required to fly. Airplanes are essential to the economy and the jobs of this country. If suddenly we had no airlines, then the shocks we are talking about would be much more profound. So my view is that we should take a serious look at the demands of air carriers, which had to be assisted just in the last 72 hours due to the fact that airports and aircraft were no longer covered by insurance. That's an example of where governments had to step in.

Are there additional steps that should be taken? I think that's something you should look at very seriously. But the criteria I would use are whether it is absolutely essential to the movement of people and commerce and to the security of the country. If it's not, you should be hard-headed about it and say there should be no support. In some industries where there is overcapacity, restructuring is not a bad thing.

One of the other things The Economist pointed out is that the economies of the world were in trouble before September 11. We were already heading for a recession before September 11. Part of the reason for that recession was an oversupply of services, manufacturing, and production. If a period of difficulty results in forced restructuring, it's not always a bad thing.

So all I would say is that as a general principle, no, and in some cases, yes, where national security is absolutely essential. That form of assistance should not just be holus-bolus, let's roll in the wheelbarrows of cash. It should be a conditional form of assistance. The concept of bailout should be dead in the water in times of crisis and in times of peace.

The Chair: Madame Picard.

[Translation]

Ms. Pauline Picard (Drummond, BQ): Good morning, Mr. d'Aquino.

You stated in your brief that we are witnessing, in particular, in this sudden surge of calls, both in Canada and in the United States, demands for massive interventions in order to stimulate the economy, cut taxes and approve new spending.

You said that these suggestions were imprudent and that it was too soon to intervene. What do you mean by that? Should we wait until we are in a full-blown recession before intervening? You are aware of the fact that the economy was already slowing down in Canada before September 11.

Mr. Thomas d'Aquino: That is a very good question.

[English]

I would say this. We say this very clearly in our brief, and the central bankers—whatever you may think of central bankers—have been saying it as well. They're saying, it's not that we are not facing hardship, it's not that we are not facing shocks, and it's not that we are likely to avoid recession. But before we decide to jump in with masses of new spending and stimulus, let's be very careful that (a) we have a correct reading of the situation and (b) that the measures we use are adequate.

The Governor of the Bank of Canada, in his statement on Friday, said we should rely on the stabilizers in our economy to deal with the possibly short-term shocks we are involved in. Alan Greenspan has said the same thing. We are saying the same thing. We are saying that inevitably, though, additional spending will be required. So it's not a case of saying let's open up the floodgates and massively stimulate the economy, because we already know that there will be additional spending required. But because there will be additional spending required and because there will probably be more than we think we will need, let's be very, very careful of where we spend the rest of the taxpayers' money. That is the logic.

If Canada falls deeply into recession, eventually that recession will end, but during the time that recession exists, there are stabilizers in our economy to deal with people who are out of a job. There is the employment insurance fund. There are a variety of ways of dealing with it. We must not assume that this recession is going to be worse necessarily than the recessions of 1980-81 or of 1991. In those periods of time it was folly, and you know the price we paid, to say “We're in recession; let's just spend ourselves into oblivion”—to an extent where we have built up so much public debt that that has been an albatross on the shoulders of every Quebecker and every citizen in this country, as we are beginning to see now, as Mr. Martin retires debt and is able to save in this year alone $2.5 billion as a result of reducing public debt.

• 0945

The Chair: Thank you, Madam Picard.

Mr. McCallum.

Mr. John McCallum (Markham, Lib.): Thank you, Mr. Chairman.

I think I agreed with just about everything you said, Tom, which is not always the case. I just have two clarifying questions. One is on deficit and the other is on continental perimeter.

On deficit, I certainly am not one of those who wants a so-called massive fiscal stimulus. My question to you is a little more difficult. There's a lot of uncertainty today, and there's a possibility that on current policies we might end up in a deficit—there's a possibility—this year or next year. Nobody denies that. My question to you is whether under such circumstances you'd allow what the economists call the automatic stabilizers to work, whether you'd allow us to go into deficit, were that to occur, or would you actively cut to ensure that we not go into deficit? That's my first question.

My second question is about the continental perimeter you mentioned. There's a lot of confusion as to what that means. I would just mention that the ambassador from the United States has stated explicitly that he doesn't want a European Union-style arrangement. He doesn't want us to have the same laws necessarily as the U.S. He doesn't want to have U.S. immigration officers and FBI agents in our airports. To me that makes a lot of sense. But my question to you is, what exactly do you mean by a North American perimeter?

Those are my two questions.

Mr. Thomas d'Aquino: Mr. Chairman, I hope every red-blooded liberal on this committee is reassured that John McCallum doesn't always agree with me.

Mr. McCallum, in response to your first question on the deficit, I think it's really important—I hate to use the word...in fact I won't. I was going to say there's a word I hate to use; therefore I will not use it. But I think we have to be very careful about the frame of mind we are in. I heard Mr. Martin interviewed on The House on Saturday morning. I thought Mr. Martin got it about right when he said we're not anxious to rush back into deficit, because Canadians have paid a huge price to slay the deficit and to start to build up reserves.

The second thing Mr. Martin and others have said is that rushing into deficit and preparing yourself to do so is the worse possible thing you can do. I guess what we're saying, John, is don't say to yourself a deficit is inevitable, therefore we must begin to prepare for a deficit. What you must say is we will do everything we possibly can to stop ourselves from going into deficit and that will force us to consider every other choice. Mr. Martin used the words “we're faced with tough choices”. That's what we're urging this committee. Don't say deficits are inevitable and then we'll start thinking about choices. Say we will try to stay out of deficit, come hell or high water—to quote a certain Minister of Finance—and therefore, before we even get there, let's consider the various choices we have. That is the thinking that I believe is in the minds of most Canadians anyway, because Canadians paid such a heavy price. You've written about it at length. You know how big that price has been.

Secondly, on the perimeter, we have worked through, over the last couple of years—and you know this from work that we have done. In fact you were even an adviser to the Canada-global leadership initiative. Part of our work required looking at the future of the Canada-United States relationship. Basically we said the border should not be erased, but we should rethink how we deal with the border.

Just to give you an example, last week I spoke to the chief executive of our railways. This was a time when trucks were being held up for eight to 14 hours. The CEOs of our two railways said the trains were moving seamlessly across the border; there were no hold-ups. I said to myself, why is it the trains are moving seamlessly and trucks are not? What is it that the trains are doing that the trucks aren't doing? The point I'm really making here is we have to think more intelligently, more creatively, in a more innovative way, about how we deal with the border. That means not just in terms of goods and services, in terms of preclearances, in terms of designating high-risk security cargoes vis-à-vis those that are not—there are a whole variety of things that can be done, and incidentally were done last week. When we were facing those great holdups, good work on both sides of the border reduced it from eight to 14 hours down to two hours within a matter of days. It shows that it can be done.

• 0950

The external perimeter is a much more interesting and I think bigger challenge. The external perimeter idea just simply says this. In two economies that are integrated, not just in terms of goods and services but also highly integrated in terms of our political ideas, our values, our commitment to openness, to freedom, to all the things I talked about in my statement, it requires perhaps, for the sake of efficiency, for the sake of effectiveness, joint efforts in the form of a common perimeter to deal with illegal migrants, to deal with drug laundering, and to deal with terrorist threats.

Some people say to me you're saying that because you want to make the Americans happy. No, we're saying this because it's important to Canadian security. If it happens to make the Americans happy, and things they do that they haven't been doing make us happy, so much the better. But that's what we should be doing.

We have a lot of specific ideas, John, on how we handle the external perimeter, and we'd be happy to share those with you in greater detail if you're interested.

The Chair: Thank you, Mr. McCallum.

I just want to piggyback on what you said, Mr. McCallum.

Mr. d'Aquino, on the issue of the deficit, Canadians fought very, very hard to win the war against the deficit. The fact that we would actually even contemplate going back into deficit...I think quite frankly, given the present economic situation, the impact it would have psychologically on business and consumer confidence would be quite serious. What are your comments on that?

Mr. Thomas d'Aquino: Well, Mr. Chairman, you as an individual have spoken out on this subject often and bravely, and we commend you for that. We've appeared before this committee. We read your report that said that before you share the pie you must grow it. We're very much aware of the commitment of this committee to the importance of keeping us out of deficit, to increasing productivity. I could not agree with you more. We will see some people who never really believed that big government spending was a bad thing to begin with. Some of those individuals may find, creatively, an opening here for saying this is a time for governments to get back into private business in a very big way.

I guess what we're really saying is look at two things. Look at our experience over the last ten years. When I appeared before this committee in 1991, the Canadian newspapers were openly debating whether Canada would hit the debt wall and whether we'd have to call in the IMF. Look at the huge progress we have made in the last ten years, and a lot of that supported by this committee. So let's not even think of going in that direction again, because the cost would be high.

But it will require perhaps an even greater challenge, Mr. Chairman, and that is the rethinking of how we spend, where we spend. If Mr. Kenney is right—and I think he is—that the level of commitment that we will have to put to bear in terms of dealing with a deteriorating military and an underresourced RCMP and security structure, not to mention some of the other security infrastructure that goes beyond those three agencies...we're talking very, very big dollars here.

One, we're going to have to count on economic growth to produce the revenues that have helped us cover the kind of spending that we have done over the last four, five, and six years. Incidentally, 122 months, 10 years, of unbroken, unprecedented growth in the United States helped us do that. But we're in a very different ballgame right now.

So the really creative thinking is not the one that says let's stay out of deficit; the really creative thinking is how are we going to spend our money more wisely and for the benefit of future generations as well as meeting the immediate test that we're facing right now?

The Chair: Go ahead, Mr. Brison.

Mr. Scott Brison (Kings—Hants, PC/DR): Thank you, Mr. Chairman, and thank you to the BCNI for its continued important contribution to public policy in Canada.

• 0955

My first question follows on some of Mr. Kenney's concerns relative to resource issues, and particularly around money laundering. With the complexity of financial instruments today and the use of technology and the advances in technology and telco applications particularly, it's extraordinarily difficult to track transfers of money. I would say that prior to the events of September 11 we had a chronically underfunded Office of the Superintendent of Financial Institutions. We have ten securities regulatory commissions in Canada, the only industrialized nation without a national securities oversight agency. Even prior to the September 11 events, didn't we have to take a serious look at dramatically increasing all levels of oversight in these areas? I'd appreciate your feedback on that.

Mr. Thomas d'Aquino: Thank you very much. That's a very good question.

This is something we've spent a lot of time thinking about in the last ten days. That is, we knew that inevitably there would be a call for greater surveillance; there would be a call for greater invasion of privacy; there would be a call for improved regulation, whether it meant improved regulation of security checks at airports or to improve surveillance of banking and financial transactions.

As we've said in our statement, some of this is inevitable. If we are truly in wartime, some of this is not only inevitable but necessary. But I would go one step further. Just as we have argued that it took September 11 perhaps to wake us up to the importance of doing something about our underfunded agencies and our deteriorating military, so too it has wakened us to perhaps a rather rosy and naive world that we live in, where we assume that all the terrorists were over there—you know, that the bombs were only going off in Spain or in the Balkans or in Ireland, or whatever the case may be.

We now know that terrorism is all around us. Therefore, in this war against terrorism, it means that the ability of agencies to be able to root out dishonest criminal terrorist transactions is extremely important. We would support that. We would support that, perhaps before people who are engaged in the business of defending civil liberties 24 hours a day would. We believe it is important, and we know that the business community would be prepared to accept that. In the final analysis, the question I always put to people is if you're conducting business above board, then you have absolutely nothing to fear, and if you have nothing to fear, some degree of surveillance isn't going to hurt.

What we must all be vigilant of, though, and members of Parliament have a special role in this, is that in wartime—and we saw this in the Second World War and we saw it at various other times of national crises—there is a tendency on the part of some people to get overly zealous. Only a very vigilant House of Commons and a very vigilant set of actors outside of the House of Commons can hold people who tend to get overly zealous to account. And we're counting on that happening.

Certainly improvement in surveillance in the area of financial institutions and transactions is important, but as Paul O'Neil said yesterday, this is not easy. Significant numbers of transactions are carried out in ways that totally go around the digital economy that we know today.

Mr. Scott Brison: But it's not simply a matter of strengthening current laws; it's enforcing and having the resources to enforce as much as anything.

Mr. Thomas d'Aquino: That's true.

Mr. Scott Brison: On the question relative to Air Canada and the request for bailout in the $4 billion range, I've heard members of cabinet say during interviews that we will not let our national airline go down, which is clearly an unequivocal statement, if Air Canada indeed needs $4 billion to stay afloat. Some accounting has indicated that there's probably $100 million to $150 million of legitimate loss as a result of September 11 and the events and aftermath of that, and the rest would in fact reflect ongoing operational deficiencies.

• 1000

Would you agree, first of all, that there are Canadian airlines that can pick up a significant amount of the business? I'm referring to some of the regional and discount carriers—WestJet and Canada 3000—that have been competed against quite aggressively by Air Canada. Further, would you support the notion of cabotage and the ability for foreign airlines to take a more active role in Canadian air routes, with the ultimate goal being better and more consistent services available to Canadian consumers for more competitive prices?

Mr. Thomas d'Aquino: Mr. Brison, the BCNI will always be in the very front ranks of anyone arguing for greater competition. We would be delighted to see greater competition in our airline sector and all of our sectors, because we believe that competition is very healthy, particularly in the airline sector, where one airline is so dominant. I don't think Mr. Milton would argue against the idea of competition.

Mr. Scott Brison: I'm not so sure about that.

Mr. Thomas d'Aquino: Well, Mr. Milton has given speeches advocating the importance and the vibrancy of competition. I'm just referring you to the record of his words.

I would say this with regard to the costs. We're not sure what those costs really are yet. I think your point is that whatever financial support there is has to be fair, legitimate, and based on proper homework. This is not just a case of rolling out wheelbarrows of cash. It has to be done on the basis of a proper assessment. We're all in favour of that. But the real issue, I submit to you, is not the $150 million loss that Air Canada and other airlines may have had in the last ten days. The real issue is how sustainable are these enterprises going to be over the next 90 days, 120 days, or the next 600 days?

In the case of the United States, you had some very big-name airlines that were facing bankruptcy within 90 days, so congressional leaders and the administration felt they had to take action. The question we really have to ask ourselves—and I don't know if you were in the room when I made the point—is we're against bailouts, but where a particular enterprise or industry is absolutely crucial to national security, then exceptions should be made, but the degree of help that should be applied should be measured and it should be the appropriate amount of help. It should not be just an open door to keep a particular airline alive forever.

So I think a judicious and prudent approach is necessary. I'm against bailouts, but I also say to myself, what am I going to do and what are Canadians going to do if airplanes aren't flying? It would be enormously detrimental to the economy. We'll pay a very heavy price for it. So that's a struggle you must engage in and draw your own conclusions, based on good homework.

Mr. David Stewart-Patterson (Senior Vice-President, Policy and Communications, Business Council on National Issues): If I may just add one quick point to that, with respect to looking at requests from domestic airline companies for assistance, what we've already said here is that the essential is what matters to the country. Clearly, as a country we need a viable air transport system. What's required to keep that viable? There was an insurance issue that came up with airports already; that's being dealt with. It was essential to keep the system running. I think that's the basic criterion.

The market has ways to make up for problems with individual companies. You've mentioned cabotage as one means of bringing competition to the market. In that respect, I think it is important to add another point. That is, if you're going to allow more competition to come in from outside the country, you do have to pay attention to the level playing field. In other words, if you're treating the domestic carrier differently than you are foreign carriers, and then you give foreign carriers access, you may be essentially undermining the domestic industry. That notion of a level playing field becomes important when you start to consider the possibility of alternatives such as cabotage.

The Chair: Thank you.

Of course we would ask for reciprocity. We're getting into that. That's very tough to obtain, by the way.

Mr. Brison, your time is up. I'll have to go to Mr. Nystrom.

Mr. Scott Brison: I didn't necessarily say.... We may ask for reciprocity, but in fact if we were not given it, which is highly unlikely, we may consider it in the interest of the Canadian consumers to allow foreign airlines to provide an improved level of service in Canada. So it may not be reciprocal cabotage that we attain.

The Chair: Mr. Nystrom, final questioner.

Mr. Lorne Nystrom (Regina—Qu'Appelle, NDP): Mr. d'Aquino, the airline industry is a very important one—I certainly agree with you—and there were losses sustained because of what happened on September 11. But there are also ongoing losses because of the passenger load going down, which is why the United States is looking at a major bailout of airlines in that country.

• 1005

I wonder, Mr. d'Aquino, rather than just giving money to Air Canada, which might be considered corporate welfare, if we do commit a huge amount of public money to Air Canada, would you be in favour of taking out an equity position in the company? You're a very wise businessman, and if you're going to spend some money, I'm sure you want some equity for the money you spend. Wouldn't you apply the same thing to public policy?

It seems to me common sense that maybe we should have some equity in Air Canada if we're going to spend money. Mr. Kenney would be in favour of just handing out the money holus-bolus in corporate welfare—

Mr. Jason Kenney: No, he wouldn't, actually.

Mr. Lorne Nystrom: —where the taxpayer doesn't get anything at all. I wonder if you'd be in favour of this very wise investment on behalf of the ordinary citizen of this country.

Mr. Thomas d'Aquino: That's another way, Mr. Nystrom, of saying that Canada and the people of Canada, through their government, should be major shareholders. Is that correct?

Mr. Lorne Nystrom: Well, if they're going to put up the money, they should have some shares in the company. You're dealing here with the taxpayers' money, Mr. d'Aquino, and if you're going to be advocating maybe spending some of that money, shouldn't they have something in return?

Mr. Thomas d'Aquino: Mr. Nystrom, you and I have had these discussions in this committee for a long time, and I guess during that period of time, wisely, the people of Canada have strongly supported moving away from government being an owner and a manager and a runner and an operator. As a result of that, in large measure, we've seen huge benefits.

Public assistance to an airline may take many forms, and the result of that would have to be, in due course, an airline that was providing good service, generating profits for its shareholders, and providing good service, most of all, and an essential service to the people of Canada. That's where I hope the airlines will get to and where we hope all airlines will get to.

If we accepted your argument, it would be the slippery slope. If airlines aren't doing well, let's take them over. We'll do that with hotels. We'll do that with the tourism industry. We'll do it with everybody else who's in trouble. Then we'll just replace them all with civil servants. I don't think that's the right way to go.

Mr. Lorne Nystrom: I'm surprised you'd be an advocate of corporate welfare, though. You're going to put all kinds of money into huge corporations. Why don't you take some equity in return?

I also have another question for Mr. d'Aquino. He mentioned the possibility of looking at the health care system and aboriginal economics or funding in terms of maybe some cost savings. In terms of the fight against the deficit, these are the groups who have really paid for the deficit—a huge human deficit. We have great household debt nowadays in this country. The health care system is under strain. The aboriginal people—and I have lots in my own riding, 12 reserves, lots of urban aboriginal people. Some are living in third world conditions. What kind of cost savings could you see in those areas without making that human deficit even greater and increasing the household deficit? Recessions are caused in large part by a lack of demand. These people just don't have money to spend. Where can you squeeze the stone any tighter than it is already?

Mr. Thomas d'Aquino: Mr. Nystrom, you and I know, if we're really being honest with ourselves, that the fact that all Canadian taxpayers spend almost $10 billion a year in support of aboriginals...spending is not the problem. The problem lies elsewhere, and you and I know it does. I only wish the public and politicians alike would face up to that. Some of them, God bless them, are. It's not an issue of spending, and you and I know it isn't.

Secondly, the biggest increases in spending in this country in the last ten years have been in health. So to argue that both aboriginals and health have “paid the price” of fighting the deficit is nonsense, and you and I know it is. The people who have paid the price for fighting the deficit are not those in the health care system or aboriginals; it's middle income Canadians, who, up until about a year and a half ago, saw no increase in their disposable income for over a decade. They're the people who really paid the price for fighting the deficit.

Mr. Lorne Nystrom: So aboriginal people haven't paid the price? Come out to Saskatchewan and look at the third world conditions in the inner city of Regina, with the highest crime rate in the country, with prostitutes on the street and the lack of—

Mr. Thomas d'Aquino: You know what—

Mr. Lorne Nystrom: And even on reserves, where unemployment is 80% or 90%.

Mr. Thomas d'Aquino: I'm painfully aware of that, but I also know one thing. Even if you doubled the contribution to $20 billion, you would still have those individuals on the street. That asks the question, how are we going to resolve the question? It's one of the biggest problems and scandals that this country faces, but obviously throwing money at it, as we have over the last ten years, hasn't done very much to solve the problem. So let's start thinking out of the box, as a lot of members in your party, people on the left, people on the right, people in the centre of this country are starting to do, and let's face up to this problem honestly. The problem lies not in spending; it lies in other areas. Let's get to those areas. But that's not what we're here to talk about today.

Mr. Lorne Nystrom: Using your logic, then, are you saying $10 billion is too much because $10 billion is not solving the problem? Are you advocating cutbacks in aboriginal spending?

Mr. Thomas d'Aquino: No, I'm not advocating cutbacks. What I am recommending is let's ensure that that expenditure...if members of the aboriginal community were here today, they would not say to you, Mr. Nystrom, give us $20 billion and it will solve our problems. That's not what they're saying. Listen to what Matthew Coon Come and others are saying. That's not where the problem lies. The problem lies elsewhere.

• 1010

Mr. Lorne Nystrom: I listen very carefully. They're also not advocating any kind of cutback in their budgets.

Mr. Thomas d'Aquino: Neither am I.

Mr. Lorne Nystrom: Where are we going to save the money then? I'm just asking you to put all of the meat on the bones.

Mr. Thomas d'Aquino: Go back and talk to your great uncles about what happened during the Second World War. When a country is faced with extreme hardship, you find ways of saving money and you find ways of spending money where it has to be done. That's what facing up to public responsibility is all about. If that means getting rid of frills, that means getting rid of frills. If it means that in some areas where expenditure is not absolutely essential, you make those choices.

Do you know what? Tony Blair and the socialist regimes in France and Germany have all made tough, tough choices, and they have done quite well in dealing with their economic challenges. They're not individuals who say the only way to solve our problems is to get government more heavily involved. Read the speeches of Tony Blair. I only wish that members of your party, Mr. Nystrom, would embrace the policies of Tony Blair. You might form a government.

Mr. Lorne Nystrom: We have formed many governments at the provincial level—Saskatchewan, Manitoba, and British Columbia—and those governments have done very well in terms of balancing budgets and keeping finances under control. Saskatchewan is a very good example of that. Saskatchewan also has a lot of investment in—

Mr. Thomas d'Aquino: Mr. Nystrom, I'm a great admirer of Roy Romanow because he's much more of a Tony Blair perhaps.... But as a native British Columbian, I would ask you to go to the problems of British Columbia. Tell me what the great and former government of British Columbia did for the people of that province.

Mr. Lorne Nystrom: The government of Saskatchewan has taken—

The Chair: Thank you, Mr. Nystrom.

Mr. Lorne Nystrom: I'm glad he endorses that policy of Mr. Romanow.

The Chair: Mr. Nystrom, thank you very much. I also noted the comment you made about the NDP governments balancing the books. This is the spirit that we will take, so probably this committee will not advocate going back into a deficit because of your wise counsel.

Mr. d'Aquino and members of the BCNI, I want to thank you very much. I thought that was a very thoughtful presentation.

This committee, as you know, historically has always been very much a committee that advocates a pro-growth strategy, something we're committed to, and for this reason the issue of national security, you will find, has obviously risen in importance because of the events of September 11. But we are also quite cognizant of the conditions prior to September 11, conditions that will of course mean that we have to remain fiscally prudent and responsible—Canadians, I know, are counting on us—and also remain committed to the $100 billion tax cuts. I don't think we want to start moving on that particular issue.

Once again, thank you, and as always you have certainly contributed to pre-budget consultation.

Mr. Thomas d'Aquino: Thank you very much.

The Chair: I'm going to.... Yes?

Mr. Rahim Jaffer (Edmonton—Strathcona, Canadian Alliance): I've given notice to the chair that I have two motions, which I'd like to move now, if possible.

With respect to the tragic events of September 11 in New York City, it is moved, pursuant to Standing Order 108, that this committee send for the Commissioner of the Canada Customs and Revenue Agency to appear before the committee at the earliest possible opportunity.

Secondly, it is moved, pursuant to Standing Order 108, that this committee send for the Minister of National Revenue to appear before the committee at the earliest opportunity.

The Chair: We'll deal with one motion at a time and we'll deal with the first one. It's pretty straightforward.

Is there any debate on this? Mr. McCallum.

Mr. John McCallum: This kind of links the two, but I think it might be a good idea. There clearly are important issues to hear, and I agree that we should hear the commissioner. As to whether it would be necessary to also hear the minister, my suggestion would be that we hear the commissioner first and then, for the sake of our time and the minister's time, defer the decision on the minister until we've heard from the commissioner.

The Chair: I also want to bring to the attention of the committee that because we will be dealing eventually with Bill S-23, which is a bill that the minister will be dealing with and appearing in front of the committee on, perhaps we could have him appear in front of us during that time and also deal with the other issues. Is that fair?

Mr. Kenney.

• 1015

Mr. Jason Kenney: I think the intention of the motion, which I support, is to have a special hearing of this committee where the minister and commissioner could appear jointly. After all, the commissioner is effectively the deputy minister of that department. It's quite conventional for ministers to appear with their most senior officials. I think this is not simply a matter of the regular statutory agenda of the House but rather a matter of some urgent necessity, which will involve policy matters far beyond Bill S-23 or any other legislation on the Order Paper. The Prime Minister has invited committees to seize the agenda in terms of the new security environment in which we operate, and for that reason I would argue in favour of the participation of both the minister and the commissioner.

The Chair: My next question is, could they appear at the same time in a round table format?

I'd like to ask you a question just out of interest. Why would you ask the Canada Customs and Revenue Agency to appear and not the commissioner of the RCMP and CSIS, for example?

Mr. Ken Epp (Elk Island, Canadian Alliance): These are the ministers who are directly answerable to this committee.

The Chair: But if we're looking at national security and investing resources to address some of the issues related to the RCMP and CSIS, why wouldn't we invite them as well?

Mr. Jason Kenney: Mr. Chairman, it is my understanding that in fact there are motions before the justice committee seeking that they come before that committee as witnesses. I would certainly not object to having those officers come before us to talk specifically about the fiscal impact on their agencies, but I understand that they may be appearing before other committees to address those issues as well.

The Chair: Just for the record, as your chairman I would favour having those two individuals appear as well since we are going to be addressing resources to be directed toward those agencies.

Ms. Leung.

Ms. Sophia Leung (Vancouver Kingsway, Lib.): I think the minister and the commissioner of CCRA are coming for Bill S-23. Why don't we use that opportunity to talk about that?

Then there's another bill coming, Bill C-16. That would involve Lawrence MacAulay and other colleagues. I think it should be separate.

The Chair: Mr. Cullen.

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you, Mr. Chairman.

In the motion there's a reference to the tragic events of September 11 in New York City and then a request to bring the commissioner of the Canada Customs and Revenue Agency before us, but there's no indication of what the issues would be. I think some would be quite obvious, but I'm wondering if the proposer of the motion could describe for the committee what exactly it is that you wish to question the commissioner about. I would like to echo the comments of my colleague. We have Bill S-23 in the House right now on modernizing Canada Customs. Why can't we do it together?

Mr. Rahim Jaffer: Mr. Chairman, as my colleague Mr. Kenney said, as a bill comes in front of a committee, the minister or the people involved just have to speak specifically on that bill. Given the fact that many security issues have come up since September 11, I think it would be in the interest of this committee and of national security that we deal specifically with the issue of a common perimeter and a number of other issues, which are much larger than the particular bills you've mentioned. So I think it would be useful to have the commissioner of the Canada Customs and Revenue Agency here along with the minister. We could include the RCMP as well, and I'm willing to amend that to include them. All of them could deal specifically with security issues that are, I think, outside of the bills mentioned by Ms. Leung.

The Chair: Quite a few members want to debate this issue. I do want to remind members of this committee that we are in the middle of pre-budget consultations, and there are individuals waiting very patiently to make their presentation. I'm just wondering if now is the time to proceed with this.

An hon. member: Mr. Chairman—

The Chair: I'm going to finish what I have to say, and then I'll recognize you. Perhaps it would be best to listen to what they have to say and then return to this, unless you're willing to forego the statements you're about to make. I don't think it's fair to witnesses to have them sit here while we deal with this particular issue.

Mr. Lorne Nystrom: We have the motions before us. We know the arguments pro and con. Let's have the question now out of respect for our witnesses.

The Chair: Okay.

Are there any further comments? Mr. Cullen.

• 1020

Mr. Roy Cullen: Mr. Jaffer said that Bill S-23 is not relevant to this. I think it's totally on topic. It's about the modernization of the Canada Customs and Revenue Agency, which means looking at the legislation in the context of today. So I think it's totally relevant. I don't see his argument.

The Chair: Madame Picard.

[Translation]

Ms. Pauline Picard: Mr. Chairman, I too agree that Bill S-23 does not pertain whatsoever to... At any rate, it had been tabled before the September 11 attack. It's another matter.

I feel that we should support the two motions before us. We should have the commissioner and the minister appear. These are not normal times and since you talked about witnesses earlier, they will understand that the situation we are experiencing was quite unforeseeable at that time. It is therefore important, in my opinion, that we have the Minister of Revenue and the Agency Commissioner appear before us in order to discuss the real situation, to discuss what has been occurring since September 11. Consequently, I am in favour of these two motions.

[English]

The Chair: We'll move to the vote.

Mr. Ken Epp: Mr. Chairman, could we ask the clerk to confirm that all the members present are properly signed on to the committee?

The Chair: Yes, we'll take a minute or two to do that.

I don't have a decision. It's a draw, eight and eight.

We can move to the next motion, if you like, Mr. Jaffer.

Mr. Rahim Jaffer: The second motion is that pursuant to Standing Order 108, this committee send for the Minister of National Revenue to appear before the committee at the earliest possible opportunity.

The Chair: It's a tie vote again.

We'll have to proceed to listen to the witnesses.

[Translation]

Mr. Bernard Bigras (Rosemont—Petite-Patrie, BQ): I have a point of order.

[English]

The Chair: Yes.

[Translation]

Mr. Bernard Bigras: Mr. Chairman, I would like you to confirm the fact that the clerk had signed the form even before the Parliamentary Secretary to the Minister of the Environment had come in and sat down.

[English]

The Chair: That didn't count. We can take a quick count. Go down that list and tell me what number you get. It's nine. I said it's a draw, so it's eight and eight.

Mr. Bernard Bigras: Okay.

The Chair: Let me apologize to the witnesses for the delay. I'd now like you to come up so that we can listen to you on a very important issue, the environment.

I'm going to suspend the sitting for just two minutes.

• 1025

• 1032

The Chair: I call the meeting to order.

First I'd like to thank you very much for your patience, but the committee does have to do its work.

We have an opportunity to listen to some experts on the environment today, a very important issue for this committee as we deal with pre-budget consultation. I read your briefs prior to your appearance here, and a lot of hard work has been done, and for that we're very, very grateful.

We have representatives from the Canadian Nature Federation, Ms. Christie Spence, co-manager, wildlands campaign. From the Green Budget Coalition we have Robert Hornung, policy director, Pembina Institute for Appropriate Development, and Sara Wilson, manager. From the World Wildlife Fund Canada we have Julia Langer, director of international programs.

Did I get everybody?

Ms. Joan Kuyek (Executive Director, Mining Watch Canada; Green Budget Coalition): I'm Joan Kuyek, with Mining Watch Canada and the Green Budget Coalition.

The Chair: Welcome to everyone. We'll proceed in the way you appear on the agenda, so we'll begin with the Canadian Nature Federation. Welcome.

Ms. Christie Spence (Co-Manager, Wildlands Campaign, Canadian Nature Federation): Good morning. Thank you for the opportunity to present to the committee today. I know there are a lot of other important issues on everybody's agenda.

I have prepared copious amounts of material for this committee. I'll make my remarks quite brief, but we do have quite a detailed submission and also some other materials that I hope will be of interest to you.

My job at the Canadian Nature Federation is to help complete the national parks system and also to help ensure that national parks are safeguarded for future generations. I trained initially as an ecologist. I never imagined I'd be in a suit, talking about federal budgets as often as I have been in the last little while.

The reason I'm here is that it's become very clear to me, and to many others in the conservation community, that there simply will not be new progress on national parks, existing or new ones, until Parks Canada is allocated significant new funds. There is a general consensus in the conservation community that the most important first thing we can seriously do for nature conservation, and the biggest conservation gain, is going to be investing in our national parks and national marine conservation area systems. Protected areas are the cornerstone of any major conservation agenda, and they're fundamental if we want to actually effectively conserve species and their habitats as well as vital ecosystem services such as water protection—clean water.

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In terms of benefits, it's important to recognize that this is a long-term investment in biodiversity, in habitat protection, in watershed protection, in aboriginal and rural communities, and certainly in sustainable economic development.

A commitment to completing the system has been in place since 1988. In 1993 the Liberal government first promised to complete the system by the year 2000. We're in 2001 and we're still missing 14 national parks, and we've barely even started to create protected areas in our waters. So parks are a long-standing but thus far neglected commitment of this government.

I've thought about why this is. It's been in the last two throne speeches and three Liberal platforms. I think probably there was a sense that we could wait, that there was vast wilderness out there just waiting for the day and the time and the place when we had a big surplus and we'd met other agendas. And that was probably true for some time. However, we're at the stage where if we don't make the investment and the commitment now, we won't have the opportunity to do so. The Canadian landscape is changing rapidly, with oil and gas exploration and development, mineral development, and forestry pushing into those wilderness areas that we thought we would never get to. So unallocated wilderness areas that will really truly be representative of these places we want to protect and contain the species that we're committed to protecting are becoming more and more scarce.

Not only do we risk losing future opportunities, but we're also facing the very real threat of losing agreements for new national parks and for marine conservation areas that have been under negotiation for decades. Parks Canada and the Minister of Canadian Heritage have made it abundantly clear that they simply cannot proceed to establish new protected areas without new sources of funds.

A prime example of this is that after 20 years of negotiations with the Inuit in Repulse Bay to establish Wager Bay National Park, Ukkusiksalik, Parks Canada cancelled the signing ceremony on June 13 of this year. The only possible explanation is that they simply don't have the funds to implement that agreement.

In addition, we're still waiting for announcements for a new national park in the Gulf Islands, which is all ready to go in B.C. Another one is in the Torngat Mountains of Labrador, and a third is a national marine conservation area on Lake Superior in Ontario. The only missing ingredient is funding. Years of difficult political negotiations and hard work to build community support could go to waste.

These delays send a worrisome signal. Really, the government could be accused of dealing in bad faith in negotiating with aboriginal, territorial, and provincial governments if they simply can't implement the agreements they have negotiated.

Funding is also required to address the urgent situation of the declining health of our existing national parks. Unfortunately, even good legislation—and we have excellent legislation in the National Parks Act—is not enough to protect these habitats and the species that live in them. Parks Canada requires the capacity to properly manage visitor impacts, to conduct research and monitoring, and to participate in regional land use planning processes that will ultimately affect its ability to protect natural resources within parks.

Many of the proposals you'll be hearing about during these consultations will undoubtedly be big, exciting, bold, new spending initiatives. Parks is not a new spending initiative. It's been a long-standing cabinet priority since 1993, and Parks Canada has a legal obligation under the newly renewed National Parks Act to protect and pass on parks unimpaired for future generations. Until the funds are in place, however, the future for parks will be bleak.

The good news is that major conservation gains can be made relatively easily and quickly with an immediate allocation of new funds to Parks Canada. By the time Canada joins the world in Johannesburg in September 2002 to report on its progress since the Earth Summit in Rio, we could proudly and easily point to the establishment of three new national parks and one new marine conservation area.

Investing in protected areas will bring tremendous benefits to nature conservation and certainly to economic development. But this cannot wait for some time in the distant future when other priorities have been addressed. The time to make this investment for future generations is now.

Thank you.

The Chair: Thank you.

Mr. Hornung.

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Mr. Robert Hornung (Policy Director, Pembina Institute for Appropriate Development; Green Budget Coalition): Thank you, Mr. Chairman. I'm here today to present proposals from the Green Budget Coalition, which is a coalition of 16 major environmental groups, covering the spectrum all the way from Ducks Unlimited to Greenpeace, who have come together and reached consensus on initiatives that we would like to see go forward in the federal budget.

I'm filling in today for Julie Gelfand, who is the chair of the coalition, but unfortunately she is ill and is unable to attend.

We very much appreciate the opportunity to present to you today, and we also appreciate the growing interest and attention shown by this committee to environmental issues. We think that such a growing interest is wholly appropriate. After all, a budget is a public statement of a government's priorities, reflecting what it views as the most important and pressing issues. We feel the budget is the single most important environmental policy statement made by a government on an annual basis.

Given the fears that now exist about an economic slowdown in light of the events of September 11, we think it's going to be very important in the budget to look for opportunities, win-win opportunities, that allow us to achieve multiple goals, opportunities that allow us to both stimulate the economy and pursue environmental protection. We believe the proposals we're bringing forward allow that to happen.

We know there are clear links between the environment and the economy. Eighty-five percent of Canadians participate in nature-related activities. In doing so they spend $11 billion, generate $16 billion in gross business production, $5 billion in government revenue from taxes, and sustain over 200,000 jobs. We know, according to Statistics Canada, that $19 billion is annually spent on environmental protection in Canada, that exports from Canada's environmental industries are worth $540 billion a year, and that the environmental sector employs 150,000 Canadians. This doesn't include and doesn't count all the services that a healthy environment provides for the economy in terms of clean air and clean water.

We believe it's important to unleash the potential of these sectors and use the budget to provide incentives that shift activities from those that compromise environmental integrity to those that both protect the environment and stimulate the economy. Unfortunately, we feel Canada is falling far behind other countries in this area. In the 2000 Global Competitiveness Report, which was published by the World Economic Forum, Canada's competitiveness ranking fell from fifth to seventh. Why? One of the major factors identified in Canada's downgrade was our poor environmental performance, especially our lack of effective energy efficiency policies.

The OECD, in its annual report on Canada in the year 2000, also criticized Canada's environmental performance, citing the lack of a concrete plan to reduce greenhouse gas emissions, a reliance on ineffective voluntary measures to reduce pollution, generous subsidies to resource companies, and severe budget cuts that have prevented enforcement of existing environmental laws.

At the Green Budget Coalition we've proposed a broad series of measure to, as I've said earlier, stimulate the economy, improve competitiveness, and protect the environment. Those have been distributed to you today.

I'm only going to speak to three priority measures of that package. The first is a national building retrofit strategy, looking to improve the efficiency of energy use in our buildings; the second is a Clean Canada Fund to address the legacy of toxic sites across the country; and the third is funding for new national parks, touching on what Christie just spoke about.

We know in our buildings in Canada that on average we can improve the efficiency with which we use energy by between 10% and 35%. We know that investments in improving energy efficiency create more jobs than investments in new energy supply. We know that 20% of all the greenhouse gas emissions in the country come from energy use in buildings as well as associated air pollutants associated with that energy use.

There are three measures we're proposing in this area. One is $250 million as seed funding for a national better buildings fund that would be used to support energy efficiency retrofits in Canada's institutional and commercial sectors. It's a one-time investment. The fund is self-sustaining. It is repaid from the energy savings generated through people who have borrowed from the fund.

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The second measure we have proposed is financial rewards for homeowners who improve the energy efficiency of their home. We're not saying provide financial rewards for the implementation of a specific technology. What we're saying is if you can implement measures that will improve the energy efficiency of your home according to a system we have, the EnerGuide for Houses, and can demonstrate that your home has improved, no matter how you choose to do that, you should be rewarded.

Third, we propose the establishment of a national network of green communities across the country, advisory services where people would go into people's homes, educate them about energy use, and provide them with information and opportunities to reduce emissions in their homes. We know these types of programs can have significant benefits.

In Toronto, a Better Buildings Partnership has been established where $25 million in seed funding leveraged private funding at a four to one ratio. The fund has received a return on investment of 25% a year in terms of repayments on the loans. Four hundred and sixty-seven buildings have now been retrofitted in Toronto, reducing energy bills in those buildings by $19 million a year, creating 3,800 person years of employment, and decreasing carbon dioxide emissions by 132,000 tonnes a year.

The second area I wanted to speak to was the Clean Canada Fund. This fund would be a capital start-up fund that would be used to clean up priority contaminated sites and help relocate communities at risk. We also see this fund as a one-time investment that would be replenished by a tax or levy on relevant sectors, moneys regained from settlements regarding toxic sites, or the sale and lease of remediated properties.

In addition, the fund would provide funding for the contaminated sites management working group and for non-government experts to contribute to the inventory of toxic sites being developed. Why is this important? In April 2002 an inventory of federal toxic sites will be completed. Thereafter, the estimated cost of remediation of those sites will be shown as liabilities on the real property accounts of the government. This fund provides an opportunity to reduce that liability.

There are clear health dangers associated with toxic sites. According to a report from the Canadian Institute of Child Health, toxic exposure has likely contributed to the 25% increase in childhood cancers, the fourfold increase in childhood asthma, and the dramatic rise in other childhood diseases over the past 25 years.

We also know that environmental contamination from toxic sites has caused losses in water quality. It's going to result in increased costs in the future in terms of remediation as well as foregone economic opportunities.

Implementing this fund will result in direct benefits by eliminating financial and environmental liabilities and improving the health of nearby communities.

I would just reiterate, building on Christie's presentation earlier, that these sixteen groups that have formed this coalition have identified as their third priority funding to complete eight new national parks and four new marine conservation areas and funds that would allow the recommendations of the ecological integrity panel to be implemented.

We believe Canadians will benefit economically, environmentally, and socially from these initiatives. Energy efficiency retrofits produce energy cost savings for businesses and households. It puts money back in people's pockets, money they will then spend in the economy, usually locally, purchasing goods and services and stimulating economic activity. It will also reduce air pollution and greenhouse gas emissions.

Cleaning up toxic sites will make communities healthier, safer, and provide a higher quality of life. It will also allow businesses and investment to be attracted to those areas that are now seen as non-economic because of the toxic nature of them, as well as preventing health risks, illnesses, and public health costs.

An investment in the protection of Canada's biodiversity through investments in national parks is an investment in ecosystem services, such as clean water for downstream communities and an economic development and diversification of local communities.

Lastly, these three proposals will help us fulfil domestic and international commitments. Investments in national parks will help Canada meet its commitment to the Convention on Biological Diversity. The Clean Canada Fund will address the commitment from the throne speech to safeguard the health of Canadians from toxic substances and environmental contaminants. Investing in energy efficiency improvements in buildings will be one of the first steps we can take toward implementing the Kyoto protocol in meeting our commitments.

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We ask that these and our other submitted initiatives be considered for inclusion in the next budget. Looking forward, we will continue to develop ecological fiscal reform initiatives and apply a greater focus on identifying both subsidies that should be eliminated and revenue-neutral initiatives that will be win-win from both an environmental and economic perspective.

Thank you.

The Chair: Thank you very much, Mr. Hornung.

We will now hear from the World Wildlife Fund Canada, the director of international programs, Julia Langer. Welcome.

Ms. Julia Langer (Director, International Programs, World Wildlife Fund Canada): Thank you.

I want to focus on one aspect of the Green Budget Coalition's proposals, specifically regarding agriculture and pesticides, something that the World Wildlife Fund has put a fair amount of attention on. While we support, of course, parks creation and endangered species recovery, which is the hallmark of World Wildlife Fund's work around the world, sometimes you just can't draw a line on a map and expect to save a species, because their functions are undermined by chemicals, which impede reproduction or which are cancer causing, the kinds of toxic effects that have been mentioned in numerous other reports.

The fact is that at least five million kilograms of pesticides are used in this country. They are deliberately put into the environment and on our food, the effects of which have to be taken into consideration, but not at the expense of the people who are using them now as integral components of their agricultural program. With sensitivity to both our ecological and health agenda and to the agricultural sector, which depends right now, unfortunately, on pesticide products, we have tried to formulate a policy agenda and an actual sustainable agricultural program that addresses the reality.

I'd like to put something on the table for the committee that is short term and then address this in a bit more detail. This is the Ecological Agriculture Fund, which is outlined on page 14 of the Green Budget Coalition's proposal. Right now there is an amendment to the pesticide legislation that apparently is ready to go. I've been involved in the amendment process for many years, and the Minister of Health, Mr. Rock, has promised amendment. This is a piece of legislation that was passed in 1969, and it has not been significantly amended since, even though we know a lot more about pesticides than we did in 1969. The fact of the matter is that we also know a lot more about how to do pest management without such reliance on pesticides.

But there seems to be a bit of a holdup, and the reason I'm bringing it to the attention of this committee is because that holdup seems to be funding. I realize there is a real effort to have some fiscal responsibility in terms of the legislation that is put forward. But we feel that this legislation, which is more or less ready to go, needs a bit of a push to get that funding in place so that it can be tabled in the House of Commons for debate and then go to the health committee. We feel that this legislation is a fundamental piece of the puzzle in terms of reducing reliance on pesticides.

We don't believe this is a very big bill. My calculations are that the current budget for pesticide regulation is $29.5 million. If you add on the new responsibilities that Mr. Rock has been promising, such as the re-evaluation of pesticides, the integration of alternatives into the regulatory process, and some compliance activity, you couldn't possibly more than double that bill. We'd certainly like to see a push from the finance end to actually ensure that funding is not a barrier to tabling the legislation, which can then be debated in Parliament.

I'll now go on to the other aspects of the puzzle. You could have the best piece of legislation on the planet, from our perspective or from anybody's perspective, and it wouldn't get implemented if nobody could use it, if the people on the farms do not have alternatives. This is exactly where the Green Budget Coalition's proposal is aimed, to create the programs and incentives for farmers to actually adopt alternatives. It's not just going to fall from the sky. We need to actually have a goal of reduced reliance on chemical pesticides in order to get there.

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Part of achieving that goal will require research programs, extension services for the farmers, and actual per-hectare incentives commensurate with some of the programs in Europe and the United States, which have provided incentives for farmers to look at the alternatives and to take the challenge. It's not easy to take the challenge of implementing some of the reduced-risk and reduced-reliance methodologies.

The proposal we've framed is based on the standard matching formula that agriculture programs work on in this country: a federal contribution, a provincial contribution, and a farmer contribution. It's based on a goal of having, let's say, half of our acreage in reduced-reliance agriculture, and not necessarily just organic but integrated pest management and moving people toward reduced reliance. That would constitute about 10 million hectares of land in Canada. Based on a per-hectare contribution, we propose that there be a $90 million federal contribution to an agriculture fund, which would support these kinds of alternatives to chemical pesticide activity, with a matched provincial contribution and a contribution from the farmers.

This would go a huge way toward making Canada competitive in terms of markets for agriculture. The farmers are saying they need alternatives to meet the demands of European markets, etc.

I don't think I'm misrepresenting the farming community—although I would love them to be able to present to you themselves, and I'm sure they do—when I say that they would certainly welcome some assistance from the federal government in reaching sustainability, on top of all the other issues they have to deal with.

That's it in a nutshell. I'll leave you with the short-term need to move legislation forward, making sure the funding is not a barrier, and some longer-term attention to sustainability in the farming sector.

The Chair: Thank you very much, Ms. Langer.

We'll now proceed with the question-and-answer session. Mr. Epp, it will be a five-minute round.

Mr. Ken Epp: Thank you very much, Mr. Chairman, and thank you for your presentations.

I have a question, first of all, that is going to totally display my ignorance. I've been listening on one channel—I'm wired for stereo like most of us are—and perusing your literature. In this little booklet I see over and over again “IPM”, “link you to IPM resources”, “insist on IPM support”. I know it probably means insect pesticide management, or something like that, but I have no idea from this document. So what does the acronym IPM actually stand for?

Ms. Julia Langer: I'm so sorry about that. I'm sure it must have been explained when it was first mentioned, but it's a good question. IPM stands for integrated pest management. Basically, it's a method of agriculture, lawn care, or golf course care that does not rely on pesticides. You use nature and some of the beneficial bugs in nature and biological products, with a reduced reliance on chemicals. On the one hand, you have complete reliance on chemicals, and I'd say a lot of farmers are in that boat right now. On the other hand, you have organic, which involves no use of chemicals. But we think a huge number of farmers and a lot of acreage in this country are not going to be on either side of it. They are going to be in the middle, and that is what we're terming integrated pest management.

Mr. Ken Epp: I happen to have grown up on a farm in Saskatchewan where we had all sorts of pests. We had the Richardson's ground squirrel, which used to attack our fields and basically clean up the crops if we didn't declare war on them.

I remember we had rats. We moved to Alberta—

An hon. member: There are no rats there.

Mr. Ken Epp: —and none of the rats from Saskatchewan came with us. As you may know, Alberta is rat free. They actually have a border patrol between Alberta and Saskatchewan—I don't know if you're aware of it, but this is literally true—where they stop the rats. They use various chemicals to achieve a very honourable goal, because rats are rotten, I'll tell you, having grown up with them in Saskatchewan.

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I hope you're not saying that farmers and other people who are concerned about pest control should eliminate the use of chemicals entirely.

Ms. Julia Langer: My perspective is that we need to reduce our reliance on chemical pesticides. Often the organic agriculture farmers are really leading edge in terms of developing some of the techniques, and there is certainly a niche market for organic food, as I'm sure you have noticed, around the world. I think it would be an ambitious goal to have 10% or 15% of agriculture be organic, but the bulk of the farmers really are looking to reduce their reliance on chemicals. They're expensive. There's a personal health and safety issue. There's an ecological issue, because pesticides do not know when to stop killing. They're not necessarily just going to kill what they're designed for; they have a broader impact.

I think there is a real consensus that we need to rely less on pesticides, but it isn't easy. It isn't necessarily straightforward. It's possible, but it's not easy, which is why we advocate support in the form of incentives, research programs, extension services. It's what people want, but you need to help it along.

Mr. Ken Epp: I don't know whether you're aware of this, and perhaps this is something you might want to take up with the government of the day, but organic farming is actually illegal in this country. I don't know whether you're aware of that, but it is. Farmers on the prairies, for example, go into the sale or the production of organic food, with no chemicals at all. The Wheat Board, which insists on marketing all grain, can't manage this. It has no capacity to sell organically grown foods separately, so the farmer will either go to jail or whatever if he markets his product outside the Wheat Board, and the Wheat Board won't do this.

So I would encourage you perhaps to take that up with the government of the day and the agriculture minister and so on, because that's one area where I think there could be some very positive change. That is, to have the government actually encourage this and move it from being illegal to actually having positive changes toward it.

I want to ask also a question of the Canadian Nature Federation. I have heard from a number of people. I happen to live in Alberta, and of course we have undoubtedly—I say this without any hesitation—the very best, most beautiful, scenic, wonderful parks probably on the whole planet in Alberta, namely Banff and Jasper.

A voice: Oh?

Mr. Ken Epp: They are. I have talked to people who have been all over the world, and they've said to me the Banff-Jasper highway is undoubtedly the most scenic they have ever seen.

My question, and this is what people are talking to me about, is that it seems that both the government and organizations such as yours are intent on protecting the animals and the parks from people, and yet we believe that the parks should be there for the enjoyment of people. I just wonder how you would reconcile those two.

I know there are times when people seem to be ecologically unwise. I've observed it myself. My family always observed that a good camper leaves nothing behind but the sound of his footsteps. So obviously there's an education component, to make sure that people know what they should be doing.

What is your response, when people are starting to feel very, very unwelcome in our parks? For example, the entry fees now are such that ordinary middle-income people can scarcely afford to take their families to the parks. We are changing it so that it's a society for the rich only, and I think that's very, very wrong.

Ms. Christie Spence: There are two questions in there.

There certainly is a legacy in the mountain parks of dealing with a history of all kinds of activities that were brought in right away—for example, golf courses, ski hills, those sorts of things that I don't think now we would ever dream of putting in a national park, simply because we know that they have deleterious effects on the natural environment.

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In the dedication to the National Parks Act, it says “The National Parks of Canada are hereby dedicated to the people of Canada for their benefit, education and enjoyment”. But it also says that they have to be passed on unimpaired for future generations. This has been perceived, rightly or wrongly, as a dual mandate: they're for people; they're for nature.

Certainly the National Parks Act, the way it has been revised over the years, and confirmed in the last Parliament, leaves no question that, first and foremost, we have to ensure that parks protect nature. Does that mean that there can't be people? Absolutely not. I lived in a national park. My favourite national park is Kluane National Park, in the Yukon. I'll invite you to visit some of the other spectacular parks across the country.

There are many ways in which Canadians can enjoy national parks. The National Parks Act provides zoning, for example, so that super-sensitive areas—endangered species habitat, for example—are off limits to motorized vehicles. There won't be golf courses and there won't be ski hills in those areas. But there are also lots of other places. National parks are huge. They're hundreds of thousands of kilometres collectively. Wood Buffalo National Park is 33,000 square kilometres. There's lots of room for people, but in appropriate ways. There are lots of places where we have golf courses outside of national parks, and there are lots of places where we have ski hills outside of national parks.

Obviously there's a legacy in the mountain parks, and that has to be dealt with respectfully. But I certainly don't believe there's an unwillingness to support the enjoyment of Canadians. And even uses for rural and aboriginal communities are being recognized, traditional uses such as hunting and fishing in parks. That's controversial, but it's a recognition that parks are for people as well as for nature.

The other issue, in terms of user fees, is a very relevant one to this committee. In the 1990s Parks Canada saw 25% of its budget cut—about $100 million. At the same time, we were creating new parks. It was a great idea, really important and an urgent agenda, but the A base was never increased for Parks Canada. They have a larger mandate, more problems in terms of regional and environmental stresses on the parks, they have no science capacity to address them, and yet they're still asked to provide all of these things for communities.

Part of the problem—and you see this also on the east coast—is parks were so desperate to generate revenue to keep themselves going that they had to totally overlook visitor impact strategies, for example, just to provide very basic services. I worked in a national park when that was the case. I was told I couldn't give a hike to somebody if I didn't have five people who could pay $10 to do that. So this really speaks to Parks Canada's ability to deliver this to Canadians. And if they don't have the funds they will have to keep increasing user fees. That is to the detriment of everybody, which is precisely the reason why we're here: they really need basic funds to deliver their mandate, so that Canadians won't have to pay to enjoy these things.

The Chair: Thank you, Ms. Spence.

[Translation]

Mr. Bigras.

Mr. Bernard Bigras: Thank you, Mr. Chairman.

I would like to begin by welcoming all of the groups. I would like to say a special thanks to the coalition because you always manage to pinpoint where we should be reinvesting in the environment. First of all, I would like you to know that I am among those who believe that the next budget should include a significant reinvestment, well over the $700 million over four years which was earmarked in the last budget.

If this were a year ago, I would be asking you some very precise questions about your proposed plan. However, the current situation compels me to ask broader questions. Why? Because, as we all know, we are heading into a significant economic slowdown in Canada, an economic slowdown whose costs will have to be borne by Canada. And, historically speaking, every time this occurs the environment and the Department of the Environment are the first to be hit, the first to pay when the budget has to be rebalanced or when the government has to make cutbacks.

I think that there is this dominant school of thought that infiltrates public opinion and the government. We will ask where we should be cutting back in order to balance the budget and it will be in the area of the environment.

So, my question is the following. How would you convince this committee and how would you convince the government that concern for the environment can be economically viable and that, to a certain degree, an investment in the environment is not an expense, but rather an investment in our economic future as well?

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[English]

The Chair: Who would like to answer the question? Mr. Hornung.

Mr. Robert Hornung: I'll take a quick stab at it, and then my colleagues may add a couple of words.

My first answer would be that because it's not theoretical, we can actually look at a whole bunch of real world examples where we find that investments in environmental protection provide economic benefits. We've had studies from people like Michael Porter, who has talked about the importance of taking action on the environment as a means of improving a country's competitiveness.

We look within the private sector and we see the Dow Jones sustainability index, which was an index that Dow Jones created to look at companies that were leaders within their sectors on environmental protection. They found that those companies regularly outperformed other companies in the sector. Why? Because those companies found that addressing environmental issues led to improved efficiencies, improved competitiveness, and stronger benefits.

When we look internationally in terms of different countries and where investments are being made right now, for example, to prepare for a future where we'll be reducing, somewhat at least, our use of fossil fuels because of concerns about greenhouse gas emissions and air pollution, we see some countries and some governments making significant investments in improving energy efficiency, in identifying opportunities to enhance the production of renewable energy within those countries, because they're thinking long term. They're positioning themselves not only to improve the environment but to be players in the world energy economy 50 and 60 years from now. In that area, Canada is behind.

Again, I gave some examples in the presentation of what we've seen in municipalities like Toronto in terms of investments in efficiency and how that has generated a whole slew of economic benefits as well. Over and over again it's clear that investments in environmental protection and improved efficiencies, better use of resources, frankly, is something that provides economic benefits.

I'd like others to comment as well.

Ms. Julia Langer: From a very narrow perspective, in terms of agriculture and pesticides, which I address, one of the things to reinforce is that Canada will lose markets without investment in sustainable agriculture. This is very much in line with what Mr. Speller's committee on the future of agriculture is looking at, at this very moment.

I think it's very timely. For instance, we work with apple growers in Norfolk County, and they are securing markets in England because they are following an integrated pest management regime that we've developed with them. They feel they would lose that otherwise, and they also feel they're going to really be uncompetitive unless the registration system supports alternatives and lower-risk pesticides because other countries have access to those products and they do not.

The flip side of this in terms of your question, in terms of cuts, is that one of the things we see throughout the budget and the economy is spending that is damaging to the environment. We've raised as sort of a flagship issue—but it's not the only one—that pesticides are GST exempt. Here you are providing incentives for the use of chemical pesticides. I know it's wrapped into the whole food system structure, but just think about that. You're providing an incentive, and that's maybe where some of the budget thinking in terms of cutting the bad things and supporting the good things could come in.

The Chair: Ms. Kuyek.

Ms. Joan Kuyek: I want to address the contaminated sites issue in this context. Over the last five years, the Auditor General has been increasing pressure to include contaminated federal sites in the account books. It's going to appear on the next set of federal accounts as liabilities against real property held by the federal government. These figures are extraordinarily high. They're limited by a number of factors, but they're still very high.

Not only are there questions in terms of the real property assets held by the federal government, but there are long-term health costs associated with cancers and other treatments that are required because of leachate and problems. There's the possibility of major disasters and accidents taking place for which the federal government would not necessarily be prepared. There has been an attempt over the last few years through Treasury Board to set up this contaminated sites management working group, which is line level people from Environment, the Department of National Defence, Treasury Board, and others, who have been coordinating a program to deal with the management of federal contaminated sites in an organized fashion.

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When that inventory comes out in April of 2002, it seems to me it would be particularly important that the federal government be prepared to start dealing with those sites. But if no money is in the budget to do that, you're going to be caught in a very strange position.

That contaminated sites management working group has had a request for a very minimal amount of funding over a five-year period, sitting there waiting to be dealt with. It's $540 million. We think this is a very minimal amount of money that would enable this to be continued, for prioritization to be undertaken, and for some sites to be cleaned up and accidents to be prevented.

That was one of the key pieces in the recommendation. Our understanding, although the data isn't all there, is that that would save a great deal more than that over a five-year period for the federal government, and certainly for the health costs of Canadians.

The Chair: Thank you. We'll now move to Mr. Szabo and Mr. Cullen.

Mr. Paul Szabo (Mississauga South, Lib.): Thank you, Mr. Chair. Thank you to the witnesses.

Mr. Chairman, as a result of the invitation of the finance committee to conduct round tables or other activities, I just want you to know that I did conduct an extensive survey of my constituents and I have over a thousand responses. I want this panel to know that my constituents of Mississauga South very strongly support greening the budget.

I think this bodes well in terms of establishing priorities, as Mr. Hornung laid out.

The Pollara survey firm also released some results recently in which health care came out to be the top priority of Canadians, which I think we all understand. In fact, the environmental linkages are very significant. So I think you'll be comfortable with that. But after taxation, which is also an issue that Canadians continue to hold high, environment was clearly number three as a standalone issue. I very much support that, Mr. Chairman. I look forward to reporting to the finance committee on some of the substantive input from my constituents on the pre-budget and supporting greening our budget.

With regard to the presentations, I was very interested in the initiatives in which we would green the budget. The input I received basically identifies that in the longer term the greenhouse emissions and harmful pollutants related to transport and fossil fuel production are the key in the future. These are the ones where the highest growth rates in terms of negative performance are going to be the challenge for us.

Given that, I'm wondering why we haven't also brought to the fore the need for continued development of alternative energy sourcing, as well as a variety of other initiatives, such as conversion to alternative fuels, etc., which are in line with the risks and the size of the risks, as we see them, from the reports that have been done by those who are in the know.

The Chair: Go ahead, Mr. Hornung.

Mr. Robert Hornung: I can respond to that. Thank you for the question. In the presentation I noted that I touched on what we had identified as priorities, in terms of giving a manageable number for you to deal with in a five-minute presentation. However, in our full proposal, which we hope all of you will have a chance to look at, we have a section on climate change and energy that addresses exactly what you're talking about. We have a focus on building energy efficiency retrofits. We also have a focus on the development of renewable energy technologies, primarily through both incentives on the production side and incentives for consumers to actually purchase green power, consistent with a number of other initiatives going forward. We have called for more funding for public transit on alternatives to the automobile to deal with transportation, which clearly is at the heart of many of these issues.

So you're absolutely correct, the climate change issue and air pollution issues are significant. They can't be dealt with on just one front. They have to be dealt with on many fronts. We've tried to cover that in the proposal, but for the purposes of presentation today we only chose the one to highlight.

Mr. Paul Szabo: Thank you.

The Chair: Mr. Cullen.

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Mr. Roy Cullen: Thank you, Mr. Chairman. And thank you to the presenters.

I have a few questions, but we're probably not going to get to them all. How much time do I have?

The Chair: You have five minutes.

Mr. Roy Cullen: I have a question related to brownfields and also to public transit. I'll throw them out, and whoever would like to have a go at them....

Brownfields I guess are a component of contaminated sites. In my riding of Etobicoke North there are a lot of brownfields, and in fact there are a lot of brownfields all across Canada. If you can find the polluter, I guess the polluter should pay, but in many cases you can't find the polluter. How do we get brownfields back into production? What are the policy initiatives we should be looking at federally, the provinces should be looking at, the private sector and others?

The Chair: Mr. Hornung or Ms. Kuyek, go ahead.

Ms. Joan Kuyek: The difficulty with dealing with brownfields actually is a question of jurisdiction once the polluters disappear and the question of who pays for these problems. It's our position that the federal government should take some leadership around the organization of responsibility for sites where that's in dispute. The national contaminated sites program that disappeared in 1994 did some of that, and the Canadian Council of Ministers of the Environment had some policies around that. In our proposal we've suggested that the federal government take some leadership in regenerating a program like that.

We realize that's probably a long-term strategy. There has been some interest in trying to undertake some leadership there, especially in terms of what the federal government can do.

We think that the polluters should in the long term be responsible for this, although the process of actually pursuing individual polluters is a very lengthy problem. It might be more useful to introduce tax measures and fees and so on that would recoup the cost from the industries in general, rather than trying to go after individual polluters where they're hard to identify.

Mr. Roy Cullen: Are the provinces doing anything? I understand Ontario has brought in a bill on contaminated sites or brownfields. Are the municipalities doing anything? How could those efforts be coordinated, if they are?

Ms. Joan Kuyek: The Federation of Canadian Municipalities has been undertaking some work around this, and so has the national round table. I think there might be ways to coordinate some of this that are outside the purview of what we can discuss here in great detail.

Mr. Roy Cullen: Perhaps I could move quickly to clean air. In Toronto, I've noticed in the last ten years that air quality seems to be a concern, certainly a concern of mine. We turn then to public transit. In evaluating numerous economic instruments, part of the challenge of government is to weigh the value of different economic instruments in terms of achieving environmental benefits versus costs: what is the kind of leverage we get out of our investment?

One of the initiatives that's before the House, or will be, is a number of private members' initiatives to look at urban transit passes and allow employers the deductibility of these passes, or for employees not to be taxed on those benefits, or a combination thereof.

There are some economists who argue that the benefit of those measures isn't as great as other ways of increasing public transit or taking other initiatives to clean up our air. Do you have any perspectives on the relative worth of an initiative like that versus other initiatives that are in the public domain?

The Chair: Mr. Hornung.

Mr. Robert Hornung: Yes, I can comment on that.

There's no doubt that the transit pass initiative is one that can provide some benefits in terms of environmental protection. It has always been presented as a first step, however, in terms of helping to reduce emissions from transportation. It has never been seen as kind of the big-ticket item to move it forward.

I think once we've moved the debate to a point in recognition where we are now, where we have regular smog alerts and this is clearly a major concern and people are willing to consider the bigger-ticket items, then I would say there are better things we could be doing than focusing on the transit pass issue to move forward in terms of solid investments in public transit infrastructure that's performance based. It's not just money you give away; you actually have to demonstrate that you're improving service efficiency and things like that to make it happen.

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So it's funding that helps to provide mechanisms for alternatives to the automobile. When we're talking about transit it's not all new subway lines and things like that. It can be para-transit services and a number of other things that are less costly and undoubtedly more efficient from an economic perspective.

So, yes, it's part of the puzzle, but I would say it's a relatively small part. I think we're now at the point where we've moved past the need to take baby steps in that area. We need to make more solid investments to move forward.

The Chair: Thank you, Mr. Cullen.

Mr. Nystrom.

Mr. Lorne Nystrom: I want to welcome the group before the committee this morning. I'll ask a couple of questions.

Next spring will be the tenth anniversary of Rio, which happened in 1992 in Rio de Janeiro, Brazil. At that time we made a number of commitments to implement the agreement. At that time I don't think we had a bad reputation in the world in terms of the environment. Since then we've been lagging far behind. How has this damaged our reputation as a country in terms of our record on the Rio accords?

Mr. Robert Hornung: I'll take a first stab at that on an issue I'm very familiar with, climate change. Canada's climate change performance record is poor. We've failed to meet our stated commitments. We've failed to do that. When we look ahead to future commitments, we don't yet see the evidence that we're going to be able to do that.

As to the impact on Canada's reputation, if we look at what happened over the past year in terms of international climate change negotiations, where environmental groups from around the world regularly chastised Canada for its position in those negotiations, I think we see the effect of not backing up rhetoric with action.

Mr. Lorne Nystrom: I'll switch it a bit now to talk about the internal combustion engine, one of the greatest polluters, of course, ever developed by human beings. I wonder what your advice is in terms of alternative fuels. Ethanol, for example, is being looked at very seriously in the prairies.

I also want to ask you about your suggestion here of a pollution tax. I assume you're talking also about a carbon tax. How do you propose that to be a fair tax if you come from the kind of area I come from, rural Saskatchewan, where people have to drive a long way, through no choice of their own, to go to work, and where farmers have costs in terms of fuel to cultivate their fields and so on? How do you put the round post in the square hole in terms of equity?

It's a bit different in downtown Toronto, where you can hop on public transit or hop on the subway and away you go. You can ride a bicycle. You can walk to work. You can't walk 30 or 50 kilometres each way to work from Kamsack, Saskatchewan, to somewhere else. How do you work that one out in terms of being fair and equitable?

As well, perhaps you can make some comments on alternatives fuels and what we should be doing in that area.

Mr. Robert Hornung: Okay. Big questions. I'll take on alternative fuels first.

We're of the view that there are several potential alternative fuels that we could be moving toward and that it would be an error to try to pick a winner, per se. We also have a great deal of concern that when we're looking at alternative fuels, not enough attention is being paid to the full life cycle implication of those fuels.

If we take the example of ethanol, there are some types that clearly provide solid environmental benefits—for instance, the ethanol produced from agricultural waste, from straw, in the prairies. There are other types of ethanol produced from corn, for example, where the environmental benefits are much more marginal, at least in terms of greenhouse gas emissions. There are other issues where it does provide a stronger benefit. So there's a need to consider that full life cycle.

When we're looking at fuel cells that are going to be powered by hydrogen, the issue people should be thinking about is where the hydrogen comes from. If the hydrogen comes from fossil fuels, and you have all of the energy and pollution associated with producing the fossil fuel, do you really have a benefit? A lot of studies have shown that, frankly, if we produce hydrogen from gasoline, as many are proposing, the environmental benefit is marginal. If we produce hydrogen from renewable energy, there's a massive environmental benefit. So we need to consider those things.

To answer your second question, our proposals do not include a proposal for a carbon tax. We do include a proposal that calls for a tax on coal specifically, because the use of coal in electricity generation is no longer required, frankly. We have alternatives we can use that can compete cost-effectively and that will do well.

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To address your concerns with regard to the economic and distributional impacts of those taxes, our coalition is committed to a concept of ecological fiscal reform that would see essentially tax restructuring. When we talk about putting new taxes in place on pollutants, we're quite open to looking at a reduction of taxes in other areas that might stimulate economic activity. We would encourage people to look at this. We're looking for revenue-neutral packages that can help us change the signals we're sending into the economy; essentially, tax the bads and decrease tax on the goods. By doing that, we would be sending signals into the economy that simply encourage economic activity to develop in a way that is more environmentally sustainable.

Mr. Lorne Nystrom: I certainly agree with the philosophy, but again, how do you determine who's good and who's bad? That's always the question, I think. Some are easy to determine, obviously, such as huge polluters that are very obviously huge polluters. Organic farming—something I support, by the way, very strongly—is obviously very good. Can you give us any advice on how to set up the criteria?

Ms. Julia Langer: Let me quickly address the point about the pollution tax. I think not only high-level international agreements would say what are the bads in the pollution area but also a whole bunch of domestic priorities would have to be put into the pot in terms of what might be the bads.

To go back to your question on how Canada has been doing since Rio, well, Canada deserves all the credit in the world for being the first country to sign and ratify the Stockholm Convention on Persistent Organic Pollutants, but that was 12 chemicals. Let's get this in perspective. There are 23,000 chemicals on Canada's domestic substances list that have to be re-evaluated, and there isn't the money or the people to do it.

So maybe we can take a different approach and say, based on certain kinds of criteria about toxicity or emissions to the environment, these are bads, and let's send the signal or the incentive that it would be better to have less of those. Even if we don't know all the details of all these pesticides or all these chemicals, less would be better. An economic signal could make that point.

The Chair: Thank you.

Mr. Brison.

Mr. Scott Brison: Thank you, Mr. Chairman. I thank the witnesses today for their interventions.

My first observation is that one of the mistakes we make in developing public policy is we often tend to isolate environmental issues into a particular silo. We consider them separately from economic issues. If we have learned something in the last 20 years, it's that bad environmental policy is bad economic policy, and vice versa. If you don't account for some of the costs, there may not be short-term monetary or fiscal costs but in fact long-run environmental costs that ultimately will have to be fixed. You end up creating huge problems. I agree with the Auditor General that we need to take into account some of those liabilities that ultimately will have to be dealt with.

Along those lines, strong arguments could be made that sound environmental policy can create very significant business opportunities. One area where we can reap benefits in a province like mine, that being Nova Scotia—Mr. Epp was promoting his province of Alberta earlier, so I'm going to be equally adamant about the benefits of mine—is ecotourism. That represents just one area where some countries have, through very concerted and organized strategies, found ways to commercially incentivise environmentally sound practices.

Further, if you look at the degree to which consumers in some parts of the world, primarily Europe, are demanding lumber harvested in more environmentally sensitive ways, should we be developing less of a silo approach? Perhaps Industry Canada, working with environmental interests, should consider not just an innovation agenda, which currently is being considered, but somehow an environmental and business agenda that could actually be synergistic.

That's the first question.

The Chair: Go ahead, Ms. Kuyek.

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Ms. Joan Kuyek: I'd like to respond to that by addressing the issue of mining, which is one I know well. It certainly has had its impact in Nova Scotia over the years. Mining is a real example of the silo effect of economic policy. Mining is subsidized very heavily, in the exploration phase in flow-through shares, resource allowances, accelerated capital costs. Most mines these days don't last very long, if they are around at all. They last 10 to 15 years.

In the Yukon there are over 43 abandoned and closed mines. There is one operating mine in the Yukon now. The level of federal involvement and subsidy to keep those mines going and to try to keep them as generators of regional economic development has been incredible over the years, and now the federal government is faced with having to clean up these toxic sites. Some of them will cost millions of dollars. The same thing is true in the Northwest Territories, and the same has been true in Nova Scotia.

In former times mining would provide employment over a long period. People were dependent on it—I'm from Sudbury, so I understand it very well. But the mess that's left behind was never on the books at the beginning. There have been moves in recent times, because of this, to make sure that reclamation bonds are put in place at the beginning, to put the environmental consequences of the mine on the ledger at the very beginning, but having that integrated in any real way is still a long way down the pipe, and when committees like this are considering appeals from the industry for focused flow-through shares, for example, the costs at the end for liabilities and so on aren't put into that discussion.

On the other hand, maybe there were other regional economic generators that would have been much more effective—as you suggest, ecotourism in some cases. There may have been other kinds of industry that would have been much more successful, and instead of the kinds of investments that were made to stimulate mining, perhaps something else should have happened at that time.

Mr. Scott Brison: Mr. Hornung, you were saying earlier that if you evaluate companies, some of the companies that have been separated from the stock indices based on environmentally sound practices consistently perform better than other companies. Why would we have to create government incentives at all, if economically, from a company performance perspective, they are already doing better? It would seem the market is already encouraging what you would want to achieve.

Mr. Robert Hornung: I have a couple of answers to that. First, right now we are still only looking at a small number of companies that are leaders, that are willing to think in the long term and to make the types of investments that are required. In a world where many companies are making capital investment decisions based on what's going to happen tomorrow, in respect of share price and things like that, that long-term thought isn't always there. So there is a need to provide incentives in that regard.

The second thing is that even with those companies, you run into barriers. I will use the example of renewable energy. We have a small number of energy companies in Canada that want to enter the renewable energy industry. They look ahead and say, oil and gas are not where they're going to be 50 years from now, we'd better start doing this. They look around the world and see what other governments are doing to encourage investment in renewable energy, and they are finding that within the Canadian context there is nothing that competes. When companies like Suncor, or Shell, or others are looking to invest in renewable energy, they find it actually makes much more sense to make investments like those in Europe, in France and other countries, where governments have actually established a regime that encourages those types of investments.

So there is a need, I think, to set up signals in such a way that we're encouraging companies to make these types of investments. Some will, some won't, the choice is there, but I think by putting those investments in place, we will find that instead of having a few isolated leaders, we can move a majority of the corporate sector in a more sustainable direction.

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The Chair: Ms. Langer.

Ms. Julia Langer: I have one small addition to that on the agriculture and pesticides front. You don't want to go from one silo to another silo. You want to mainstream this. So, for instance, we find that on the one hand, the farmers, as I say, are interested in pesticide reduction, alternative products that are lower risk, while on the other hand, the consumers, the eaters, are interested in eating fewer pesticides, being less exposed. But you have retailers in the middle, who don't do anything to help one or the other. They're fighting over price with the farmers and not listening to the consumer. Providing incentives for marketing would actually break some of those barriers, and so make the process mainstream.

I think we shouldn't really be looking just at ecotourism or the renewable energy sector. This has to be the mainstream Canada. This is where federal leadership in some start-up investment incentive would really help make a breakthrough.

The Chair: Are there any final comments?

Mr. Scott Brison: I have a quick question. You mentioned that in agriculture pesticides are exempt from GST. I'm wondering whether Vision, a chemical, a sister product to Roundup for forestry applications, is so exempt. Also, we haven't had any really significant reform of pesticide regulations, I believe, in 30 years in Canada. How have other countries addressed issues, for instance regarding Roundup and Vision? I'm particularly interested in Vision from the perspective of its application in Nova Scotia's forests right now. It has become a huge issue in my constituency and in other parts of the province.

Ms. Julia Langer: Without getting into the toxicology specifically of that chemical, I think Canada is really lagging behind our major trading partners in respect of the legislation and the regulatory system. There is a real drive for harmonization. In fact, we have an obligation under NAFTA to harmonize our pesticide regulations. The U.S. Food Quality Protection Act of 1996 is far ahead of ours in addressing some of the problem chemicals. The same is true of some of the OECD countries as well. I've compiled a list of 60 chemicals that are banned elsewhere in the world, but are still registered in Canada, mainly because our regulatory system does not require regular re-evaluation. This is one of the things we need these amendments to do. As I say, it's ready to go, Mr. Rock keeps promising it, but I'd like to see it hit the floor of the House of Commons for you folks to debate.

The Chair: Thank you very much.

On behalf of the committee, I first want to thank you for today's panel, but I also want to thank you for the two round tables you participated in prior to summer recess. That provided us with a base of knowledge that will help us in writing the report.

I'm also quite happy to see that there is an emerging trend in not only dealing with sustainable development, but understanding that a sustainable economy is also very important, and the merging of these two ideas creates what I think is the perfect equilibrium required to take action on the environmental front.

Once again, thank you very much.

The meeting is adjourned, but don't go very far, because we have another meeting in approximately two and a half minutes.