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37th PARLIAMENT, 2nd SESSION

Standing Committee on Finance

EVIDENCE

CONTENTS

Friday, November 7, 2003

0830

The Chair (Mrs. Sue Barnes (London West, Lib.))

Mr. Phil Upshall (Chair, Mood Disorders Society of Canada, Canadian Alliance on Mental Illness and Mental Health)

0835

0840

The Chair

Ms. Claude Benoit (Vice-President, Canadian Association of Science Centres)

0845

The Chair

Ms. Diane Brisebois (President and Chief Executive Officer, Retail Council of Canada)

0850

0855

The Chair

Mr. Robert Barnett (Executive Director and Chair of the Government Relations Committee, Ontario Land Trust Alliance, Escarpment Biosphere Foundation)

0900

The Chair

Mr. Richard Hardacre (President, ACTRA - Toronto Performers)

0905

Mr. Brian Topp (Executive Director, ACTRA - Toronto Performers)

0910

The Chair

Mr. Brian Topp

The Chair

Mr. Brian Topp

The Chair

Mrs. Laurel Rothman (National Coordinator, Campaign 2000)

0915

0920

The Chair

Mrs. Laurel Rothman

The Chair

Mrs. Laurel Rothman

The Chair

Mrs. Laurel Rothman

The Chair

Mr. Monte Solberg (Medicine Hat, Canadian Alliance)

Ms. Claude Benoit

Mr. Monte Solberg

The Chair

Mr. Peter Woolford (Vice-President, Policy Development and Research, Retail Council of Canada)

0925

Mr. Monte Solberg

Mr. Robert Barnett

Mr. Monte Solberg

Mrs. Laurel Rothman

The Chair

Mr. Monte Solberg

Mr. Brian Topp

Mr. Monte Solberg

The Chair

Mr. Brian Topp

The Chair

0930

The Chair

Mr. Brian Topp

The Chair

Mr. Bryon Wilfert (Oak Ridges, Lib.)

The Chair

Mr. Robert Barnett

Mr. Bryon Wilfert

Mr. Robert Barnett

Mr. Bryon Wilfert

Mr. Robert Barnett

Mr. Bryon Wilfert

0935

Mr. Brian Topp

Mr. Bryon Wilfert

Mr. Brian Topp

Mr. Bryon Wilfert

Mr. Brian Topp

Mr. Bryon Wilfert

Mrs. Diane Brisebois

Mr. Bryon Wilfert

Mrs. Laurel Rothman

The Chair

Mr. Shawn Murphy (Hillsborough, Lib.)

0940

Mr. Robert Barnett

Mr. Shawn Murphy

Mr. Robert Barnett

Mr. Shawn Murphy

Mrs. Laurel Rothman

Mr. Shawn Murphy

0945

Mrs. Laurel Rothman

Mr. Shawn Murphy

The Chair

Mrs. Diane Brisebois

The Chair

Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP)

Mrs. Laurel Rothman

Ms. Judy Wasylycia-Leis

0950

Mr. Brian Topp

Ms. Judy Wasylycia-Leis

Mrs. Diane Brisebois

Mr. Brian Topp

Ms. Judy Wasylycia-Leis

Mr. Phil Upshall

0955

Ms. Judy Wasylycia-Leis

Mr. Phil Upshall

The Chair

Ms. Caroline Di Giovanni (Executive Director, Hope for Children Foundation, Campaign Against Child Poverty)

Ms. Jacquie Maund (Coordinator, Campaign Against Child Poverty)

Ms. Caroline Di Giovanni

1010

Mr. Gerald Vandezande (Steering Committee Member, Campaign Against Child Poverty)

1015

The Chair

Mrs. Gail Martiri (Director of Policy, Writers Guild of Canada)

1020

The Chair

Ms. Martha Friendly (Coordinator, Centre for Urban and Community Studies of the University of Toronto, Childcare Resource and Research Unit)

1025

1030

1035

The Chair

Mr. Joseph Polito (As Individual)

1040

The Chair

Ms. Mary MacKenzie (President, Association of Municipal Managers, Clerks and Treasurers of Ontario)

1045

1050

The Acting Chair (Mr. Shawn Murphy)

Mr. Gary Pillitteri (Niagara Falls, Lib.)

Ms. Martha Friendly

1055

Mr. Gary Pillitteri

Ms. Martha Friendly

Mr. Gary Pillitteri

Ms. Martha Friendly

Mr. Gary Pillitteri

Ms. Martha Friendly

Mr. Gary Pillitteri

Ms. Martha Friendly

Mr. Gary Pillitteri

Ms. Martha Friendly

The Acting Chair (Mr. Shawn Murphy)

Ms. Jacquie Maund

Mr. Gary Pillitteri

The Acting Chair (Mr. Shawn Murphy)

Mr. Scott Brison (Kings—Hants, PC)

1100

Mr. Gerald Vandezande

Mr. Scott Brison

1105

Mr. Gerald Vandezande

Mr. Scott Brison

The Chair

Mr. Bryon Wilfert

Ms. Caroline Di Giovanni

Mr. Bryon Wilfert

1110

Ms. Martha Friendly

Mr. Bryon Wilfert

Mr. Gerald Vandezande

The Chair

Mr. Gerald Vandezande

The Chair

Mr. Bryon Wilfert

The Chair

Mr. Shawn Murphy

1115

Mr. Joseph Polito

Mr. Shawn Murphy

Mr. Joseph Polito

Mr. Shawn Murphy

Mr. Joseph Polito

Mr. Shawn Murphy

Mr. Joseph Polito

Mr. Shawn Murphy

Mr. Joseph Polito

Mr. Shawn Murphy

Mr. Joseph Polito

Mr. Shawn Murphy

Mr. Joseph Polito

Mr. Shawn Murphy

Mr. Joseph Polito

1120

Mr. Shawn Murphy

Mr. Joseph Polito

Mr. Shawn Murphy

Mr. Joseph Polito

Mr. Shawn Murphy

Mr. Joseph Polito

The Chair

Mr. Shawn Murphy

The Chair

Mr. Shawn Murphy

Mrs. Mary MacKenzie

The Chair

Ms. Judy Wasylycia-Leis

Ms. Caroline Di Giovanni

1125

Mr. Gerald Vandezande

The Chair

Mrs. Gail Martiri

1130

The Chair

Ms. Albina Guarnieri (Mississauga East, Lib.)

The Chair

Ms. Albina Guarnieri

The Chair

Ms. Albina Guarnieri

Mr. Joseph Polito

The Chair

Mr. Bryon Wilfert

1135

The Chair

Mr. Norman Beach (Co-chair, Campaign for Stable Funding of Adult ESL Classes)

Mrs. Linda Zhai (Former Adult Student in English as a second language classes (ESL), Campaign for Stable Funding of Adult ESL Classes)

The Chair

Mrs. Cyndy DeGiusti (Vice-President, Child Advocacy, Hospital for Sick Children)

Dr. Manuel Buchwald (Chief of Research, Hospital for Sick Children)

The Chair

Mrs. Gerda Kaegi (President, Canadian Pensioners Concerned Inc.)

The Chair

Mrs. Gerda Kaegi

The Chair

Ms. Elizabeth McIsaac (Manager, Research and Policy, Maytree Foundation)

Mrs. Naomi Alboim (Associate, Maytree Foundation)

The Chair

Mrs. Naomi Alboim

The Chair

Mrs. Shirley Hoy (Chief Administrator Officer, City of Toronto)

The Chair

Mr. Rahim Jaffer (Edmonton—Strathcona, Canadian Alliance)

Mrs. Gerda Kaegi

Mr. Rahim Jaffer

The Chair

Mr. Norman Beach

Mrs. Naomi Alboim

The Chair

Mr. Bryon Wilfert

Dr. Manuel Buchwald

Mr. Bryon Wilfert

Mrs. Cyndy DeGiusti

Mr. Bryon Wilfert

Mrs. Cyndy DeGiusti

Mr. Bryon Wilfert

The Chair

Mrs. Shirley Hoy

The Chair

Mr. Edwin Watson (Member, Canadian Pensioners Concerned Inc.)

The Chair

Mr. Shawn Murphy

Mrs. Naomi Alboim

Mr. Shawn Murphy

Mrs. Naomi Alboim

Mr. Norman Beach

The Acting Chair (Mr. Gary Pillitteri)

Ms. Judy Wasylycia-Leis

Mrs. Gerda Kaegi

Dr. Manuel Buchwald

The Chair

Mrs. Naomi Alboim

Mr. Norman Beach

The Chair

Mr. Gary Pillitteri

The Chair

Mrs. Naomi Alboim

Mr. Gary Pillitteri

Mrs. Naomi Alboim

Mr. Gary Pillitteri

The Chair

Mrs. Shirley Hoy

Mr. Gary Pillitteri

The Chair

Mr. Norman Beach

The Chair

Mrs. Gerda Kaegi

The Chair

CANADA

Standing Committee on Finance

NUMBER 103

2nd SESSION

37th PARLIAMENT

EVIDENCE

Friday, November 7, 2003

[Recorded by Electronic Apparatus]

¾ (0830)

[English]

The Chair (Mrs. Sue Barnes (London West, Lib.)): Order.

Pursuant to Standing Order 83.1, we are in pre-budget consultations on Friday, November 7, with our first panel of the day.

Welcome to everyone.

We have, from the Canadian Alliance on Mental Illness and Mental Health, the chair of that organization, Phil Upshall, from the Mood Disorders Association of Canada. He's here together with Joan Montgomery, CEO, Schizophrenia Society of Canada, and is our first presenter this morning. Bienvenue.

From the Canadian Association of Science Centres we have Claude Benoit, vice-president, and Tracy Ross, the coordinator. Welcome to you.

From the Retail Council of Canada we have Diane Brisebois, president and CEO, together with Peter Woolford, vice-president of policy development and research. We saw you earlier; welcome.

We have Robert Barnett, executive director the Escarpment Biosphere Foundation and chair of the government relations committee of the Ontario Land Trust Alliance. Welcome to you, sir.

From ACTRA Toronto we have Richard Hardacre, president--welcome, sir--and Brian Topp, who is the executive director. Welcome.

From Campaign 2000 we have the national coordinator; we're very pleased to have Laurel Rothman with us today.

Without further ado, the first seven minutes of the floor goes to Mr. Upshall. Go ahead, sir.

Mr. Phil Upshall (Chair, Mood Disorders Society of Canada, Canadian Alliance on Mental Illness and Mental Health): Thank you, Madam Chair and members of the committee. We're very pleased to be here with you this morning.

Our preparation, unfortunately, is in English only, and I apologize to the members of the committee. We have not received our French translation yet.

It is indeed an honour to be with you. With me today is Joan Montgomery, who is the CEO of the Schizophrenia Society of Canada.

We've provided you with green folder kits, and I just thought I'd go through the material in there. The first item you'll see is our very first national champions agenda. We had a very successful luncheon in Ottawa on October 7, and for the first time in Canada's history we now have national champions on mental health and mental illness. The next document is our deck for the slide presentation, which we won't have today, but it's there in short form.

As you may know, we are working very closely with Senator Kirby's standing committee with regard to his study on mental illness and mental health, and we have a very comprehensive brief, which we've given you a copy of in the left-hand side of your kit.

The next documents you'll find in your kit are the dailies from Stats Canada's releases on September 3 and October 31. These are the first ever Stats Canada studies on mental illness and mental health issues.

The September 3, 2003 study is the one that finally came out and said “As many Canadians suffer from major depression as from other leading chronic conditions, including heart disease, diabetes or a thyroid condition...”. It continues, “Some 4% of people interviewed in the survey reported having experienced symptoms or feelings associated with major depression, compared with 5% with diabetes, 5% with heart disease...”. This study did not include any youth under the age of 15, and it did not include a major mental illness known as schizophrenia. And when you add those numbers together, you'll come up with epidemic numbers, as you'll see in my speaking notes.

Subsequent to that, on October 31 Stats Canada released another daily on factors related to adolescents' self-perceived health. It's an incredibly important document. It's short: two pages. It's a description of 12- to 14-year-old girls, who had a high risk of having had a major depressive episode in the year before the survey, compared with 2% of boys the same age. Among 15- to 17-year-olds, the proportion of girls who had had such an episode was much higher, and by contrast, 15- to 17-year-old boys were no more at risk of depression than those of age 12 to 14. We take a little bit of an issue with that particular number, because, as I'm sure all of you know, suicide is epidemic in Canada. Young males kill themselves at a rate four times that for young females in the ages 16 to 21.

That being said, mental illnesses are positioned quite well now as being one of the leading health issues we have to address. That's what the Canadian Alliance on Mental Illness and Mental Health is here to do.

You have my speaking notes, but I'm not going to run through them; I'm going to ramble a bit.

On page 2 of my notes you'll see “What is CAMIMH?” Established in 1998, CAMIMH is an alliance of national mental health organizations representing patients, their families, and health care providers. CAMIMH's mandate is to get mental illness care and prevention and mental health promotion placed on the national agenda. We want to see the mentally ill and their families receive appropriate access to care and support. We also believe firmly that good practices and the promotion of mental health contribute to healthy families, productive workplaces, and strong communities. An effective mental health strategy will be good for our society and good for our economy.

The list of CAMIMH members currently includes the Autism Society of Canada, the Canadian Association for Suicide Prevention, the Canadian Coalition for Seniors' Mental Health, the Canadian Federation of Mental Health Nurses, the Canadian Medical Association, the Canadian Psychiatric Association, the Canadian Psychological Association, the Canadian Mental Health Association, the Mood Disorders Society of Canada, the National Network for Mental Health, the Native Mental Health Association of Canada, and the Schizophrenia Society of Canada.

Our anchor document, which I think we sent out to all members of Parliament at least twice, is called “A Call for Action”. It's a consensus-based document, and it calls on governments to provide leadership in establishing a national plan on mental illness and mental health with four pillars: public education, research, data collection and reporting, and a framework for mental health services and the promotion of mental health. The need for progress in each of these four areas is easily demonstrated by the prevalence of mental illnesses in our society.

¾ (0835)

I won't read my notes from pages 2 to 4; I'm just going to deal with addressing the problems. The solution lies in a comprehensive strategic approach involving all levels of government. This approach must address mental health promotion, stigma and discrimination, the lack of treatment available to the mentally ill, and the gaps, inequities, and the fragmentation of available services.

Several factors must be addressed if progress is to be made. These include the following.

There is a general lack of awareness in the Canadian population about mental illness and its symptoms. More often than not, stigma stands in the way. For sufferers, the fear of having a mental disorder continues to be strong.

On the part of the general medical community, much work needs to be done to improve knowledge transfer and skills in diagnosing mental illness and applying best practices in intervention and prevention.

The recruitment, training opportunities, and retention of appropriate health professionals to deal with mental illness and mental health are inadequate. More psychiatrists, psychologists, psychiatric nurses, and social workers are needed to address projected and current needs.

Not all health services are available to Canadians with mental illnesses, contrary to the Canada Health Act. In some areas of the country, no specialized treatment or services are available at all. At best, the availability of medical, community, and other health professional services and systems of care is uneven. Only those with average or above average incomes can afford a private-practice service offered by certain mental health professionals.

There are no national treatment or service guidelines. There's a lack of coordination and dialogue between the components of the continuum of care between health, social services, and correction agencies, as well as between agencies and many health organizations, and aboriginal leaders and other communities concerned with mental health and mental illness.

Canada does not have an effective surveillance and data management system. The many volunteer and community-based agencies that provide much-needed social support, public education and awareness, and self-help services do so with severely restricted financial and human resources.

While CAMIMH recognizes that this committee cannot address all of these issues, we believe a start can be made with respect to health promotion. The pan-Canadian healthy living strategy should include a greater focus on mental health.

We also believe a start could be made on the development of an adequate surveillance system, more appropriate funding of research, seed funding for the development of a comprehensive national strategy, and the targeting of funds transferred to the provinces under the provisions of the CHST to the provision of mental health services within the provinces and to those suffering from severe and persistent mental illnesses.

My time is almost up, Madam Chair. I'm just going to draw your attention to one other document that's in your material. That is a quick note from Dr. Rémi Quirion, the scientific director of the Instituteof Neuroscience, Mental Health and Addiction, with whom we work very closely. As some of you may know, I'm a member of the institute's advisory board. He's in New Orleans and offers his apologies for not being able to be with you.

His note is self-explanatory, but clearly he and the members of CAMIMH, and the entire CIHR world are very anxious to get more research funding. We in the Instituteof Neuroscience, Mental Health and Addiction are very anxious to get more of that funding directed towards our particular research projects.

I'd be happy to talk about dollar values, but we're very anxious that this committee recommend substantial increases in research funding for medical health.

¾ (0840)

The Chair: Thank you very much.

Now we'll hear from the Canadian Association of Science Centres. Go ahead, madame.

Ms. Claude Benoit (Vice-President, Canadian Association of Science Centres): Members of the Standing Committee on Finance, thank you for hosting us.

[Translation]

Ladies and gentlemen, my name is Claude Benoit. I'm the Vice President of the Canadian Association of Science Centres. With me is our coordinator, Ms. Tracy Ross.

[English]

Who are we? We are an association of 54 institutional members such as science centres, planetariums, children's museums, natural sciences museums, outdoor environmental interpretation centres, and many suppliers to our sectors.

Our mission is to improve the capacity of our members to enhance and promote public understanding and enjoyment of science and technology. Our members are coast to coast, from Watson Lake, Yukon, to Vancouver, to St. John's, Newfoundland.

The common thread of all these centres is informal learning in science and technology. We call informal learning an experience that excites people with hands-on exhibits, shows, and programs, in a friendly and engaging atmosphere. All our institutions are bilingual. Our members are community-based; our members are trusted and supported by both public and private sectors. Our members are respected for their balanced and objective approach in presenting science and technology information.

Our members are networked throughout the world and contribute to establishing Canada's reputation for creativity and innovation. Many of our members are also members of well-renowned associations such as the Association of Science-Technology Centers in the United States, and ECSITE in Europe.

Our association and our members focus on the future and are future-oriented, and by doing so complement the missions of other institutions like ours that are oriented on the past and on art.

What is our impact in the Canadian community? Seven million Canadians visit science centres each year, and 1.5 million school children participate in Canadian science centre school programs each year.

Our total operating budget represents $150 million each year. Our assets, buildings, exhibits, land, and collections are worth more than $500 million. We represent 2,000 employees, 4,000 volunteers, among whom there are 600 board members who are influential leaders in their communities.

Why are we here today? We are here today to help Canada become part of the global economy driven by innovation. We are here to propose a partnership investment that will value and recognize that lifelong learning, improving science and technology literacy, and exciting the Canadian population about science and technology and the role it will play in our future are particularly important for our future performance as a democratic nation.

So what is our investment proposal all about? You have a detailed proposal in your package, which was submitted to you both in French and in English.

We are proposing a Canadian program for informal science promotion and learning, to provide to Canadians hands-on learning projects and programs that broaden public understanding of science and technology, engineering, and mathematics, and to enable a national science and technology public awareness campaign. We are proposing a 2004-2009 five-year program, with a yearly investment of $25 million, for a total of $125 million over five years, a five-year commitment that we believe will clearly demonstrate its value during that time and as such will be continued beyond the initial period.

Clearly, $125 million over five years is a significant commitment. However, it is vital that there be sufficient financial resources to put towards this so it can truly have a significant impact on the future of Canada's economic well-being.

¾ (0845)

We propose that Industry Canada be the leader and the custodian of the program, because currently Industry Canada has overall responsibility for science and technology at the federal government level. Industry Canada should count on the support of our association and other organizations involved in informal science learning and enterprise in the country.

Why should we act now? The culture of innovation is at the core of our nation's economic performance. It is clear that to improve our innovation we must further invest in research and development. We also need to develop a highly skilled and well-educated workforce. Industry leaders have identified a shortage of highly skilled people as one of the major barriers to innovation in Canada. But crucially, to achieve and sustain these goals we need to engage more people at every level, from simple enjoyment of scientific accomplishments to life-long careers in science and technology.

We must act now, because to implement and improve the culture of innovation we need more trained teachers in science and technology, engineering, and mathematics. We need a significantly increased number of our young people choosing and pursuing careers in the science and technology field. We need more Canadians involved in animating public debate on the role of and need for research and development and in informing national policies on our future challenges, so many of which involve complex scientific concepts.

We need to act now, because Canada is one of the few advanced nations in the world that do not have a national program to support informal science learning and promotion. Other countries are already investing more. In the U.S., the National Science Foundation invests more than $100 million annually to support informal science learning. In the U.K., the Millennium Commission, along with others, is investing more than $70 million to keep their science centres current.

What are the gains? The gains are leveraged investment by the private sector and other levels of government; public support of Canadian government investment in research and development; benefits to teachers of science and technology who require original training programs and learning tools to deal with regular changes to curriculum and educational strategies; more resources to spark and sustain the interest of young children in a future career in science and technology; increased computer and Internet literacy; improved access for all Canadians to interactive, hands-on, informal science learning opportunities; and a better dialogue of scientists, engineers, and the community.

Thank you.

The Chair: Merci, madame.

Next is the Retail Council of Canada.

[Translation]

Ms. Diane Brisebois (President and Chief Executive Officer, Retail Council of Canada): Thank you, Madam Chair.

Good morning. The Retail Council of Canada is pleased to have this opportunity to participate in these pre-budget consultations.

¾ (0850)

[English]

Thank you for the opportunity to appear. I'm pleased to be here with my colleague, our vice-president of policy and research, Mr. Peter Woolford. We would be pleased to answer any questions after the presentation.

The Retail Council of Canada is well known to many of you, but I'd like to provide some background. RCC is the voice of retail in Canada. We represent general merchandise retail trade, and have about 9,000 members from coast to coast. We speak on behalf of all retail formats, including department, specialty, discount, and independent stores and online merchants. More than 90% of our members are independent store owners in all regions of this country. By the end of this year, retailers will employ more than two million Canadians and sell approximately $315 billion worth of merchandise.

Let me just give you an overview of the retail conditions and what we see in the year ahead. In 2003, as we know, retailers faced almost every disaster in the Bible--fires, floods, disease, locusts--and yet retail sales continued to grow at a modest pace.

RCC's back-to-school retail conditions report, covering the period in August and early September, indicated that conditions in the trade at the end of the summer were slightly softer than retailers had expected. However, as we know, retailers are always very optimistic, and they expected that sales would strengthen over the rest of the year. It seems that this is indeed what's happening. The association is forecasting that holiday season retail sales will grow between 3.5% and 5.5% over 2002. Just this morning we received employment numbers for October, and Canada created an additional 65,000 jobs. Thus, year-to-date, that's an additional 164,000 jobs, which is very good news for the retail sector as we move into a very important selling period, the holiday season.

This is based on our knowledge of the industry and discussions with knowledgeable people within and outside the industry. I refer to the 3.5% and 5.5% increase that we are expecting. We do extensive interviews in the field as well as meet with the major players, and we survey those players to ensure that those numbers are fairly accurate. We expect that retail conditions in 2004 will show a gradual improvement over this year.

Now let's discuss the position of the retail sector with regard to some issues of concern to us and to the committee as well, I'm sure.

Retailers and their customers have benefited from responsible fiscal policies followed by the government. We're concerned that federal spending appears to be again growing rapidly. We strongly recommend that the government continue to pursue fiscal balance, along with debt and tax reduction, as overarching objectives.

The focus of our policy advice this year is the employment insurance program. The program has built up an enormous surplus that Canadians rightly believe belongs to them. The impact on Canadians of this massive overtaxation is very harmful. In our submission, we did a calculation of how much EI overpayments have taken from each retail position in this country. It amounts to almost $1,400 per job. That is a big hit for the 1.9 million retail employees, most of whom earn modest incomes.

In his 2003-04 budget, Mr. Manley listed five principles that should guide the development of EI rates. In our view, the current system fails on all five.

We recognize that the government would face a large fiscal problem if it were to hand back the surplus to its rightful owners, the employers and employees of this country, but we have identified two options that respect Mr. Manley's principles, that would assure premium payers they would not be overtaxed in the future, and that would acknowledge the government's fiscal situation.

First, establish EI and its fund separate from the accounts of Canada and set up an entity to direct its affairs, subject to legislative direction from Parliament, such as the CPP model. And second, continue to keep the EI program and its funding within the fiscal framework, but legislate rate guarantees that would protect premium payers.

Under the first option, the new entity running the EI program would take over responsibility for management of the accumulated surplus and would set rates based on the entity's financial circumstances and its forecast of unemployment and other demands on the program. Transferring the surplus would present challenges to the fiscal framework that would require negotiation of a multi-year process of payment.

The heart of the second option would be legislation freezing rates at an employee rate of no more than $1.75 per $100 of pay for ten years. In recognition of the accumulated surplus, the government would finance any cost overruns for the period of frozen rates from general revenues. In effect, in return for keeping the program within the government account and retaining the surplus, the government would accept the risk of possible cost overruns for an extended period of time.

Our submission contains two other recommendations regarding the EI program. We support the recommendation of the Commons human resources committee to establish a yearly basic exemption for the first $3,000 of income earned. This would improve the progressivity of the EI program and improve the take-home pay, especially for those with low incomes.

If the EI program is to be given a new governance structure, as we've suggested in our first option for new premium arrangements, it will be necessary to change the division premiums to an equal split between employers and employees. Otherwise, either employer representatives would have a permanent majority in the governance of the program or employees would have representation out of proportion to their stake in the program.

In conclusion, Canadians made substantial sacrifices to restore Canada's public finances. We believe the government must take two steps in next year's budget to ensure those sacrifices were not in vain. The government must continue to pursue both fiscal balance and debt and tax reduction as overarching objectives. Finally, the government must redress the massive overtaxation that continues to build the surplus in the EI account.

Thank you very much, Madam Chair.

¾ (0855)

The Chair: Merci.

From the Escarpment Biosphere Foundation, go ahead, sir.

Mr. Robert Barnett (Executive Director and Chair of the Government Relations Committee, Ontario Land Trust Alliance, Escarpment Biosphere Foundation): Thanks very much, Madam Chair and members. It's great to be here.

As executive director, I'm speaking for our 15 board members from Ancaster to Gore Bay; and as representative of the Ontario Land Trust Alliance, I'm speaking for the 32 trusts from Thunder Bay to the Thousand Islands. Unofficially, I'm speaking for the 100 land trusts across Canada.

Our own escarpment biosphere conservancy's priority has been to protect land near the Bruce Peninsula National Park. So far we have protected five properties, with 397 acres. Over the entire escarpment, our own conservancy will have protected 30 properties with about 2,500 acres by Christmas.

A couple of things are going very well. We appreciate this year's measure in the budget to allow split receipting or bargain sales. That was a big move forward and we appreciate that. The species at risk legislation is also very much appreciated.

We're suggesting today further encouragement for land owners, to build on the strength of the existing programs. We would like more land owners to join with this government initiative and leave a legacy to the country through their local land trusts.

The partnership of the Department of Finance, Environment Canada, and local land trusts through the eco-gift program is working very well. It's a model to be celebrated and copied, so it's good news. I'm suggesting some modest tweaking today, not a major overhaul.

First is the capital gains tax. It comes up every single year, and I'm going to give you my four reasons why we should not be applying capital gains tax to donations of ecologically sensitive lands. It's really a disincentive. The landowner gets a tax receipt in Ontario for 46.4% of the value of his land, and extracting capital gains tax from that 46.4% is really a major disincentive.

I'll just summarize this by saying that if somebody donates land worth $100,000 with an 80% capital gain--which is sort of typical--they end up paying $4,400 to $9,300 in taxes on that gift. So the landowner makes a pretty major sacrifice. A high-income payer is going to be sacrificing $37,000 by making this $100,000 gift, so they're better off to sell the land, let's face it.

I would like to get rid of the capital gains tax. I think capital gains tax is a fiction on a donation. Taxing a gift of land to land trusts or to the government itself is really a tax on a donation, which is kind of a funny concept to me.

Capital gains tax has been eliminated on portable goods. If you have a piece of art, a sculpture, or something, you can take it across the border and sell it--it's a little easier to do. Land is stuck to the ground, so it's kind of hard to sell overseas. But I think our wetlands and shores are at least as important as pieces of art. They're all important, but we should be giving them equal treatment here.

I think there's a question of equity. In the United States, they don't tax such capital gains on donations of ecologically sensitive land. In fact, when U.S. citizens who own Canadian land donate Canadian land to a U.S. charity, they don't pay capital gains taxes. It's right in the Income Tax Act. So we've got a question of equity here, where Canadians donating the same piece of property pay tax, but U.S. citizens donating land in Canada to a U.S. charity don't pay tax. To me that doesn't seem very fair. I don't think we're treating our donors of good quality land properly.

My second point is that business people who wish to donate ecologically sensitive land are taxed on an income basis, not on the basis of capital gains, and therefore they don't donate. They get some money in one side and lose the same amount of money on the other side, so there's absolutely no incentive for people who do business in land to donate--and they own some great land.

One fellow said to me, “Why would I donate my land to you? I'm better off tax-wise to buy another dump truck.” So it doesn't work for people who own land, like developers or companies that do business in land. I would like to ask that donations of ecologically sensitive land be treated, for those folks, as capital dispositions and not as income.

¿ (0900)

Third, GST is applicable on some sales where people are doing business, but we have to pay the GST. Yes, we get half of it back, but with some of the land we purchase we have to raise a fair amount of money from our donors to pay the government taxes.

I'm going to suggest a fourth measure, which is a modest grant program to support these kinds of donations through Environment Canada. We pay about $5,000 to $7,000 per donated property for appraisals, surveys, and legal expenses. That's a very small fraction of the cost of that land--maybe 10% at most. So a small grant would help us protect that. Believe it or not, we have trouble raising that kind of money when somebody makes a large donation and we have to lay out $5,000 or $7,000.

So I'm suggesting that a modest funding program--I think there was a $15,000 program in Ontario last year--to build on that would be very helpful. Our trust was helped on two or three properties by that $15,000 fund--a small fraction of the cost of the land.

Where the land is close to a national park, a national wildlife refuge, a canal, or an historic site, perhaps that funding could be increased. It's much more effective for us to secure that land as a donation than for the government to go out and buy the land. So I'm suggesting a very modest amount of money--maybe $1 million a year--be put into a program like that across Canada.

As an example of how this works in Ontario, the land trusts protected 4,000 acres worth $4 million for only $170,000. So there's a great return on this investment.

We believe that the four ideas I've presented today are sympathetic with your own suggestions and previous recommendations. They are suggestions of the National Round Table on the Environment and the Economy, and the Green Budget Coalition, so I'm not necessarily breaking a lot of new ground here.

We appreciate the opportunity to help Canada achieve its internationally accepted agreements on conservation. We're here to help, and I think the partnership is working well. We'd like to help build on that partnership.

Thank you very much.

The Chair: It's always nice to hear that people realize we've helped them.

We'll go next to ACTRA and Mr. Hardacre.

Mr. Richard Hardacre (President, ACTRA - Toronto Performers): Merci, Madam Chair, and thank you to the committee for welcoming us today.

My name is Richard Hardacre. I'm an actor, and I have the honour of being the president of ACTRA Toronto, which has a membership approaching 13,000 professional performers at this point. We're very grateful for this opportunity to speak to you today.

As the committee will remember, our colleagues, the actors Rick Mercer, Sonja Smits, and Thor Bishopric, appeared before this committee in Ottawa last month to speak to you about the Canadian Television Fund. We're not here today to repeat their presentation, although we want you to know that without a doubt we still strongly support it. We believe the Canadian Television Fund should be renewed, refinanced, and expanded.

The fund already plays a critical role in supporting Canada's highly successful French-language prime-time production. The fund is going to be an important part of the work that lies ahead of us in English Canada, taking back our own prime-time Canadian television.

We're here today to provide you with an overview and some numbers about what has occurred this year to the people who work in the film and television industry here in Toronto. Then I'm going to ask the committee to consider recommending a specific policy change that would greatly assist thousands of people in this city of Toronto.

I'd like to draw your eye to the chart we distributed earlier. It was produced by Entertainment Partners Canada in cooperation with ACTRA and the other unions and guilds involved in this industry. EP Canada is by far the largest payroll company operating in our business. These numbers capture about 70% of the film and television production work in Toronto, and are clearly representative of what's happening.

As you can see from the chart, in the first quarter of this year, averaging the three months, we were having a more or less normal year. The second and third quarters show a catastrophic collapse of film and television employment and earnings, essentially attributable to the hysteria over the SARS crisis. Overall for the year so far, employment for actors is down 43%. Earnings are down 33%.

It's the same for everyone else in our industry. As you can see on the bottom lines of the chart, all categories of workers in our industry of film and television are facing disastrous declines in employment and earnings. This is unfortunately our current reality.

I'm going to ask my colleague, Brian Topp, to speak about what these numbers mean, and how this committee might be able to help address them.

Merci.

¿ (0905)

Mr. Brian Topp (Executive Director, ACTRA - Toronto Performers): Thank you, Madam Chair.

Diane Brisebois from the Retail Council talked in her presentation to the committee about biblical plagues. I want to say we very much sympathize with that idea. We've had a little taste of biblical plague in Toronto this year, you know, between SARS and the power outage, and the faint echoes, which the vice-chair would be very familiar with, of the BSE affair. This town has been hit pretty hard this year.

I listened to that 3.5% growth number that was cited and I felt awfully envious. As you can see from the chart we just looked at, our folks are looking at declines in their incomes so far of 40%.

The human cost of that kind of consequence in a town like this is pretty serious. There have been a lot of people in our industry in this town who sold their houses this year, and an awful lot of people who had to leave town. And then, for way too many creative people, they had to resort to the only form of EI available to them, which is to cash in their RSPs. You all know what that means, both in the short term and the long term, to people and their financial future.

Madam Chair, the film and television industry here in Toronto I think has done some pretty remarkable things to respond to this, beginning by not panicking, as tempting as it was. The industry has for the first time ever formed itself into an industry group, a trade group called Film Ontario, where people in the industry, people in the unions, people on the production side, have been pooling some pretty significant dollars to work together basically as a marketing consortium to try to rebuild their business, and the industry has responded.

The City of Toronto has responded to this by taking a hard look at its core role in our business. They've been talking about how to make it easier to do productions in Toronto, to address location issues, which are interesting and complicated and needed to be addressed.

Our hope is that the province may as well respond. There's a new government in Ontario, and they've had some things to say about the film and television industry in Ontario--a $1.2 billion industry, we should note. The new government has acknowledged that the competitiveness of the provincial tax credit needs to be looked at, and we're optimistic that in the months to come, they're going to do something.

So we're here today to talk about how the federal government might respond. I think it's on the theme of acknowledging good work. I think we need to start by saying that the federal government is a very important partner in the film and television industry. Specifically, the Canadian Television Fund is a wonderful contribution by the federal government to our industry, for which we're very grateful.

We want to draw your eye to one issue with the Canadian Television Fund that's well worth a look by anybody who is sensitive to issues in Ontario, and specifically the GTA, after this tough year.

If you look at the second page of this little handout that we've given you, we've given you an extract from the guidelines the federal government uses to administer this critically important Canadian Television Fund. What you'll see there--just to cut to the chase--is that the federal government pays producers to not produce in Toronto. This is executed through a policy called the regional bonus. You can see Toronto-Montreal productions, and what this fund is prepared to do for what are called “regional productions”--in other words, in English Canada, basically any production not produced in Toronto. The federal government essentially, through this policy, will pay you to not produce here.

There was a time when people in the industry in Toronto were prepared to not comment on that policy. In the 1990s this business saw some pretty serious growth, people were busy and there was a sense of noblesse oblige here, and basically we didn't make this an issue. But now, had the biblical plagues not happened to us, we would be in the third year of no growth. The biblical plagues have taken a serious kick at our industry. This policy of paying people to not produce in this town is becoming increasingly intolerable, I have to tell you.

The foreign production, which is 60% of the business in Toronto, was the most sensitive to the shocks the city received. Domestic producers were the people who tended to stay in situations like this, but regrettably, we have this policy that basically pays people to leave.

Our pitch is that this very difficult year for the greater Toronto area, for the city of Toronto, is an opportunity for the federal government to revisit this policy. We call your attention to it, we draw your eye to whether or not it really makes sense to try to dismantle a successful industry cluster and scatter it around the country.

¿ (0910)

We would suggest that it doesn't make sense to do that, and that the circumstances of this year provide you with a good opportunity to consider this and to recommend to the federal government that it will basically bring about a level playing field to players in this industry by eliminating regional policy that grossly discriminates against this town.

That's our pitch, Madam Chair. Thank you very much for your time.

The Chair: I should put on the record that I lost in London, Ontario, a production that probably would have taken away or utilized that breakage. Perhaps you can give us an idea quantitatively. How often is it used? Is Toronto losing a lot because of this? How often is the pickup?

Mr. Brian Topp: We're going to have to wait to see what the numbers are from this year's CTF report to really be able to answer that question. However, for example, if we look at where there has been an awful lot of debate lately, in the area of dramatic production, because the city of Vancouver, which is as large as Toronto as a production centre, is viewed as a “region” under this policy, there has been a lot of pressure to take the crown jewel of production, which is television production, out of Toronto and to Vancouver. So if you look at the very few hourly drama shows that are produced, right down to Da Vinci's Inquest, Cold Squad,and so forth, they're in Vancouver.

The Chair: I don't want to waste a lot of time here, but I will say, in fairness, the reason my city lost was not because of that. It was because of the cut on the television front.

Mr. Brian Topp: There you go.

The Chair: Thank you for your presentation.

I will now go to Campaign 2000. Please go ahead, madam.

Mrs. Laurel Rothman (National Coordinator, Campaign 2000): Good morning. Thank you for the opportunity to speak again.

Just to remind people, we're a cross-Canada coalition of more than 90 organizations monitoring that all-party resolution from 1989 to seek to end child poverty in Canada. We're broad and we're diverse. There are not a lot of tables where psychiatrists, auto workers, faith communities, women's groups, health care providers, housing providers, local social planning councils, parents, and low-income people sit around the table. It's pretty much a virtual table these days, but we are together.

I think we're here to say in the shortest of messages: sustain the momentum and build on the achievements. We must go beyond the status quo. We still will continue to urge you to pursue a comprehensive, multi-year social investment plan to reduce and eventually, we hope, come close to eliminating child and family poverty in Canada. That will include income supports, including an enhanced child benefit and a fully accountable Canada social transfer; early childhood education and care service, affordable housing, including social housing for our most vulnerable; and importantly, labour market training initiatives.

As I said earlier, we're very pleased with some of the progress, incremental as it is, that federal along with provincial government policies have contributed to reducing the child and family poverty rate. We just got the numbers for 2001, and we are down again. However, it's not exactly a good news story, but slow decrease over five years is important. We're at about 15.6%. That's not in the brief.

Unfortunately, Canada remains 15th out of 19 rich countries, part of the Luxembourg income study around the world, in proportion of children living in low-income families. We're still stuck at one in six children. In 1989 it was stronger yet, at one in seven children. I need to recast this in a context of our population. As we now have about 80% of our population in urban areas, child and family poverty is certainly significantly concentrated, but not only in the urban areas. We know that one out of every two aboriginal children, whether on reserve or off reserve, is living in a low-income family situation.

Recent newcomer families are not doing as well--recent meaning the decade of the 1990s, looking at the 1991-96 census. We don't have the detailed 2001 census yet. What we call recent newcomers—families—are not doing as well as in the earlier decades. We know some of the issues. I know you're going to hear from the Maytree Foundation around the issue of access for foreign-trained professionals to decent jobs.

In Toronto alone, 45% of our children in the African-Canadian communities are living in poverty. It's very, very high. We're not seeing that improve yet. Now, I know that the situation is somewhat different in different parts of the country. Of course, children with disabilities remain more likely to be in poverty.

I want to talk a little bit around the labour market. As you know, we've always talked about public policies. We want to emphasize this year our concern about the weakness of the labour market to assist families to both lift themselves out of poverty and to prevent the situation where families fall into poverty.

Just a couple of facts. As I said, there's a growing number of children in low-income families where parents are indeed in the labour market. I think there's a myth that's not the case. Recent data are showing that one in four Canadian workers are low-paid, meaning less than $10 an hour. Women are more likely to be low-paid.

During our recovery years, 1997-2000, full-time employment grew about 8%, but temporary jobs increased 21%. We know those are often the jobs that low-income families get when they leave social assistance or they maintain with social assistance and cycle in and out.

¿ (0915)

Many of those workers, particularly women, are not eligible for EI any more. As of 2001, only 35% of workers who are unemployed get EI—a slightly lower percentage for women—and the largest number of women who are not covered by EI are those younger women, 25 to 44 years of age, who are indeed most likely parents of young children.

We're proposing that we consolidate the Canada child tax benefit and the national child benefit, and we move to the next stage. We need to move from what actually Mr. Martin called phase one way back in 1997 when it was announced. We move to the maximum of $4,400 per year for the first child. We're pleased with the announcements in the last budget that will bring that child benefit up to about $3,200, but we know what that gap is between low-wage income and the poverty line.

We also want to urge you that we were very pleased to see the mention and commitment to review—how do we best say it?—the integration and synergies between the child benefit reaching certain levels and the agreement from the provinces to reinvest funds. We think that will enable more provinces to shift from clawing back the child benefit for families on social assistance. But we're very concerned and want to see a process whereby the federal government, the provinces and territories, and the non-governmental community can participate—a process which is transparent and in which there's a forum for ensuring that those reinvestments, or clawed-back funds, are not lost. In other words, we need a net increase in what's spent on children and families in this country.

On early childhood care and education, we were very pleased to see an historic mention of child care in the last budget, but extremely disappointed, as we told Mr. Manley, with the very small allocation for the first two years. I guess we're really here to say you need to ramp it up this year.

Mr. Manley announced special provisions for health, I believe, coming from the reserve fund, for a first time only, if I understand the announcement correctly. We want you to consider that for the social investments as well.

Indeed, the Liberals' social policy caucus last year, I think it was, did a paper that projected spending on child care over four years, the first year starting with $1 billion and increasing. We urge you to look at that and consider that scope of investment.

I'm probably running over, but you might recall there's an interesting study by two University of Toronto economists showing that for every dollar invested in high quality, regulated child care, there's a $2 payoff. That's a Canadian study done on Canadian data, not the American one, and it's looking at a universally accessible system. So this is part of lifelong learning and a broad social investment program.

We also, of course, don't want to forget and want to emphasize housing. Build on your earlier initiatives. We're particularly concerned that increased funding will ensure that there is a targeting of families in real need. Many of the provinces are not defining “need” broadly enough to include the lowest and most vulnerable income, and therefore we're not seeing new social housing for the most vulnerable.

I think I'll stop there.

¿ (0920)

The Chair: Thank you very much.

Did you give us that citation of the Canadian study in your written material?

Mrs. Laurel Rothman: No, but I can give it to you, or Martha Friendly, who's coming on the next panel, will.

The Chair: Could you make sure the researcher has it, because I haven't read that one.

Mrs. Laurel Rothman: Yes.

The Chair: Not that I doubt that it's true. I know it's true.

Mrs. Laurel Rothman: No, it's useful.

The Chair: Thank you very much.

We were pleased that for the first time ever a finance committee report recommended the child care last year. I was pleased the government followed up on it.

We'll go to six-minute rounds, all five of you, and we'll start with my colleague and friend, from the opposition, Mr. Solberg.

Mr. Monte Solberg (Medicine Hat, Canadian Alliance): Thank you very much, Madam Chair.

Time is very short, so I'll try to ask as many questions as I can. I would urge you, in a friendly way, to come to the point, because time goes by very quickly.

I'll start with the science centre representatives. Do you have any evidence that in the schools and in the universities in those areas where science centres exist you find more people pursuing the sciences? Obviously, if that's the case, then you have a very powerful argument for more science centres. Do you have any evidence like that?

Ms. Claude Benoit: There is some evidence in each province. In Quebec we have too few students pursuing science at higher levels for us to be able to develop competitive innovation, and throughout Canada there is this increasing demand for funds in science and technology, in research and development. But there is also a lack of money to do that, and there's a lack of people to take over, the scientists and the science teachers in universities and colleges and at the primary and high school levels.

We could provide those figures to you.

Mr. Monte Solberg: Thank you.

To the Retail Council, I'm interested in your idea to hive off the EI fund. I think there's a lot of sense in that and a lot of Canadians would agree with it. One thing I'm wondering about is if you've had any sense of whether or not labour would be willing to go along with this idea. It has much to commend it, obviously, and right now people on the labour side probably feel as aggrieved as people on the business side do. But I'm wondering, have you ever sat down and talked to a union, for instance?

The Chair: Mr. Woolford.

Mr. Peter Woolford (Vice-President, Policy Development and Research, Retail Council of Canada): Thank you, Madam Chair.

When we participated in the consultations with the Department of Finance, there were representatives of the Canadian Labour Congress there, and they had some thoughts in that direction. The CLC has come out and called for additional spending under the employment insurance program, particularly in the area of training, so that's obviously their first priority for dealing with the surplus: they'd like to spend it.

However, the trade union movement has for years argued that the government should take some responsibility in a fiscal way for downturns in the economy. This would be one way the government could accept some of that responsibility, by taking onto its account the costs of any overruns in the program for about ten years.

So our proposal responds to at least some of the themes on the trade union side, but as I say, in this current round they've asked for more spending.

¿ (0925)

Mr. Monte Solberg: Mr. Barnett, I speak for myself and not for the whole committee, but I certainly support the approach of eliminating what basically amounts to a tax on a donation, as you put it. But my question is, do you have any sense--you've talked to a lot of people, obviously--of how much of an impact it would have for us to do this? Are there people who are saying to you, if you get rid of this tax on donations, we will definitely start handing over more chunks of land to you? Is there a long list of people, a hundred people, or are there five?

Mr. Robert Barnett: I can talk from my own experience. We're creating about fifteen new nature reserves every year, and you end up with some people for whom a tax receipt comes as a big surprise; they just wanted to protect their land. But a very large percentage of people will not make a donation unless they're getting some kind of pretty good value.

Generally speaking, I would say half or more of our donations are in the category of people who are pretty much interested in the money, so it's very difficult to categorize it, but every little assistance like this really makes a big jump. When the decrease in the capital gains came from 75% down to 50%, in whatever year that was--1997--it made a huge change, so this would have a similar impact, in my opinion.

Mr. Monte Solberg: Ms. Rothman, we had a presentation the other day from St. Christopher House about an idea they have for a registered development savings plan. You're familiar with it. What are your views on it?

Mrs. Laurel Rothman: I think it's an interesting addition to the range of support to assist low-income families. In fact, I work at the Family Service Association here in Toronto, and I'm involved in an initiative with St. Christopher. It's a research and demonstration project HRDC is funding called “learn$ave”, which is a matched savings program for those wanting to go into training, so we have a little bit of experience in it.

My concern, quite frankly, is that we make it clear that the strategy to help low-income people build assets is not going to replace the income support people need at various points of vulnerability.

The Chair: You have 30 seconds.

Mr. Monte Solberg: I have a very quick question to the people from ACTRA. I know you were talking about the TV fund, and that's your primary interest, but I'm curious about the impact of the rising dollar on your business. Has it driven away productions to a large degree? It came up so quickly. Are planned projects still going ahead?

Mr. Brian Topp: Thank you for that question.

There's been a 20% price increase in six months, which is, as you say, a significant challenge. Our marketing group, Film Ontario, which I referred to, just completed a round with all the major studios in Los Angeles. We were there two weeks ago, and we asked every one of them what they thought about that question, for obvious reasons. Basically, our question was, what's the tipping point? What is the point you get to where the economics drives you out of the country?

What we have going for us is that the American dollar depreciated against all the major foreign currencies at the same time. You don't have a situation like the one that was sneaking up on us before, where Australia, eastern Europe, and South Africa were all becoming more competitive. Everybody got worse at the same time.

What they essentially said was we are losing a bit of a good thing. The economics of going to Canada used to be stunning; now it's merely pretty good. The tipping point is more in the eighties than in the seventies; they appreciate that if our dollar gets to 80¢, 82¢, or 85¢, there is going to be a crisis. Now it's just unfortunate.

Mr. Monte Solberg: Thank you.

The Chair: I'm going to add a question to that one. There has been some rhetoric coming out of the new governor of California. How much will that impact on this industry in Canada?

Mr. Brian Topp: The Arnold effect.

The Chair: Yes.

Some hon. members: Oh, oh!

¿ (0930)

The Chair: I don't use names, but you can.

Mr. Brian Topp: I still think he'll be back.

Arnold--Mr. Schwarzenegger--as any American governor has, has an opportunity to set the tone in California on this issue. Now, this whole runaway production campaign was petering out because things were getting pretty good in Los Angeles. They were busy and things were going well, so the campaign was basically running out of steam. I think what putting Mr. Schwarzenegger into Sacramento has done is bring it back as an issue.

But Mr. Schwarzenegger can't do a lot more about it in the short term other than set the tone on it. The reason for that is because at the end of the day, as has been made so explicitly clear to us so often, the film and television business is a very bottom-line-driven business, very price-sensitive and very budget-driven. The way the government of California can speak to its film and television business is basically through budget measures. They're $38 billion U.S. underwater, and they've just cut their film commission by 90%, so the odds they are going to make a big fiscal move are low.

Mr. Schwarzenegger was before the U.S. Congress in Washington recently, talking about a major fiscal move that could be significant. You'll recall that there's a debate going on about their export financing arrangements, and Congress is looking at a bill right now. Lobbyists for the industry have attached a tax measure that could be significant. He was there. He might be able to make a difference, but most people believe he's not going to have a real effect. What's going to drive our future in terms of that part of our business is the dollar.

The Chair: Thank you very much for clarifying that.

Now I'll go to Mr. Wilfert for six minutes.

Mr. Bryon Wilfert (Oak Ridges, Lib.): Thank you, Madam Chair.

Mr. Barnett, as member of Parliament for the riding of Oak Ridges and as a member of council for 12 years, I have had the moraine front and centre for me for some time. The federal government did set aside 7,500 hectares of land, our own land, for which of course the no-development-in-perpetuity was well received. I have certainly talked to many developers on the issues you've raised, and I'm very supportive of them.

As parliamentary secretary to the Minister of Finance, I'd like to know how much you estimate these kinds of changes would cost, because that obviously will have an impact. I don't know if we would be able to do all four of them, but I certainly believe the issue of donations is one developers would like to know about at the beginning, before they decide what they're going to do with the land.

The Chair: Mr. Barnett.

Mr. Robert Barnett: Thank you, Mr. Wilfert. That's a good question.

I'm on the board of the Oak Ridges Moraine Land Trust as well.

Mr. Bryon Wilfert: I know that.

Mr. Robert Barnett: My feeling on this is that it's not going to have a major impact. If developers own land, mostly they want to develop that land, but there are some instances when they can be persuaded to give away their land. I think it's going to be a small fraction, just as the ecological gift program in Canada is pretty small fry. I think the extent to which developers are going to participate is going to be even smaller fry, but I think they could put some very important land next to occupied areas into the quasi-public domain, where people can get a lot more benefit out of it. So I think it's a small amount, but a very powerful part.

Mr. Bryon Wilfert: The alternative is for the public to ask governments to buy the land, and frankly, that's not in the cards.

Mr. Robert Barnett: That's not possible. We've seen Mr. McGuinty have problems with that in the last few weeks.

Mr. Bryon Wilfert: To ACTRA, as far as the regional productions are concerned, I would support the elimination of that policy. I think it's highly discriminatory, and whatever the rationale that was used in the 1990s, the fact is this is supposed to be Canada. I would suggest there are certain benefits in going to certain parts of the country, but one of them shouldn't be that there's an unequal playing field in that sense.

I support the Canadian Television Fund. In my view, however, the Canadian heritage committee played politics when they denounced the cut. There was no cut. The reality was that the fund would have ended at the end of March had the minister not extended it for two years. I know, because as parliamentary secretary, I was very much involved with that. There was supposed to be government money in the cable and others that we were funding, and then it was supposed to go down as other funds came up. For whatever reason, that didn't happen.

If you want an entirely different formula in terms of how the Canadian Television Fund is put together, which I presume you do, asking for $120 million annually, I have no problem with that. But I didn't like the politics, particularly from the heritage department, and it probably had to do with things outside our control, as you may know. But I certainly would agree with that.

I don't know if you have any comment on that.

¿ (0935)

Mr. Brian Topp: I can offer you a brief one.

I thank you for those remarks. I think you cut to the heart of it, which is it doesn't make sense to target an industry cluster for dismantling. You might recall, and this committee will surely recall, the federal government's pursuit of roughly similar policy in financial services in the 1970s. It didn't make any more sense then than it does to the film and television industry now. It's dismantling success. You wouldn't do it with the pharmaceutical industry in Montreal, and I would suggest the film and television industry isn't a fair target in Toronto.

With regard to the fund, I'm familiar with the issue you're touching on, what the deal was originally, and I think you fairly represent how the finance department saw it. I mean, the bottom line is the Canadian Television Fund has become critical trigger capital for domestic production. When you look at the competitive pressures on this English Canadian industry and at the issues around capitalizing shows, the fund has become what I said in my remarks, a really important contribution by the federal government, with the consequence that we all got marinated in when we were talking about phasing it out.

Mr. Bryon Wilfert: The government's support for the CBC and other things obviously demonstrates there's a whole larger package here.

Mr. Brian Topp: Very much so.

Mr. Bryon Wilfert: My wife's cousin happens to be Colin Mochrie, so I have to tell you I do get comments from time to time. To me they look at one isolated issue, rather than at the whole thing. If it is the issue of $120 million annually, I think it's a very important fund. Let's do it.

Mr. Brian Topp: Well, that's our brief. Let's just talk about what we're trying to do with that.

Our colleagues, when they came to speak to you in Ottawa, talked about the painful need to take prime time back. It's the most telling medium you have. Look at the top ten shows in Australia--they're local; in Britain--they're local. Germany, Spain, every major industrial country, including, by the way, in this country Quebec, has taken its prime time back. That's a job we still have to do.

I think it's fair for the government to say we want to join Charles Dalfen from the CRTC and take that job on, and we're going to measure against results. That's a good challenge for the industry. But a relatively small investment in that fund and a helpful evolution of the way CRTC regulates the industry could work.

Mr. Bryon Wilfert: I see the value that we get back for it, absolutely.

To the Retail Council of Canada, I was glad to see you participated in the minister's review of EI. He's very much committed to that new rate by 2005. In regard to the separate account, Parliament certainly can make those changes, I presume, although, as you know, the Auditor General in 1987 said you couldn't have a separate fund; therefore, there is no separate fund and there is no $45 billion floating around. There never has been. Yes, it's in the general revenue.

Mrs. Diane Brisebois: It could be argued, I suspect, but we won't.

Mr. Bryon Wilfert: No, we won't. But I would suggest to you that I support a very transparent, open process, for both employees and employers. I think that's important.

I do support the yearly basic exemption, just so I have that on the record.

To Campaign 2000, I was pleased about your comments about the child tax credit, which I think is very important. We have certainly been doing a lot with that.

I think on the Canada social transfer, again, I would split everything up so it's much more accountable. We're having a lot of problems with the provinces, particularly in social housing, so for me the answer isn't more money until we get more accountability from the provinces to come through. Ontario was a disaster. Nova Scotia is only at 15 units, I understand.

So I'm hoping that the pressure you're suggesting we put on the Government of Canada applies equally to the provinces.

Mrs. Laurel Rothman: Oh, definitely. And we're working on some more specific proposals around mechanisms. We need to go back to conditions and accountability.

The Chair: We're out of time.

To the Retail Council, as you know, this committee did recommend the yearly basic exemption in its report last year.

To ACTRA, taking prime time back could have been a title for your report. We didn't see those words in there, but we've noted them. Thank you.

Now I'm going to go to Mr. Murphy, followed by Ms. Wasylycia-Leis, followed by Mr. Pillitteri.

Mr. Shawn Murphy (Hillsborough, Lib.): Thank you very much, Madam Chair.

I just have a couple of questions, Mr. Barnett, on the ecological gifts program.

First of all, I support this program 100%. I think it accomplishes a lot of environmental objectives, putting more land that's environmentally sensitive into public hands. I've been involved in two or three divestures and attempted divestures. I used to practise law, even when I continued in politics here.

I'll just ask about your own experiences in Ontario. On the evaluation process, how much the land is worth, one of the problems I've run into on two occasions is when the person wants to make the gift of the ecologically sensitive property, but there is some sort of government moratorium on any development. Once the appraisal goes out there, it basically comes back that the property is worthless. The one property I think of is a beautiful property, breathtaking--100 acres along a river, everything you'd want. But there is a government moratorium on development, and the appraiser says because there's no best use, or any possible use, it's basically useless. I shouldn't say it's totally useless, but they give some nominal figure of $100,000 or $75,000 for the property, which basically defeats the whole intent of this program.

Now, you don't want a great big shemozzle, so they get unrealistic appraisals, but have you ever run into this specific problem?

¿ (0940)

Mr. Robert Barnett: No.

I guess when the capital gain was brought down to 25% the quid pro quo was that we have to look at these appraisals really carefully to make sure nobody is pulling sleight of hand and--

Mr. Shawn Murphy: Inflating the value.

Mr. Robert Barnett: Yes. That is well looked after. There is a dual appraisal, and it's not a problem.

When you come to appraising strange and wonderful things like waterfalls and a kilometre of cliffs, it's very difficult to do. The appraisers have to take a dollar-and-cents approach. If there's a waterfall but it's a mile from where you can build your house, it doesn't add much to the value of the property. As much as I in my heart would like it to be otherwise, the market has to dictate. The market is dictating, and the appraisers are following those rules fastidiously and coming up with--I think--what the real market value is.

Now, sometimes it's difficult to find comparables, but they're doing their best. And it sometimes doesn't please landowners to know in their hearts they've got a $2 million property but they can't put a row of houses on it so they can't achieve that $2 million value. They have to appraise according to the development potential. I feel comfortable with that. Some of my landowners don't, but that's life. A lot of people don't like the Niagara Escarpment Commission because they say you can't build houses wherever you want to on the Niagara Escarpment, but that's our government, that's our life.

Mr. Shawn Murphy: On the issue of child poverty, Ms. Rothman, I have a couple of questions. Regarding the modelling the association is doing, as you know, we have in this country a declining birth rate--it's declining each year, or it seems to be. Do you think that will have any effect on the number of children living in low-income families in the years to come?

Mrs. Laurel Rothman: It's an interesting question I hadn't quite thought of. It's hard to know, because I think if we also look at the fact, as I understand it, that Canada is mostly looking at sustaining and increasing our population through immigration, that leads us to be very concerned about how we are not yet successfully integrating newcomers as effectively and quickly as we need to.

I was talking about the Toronto statistic; I don't have the cross-Canada statistic yet. So I'm not sure the degree to which the birth rate per se is going to make a difference. We're still looking now at one million children living in poverty, a ratio that's worse than that of 1989.

Mr. Shawn Murphy: My next question is on the whole issue of EI, and I can address it to you and perhaps Madame Brisebois too.

EI has lost its way. It's become to a certain extent an employment tax by stealth. Secondly, it has also become part of the social architecture to indirectly--not the original intent--support low-income families. A lot of your seasonal workers out there use the EI system, and perhaps it's not the way they should be using it and it's not the way it was originally intended.

If we go to a pure insurance model that's been recommended, and there are a lot of good arguments that we should, that's going to probably have more children going in poverty.

Do you have any comments on that issue?

¿ (0945)

Mrs. Laurel Rothman: I'm not familiar with the proposal going to a more pure insurance model.

Let me make a quick comment. Our concern is that we don't have, if you will, the secure income net for families at various steps along the way. You move from social assistance, which often includes men going part-time into the labour market, and you lose that part-time, four-month job and you cycle back and there isn't anything. Then you get the full-time job for six months and it ends and you're eligible perhaps for EI and that supplement for low-income families.

We need something more secure, stable, and adequate, which families can build on over a longer term.

Mr. Shawn Murphy: I think you've answered my question.

I think the changes we would make to the EI system will have to be accompanied by certain changes to the social architecture of this country for low-income families when they go from these institutions. To a certain extent it has been EI that is replacing social assistance in many provinces.

The Chair: Madame Brisebois.

Mrs. Diane Brisebois: We obviously agree with your comments.

If you look at page 12 of our submission, we refer again to the $1,400 per job of what we consider overpayment or tax. So if you assume that this would be going back into the marketplace and creating jobs or supporting those who cannot work, certainly it would have a greater benefit than just overcharging employers and employees. There's no question about that.

The Chair: Thank you.

I'm going to now turn to Ms. Wasylycia-Leis, and this will be the final round to keep us on time. Mr. Pillitteri has given up, so go ahead.

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

I want to ask a question specifically to Laurel, Brian, and Phil, and perhaps the rest of you, if there's time, can jump in where appropriate.

First of all, with respect to the last question from Mr. Murphy on EI, it seems to me, Laurel, that in fact going to a true insurance system would see some of that $45 billion in surplus that came from working families and caused them to go into poverty might have helped to deal with some of the issues you're talking about. And it would have made good economic sense if we were investing in low-income working families and single mothers who were living in deep despair and poverty.

Mrs. Laurel Rothman: I certainly would agree.

I think it would take me a few minutes to walk through how they all connect, and perhaps we have not fully developed that proposal as much, but there is no question that there are resources there, but they are not sufficient. We have to ensure that the resources are there.

For example, we were recommending the need for an enhanced Canada social transfer. We're using the term “revenue recovery”, whether you recover it, to what degree it's recovered from EI and/or other sources, but we need increased funding for the social part of the transfer. Health transfers have been increased several times since the major cuts of 1996, and certainly that's needed, but the social side also needs a fair investment.

Ms. Judy Wasylycia-Leis: It must be galling to know the needs, to see that child poverty has hardly decreased at all in the last ten years, and then to hear about an additional $4 billion in surplus this past year going to pay down the debt, which hardly makes a difference.

It brings me to the question I have for Brian, which is the tendency on the part of Liberals to split hairs around the $50 million that was lost and not to focus on the fact that there was some flexibility in government that has been denied in important programs like Canadian programming, which is so important to our sovereignty and our identity.

Can you comment, Brian, on the broader macro-issues here, about the hard choices we have to make vis-à-vis government spending, vis-à-vis tax cuts, and now this latest new preoccupation, debt reduction, even though we appear to be the best of the G-7 in terms of the debt-to-GDP ratio?

¿ (0950)

Mr. Brian Topp: Well, that was a fairly big question.

Ms. Judy Wasylycia-Leis: We only have six minutes.

Specifically on that, what would you say to the Retail Council, which seems to be advocating this line that Paul Martin has, which is stay the course, more tax cuts, more paying down the debt, and the rest of us have to really take a hit again?

Mrs. Diane Brisebois: I think it would be wise if you agree with me.

Mr. Brian Topp: Actually, I'm not sure I'm going to give the honourable member exactly the answer I think she's looking for, but I'll give you a story from a previous life and then I'll offer one other comment.

In a previous life I used to work for the Government of Saskatchewan. I can remember attending a meeting with some bond raters here in Toronto, with my premier, Roy Romanow. I remember at the time it was a grim moment in the fiscal history of Saskatchewan and they were looking at our budgets and they were saying “Do you really need to spend that much for health care? And it's that much for education--well, we're not sure that we really approve of that.”

I left that meeting thinking that choking the government in $15 billion for one million of population in debt is not smart. As old Tommy Douglas used to say, if you let the bankers own the government, then they'll tell you how to run it.

So I think the idea of being careful about public debt has a lot of value. At the end of the day, the only thing they sense is a balanced approach in which you try to limit debt to what's reasonable, given your fiscal capacity, but also speak to your social deficit. It makes no sense to focus on only one side of the equation. I think this argument is familiar to this committee. Some of the figures we were hearing from Laurel make the point. It makes no sense to focus only on the fiscal side and leave aside the human side.

Perhaps I can add one other comment on this EI discussion. I mentioned a little while ago that the only income security available to most creative people in this country is the RRSP system. And the day will come when that will be worth a look in the federal government. Creative people in this country basically don't have access to income security, and the result is they basically bridge these wildly fluctuating incomes in their world by resorting to their retirement savings. The result is fairrly scary consequences in terms of levels of poverty for people in that industry who have retired.

The whole system needs to be looked at, including for creative people.

Ms. Judy Wasylycia-Leis: Thank you.

My last question is for Phil Upshall. It is again on recognizing the urgent needs in the area of mental health and putting it in the context of these hard choices we have to make. I'll put to you the question that actually the head of the Canadian Medical Association put to us. Since 1997 and 1998 funding for tax cuts and debt repayment was more than three times new funding for health care. Why doesn't the federal government give health care funding the same priorities as for the funding for tax cuts and debt repayment? And I want to throw in there, specifically, funding and support for mental health.

Mr. Phil Upshall: I can't answer for the government, but I wish, from my perspective, that it would pay a little more attention to the elephant that's in the room, and that's the cost of mental illness and mental health issues in Canada. It's $15 billion to $30 billion, take your pick, it's in that area, and we're not paying any attention to it. We're not paying any attention to the fact that it's really appropriate to get into early intervention, early diagnosis. It's one of the big issues we could save a lot of money on in terms of health care costs.

We're hoping that with our advocacy the awareness about mental illness and mental health issues is growing and that greater attention will be paid to it by this committee and other committees of the House. We can save an awful lot of money if we get early intervention and keep kids out of jail. Well over half of our jail population lives with and suffers from severe and persistent mental illnesses. Giving them proper mental health treatment, as opposed to incarcerating them, would cost us a heck of a lot less money, would make them far more productive, give everyone a heck of a lot more hope, and make this a far more socially responsible country.

Canada's the only country of the G-7 that does not have a national strategy for mental health and mental illness issues. We don't have an adequate social policy dealing with people who have any type of mental illness, and we don't have an adequate mental health promotion activity.

In terms of why we haven't made the impression, I guess it's a lack of advocacy. There are a lot of other health care groups at the table. Canada's gone through a hugely difficult problem in the last ten years with regard to debt reduction, but we're hoping to make a difference. We're hoping this committee will, in its recommendation, deal specifically with our requests for support in the mental health and mental illness issues.

¿ (0955)

Ms. Judy Wasylycia-Leis: I have one last point on this. The good news was that finally mental health showed up in terms of the royal commission on the future of health care in Canada, Roy Romanow's report. The bad news is that there has been no movement on it. What can we do to help translate that recommendation in the Roy Romanow report into action?

Mr. Phil Upshall: Roy Romanow only said two words, “orphan child”. The key for us is to continue to support and watch the Kirby committee hearings. They're very important. A tremendous amount of information is in there.

With regard to your current hearings, if you would specifically designate some area of your report to deal with mental illness issues.... Surveillance, adequate information, is absolutely essential. Some form of funding to start our national strategies is essential. More directed funding to research is really important, and the CHST is absolutely essential to be attended to.

We really think you have to have tied funding. Money going straight to the provinces that has been identified for mental health and mental illness issues has in fact gone elsewhere. Our goal and advocacy is to say please tie any transfers and make sure that there's an adequate evaluation of the spending at the provincial level.

The Chair: Thank you very much.

That will be the last word from this panel. Last year we had something on mental illness. Also, to the film undustry, the Writers' Union has been very strongly advocating limited back-averaging of income, which you know is partially allowed right now, but not to the extent they're looking for.

All of you have been great participants in this presentation this morning. We have a number of panels, so I'm going to thank you, and not only on behalf of the members present here today, but all of our members who have all of your briefs. I can assure you that your briefs find their way into the finance department. The Hansards for these meetings are read inside the finance department.

As chair, don't know whether I will be tabling a report that we're going to start writing later this weekend, because events are out of my control. But this consultation will have heard from over 500 sets of witnesses since September. We think it's one of the most valuable tools that Canadians have to participate in their government. So thank you very much for your presentations, your attendance, and for answering our questions.

We will suspend for less than five minutes for our next panel. Thank you.

¿ (0958)

À (1005)

The Chair: We are back in session with our second panel of the morning in Toronto, on November 7, and again we have an excellent panel before us.

We start with the Campaign Against Child Poverty, represented by Caroline Di Giovanni, executive director for the Hope for Children Foundation. Welcome to you. And you are joined at the table by your steering committee member, Gerald Vandezande, and Jacquie Maund, who is your executive coordinator. Thank you very much for joining us.

From the Writers Guild of Canada, we have Gail Martiri, who is the director of policy. Thank you for joining us.

From the Childcare Resource and Research Unit, we're pleased to have the coordinator of the unit, Ms. Martha Friendly, who comes to us from the Centre for Urban and Community Studies at the University of Toronto.

As an individual, again, we receive the input from Joseph Polito, and we appreciate that.

From the Association of Municipal Managers and Clerks of Ontario, we have Mary MacKenzie, their president, and Andy Koopmans, who is the executive director. Welcome.

Welcome.

We'll go as normal. We'll allow seven minutes for each participant to put their voice and their concerns on the table, and then after we've heard from all of you we will go to rounds of questioning to complete our time period.

We'll go in the order on the agenda, and start with the Campaign Against Child Poverty. Madame, go ahead, please.

Ms. Caroline Di Giovanni (Executive Director, Hope for Children Foundation, Campaign Against Child Poverty): Thank you, Madam Chair.

I'd like to start with Jacquie Maund. She's going to read the first part of our speaking notes.

Jacquie.

Ms. Jacquie Maund (Coordinator, Campaign Against Child Poverty): Good morning.

I'll start with some current facts on child and family poverty in Canada. I know our colleague Laurel Rothman spoke to you earlier this morning, so I'll just summarize.

According to Campaign 2000 figures, 16.5% of Canadian children live below the poverty line. This means in actual numbers about 1.1 million Canadian children living below the poverty line. That figure is consistent with a new measure of poverty introduced by HRDC last year, called the market-based measure. That measure indicated that 16.9% of Canadian children live below the poverty line, again using 2000 statistics. So there is consistency. In previous meetings there has been discussion about how to define poverty, but we raise that to show there is consistency in terms of the definition of the numbers of Canadian children in poverty.

I have some quick comments for you on recent federal initiatives. The Campaign Against Child Poverty was indeed very pleased to see the social investments announced in the last federal budget relating to child care, housing, and income security. We were particularly pleased to see the commitment to early childhood education and care, and the subsequent multilateral agreement on early learning and care signed with provinces. We see that as a first step toward a national child care program. But we were disappointed that only $100 million was dedicated to this initiative over the first two years, and I'm sure our colleague Martha Friendly will be speaking more about that.

We'd like to move now into our recommendations. As a general comment, we want to ensure that social investments addressing child and family poverty are increased, and that federal government commitments to children are not overshadowed by other spending priorities.

We also urge stronger measures to ensure that provincial and territorial governments play their part in the important federal-provincial-territorial agreements that have implications for reducing poverty.

Caroline will speak about our recommendations.

Ms. Caroline Di Giovanni: Thank you, Jacquie, and Madam Chair and members of the committee.

Our recommendations are succinct and repeat recommendations we've made in previous years. First, increase federal investments in early childhood education and care with a $1-billion annual investment in the next federal budget to support the multilateral agreement on early learning and child care. And please tighten the requirements to ensure that provinces and territories spend these funds to support increased high-quality, licensed, regulated child care spaces.

No doubt you'll hear more on this issue, but U of T economists Gord Cleveland and Michael Krashinsky have completed a document that shows the investment in early years creates a two-for-one return on the investment. Increased parental workforce is also an outcome of early investment in child care, and children respond with more productivity in their learning if they are started with quality early education.

Our second recommendation addresses income security by improving child benefits for all low-income families. Consolidate the child tax benefit into a single program providing a maximum benefit of $4,200 per child to families living in poverty, and bring it into effect immediately, instead of the current recommended five-year phase-in period. We need immediate attention to this issue, and we believe the potential is there to carry this out.

Please strengthen the national child benefit program by holding the provinces to task and stopping the clawback of benefits from those on social assistance. The new regime in Queen's Park holds promise that this may take place in Ontario. We would like this committee to recommend attention to that issue.

Recommendation number three: increase the availability of affordable housing through further investment. For example, $1 billion would support the construction of 20,000 new affordable units. Hold the provinces and territories accountable in bilateral agreements to provide matching funding. Housing is the key to family stability, and we want housing, not shelters, for families in difficulty.

Recommendation number four: hold provincial and territorial governments accountable in joint initiatives that can help address child and family poverty. If the provinces refuse to be accountable, consider other measures to ensure that families and children in those jurisdictions receive the services they need.

Thank you.

Now we'll go to Gerald.

À (1010)

Mr. Gerald Vandezande (Steering Committee Member, Campaign Against Child Poverty): Madam Chair and members of the committee, as part of the coalition's determination to make sure that the Ontario government is properly accountable for the funds that are being transferred from Ottawa to Queen's Park, we have appeared before the provincial finance committee. We've had direct contact with the leaders of the opposition and the previous premier.

In an ad attached to your copy of the submission, which we ran during the election campaign, in a public message signed by 60 faith leaders, we challenged the provincial government to pursue the major social justice issues that we put before the public at large in a non-partisan way and to the leaders of the parties.

We hope there will be a new era of cooperation between the Ontario and federal governments, particularly now that both are Liberal, and that they will do whatever is needed to invest in regulated child care and make sure that the clawback of the national child benefit ends.

The other point we're making is that this committee recommend to Parliament, and particularly to the finance minister and the new Prime Minister, that the government recognize the need to invest additional moneys. And these funds are available, as indicated by the finance minister's recent announcement regarding the 2002-03 surplus, which was larger than originally forecast, and again will be anticipated in this year.

We're pleased that the Prime Minister, in his letter to the provincial governments, indicated that $2 billion will be earmarked from that surplus in order to strengthen the health care portfolio.

In addition to that, we're relying also on the important document that was made available as an attachment to the financial statement for the year ended March 31, 2002, by the Auditor General, in which she made some very helpful comments--about 39 pages worth. One of the key recommendations she made is:

I have become concerned in recent years with certain misinformation on what happens to the surplus for the year. The surplus for the year does NOT automatically pay down the debt. There is neither any law nor accounting rule that requires this.

Our submission is that the surplus money that was available could be used--and as an accountant by background, I'm familiar with the way financial statements are put together. And now we recommend that this committee do what the Prime Minister himself did--namely, earmark moneys that are expected to become available in this year as part of the surplus so that they be designated, for example, for extra investment with respect to housing and other anti-poverty measures, social investments that could, as the Auditor General indicated, be listed as financial assets in the financial statements for projects that have already been agreed upon, both in the throne speech, where they were indicated, but also in previous budget commitments, as well as statements made by the finance minister, the previous finance minister, the existing Prime Minister, and the future Prime Minister.

So we urge that the committee make that a strong recommendation and take seriously the statements made by Madam Fraser and that it be drawn to the attention of Parliament. Parliament, in a free vote, should determine how the surplus ought to be used, for which investment purposes. We say it ought to be for social investment purposes in the context of the throne speech commitment to eliminate poverty and homelessness.

Thank you very much.

À (1015)

The Chair: Thank you very much.

Now I will go to the Writers Guild of Canada. Go ahead.

Mrs. Gail Martiri (Director of Policy, Writers Guild of Canada): Thank you.

We represent screenwriters who work in film, television, and multimedia in Canada. I thought it might be useful, perhaps, before I enter our main recommendation to give you an idea of what type of work our writers do in terms of film and TV in this country.

The finance committee's pre-budget consultation also coincides with a very critical moment in our industry. The indigenous production sector is in crisis due to unstable and reduced financing, minimal spending by broadcasters on Canadian content production, and shrinking export markets for Canadian audio-visual works. Writers, directors, performers, technicians, and Canadian producers have united to urge the government and its agencies to establish stable and long-term funding for industry in order to allow our creators to tell Canadian stories.

Canadian screenwriters work almost exclusively on indigenous programming in this country. By this we mean ten out of ten or eight out ten Canadian content productions, as determined by the CAVCO grid. WGC statistics point to a significant decline in this type of indigenous programming. In 1999 we had 147 broadcast hours of one-hour live action dramas in our jurisdiction. By 2002 we only had 65 hours. This represents a 56% decline. The downward trend is also clear in terms of eight out of ten products designed for export markets. While in 1999 we had 434 hours of export shows made here, by 2003 we only have 186 hours. This represents a 57% decline.

This type of programming, which is written, directed, and performed by Canadians, and supported by the CTF, has declined due to a lack of adequate regulation and financing. The CRTC's 1999 TV policy relieves broadcasters of expenditure and exhibition requirements to develop, produce, and air distinctly Canadian shows. The policy allows our conventional broadcasters to buy and air U.S. simulcast shows rather than invest in the development, production, and broadcast of our own shows created by Canadians. The WGC, along with the unions and guilds, is strongly advocating a reversal of this policy at the CRTC level.

Limited financing has also severely hindered our indigenous production sector. The reality is that making dramatic programming in this country is an expensive and risky business. Increasingly broadcasters are choosing U.S. sitcoms and dramas over indigenous Canadian shows, because economies of scale south of the border make them cheaper to buy. A broadcaster here can buy a popular American show for about $150,000, whereas a typical hour of Canadian drama costs over $1 million to make. It is very difficult for our indigenous sector to compete.

So why is Canada different from other countries? It seems to us that our country simply does not value the indigenous television sector enough to invest the necessary financial and regulatory resources to promote and protect it. Other jurisdictions that used to be major export markets of our Canadian dramas, such as Australia and the U.K., have recently changed their regulations to bolster that production sector, which has shrunk the export market for our product.

In terms of our recommendations, first I'd like to address the fact that our group would like to urge this committee to implement stable and long-term financing for the Canadian Television Fund, the CTF. You heard from our colleagues from ACTRA this morning. Their position is very similar to ours.

As you know, Canadian programming is basically supported by the CTF. It's the first step where financing begins. Typically, CTF finances about 20% to 30% of a production budget. From there it triggers other elements, including broadcaster licence fees and export sales. Therefore it's the crucial first step for our industry. Usually the CTF budget is about $250 million and over. We've seen a downward decline in that budget over the last three or four years as well. That has also contributed to the decline.

The impact of the Canadian Television Fund is also quite substantial on our production sector. In 2001-02, the CTF contributed $241 million to Canadian productions. This initial investment multiplied into over $800 million of total production budget. Therefore, that crucial first step cannot be something we can dispense with. Our industry estimates show that any elimination of CTF funding—if that fund ceased to exist—would probably result in at least a $500 million loss of production and about 2,000 hours of original Canadian programming that would have been available to our audiences.

À (1020)

Given the significance of the CTF to our Canadian TV sector, the February 2003 federal budget cuts, which reduced the government's support by 25%, from $100 million to $75 million, severely threatened our industry, which was already in decline.

Full government support for the CTF is crucial if we want to revitalize our Canadian television production sector. If we want to provide our audiences with the stories that tell our unique Canadian experience, there has to be an investment in that sector.

As you know, the 2004 budget numbers are even worse. Our industry took a gamble by lobbying Minister Manley to transfer some portion of the funding for next year into this year's budget. That $12.5 million transfer means that for next year we're heading into the production year with only $62.5 million of Canadian government support in that sector.

We were willing to take that gamble at the time, hoping that this type of discussion would reinstate that fund for next year. Let's see what happens. If we don't get that support, we're seriously worried that we will not have a production sector to speak of next year.

The fact is that without work opportunities our creators simply cannot survive in Canada. They're either heading south of the border or finding other work. That means that if a decision is taken three or four years down the road to reinstate funding and support our indigenous sector, there will simply not be Canadian creators available to produce that content. We will have to start from zero. The training ground will be lost. We will not have the talent to contribute to our film sector, which has a rather high goal of achieving 5% at the box office in the next three or four years.

The next issue I would like to address is the Canadian film or video production tax credit. The Canadian film or video production tax credit supports uniquely Canadian productions shot here in Canada. It's at a level of 25% as a tax credit to producers who are using Canadian talent.

I would just like to highlight one issue before I close. In the 2003 budget, while the CTF was reduced by $25 million, the production services tax credit, which basically supports Hollywood producers with quite deep pockets who are shooting productions here, was increased from a level of 11% to 16%. Government officials estimate that at about a $25-million cost to the Canadian taxpayer.

We are calling on this committee to ask the government to set its priorities straight—to first support our homegrown talent in order to ensure that our Canadian shows will be provided to our Canadian audiences. Hollywood is quite rich. Let's build our industry first.

Thank you very much.

The Chair: Thank you very much.

Now we'll go to Martha Friendly.

Ms. Martha Friendly (Coordinator, Centre for Urban and Community Studies of the University of Toronto, Childcare Resource and Research Unit): Good morning. Thank you very much for having me. I've met many of you before.

What I'm going to do is summarize my brief, with the exception of the financial figures, which I want to address and change.

I should mention that I know last year you were interested in the OECD Thematic Review of Early Childhood Education and Care Policy. I actually co-authored the Canada Background Report. If you continue to be interested in it, we could talk about it.

Let me make the points in the brief, in summary.

First of all, I want to emphasize how much we understand now that early childhood education and care is a multifaceted program. It signifies much more than looking after children while the mother is employed. We understand that these programs provide early childhood education care and support for parents, if they're well designed. Well-designed programs mean that they can deliver these through well-integrated, well-designed, multifunctional programs, and they can fulfil all of these functions. In other words, you could really get a good bang for your buck.

Unfortunately, early childhood education care has not evolved in this way in Canada. Day care, child care, kindergarten, and nursery schools are all organized, legislated, and funded separately. It makes it very difficult for parents, but it also means that the financial resources are being used really badly.

The second point I want to emphasize is that early childhood education and care is an issue for families across economic categories, for all social groups, and across all regions of Canada. You've heard how it's one of the pieces of an anti-child-poverty strategy, but it's also true that middle-class and affluent families, immigrants, refugees, and parents in all regions of Canada use these programs if they're available and affordable.

This would suggest to me—and I know this to be true from research—-that all Canadian parents want their children to get the best possible start in life. It's one of the reasons they're seeking these programs. But at the same time, Canada's rate of mothers' participation in the labour force is very high for an industrialized country. It's higher than it is in many of the European countries, and it continues to rise each year. It's around 70%, depending on the age of the child.

The third point I want to make is that I've been coming here for many years, but Canada has now really fallen behind. It has been behind other countries in this area for the last two decades. What's happening now is that in fact some developing countries are moving in ways that we have not, where they're actually putting in resources. Countries such as Jamaica, for example, are developing national policies on early childhood education and care. Even in the United States, which I wouldn't look to as a social policy model, there are many more three-year-olds, for example, in a variety of early childhood education and care programs than we have in Canada. We haven't even made a start in this area.

I'll get to that in a minute. Let me go on.

There are two main issues, and they go hand in hand. The first main overarching issue is that there is no coherent policy approach. At the same time, the public financing for this area, I'd say, is shamefully inadequate.

It's not merely a jurisdictional issue, because this is an area of provincial jurisdiction, but none of the provinces and territories, with the possible exception of Quebec, have developed coordinated, well-thought-out approaches to this either. The programs are all piecemeal and patchwork at the provincial and territorial level. I'd like to point out that even in an area where the federal government does have jurisdiction, early childhood programs for aboriginal children and families, there are seven different programs.

It means that these things are quite scattered, and it makes two things very difficult from a delivery point of view. The first is accessibility, because programs are not accessible or they're not suitable. For example, kindergarten is mostly for part of the day, and many parents are in the labour force.

The thing is that the quality is really poor. I would say, coming back to the OECD framework, that this is probably going to be one of the issues that's going to emerge as a primary issue. The quality of our programs is very poor. I'm talking mostly about the child care programs. If they're good quality, it means that some community people have taken it upon themselves to make them good quality. It's not really through a well-developed policy.

À (1025)

In fact, if an early childhood program isn't good quality, it doesn't provide the best possible start in life. You can't look at it for improvement of human capital and looking at future citizens. We have a lot of research that documents that really well.

Last year we were delighted that there was the multilateral framework agreement on early learning and child care, which was clearly the first step. Minister Stewart called it “the first step toward a national child care program”.

We were very pleased that the federal government really stuck to its guns in requiring provinces to do two things: to use the money solely for regulated child care, and to actually provide public reporting. I think we need to go much further when we take the next step in policy development.

Let me get to my recommendations, if I can, because I think my time is probably shrinking.

If that was the first step, what are the next steps? Here are what I recommend as the next steps.

I want to point out that all of us who have been advocating for child care, day care, early childhood education and care for decades recognize—and I don't think this is a new recognition—that building such a program will take a long time. It will take at least a decade. I think what we have to do is begin. I think the multilateral framework was a beginning. Then the question is, what are the next steps? Here are my next steps.

The first step is that we need a goal. My goal, and I would recommend that this is the goal for the OECD and the goal for most countries, is that we need to have a long-term goal of universally accessible, high-quality ECDC to be developed within Canada within 10 or 15 years.

This needs to include a policy framework with stated principles. It needs national legislation, recognizing that this is within provincial jurisdiction. It needs quantifiable short-term and medium-term objectives. It needs implementation plans with targets and timetables. It needs data research and evaluation. I think there needs to be a national articulation of that as the long-term goal.

The second thing that I think really needs to be done is that I think we need to have a directorate or a secretariat for early learning and care within the federal government in order to pull this together, even though the responsibility for implementing and managing programs would still be within provincial-territorial jurisdiction. I identified the kinds of things that piece of the federal government would need to do. They're in the brief. I don't think this can move ahead as a policy issue without having some kind of a home, a place in which it can happen.

I guess the third thing is the money. Since I've submitted this brief, we've been having a lot of discussion within the community about what this would be. The money that you spend is very related to what your objective is, like how much you think you can accomplish.

We've actually been quite encouraged by discussion of the fact that it seems to be on Mr. Martin's agenda. We've been having a lot of discussion in our community about what the first-term objectives for a new government would look like. I would like to revive my financial figures to suggest that in the first year you would recommend $1 billion. It matches your own social policy committee.

I think this has emerged through discussion among the community and people who are doing policy work on this. It would ramp up to $4.5 billion annually in year four. It would be the first phase of building a national provincially delivered program, which would eventually cost more than $10 billion annually. It is consistent with the European Union's guideline from their own child care network of 1% of GDP.

I want to conclude and say that the agreement last year was welcome, but there has not yet been a strong commitment in a federal budget. We were extremely disappointed by the last federal budget, particularly in light of the first step agreement. I think that such a commitment is long overdue. I think everybody knows it's long overdue.

À (1030)

I also want to emphasize that money needs to go hand in hand with strong policy. Everybody has been talking about holding the provinces accountable, but there has to be a policy framework to which they will be accountable. I think we need to develop the policy in a serious manner and put serious money into it.

Thank you very much.

À (1035)

The Chair: Thank you.

Mr. Polito.

Mr. Joseph Polito (As Individual): She was so effective, can she do mine?

This morning, and many mornings and afternoons, you've heard all sorts of very compelling cases for funding and money. Mr. Manley and the outside experts are telling us it's not there. They're also telling us that our demographic changes and looming infrastructure needs are going to have enormous financial challenges attached to them.

This submission is designed to help provide that much-needed money, and meet some of our highest-priority goals, by providing a zero-cost version of a proposal you have been endorsing for the past two years.

This submission is based on the work of Canada's finest economists, including David Foote, Arthur Donner, and Frank Reid, who have been promoting a remarkable, innovative, market-oriented tax strategy to create a powerful bias to full employment in good times and, more importantly, in bad.

This strategy is designed to reverse perverse market incentives, something that all good employers want. This strategy would permit the implementation of two shelved reports: the 1994 Donner report, and the 1997 “Collective Reflection on the Changing Workplace”. In the latter, Lars Osberg explained a perverse market incentive:

The design of payroll-tax based programs such as Employment Insurance and the Canada Pension Plan now encourages firms, when they need more labour, to increase overtime hours rather than hire new employees

To reduce payroll premium costs during slowdowns, employers lay off employees rather than reduce everyone's hours a little. To reduce premium costs, employers resist family-friendly flexible practices such as reduced hours, job sharing, and education leave. Many employees are what David Foote has coined “the sandwich generation”, most acutely felt by women with careers, young children, and aging parents. There's also the child care issue, of course.

Consequently, we have found ourselves in the ludicrous situation of overworking to transfer income through taxes to the unemployed, who wish to work for themselves. Worse, they've created a bias against the best social program--jobs.

Who are the first to lose their jobs and the last to be hired? They are our youth, our immigrants, and our young parents--more child poverty. Most smart employers wish to keep employees in bad times because of the enormous training costs for new hires in a knowledge economy and the costs of severance for layoffs. Our payroll tax structure impedes them from doing so. It's perverse.

The keystone of this strategy is William Scarth's C.D. Howe Institute publication in 1997, with the wonderfully appropriate title “A Job-Creation Strategy for Governments With No Money”. It should be the keynote of your upcoming report. You have recommended a form of this proposal for the last two years, and your recommendations were supported in several submissions to the finance department, which was consulting with the public on another of your recommendations to fix the payroll rates.

Experts tell us that Canadian governments at all levels must spend from $30 billion to $90 billion--including enormous indirect costs involving health, justice, and social services--to relieve unemployment and its pathology. By creating a bias for full employment, we could apply billions in savings to the necessary investment in human capital, health, the environment, and the infrastructure necessary to optimize our economy. The following zero-cost strategy will create this bias for full employment.

The proposal is to have a revenue-neutral restructuring of payroll taxes by first raising the current EI for employers back to the 1994 rate, and applying the revenue to a basic exemption of about $6,000. In other words, you're going to make it progressive and have an exemption, just like we do with income tax, then dedicate all future cuts to EI--which you've been doing year after year--to the exemption, rather than lowering the rate. Assuming a 14% reduction for employers this year, the cumulative revenue saving of about $5 billion over the last eight to ten years, had you been doing it, would raise the exemption to about $6,800.

A similar revenue-neutral restructuring of CPP for employers would also be necessary, making it progressive. A bias to full employment would be created. Employers would have a market incentive to rely on new hires rather than overtime in good times, and to reduce hours and not employees in bad times.

On employees' premiums, that's where the costs came last year when you recommended that. Rather than spending money, simply dedicate all future cuts to an employee premium exemption. Assuming a 10¢ reduction for the coming year, the exemption would be the first $1,000 of income. After three years, the exemption would match the CPP exemption--which it should do at the absolute least. After eight years, like our personal income tax exemption, it would remove low-income people from the premium schedule, and help reduce child poverty.

À (1040)

To my mind, this proposal should be the keynote to your recommendations. In almost all of your recommendations there should be a reference to restructuring payroll taxes to provide funds for child poverty, municipalities, and day care. It will simply make us more competitive, by allowing us to invest more in infrastructure, and so forth. It will allow us to provide more money for municipalities.

A bias to full employment would create a virtuous circle of EI tax cuts as well. As unemployment is reduced, EI premiums can be reduced in the form of a larger exemption. As the exemption increases, employers rely still more on new hires rather than overtime in good times, and still more on reducing hours and not employees in bad times, lowering your cost to EI and allowing you to create another reduction. It's a virtuous circle.

A revenue generating zero-cost version of this great public policy tool...this is a rare one. Most of your incentives--as we've heard from the Writers Guild--cost you money. Tax incentives are a great public policy tool that usually cost you money. This one has zero cost, and in fact will generate funds.

In appendix 1 there's a list of the extraordinary array of benefits to this strategy, but I obviously don't have time to read them. I'd like to turn just for a moment to another remarkable document that raises the opportunity to save money and reallocate funds to more worthy causes, and to address some of the legal and constitutional tax issues you have to deal with when it comes to our tax code.

The item is based on the Law Commission report, “Beyond Conjugality”. In recommendation 22 it states that Parliament should replace the Income Tax Act's spouse and common-law partner tax credit with programs that more carefully target caregivers and children for direct support. The report states that the credit is over-inclusive. Over half of the spouses who receive this credit--which costs you a lot of money--are not supporting children.

This recommendation reminds us that government resources are limited and should be allocated to compelling needs. The universal spousal deduction was appropriate for the compelling needs of a different era, when couples almost always had children, and women were not as welcome in the workforce.

Why do our tax laws permit universal spousal deductions no matter how affluent the couple, yet parents are means-tested for the child tax credit--which we'd like to see raised?

Why do our tax laws permit universal deductions for those who care for the infirm or elderly without income, yet parents are means-tested? If parents should be means-tested, all recipients of those kinds of tax benefits should be means-tested.

I'll e-mail to you reference to a paper that talks about the extraordinary importance of parental investment in our evolution. It's more important than a universal spousal deduction. We have to rejig it.

Our CPP benefits are very similar. They were designed originally in 1966 for widows who had spent much of their lives caring for children, or for wives who faced barriers to the workforce. If a woman got remarried, it was cancelled. Yet today, some childless couples who both work can qualify for this enrichment.

These benefits have been recently expanded with Bill C-23, the Modernization of Benefits and Obligations Act. It is constitutionally questionable that others, such as devoted cohabiting siblings or friends, cannot...particularly since recent court decisions suggest neither children nor conjugality are essential elements of marriage or common-law relationships.

In a real sense, those extended benefits have been funded by cutbacks to children and students. In the last decade we ended the universal family allowances and personal tax deductions for children because we were told we could no longer afford them. Likewise, tuition and student debt have skyrocketed.

I'll stop there. Thank you very much.

The Chair: Thank you very much.

Now we will have our final panellist, the Association of Municipal Managers and Clerks of Ontario.

Go ahead, Mrs. MacKenzie.

Ms. Mary MacKenzie (President, Association of Municipal Managers, Clerks and Treasurers of Ontario): Good morning, and thank you for allowing us an opportunity to speak to you today.

The Association of Municipal Managers, Clerks and Treasurers of Ontario represents more than 2,200 municipal professionals across the province, making us the largest voluntary association in Ontario for municipal professionals. We are proud that our members work in approximately 97% of the municipalities in Ontario and are directly involved in almost all aspects of administration and finance on a daily basis.

Municipalities have been facing a severe cash crunch when it comes to providing local services. The problem is only compounded when senior levels of government, particularly the province, download to already strained municipalities many of the services that the province once provided.

Property taxes, as you know, are a major source of revenue that municipal governments use to pay for many of the services that residents have come to expect. However, property taxes on businesses are profit-insensitive and therefore act as a drag on economic growth, productivity, and innovation. Property taxes on households are vulnerable to economic swings and the impacts of an aging society. In short, municipalities' reliance on property taxes as their most significant source of revenue represents poor fiscal policy.

Municipalities today are faced with a complex conundrum. While legislated to maintain balanced budgets, municipalities are expected to provide ever-increasing levels of service, either as legislated by the province or demanded by citizens, while at the same time addressing an array of challenges as the municipality grows and new projects arise. The dilemma is in trying to achieve these goals without having to raise property taxes or cut existing services to be able to fund new ones.

While many local governments try to limit the property tax increase to no more than the rate of inflation, many are finding it harder and harder to hold the line in order to balance their budgets. It has become an unfortunate trend in many municipalities that in order for budgets to be balanced it is the services and capital programs that are cut, and as a result the residents suffer.

Local governments across the province are finding that the condition of their municipally owned roads is deteriorating or is simply not adequate to meet higher demand as a result of growing populations and expanding urban borders, the quality of our drinking water is an ongoing concern, and our transit systems are not adequate to address the current demand, let along get ahead of development.

Today the AMCTO would like to present to you some financing ideas that municipalities would like to see offered to them from the federal government in order to address some of the challenges we are facing.

Ontario, like every other province in Canada, faces a huge and growing infrastructure deficit. By this I mean the gap between the financial resources available from the public sector and the resources needed to build, upgrade, or repair our aging public infrastructure. We have let this problem fester for too long. Unless we take effective and immediate action, we risk presiding over an escalating deterioration in our quality of life and our economic opportunities.

The AMCTO recognizes that recent federal initiatives, particularly in transit and transportation, are designed to reduce that deficit. Since 1994 the Government of Canada has invested $12 billion for infrastructure projects across Canada, resulting in over $30 billion in projects. In 2003 alone, $3 billion was earmarked for the Canada strategic infrastructure fund outlined in the federal budget for major national and regional strategic infrastructure needs across the country. Our report includes a couple of examples of projects that have been completed.

It is safe to say that municipalities are using the current infrastructure grant programs wisely and to their great advantage. Either directly or indirectly, municipalities across Ontario and Canada are significantly benefiting from these programs. However, the challenges still exist. Municipalities are still struggling to meet the rising pressures for investment in new infrastructure. We cannot rely on property taxes alone to finance investments in roads, transit, and water quality improvements. We need additional funding.

With the greatest respect, the strategic infrastructure fund's commitment of $3 billion over 10 years, even with matching provincial funding, isn't nearly enough. The AMCTO therefore recommends that the federal government establish additional infrastructure grant programs to aid municipalities and also that effective successful programs such as SIF be expanded in terms of the funding available.

While welcoming and encouraging new and enhanced infrastructure grant programs from the federal government, the AMCTO suggests that the application process for such programs could and should be less onerous and complex.

À (1045)

Municipalities, particularly smaller municipalities, have found that the experience of applying for infrastructure grant moneys and the subsequent reporting requirements have used up valuable resources and time that they do not have or cannot afford. Such application processes have created an astounding amount of paperwork that is unnecessary and not profitable.

Many municipalities investigated the application process for the Canada-Ontario infrastructure works program, but found the requirements were so complex and detailed that they simply chose to forgo the application.

The AMCTO is of the belief that if any infrastructure fund is to achieve its desired effect and meet its ultimate goals, the application process needs to be less complex, less time-consuming, and more straightforward.

The costs of maintaining local roadways and the downloaded provincial highways and bridges are now funded through property taxes. Originally, provincial and federal gas taxes were to be collected on the premise that they would fund roadway construction and maintenance. The AMCTO believes that access to some share of this tax will go a long way to financing road and bridge repairs and transportation system improvements.

Currently, the vast majority of federal gasoline tax revenues are not being spent as they were originally intended, to improve our roads and highways. It is our understanding that of the $4.7 billion collected in federal gasoline taxes between 2001-2002, the federal government investment in infrastructure projects was only 2.5%, or $118 million of the total revenue generated. The majority of these expenditures were concentrated in certain portions of the country.

The provincial Liberals who now form the government in Ontario campaigned on this issue by committing to redirect two cents per litre of the existing provincial gasoline tax to municipalities for public transit. The AMCTO applauds this bold step, and we will be meeting with them in the very near future to encourage them to follow through.

We recommend that the federal government follow suit and commit a matching or greater amount of the existing gas tax to municipalities for much-needed infrastructure investments.

In Ontario alone, if just three cents per litre of the $2 billion currently collected in gas taxes were dedicated to municipalities, that move would yield over $400 million to address much-needed infrastructure projects. This will mean additional dollars that can be used exclusively for building better roads or improving our transit systems. It would also free up current resources at the municipal level that could be redirected to improving our drinking water or addressing other municipal services that have been reduced or neglected altogether.

I should note that by redirecting the gas tax to municipalities directly, the federal government can be assured that every region in the province is receiving its appropriate share.

It should be stressed, however, that the AMCTO, like other municipal groups, is not proposing an increase to the current gas tax. We are simply requesting that municipalities be granted a share of the taxes that are already collected and that this revenue be used for their original intent.

Thank you.

À (1050)

The Acting Chair (Mr. Shawn Murphy): Thank you very much, and thanks to all of the presenters.

We will now turn to the question segment of the panel. We'll start with Mr. Pillitteri.

Mr. Gary Pillitteri (Niagara Falls, Lib.): Thank you very much, Mr. Chairman.

I've been coming for ten years to these pre-budget consultation hearings, and every time I come to Toronto, these are the most costly presentations in the whole country. No offence, but when you start adding it up—maybe it's because of the size of Toronto, and everybody is looking at what their real needs are—it always costs the most.

I have two things to discuss.

Ms. Friendly, one thing that really strikes me this morning—of course, you've been making a lot of presentations to the finance committee, in Ottawa most of the time—that I find a little troubling is that when you mention Canada and child poverty and what we have tried to do, you put us in the same category with Jamaica in saying how much they are proposing in projected spending. That's one thing.

Another thing is you're talking about the Europeans, saying in Europe they spend 1%. The Europeans have also for years been writing beautiful reports about how much they spend and what they do. One report I remember most, on agriculture in the European Community, says that for the last 30 years they should have been cutting subsidies in agriculture. My God, I can never remember them cutting subsidies in agriculture. They always keep increasing them and spending more. So the Europeans write good reports, but the reality, when we go there to take a look at the reality of how they are applicable, is that they're not applicable.

As far as child poverty is concerned, I will live in Canada rather than any country in the world. When it comes to child poverty, I don't think we are as bad as it sounds when you say that in Canada we are not doing as much as the European Community in child support.

Ms. Martha Friendly: May I go ahead?

À (1055)

Mr. Gary Pillitteri: Yes, I want you to respond.

Ms. Martha Friendly: Let me answer your questions in turn.

First of all, maybe you misunderstand what I'm talking about. I'm not talking about child poverty; I'm talking about early childhood education and care, which is a program for children that provides early childhood education, care if the parent is somewhere else, and support for parents in their parenting role. It may be considered by child poverty groups to be part of a package of strategies to combat child poverty, but I'm talking about something different from child poverty.

What I said about Jamaica, and I used it as an example of how far behind Canada is in developing social policy and devoting public financial resources to this.... I used Jamaica as an example because I'm on the board of an organization that is concerned with this. Actually, the Jamaican government--it is a very poor country and has very high rates of child poverty--is putting financial and policy resources into developing a national policy to provide the kinds of programs I'm talking about. I'm not saying they're as wonderful as Sweden; I'm only saying that within their context they are looking at this question.

Let me move on to answering your second question. I know you're talking about child poverty in European countries. First of all, I want to assure you that the rate of child poverty, particularly in the Nordic countries, is much, much lower than it is in Canada. You can see that from any of the human development reports of the United Nations, or other reports. But I'm talking about early childhood education and care in the European Union countries in particular, because they have been perhaps the most exemplary countries in developing coordinated public policy and devoting public policy and fiscal resources to this. And that's what I'm talking about.

I can assure you that I have been in European countries. I've toured programs in France--

Mr. Gary Pillitteri: I was born there.

Ms. Martha Friendly: Yes, and Italy. And I can assure you that in most of the continental European countries today, almost all children between the ages of two and three begin attending a publicly provided--

Mr. Gary Pillitteri: If they can afford it, the parents.

Ms. Martha Friendly: No, no. In Italy this would be true and in France and in Belgium and in Sweden and in Norway and in Denmark. They have programs for the school day that are generally free of charge to the parents--and I have this in my brief--with the programs for younger children, babies and toddlers, on sliding scales, and the ends of the day, on sliding fee scales for parents too. I can refer you to the reports for the OECD study I was referring to. They're all linked on my website. I'd be happy to send them to you.

What I'm saying to you is that in the last decade, twenty years or a decade, all of these countries have put these programs in place, while we haven't begun to do so. And some of the programs in Italy, particularly in northern Italy, are exemplary.

Mr. Gary Pillitteri: In the north, yes.

Ms. Martha Friendly: And in southern Italy as well, but when we're talking about the quality of the programs, the programs in northern Italy are famous.

I don't know how to invite you to a tour, but--

Mr. Gary Pillitteri: I beg to disagree with you, please, because when I go and visit personally, maybe they don't show me a showcase, but I do go and travel among them, and the money is not spent there. Realistically... I've seen some of it up in the north, but so little of it that it's incredible.

Ms. Martha Friendly: Mr. Pillitteri, I would actually be happy to provide the committee with the research studies, because I'm not just relying on my own anecdotal view--this is really well known. The amount of money is documented, the percentage of children who attend the programs is documented, and it's pretty good information from the OECD about what the programs are like. So if you want to debate it, I'm happy to provide this to the committee. It's what I do for a living.

Thanks.

The Acting Chair (Mr. Shawn Murphy): You have only a few seconds left, Mr. Pillitteri.

Ms. Maund.

Ms. Jacquie Maund: May I add a quick response to the numbers? You asked how Canada ranks against other countries. This is in the original report that I provided to the committee in September. While Canada leads the G-8 nations in terms of growth in GDP, international comparisons of child poverty rates are less favourable. The latest available data that compares Canada's child poverty rates with OECD countries indicates that we rank a low 15th among the 19 richest nations of the world, and I can give you the source for that.

I personally went to a child care centre in Italy when I was four years old, so it's available for everyone.

Mr. Gary Pillitteri: It depends what criteria you put in the envelope.

The Acting Chair (Mr. Shawn Murphy): We're having a really interesting discussion, but unfortunately we're out of time. I will now move to Mr. Brison.

Mr. Scott Brison (Kings—Hants, PC): Thank you, Mr. Chair, and thank you to each of the presenters this morning.

My first question is in terms of some of the federal tax labours we can utilize to address issues of child poverty with family poverty in a general sense, because we're limited in the federal context in some ways because of some of the constitutional issues where provinces do have the constitutionally defined responsibilities for health care and education. These need to be tied to transfers and some accountability mechanisms and also federal taxes. It strikes me that we're not utilizing the tax system itself very effectively in terms of helping. For example, raising the basic personal exemption to $15,000 such that no Canadian making less than $15,000 would be paying taxes would take 2.2 million low-income Canadians off the tax rolls.

The policy idea of a guaranteed annual income, which has been debated for at least 30 years and has proponents on the right and the left, is one that even in the U.S. has resulted in what they call an earned income tax credit, which in some ways provides them some level or kind of refundable tax credit at the lower end to help low-income working Americans.

I'd appreciate feedback on raising the basic personal exemption, first of all, but also on the notion of an earned income tax credit, which would help particularly people on social assistance go from being on social assistance to working. We have a current situation in Canada in which often families on social assistance who choose to work are doing so to the detriment of their family income. We can't blame them for choosing rationally to not make a decision that would reduce their family income for themselves and their children. Can you comment on this?

Á (1100)

Mr. Gerald Vandezande: I'd like to respond to that.

I think it's important, indeed, to raise the exemption level, provided there is a built-in equity. Otherwise, you could run into the situation where de facto.... And from my accounting background I'm always concerned that the equity is indeed practised, and that is different from equality. Equity specifically zeros in on those families, single parents, etc., who actually need the support through an increased tax exemption and ensures that it gets to them. It's the same with the tax transfers. In Ontario, we've had that struggle for a long time: the transfers guaranteed by Ottawa weren't reaching the people, or if they did reach the people, there would be the clawback provision. So transfers, tax rates, and credits need to be integrated in such a way that the net effect for needy families and children is that they actually do receive--and I'm in constant contact through my immediate families and friends and in the neighbourhood--an increase in income that, as you suggest, would be non-taxable at a certain level.

I think it is also important that these transfers, however they are implemented, be seen as investments. Again, from an accounting background, it's crucial when you spend money to make a distinction between what you invest in people's needs for adequate housing and for child care. Those are investments that have long-time return on that investment and will raise the quality of life in a quantitative way for those families.

So I think there can be a blending of various measures, also by tax credit provincially and federally, that raise the quality of life for needy families and their children in such a way that they can experience the benefits of adequate housing and get the purchasing power they need in order to participate in the society without being utterly dependent upon the charity of other organizations.

I recently received in the mail the increased number of people who have to go to food banks in Toronto--that has doubled--and into shelters. It's a huge issue in this city.

Mr. Scott Brison: Another issue it impacts—this committee was talking to representatives of both the food banks and the shelters—is the degree to which mental health issues and addiction issues are the biggest issues. From a health care perspective—and we know there's a health care crisis—there hasn't been adequate discussion on mental illness and the strategy to affect it. I think that's one of the victims of the health care crisis. People talk about how we need MRIs. Of course we need MRIs, but the focus on MRIs has often distracted us from issues of mental health, which is huge.

Madam Chair, thank you very much.

Á (1105)

Mr. Gerald Vandezande: Just on that, though, it's crucial that we engage in preventive maintenance, so to speak, and proactive measures, so that you don't first incur the cost, and then say we need to deal with this crisis. There are ways and means of anticipating the possibility, the very likelihood, of families ending up in very critical situations. Had measures been taken by the different levels of government in cooperation, where need be, with NGOs and other community-based organizations to prevent people from falling between the cracks—through tax measures, through whatever—that would sharply reduce the commitments that now need to be made to health care.

Mr. Scott Brison: I have a question.

The Chair: Thank you very much.

I'm sorry, but we have four people and not that much time, and you're over seven minutes.

Mr. Wilfert, go.

Mr. Bryon Wilfert: Thank you, Madam Chair.

Regarding the campaign against child poverty, we often talk here—and Ms. Friendly also mentioned the same thing—about policy framework. Like many people, I am frustrated beyond belief with regard to the issue of provincial administration. You talk about national policies, and yet somehow we're supposed to take a big stick to these provincial premiers to get them to do something. We haven't found the right stick.

With regard to the five principles of medicare, we say that if you do not follow the five principles, we're going to withhold funding. I'm not prepared to commit an extra dollar at all until we have something like the five principles in place that clearly say that if we're going to give any money, you must do the following. And your responsibility, I must say, is also to put the feet to the fire for these provincial premiers, as well, because they duck it.

I wonder if you would comment briefly on a similar proposal with regard to the five principles of medicare. How do we ensure...? We need to make sure that it's ironclad in order to have the funding mechanism to withdraw, if in fact moneys go there.

Ms. Caroline Di Giovanni: I'll start, and I'm sure that Martha and others will have things to say.

I think the discussion of accountability at the provincial level has been part of our advocacy from the very beginning, because we are looking for a national leadership, as well as getting the provinces to be onside. The multilateral agreement on early learning and care is a significant step. Working with Minister Stewart, we've been able to discuss this, and discuss it at great length, because we, as advocates, are certainly prepared to continue to work at the provincial level to get the provinces embarrassed into agreeing to the accountability measures. We are certainly supportive of having that sort of framework and an accountability that requires participation by the provinces.

I'll refer again to what we did during the provincial election here in Ontario. Our multi-phased ad was covered by all of the Toronto media and some of the national media, because we were focusing on the commitment of people across all political lines to focus on this issue and to overcome their political resistance to participation and to working together. We're very happy to do that.

In one of the recommendations, the fourth one, we also talk about if provinces refuse to be accountable or consider other measures. We've had long discussions with the possibility of direct funding to municipalities, for example, to cover some of these issues. We're ready, as advocates, to be on the side of those who are bold and prepared to look at it. We considered child poverty levels a crisis and a disgrace.

Some of the others may want to comment.

Mr. Bryon Wilfert: Thank you.

Be very short, because I have a few other questions.

Á (1110)

Ms. Martha Friendly: I completely agree. What we've been advocating for years is something that looks much more like the health care system, recognizing provincial jurisdiction and ensuring that the money isn't just wasted or spent on other kinds of things.

When I'm saying a policy framework, I'm talking about something much more detailed than we had in the.... No, it's not exactly only the stick, it's also the carrot. I think it has to be a mixture for these things. I think there's a much longer discussion about what happened with the social union, and where did the Canada Assistance Plan go? These were federal decisions made that, I think most of us would agree, are not working.

When things aren't working, something different has to happen. I would really urge the federal government to retake a leadership position in social policy. It doesn't mean that it delivers the services or completely determines all the services. Some of those things, by the way, need to be determined at the local level.

When we say a policy framework, I think my biggest frustration has been to see the federal government disappear as a social policy maker. If we have a federation like Canada, you can't allow it to just spin off into a kind of a balkanized every-premier-for-himself approach.

Mr. Bryon Wilfert: I'd agree, but policy makers are good. The problem is that I think the carrot has not worked. I'm ready to use a much bigger stick in many regards, but I think that it comes down to political will, and the political will must be on all sides.

On the issue of the Writers Guild, I won't harangue you on the CTF again, because in fact it was badly misrepresented by Canadian Heritage. If it is $120 million you're talking about, I'm on record, that's fine.

I'd like to say, Madam Chair, I'm actually a member of the AMCTO. I was the only elected municipal politician with that designation. I still have the designation, because I pay my dues, which of course I know they appreciate.

I agree with you on the application issue. The problem is that these infrastructure agreements are designed with each province. Some of them are much more complicated than others. Alberta is actually much more efficient.

I think you made a slight error there. The SIF was not a 10-year program That was the municipal infrastructure program per se. The strategic infrastructure fund was brought in and then doubled by the minister. That is a very important initiative for wider projects.

On the gasoline tax, I'm not a big fan of it, because I don't believe there is the structure to get it to municipal governments. Quebec doesn't allow it in their legislation. I'm not prepared to write one cheque to the provinces and let them supposedly know what's best in giving it to municipal governments. If we can work that out, then I'd be happy to look at it. I didn't support it as president of the FCM. I still don't support it without the proper mechanism in place.

I do believe that one of the things you should be advocating, if you're not already, is to improve the taxation power base for municipal governments in this country, particularly in Ontario. Manitoba is a little more progressive in some regards.

I'm not saying that we increase taxes. What I am saying is that in terms of accountability and transparency, municipal governments should have that ability. I'd love somebody to give us money, as a federal government, that I wouldn't have to account for, and spend it. That's what some of my municipal colleagues want us to do, and I don't think that's very practical.

I agree with you on the application form. When you're talking to the provincial government, you might want to streamline it. The best program, in my view, was the 1994-97 program. It was simple, easy: one-third, one-third, one-third. There wasn't one municipal jurisdiction in this province that didn't apply, because they simply couldn't say they didn't have the money, because they did. They found it. So I agree with you there.

Mr. Gerald Vandezande: Mr. Wilfert, many people in bigger cities complain that the federal government is not accountable for all the revenues that flow to Ottawa coming from the cities.

The Chair: The chair still is going to control this meeting, and--

Mr. Gerald Vandezande: I'm sorry.

The Chair: --Mr. Wilfert is over time.

Go ahead and just wrap up your comment, Mr. Wilfert.

Mr. Bryon Wilfert: I think that in terms of accountability, all orders of government should be accountable, but so should all the organizations. When you come here, one of the things you never tell me is where we are going to get the money. That is one of my great concerns, because we don't have a lot. We're not going to go into a deficit.

I wanted to actually go to Mr. Polito, but obviously six minutes is up.

The Chair: You're over time.

We're going to go to Mr. Murphy. Go ahead.

Mr. Shawn Murphy: I will go with Mr. Polito.

I have a few questions, Mr. Polito. I read your presentation, and I find it very interesting. I do believe you may be on the right track here, but there are some issues that I just don't quite understand from the written presentation.

First of all, I think at some point in time some government, whether it be this government or some successive government, is going to have to really examine this whole EI system. It has by stealth become a tax on employment, but it has also, at the same time, become part of the social architecture of this country. But it has some pretty perverse outcomes vis-à-vis the productivity of this country. So there's going to have to be a long, hard look at the EI system and where we're going in the system.

I read your article. You talked about the premiums. I take it that you would support the recommendation this committee made last year on the YBE.

Á (1115)

Mr. Joseph Polito: Yes.

Mr. Shawn Murphy: Secondly, you talked about the premiums paid and the deduction, which would be quite a bit larger than we recommended last year--but that's just a detail; we can talk later. You didn't discuss in your paper the benefits that presently exist. Are you saying basically the status quo?

Mr. Joseph Polito: Oh, you mean the payments of--

Mr. Shawn Murphy: It's the benefits that you get. Let's say you work 24 weeks in a seasonal job. You're entitled to the same benefits. Is that what you're saying?

Mr. Joseph Polito: No, I wasn't. I'm focusing on just the one element of the restructuring of the premiums. The actual EI system is far too complicated to--

Mr. Shawn Murphy: You didn't get into that. So basically the gist of your presentation is to advocate that there be a certain threshold to exempt.

Mr. Joseph Polito: You'd have an exemption, and do it through restructuring, as Professor Scarth originally suggested, as opposed to....

I think you adopted, essentially, the proposal last year of the Canadian Restaurant and Foodservices Association.

Mr. Shawn Murphy: Yes, and the Retail Council of Canada.

Mr. Joseph Polito: They essentially wanted you to focus a tax cut there, as opposed to let's say a corporate income tax cut, but obviously you couldn't afford it. It was something like over $2 billion. But this way you can catch a lot of the benefits to society, to all these worthy causes, to poverty, unemployment, and so on, simply by restructuring. That was Professor Scarth's approach, and Professor Foot, Professor Donner, and all the other fine economists that we Canadians have.

You know, $30 billion to $90 billion is being spent on unemployment of some form. With every percentage of unemployment that you reduce, you're capturing many billions of dollars that you can reallocate, not to mention reducing all the social pathology, the broken families, the lost jobs, and the rest of it, the lost homes.

It's one of those innovations in history. I'd like to meet the economists to the efficiency experts at the beginning of the century. They made a few slight changes to the way bricklayers worked, and they doubled their productivity and saved the contractor half the money. It's extraordinary things, really smart things that we can do, and this is one of them.

Mr. Shawn Murphy: So what you're basically saying by going to this exemption formula is that there would be more of a bias towards full employment and that our rate of employment, which I think now is 7.8% or 8%, would drop to.... I guess full employment is probably 3% or 4%. Is that what you're saying?

Mr. Joseph Polito: Yes, it would move it in that direction.

Mr. Shawn Murphy: Is there any other country that you can point to where this might...?

Our EI system is somewhat unique in the world.

Mr. Joseph Polito: I would suggest the United States has a higher cap, which has a similar effect, and still some American commentators are advocating the same thing, the big exemption at the front end, rather than these massive tax cuts Mr. Bush is calling for, a $70 billion deficit, to target a cut to that area, for the same kinds of reasons.

Because they have a higher ceiling on their social security taxes, employers aren't as inclined to work people overtime and to lay people off, because there isn't as much of a financial incentive to do so, and their natural rate of unemployment is a little lower than ours. So it does seem to have some.... But I would like to see Canada be the innovator. I would like the House of Commons to see that Canada can be the innovator, and have all the other countries, European countries, come to us and say this is a fabulous program. Our payroll taxes are messed up too.

Mr. Shawn Murphy: Related to this discussion, when you read Professor Foot and the others, right, there is an impending labour shortage in Canada, and how that's going to interplay with all the--

Mr. Joseph Polito: This wouldn't affect that at all.

Á (1120)

Mr. Shawn Murphy: No, it would't affect it, but it's related to it.

Mr. Joseph Polito: It is, but I've been taking students to economics conferences for two decades now, and they've been telling us that and it hasn't happened yet, because you can never get the demographics exactly right. So this is something we can do right now, and really make immediate assistance to the problems that these people are having right now, and knock down our child poverty rate.

Young parents are the first ones to lose their job, and boom, you have more child poverty. This would help to reduce that.

Mr. Shawn Murphy: My last comment, Mr. Polito, is if there is any other literature you have, if you don't mind sharing it with the committee, we would certainly love to get our hands on it.

Mr. Joseph Polito: I've tried to make reference to the most important points in the original presentation, the changing workplace and the Donner report. Actually, just prior to the 2000 election, Professors Donner, Foot, and Reid were going to come--and I think Mr. Cullen was trying to arrange that--and make presentations to this group and to the finance department on these very issues, because they are incredibly knowledgeable about these things.

Mr. Shawn Murphy: Have you had any discussions with the finance department or any of the people who were advocating this proposal?

Mr. Joseph Polito: No.

The Chair: Final comment, Mr. Murphy.

Mr. Shawn Murphy: I haved a comment to Ms. MacKenzie on this two cent or three cent a litre transfer that's been talked about, that's been bandied about across Canada. We don't know how much support it has. We don't know who supports it, and we don't know who doesn't support it. But one thing I can say, after listening to Minister Manley last Monday, is it's going to be difficult to see where the money is going to come from.

I personally am not totally adverse to raising, because we have the whole Kyoto play out there too, and there's the issue of how that's going to be funded, how are we going to meet our commitments. It would be basically a tax on carbon transfer. And you say and a lot of people say that the government collects so many billion dollars in excise tax and they only put back so many million. But there's a major environmental issue, because I believe 40% of our greenhouse gases are emitted by the people you're talking about. They're not paying to clean them up. It's going to be left to the federal government, and perhaps to a lesser extent to the provincial governments. You didn't factor that in in your equation.

My question is I take it in your submission that you are opposed to an increase in the excise tax to cover that proposal that you're so readily adopting.

The Chair: Thank you very much.

Mr. Shawn Murphy: Is that right? You're opposed to...?

Mrs. Mary MacKenzie: Yes. We feel that by diverting some of the funds--I think we suggest three cents--it's not an increase in the tax, it's just using what's already being collected and diverting some of that to municipalities for the roads.

The Chair: So this automatically means that the federal government has that much less revenue, and that makes everybody else's discussion a lot more difficult. I think you have to acknowledge that. We're talking big dollars here, and that's going to have a huge impact. So we'll have to look at this very carefully.

Now, Ms. Judy Wasylycia-Leis.

Ms. Judy Wasylycia-Leis: Thank you, Madam Chairperson.

If Martha Friendly were still here, I would love to ask her about her proposal for $4 billion at the end of four years for child care. I think it's an interesting proposal, which I hope the Liberals around the table are listening to, although I find it rather galling that groups so important as the day care and anti-child-poverty groups have to lower their expectations to those kinds of numbers when in fact we just saw $4 billion disappear against the debt for this past fiscal year, because of lowballing the surplus.

Let me ask this general question that you've been hearing about from my colleagues across the way about where are you going to get the money, and what are you going to do about these awful provinces that are never accountable.

I'd like to ask both the Campaign Against Child Poverty group and the Writers Guild this question, because I think we're talking about the same issues here. We're talking about poverty among children, poverty among our writers, and a failure to invest in programs and in communities and in people, where in fact we could see some spin-offs in terms of economic growth and hence bring down the debt.

Let me start with the Campaign Against Child Poverty group, then go to Gail, and then I'll see how much time I have left.

Ms. Caroline Di Giovanni: Thank you for asking that question: where is the money coming from? I think Gerald will speak to that.

To a certain extent, we feel that some of the surplus ought to be directed to this particular program. We believe that the child tax benefit can be speeded up, because the capacity to directly assist children through their family's tax framework is an important way of delivering.

But aside from that, let's think of it as an investment. Let's think of what Martha told us and has continued to work with us to describe. If it becomes a priority for the leadership of the national government and also provincially, then you can find the money.

I think of the country before there were any school systems at all and people in each community found ways to hire a teacher and have a school system. It seemed to be a priority, and they found a way to do it. We are in some ways at that stage with child care. We have to see it as a priority that needs to be met and that it will be an investment that returns at least twofold, and probably much more than that, in terms of its stable citizenry. If you think of an investment in the early years as a 20-year investment, then the people who'll be covering the pension plans in years ahead will be stable, will be employable, will be able to read, will have a sense of commitment to their community. That's what we need to establish in the early years.

We are not simply talking about learning the alphabet and learning your colours. We're learning how to be good members of a civilized society rather than a lot of dispersed and undernourished communities across the country. So that's the value of finding the money from the surplus, from the tax benefit, and from whatever resources you can work out in cooperation with the provinces.

Some of the provinces have put these issues, the multilateral agreement issues, higher on the agenda than others. We know that. But if the leadership is correct, and we can move across the country proving this is a high priority, I think we will be able to achieve what we want to achieve, which is to have a stable environment for children all across the country.

Á (1125)

Mr. Gerald Vandezande: I won't repeat the comments I made with respect to the use of the surplus. I think this committee, according to its letter of invitation, wants to stimulate a national dialogue to share priorities, values, and specific proposals. Given the current crisis worldwide, given the particular opportunity that we now face in Canada, that Mr. Martin faces, the Liberal and other parties face, what are the core values that should shape the Canadian budget? What do we mean by prosperity, well-being, community building, affirming human dignity, and practising mutual respect and responsibility?

I don't think tax cuts, for example, as they are being done in the United States, are helping either the economy or the people who are in desperate need. So if we are going to use tax measures, let them be tax measures that are clearly targeted that help those who are indeed in need, and help also those communities and neighbourhoods that are facing the crisis in terms of homelessness.

To come back to Mr. Wilfert's concern, and I share that, I think we need to be tough throughout all the structures so that money will be spent stewardly, efficiently, effectively, because it's taxpayers' money. But then taxpayers' money must go for the benefit and the improvement of the lives of the most vulnerable among us.

Mr. Martin has been clear about that, in private conversations I've had with him, in correspondence, in some of his major speeches. I hope he will build on the excellent throne speech that came down on September 30. There are sections in there that should continue to be the heart of the platform. But we need to back up our talk about values, priorities, and dialogue with actions that indeed involve all the partners. The NG0s, of whom we were part, would love to be at the table to help work out meaningful solutions that are effective and that also make stewardly use of the tax money.

But we can't go the U.S. route. We don't want to compete with that kind of an empire mentality that puts the needs of the people on the back burner.

The Chair: Ms. Martiri.

Mrs. Gail Martiri: Thank you.

In terms of the film and television industry in this country, it's very hard to make an economic argument as to where the money will come from. It's a very big employer. There are about 137,000 people indirectly and directly employed in our film and TV sector across Canada. We have production in all of the major cities. We also have rural production.

Despite that, when we're talking about raising the CTF to even $120 million, it's about a $45 million investment per year. It's huge for our industry, but in terms of the overall budget, it's a small amount.

Similar figures can also be applied to raising the Canadian tax credit to a parallel increase from 25% to 30%. I think it comes down to whether or not our country, whether or not our government, will make a commitment to our indigenous storytellers. Do we want Canadians across Canada to be brought together from different regions and represented in the film and TV industry, or are we happy to broadcast U.S. simulcast?

If we look at days gone by, when our industry was a lot healthier, we had The Beachcombers and we had North of 60. We had a lot of programs that represented Canadian ideals and bound us as society. Today we don't have that.

Á (1130)

The Chair: Thanks very much.

Ms. Guarnieri, did you want a couple of minutes?

Ms. Albina Guarnieri (Mississauga East, Lib.): Actually I'm going to defer to Bryon, but I have a quick comment.

The Chair: Take your time, because we're at 11:30.

Ms. Albina Guarnieri: I think Bryon wanted to interject.

The Chair: Okay, go ahead.

Ms. Albina Guarnieri: I just have a quick comment. Notwithstanding the fact that the NDP seems unconcerned with the $3 billion savings that we have every time we pay down debt, I have a very quick question for Mr. Polito.

Have you costed your proposal in terms of your recommendations? The reason I ask you is that I share Mr. Pillitteri's concern. When I was carrying these briefs, I felt weighted down by the amounts that were being asked for, considering the economic statement last week.

Mr. Joseph Polito: Professor Scarth's comment in 1997 was that this would initially be revenue neutral. It would only be restructuring. The federal government and the EI program would take in the exact same amount of money; it would only be taking more from the higher-income people and less from the lower.

If it indeed removed barriers to employment, in fact you would find yourself with a surplus of EI funds. You would, as you've been doing for the last ten years, continue to lower the EI. In fact, this would be a tax policy, which would actually lower taxes on society. It would actually, unlike many of your other really good tax policy incentives, have no cost. You would actually have a negative cost. It would provide more funds for you.

Of course you are also spending all sorts of money on unemployment. The provinces are spending it on social welfare. The justice system is spending it. All these programs that we've heard described cost money, because poverty is higher and unemployment is higher.

This would lower unemployment, lower some of those needs, lower some of those expenditures, and free up billions of dollars to accomplish, in the municipality, more for those causes and more for a better society. A full-employment society would be inherently better off.

You mentioned that in Sweden and the Netherlands and so forth, their child poverty rate is about 3% and their unemployment rate is about 3%. There is a correlation, a high correlation. It's not perfect, obviously.

The Chair: Okay. Mr. Wilfert.

Mr. Bryon Wilfert: I was only going to make the comment, Madam Chairman, that besides, obviously, as you pay down the national debt to save at least $3 billion a year in interest, one of the ways we're going to have to really look at is, again, reallocation of resources within the federal government to really prioritize.

On your issue, I think we need to really go with a blank piece of paper and start all over again. We get into too many jurisdictional issues. If we were going to rewrite the Constitution, we'd obviously have more emphasis on municipal government today than we had in 1867.

The problem is that I get very disturbed when I hear that there's no coherent policy and delivery systems are disjointed across the country. I really think that it takes you back to the political will of going forth. Certainly under the new Prime Minister I expect we will be able to sit down and say that there will be no preconditions and see how we can best deliver that.

What we need to have at the table are people like yourselves, who are going to be able to ask, if you were to develop the system, what would you want? How would you make it accountable? How would you fund it? Because obviously money doesn't grow on trees.

That's what we need to do. We need to do that sincerely in order to make sure that a country as rich as this doesn't have the problems that we see.

Don't forget that the $3 billion in interest is very important in terms of saving the debt.

Á (1135)

The Chair: Thank you very much.

Thank you for all of the participation here today and for your briefs.

By the end of this afternoon, this committee will have had 40 meetings on pre-budget consultations, heard from 343 national organizations, and listened to 562 witnesses. This has been an extensive consultation.

I'm sorry, I think all of us are sorry, that we can't have long discussions with all of you, but we appreciate your time and the energy you've put into your briefs. You can be assured that they're shared not only with the members who are present here, which is a representation of all the parties on our committee, but with the committee members who are in Ottawa and other areas of the country. Those briefs do find their way back to the finance department, as does our Hansard. I'm sure it's read there too.

Thank you very much.

We're going to go to our next panel immediately, if I could hold the members at the table for a short minute.

We'll suspend for a second.

Thank you.

Á 1136)

Á (1140)

The Chair: Pursuant to Standing Order 83.1, we're on pre-budget consultations. This is our third panel of the morning in Toronto, on November 7.

We're very pleased to be joined by witnesses from a number of organizations, including the Campaign for Stable Funding for Adult ESL Classes. Norman Beach is the co-chair, and he is joined at the table by Linda Zhai, a former adult student in English as a second language class. Welcome to both of you.

The Hospital for Sick Children is represented by the chief of research, Manuel Buchwald, and Cyndy DeGiusti, who is vice-president of child advocacy. Welcome to you.

From the Canadian Pensioners Concerned, Inc., we have the president, Gerda Kaegi, and also Edwin Watson, who is a member of the organization. Welcome, both of you.

From the Maytree Foundation, we have Naomi Alboim, who is an associate, and Elizabeth McIsaac, who is manager of research and policy. Welcome to you also.

From the City of Toronto, Shirley Hoy is the chief administrative officer. We look forward to hearing your presentation today.

I think we'll go directly to presentations now.

Mr. Norman Beach (Co-chair, Campaign for Stable Funding of Adult ESL Classes): Thank you very much. We're very pleased to be here today.

We would like to address the themes that the finance committee has identified as being important: enhancing economic growth, job creation, investing in and caring for all members of Canadian society, and ensuring our communities are desirable places to live and work.

We believe that improving the official language abilities of those from abroad who have chosen to make their home here is essential to progress in all of these areas. The most obvious barrier to the achievement of these goals is the fact that newcomers are taking longer to catch up to Canadian average incomes, and in major cities an economic underclass has emerged that is defined by ethnicity and race.

This threatens the basic fabric of Canadian society, especially our stated national objective of eradicating child poverty. We must face the startling fact that in our biggest city, Toronto, many ethno-racial groups have child poverty rates ranging from 60% to 80%. Some might say part of the solution is to admit only university-educated immigrants, yet studies show that in Toronto and Vancouver there are ethnic neighbourhoods that have twice as many university graduates as the national average and twice as much poverty.

It's now clear that most immigrants that Canada selects for their educational skills have difficulty finding work in their occupational field. This imposes a tremendous human cost on these new Canadians and their families, and from a national economic perspective it's a waste of human resources.

Why is this happening? People will be making various presentations addressing these issues. We would like to focus on language barriers, because a recent Statistics Canada longitudinal study of 12,000 immigrants has pointed out that this is one of the major barriers, although there are others.

Six months after arriving, over one-half of immigrants who spoke English or French were employed versus only one-third of those who spoke neither official language. Among newcomers who did speak an official language, four out of ten were employed in their field. That's not a terrific record, but the corresponding figure for those who spoke no English or French was one in four. In fact, there is a bigger difference in employment rates between official language speakers and non-speakers—which was a 19% gap—than between university-educated and non-university-educated immigrants, at 15%.

We know that education is important in the labour market, but statistics show that for immigrants, official language ability is even more important. Without it, how can one's education be effectively used?

Many people have spoken of a need for lifelong learning to increase our productivity. Overwhelmingly, new immigrants agree. They believe that further education and training are key to their success in Canada. However, when asked about barriers to accessing education or training here, newcomers identified language as their biggest problem. There is a graph in the presentation that shows that.

Clearly, for immigrants, official language ability is the key to lifelong learning. Unfortunately for many, the door to further education appears to be bolted shut. The largest number of these people are women, who are almost twice as likely as men to have no official language ability. Many were denied higher learning at home. Will the same be true for them in Canada?

Many reports have emphasized the critical importance of language training in building a prosperous and inclusive country. We have included these in our appendices.

Last year, after our presentation to this committee, we were pleased to see its recommendation for increased funding for English and French second language programs. However, despite pledges in the budget to make major investments in immigrant settlement and integration programs, this fiscal year's allocation for language instruction for newcomers to Canada, LINC, is actually smaller than last year's. This is not an anomaly. The long-term view of federal spending on language training shows that between 1999 and 2002 federal spending on LINC was flatlined, but the number of newcomers needing the classes rose by 50%, leading to a huge drop in per capita investment in this vital area. The government appears not to have committed itself yet to a significant reversal of a policy that is closing down opportunities for newcomers to improve the lives of their families and the productivity of our economy.

Last year 105,000 people arrived in Canada with no knowledge of either official language. This is approximately 45%, which is a figure that has been constant over the past several years. Many are waiting to see whether the doors to opportunity get any easier for them to open or whether access to a better life remains just a dream. To achieve this, Canada will have to make a more significant investment in settlement services, especially language training.

The House of Commons Standing Committee on Citizenship and Immigration has already recommended that funding for newcomer settlement services be increased to a benchmark of $3,000 per capita.

Also, federally funded language training would more effectively support the three objectives identified by the finance committee if it were provided on a multi-year basis to refugee claimants, to advanced-level learners, and to all who need it to compete in the job market, including citizens.

I would like to introduce Linda Zhai, whose story illustrates the shortcomings of LINC programs, as they are structured at present, in meeting many of the needs of newcomers. She arrived in Toronto speaking English at an intermediate level, but needed advanced English to fully use her skills. LINC offers no advanced classes, although there is a pilot project at the moment that has just come out. But in LINC, in terms of stable, long-term funding, nothing is there for advanced students.

Later on, if people are laid off at work, they are ineligible for these classes that could develop language skills that they need for retraining in our rapidly changing economy, because there's only a three-year window of opportunity to access LINC.

As a final point, provincially funded ESL programs do not provide child care, and that's another problem.

Mrs. Linda Zhai (Former Adult Student in English as a second language classes (ESL), Campaign for Stable Funding of Adult ESL Classes): Thank you for the opportunity to speak about the importance of adult ESL classes.

Four years ago I immigrated from Shanghai to Toronto with my husband and our nine-month-old daughter. In China, my husband was a computer engineer and I was a regional sales manager of an international pharmaceutical company. We wanted a life of freedom in a multicultural, tolerant society, so we chose Canada to make our new home in.

Like almost all new immigrant families, we faced cultural and language barriers. We struggled to make a living. My husband began to work as a machine operator and I became a cashier at Pizza Pizza. I worked there for two years until I had a chance to upgrade my English at an advanced ESL class funded by the Ontario government.

My ESL classmates became like a big family to me. It was an international family, with 30 students from South America, Asia, Europe, and Africa. We learned English, but we also learned about each other's cultures and about daily life in Canada and how to participate in it.

We learned about Canadian history, geography, and politics. We read newspapers and listened to the news. The ESL course helped me pass an examination and interview to enter the George Brown College post-graduate program in marketing. I graduated and have begun work in my field.

The ESL classes improved my whole life. I learned to communicate competently with my daughter's day care teachers. It is very necessary for immigrant parents to direct the healthy growth of the younger generation. ESL helps build our society and our country.

I often think, Canada, I have gotten so much from you. In return, I will contribute as much as I can--I promise.

From the bottom of my heart, I say thank you, ESL; thank you, teacher; and thank you, Canada.

The Chair: Thank you. I think your English is very good.

We will now go to the Hospital for Sick Children.

Mrs. Cyndy DeGiusti (Vice-President, Child Advocacy, Hospital for Sick Children): Hello, Madam Chair and committee members. I'm Cyndy DeGiusti, vice-president of child advocacy at the Hospital for Sick Children. With me today is Dr. Manuel Buchwald, our chief of research.

I'd like to thank you for inviting us to participate in the hearings, and I assume you all have a copy of the brief we submitted in September.

Everything we do at the Hospital for Sick Children, from care at patients' bedsides to research in the laboratory to national strategies aimed at injury prevention, is dedicated to improving children's health in the country. We look forward to continuing to work with the federal government to make Canada's children the healthiest in the world.

I would like to ask my colleague, Dr. Buchwald, to describe how some of the recent federal investment has made a real difference at the hospital and to the children it serves.

Dr. Manuel Buchwald (Chief of Research, Hospital for Sick Children): Thank you, Cyndy, Madam Chair, gentlemen, and ladies.

To start, we would like to thank the federal government for the increased investment in health research that was made in budget 2003 and that continued previous investments. The additional funding for the Canada Foundation for Innovation, in particular the new research hospital fund, is providing us with the opportunity to compete for much-needed infrastructure funding. The increase to the operating budget of the Canadian Institutes of Health Research and the solidification of the funding of indirect costs of research as a permanent program are also helping us to work towards solving the problems of child health.

Funds from federal granting agencies such as CIHR and CFI, funds that are obtained through a competitive peer review process, are making a difference. Examples include the launch of the largest clinical trial in Canada. Health Minister Anne McLellan and Dr. Alan Bernstein, the president of the Canadian Institutes of Health Research, in June 2002 launched at Sick Kids the Canadian component of a multinational clinical trial aimed at reducing the incidence of type 1 diabetes in children. This clinical trial grew out of basic research that began in our hospital in the 1980s.

The second example is the brain gain from the Canada research chairs program. Five Canada research chairs were awarded to Sick Kids researchers this past year, bringing the total CRCs now housed at the hospital to 14.

The Canada research chairs program has been instrumental in allowing HSC to attract researchers and clinicians to the hospital and to Canada. For example, Dr. Meredith Irwin, who now holds the Canada research chair in cancer biology, came to Sick Kids this past year from Children's Hospital Boston and the Harvard Medical School. As an oncologist, Dr. Irwin treats children with cancer, but she also conducts research into the most critical family of cancer genes yet discovered.

A second example is Dr. Benoit Bruneau, a Canadian from Quebec who came to Sick Kids from Harvard Medical School to accept a scientific appointment and who also received a Canada research chair. As holder of the Canada research chair in developmental cardiology, Dr. Bruneau is uncovering the genetic causes of congenital heart disease.

A third example is the creation of the Canadian child health clinician scientist program. We led an initiative to create this program, which is offered through universities in affiliated children's hospitals in 12 cities across the country, from Newfoundland to British Columbia. The purpose of the program is to train doctors and other health care professionals in the field of child health on how to conduct research so they can work as independent scientists.

We have as well, of course, a continuing set of medical discoveries. In the past couple of months, for example, researchers at the hospital linked maternal folic acid intake to a decrease in neuroblastoma, a deadly childhood cancer. We discovered a cancer stem cell for brain tumours, and we identified a gene responsible for the most severe form of teenage-onset epilepsy. This latter discovery got big play in the National Post with a 4,000-word article, which I think you may have seen, that talked about the impact of these diseases on families.

Health research discoveries like these do not happen overnight. They are results of hard work. For this reason, we would like to recommend that health research funding, particularly for the Canadian Institutes of Health Research, be stable and be competitive with that of other developed countries. The budget for the CIHR should increase to 1% of Canada's health budget.

We would also like to ask the committee to ensure that children's health needs are not overlooked when funding decisions regarding health research and health infrastructure are made. Children's health issues and diseases are very different from those of adults. Children are not simply small adults, and research findings on adults cannot simply be extrapolated to children. Further, with children's diseases, which have a larger component of genetic determinants as opposed to environmental ones, we stand to truly benefit from the explosion of new knowledge in molecular medicine. Furthermore, an investment made in the health of a child will pay off over his or her lifetime.

Along with research into the causes and treatments of children's diseases, the Hospital for Sick Children is also investigating ways to help keep healthy children healthy. For example, recent research at Sick Kids showed that provinces that have adopted mandatory bicycle helmet legislation have had a significant reduction in the number of bicycle-related head injuries in children.

Many long-term health problems that affect adults also have their roots in childhood. Strategies that mitigate or eradicate these diseases in children could result in substantial benefit to the Canadian population and health care system.

In order to maximize the effort brought to bear on children's health issues and diseases, we are partnering with other pediatric academic health science centres from across the country, such as the B.C. Research Institute for Children's & Women's Health and the Izaak Walton Killam Hospital For Children in Halifax to develop a Canadian health research council. Through this partnership, it is hoped that the infrastructure for child health research can be further developed. We truly believe that an investment into the health of Canada's children is an investment in the future of our country.

Thus, our third and final recommendation is that the federal government consider a separate funding formula for teaching hospitals that is commensurate with the role of these institutions in our country. Teaching hospitals, also known as academic health science centres, play a distinct role in the Canadian health care system, one that is very different from that of a community hospital. As the country's largest pediatric academic health science centre, Sick Kids works to provide the most advanced care for the sickest children, it trains the next generation of health care professionals, and it conducts research into children's diseases so the care and outcomes for the children in this country are constantly improving.

Thank you for your time. Later on I'll be happy to answer any questions.

The Chair: Thank you very much.

Now we'll move to Canadian Pensioners Concerned Inc. Who would like to start?

Mrs. Gerda Kaegi (President, Canadian Pensioners Concerned Inc.): Thank you very much, Madam Chair. We are grateful to be able to appear once again before this committee.

We have addressed the three points raised in your studies for this year. The first one, on taxation spending, economic growth, balanced budgets, and the debt-to-GDP ratio, we argue that taxation must be used to restore social programs, to develop our conservation programs, to rebuild and redevelop our infrastructure, our transportation and communication systems, including the CBC, and to make a contribution to peace and stability in those countries in need of our assistance and skills.

We believe in taxation if it is fair and progressive in terms of ability to pay. We see taxation as the expression in fiscal terms of the policies and programs of the government responding to the real needs of the Canadian people. The critical tests should be, it is fair, is it equitable, and is it in the broad public interest? And too often it is not.

We are not in favour of tax cuts so long as the real needs of individuals and communities are not being met. They provide a disproportionate benefit to the wealthy and do little to help economic performance. Furthermore, it has been shown that tax cuts do not stimulate the economy in the long term. Business will not invest in the real economy if there are marginal returns and they can invest in the stock markets or in exchange markets or, increasingly, in those countries where wages are lower and they have minimal environmental regulations.

In contrast, government spending on social programs, on infrastructure, is in effect a redistribution of wealth and thus more money remains in the hands of the general population, who do spend it on consumer goods and services. Strengthening employment insurance benefits would do much more in saving and creating jobs than corporate tax cuts.

In terms of international responsibilities, we argue that Canada must help other countries to fight the dreadful scourge of HIV/AIDS, to develop programs to prevent other illnesses, to improve health care, to provide good levels of nutrition, and to assist in the education of their people, and to help them in the provision of their own food.

In terms of education, we argue that federal investment in research and higher education must be strengthened. It is obvious self-interest to do so. And we have just heard what benefits are being paid, with the previous speaker.

A highly educated population is a key factor in economic growth and job creation, and it must not revert back to being the preserve of the privileged few in society. In this regard, we wish to draw attention to the special needs of those with disabilities.

We argue, as previous speakers have said, that immigrants are essential to the social and economic fabric of our society. The federal government must work more effectively with the provinces to eliminate the artificial barriers immigrants face in establishing their professional careers in Canada. Once they are admitted to Canada, they must be assisted in their integration.

On the environment, we argue there is a need for much greater effort to protect our environment. We must increase our public and private investment in new environmentally supportive technology while aggressively pursuing conservation practices, and we must fulfill our commitment to the Kyoto Protocol and give leadership in moving it forward both in word and deed.

On the issue of taxation spending and measures to invest in and care for all Canadians, we argue that the basic exemption for individuals should be increased and fully indexed to inflation. Tax brackets should also be fully indexed to inflation, and the two upper income tax brackets for those earning over $100,000 should be restored. Capital gains--and it was a royal commission that recommended this years ago--should be taxed at the same rate as employment income.

The GST tax credit for seniors and disability tax credits need to be increased.

The child tax benefit should be increased, and a stop must be made to provincial clawbacks of the benefit.

The Canada Pension Plan needs to be adjusted to give credit to workers who have had to leave the paid labour force to provide essential care to family members.

Federal spending, we argue, must be strategically targeted and clearly accountable. A yearly evaluation report must be provided in terms that the lay person can understand. Federal revenues must be reinvested in Canadian society and not primarily focused on paying down the debt.

For children, we must invest in the well-being of children and reduce child poverty. And you've heard the argument about a national child care program. It's long overdue.

We need to have the Central Mortgage and Housing Corporation return to its role of assisting cooperative and public housing developments. We are in desperate need of safe, clean, affordable housing for low-income families and individuals.

On health care, we are totally opposed to any privatization of health care. It is a service to people; it is not a commodity. The federal government must use its powers under the Canada Health Act to stop the growing privatization of health services. This will be meaningful only if the federal government's cash transfers are substantially increased. We were pleased to hear about the $2 billion perhaps coming next year.

The provinces' reluctance to move ahead with the Canada health council, as recommended by Romanow, is unacceptable and contrary to the express will of the Canadian people. The federal government must act unilaterally in order to get this council underway and to ensure it is not a piece of hollow obfuscation.

We support the concept of primary health care, where services are delivered on a 24-hour, 7-day-a-week basis by an interdisciplinary team of health and social service providers. We argue that home care must become part of the national public health care system. Since home care is presently not covered by medicare, it varies from province to province in how it is programmed and financed. In many provinces people are sent home from hospital often requiring sophisticated care that is not available to them.

Seniors and others who wish to age in their own homes are often unable to get adequate care, with preference going to those coming out of hospital. Similarly, nursing homes do not have adequate staffing to provide care with dignity and compassion.

We call for the creation of a national pharmaceutical drug agency that will improve the evaluation of drugs and help limit the soaring cost of drugs. The government must also act now to stop the abuse of patents by the research-based pharmaceutical industry.

Could I quickly run through the last points?

The Chair: We have the written brief, but perhaps there are one or two you want to highlight, because you're over time now.

Mrs. Gerda Kaegi: I'm sorry.

I think one of the key issues for federal-local relations we're really concerned about is the downloading that is taking place to local municipalities, and we want the federal government to really ensure that moneys designated for local governments get there.

We also argue that there is in fact a climate where we need leadership from the federal government. The interprovincial-territorial bickering is unacceptable to all of us, and we plead with the federal government to take a leadership role in this direction.

The Chair: That's a good note to finish on.

We'll go to the Maytree Foundation, please.

Ms. Elizabeth McIsaac (Manager, Research and Policy, Maytree Foundation): Thank you, Madam Chair and honourable members.

My name is Elizabeth McIsaac, and I'm here today with my colleague Naomi Alboim. We are with the Maytree Foundation, which is a private charitable foundation based here in Toronto, with a refugee and immigrant program that focuses on, among other things, improving access to suitable employment for immigrants.

Immigrants make important contributions to our economy, culture, and civic life. They establish businesses, create jobs, stimulate the economy by increasing demand for consumer products, and they fill labour market needs. More importantly, as future citizens who have chosen Canada, they stand with all of us in the task of nation-building. But with six out of ten immigrants making a downwardly mobile shift into careers other than the one they were trained for, we are clearly not leveraging the real potential of immigration.

We believe it's time for the government to catch up with the on-the-ground realities of immigrants. It's time for practical and effective public policy that ensures we benefit from the wealth of immigrant skills and expertise. This is increasingly important when you look at Canadian demographics. Our population is aging, its fertility rates are decreasing, and its training systems are not producing the numbers of skilled workers needed for the labour force.

It is estimated that by the year 2011, 100% of our net labour force growth will be dependent on immigration. Yet skilled immigrants attempting to enter the labour market in their occupations face a wide variety of hurdles, including lack of information, inadequate assessment and recognition of qualifications that are achieved overseas, lack of upgrading opportunities, lack of occupation-specific language training, and lack of opportunities to gain Canadian work experience.

There are some excellent initiatives underway to address these barriers; however, many are ad hoc, time-limited projects that serve only a limited number of people in a limited number of occupations and locations. A more systematic approach is needed involving all stakeholders and all levels of government working together.

Naomi has been working with the Maytree Foundation to develop a 10-point strategy that sets out the steps the federal government should take to help immigrants fulfill the promise they bring with them to Canada. I will turn it over to Naomi to outline that plan.

Mrs. Naomi Alboim (Associate, Maytree Foundation): Thank you, Elizabeth.

The 10-point plan I'm about to talk about is very specific, very concrete, and deals with the barriers Elizabeth just identified.

Number one, first of all, is to create a Canadian Internet portal of information for skilled immigrants. A portal could link sites that provide important information for immigrants before they arrive in Canada and once they are here, including labour market information, occupational licensing requirements, how to get qualifications assessed, immigrant counselling services, where to get upgrading courses, and how to connect with potential employers.

Several federal departments are now currently working together to develop this Internet portal, but an infusion of limited dollars would expedite the process and would allow for the involvement of provinces, which to date has not happened, so that the site could be truly a one-stop, user-friendly, immigrant-friendly portal.

Number two is improved collaboration on the assessment of academic credentials, to increase employer confidence. The Conference Board of Canada recently concluded that the Canadian economy loses between $4 billion and $6 billion annually because of unrecognized qualifications, and that immigrants experience some of the most serious problems in achieving recognition of their learning.

There are a host of organizations that assess international academic credentials, and perhaps that's part of the problem. The federal government should provide support and incentives for the various assessment providers to work together with the Allianceof Credential Assessment Services of Canada to adopt common standards for assessment and to work collaboratively on shared objectives. This would result in academic credential assessments that are more likely to be accepted by employers.

Number three is to work with the provinces to provide incentives for educational institutions and licensing bodies to develop competency-based assessment tools. It's not just a matter of academic credential assessment; many immigrants come to this country with skills and experience that are undervalued because potential employers have no way of assessing what the immigrants are capable of actually doing.

Some post-secondary institutions have developed prior learning assessment tools for students who want credit for what they have learned outside the traditional school system, while some regulatory bodies have developed clinical exams to assess candidates for licensure. This expertise needs to be pooled so that effective tools can be developed to assess people's skills and help identify gaps that can be addressed in upgrading programs. The development of these tools is difficult and expensive. Support for collaboration in their development would be both cost-effective and efficient.

Point number four is to create new funding mechanisms that address the specific needs of immigrants who do not have previous labour market attachment and are therefore not eligible for training either under the Employment Insurance Act or labour market development agreements with the provinces. Support the work of the provinces in the provision of bridging programs as part of Canadian educational institutions' mainstream services, and provide pilot funding for the implementation of bridge training by Canadian institutions in major source countries of immigration.

Once immigrants have had their academic credentials and occupational skills assessed, some gaps may exist that must be addressed. Some provinces have developed pilot bridging projects that train immigrants in occupation-specific terminology and provide a workplace practicum to refresh or upgrade skills in the Canadian context. Federal funding to assist provinces in the expansion of these pilot projects into mainstream programs would be well received. Some of these bridging programs could even be offered in the source countries of immigration, where many of our Canadian community colleges and universities are already very active in the provision of training.

Point five is to work with the provincial governments to expand student loan programs. Permanent residents are eligible for student loans only after they have been in Canada for 12 months, and loan provisions for part-time students are not substantive enough to make this an option for most adult learners. Loans are only available to students enrolled in a full degree, diploma, or certificate program. The federal government should work with the provinces to amend the Canada student loan program to—

The Chair: You have about 30 seconds left, so you might want to go to your recommendation highlights.

Mrs. Naomi Alboim: These are all recommendations. Okay, I'll just read them out in highlight form.

That was five, to expand the student loan program.

Six is to fund labour market language training to be delivered by employers and educational institutions.

Seven is to provide incentives to employers and employer associations in labour to become more active in the integration of immigrant skills.

Eight is to sustain the collaborative efforts of Canada's self-regulated professions to improve access for international candidates.

Nine is to support local initiatives to integrate immigrant skills, such as the one we're starting here with the Toronto Region Immigrant Employment Council, and this could be promulgated in other cities across the country.

Ten, the last one, is to initiate multilateral discussions to create five-party agreements on the labour market integration of immigrants, and that includes cities. That would mean that CIC, HRDC, would work together with provincial ministries and major cities in the development and implementation of labour market integration programming for immigrants. The cities must be involved.

Each of these ten has merit on its own, but combined we feel they represent a robust plan that has the promise of creating meaningful and lasting change for immigrants. We urge the standing committee to champion this effort, so that all Canadians can gain maximum benefit from the skills and expertise of our new citizens. It is not an expensive plan.

The Chair: Thank you very much.

Now we'll go to the City of Toronto.

Mrs. Shirley Hoy (Chief Administrator Officer, City of Toronto): Madam Chair, members of the committee, thank you for this opportunity for the City of Toronto to appear before the Standing Committee on Finance. Toronto is important to Canada. We know that our city has a major role to play in ensuring the prosperity and quality of life right across the country.

We're keenly aware of the impact of the city on the Canadian economy. Toronto contributes 10% of the entire country's GDP. It is home to 40% of Canada's head offices and 80% of the country's largest research and development, advertising, and high tech firms, and it provides one-sixth of all the jobs in the country. I think the SARS crisis brought home the fact that what happens in Toronto has national and international consequences.

I'm here today to emphasize that the City of Toronto wants to work cooperatively with the Province of Ontario and the Government of Canada to strengthen Toronto's contribution to the well-being and economic health of the country. Specifically, we invite the Government of Canada to participate in four major areas with us: affordable housing, early childhood development, immigration, and public transit.

First, turning to housing, Toronto commends the Government of Canada for the Canada-Ontario affordable housing agreement and the community rental housing program. These programs have already resulted in approval to proceed with over 900 new units of affordable rental housing in Toronto. We also welcome the extension of the supporting communities partnership initiative, known as SCPI, and the residential rehabilitation assistance program.

These programs pave the way for the new Ontario provincial government to meet its commitment to provide more housing for those who need it most. The community rental housing program is successful, because it builds on the City of Toronto's own initiative to provide housing. We encourage continued federal involvement in the provision of affordable housing, and we ask you to ensure that the municipality is at the table with the provincial partners.

Second, Toronto also commends the federal government for the early child development initiative. The City of Toronto is the second largest child care provider in the country, but over the last few years we have seen the erosion of child care—the loss of 1,700 subsidized spaces due to constrained provincial funding—because none of the federal ECDI funding has been provided for regulated care.

Toronto anticipates the new provincial government will use the federal funding to help restore child care in Toronto that was lost under the previous government and will create new quality regulated child care. Child care ensures that parents do not have barriers to employment and that children receive quality care. It's a fundamental investment in Canada's future.

Toronto asks that the Government of Canada ensure that funding for children is invested in quality regulated child care for children. They deserve it.

Third, the Toronto area welcomes 40% of all newcomers to Canada, with 30% settling in the city of Toronto. The value of immigration to the country and especially to Toronto is inestimable, but newcomers have settlement needs that must be addressed early, so that they can be fully participating in our economy and in our community. Toronto's working to ensure immigrants can use their valuable skills and expertise to reach their full potential, establish a good life for themselves and their families, and can contribute effectively to the city and Canada. But Toronto needs to be at the table when the federal government discusses immigration with Ontario in order to ensure that critical services are provided to the newcomers for successful settlement transition, because we are the largest immigrant-receiving centre in the country. Collaboration amongst the three governments is also important to avoid duplication and ensure effective service delivery.

Fourth, and most important, is transit. The participation of the federal government in funding transit in Toronto is critical. We're extremely proud of the TTC. It continues to be an integral part of what makes Toronto Canada's great city.

Transit in Toronto is not just a means to get around; it's a major contributing factor to the economic growth of Toronto and the GTA, with benefits to the entire country. It's also a means to curb sprawl and maximize the use of the existing infrastructure within the urban area. It's a means of providing choice for travel that decreases air pollution and does not consume vast amounts of land for parking. It's a means of reducing the congestion in the Toronto area that detracts from the region's quality of life, and indeed, also its economic health.

In short, transit in Toronto is a good investment. It's an investment that needs the participation of the Government of Canada.

The National Round Table on the Environment and the Economy recommends that the federal government invest $1 billion per year for 10 years in transit in Canada's cities, targeting the urban regions with opportunities to increase transit ridership and reduce sprawl. The City of Toronto supports the recommendation, and indeed, we even have our new official plan that encourages transit-oriented city and urban development.

Later this afternoon you will hear from Vince Rodo of the TTC about how the lack of funding in recent years has had a real impact on the choices that people have for travel and how the TTC proposes to turn that around. He will demonstrate that we can do much better if the system is properly funded.

In 2002, the Government of Canada, for the first time, provided funding for urban transit, and we thank you for that. Toronto received a third of the TTC capital expenditures from the Government of Canada for transit renewal. That funding was put to very good use for repairs and to replace transit vehicles.

Continuing in 2003, the city approved the TTC capital budget based on this one-third funding from each level of government. Unfortunately, with our actual expenditure for 2003 expected at about the $254 million level, the one-third funding did not come through for every level of government. Right now, while the city has fully committed to its share, we have received only $14 million to date from the federal government and $73 million from the provincial government. So in essence, the City of Toronto has to do about 68% of the funding; we have to pick up the balance.

To sum up, I would ask that this committee recommend that the Government of Canada continue to fund affordable housing and to work with municipalities to ensure that the design of the programs will result in the optimal use of the funding; continue to provide funding for early childhood development, but make sure the funds are directed to quality regulated care; as it pertains to newcomers to Canada, ensure that we work collaboratively with you and the provincial government; and finally, for transit, provide long-term sustained funding in order to ensure economic growth for the city and, in turn, for the country.

Thank you for this opportunity.

The Chair: Thank you very much. Thank you for all your briefs.

Now I'm going to give six-minute rounds, which will take us a couple of minutes over time.

Go ahead, Mr. Jaffer, for up to six minutes.

Mr. Rahim Jaffer (Edmonton—Strathcona, Canadian Alliance): Thanks, Madam Chair.

Thank you to all the presenters today. I found all your briefs very interesting.

In the time that I have, I'll have to limit myself to only two questions, one specifically to the pensioners.

In your brief initially, when you talk about tax cuts, it seems to me you're concerned that they may not do long-term economic good. But I think one of the areas we could focus on--and I know you've suggested it in your brief--is targeted tax cuts, especially in looking at raising the basic exemption, as you've identified in your brief, which could help low-income families especially.

One of the things I know you've mentioned is that it should be indexed and it should be increased, but I wonder if you have any idea where you would like to see that increase, because there have been different suggestions. Different times there have been suggestions that it should be increased up to $10,000. There are even some here, including my colleague Scott Brison, who've talked about $15,000, which would take, in effect, over 2 million low-income Canadians right off the tax roll, which would help them, I think.

So I wonder whether you've given any thought to where that basic exemption should be, where we should look.

Mrs. Gerda Kaegi: I think the issue for us is to eliminate poverty and the low-income cut-off. So when we look at the concept of tax cuts or, on the other side, OAS and GIS increases, what we're trying to do is move people out of the low-income cut-off.

So to be specific, in different parts of the country, different levels of income apply. Somebody in a large urban centre may need, as Statistics Canada said, if I remember correctly, a minimum of about $18,000 a year to be at the low-income cut-off. That is not true in other parts of the country. So I think it's very hard to come up with a specific level, but for us, the issue is to try to eliminate the poverty within this society.

I'm sorry if it's not as specific as you might like.

Mr. Rahim Jaffer: No, but it gives me an indication, obviously, to look at that poverty level, or whatever it might be, and maybe set that target around there for the basic exemption. So I appreciate that.

In the remaining time, my question will be a general one. It will apply to the ESL training, as well as the Maytree Foundation, and Ms. Hoy, you may have a comment on it as well. It's focused specifically on the issues of immigration and training and settlement for people coming to the country, and I think you all addressed that.

First of all, I want to congratulate you on your work. I know what sorts of efforts people who come to this country make. Obviously, in looking for new opportunities, it's always a challenge.

My family came here as refugees in the early 1970s. I was too young to know the challenges when they came here, but I've heard all about them. So I admire people who have to go through that process.

One of the things I'd like you to address in trying to strengthen some of the services we have here in Canada, language training and other things to help immigrants once they get here, is what we can do to try to prepare immigrants prior to their coming here.

One of the criticisms I've heard of some of our missions around the world is not that they're doing a bad job...but what more could they do to give a better indication to immigrants, if there are certain things they could prepare before they actually come here so they know exactly what challenges they're going to face when they get here. It may change their approach to how they're going to go about applying and what they're going to do prior to coming. That's where I think some of our challenges could also be reviewed. I think accreditation is definitely something we have to deal with more substantially.

But what can we do at our missions, if you think it would be useful...whether courses should be acceptable there or working with institutions, as you mentioned, that already exist in these countries, to let them know exactly what the language requirements are? It doesn't seem that this is being done effectively.

I would like you to comment on that.

The Chair: Go ahead.

Mr. Norman Beach: I'd like to make a very quick comment, because I think Maytree has a lot more to say about this one.

I'd like to point out that, as regards having people come here sort of ready to integrate, it would be nice to get people closer to that goal before they arrive, but I think a certain amount of it has to be done after they arrive.

One of the reasons for that is just the fact that immigrants come from so many different countries and actually come together in a class with people from other countries. I think it's a nation-building exercise in itself, because we are a multicultural society, and it's not just that immigrants need to know about Canada from outside; it's also that once they're here they need to integrate with people from other racial and ethnic groups, and they need to feel that they're part of a collective experiment. I believe language classes help to do that.

I think it's good to prepare people before they come, but we should not overlook the fact that even people who may speak English perfectly may not be part of that collective experience that they get through a language class.

But I'd like to defer to Maytree.

Mrs. Naomi Alboim: I think the missions are probably not the best place to do this. In most cases, the immigration officers don't even see the people. Most of the economic immigrants are dealt with on a paper basis. They don't have the time. They're already so overwhelmed.

So I really do believe this Internet portal that we were talking about is very useful. If all the mission staff did when they sent out applications to people was to say, “Go to this one portal and you will get the links to everything you need,” people would have the information about the labour market. They could do self-assessment tools on the Internet. They could be linked up to the academic credential assessment people and get their academic credentials assessed before they even came.

This is a really interesting model. I don't think we understand how many of our community colleges and universities are actually in the source countries doing training. They could easily play a role there, doing some of the assessment and some of the bridge training before people even come. They could come with a Canadian credential and then be linked up to those universities and community colleges once they're here, with that support system already in place. Those universities and community colleges could help find them co-op placements or work placements with employers that they already have contact with. That would really help the process.

But there is no Internet portal now. People have to go to 12 different places, 12 different provinces. We don't have any central electronic basis, and all the economic immigrants who are coming here have the Internet or access to it.

The Chair: Thank you very much. I think that is an excellent idea.

Now I'll go to Mr. Wilfert.

Mr. Bryon Wilfert: Thank you, Madam Chairman. I will follow up on that.

I have a riding that is 17% Asian, and of my staff, one person speaks nine different languages, and one speaks Cantonese and Mandarin and taught English, his second language, on television. So I would certainly support the Canadian Internet portal.

We don't do a very good job abroad. I think people need to know what they're coming to before they decide to come here. That's very important, so they aren't shocked when they get here. One of my staff is doing immigration work full-time. I don't think she should be doing immigration. Personally, I think the department does a lousy job, in terms of what they should be doing. I have more fights about that than anything else.

In any event, I strongly believe in ESL, but I think we could reduce the number of people coming over here; 45% is far too many. You say that 45% don't speak either official language, and I have a problem with that, personally. We talk about professional qualifications. Many of those, of course, are under provincial jurisdiction, and many of the professional organizations are the ones.... Some are a little better than others, particularly the engineering societies. We have a lot to do, but I certainly endorse the concept of one-stop shopping--the portal idea.

To the Hospital for Sick Children, I very much appreciate your comments on the CIHR, and so does the minister, I can tell you. We like to hear incremental...every year. We're getting the value for that.

Briefly, how do you see this separate funding for teaching hospitals working?

Dr. Manuel Buchwald: A variety of mechanisms could be put in place. The activities of a teaching hospital sort of straddle federal-provincial responsibilities, in the sense that in our society the provincial governments are in charge of supporting health care either directly through their own taxation or through transfers, but research and some aspects of research training are clearly federal responsibilities. So there has to be some mechanism for institutions like ours to receive support for activities that currently fall between the two jurisdictions.

We talk about our research institute with a lot of pride, but it's supported by our foundation, which has developed over the last 30 or 40 years. As the previous head of our foundation said, we're supporting an internationally competitive research operation on the sale of t-shirts.

Mr. Bryon Wilfert: What's the mechanism for getting the teaching hospital funded?

Mrs. Cyndy DeGiusti: The Kirby report had some ideas that we would certainly be happy to look at. They were around looking at specific technology help for teaching hospitals, because our infrastructure tends to be at the state-of-the-art level that's hard for the provinces to handle. Also, in the case of Sick Kids, we have children coming from right across the country because we offer a type of care that's unique.

Mr. Bryon Wilfert: So you're talking about expanding on one of the streams you already have.

Mrs. Cyndy DeGiusti: Yes.

Mr. Bryon Wilfert: Thank you.

The Canadian Pensioners Concerned had a lot there, but the one thing I'm glad you stressed was the Canadian health council. I absolutely disagree with the government's decision to give up to $2 billion to health care. If we're going to give them the $2 billion without the health council in check, they shouldn't get the money.

Some were silly enough, stupid enough, or whatever you want to say, to bank it this year. They all didn't do that; some of them were on the ball. It said in the agreement “up to $2 billion”, depending on the finances for next year. The fact is that Klein has said, no, we're going to take your money, but we're not going to be accountable. That's unacceptable. I think that's the string we should have had there. I don't accept that.

Just to let you know, the Prime Minister's Caucus Task Force on Urban Issues identified $55 billion-plus to go back into the five largest urban areas of this country. I agree with Ms. Hoy that the cities should be at the table regarding immigration, although I must say that members of your council were totally unaware of all the money we're putting back into the city of Toronto, particularly on immigration resettlement, which rather disturbed me.

On the transit issue, we have asked for a national transit strategy--I think that's very important--but we're not going to fund operating costs. Obviously capital is an area, but they have to have the right mapping, and we cannot do it.... Whatever we do for the city of Toronto we'll have to do for Calgary. So we have to be very careful, because we're not going to supplant the provinces.

I guess that's where I always hear from everyone who comes here. Leadership role of the federal government--I don't know what that means. I wish somebody would define it for me. And then we have the Constitution. We get hammered for things, but on the other hand, sometimes we make poor agreements, I have to say. But the difficulty is that unless we have the constitutional hammer to come down on them.... Your leadership role is wonderful. We can tell you all sorts of platitudes. The reality is, how do we make sure?

I asked a group this morning about the five principles of medicare, to maybe apply the same things when we're talking about early childhood education or child poverty. We need to have the tools to be able to come down, because they deliver.

As we know, in many of these things it's the provinces that deliver or don't deliver. We know housing is an example. Nova Scotia has done 15 units. If you were the Government of Nova Scotia, wouldn't you be embarrassed to say that with all this money on the table you had done only 15 units? They got re-elected, but that's kind of hard to believe.

The Chair: Ms. Hoy would like to comment.

Mrs. Shirley Hoy: On the leadership question, if I look at what has happened with your Canada assistance plan funding versus the Canada health and social transfer funding, Mr. Wilfert, I would respectfully submit that as part of the leadership role you have to set out the objectives and the principles. In the old CAP, you did set out some of them.

When you roll everything together in the CHST, I don't think you can hold either the province or, in those provincial jurisdictions where municipalities have downloaded services, any level of government accountable at the provincial and municipal levels. I think a review of CHST and whether or not it's now time to pull it back out, on the cost sharing on health, education, and the social services, would be helpful. You're right, you're spending a lot of money, but to be able to see the impact on the community is difficult.

Certainly from a City of Toronto point of view, that's what we mean by a leadership role. We want a system of three levels of government working together to make it work. I think that's what we need to do.

The Chair: Thank you very much. We've heard that theme throughout the country.

I'm going to give 15 seconds to Mr. Watson, if you want it.

Mr. Edwin Watson (Member, Canadian Pensioners Concerned Inc.): On your comment about leadership, I suggest that the federal government could make Alberta live by the federal government's own rules under the Canada Health Act.

The Chair: Thank you very much.

We'll go to Mr. Murphy now for six minutes, please.

Mr. Shawn Murphy: Thank you very much. I have a question to Mr. Beach, perhaps Mrs. McIsaac, and Naomi Alboim on this whole immigration file.

I was very impressed by your presentations, especially from the Maytree Foundation. It was very reasonable, well presented, and not very costly. It was one of the cheapest presentations we've heard in five days.

Voices: Oh, oh!

Mr. Shawn Murphy: We should give you a scroll.

Mrs. Naomi Alboim: Just implement it and I'll be happy.

Mr. Shawn Murphy: At any rate, I think they're very good.

We've talked about a number of things here--nation-building, our multicultural society, the importance of integrating new Canadians into our society, acknowledging foreign credentials and the necessary training. However, there is another issue out there...and perhaps I'm off topic here. Tell me if I am, or if you're not prepared to answer it.

Right now the vast majority of new Canadians who come to Canada settle in Toronto, Montreal, and the lower mainland of British Columbia. We're becoming a multicultural society, which is tremendous, but that's not the case in the rest of Canada. It's not the case in Atlantic Canada, it's not the case in the province of Quebec outside the Island of Montreal, it's not the case in rural Ontario, and it's not the case in western Canada other than the Calgary-Edmonton corridor and of course the lower mainland of British Columbia. If we're going to develop as a country, I think we have to look at trying to make the whole country more diverse, more multicultural, and that would mean creating some mechanisms so that new Canadians look favourably at other parts of Canada.

Now, I know there are clustering issues, and job issues, and other issues involved. I also know that perhaps it's not part of your associations' mandates or something you've ever studied.

Does either of your two organizations have any comments or opinions on this issue?

Mrs. Naomi Alboim: Yes, we do. In fact, my colleague here has authored a paper on the issue. This was in response to Minister Coderre's suggestions for regionalization, which we are strongly opposed to in terms of the methodology he proposed.

Immigrants go to major urban centres for a whole lot of reasons, and I think we have to accept those reasons--for example, what they know exists, what they have heard about those centres, where their friends and family have gone before, what the employment situation is, whether they could practise their trade or occupation in that particular location, whether there are educational opportunities for themselves and their children, and the kind of lifestyle they can live.

They do, especially the economic immigrants, actually think about these things. Unfortunately, they don't have the information, so I do think the information issue is a big one. More importantly, however, the kind of information they get will depend on what exists. And what exists can be nurtured. For example, we think the federal and provincial and local governments could work together in a bottom-up way rather than a top-down way. Rather than the federal government saying, “We destine this immigrant to this location,” the local communities could make it known that they need this number of immigrants in these occupational groups, and that they're prepared to work together with all of the stakeholders in the community to develop a welcoming community that addresses educational, language, occupational, and cultural issues for that group. And they could make this known to the people overseas who don't have particular friends or family they want to live with, who are open to other alternatives.

We really do believe that in this case, if you build it, they will come. They're not stupid people. If they think they can practise their profession more quickly by going to Winnipeg than to Toronto, they will go to Winnipeg--if, that is, the regulatory bodies are onside and the employers are onside and the network is there.

But we don't think this is a rural strategy or an “every nook and cranny” strategy. This is a city strategy. Immigrants want to live in cities. All the evidence says that. They go from the local rural areas in their own countries to the urban centres before they come here. Canadians are primarily living in urban areas. If we can develop what we call a “second-tier” strategy--not just the big three cities but maybe ten cities, or twelve, across the country--and really nurture this in a bottom-up way, immigrants will go. But it has to be this bottom-up approach, addressing what the immigrants are actually looking for. They won't go anywhere where there isn't a university. They want their kids to go to university. So let's cut out, as a strategy, those cities that don't have universities, for example.

Mr. Norman Beach: I think one of the main problems that a lot of communities have identified is that they can't get doctors.

One of the problems we have all over Canada is that immigrants who are doctors can't get residencies and can't get to those communities. I think one of the very best ways that we could work on giving people opportunities to serve, where they don't have the chance, would be to increase the ability of people to work in their professions. I know that a lot of provincial agreements can fast-track people to serve in other places.

I absolutely agree that it should be done as a strategy, not to fill up empty spaces in the country, but where people can actually serve and contribute to our society. I think there are a lot of places where it could be done in that way, not in a coercive way.

The Acting Chair (Mr. Gary Pillitteri): Thank you.

Ms. Wasylycia-Leis.

Ms. Judy Wasylycia-Leis: Thank you, Mr. Chairperson.

I have one question I want to raise that could apply to all of you, so feel free to jump in, depending on what time is available.

I support all of the issues raised here today. I think it is time for the federal government to invest in all of those areas. But I think the success we will end up having in terms of shifting the agenda depends on positions you will also need to take on fiscal policies.

My question is really twofold.

Number one, obviously you had some success here in Ontario in getting a government elected that said it's time to forgo or put on hold the tax cut agenda in order to invest in people in communities. How did you do that? What are you going to do? How are you going to be able to convince Paul Martin and his government to do that?

Secondly, the other problem we have federally is that we have a government and a new Prime Minister coming soon who is used to low-balling the surplus and then saying that any extra money goes against the debt. We lose the opportunity, as a country, to debate priorities and put it against the money that's important. What do you say about that, and what can you do about that?

Mrs. Gerda Kaegi: We've been talking about tax cuts for years. We come to the finance committee every year. We've written to the Minister of Finance. We've written to the Prime Minister.

Provincially, we rejected the tax cuts for seniors. The government of the day was very surprised that seniors were saying they wanted the money in the schools and the health care system. We said no and no.

I think there is a feeling that Canadians have realized you can't have tax cuts and human and other services, infrastructure. You're going to pay for it out of your own pocket. It's far better to pay for it collectively in a fair and equitable way. I think, as long as we all--which I'm sure everybody at this table has been doing for years--make that argument consistently, eventually the message gets through.

I am concerned about the low-balling. It's a stupid tradition. It builds distrust on what is coming out of the Minister of Finance's mouth, because every year it has been proved wrong. That is not a way to build respect for the planning and decision-making at the federal government level.

I don't know if that helps, but it certainly is reflective of our view.

Dr. Manuel Buchwald: We view the expenditures that the federal government has been making in our area of health research as an investment in the future.

I can tell you that one of the issues that have arisen in public debate has been the issue of the brain drain, if you wish. Arguments have been made that to reverse the brain drain, you need to bring our tax policy in line with that of the United States. Well, I can tell you, from our own experience, that's not the case.

The reason we have been able to recruit to the Hospital for Sick Children upwards of 20 or 30 highly trained pediatricians, surgeons, and scientists is that we were able to convince them that the opportunities for them to be an internationally competitive clinician scientist or scientist were possible here, not because of our tax policy. It was really more a question of the investment in giving them opportunities, rather than having more take-home pay for themselves.

The Chair: Go ahead.

Mrs. Naomi Alboim: One of the things I mentioned very quickly and I would like to go back to is the employment insurance issue and how it is now defined, who is now eligible, and what happens to the surplus now.

If we look at the employment insurance system very differently in the future, it could really be very beneficial to Canada and Canadians. We all know that our labour force needs to grow. Our labour force is declining. We're focusing much more on immigration for our labour market, etc.

Now, the situation is, as you know, that the only people eligible for part 2 of the employment insurance benefits are people who are EI-eligible, which doesn't deal at all with 80% of the potential population. It doesn't deal with the aboriginals. It doesn't deal with people with disabilities. It doesn't deal with immigrants. It doesn't deal with first-entry women or re-entry women who have been away for awhile. We're losing a whole part of our potential labour pool who are not eligible for any training or any benefits, other than the little money that is set aside under the CRF for those particular target groups--none of which goes to immigrants, by the way, and immigrants are the biggest source of potential income.

So I would think a real look at the EI system and a commitment made by employers that this money that they go to is not just for people they currently employ, but also for people they need to employ in future.... It's not inappropriate to ask employers to have some of the surplus go to people who are not EI-eligible. I think it's a source of funding that really should be looked at.

Mr. Norman Beach: Also, on the subject of EI, there's money available there that could be used, but is not being used, for language training. Language training is often essential for a person who needs to get back into the workforce. They need retraining. Well, you can't retrain unless you speak English or French in this country. So that certainly is a source where there is money available that could be used for language training.

The Chair: Thank you very much.

Before we go, I'll make one comment on these last comments. I

have a real problem using employers' and employees' money to do things that perhaps government should be doing. So I don't see that a lot of these programs should be coming out of EI at all. I think that the nominal EI account, as it is a nominal account...and we have done what the Auditor General told us to do; we put that money into general revenue. If this is an important policy and objective of the government, then it should come out of Immigration, HRDC, or wherever else. But I have a real problem with creating screens into funds that the government doesn't pay into. That's just my personal perspective--not as chair, just personal.

Thank you. That's been bugging me, so I had to say it.

Mr. Pillitteri, the floor is yours.

Mr. Gary Pillitteri: Thank you very much, Madam Chair.

For some of you here who don't know my last name, I am an immigrant, too. So much has been said about how we move immigration, but let me tell you, as one who immigrated here to Canada 55 years ago, it is not the fact today that people go to Toronto for any one reason. People go to Toronto for simplistic reasons, because you have the same people. They have the same nationality, they have the same education, and they have affiliations with friends, family, everything.

Fifty years ago that was not the case in Canada. Fifty years ago immigrants were going to all parts of Canada; they reached all parts of Canada, from the east coast to the west coast and the territories. If we go back even prior to that, immigrants went all over.

Let me say one thing. As much as we have the language barriers and so on, and we have to educate them, that's also why they flock there, to save time. Once they see there is no support for them in smaller communities, that it is much easier to find support in larger cities, then they move away from there and go to the larger cities. So as much as one benefits from all the things we do for them, it also moves right into that area, where the benefits mean the most for them. When they come to Canada--they are not fools--they come here for a reason, and that is to express their own initiative and also for a better standard of living.

But I want to go to another line of questioning. In Toronto, as I said earlier on, we always get the spending concept. I am a businessman, and government should not be run as a business. Let me put it this way. It should be run with social policies, and actually we should socialize everything that we pay in the tax system in order to benefit all the people of Canada.

But I have a little problem when we now have a $510-billion debt, which has been created by us sitting around this table, because there are a lot of underfunded programs, from the CPP to other programs that were never funded. People paid in very little to it and benefited from it. I have a little problem with leaving all of this debt to my children or my grandchildren; there is this intergenerational debt. We say spend, spend, spend.

We have seen it in the past in Ontario, where specifically the NDP tried to spend their way out of a recession. And where did we find ourselves? We found ourselves with another $100 billion debt in the province of Ontario.

I think that as much as we need to provide the services in the future and the investment for the future, we also have to live within our means.

Dr. Buchwald made remarks about the brain drain. All of a sudden, in the last four years only, we started having much more of a brain gain in Canada, because we had put in place the fundamentals in order to get the scientists and researchers back in Canada again, and also because they could make a comparable or even better living than they had made before south of the border.

As much as we like to spend, has anybody thought about or talked in their presentation about maintaining the line and saying let's not go into a deficit again? I never heard anyone say that we should stay out of a deficit situation, that we should maintain the line, the few tax cuts that we have, but not increase taxes. Also, I never heard that we should go down the road of trying to pay off some of the debt that we accumulated instead of leaving it for our grandchildren.

Does anybody care to comment on that?

The Chair: I'll take a couple of comments.

I'll start with Naomi.

Mrs. Naomi Alboim: I think, in terms of where we're coming from in our presentation, the issue for us is not whether there should be a deficit or not, or whether we should spend on the deficit. That's not the issue. For us, the issue is that a little bit of investment will pay back in spades.

For example, you heard the story of one of the presenters here. She was a cashier at Pizza Pizza. I don't know what you earn as a cashier at Pizza Pizza, but it's not very much. She's now working in marketing. She's earning more. She's spending more. She probably lives in a better place than when she was a Pizza Pizza cashier. She's paying more taxes. She's contributing more.

All we're saying is, if you believe the Conference Board's figures--which I have no reason not to believe; they were assessed by many people--they talk about a $4 billion loss through the lack of credential recognition. That's $4 billion that could be in the economy rather than not in the economy. So let's look at what kinds of short-term investments may be necessary for really long-term gains, rather than not making the short-term investments and losing out big time in the long term.

Mr. Gary Pillitteri: The Pizza Pizza job is still there, too.

Mrs. Naomi Alboim: Yes, okay.

Mr. Gary Pillitteri: Someone else will fill it.

The Chair: Ms. Hoy.

Mrs. Shirley Hoy: Madam Chair, our suggestion isn't so much that you have to add more. We believe the balanced approach that the Government of Canada is taking now is reasonable--you know, pay down some debt, but also do some spending. But in the two examples I used, especially your early years development initiative, it's not being directed to the area that we believe will help kids to develop. If it were put into the regulated quality child care, it would be better than just adding or inventing and creating new initiatives.

So we're saying, where you have spending already in place--for example, affordable housing--lever that spending at the provincial level. That's what we're suggesting. Your money is already there, your program's announced, but you're not levering the further funding by the other levels of government. That's what we're saying.

Mr. Gary Pillitteri: Well, the response is that you've put the right government in place now. There has been $2 billion sitting there for housing for a couple of years.

The Chair: Mr. Beach.

Mr. Norman Beach: I'll give a specific example of something.

British Columbia is the only province where refugees are eligible for settlement services, which include language training. Now, some people might say that this is going to be a drag on the system, because people are going to be using up this money. But studies show--and I have it right here--that by allowing them to have access to settlement services, in the end they end up doing better in the job market. This grows the economy. It's better for their families. It's better for our whole society.

So there is an initial investment, which is not actually particularly large, but in the long run you get something in return. That would be my point.

The Chair: Ms. Kaegi.

Mrs. Gerda Kaegi: I'm not sure I can add much, but I was thinking as you talked that one of the key investments for families very often, if they have the opportunity--and my husband is an immigrant to Canada--is in a home. That's a debt they take on, but it's an investment over the long run that pays off. To my mind, debt is not necessarily a bad thing if it's building towards a future.

I don't think any of us has suggested going back into greater debt. I think it's to invest for the future now, because we're losing the return on that investment if it doesn't occur.

The Chair: Thank you very much, all of you.

I know everybody is asking for investments, but I have to tell you, when I first came on this committee three years ago, the “asks” were in millions of dollars. We are now at this committee getting them in billions of dollars--for aboriginal issues, environment, health, social services, research, infrastructure, cities, transport. I could go on.

So when everybody comes to the table and says give me mine because it's a good investment, you have to realize that if we honoured all of that, we would be in deficit financing. And the clear message across this country is don't go back into deficit. What we have here is a situation where we gather the excellent ideas, we lay them out in our report and try to focus on some of the best of the best, knowing that we're not covering everything that's been presented. We're helping to show Canadians that we are balancing priorities here, and hopefully this country is going to get the balance more right than wrong, and your contribution will help with that decision.

So thank you very much. We are adjourned.