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37th PARLIAMENT, 2nd SESSION

Standing Committee on Finance

EVIDENCE

CONTENTS

Thursday, October 24, 2002

0935

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

Dr. Patricia Clements (President, Canadian Federation for the Humanities and Social Sciences)

0940

0945

The Chair

Mr. Paul Wiens (University Librarian, Queen's University, Canadian Association of Research Libraries)

0950

The Chair

Mr. Michael Gorman (President, Canadian Federation for Promoting Family Values)

0955

Mr. Michael Gorman

1000

The Chair

Mr. Andrew Jones (Member, National Professional Association Coalition on Tuition)

1005

1010

The Chair

Mr. David Paterson (Executive Director, Canadian Advanced Technology Alliance)

1015

1020

The Chair

Dr. Gordon McBean (Chair, Board of Trustees, Canadian Foundation for Climate and Atmospheric Sciences)

1025

1030

The Chair

Ms. Marie Lemay (Chief Executive Officer, Canadian Council of Professional Engineers)

1035

The Chair

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

1040

The Chair

Dr. Patricia Clements

The Chair

Mr. Michael Gorman

The Chair

Mr. Andrew Jones

The Chair

Mr. Pierre Paquette (Joliette, BQ)

1045

The Chair

Mrs. Marie Lemay

Mr. Pierre Paquette

Mrs. Marie Lemay

Mr. Pierre Paquette

The Chair

Dr. Patricia Clements

The Chair

Mr. Andrew Jones

The Chair

Ms. Maria Minna (Beaches—East York, Lib.)

Ms. Marie Lemay

1050

Ms. Maria Minna

The Chair

Ms. Maria Minna

Ms. Marie Lemay

The Chair

Mr. Shawn Murphy (Hillsborough, Lib.)

Mr. Andrew Jones

1055

The Chair

Mr. Roy Cullen (Etobicoke North, Lib.)

Mr. Andrew Jones

1100

The Chair

Mr. Tony Valeri (Stoney Creek, Lib.)

The Chair

Mr. David Paterson

Mr. Tony Valeri

Mr. David Paterson

The Chair

Mr. Bob Speller (Haldimand—Norfolk—Brant, Lib.)

The Chair

Dr. Patricia Clements

Mr. Bob Speller

Dr. Patricia Clements

1105

The Chair

1110

The Chair

Mr. Jean Bélanger (Chair, Ecological Fiscal Reform, National Round Table on the Environment and the Economy)

1115

Mr. David McGuinty (President and CEO, National Round Table on the Environment and the Economy)

1120

The Chair

Mr. Jim Lee (Assistant to the General President for Canadian Operations, International Association of Fire Fighters)

1125

The Chair

Mr. Jim Lee

1130

The Chair

Mr. Michael Roschlau (President and Chief Executive Officer, Canadian Urban Transit Association)

1135

Mr. Eric Gillespie (Chair, St. Catherines Transit Commission, Canadian Urban Transit Association)

The Chair

Mr. Harvey Weiner (Deputy Secretary General, Canadian Teachers' Federation)

1140

1145

The Chair

Mr. Jeffrey Dale (President and CEO, Ottawa Centre for Research and Innovation)

1150

1155

The Chair

Ms. Dianne Bascombe (Interim Executive Director, Coalition of National Voluntary Organizations; Director, National Children's Alliance)

1200

The Chair

Mr. Rahim Jaffer

1205

Mr. Harvey Weiner

Mr. Rahim Jaffer

Mr. Jeffrey Dale

1210

The Acting Chair (Mr. Roy Cullen)

Mr. Pierre Paquette

Mr. Harvey Weiner

1215

The Chair

Mr. Roy Cullen

Mr. Michael Roschlau

Mr. Roy Cullen

Mr. Jeffrey Dale

1220

Mr. Michael Darch (Executive Director, Ottawa Global Market, Ottawa Centre for Research and Innovation)

The Chair

Mr. Pat Martin (Winnipeg Centre, NDP)

The Chair

Mr. Pat Martin

Mr. Jim Lee

Mr. Pat Martin

Mr. Jim Lee

Mr. Pat Martin

Mr. Jim Lee

Mr. Pat Martin

Mr. Jim Lee

Mr. Pat Martin

Mr. Jim Lee

1225

Mr. Pat Martin

Mr. Jim Lee

Mr. Pat Martin

Mr. Jim Lee

The Chair

Ms. Maria Minna

1230

Ms. Dianne Bascombe

Ms. Dawn Walker (Executive Director, Canadian Institute of Child Health, National Children's Alliance)

The Chair

Mr. Harvey Weiner

Ms. Dawn Walker

The Chair

Mr. Bob Speller

1235

Mr. David McGuinty

Mr. Jean Bélanger

1240

Mr. Bob Speller

Mr. Jean Bélanger

The Chair

CANADA

Standing Committee on Finance

NUMBER 005

2nd SESSION

37th PARLIAMENT

EVIDENCE

Thursday, October 24, 2002

[Recorded by Electronic Apparatus]

¿ (0935)

[English]

The Chair (Mrs. Sue Barnes (London West, Lib.)): Pursuant to Standing Order 83(1), we're in pre-budget discussions.

From the Canadian Federation for the Humanities and Social Sciences, I welcome Dr. Patricia Clements, president. Again, we also see Mr. Paul Ledwell, who is the executive director. He's here in a different capacity today.

From the Canadian Association of Research Libraries, we welcome Paul Wiens, the university librarian from Queen's University.

Mr. Wiens, you've been here before. Thank you very much for coming again.

From the Canadian Federation for Promoting Family Values, we welcome Michael Gorman, president.

From the National Professional Association Coalition on Tuition, we have Andrew Jones, a member of that organization.

From the Canadian Advanced Technology Alliance, we have David Paterson, the executive director, and we thank him for attending this morning.

From the Canadian Foundation for Climate and Atmospheric Sciences, we welcome Dr. Gordon McBean, who is the chair of the board of trustees.

Finally, from the Canadian Council of Professional Engineers—I think we heard from the consulting engineers the other day—we have Marie Lemay, who is the chief executive officer.

I'm going to ask you not to read your briefs. All of your briefs have been distributed to the committee members. If you would address your briefs for approximately seven to eight minutes, that will allow us some time for questioning. Thank you very much.

We will commence with you, Dr. Clements. Please go ahead.

[Translation]

Dr. Patricia Clements (President, Canadian Federation for the Humanities and Social Sciences): Thank you, Madam Chair.

Good morning, Madam Chair, members of the committee. My name is Patricia Clements and I'm from the University of Alberta. However, I'm here today as the President of the Canadian Federation for the Humanities and Social Sciences.

With me today is the Federation's Executive Director Mr. Ledwell, who is already well known to you, I believe, as well as Ms. Jody Ciufo, the Director of Public Affairs.

[English]

I want to thank you, on behalf of the federation, for taking some time with us this morning.

The Canadian Federation for the Humanities and Social Sciences speaks on behalf of 67 scholarly associations from a wide range of disciplines, about 69 universities in Canada, and approximately 24,000 individual researchers in our fields. We are the largest research community in Canada. Though I'm speaking today as president of the federation, I want also to speak to you from the trenches, as it were, because I'm a university teacher and a former dean--I was dean of arts for ten years at the University of Alberta--and those experiences very much influence my understanding of the issues we're dealing with now in Canadian post-secondary education and research.

I'm here today to talk about federal funding for research in the humanities and social sciences, but I want to approach that subject through the door of education. I'm aware that in taking this angle on this research, I'll be speaking against the grain of our particularly Canadian arrangements, which have by and large allocated research to one level of government and education to another. But I want to tell you that out there in the labs and in the classrooms that division seems a little like dividing a pie by putting the crust on one plate and the cherries on another.

My first point is about the extraordinary educational productivity of the human sciences, and also about the lengths we've gone in this country to avoid noticing that. Let me illustrate with a story from my deaning days. Each year in the Faculty of Arts at the University of Alberta we convene a meeting of about 30 or so stakeholders from the various communities we see ourselves as serving. One year a corporate visitor spoke to us. She said she had become aware of a remarkable phenomenon in post-secondary education in Canada and that she was going to demonstrate it to us. Here she goes. How many people in this room, she said, have a BA? Lots of hands went up, almost all of them. How many people in this room, she said, have their BA on their business cards? No hands went up. That is, she said, the remarkable phenomenon. It is the invisibility of this kind of education. And you need to know that in that room people who had built distinguished careers on their BA included lawyers, business people, corporate executives like her, journalists, stockbrokers, teachers, and probably other kinds of people.

For the fact is, Madam Chair, that the BA and the kind of education it represents is everywhere. It's in business, it's certainly in government, it's in the fine arts, it's in banking, it's in management, it's in property development, it's in law offices and art galleries, and it's in medical practice. It's the heart and soul of journalism. It's a mainstay of the communications industry. It's a creative engine of public policy. I have ventured in the past to suggest, and even in this sacred place dare to do so again, that if you pulled the BAs out of the House of Commons and took with them the BAs in the communications and financial industries, Canada would be on a long holiday.

Almost 70% of undergraduate students in Canadian universities are registered in programs in the broad areas of the social sciences and humanities. This includes people registered in arts, law, business, education, and a number of other fields, including health. Last year Canadian universities graduated 81,000 undergraduates in these areas and 17,400 graduate students. That's the last year for which we have Statistics Canada information. Those graduates, in their thousands, carry various kinds of knowledge and skills into many different professions, careers, occupations, and enterprises. They are a mainstay of our society, of our economy, and of our culture. For instance, Madam Chair, research has been done on you. Fourteen of the eighteen members of this committee have degrees in the social sciences and humanities. My information tells me that you are three BComs and eleven BAs.

¿ (0940)

Yet in the past few years, in which funding policies have re-engineered the relationship of our universities to the society they serve, we have been taking this essential work of education for granted. It has been, as our corporate executive told us at the University of Alberta, absent from our discussions. It has not been much noticed in our innovation policies at either level of government, because these have been focused very largely on commercializable science and technology. It is as though we have been looking at post-secondary education with one eye shut. You might say our vision has become monocular, with the result that the needs of the vast majority of Canadian university students are largely marginal to current funding policies.

Pressure on the humanities and social sciences in our universities has intensified steadily. Numbers of students have risen, core operating budgets have been eroded, partly as a consequence of the single focus that we have developed on the innovation sciences. In 10 years, we know now--and it's in the headlines, it's not a secret for us any more--there will 200,000 more students in our universities than there are now. We will need about 40,000 new faculty members to deal with the extra students and with the vacancies created by departing boomers. More than half of those positions will need to be in the social sciences and humanities.

But, Madam Chair, I said I had come here to speak about research, and that I was entering through the door of education. What does this classroom crisis have to do with research? It has a whole lot to do with it. Human science research has many products, and other people will have spoken to you about these. They are terribly important. They help us to deal with Kyoto, they help us to deal with health care, and so on. They have huge impact. But one of the primary products of human science research is education. In post-secondary education, if there are not cherries, it's not pie, it's just crust.

The federal government's instrument for support of research in the human sciences, the Social Sciences and Humanities Research Council, has responsibility for about 55% of researchers in Canada and for about 60% of graduate students, and it receives about 12.5% of the budget of the federal granting councils. This falls far short of meeting needs. The council is able at present to fund only 3.5% of graduate students in the areas. At every research grants competition it turns away more than a quarter of the projects that have actually been recommended for funding. It is far from able to provide necessary support to new researchers as they launch their careers.

We believe, Madam Chair, it is time now for the government to turn its attention to the situation that has developed in the social sciences and humanities in Canada's universities and to balance funding across the whole spectrum of science in Canada. At this demographically critical moment and at this particular moment in the cumulative history of financial erosion we must look to the future. We need to find a way of building strength in these areas. We must restore a two-eyed vision, a binocular vision, to our planning.

The Canadian Federation for the Humanities and Social Sciences has three recommendations to make.

We recommend that the government provide for, in the first place, an adjustment to the budget of the Social Sciences and Humanities Research Council that recognizes the important and essential contribution of the social sciences and humanities and will bring balance to the support of research across the full spectrum of the sciences in Canada.

The second is a substantial increase in funding for graduate students in the human sciences, aimed at recruiting the best Canadian students into advanced work, to meet the needs not only of PhD graduates in our universities, but of PhD graduates in many other places, certainly including government.

The third is the development of a mechanism for addressing the critical issue of the core budgets of Canadian universities, including completion of the payment of the indirect costs of research.

In closing, Madam Chair, I want to say that the Canadian Federation for the Humanities and Social Sciences applauds outstanding programs that the Government of Canada has devised in recent years to support research and university infrastructure, and we are grateful to the finance committee for the strong positions it has taken on these matters in the past.

Merci.

¿ (0945)

The Chair: Thank you, Dr. Clements.

Mr. Wiens, please go ahead now.

Mr. Paul Wiens (University Librarian, Queen's University, Canadian Association of Research Libraries): Thank you and good morning, Madam Chair and committee members. The Canadian Association of Research Libraries is pleased to take part once again in your consultations on the government's upcoming budget.

CARL, the Canadian Association of Research Libraries, represents the 27 major academic research libraries across Canada, plus the National Library of Canada and the Canada Institute for Scientific and Technical Information. Let me begin by stating the fundamental premise of our brief.

Research is the engine that drives Canada's innovation agenda, its economic development, and our desire for an improved quality of life. Central to successful research are the information resources and services provided by research libraries. Libraries and information resources are critical for much of the research funded by research granting agencies. With over 660,000 articles published in one year in North America alone, libraries are an essential tool for enabling researchers to keep current with developments in their fields.

Thanks to the efforts of this committee, the government, in last year's budget, addressed CARL's number one concern: the indirect costs of carrying out research. It provided a welcome one-time investment of $200 million to assist universities and their research libraries in filling some of the gaps in these areas. We're now filing reports with Industry Canada on how the new money was spent.

Pleased as we are that government has acknowledged our concern and has acted upon it, CARL, together with the rest of the academic community, is now looking for a permanent solution to the issue of indirect costs. We would like to see the “strong commitment” recommended by the committee in its report last year changed into an ongoing commitment in this year's report. More specifically, we would like to see the government adopt a formula that will cover the indirect costs of carrying out research. As a rule of thumb, for every dollar spent directly on research, an additional 40¢ needs to be allocated to cover the indirect costs. Without such an ongoing funding formula, universities will be obliged to cannibalize other budgets in order to carry out the research projects they have fought so hard to win.

Canada is falling behind other countries. In the U.S., the average rate of reimbursement is over 50%. This neglect by the Government of Canada is underscored by the decline, in the last decade, of Canadian research libraries when compared to their American counterparts. In terms of total library expenditures, except for the University of Toronto, all other 12 Canadian universities included in a survey by the Association of Research Libraries saw their rankings drop precipitously, with 7 being at the bottom of the list of 112 academic institutions being surveyed. What's startling about these numbers is that, in 1990, 1 Canadian library ranked among the bottom 10. In 2000, 10 years later, 7 Canadian libraries had dropped to the bottom of that list.

The relative neglect of research libraries in Canada is also reflected in the fact that spending on information resources per faculty member is approximately $8,000 less in Canada than it is in the U.S.

The adoption by government of a formula for funding research would acknowledge the incremental costs that must be borne by different parts of the university: by the central administration, by different faculties hosting the research, and by the special services put in place to manage the research process. However, it's the libraries that bear a large part of the incremental costs of research, and these costs have been expanding.

Briefly, here are some factors that have contributed to growing library costs.

The first is the costs of acquiring collections. In the 10-year period between 1989 and 1999, the average price of a research journal subscription increased by 92%. Over the same period, CPI increased by 25%, and libraries' purchasing power for journals declined by 42%.

Another major cost is the cost of maintaining two parallel information systems: the traditional print system, plus the incremental costs of maintaining digital collections and creating the new electronic infrastructure that has to be available 24 hours a day, 7 days a week.

Another cost is the cost of replacing obsolescent hardware and software, and maintaining a current electronic information infrastructure. Other costs include the costs of training staff, and the costs of providing access to, maintaining, and storing digital collections.

The research library community is doing what it can to manage and to contain these costs. CARL members participate in group purchasing, reciprocal borrowing, shared storage, cooperative collection development, and the sharing of information technology. However, without a long-term resolution, our research libraries are going to be severely hampered in embarking on collective projects.

¿ (0950)

I'd like to describe for you two examples of exciting collaborative pilot projects that could be supported on an ongoing basis if Canadian university libraries were adequately financed.

The first example is the Canadian national site licensing project. This is a national showcase project whose aim is to stimulate the creation of new knowledge. Sixty-four Canadian university libraries have come together to jointly license electronic texts of scholarly journals and research databases in science, technology, health and the environment, and some other related social sciences and humanities areas.

More than 750 scholarly journals are available through the Canadian national site licensing project to over 650,000 university researchers, post-doctoral fellows, and students. This pilot project is funded at $50 million. It was made possible, in part, thanks to an award of $20 million from the Canadian Foundation for Innovation.

We estimate that over $300 million will be saved over the life of the project. At Queen's, for example, for $368,000 we are now acquiring, through this project, information resources that otherwise would have cost us something in the neighbourhood of $1.4 million. That gives you some idea of the return on investment that this project has made possible.

This project is an inspiring example of national cooperation, and offers CARL a huge return on investment, one that needs to be sustained. Ongoing funding for indirect costs of research will make it possible to transform this project into an ongoing and expanded service to researchers.

Another example is the CARL institutional repositories project. This is a project to create a digital collection of a university's intellectual output. It's a cost-effective alternative to the traditional way of publishing the results of academic research in print-based journals. The process is much quicker and allows for local control. And when it's part of a global system of interoperable repositories, it can widen the potential audience for Canadian-based research.

CARL has initiated a pilot project to implement institutional repositories that will pave the way for other Canadian universities and to help realize the dream of a national digital library for the benefit of Canada's research community.

In conclusion, CARL would like to thank the committee for its support in the past, and would urge it to recommend to the government the following: one, that it acknowledge the fiscal reality of carrying out research in today's competitive and technologically based environment; and two, that indirect costs associated with the operation and maintenance of research libraries and the provision of research information resources in support of research are as real, significant, and as critical to research as the research facilities and the management of the research process. We'd also like to have the committee recognize that Canada should be emulating other leading industrial countries. Finally, we urge the committee to adopt a research funding formula that covers the indirect costs on an ongoing basis.

Thank you for your attention. I'd be pleased to answer any questions you may have.

The Chair: Thank you, and I appreciate your sticking to our timelines.

For the Canadian Federation for Promoting Family Values, we now go to Mr. Gorman.

Mr. Michael Gorman (President, Canadian Federation for Promoting Family Values): Thank you very much, Chair.

Good morning, everyone. My name is Michael Gorman, and I represent an organization called Canadian Federation for Promoting Family Values, more commonly known as CFV.

CFV was created 13 years ago to democratically promote and protect family beliefs and expectations within Canada and abroad. It is an incorporated, non-profit organization without any affiliations from a religious or gender point of view whatsoever. We have a membership of about 2,000 people, with a rather large potential. We call on many of the family businesses. We are now beginning to call on individual homeowners, and we're thinking very seriously of starting telephone campaigns right across the country.

Who are we? Right now, ladies and gentlemen, we are the people who might sell you a shirt in a store. We may be the people who build a deck on your house or put a new roof on your cottage. We could be the people who fix your cars. At this point we are family businesses, in particular, and many of the family owners across the country.

We break our priorities into several issues. First of all we prioritize what we think the government should be doing in terms of its high priorities. Then we look at some of the observations on many of those issues. From that information we can come to conclusions. Of course, then we make our recommendations to the committee, and that's exactly why we're here today.

We start off with the number one issue in the country, which is debt surplus; 84% of the voting members would like to see this as the number one issue in Canada today. From there it goes down through health care, environment, defence, education, pensions, employment, Canadian unity, human rights, globalization, and then, of course, homelessness.

I'm going to go into these in a little bit, but first, if I may, I will

¿ (0955)

[Translation]

Mr. Michael Gorman: discuss briefly with you our observations on the responsibilities of the government.

The vast majority of the membership believe it is time to review the cost of running our health, education and government. We may be reverting back to pre 1990s attitudes. CFV members support post 1995 government policy improvements.

Seventy per cent of our members expressed support for our health care system, while 20% responded unfavourably. The majority prefer a one tier, user fee and national pharma care system.

Unfortunately, I don't have time to address all of the other areas of concern, but there will always be problem areas.

As far as people's standard of living is concerned, 60% of the membership believe our standard of living is slipping.

With respect to family farms, 60% of the membership feel that we should do more to protect Canadian family farms. There appears to be little support for big corporate farming.

Sixty per cent of our members think the government should be involved in make-work projects, while 30% feel it should not. It is generally felt that EI does little to encourage employment. Human Resources Development officials do not appear qualified to dispense job creation funds. We do not appear to be taking full advantage of our human resources. No doubt you'll be asking me questions about this, and I will be happy to answer them.

Let me share with you a number of conclusions that we have drawn.

Defence and unity are gaining momentum as important issues, while employment has decreased in importance. The issue of aboriginal rights appears to be gaining momentum quickly as well.

Debt reduction remains the number one priority, followed by tax cuts. The focus needs to be placed on low income families with children and low income seniors.

The vast majority of CFV members support our health care system. A one-tier, user fee, national pharma care program is the preferred option.

À (1000)

[English]

I'd like to now move quickly into the specific recommendations.

First, we are looking for a commitment this year of $15 billion toward debt reduction. We are very pleased with the performances of our government and the recommendations of this committee in past years. We have been just about dollar for dollar in realizing debt reduction. Within two years we'll probably be looking at the high $400 billion category. That's down from about $580 billion. We think it's a marvellous performance. One thing we would like to suggest this year is a definite commitment from the committee and from the minister saying, come hell or high water, we're going to put down a certain amount of money against the debt. In other words, we would like to see this as an expense and not just say, well, if there's anything left over, let's put it against it. We'd like to see a little notching up of the commitment towards debt reduction in this country, but we are very pleased with the performance so far.

We would like to continue the trend of eliminating taxes to lower-income families with children and lower-income seniors. The tax-free zone should be $10,000. It's now at about $8,000. We've been kind of nudging that one up. We'd like to see another cranking up of that, with the objective of a $15,000 tax-free zone within five years.

Also, we would like to see a billion in additional funds applied to defence. CFV favours a larger, better trained and equipped military. A larger emphasis on a younger military force is preferred. We believe this is the time to do it. We have to remember, in the case of defence.... For example, it was just a couple of years ago that we were budgeting something in the vicinity of $10 billion here. Now we're talking about $14 billion probably this year, with a levelling out at about $15 billion.

I see I'm being asked to rush along here. I'll do it very quickly.

Civil servants and educators should spend at least three years in free enterprise before they can assume senior responsibilities in their chosen field.

We are also looking for $500 million to encourage well-educated bilingual Canadians to teach pre-school and primary education students their second language. In other words, we would like to take a group, a younger group or whatever, from Quebec and spread them across the west, and do the reverse as well, with the intention of really getting at the bilingualism issue in the country.

We also want to develop a long-term strategy to increase tourism within Canada, aimed at a global market.

We certainly would encourage the government to promote privatization of government funding organizations.

Ladies and gentlemen, Canadians are very special people, but we should not have special Canadians. Canadians also require increased information on the impact of secession.

Thank you.

The Chair: Thank you very much.

Now we go to the National Professional Association Coalition on Tuition.

[Translation]

Go ahead, Mr. Jones.

[English]

Mr. Andrew Jones (Member, National Professional Association Coalition on Tuition): Thank you, Madam Chair and distinguished members of the Standing Committee on Finance, for this opportunity to speak to you today about Canada's fiscal priorities, and specifically about post-secondary education for all Canadians.

On behalf of the members of the National Professional Association Coalition on Tuition—which, you'll be happy to know, we've shortened to NPACT—I want to commend the federal government for its ongoing dialogue with individual citizens and groups such as ours on issues of vital importance to the economic prosperity and future of Canada.

NPACT is a unique group. We're comprised of members from a diverse range of respected national professional organizations. Our co-chair is Dr. Bill Easton from the Canadian Medical Association. Dr. Easton sends his regrets to the committee and asks that I, in my capacity as a member of the coalition, deliver our presentation this morning. I am Andrew Jones, director of corporate and government relations at the Canadian Dental Association.

In total, our coalition consists of eight professional associations representing architecture, dentistry, law, medicine, nursing, pharmacy, physiotherapy, and veterinary medicine. The Canadian Federation of Students is also a member. We joined together as NPACT in May 2000, out of a shared concern that high post-secondary tuition fees in professional programs create real barriers to access to post-secondary education. As a consequence, the Canadian public may find itself with insufficient professionals to meet its growing needs.

As this committee undergoes the challenging task of determining financial priorities for the country, we urge you, one, to increase funding for post-secondary institutions to alleviate some of the pressures driving tuition fee increases; and, two, to expand financial support systems for students, particularly in the form of needs-based grants.

At this point, I would like to provide a few facts about professional programs of which you may not be aware. Many professional programs such as law, dentistry, and medicine are second-entry programs. This means most students entering these programs have completed an undergraduate degree and have already assumed some pretty significant debts. In addition, because this is their second degree, many of these students are in their mid- to late twenties and have families, mortgages, and other unavoidable expenses.

In Ontario, first-year tuition and compulsory fees at its five medical schools averaged $14,800—almost $15,000—in 2001-02. That's an increase of almost 880% since 1980. In Manitoba, dentistry program tuition fees—the area that I'm most familiar with—will be nearly $14,000 this academic year, and that is not including costs for instruments. At the University of Saskatchewan, it's $32,000 for a year of dentistry. During 2002-03, tuition fees in pharmacy will be close to $10,000 at the University of Toronto. At the Atlantic Veterinary College at the University of P.E.I., this year's tuition fees will be over $7,000. So you can appreciate that all across the board with respect to professional programs, we're talking about some very significant tuition fees.

These statistics speak to the situation for families and individual students who are pursuing their professional careers, but the burden of high tuition fees is also borne by the broader Canadian public, because high debt loads discourage professionals from practising in small or remote communities.

Take law, for instance. Hal Jackman, the chancellor of the University of Toronto, told the National Post that he is worried that average Canadians will not have access to University of Toronto law graduates—among the country's best legal minds—because they will be working with corporate law firms with high legal fees.

The same can be said of medicine. A study published in the Canadian Medical Association Journal this year found that, compared with fourth-year Ontario medical students, first-year students were more likely to cite financial considerations as having a major influence on specialty choice or practice location.

High debt loads due to tuition may particularly impact on the availability of health care services in rural communities, where access is already very difficult. In fact, another recent national study found that only 10.8% of medical students came from rural high schools. This is important, because research shows that students from rural areas are more likely to return to those communities to practise medicine. The higher tuition fees get, the harder it's going to be to increase this percentage.

À (1005)

In addition, NPACT believes high tuition fees, as well as the fear of accumulating a large debt load, may also deter people who traditionally have lower incomes, such as disabled persons and single mothers, from pursuing a professional education. Studies have found that almost half, 43.5%, of medical students come from neighbourhoods with median incomes in the top quintile. Other findings show students from the poorest neighbourhoods are seven times less likely to enter medical schools than students from the richest neighbourhoods, whose parents tend to have occupations with a higher social standing. In fact, 15% of medical students surveyed actually have a parent who is a physician. The good news is that this study found a significant increase in female representation in medical school compared with 35 years ago, as well as more visible minorities in medical schools than in the Canadian population.

NPACT is also concerned with the brain drain to the United States and elsewhere. Offers from American recruiters to pay off high debt loads, often in excess of $100,000, will increasingly attract new professional graduates to the United States.

In concluding my opening remarks this morning, I would like to say that the federal government has already identified an important role for itself in post-secondary education through the following goals outlined as part of Canada's innovation strategy:

That all qualified Canadians have access to high post-secondary education, ensuring that in years to come Canada has enough highly qualified people with the skills for a vibrant knowledge-based economy.

In order to meet these goals, and in light of the important issues I have outlined this morning, NPACT urges the federal government to ensure regulated and reasonable tuition fees; to increase federal government funding to post-secondary institutions to alleviate some of the pressures driving tuition fee increases; to provide financial support systems for students that are non-coercive, developed at the same time as or in advance of any tuition increase, in direct proportion to the tuition increase, and provided at levels that meet the needs of students.

I'm sure we'll have the opportunity for some discussion. I know this issue has been in the news just recently, so I am certainly eager for a good round of discussion after our opening statement.

À (1010)

The Chair: Thank you very much.

We now have Mr. Paterson from the Canadian Advanced Technology Alliance. Please go ahead.

Mr. David Paterson (Executive Director, Canadian Advanced Technology Alliance): Good morning, Madam Chair, ladies and gentlemen. Thank you for inviting CATA to appear here today.

The Canadian Advanced Technology Alliance is the association that represents the high-tech industry. We have 500 members, and another 1,200 to 1,500 companies belong to regional associations from Newfoundland to Vancouver Island that are affiliated with CATA in some formal way.

Some of the companies are the giants of the industry--Nortel and BCE Emergis and Cognos--but the vast majority of the membership is made up of SMEs. We have very few members who don't do research and development. We have even fewer who don't export.

The committee's invitation stated that its goal is to recommend to the Minister of Finance a plan whose objectives are greater levels of economic prosperity widely shared by all Canadians, and how the government can best assure the highest quality of life for all. CATA members feel these objectives can best be achieved through vigorous pursuit of a strategy with four strong ingredients: a competitive tax structure, strong support for R and D, strong support for skilled human resources, and an efficient regulatory regime.

Beginning with the competitive tax structure, I must say that most of our members believe the income tax structure in this country, as a result of the reductions that are now underway for both personal and corporate taxes at the federal level, is now competitive. However, there is one tax that we regard as a serious problem, one that discourages the type of innovation and investment performance that the government wants in order to encourage economic productivity and job growth in Canada.

I'll quote two statements from our paper. The first is that the corporate capital taxes “cost $7 of output for every $1 collected”. The second is that “capital taxes discourage the behaviour that the government is trying to encourage in order to stimulate innovation and productivity”. Those quotes are not from David Paterson or Jack Mintz or the Fraser Institute; those are quotes from papers by the Department of Finance. If the Department of Finance thinks these taxes are counterproductive and have a baleful effect on the Canadian economy, it's hard to understand why they continue to collect them. The taxes discourage innovation, investment in new technology and process, all the sorts of things the government is trying to encourage in its innovation strategy. In fact, CATA's first recommendation on the innovation agenda was that this tax be eliminated.

The federal government has an opportunity here to follow the example of the provinces. Alberta has eliminated its tax; B.C. cut its corporate capital tax in half last year and will eliminate the rest of it this year; Ontario, Saskatchewan, and even Quebec, the capital of taxation, have all assured they will reduce their capital taxes.

The second item on CATA's agenda is strong support for research and development. Canada has a very good structure for research and development financing encouragement by the government. The scientific research and experiment development tax credit program is unquestionably one of the best designed by any country in the world. It is very effective in encouraging research. However, it has one flaw that the recent downturn in the high-tech industry has made critically important.

À (1015)

Private companies, Canadian-controlled private corporations, can claim their investment tax credits whether they're making money or not. Public companies, on the other hand, can only claim their SR and ED tax credits if they are profitable. This has the effect of eliminating these valuable tax credits at the time when companies need them most. When your revenues are down and your profits are under pressure, it's very difficult to resist cutting your R and D expenses. If the credits were available, there would be less of that taking place and Canadian industry would be in a better position to capture new markets and encourage job and revenue growth when the turnaround comes. We believe the SR and ED tax credit program should be amended in the next budget to correct this deficiency.

Strong support for skilled human resources is a critical issue. For its success, the industry is entirely dependent on innovation. Innovation only comes from skilled, motivated people doing an excellent job of research and development, innovative management practices, and innovative marketing.

CATA recommends that the government increase its funding for post-secondary education—and that includes all aspects of post-secondary education. Regarding the comment from the social sciences representative here today, it's true that we have focused strongly on technical education. We have persuaded the governments of Ontario, Alberta, and British Columbia to double their enrolment in computer science and electrical engineering. At the same time, however, the industry recognizes that without the skills and talents developed in the arts community, we cannot succeed.

When the Premier of Ontario some years ago made some disparaging remarks about liberal arts education—something along the general line of questioning why anyone would study philosophy rather than computer science—within 48 hours he had on his desk a letter signed by more than 40 CEOs of high-tech companies—I'm pleased to say most of them were members of CATA—explaining to him that while technical education was important, the industry would not survive without the innovative thinking that it receives from the arts community. So we are encouraging continued investment not only in the hard sciences, but in the social sciences as well.

Still on the education front, we also believe the Internet is a resource that will provide all sorts of support for education and research in areas in which the resources are not generally available. It has been proven that students who use the Internet to conduct their research, to do their homework, or to write their papers, achieve much better results than those who don't have access to it. For economic reasons, a large part of Canada, in terms of geography if not population, cannot access the Internet at the broadband speeds essential to using it effectively. We strongly encourage the government to step up its funding for the extension of broadband geographically across Canada.

Last is an efficient regulatory structure. As I said, most of our membership is made up of small and medium-sized companies, of small businesses. From dealing with our membership, one of the things we know is that the only resource scarcer than money is time. It's the time cost, and not the monetary cost of meeting government regulations, that is the serious problem. The government has stated that it wants to reduce the impact of regulation on the economy, and we recommend strongly that it pursue that objective by consulting with industry and other parties to determine which of those issues are the most important.

À (1020)

We have an opportunity here. Economic growth has returned and the country has a modest budget surplus that it can afford to spend very carefully. But Canada is not in a position to suddenly expand in all directions. Proposals like the four-lane Trans-Canada Highway—which I believe and trust has been withdrawn from the trial balloon process—are the sorts of things we do not have the capacity to fund at this time. The government must be extremely careful in this respect. I think careful consideration should be given to funding many of the initiatives that have been suggested in the throne speech by reducing expenditures on programs that are no longer effective.

Thank you very much.

The Chair: Thank you, Mr. Paterson.

We'll go now to the Canadian Foundation for Climate and Atmospheric Sciences. We have Dr. Gordon McBean, and we also have Dr. Tim Aston, who is the science officer.

Who is going to make the presentation? Dr. McBean, commencez, s'il vous plaît.

Dr. Gordon McBean (Chair, Board of Trustees, Canadian Foundation for Climate and Atmospheric Sciences): Thank you, Madam Chair and members of the committee. I'm very pleased to have an opportunity to speak to you today on behalf of the Canadian Foundation for Climate and Atmospheric Sciences.

As noted, my name is Gordon McBean. I am the chair of the board of trustees of the foundation. I'm also a professor of geography and political science and hold the chair in policy for the Institute for Catastrophic Loss Reduction at the University of Western Ontario in London. We have provided a statement, so I'm just going to speak to a few issues.

Every day, including today, the front pages of our newspapers are talking about the Kyoto Protocol and climate change. Why is that? Because climate scientists have done the science over the years, over the decades. They've raised the concerns and made this a public issue. The science goes back decades, and although we have learned a considerable amount, we still have a lot to learn.

Climate change is a long-term, multi-decadal issue. It will go well beyond the issues of the Kyoto Protocol in 2010. We are already seeing the impacts of climate change due to the past 100 years of human activities, and we will see much more climate change in the century to come. There will be impacts, and we need to know how fast and how much the climate will change, what will be the spatial variations of that change, and how it will impact on our extreme weather events. We need to understand what will be the eventual stabilization, whether it will be two, three, or four times the pre-industrial values of atmospheric greenhouse gases.

A climate change strategy must be long term and built on three elements: mitigation, or emission reductions to reduce our rate of increase in greenhouse gas concentrations; adaptation to inevitable climate change, that is, informing Canadians on how to adapt to reduce the negative impacts of climate change; and taking advantage of the positive changes in our climate system. These are major economic and social considerations, and those approaches must be built on a solid science and technology base.

The Canadian Foundation for Climate and Atmospheric Sciences is the only Canadian agency dedicated to advancing knowledge and training in the university community in understanding and modelling for prediction purposes the climate system, including the greenhouse gas cycles, extreme weather, the quality of our atmosphere, and the marine environment. The foundation itself was established by the Canadian Meteorological and Oceanographic Society in the year 2000. Budget 2000 allotted $60 million to the foundation under an agreement with Environment Canada, and certainly the climate and atmospheric science community in the country would like to thank the government for those allotted funds.

The agreement and much other information of the foundation can be found on our website, which is www.cfcas.org.

We are a not-for-profit private organization, but we have voluntarily adopted the good principles of government, including access to information, bilingualism, program evaluation, and others. Our mandate is to support outstanding academic science, but with the additional criterion that this must be relevant science, science that will provide the basis for policy development and service by governments at all levels, the kind of science that lays the basis for our climate change policy, for our air pollution policies, for our weather and climate forecasting, for example. We are also mandated to build the capacity in universities in these fields and to train the next generation of scientists that we need so much in the years to come.

Part of the agreement is that all of the $60 million is to be spent by the year 2007. I'll come back to that. We have utilized open calls for research proposals to mobilize the community. We use a strict peer review process to select only the best proposals. We've had over 500 experts involved in our peer review process from Canada and abroad. We have a grants review committee and we have a small but dedicated secretariat, one-third of which is with me today.

The board of trustees in the end, though, makes the final decisions as to which projects are both outstanding in science and will meet the relevancy criteria that we apply. We work very frugally, and quite frankly, the interest on the initial allocation will more than cover our expenses, so that we will be actually allocating more than $60 million over the period of the foundation's mandate.

Where are we now? We do have 11 research networks in place, involving 114 scientists in Canadian universities working with partners in government research laboratories. This is a $17 million investment, and it has been more than matched by investments from other sources.

À (1025)

We have a project dealing with the carbon sources and sinks arising from our forests. It's a major program from coast to coast. We are supporting science in understanding the ocean's role in the carbon cycle and how we will model that in our climate system. We have projects looking at the natural- and human-caused variability of the climate system and how predictable it may be in the future. Through studies and research involving atmospheric chemistry, we've linked the climate and ozone depletion issues.

We also have projects dealing with air pollution nearer the ground where we all live and breathe. One project, Pacific 2001, is a national research program studying the smog in the Fraser Valley, but it involves scientists from York University and others across the country.

We're also funding 65 smaller projects that involve 270 researchers at 22 universities. At this point, in cases of three-year projects, we have committed—not spent, but committed—about $35 million of the $60 million dollars that have been allocated to us. More than half—$22 million of those dollars—go to support 196 graduate students and 92 post-doctoral fellows as part of our capacity-building and training for the future.

I have stressed that climate change is a long-term issue, yet we must have all the money spent by 2007 under our agreement. That isn't actually very far away, and it will be just before we go into the Kyoto Protocol commitment period. At that point, we will be no longer able to dispense funds. But climate science is big science, and it's long-term. When you look at major international projects, they're typically ten years in length.

We have three recommendations for consideration by the committee that may be in turn dealt with through government processes. First, we recommend an allocation of at least three years of additional funding, at a rate similar to that of the first six years. That is, about $30 million over three years would allow the Canadian Foundation for Climate and Atmospheric Sciences to continue to support the high-quality science it has been supporting for the first few years.

We think it's important to recognize that the climate and atmospheric science field has special equipment needs and research infrastructure that have not yet been covered in other areas. We recommend that the mandate of the foundation—which presently excludes supporting research infrastructure—be extended to include a small equipment grant and provide perhaps $10 million in new funds—again to be expended over three years—to support this need.

These first two recommendations would amount to about $40 million over three years. I would note that is a very small fraction of the costs being talked about in the newspapers about climate change and the Kyoto Protocol.

And third, we recommend that the foundation be given a longer mandate, extending the agreement perhaps to, say, 2015, with the understanding that further additional funds beyond what we are suggesting today would be dependent, of course, on any further program evaluation.

We thank you for your consideration.

À (1030)

The Chair: Our final witness today is from the Canadian Council of Professional Engineers.

Ms. Lemay, go ahead.

Ms. Marie Lemay (Chief Executive Officer, Canadian Council of Professional Engineers): Good morning. Thank you, Madam Chair and members of the House Standing Committee on Finance. My name is Marie Lemay, and I am the chief executive officer of the Canadian Council of Professional Engineers.

Only a year ago, I was talking to a television reporter whose first question to me was, “Marie, where is your white hard hat?” Obviously, he was trying to be funny—I hope he was—but such remarks say quite a bit about the misconceptions that many Canadians have about the engineering profession.

There's more to engineering than hard hats or slide rulers or whatever other image engineering might conjure. Our profession has grown and diversified, and now includes more than 20 different disciplines. We went from the four classical ones that you know—mechanical, civil, electrical, and chemical engineering—to including things like agricultural engineering, bioengineering, and software engineering.

Historically, engineers have played an important role in building the nation, from the Canadian Pacific Railway to the Confederation Bridge. But we also work in outer space, we've performed delicate work on human cells, and we find ways to tap into the wealth of our country's resources with respect for the environment.

Canadian engineers have rightly earned an international reputation for excellence, safety, and innovation. No matter what our role in the workforce is, engineers are at the forefront of the innovation that helped create our country's health and wealth.

[Translation]

The Canadian Council of Engineers represents the 12 provincial and territorial associations-orders that regulate the engineering profession in Canada and licence Canada's 160,000 professional engineers.

It's worth noting that engineering raises the standard of living of Canadians through innovation and the pursuit of professional standards that place a high value on safety considerations during the planning, design, construction and maintenance stages.

[English]

So today we're pleased to make recommendations that will achieve the goal of making Canada more prosperous through innovation while simultaneously improving the quality of life Canadians have already come to enjoy.

The most recent Speech from the Throne emphasized the need to develop a national innovation strategy that will enhance productivity, efficiency, and the sustainable management of resources, while improving our quality of life. CCPE congratulates the government for its commitment to innovation and research. We believe a commitment to innovation will pay enormous dividends to Canadians.

To facilitate those efforts, we believe the Canadian government should direct its efforts into five key areas. These areas are identified in our brief as, first, increasing the federal government's stake in education funding—and some of this is going to sound familiar; second, developing immigration strategies that identify sectoral needs, that accelerate the immigration process for skilled workers such as engineers, and that appropriately evaluate foreign academic credentials in order to reduce false expectations; third, recognizing the value of regulatory regimes, thus providing quality assurance that protects the public safety and promotes environmental stewardship; fourth, addressing the overall $44-billion infrastructure deficit, thus reducing the risk of catastrophic failure in infrastructures and saving lives, and supporting both industry and the environment; and fifth, promoting a sustained approach to investing in research and development in Canada to help build innovation and develop new and marketable products and applications that enhance efficiency, improve Canada's productive capacity, and meet environmental goals.

Due to the limitations of time, I will focus only on two of our recommendations. I would have liked to talk to you about foreign credentials and the importance of integrating foreign skilled workers into the workforce, but I would probably have spent all day on it and I think you have other things to do. And you probably also expect me to talk to you about infrastructure, but, sorry, I've chosen to talk about education funding and regulatory regimes. I would therefore like to remind the committee that a more comprehensive review of all our recommendations is in our written statements.

[Translation]

In our view, the federal government plays an indirect, albeit vital, role in education. It provides financial support for post-secondary education, labour market training and the teaching of Canada's two official languages. In order to reach the goals expressed in the innovation strategy, Canada will require more skilled workers, and specifically, more engineers. However, the shortage of skilled workers in Canada will grow worse as the first group of engineers from the post-war generation approach retirement age.

À (1035)

[English]

At the same time when Canada requires skilled workers, our post-secondary education is being damaged by rising tuition fees that increased by a national average of 12% annually in the past decade, according to Statistics Canada. Some universities have been forced to cap enrolment due to the lack of revenues needed to expand campuses. That resulted in 222 qualified engineering applicants at the University of Calgary being turned away this year alone. The anticipated mass retirement of over one-third of all university faculty will cause additional shortages.

Each of these issues will need to be addressed if Canada is to push forth with its innovation agenda. We therefore recommend that the government strengthen funding for post-secondary education; increase federal support for post-secondary education to offset the downloading of university costs to students; and provide sufficient funding for expansion of engineering science facilities. Failure to act will mean that Canada may not have sufficient numbers of engineers and other skilled workers required to meet the demand of the knowledge-based economy, or it will limit opportunity to only those who can afford the cost of education, making education less representative of Canada's cultural diversity.

Our second area of concern is the regulatory regime. Our high standards of living are in many ways the product of good regulatory regimes. Regulations provide a framework that protects health, environment, and safety. In the new knowledge-based economy, regulations will be more necessary for and essential to protecting the public interest, because innovation will allow us to do things we have never done before. It's therefore important for the government to provide guarantees that these advances are used prudently and to improve the quality of life.

We recommend that, in the interest of public safety, the federal government should commit funds to assist areas of the new, innovative economy where regulation may not currently exist or may be insufficient, while avoiding duplication and red tape by establishing new governing bodies for professions that are already effectively regulated.

[Translation]

Industry Canada's paper Achieving Excellence notes that the federal government has a role to play in the public interest to create a supportive regulatory environment for innovation. CCPE agrees. However, in many professions, effective and efficient regulation which promotes public safety already exists. Every possible effort needs to be made to avoid creating new useless layers of red tape that would impede innovation. Rather, we need to identify new areas in need of financial support and expert advice with a view to establishing standards of practice in the public interest.

For instance, the engineering profession recently devised a plan to identify new technologies and new engineering fields with a view to ensuring that these are properly regulated.

[English]

In the interest of public safety, we also believe the government needs to make mandatory licensing a condition of employment for practising engineers in the public service. Currently, the federal government guidelines only require eligibility for certification as professional engineers to meet the terms of employment. We believe this classification fails to serve the public interest and can threaten public safety. We therefore recommend that you invest the funds to license the engineering staff with the governing provincial and territorial licensing body. This is consistent with pre-existing collective agreements that other professions have.

These recommendations that I have outlined to you today do not come cheaply, but a sustained and committed effort to innovation would be incomplete without addressing these concerns.

Thank you very much.

The Chair: Thank you very much. I appreciate that.

We have another panel starting at eleven o'clock, so we're going to go with five-minute rounds, starting with Mr. Jaffer.

Mr. Rahim Jaffer (Edmonton—Strathcona, Canadian Alliance): Thank you, Ms. Chair. With so much information presented today and so little time, that's unfortunate, because I would like to address individual concerns that the witnesses have raised. However, I guess the best way to approach it is just to ask a larger question and then open the floor to whoever feels like addressing it.

Obviously, the government currently spends approximately $170 billion in operations and spending. It seems to us that any surplus that is going to come out when the budget is reported is already committed under the throne speech, given many of the program strategies that were outlined.

My question to all of you is this: in allocating resources and deciding how, as a committee, we make recommendations to the finance minister to spend money...? Currently, Canada is one of the highest-taxed nations in the industrialized world. Going down the road of all the recommendations you are making, the fear is that we will have two options, those being either to raise taxes again or to head back into a deficit situation. Hopefully we can avoid those two options, so I'm just curious if the various presenters today would support a serious program review to reallocate existing resources that are already there, to basically do a comprehensive review of program spending. Hopefully, instead of taking on taxes or more debt, we could reallocate according to priorities. Would you support generally looking at potentially...?

In trying to meet the recommendations that many of your organizations are making, would you recommend the government take on either increasing taxes or incurring a deficit or debt situation? I'll just leave that out there so that you can give us a general indication of which way we should be going.

À (1040)

The Chair: Thank you.

We'll hear from a few people on this, with Dr. Clements going first.

Dr. Patricia Clements: On the part of your question dealing with the importance of the priority attached to the needs that have been described here today, it seems to me that we are talking about seed corn. Most of us have been talking about post-secondary education and about the fact than an investment in post-secondary education is an investment in the nature of the society we have. We've been talking about access. If we don't have access to post-secondary education, we don't have equality, so it's an investment in the nature of the society we have and an investment in the future.

As for those other questions that you raised about how this should be done, I personally think the answer to that has to be that I rely on the expertise of the finance committee. What I can tell you, though, is that from my point of view, in my expertise, we do need to act.

The Chair: Thank you.

Mr. Gorman, followed by Mr. Jones, and that will be the end.

Mr. Michael Gorman: If we are running a $170-billion-a-year business, we made a profit this year of about $8.9 billion. We've decided to put that against the debt, which I think is the number one area. I think we all think that in the long run, if we don't pay our debts, we're done. We spend $40 billion servicing that $530 billion debt. Let's get it down.

Where is the opportunity for us to save money? Ladies and gentlemen, there are three places: the cost of government itself, education, and health care. We've made great improvements over the years in all three areas, but we're now getting back to spend, spend, spend, in all three areas. We had super improvements. They were not the kinds of improvements we would all have liked to see in the early and mid-1990s, but, ladies and gentlemen, I can assure you that our members are coming out and saying governments are starting to spend like drunken sailors again. Let's cut costs and let's pay down the debt.

Thank you.

The Chair: Mr. Jones, quickly.

Mr. Andrew Jones: Thank you.

The National Professional Association Coalition on Tuition has come together to address, really, an issue of national fabric: the access to professions and how that relates to service throughout Canada. I think that, because of some tough decisions that had to be made earlier in the 1990s, we've seen a real threat and thus a real need to increase tuition levels. We're saying the country is now in a different position, and we think the federal government can use its mechanisms to help out, to set the mechanisms so that tuition fees can in fact be decreased. So I think that, with the fiscal reality of the day, the federal government has the ability to move forward at this time.

[Translation]

The Chair: Merci beaucoup.

Go ahead, Mr. Paquette. You have five minutes.

Mr. Pierre Paquette (Joliette, BQ): Thank you, Madam Chair. Thank you as well to the witnesses for their presentations.

I too am feeling a little frustrated because we have been deluged with information and we have relatively little time to ask questions.

At least three of the briefs presented, namely the submissions of the Canadian Federation for the Humanities and Social Sciences, the National Professional Association Coalition on Tuition and the Canadian Advanced Technology Alliance--although there was a common theme running through many of the other presentations--called for new investments in post-secondary education. This recommendation is right on the mark because it's a fact that since the mid 1990s, post-secondary education has been funded through the Canada Social Transfer.

When we look at how the federal government's involvement in social programs, including education, has changed, we note that in 1985-1986, its overall share of social program and post-secondary education funding totalled 22.7 per cent. By 1998-1999, its share of the funding had fallen to 11.2%, a drop of 50 per cent over 1985-1986. Contribution levels rose slightly in 2001-2002 to 14.1%, still down 37% over 1985-1986 levels. Levels continued to fall and today, the federal government accounts for 13.6% of overall provincial program funding.

According to our estimates, the federal government spends a mere 8¢ of every dollar on post-secondary education in Quebec.

Therefore, I support this recommendation one hundred per cent. I do find it rather odd, however, that no one mentioned the fact that these areas come under provincial jurisdiction and that funds should therefore be reinvested via the Canada Social Transfer. I would have enjoyed hearing your comments on this point. If I understand correctly, you would like us to recommend to the federal government that it increase transfers to the provinces for health and social programs.

Mr. Jones, I have a very specific question for you. I've looked at your brief. You never mention the fact that in Quebec, tuition fees have been frozen for many years, or that the province has a highly sophisticated loans and scholarship program in place. I agree that under the circumstances, the federal government needs to move in this direction, but at the same time, it must respect respective jurisdictions set out in the Constitution Act of 1867.

I look forward to hearing your views on the subject.

À (1045)

The Chair: Go ahead, Ms. Lemay.

Mrs. Marie Lemay: We're very mindful of these jurisdictions, Mr. Paquette. Ours is a federal organization and our members are provincial organizations. The federal government has a vital, albeit indirect, role to play in post-secondary education. It has come up with highly creative ways in the past of supporting and funding post-secondary education. I'm confident that others ways of funding these sectors can be found as well.

Mr. Pierre Paquette: In so far as the Canada Social Transfer is concerned, are you recommending an increase in transfers to the provinces?

Mrs. Marie Lemay: Yes, in terms of transfers earmarked for education.

Mr. Pierre Paquette: Would you care to add anything to that, Ms. Clements?

[English]

The Chair: Dr. Clements, go ahead, and then Mr. Jones.

Dr. Patricia Clements: From past experience, it seems perfectly clear that in increasing transfer, there needs to be a process of accountability, so that one can be sure the dollars go where they're intended to go.

The Chair: Mr. Jones.

Mr. Andrew Jones: Thank you.

For me, one of the other issues in the tuition topic has to do with the consistency across the country. I think the federal government can certainly play a role so that high school students, whether they're in Quebec, Ontario, or Manitoba, are able to make choices and attend schools in their area at more of a consistency. Right now, you're quite right, we don't have that throughout the country. You saw some of my examples, ranging from $32,000 for a year of dentistry in Saskatchewan to much more reasonable rates in the province of Quebec.

So, again, through the Canada health and social transfer and other mechanisms, I think the federal government can play a role to correct this inequity that we have now in this situation that we have today.

The Chair: Thank you very much.

Ms. Minna, for five minutes, followed by Mr. Murphy, and then I have more presenters and I'm going to add you to the first list for the next round.

Ms. Maria Minna (Beaches—East York, Lib.): Thank you, Madam Chair. I would like to go to Madame Lemay.

While you chose not to go into foreign credentials, I'm going to go there. The reason I want to go there is that I know there's a major problem in this country with respect to our immigration vis-à-vis people who come from other countries with credentials but cannot get accreditation here for their credentials or work in their field. I asked this question a couple of days ago and was told that this was provincial. Maybe you can help me on this, because although it is provincial, the fact of the matter is that the associations have control. Quite frankly, the provinces have not had the guts to deal with the associations in making them change how they address the issue of credentials.

What I want to know from you is what's happening in areas other than the engineering family, if you like, to address this issue, because there are far too many people who are wasting their brains. We talk about brain drain, but we don't talk about brain waste in this country.

Ms. Marie Lemay: I could not agree more with you. I've been with CCPE for two and a half years. This is probably the issue I've spent the most time on, and it has not been for the lack of other issues.

I'm very pleased to be able to tell you that on October 3, actually, the engineering profession got together, all the provincial regulatory bodies got together, and agreed that this is an issue of extreme importance for the engineering profession and for Canada. We decided that we would work collectively to facilitate the integration of foreign trade engineers into the workforce. We call it “From Consideration to Integration”, and we want to develop a model, working with the ten provinces and three territories together, to be able to facilitate that integration and build that safety net for when somebody comes here with the credentials.

Maybe it's a cultural issue. They might be missing just a little bit of language or work language or just one course. Instead of having them knock on the door and then fall through the cracks in the system, we can pick them up and redirect them to groups—maybe not us, but other groups—that can then give them the tiny bit that they're missing, because there's a crucial time lag here. If these people come in and don't get integrated in a short timeframe, their skills atrophy, and that means we have disappointed people and it's this country's loss.

I'm really happy that we've taken that step. We've decided that we're going to be working on this and we will facilitate integration—without lowering the standards, obviously. These are standards that Canadians have been accustomed to. It's our quality of life and I think Canadians cherish that. But we will facilitate the integration of foreign trade engineers. We need them.

À (1050)

Ms. Maria Minna: Am I out of time?

The Chair: No, you have time left, unless you want to share your time.

Ms. Maria Minna: Just quickly, it would be interesting to see that we have some national standards across the country, with the cooperation of the various associations, on all of the different professions. Does your association support the concept of establishing those, with the participation of the associations? The associations obviously see some national standards that can be used to do so. Also, how would we go about doing that with other associations? Have you had any dialogue with any other associations besides engineering?

Ms. Marie Lemay: There are already some existing standards. For example, in education, we accredit all the engineering programs across the country. If you graduate from Newfoundland, you can enter into B.C., the first step being that the education is the same, and it's considered so. So there is some consistency. There are guidelines in terms of experience in the national guidelines. That's our role. That's what we do. We develop and facilitate them.

But there is need for even more consistency. Remembering that we have 12 provincial and territorial acts, everybody is very aware of that mobility. We now have a mobility agreement for engineers so that they can go from one province to the another, so we're working really hard on this.

We have also gotten together a group of regulatory bodies. We've called it a coalition of regulatory agencies, and it's bringing professions together to try to address this issue. We'll definitely be able to share whatever work comes out of our model.

Remember that the engineering profession represents a big portion of the skilled workers that this country needs, so it was really important for us to be proactive on this and to be there.

Thank you.

The Chair: Mr. Murphy.

Mr. Shawn Murphy (Hillsborough, Lib.): Thank you very much, Madam Chair. In the interest of time, I think I'll take about two minutes here. I just have one question for Mr. Jones.

On this whole area of post-secondary education, as you can see from the other presentations here this morning, the government is under a lot of pressure. I had a meeting earlier this morning with six Atlantic Canadian university presidents. They had a whole list, ranging from infrastructure to research to indirect costs of research, but tuition wasn't mentioned on their shopping list. When I look at yours, it's going to be one of the priorities.

I agree with a lot of the submissions, in that the government has to—there's no choice—put more money into post-secondary education. We're seeing expanding numbers, but we see an infrastructure deficiency. There are a lot of issues going on there. But on the examples you used, I'm not sure I agree with them. You're saying a medical student has to pay $14,000 for tuition. A dental student—and you would know exactly what the average dentist in Ontario makes in your position—pays $7,000. A veterinary student pays $7,000. In the whole scheme of things in those professional schools, that doesn't bother me a whole lot. These people make five, six, seven, or eight times what an average Canadian makes, and I'm not aware of any credit crunch. Maybe it can be accommodated through the student loan program.

I guess I disagree with your examples and that the government should be looking at this as an issue, with all the other priorities out there that are dealing with research, indirect costs, and infrastructure. Do you have any comment?

Mr. Andrew Jones: Yes, and thank you very much.

Not unexpectedly, this becomes an issue around the table. There's no doubt that in dentistry, which I'm associated with, and in the other professions in our coalition, once those individuals graduate and get into the workforce, many make more money than the average Canadian does. But we still feel this is an access issue for students who are making that choice as high school students: Where am I going to be? What am I going to do once I become older and join the workforce? We're finding and are concerned that more and more people are not going to make the decision to go into law, into medicine, or into dentistry. They're going to make other choices, and that in turn hurts the fabric of the country.

The second point is that ten or twenty years ago, we saw individuals graduating with a much lower debt load, a much lower debt-to-income ratio. We're finding that if you have four years of undergraduate work, and four years or five years in a profession at $20,000 or $30,000, people are starting to come out with debt loads much in excess of $100,000. They're upwards to $200,000 and beyond. And we then have costs of association and costs related to starting up a practice, whether it's in dentistry or medicine. There are large overhead costs. So we really feel we are terribly out of order with respect to this issue, and that it's going to hurt access in remote areas and rural areas in the country. It is therefore something the government does need to address.

I certainly take your point, though, that many of these professions do earn more money coming out. There's no doubt about that, but we feel it's still an inequitable position that we're in today.

À (1055)

The Chair: Since Ms. Minna and Mr. Murphy have been very succinct, I'm going to allow one question each from Mr. Cullen, Mr. Valeri, and Mr. Speller.

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you, Madam Chair. I'd like to thank the presenters. I had a range of questions, but because it's a very large panel, we're not going to get to them all. I'd therefore like to come back to Mr. Jones.

I have two questions, really. First, I didn't really hear the rationale for the access in terms of rural or remote individuals and why the cost of tuition is a particular problem for attracting people back to rural communities.

Secondly, I'd like to build on my colleague's question. Have you done any analysis on the return on investment, if you like? I'm having a look at this in strictly economic terms. If I go to dental school and medical school, yes, the tuition is high, and, yes, I'm going to have to take on some debt, But in terms of a discounted cashflow, it still makes a lot of sense. My return before might have been 30%, whereas now it's 26% or whatever. And I'm not trying to trivialize it, because I am concerned as well about tuition and student debt.

Is it a cashflow problem or is it a return on investment problem? I ask because that begins to affect what kinds of instruments you'll look at. In terms of access, what we have are a lot of students going into university and taking on the debt, and the debt building. So if it isn't a cashflow problem, why would that be a constraint if you're going to have an income stream down the road that will pay for all of this? Maybe you're looking at it in relative terms when compared to past generations. But we are in a different world, and there are a number of issues that the government has to deal with.

Mr. Andrew Jones: Thank you very much. I think the two questions are very much interrelated.

With respect to the rural and remote area issue, let me speak to dentistry again. What we find there is individuals who are graduating with very high debt loads, and instead of choosing to go and set up a practice or buy a practice in, say, small town Ontario or small town Atlantic Canada, they will join an established practice and act as an associate, to have the secure income in order to deal with their high debt load situation, rather than taking on more debt. So this is the concern we have. Because of people graduating with high debt loads, there's not the move out to the smaller areas to establish a stand-alone practice. I believe many of the same circumstances occur with respect to medicine and with respect to law.

On the second part of your question, with respect to return on investment, our coalition is not so advanced as to have worked out many economic models, so clearly, again, the aspect of graduating with very high debt loads and then having that burden as you begin your professional life is front and centre. But we would be pleased to work with you off-line and address that issue more thoroughly.

Á (1100)

The Chair: Mr. Valeri.

Mr. Tony Valeri (Stoney Creek, Lib.): Thank you, Madam Chair.

Mr. Paterson, with respect to the comments in your brief about the corporate taxes and the suggestion that we're competitive now with the United States, and so we should just be moving on capital taxes, I would like to be clear on what the position of CATA would be, remembering that by 2006 Mexico is at 32, the U.S. is at 40, on the corporate side, and we'd be about 37.9. I'm just wondering if you think that's enough to make Canada the kind of magnet I think it should be for investment in NAFTA.

Second, with your second recommendation on the tax credit program, just so we're clear, are you suggesting that we eliminate the present ten-year carry forward and three-year going back in the present system for public companies and just making it a refundable credit?

The Chair: Mr. Paterson.

Mr. David Paterson: In response to the first question, it is our policy not to appear to be too greedy. We do regard the corporate capital taxes as the main issue at this time. If they're eliminated, it will improve the position of Canadian business substantially. If we can achieve that, I'm sure our members will then turn their attention to the income taxes.

With respect to the second one, the answer is yes. The need for cash is now. It's not going to be three years down the road, when everyone's back in the black and prosperous. The damage will have been done by then. We're calling for the large companies to be eligible to get their tax credits when they incur the costs.

Mr. Tony Valeri: Let's be clear, though, that when we talk about corporate taxes, no one is suggesting anyone's being greedy here. If anyone talks about corporate taxes, it's about improving the productivity and quality of life of the country, not feeding the needs of a particular industry or sector. I just want to make sure we don't have that mindset when we're talking about making Canada a magnet for investment in the NAFTA economy.

Mr. David Paterson: No, exactly. We think we're competitive now, but we will not stay that way, because the United States already has a further tax reduction scenario built into their legislation. We will have to face that challenge.

The Chair: One final question, Mr. Speller.

Mr. Bob Speller (Haldimand—Norfolk—Brant, Lib.): Thank you very much, Madam Chair.

Dr. Clements, I come from a rural area in southwestern Ontario. We heard earlier about rural and remote Canada, and we're always hearing that we need more science and technology, how science and technology will help us in rural Canada become more innovative, will create more jobs. You're coming today and asking about the social sciences. I'm wondering if you could explain to me how that will help us in rural Canada, how that will help us to become more innovative and how that will help us to create more jobs.

The Chair: Dr. Clements.

Dr. Patricia Clements: First, I think we probably do need more technology, or at least we need more technology of the right kinds. Second, I think that to determine what the right kinds are will require some social science investigation. Then to determine what the impacts of that technology will be on rural environments or on urban environments will also be the business of the social sciences and humanities. To me it seems that we're in a period in which we can't think in silos in the academic business either. We need to think of technology and social science working together, we need to think of technology and the creation of culture as part of the same project.

Did I answer your question?

Mr. Bob Speller: I think so. But are the granting councils actually giving dollars towards those sorts of issues?

Dr. Patricia Clements: Sure. I have to tell you that my own research, although it doesn't have to do with rural Canada, does represent one of the ways in which the Social Sciences and Humanities Research Council funds linkages between technology and other fields. I'm working with a number of other scholars on the adaptation of history to technology. We're working on a way of making the web a little more responsive to deep kinds of interrogation, and that work has been supported both by the Social Sciences and Humanities Research Council and by the Canada Foundation for Innovation.

On the subject of life in rural Canada, we need social and cultural investigations of the impact on the rural family, on the rural community of technology.

Á (1105)

The Chair: Thank you very much. I appreciate everybody's attendance here, your briefs, and the fact that you were succinct in your presentations.

We are now going to suspend for a minute and have our second panel of the morning come up.

Merci beaucoup.

Á (1106)

Á (1110)

The Chair: We will open the session again, and our second panel today includes the National Round Table on the Environment and the Economy, with David McGuinty, the president and CEO, and Jean Bélanger, a member. From the Canadian Urban Transit Association we have Michael Roschlau, the president and CEO; Eric Gillespie is with the St. Catharines Transit Commission and is the chair of the organization. From the International Association of Fire Fighters we have Mr. Lee. From the Canadian Teachers' Federation we have Harvey Weiner, who is the deputy secretary general. From the Ottawa Centre for Research and Innovation we have Jeffrey Dale, who is the president and CEO, accompanied by Michael Darch, who is the executive director of the Ottawa Global Market.

Welcome, all. We are also expecting one other group, but we will start now with the National Round Table on the Environment and the Economy. I would invite you to stick to your brief for up to eight minutes.

[Translation]

Go ahead, Mr. Bélanger.

Mr. Jean Bélanger (Chair, Ecological Fiscal Reform, National Round Table on the Environment and the Economy): Thank you.

Good day. My name is Jean Bélanger and I'm a member of the National Round Table on the Environment and the Economy. With me today is the Round Table's CEO, David McGuinty.

[English]

Thank you very much for inviting us to discuss the round table's “Greening of the Budget“ submission. The feedback we receive from this committee is always an important part of our final submission to the government, and your support of our recommendations in the past has also been crucial in persuading government of the need to act.

I want to begin with a brief overview of the round table and the process we use to develop our annual submissions.

The National Round Table on the Environment and the Economy is an independent advisory body that reports to the Prime Minister. We are mandated to provide policy advice and recommendations to the government and the public on promoting sustainable development in Canada. Our annual “Greening of the Budget“ submission is one of the key ways we fulfil this mandate. Our recommendations have one unique quality that I want to highlight. They do not come from our staff, nor do they come from any particular special interest group. They are all the products of multi-stakeholder processes in which all participants have agreed on the assessment of the problem and have negotiated some difficult trade-offs and proposed concrete practical solutions.

This year our submissions will contain recommendations in four key areas, promoting sustainable communities, preserving and enhancing Canada's legacy of natural capital, improving our understanding of the links between the environment and human health, and building the knowledge base and capacity for achieving sustainable development in Canada. Our recommendations are not all finalized, so in the next few minutes we'll tell you where we're at in our multi-stakeholder task forces and give some examples of the types of recommendations we expect to bring forward in our final submission.

Everything in our submission and in this presentation is about achieving a better balance between economy, environment, and social well-being. It's about levelling the playing field, so that our fiscal regime sends more coherent signals in daily decision-making processes. Our current fiscal regime creates signals that often provide incentives for unsustainable practices. We would like to ask you to create incentives that tilt the playing field in favour of sustainable practices. At the very least, we should level the playing field by providing equally positive incentives for sustainable practices.

The government recognized the importance of this work in 1993 when it proposed to conduct a baseline study on incentives and disincentives in fiscal policy. A baseline study really has yet to happen. If we just created a number of new person-years, say 10, in the government, to generate credible options for redirecting spending and taxation policies to achieve a better balance, we would be getting ahead.

I'll now turn it over to David, who will highlight some of our recommendations in each of the identified areas.

Á (1115)

Mr. David McGuinty (President and CEO, National Round Table on the Environment and the Economy): As Jean has mentioned, Madam Chair, the first theme under which we're coming forward is that of sustainable communities—something that's not wholly unknown to the members of this committee, given the Speech from the Throne.

The first thing we will be doing is to develop a series of recommendations on how the federal government can shift its fiscal regime to improve the environmental quality in our cities. We know we're 80% urban now, and we will likely be 90% urban in 15 years. That's an exactly 100% turnaround from where we were in 1910 in this country. We know cities are increasingly becoming the economic drivers of the country. We also know, of course, that environmental quality questions like smog and water quality are going to come to the fore as more and more of our citizens are asking questions about the quality of both of those.

We're developing a series of fiscal measures that the federal government can implement to help cash-starved cities improve their environmental quality. We're targeting cases in which the policies of the three levels of government are working at cross-purposes with respect to the environment in our cities. As Jean said, they're measures that will level the playing field between practices that harm the environment and practices that are benign or protect cities' environments.

Here are a couple of examples: levelling the playing field between public and private transit by providing stable funding for public transit; enhancing energy efficiency in Canadian cities by, for instance, offering a GST rebate on renovations to existing homes if they improve energy efficiency; providing incentives to encourage the sustainable growth of our cities by, for instance, establishing sustainability criteria as the federal government moves to bring in more infrastructure programs; and furthermore, having the federal government get its own house in order by, for example, greening its extensive procurement regimes, in the sense that it is the largest single procurer of goods and services in Canada.

The second theme under the urban and sustainable community file is the brownfields question. In the last federal budget, we were tasked by the then Minister of Finance to devise a national brownfields redevelopment strategy for Canada. This comes hard on the heels of the Commissioner of the Environment's report two days ago that pointed out the extent of contamination in Canada and the responsibility the federal government has for those sites.

This strategy is a national strategy that will embrace both provincial and federal responsibilities. There are three main barriers to progress in this area: inconsistent and uncertain legal liability rules; a lack of available, upfront capital for redevelopment of these sites and extremely low public awareness of what these sites are; and the economic, environmental, and social benefits that would accrue should we remediate these sites. Without government action at both levels to address each of these barriers, developers are going to continue to do what developers have been doing best, which is to favour the development of greenfields, which has environmental consequences. We will continue to miss out on a massive economic opportunity for our cities and for Canada.

We're going to be coming forward with a number of specific recommendations under this brownfields redevelopment strategy. In early research, for example, we found that a study commissioned by the round table found that brownfield redevelopment has an economic multiplier effect of 3.8. According to Statistics Canada, that's the highest of any other individual economic sector in Canada today, so the strategy has the potential to unleash the full force and effect of the market and of course deal with an environmental and social issue.

The second major theme is aboriginal communities. Under this sustainable communities question, a year ago we released a report that was probably the largest gander at what's going on in the Northwest Territories since the Berger report in the mid-1970s. It contains a series of recommendations to promote the sustainable development of our Canadian north. The recommendations found in this report ask the government to create a regulatory framework to ensure that decisions on non-renewable resource developments in the north respect the principles and practices of sustainable development. We're looking for sustainable funding for environmental regulatory agencies; for some serious investment in aboriginal peoples' training and education; and for some support for large-project consultations for aboriginal communities, which are absolutely overwhelmed when it comes to participating in complex environmental assessment processes.

The second major thrust and theme of our submission is the theme of natural heritage. We talk a lot in this country about national security. We're also in the business of talking about natural security. We are obviously going to be coming forward to congratulate the government on the new parks and new marine areas, but we're going to be rethinking how well we're doing on conservation in this country, because parks are clearly not enough and they're becoming islands of extinction as we go forward, Madam Chair.

Á (1120)

Finally, there's health and the environment. We are calling for a much better understanding of the linkages between the environment and human health. Congratulations to the federal government for having funded more research last year to the Canadian Institutes of Health Research. In this area of health and environment linkages, we are in a state of infancy in Canada when it comes to this type of research. We are now working with CIHR to make sure that there is much more research in this area.

And very much finally, Madam Chair, the knowledge base in environment issues today in Canada is clearly now showing the effects of program review and the 1993 forward cuts to meet deficit reduction strategies. What we are really discovering is that, if you ask the government today, “What is the state of Canada's environment?”, we are not in a position to answer the question.

Thank you very much.

The Chair: Thank you very much.

I would remind you that we have your briefs, so you just need to speak to them.

Go ahead, Mr. Lee.

Mr. Jim Lee (Assistant to the General President for Canadian Operations, International Association of Fire Fighters): Thank you very much.

On behalf of the general president, Harold Schaitberger, and the 18,400 professional firefighters and emergency medical personnel we represent across Canada, the International Association of Fire Fighters appreciates this opportunity to participate in this consultative process that will help guide the finance minister in his deliberations over the next federal budget.

The IAFF remains appreciative of the positive recommendations this committee made in 1999 regarding the issue of pension reform for professional firefighters in Canada. That recommendation assisted us in advocating our position and helped lead to commitments on that important issue that are now in place.

This morning I will address two issues of critical importance to Canada's professional firefighters that are also issues of budgetary consequence for the federal government. These issues are national hazardous materials training for Canada's first responders and the need to establish a national public safety officer compensation fund to benefit the families of Canadian firefighters who are killed or permanently disabled in the line of duty.

A little more than a year ago, on September 11, 2001, the world was shocked into a new, sinister reality as terrorists struck with devastating results in New York and Washington. They demonstrated callous disregard for the lives of innocent civilians, and showed their ability and desire to use weapons of mass destruction on North American soil.

In the days, weeks, and months that ensued, the issue of national security came to the forefront in Canada, and in the deliberations of our elected leaders. The subsequent series of anthrax attacks in the U.S. and bio-attack scares in Canada served to heighten the sense of urgency.

In response to this new reality, the federal government made a substantive commitment to national security in the form of a $7.7 billion budgetary allocation over the next five years, as announced in the House of Commons on December 10, 2001. This budget amount included specific allocations for first responder training.

It should be noted at this point that the issue of major disaster preparedness is not a new one for the International Association of Fire Fighters, and it was not developed solely in response to the events of September 11. This is evidenced by a letter written by the IAFF to the Minister of National Defence in August 2001, calling for additional resources for Canada's first responders to adequately deal with major disasters, including terrorist attacks of an explosive, biological, or chemical nature. But as a result of the attacks in the U.S., the IAFF in October 2001 drafted a funding proposal directed at the federal government for Canadian participation in the IAFF hazardous materials training for first responders program. This program has successfully trained tens of thousands of U.S. first responders with funding from the U.S. government. It includes components that address chemical, biological, radiological, and nuclear response.

Since October 2001 we have presented this proposal to a number of federal ministries and agencies, including National Defence, the Office of Critical Infrastructure Protection and Emergency Preparedness, Foreign Affairs, Transport Canada, Health Canada, and the Solicitor General.

In November 2001 the IAFF appeared before this same finance committee to discuss the details of this proposal and the importance of establishing a baseline level of hazardous materials training across Canada directly in response to the events of September 11. While the proposal has been well received, none of these ministries, independently or jointly, has yet agreed to provide the necessary funding to get this critically important training off the ground. In the meantime, weeks and months are passing while the extremely cost-effective opportunity for the federal government to provide badly needed first responder training remains untapped.

We are aware that the federal government has already targeted a number of federal agencies for funding allotments for first responder training as provided for in the December 2001 federal budget. The IAFF continues to push for implementation of our proposal. Implementation would ensure widespread baseline level of hazardous material response in Canada, specifically in regard to the threat of biological, chemical, and radiological attacks.

Because the curriculum and administration of the IAFF hazardous materials training for first responders program have already been established, virtually 100% of any Canadian government funding would be used for actual hands-on training of firefighters and other first responders. The $500,000 amount contained in the IAFF proposal represents 40,000 contact hours and the training of 1,600 students per year. Because it is a train-the-trainer program, its effects are multiplied.

Á (1125)

For example, if 80 firefighters participated in three initial train-the-trainer sessions across the country, and each of those participants taught the curriculum to 20 first responders in their home community in the subsequent year, the curriculum would reach more than 1,600 first responders. With $500,000 in annual federal funding, Canada's first responder community would be saturated with the appropriate level of training in just five to ten years. The funding amount represents a tiny fraction of the $7.7 billion allocated to national security in the December 2001 federal budget.

The IAFF hazardous materials training for first responders program has been extremely successful in the U.S., where it is jointly funded by four federal departments and agencies and offered free to fire departments and other emergency services. Because the funding is from the U.S. government, Canadian first responders are prevented from participating in this critically important training.

As the events of September 11 showed, it is the nation's firefighters who are the domestic defenders in our cities. As Canadian military officials have openly acknowledged, military-based teams are hours or even days from deployment, and are therefore not the ones who will be dealing with the immediate aftermath of a terrorist incident. It is the nation's firefighters and other first responders who will be on the scene first, within minutes of a chemical, biological, or radiological attack.

The problem lies in the fact that without the appropriate training, they cannot safely and effectively respond to one of these incidents. That means the citizens of Canada are largely unprotected from this threat. We have already provided copies of the IAFF course curriculum to various federal departments, and we are more than willing to provide additional copies of the program so that its merits can be verified for any other federal department or agency that requests it.

The IAFF is aware that a process of allocating moneys for the first responder training has already been drafted and is being implemented at the federal level. We are also assured by the Minister of Defence that our proposal will be considered as the federal government develops its long-term strategy. The IAFF strongly urges the Standing Committee on Finance to recommend the specific allocation of funding for the IAFF hazardous materials training for first responders program as a financially advantageous means of significantly enhancing the nation's ability to respond to the aftermath of a terrorist attack.

As our second point this morning, we recognize that politicians are indeed quick to join Canadians in thanking firefighters for their service to their community and for the sacrifices they are prepared to make at a moment's notice in the name of protecting the lives and property of Canadians. We submit that a more appreciative way to recognize the important role of professional firefighters would come in the form of better job protection and a concrete recognition of sacrifices that firefighters are prepared to make on behalf of Canadians.

There is no act more noble than laying down one's life for the sake of others, bravely putting oneself in harm's way so that others might escape danger. The ultimate example of this kind of sacrifice was seen in New York City on September 11, 2001. As workers attempted to flee the burning building and wreckage of the two office towers, the city's professional firefighters were heading in the opposite direction.

Canada's professional firefighters are prepared to lay down their lives to protect the lives of their fellow citizens. When they do so, it is in the service of all Canadians.

The Chair: I would like you to just make your recommendations, because your time has expired. The brief is before the committee.

Mr. Jim Lee: Okay.

We would ask that the federal government recognize firefighters who make the ultimate sacrifice in Canada by establishing for them a public safety officer compensation fund.

That concludes my remarks. Thank you.

Á (1130)

The Chair: Thank you very much.

We will now move on to the next presenter, from the Canadian Urban Transit Association, Monsieur Roschlau.

Mr. Michael Roschlau (President and Chief Executive Officer, Canadian Urban Transit Association): Merci infiniment, madame la présidente.

Ladies and gentlemen, may I ask you to imagine, for a minute, Canada's largest cities at a standstill. What I mean by that is that cars and trucks don't move because our travel demands have grown so much faster than the capacity of our infrastructure. Some people call it gridlock. If any of you have travelled in Toronto, Montreal, or Vancouver in rush hour, you'll know what I mean. In Toronto alone, the board of trade estimates that $2 billion in productivity is lost every year due to traffic congestion.

The reality is that we're rapidly losing our competitiveness against the cities of our largest trading partner, the United States, because we're not investing in our public transit systems while they are, to the tune of $7.2 billion U.S. per year at the federal level. The result is that our cities, where 80% of Canadians live—as we've already heard—won't attract the investment and the jobs they need to remain healthy as we lose our cherished quality of life to cities in other countries. Indeed, public transit is the most cost-effective way of moving people and freeing up road space to move goods. Dollar for dollar, it gives the biggest bang for the buck. The Americans have realized it, and it's about time we did, too.

Imagine also, for a minute, the number of smog days we'll have ten years from now if they continue to increase at the current rate. One of the biggest contributors to air pollution is automobile emissions. Yes, emission controls are being tightened, but technology can only be part of the solution. Investment in public transit will provide an alternative to driving, and especially to the all too popular phenomenon of solitary driving—that is, the car with only one person in it.

Yes, Canadians are increasingly demanding cities with a high quality of life, cities where people and goods move freely, with affordable housing, clean water and air, and reliable community services, including efficient public transit. But our cities are struggling to redefine their role as engines of the new economy, and they face mounting challenges in attempting simply to make ends meet. In many cities, transportation has become the number one public issue. Transit is an important part of that solution, but municipalities find themselves caught in a real financial squeeze, with little hope of finding a resolution without the help of senior levels of government.

In the absence of bold action by the federal government, we risk lower ridership, greater overall government spending on all modes of transportation, increased congestion, deteriorating air quality and a changing climate. Clearly, with the release today of the federal government's plan on climate change, these issues resonate very directly with them.

What, you will ask, is the cost involved in building competitive urban transit systems? Our estimate is in the order of $3 billion per year, which implies a federal share of $1 billion if it were to be shared equally between the three levels of government. That, ladies and gentlemen, is not as great as it sounds. For starters, it is less than 10% of the amount the U.S. spends today. Second, it amounts to pennies per person per day. Third, in gasoline terms, it equates to about 3¢ a litre of gas sold in Canada. That's less than the amount the price fluctuates every week.

Most Canadians say they are supportive of new taxes, believe it or not, provided they know where they will be invested and that the taxes are for something they believe in. Let me tell you that, according to a recent survey, 92% of Canadians believe the federal government should be investing in urban transit. The majority of Canadians believe their taxes should be invested in transit even if they don't use it themselves. The funding, however, has to be dedicated and long-term.

The Canada infrastructure program provides a model for an effective program, showing that cooperative tripartite funding of municipal infrastructure improvements can be a win-win-win scenario achieved without constitutional difficulties. Unfortunately, the program cannot itself provide major benefits to transit in the face of competing municipal priorities and the current ineligibility of rolling stock for funding under the terms of the program.

Á (1135)

The federal government's $2-billion strategic infrastructure fund, announced in the last budget, is another step in the right direction, but it's broad and provides no assurance that it will go to urban transit. Indeed, there is a chance for too many distractions along the way. What's needed is a long-term, dedicated plan, a transit investment program that future generations will be proud of, one our children and grandchildren can look back to and say, “That was a visionary government that took the bold step to set us on a path to sustainable urban transportation.”

Eric, over to you.

Mr. Eric Gillespie (Chair, St. Catherines Transit Commission, Canadian Urban Transit Association): Thank you, Michael.

Let me add that if we are to succeed in developing cities with a higher quality of life, we must also match infrastructure investment with incentives to change consumer behaviour. Gridlock alone is an important incentive, but it's not enough. Public education and outreach are required to successfully position transit as the choice mode of urban travel. There are many examples of how the federal government's investment in public education has successfully triggered change in consumer behaviour in the past. Take smoking, for example, or recycling, or seat belt use. All these areas have experienced dramatic changes in public behaviour as a result of government awareness campaigns. In the case of public transit as well, funding is required for a national image-building campaign and for the development of regional and local transportation demand management programs.

Another incentive is for employers to offer transit benefits to their staff instead of free parking. Eighty per cent of Canadian automobile commuters receive subsidized parking from their employers, but most do not pay tax on these benefits. Meanwhile an employee who enjoys the benefit of an employer-subsidized transit pass must pay income tax on it. This pricing distortion helps preserve the regime of automobile dependence and a lack of real choice, which threatens the financial, social, and environmental health of our cities.

The amendment of the income tax legislation has been a long-standing objective of both CUTA and a nationwide coalition of municipal officials, labour, and taxpayer groups. You have probably heard from this coalition for several years running now, and we want you to know that it has widespread support. CUTA's recommendation to make employer-provided transit benefits tax exempt was identified by the federal government's transportation climate change table as having substantial positive economic net benefits. It was the subject of a vote in the House of Commons that passed with overwhelming support. It isn't about to go away, because quite frankly, it is such a no-brainer.

In conclusion, Madam Chair, we are encouraged by the progress this government has made to date towards support for public transit, and with support from all parties. The federal government's budgets in both 2000 and 2001, as well as the Prime Minister's throne speech and urban affairs caucus, have all recognized the importance of transit to our cities. The government has an opportunity before it today to address urban traffic congestion, air quality, social access to mobility, as well as climate change, with a few simple transit-supportive steps. If we, as a nation, are to achieve a higher quality of life in our cities, the federal government must take the leadership role.

Thank you.

The Chair: Thank you very much for the presentation.

Now we'd like to hear from the Canadian Teachers' Federation, Mr. Weiner.

[Translation]

Mr. Harvey Weiner (Deputy Secretary General, Canadian Teachers' Federation): Merci, madame la présidente.

The Canadian Teacher's Federation is the national voice of teachers in promoting the high quality of education, the status of teachers and equality of opportunity through public education. CTF coordinates and facilitates the sharing of ideas, knowledge and skills among its 14 provincial-territorial member organizations which collectively represent over 240,000 teachers in primary and secondary schools across Canada.

We welcome your invitation to provide input in the 2003 federal budget. There are a number of key questions that we raised in our presentation to the committee last year. These questions are still valid today. Listed on page two of our submission, the questions we ask are as follows: Are we doing what is needed to give every child in Canada a good start? Does our tax system adequately recognize and accommodate the cost of ensuring the health and well-being of children and youth? Are we providing adequate assistance to families to help them make appropriate choices for their children? Lastly, are we promoting programs and policies that balance work and family obligations or are we forcing more and more people to choose between work and family?

CTF believes that while some progress has been made, these issues remain important and there is still work to be done.

Á (1140)

[English]

I might say at this juncture that we are proud members of the National Children's Alliance, which will be presenting our joint brief, 50 national organizations working together on these issues. We will continue to work on these issues until we create a much more favourable situation for children, youth, and families in Canada.

I would like to move on to some specific questions and issues that are contained within our brief, concerns I would suggest to you about our public health and education systems. Particularly, I will speak to the issue I know best, and that is public education.

We are increasingly, as a federation, becoming concerned about whether the two-tier arrangement, which we have talked about in the health sector, is becoming, by stealth, the actual situation in what we call public education. I refer not only to post-secondary, but to elementary and secondary education. When we find parents spending an average of $1,300 per child on supplies, fees, etc., things that used to be covered from the public purse, and when we find--and we have done an extensive independent survey--that our teachers are spending an average of $600 out of their own pockets to supplement classroom resources and meet student needs, when we find more and more schools turning to fundraising activities, in some cases involving the children themselves, when we find more and more reliance on corporate donations to appropriately fund our schools, what we are doing is creating inequities. What we are doing is ensuring that those communities that can afford it will be able to maintain and improve services and leave those that are unable to do so behind. All of this conflicts, I would suggest, with the federal government's strong emphasis, which we share, on the importance of education for the future, both for society and for the economy at large.

We don't talk very much about the Constitution, thank God, but the Constitution still seems to be there in the background and a very critical factor in how we cooperate, how we collaborate between different levels of government. It seems to me that we are not looking at the issues sufficiently and trying to address the needs, we're looking more at whose turf or whose responsibility is being invaded. The issues are much too important, and I hope the members of the committee agree and in the report will not only talk about priorities and the dollars to be allocated to those priorities, but also promote mechanisms and the initiatives we have to take to avoid gridlock based on turf perspective. I would leave you with that message.

We did see a couple of small, encouraging signs in the Speech from the Throne, particularly one on immigration, which, as we know, is a federal responsibility, with some turf ceded to Quebec, which has a unique situation. For the first time--and we were pleased to see it--the federal government recognized that when it takes on the responsibility of integrating in an appropriate way immigrants to Canada, we're not just talking about adult immigrants. We have to talk about the children those immigrants bring with them. These children have traditionally been literally dumped into schools and school boards without the appropriate resources to integrate them appropriately and to provide them with the second language training they need. We are encouraged to see a reference to that, and we hope that specific reference will be buttressed by the necessary funds and the mechanisms to make this work to meet their particular needs.

The other thing I would like to mention as an example is that Industry Canada has done a fabulous job of wiring Canadian schools from coast to coast to coast, and yet we are now faced with impending legislation on copyright that seemingly is unbalanced and is not creating the kinds of rules required to allow easy access for educators and students to the materials they will need in order to use these computers and the Internet equipment appropriately.

Á (1145)

Another example of where I think better collaboration is required based on needs lies in the fact that the federal government seems to confine its activities to children literally from birth to age six, and then they disappear from the map and only reappear at the point when they graduate from secondary school or drop out of school. This is a real concern, so we need these mechanisms in order to do a better job.

There are a number of tax-related issues that appear on pages 4 to 8 of our brief, with recommendations on pages 6 and 8. We are certainly concerned about the absence of any improvements to RRSPs. We support the Retirement Income Coalition on those particular issues. We would like to see some recognition for teachers' professional development expenses and out-of-pocket professional expenses. That recognition has been provided in legislation in the U.S., and that is referred to on page 7.

Our specific recommendations, which we strongly support, on children and youth are found on page 15.

Thank you, Chair. I would be more than happy to answer questions.

The Chair: Thank you very much for that extensive brief as well.

We'll now go to the Ottawa Centre for Research and Innovation. Mr. Dale, are you speaking first?

Mr. Jeffrey Dale (President and CEO, Ottawa Centre for Research and Innovation): Yes, I am.

Thank you very much, and good morning. The Ottawa Centre for Research and Innovation is Ottawa's lead economic development organization, and we're actually more affectionately known as OCRI. We are the rallying point between business, education, and research organizations within the Ottawa environment. We have more than 600 members, representing all of Canada's growing clusters, and we promote sustainable economic development while ensuring a high quality of life within our community.

As most of you are aware, Ottawa has become a globally competitive centre for technology. Our success has diversified our economy, enriched the lives of our citizens, and contributes to the growth of the new economy in Canada. However, this success did not just happen, and we must constantly work to keep our place on the world stage. The federal government forms a very critical role in keeping our place on the world stage.

Our brief was the response that OCRI put together for Canada's innovation strategy. What I would like to do is highlight three areas of recommendations that we have in that brief, around the SR and ED tax credits, facilitating commercialization of our research, and building competitive communities.

On SR and ED tax credits, for Canada to meet its goal of ranking among the top five countries in the world in research and development, the federal government must manage knowledge as a strategic national asset. Currently, Ottawa is the strongest centre for research and development in Canada, and federal support for our competitive advantages is critical to our long-term success. A key component of our competitive advantage is the SR and ED tax credit program.

To facilitate the growth of centres of R and D across Canada the SR and ED program must adapt to an ever-changing, globally competitive environment. However, today's SR and ED tax credit system is only marginally effective for public R-and-D-dependent companies during these major economic downturns. Specifically, the credits do not provide the critical assistance that these firms need to help them to weather a sustained downturn like the one we are experiencing today.

In contrast, we are seeing these credits provide the critical bridge financing for Canadian-controlled private companies—CCPCs—in similar stressing situations. Unlike the public firms, the credits earned for CCPCs are refundable and useful even when they are not profitable. These companies can claim a 35% SR and ED tax credit, whereas private companies can claim only a 20% tax credit on Canadian R and D only, and only when they are operating in the black. Potentially, there's a credible large pool of untapped tax credits that these private companies could access during these economic times.

For example, in 2001, Nortel Networks spent $4.9 billion on R and D research in Canada. That amounted to over $998 million in tax credits that they were not allowed to access because they were not running at a profit. JDS Uniphase is another example. In 2001, they spent $504 million on R and D. That's another $101 million in tax credits that such a figurehead of the Canadian technology sector was unable to access. These are the companies that could utilize these credits the most today, and they are being denied the help that they so desperately need.

OCRI supports the position of the Canadian Advanced Technology Alliance: that the tax credits should be made available to non-profitable public corporations as a source of bridge financing or as collateral for bridge financing, in order to provide these companies with a refundability during the down-turn. The refundability of these credits is one of the keys to the survival of CCPCs and would provide the same protection to non-profitable private companies.

The Department of Finance will undoubtedly take the position that the cost of expanding the refundability of these credits would be too high. However, in reality, the cost to the federal treasury would be, to a large extent, only a timing issue and not a real cost. We believe that letting the credits function as incentives when they are needed far outweighs any added costs that could be incurred. Specifically, a change of this nature would greatly enhance the importance of the credits and their influence on companies' long-term investment strategies.

Á (1150)

Our second area of recommendations focuses on facilitation of commercialization. To ensure that the Canadian communities become successful centres of innovation, the federal government needs to leverage the commercial potential of the research we are conducting today. Immediate action to facilitate commercialization processes includes expanding the federal government programs that fund, such as CFI, or encourage research to include incentives for successful commercialization efforts; renewing the $200 million investment made in 2001 to help colleges, universities, and research hospitals cover the indirect costs associated with federally sponsored research; and modifying NRC's industrial research assistance program to provide more support to bridging the gap between early stage development and the commercialization of innovation.

Our angel investors play an ever-increasing role in the funding of innovative start-up companies. It is important that the source of funds for the next generation of globally competitive tech companies be recognized and encouraged. Canada can markedly improve its business environment by developing a tax regime that encourages investments in early stage companies. Development of an investment tax credit for start-up investors, angels, as they are known, in particular is very important to reward entrepreneurs and early stage investors for the risks they bear when starting a new investment.

Building a large base of publicly traded companies that have been developed through our research efforts is crucial for our long-term success. The federal government should develop incentive programs that encourage the development of publicly traded companies focusing on commercialization of our advanced technology needs. What we are suggesting is that a tax credit system for global operations similar to the SR and ED tax credits would give Canadian companies that advantage to compete on a worldwide stage.

Our last recommendation deals with the building of community capacities. OCRI is addressing some of the community competitive issues through our global marketing program. Financially supported by three levels of government, including the Ottawa partnership, the Ontario government, and the federal government, the global marketing program achieves its relationships in expanding its networks to help create winning conditions that allow Ottawa companies to continue to attract international investment. However, its greatest source of funding and the success of its initiative, the program for export marketing development investment, PEMD-I, is presently funded only till March 2003. By continuing to facilitate regional efforts, the federal government can ensure that Canadian communities are able to become world-class centres of excellence. We recommend continuing and increasing the federal funding to flexible community-based investment attraction programs, such as PEMD-I, and increasing limits to funding for individual companies to $1 million.

Thank you.

Á (1155)

The Chair: Thank you.

Our final presenter will be from the National Children's Alliance, Dianne Bascombe.

Ms. Dianne Bascombe (Interim Executive Director, Coalition of National Voluntary Organizations; Director, National Children's Alliance): Good morning. I'm here with Dawn Walker from the Canadian Institute of Child Health. As Harvey mentioned, the Canadian Teachers' Federation is also a member of the National Children's Alliance.

We are 50 national organizations that work collaboratively to develop policy. If you look at the list of who we are, we're probably about as cross-sectoral as you could get, in that we represent organizations that work with and for and advocate for children, families, and youth in the areas of education, health, social services, environment, and a lot of grassroots, community-based kinds of programming in recreation. We have organizations as diverse as boys and girls clubs and the Ys, as well as the Canadian Nurses Association on the health side, pediatricians on the health side, the Canadian Institute of Child Health, education, schools, school boards.

So when we present to you today, we're looking at a broad range of what is our best shot at some important levers in policy you could consider that we feel will make a big difference to the lives of children, youth, and their families. When we look at how our kids are doing in Canada, we recognize that we need to address socio-economic issues, to look at issues such as child poverty, but we're also very aware of a lot of the current research on child health outcomes and well-being that gives us cause to consider that we need to look at some very coherent and coordinated policies, because kids in all socio-economic age ranges are not doing as well as they could and should in Canada.

So I'll just go through some of our recommendations, and then we will be pleased to answer questions on some of the detail.

To address some of the socio-economic issues, we're recommending that further investment be made. The initial investments in the child tax benefit have made a huge impact. We believe we should move from the current maximum of $2,440 up to $4,200 per child.

We're also looking at some recommendations on the tax side. We don't go into great detail on this, but know that many of the disability groups will. We're very concerned about the economic hardship for families of children with disabilities and illness and feel that we do need to look at some tax reform to address those costs.

It's really nice to be here not presenting some of our recommendations earlier about improvements to the parental leave, because we've certainly seen some of those come to fruition with the expansion to one year. Before they consider further expansion in time, we would like to recommend that the Government of Canada consider the fact that there's not the take-up needed with parental leave and that there are a lot of problems with the eligibility for people who should be able to get parental leave benefits. We think the best investment in parental leave to assist parents with brand-new children would be to expand the eligibility criteria, to look at widening the net to include part-time and self-employed people. We also feel that the benefits at 55% of earnings is a real hardship for many families and want to look at an increase up to 75% of earnings.

We've also been very pleased with progress that's been made over the last couple of years on the national children's agenda. We all know the work is not yet finished, but recognize the progress that's been made on the early child development initiative.

We've been doing a lot of research work looking at issues of children. You don't finish when you're six. We need to continue to look at programs and policies to address children of all ages. In particular, we have been doing some work in the area of kids in the age group six to twelve. Actually six- to twelve-year-olds are 9% of our entire population, 2.7 million children. Within that we need to recognize the numbers of aboriginal children. Although we don't make a lot of specific recommendations concerning aboriginal children in our brief, we certainly believe you should take seriously many of the detailed recommendations from aboriginal communities on how best to serve the needs of children on reserve.

Â (1200)

In the early childhood development agreement, as many of you probably know, provincial governments have a lot of range in how they can invest the money. One of the outcomes we've seen in many provinces is that child care has not been invested in, and in many cases actual expenditures have declined. So we would ask that federal, provincial, and territorial governments, in moving into the next phases of the early childhood development agreement, establish a coordinated national plan on child care. It is indeed a foundation for services and programs when we're thinking about our youngest children, zero to six.

We're also asking, as you make your deliberations towards the next budget, that we move forward on the national children's agenda and that the federal government put some investment into expanding to services for children in the six to twelve age group.

The other area we would like to put on the table in our recommendations is the impact substandard housing or lack of housing has on children. We want the federal government to seriously move forward to establish a national housing plan and allocate resources towards social housing initiatives. In particular, consider the affordable rental program.

In the research we've been looking at over the past year we are increasingly, as is the federal government, noticing that children's health is not optimal. Particularly, we're looking at issues of healthy living and obesity, and we would like to make two very specific recommendations in this area.

The first one is to allocate sufficient funds to implement recommendations arising from the national healthy living, physical activity and sport summit that's coming in February. We also have a very specific recommendation that we've been working on with our municipal governments and the Federation of Canadian Municipalities. We're really concerned about access to recreation opportunities and access to public spaces and green spaces. So we're recommending that within the model of infrastructure funds, the federal government establish a children's infrastructure fund. We're looking at beginning with $300 million over three years to help meet some of the physical activity needs of children. The way we're looking at it is that this should be really in the spirit of public spaces and family places, something that's not tied to user fees, but has flexibility to work with communities and local governments.

We also look at health care--this is what happens when you're as multi-disciplinary are we are--but we think that these are all clear priorities that have come through a real national process to bring them to your table. It is about allocating funding at this time to promote and facilitate the development of integrated systems of health, education, and social programs, so that we can start looking at models for coordinated access at the community level, recognizing that there are no clear distinctions when you're in the community with children looking for the kinds of services you need. They all meld together under health, social, and community services, and we need to look at funding towards that.

We're also looking, within health care, to thinking about protected, sustained, comprehensive, long-term budgets targeted towards children's health services.

The Chair: Thank you very much.

I thank all of you for your presentations and sticking to our time restrictions. We've had less time this year, and we appreciate that you have helped us out in this regard.

I'm going to allow every member in the room five minutes to do questioning, and I'll start with Mr. Jaffer.

Mr. Rahim Jaffer: Thanks, Madam Chair. And once again, thank you, all, for your submissions. It's unfortunate that we have limited lime and can't explore all your submissions as much as we'd like.

I have two questions. I was interested in your comments, Mr. Weiner, when you spoke about especially the immigration challenges, and I know the minister has been quite active in talking about how to integrate immigrants more effectively. I wonder if you could share with us some of the challenges that teachers specifically are facing within the system to integrate immigrants. You talked about the children when they get into schools. What sorts of things should the federal government be looking at, especially on the funding side, with that aggressive program of immigration, if that's where we're looking, to support the work that's being done on the ground with your organization?

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Mr. Harvey Weiner: There are obviously a range of challenges. Probably the most identifiable is the linguistic one, where a child enters school without any knowledge of either French or English.

I guess the point I was trying to make on that one.... The federal government, in determining the flow of immigrants, has not traditionally taken any responsibility for that. The argument--and we talk Constitution or jurisdiction--is that that's now in the domain of the province because education, K to 12, is provincial. Often these children arrive after September 30, so even the per capita pupil grant that is given is not provided because the deadline has passed. The school board and then the school, and the teacher finally, who is the field worker with that youngster, are faced with that difficulty. The resources to provide that kind of second language training are often not there or are so much in demand that the needs of the child cannot be served.

Then of course there are all of the cultural factors that are involved, because youngsters are coming in from different cultural backgrounds, etc., and these also have to be accommodated and integrated by the teacher in terms of classroom strategies, etc. What we are finding, particularly in large urban areas such as Toronto and Vancouver and Halifax, is that the range and diversity of backgrounds from which these children come are such that it is really creating enormous challenges for teachers. Without the support services and the help those services provide, even individuals who are able to work with the school, who are familiar with the culture and the language, are often not available.

So there is quite a range of challenges, and it would seem to me that the approach the federal government should take would be to sit down with both educators and provincial authorities and try to work out a comprehensive strategy that they would fund at least in part in order to meet some of those challenges. As we know today, seemingly the focus is that immigrants come in, but we only deal with the adults and the rest is your problem.

Mr. Rahim Jaffer: I appreciate that, and there was encouraging news that there will hopefully be better coordination amongst the federal government and the provinces. So we'll keep watch on that.

My next and last question is to Mr. Dale. You spoke about reviewing the SR and ED program and seeing how we could make it work better. I know that in the past, even though there has been a fair amount of success attracting businesses--you've even identified in your brief places like Ottawa and others--there has also been criticism that the tax incentive program has not in fact developed as much investment as it should.

What needs to happen alongside of an aggressive tax credit program like that in order to facilitate further growth? Do we have to start looking also at income tax rates and things like that, which tend to attract more investment and growth in Canada? What needs to balance that to really take advantage of the aggressive growth that can come out of an effective tax credit program for our research and development?

Mr. Jeffrey Dale: We can speak to the Ottawa situation only. There has been quite a strong growth of research based on spinoffs, spinoffs from existing companies or spinoffs and commercialization out of NRCs, the federal labs. The research and development tax credits have formed a very strong base to have them centred here. We've also seen that these credits are forming a strong base to have private companies set up research arms here in Ottawa. But it's not the only reason why they're here. They are coming here because of the attraction, because of the talent we have. We have a skilled talent pool so that it is easy for a company to start up here and to grow, especially in certain areas like telecommunications and software and microelectronics.

Part of my brief also talked about where we take it to the next stage. We have to encourage the commercialization aspects of the research that's happening now. How do we promote the growth of, we hope, publicly traded companies that will stay in Canada and run their global operations from Ottawa? What else do we need in terms of incentives? I think we need to continue with the tax reductions we have seen that are making our taxable environment very competitive right now, especially when we relate it to the U.S. We are more competitive than about half a dozen U.S. states already, and with certain planned reductions coming into place, we will continue to become more competitive. So I think we need to stay the course there, and we need to look more at how we commercialize these.

Â (1210)

The Acting Chair (Mr. Roy Cullen): Thank you, Mr. Dale.

[Translation]

The next person on the list is Mr. Paquette. You have five minutes, sir.

Mr. Pierre Paquette: Thank you.

I'd like to discuss two things with you, Mr. Weiner. First of all, you recommend the following:

...a national approach to quality education that strongly emphasizes the public role and the need for adequate public funding;

Obviously, if we were in France, that recommendation would make sense, but here in Canada, under the Constitution, the provinces are responsible for education, while the federal government is indirectly responsible for funding this sector. Therefore, I fail to understand why you have not made it a priority to increase transfers to the provinces. Take the example of Quebec. The province has tried to ensure a quality education system. It has frozen tuition fees and provided improved access to post-secondary education. However, when the government takes it upon itself to cut funding levels from 24% 20 years ago to 8% today, it is making it impossible for the level of government that is responsible for education to make the changes that are warranted or to meet its commitments.

The same holds true in terms of increasing the funds earmarked for income security. If the federal government reduces transfers to the provinces as it has done in the past--although it recently reinvested some funds in this area, the fact remains that funding levels are down nearly 40% over what they were 20 years ago--the provinces will be hard pressed to meet their commitments. Could you elaborate further on these principles with which, by the way, I totally agree?

I have another short question. Since I'm a teacher myself, I can understand the motivation here, but I'd appreciate some clarification from a federation such as yours. You recommend increasing the RRSP contribution limit. At present, Canadian taxpayers contribute on average anywhere from $3,000 to $4,000 to their RRSPs. You'd like the contribution limit to be increased to $27,000. Since RRSPs are a tax shelter, wouldn't such a move mean that the government was giving preferential treatment to a segment of the middle class or to people with high incomes who would thus be able to shelter their income from the tax man, even though, of course, the money would be for their retirement? Would it not have been better to recommend instead substantial improvements to the Canada Pension Plan? As everyone knows, the CPP has not been heavily indexed.

If I have any time remaining, I would like to put a question to the National Alliance for Children. The Alliance has made a recommendation that I wholeheartedly support, namely that parental leave no longer be associated with the Employment Insurance Fund. Here again, we have the example of Quebec where a parental leave initiative has been launched. However, the federal government refuses to transfer funds from the Employment Insurance Fund to Quebec. I'd also like to hear your comments on this subject. Thank you.

Mr. Harvey Weiner: Thank you for your questions.

Both of the examples you gave represent what I call areas of disagreement between the two levels of government. I totally agree with you that something needs to be done to improve the situation and to publicly fund education. That means the money must come from governments. Of course, there are different ways of going about it, but I think governments are wasting too much time arguing among themselves or blaming one other. We're not interesting in pointing the finger at anyone. The point is that public education is being privatized in different ways in each province.

To my mind, public education should be publicly funded. That's how I would answer your question. I'm not a financial expert and I'm not saying that the current system is the best one we could possibly have. Clearly, the system needs to be funded and if governments could agree on adequate funding levels, then they could address the problem of how to ensure essential services.

To answer your second question, I believe RRSP contribution limits have been frozen since 1986. There's no question that some people could contribute more. We agree with your suggestion that the pension plan could be improved overall, but we also think people should be maximizing their retirement savings. Today, we're seeing more and more people continue working at 65, 68 or 70 years of age because they can't afford to retire.

Â (1215)

[English]

The Chair: Thank you very much.

Mr. Cullen, please.

Mr. Roy Cullen: Thank you, Madam Chair. I have two sets of questions for the presenters, which gives me two and a half minutes per set. The first relates to policies that we could look at that would discourage urban sprawl, and the second set relates to policies that we could look at that would encourage the formation of more risk capital pools. I'll start with urban sprawl where I'm coming from, and look at Toronto, with so many cars and with air quality diminishing.

I pulled out some data a year or so ago, and I was surprised that the urban sprawl that I thought would be seen in Toronto didn't seem that bad, although others have refuted that. Do you have any data on urban sprawl statistics in Canada as compared to other jurisdictions? Secondly, if we could be doing a better job—which I suspect we could—what policies could we implement that would attack that problem?

Mr. Michael Roschlau: That's an excellent question, and certainly one we're very concerned about as well.

In terms of data on relative densities or the extent of sprawl, that data is available. You're quite right that while the sprawl that's happening in Canadian cities is a grave cause for concern, it isn't nearly as bad, if you will, as in some of the U.S. cities, around places like L.A., Phoenix, Denver, and so forth, where there is even a much lower density than what you have around Toronto, Montreal, and Vancouver.

Nonetheless, in our context, the sprawl that has been happening since the Second World War is one that makes for a much less efficient movement of people and goods around our communities. It is going to have significant impact, first, on the cost of providing that infrastructure, and then on the time it takes for people to get about their business and for us to move our goods around.

So, yes, the data is available. Canada is in a bit of a better position, but we're losing ground.

Mr. Roy Cullen: In terms of policies, I recall reading an article that said they have wholly different fiscal arrangements in the United States. The federal government would provide assistance for roads to those cities that had committed to very firm policies with respect to urban sprawl. I'm going to have to move to another question now, but if you have any ideas on that later, I would certainly be interested. Perhaps the other members of the committee would be, too, in terms of policies that would fight against urban sprawl.

Mr. Dale, I think the innovation agenda and finding ways to support growth are keys for us in government. You mentioned a number of instruments, like the refundability of the SR and ED. I think that's something we should look at, as are the investment tax credits for start-ups. Those would improve profitability for those companies, and that would in turn encourage more risk capital to move into those companies.

In terms of policies on the venture capital side or the angel capital side, I'm wondering if you have any ideas that would encourage the flow of risk capital formation.

Mr. Jeffrey Dale: What we've seen recently is that for the amount of risk capital that's out there in terms of venture financing, that pool is actually being fairly well maintained, but it is now going more toward later-stage investments. What we're faced with is a crunch on the very early-stage investments.

During an economic downturn especially, more ideas are generated than is the capital available to finance them. So what we're looking at is how to allow that early-stage investment for the start-up phase, the first $500,000 to $1 million in terms of advanced technology funding. The labour-sponsored funds were obviously something set up to help support that. As they've matured, however, they're looking for higher returns and less risk in their portfolios, so they're now moving to a later-stage type of financing.

It tends to be individuals putting this money in. It's high-net-worth individuals, people who have done it before and have had some success come out of this, people who are taking their net worth and putting it toward high risk. Therefore, what we've been looking at is a tax credit system that would be somewhat similar to what the labour-sponsored fund provided. It would encourage individual investors to sponsor high-risk, start-up capital investments.

Mike, I don't know if you have any other—

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Mr. Michael Darch (Executive Director, Ottawa Global Market, Ottawa Centre for Research and Innovation): The other thing to look at is the fact that Ottawa, in 2001, I believe, attracted 76% of the foreign venture capital coming into Canada. One of the reasons we've been successful at getting that venture capital is that we've been very aggressive in the U.S. market and now in the European market in regard to promotion. Certainly, programs such as the current EMDI program or something like that help the community go out and sing our praises.

I spend most of my time on the road in the U.S. and in Europe, and we're still not what we could call top-of-mind within those venture capital areas. The combination of making it easier for angels to invest plus helping us get the message out about how competitive we are at those levels would certainly assist.

The Chair: Thank you very much.

Mr. Martin, your time starts now.

Mr. Pat Martin (Winnipeg Centre, NDP): Thank you. I'm supposed to be on my feet in a few minutes in the House, but I appreciate this opportunity.

The Chair: Then you don't have to take all your time.

Mr. Pat Martin: I've waited this long, so....

The Chair: I can give it back to Mr. Paquette so that he can get his question answered.

Mr. Pat Martin: No, I'm going to use up my time.

To Mr. Lee, from the International Association of Fire Fighters, the point you made on the need for more hazardous materials training for your members and anyone else in the first responder category is a point well taken. If I understand your brief correctly, there is a curriculum developed by your union in the United States, in cooperation with the United States government, that's available, on the shelf, and accessible to us in this country at a fairly low cost, from what it looks like now.

I know what it costs to develop a training curriculum, because I've done that for other organizations. Are you running into any barriers pitching this to the Canadian government, that they just take it off the shelf and run with it?

Mr. Jim Lee: Yes, we are running into a number of barriers with the Canadian government in moving this forward. We think this is a perfect opportunity for the Canadian government to not have to reinvent the wheel here with regard to supplying some sort of training to the first responders in Canada.

This program is up and running in the United States, and running very well there. Our members are being trained on a continuous basis with regard to hazardous materials response, and we thought it was a natural progression to bring it into Canada and start training first responders from coast to coast. For the life of us, we don't know why the Canadian government is not moving forward in this direction when it's such a good deal at $500,000.

Mr. Pat Martin: It seems like an absolute bargain to be able to get this information and this safety training out to virtually every firefighter in Canada for $500,000. Again, I know how much it costs to develop a training curriculum. They could easily spend that in the developmental stage without even getting any training. It's a good deal.

Mr. Jim Lee: That's right. We're at a loss, to be quite honest.

Mr. Pat Martin: We have very little time, so I'd like to give you an opportunity to explain a little bit about what you meant with regard to the second point you were about to raise--that is, the supplementary death benefit for persons killed or injured on the job. Could you explain a bit more about how that works and how you would contemplate it in this country?

Mr. Jim Lee: The Canadian government does absolutely nothing right now to recognize a firefighter who dies in the line of duty.

Mr. Pat Martin: Other than workers' compensation, I suppose. Well, there's nothing the Canadian government does; that's the provincial government.

Mr. Jim Lee: The Canadian government does absolutely nothing to recognize firefighters who die in the line of duty, and we think it's about time they started recognizing firefighters who sacrifice their lives in the line of duty.

Mr. Pat Martin: What does the U.S. do?

Mr. Jim Lee: The U.S. had a plan in place for a number of years. It started out as a minimum of $50,000 and it has been raised on a continual basis to the point of $250,000 right now. It's indexed to inflation. In light of the disaster in New York City, the American government, under President Bush, made it retroactive to January 1, 2001, and increased it to $250,000 to look after the widows and the children of the firefighters who died in the line of duty.

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Mr. Pat Martin: Would you expect opposition to this from other workers? Or what has been the reaction within the labour movement? When a policeman dies on the job, it's tragic. When an electrician dies on the job, it's tragic. How is it more tragic when a firefighter dies on the job?

Mr. Jim Lee: I think you have to look at the role of a firefighter and you have to look at exactly what happened on September 11. When other people left the buildings, left these unsafe areas, firefighters moved in and put their lives at risk. That was made very evident.

We have absolutely no opposition from the other labour movements from across Canada in seeking this. I think they recognize that firefighters go beyond the call of duty when serving the citizens of Canada, the taxpayers of Canada. Seven firefighters have died in the line of duty in the last 12 months across Canada, and they've received absolutely no recognition from this government. We think it's about time they do.

The government has been hiding behind a jurisdictional argument that this is more a provincial problem, but we don't believe that's true. Firefighters deliver a service to Canadian citizens, and we think it's high time the Canadian government recognized that.

Mr. Pat Martin: Do you think that both of the issues you raised belong under the $7.7 billion security fund?

Mr. Jim Lee: I think the hazardous materials initiative should be under the $7.7 billion.

I'm open for discussions on the PSOC. I'd like to be able to sit down with somebody from this government and see where we can do something to recognize the firefighters who pay the ultimate sacrifice.

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

Mr. Pat Martin: Thank you.

The Chair: Ms. Minna.

Ms. Maria Minna: First of all, I want to say I'm not sure how often an MP gets to see the work that he or she has done reflected. I have to say that today I'm feeling rather good and that maybe the nine years of work on the Hill by the invisible backbenchers was not so bad. The reason I say that is because the child benefit came about as a result of eight MPs, including myself, lobbying for a full year the Minister of Finance and all the other ministers and finally the PM. The first installment of the child benefit was made, as you know, in 1996. We asked for $500 million. We got $250 million and a commitment for further increases. Then our little troop moved on to the early childhood development program area when I was chairing the Social Policy Committee at caucus, and that resulted in the agreement of 2000. Now we need to improve all of that.

You talked about child care and the ECD program not linking. Some provinces have actually withdrawn money from child care. In Ontario that's what's happening. Toronto has lost positions. Meanwhile, some new ECD programs are starting in my riding. The problem with that is we're setting up new infrastructure to provide the ECD program and taking away from the infrastructure of child care, and to me they're one and the same. There ought to be--and I want to hear whether you agree with my recommendation--a universal child care program across Canada, and it should be attached to community schools in areas where that's possible. In rural society we might look at some other solutions. There would then be a continuum, and it would address the issue of children aged six to twelve who may have special needs. In terms of actual academics, that should be taken care of at school, but the other specialties could be taken care of within the system. So an early childhood development program should be an integral part of child care and part of the community setting in that sense. I just want to hear whether you would agree with that in terms of it becoming part of the school structure.

On page 12 you recommend a third party to look after the rights of children and so on. One of my colleagues has been pushing for a commissioner for children in Canada. Maybe you could tell me if that's what you're thinking of.

My final question is for Mr. Weiner, and it has to do with immigrant children. I worked with immigrant people for 20 years and I went through that system myself, and there wasn't any assistance back in the 1950s, so I understand the difficulty of learning English or French and dealing with different cultures. In addition to the language issue and the remedial assistance that children sometimes require, when you talk about programs, are you also talking about supportive programs for families because of language barriers, cultural differences, work cycles, and so on, and just the stress that immigrant families go through?

The Chair: I can't allow more time.

Ms. Maria Minna: I apologize. There's so much there.

The Chair: Go ahead.

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Ms. Dianne Bascombe: On the issue of child care, that's certainly what we had in mind in our recommendation. We're looking at a coordinated, coherent policy where child care plays a foundational role. We don't need to build it into the constraints that are there within the funding structures of the school system itself, but we do need integrated systems at the community level. We want to see schools as hubs, obviously, in the community.

Ms. Maria Minna: I just meant adjacent.

Ms. Dianne Bascombe: Yes, absolutely.

And we also want to recognize the range of services involved in child care, from regulated centre-based care, family child care, family resource programming, the full range of supports. We hope that with the foundation we have in the early children development agreement, governments, with us hopefully coming to the table soon, can really look at how we can build on what's there with the ECD to reach that dream.

The National Children's Alliance has always supported the notion of a commissioner for children, but we see that role as something very different from our role as the voluntary NGO in third-party monitoring. With third-party monitoring, in the brief we're really looking at it in the context of the social union framework agreement, the early childhood development agreement, and our role in being able to bridge and link practice, research, and policy on how kids are doing in Canada and how that relates to our policy environments and frameworks and the current research.

Ms. Dawn Walker (Executive Director, Canadian Institute of Child Health, National Children's Alliance): One little point is that the Canadian Coalition on the Rights of Children, which is also linked with the alliance, has supported Senator Pearson and the group's recommendation for a commissioner of children's rights, and we would expect that to be linked to a voluntary sector component as well.

The Chair: Mr. Weiner, very briefly.

Mr. Harvey Weiner: Thanks very much, Ms. Minna, for supplementing--you did it very well, and I would be in full agreement--my response to Mr. Jaffer. Certainly, we're talking about integrated services, and children of immigrant families are part of that. It means providing those support programs, it means ensuring that the parents become familiar with Canadian school systems and understand what is being done, and it means an opportunity for the teachers as well to understand where the parents are coming from. Work arrangements obviously create some difficulties at times for meeting. If we can get that community school situation, which certainly is one of our objectives, where the services are there, they're accessible, they're not necessarily being provided for teachers--teachers are being asked to do what we wouldn't ask God to do at times, just covering all the bases in the absence of the resources--we certainly would be doing a better service for both the immigrant children and the families from which they come.

Ms. Dawn Walker: We want to throw a public health nurse in that mix too.

The Chair: Thank you.

Mr. Speller.

Mr. Bob Speller: Thank you very much, Madam Chair.

Given the time, I have a quick question for Mr. McGuinty. I've been reading through your report here and looking at your priorities for this year. You talk about promoting sustainable communities, but you talk about them in terms of urban sustainability. I come from a rural part of the country, I represent an agricultural base. As I read through your whole document here, I can't really find where rural Canada ties into this. You talk about preserving and enhancing the rich legacy of natural capital, which is important, the Prime Minister's commitment to parks, and I suppose parks are in rural, remote Canada, but you don't talk about the importance of natural capital such as farmland or forests or that area. You talk about supporting a better understanding of links between environmental regulation and human health, and you talk more, it seems, about polluters than some of the problems being faced in rural areas, remote areas too in the north. You talk about building the knowledge base and capacity for achieving sustainable development in Canada. Again, you don't really touch on parts of the country I represent.

I'm wondering why that is. Are there not priorities you would have to look at in rural Canada? I speak specifically to questions like agricultural land, where we're going. I talk about a number of environmental issues I think are important in rural Canada that governments need to address.

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Mr. David McGuinty: Thank you very much for the question. The reason we weren't able to get into the rural component in the presentation was shortage of time. In fact, what we're looking at now on our natural heritage task force very closely is this whole question of the state of nature conservation in Canada, and that interface is usually in our working landscapes, places where we fish, for example, in the case of seascapes, where we farm, where we mine, where we log, where we're exploiting our natural resources in one form or another. We're getting at the rural question from the optic of conservation of nature.

We're not naive, and we've not rural romantics either. The fact is that if we're going to ask Canadians who live in rural areas to do better and more conservation, we will have to pay them, and we'll have to find the mechanisms and the approaches for doing better and more conservation as we farm, as we log, as we fish, as we mine. We will have to find those mechanisms that are going to soften the blow. It's all fine and dandy for somebody on a 60th floor condo in downtown Toronto to feel good about ten new parks and five new marine protected areas, but it will be rural Canadians, just as it's northern Canadians, who are going to be stewarding the land for us outside our urban areas.

So lest we leave you with the impression that we're not concerned, we're extremely concerned about the hemorrhaging going on in rural communities today. We think there are some real opportunities. If we're going to ask small communities in rural areas, for example, to act as gateway communities, to play a larger role in doing more and better conservation, we need to find where the trade-offs lie and we need to find how we're going to compensate those communities for doing it.

We're not in the conservation business because we like bears and bunnies alone, because we like ecological integrity, we're in the conservation business because we're going to need the DNA over the next hundred years. This is going to be about genomics. Who's got the DNA? Who'll find the biomimicked solutions to our problems? What is it that people jumping out of helicopters as bio-prospectors from Raleigh, New Jersey, know that we don't know? They're jumping off helicopters all over the world because they want the DNA cultures and samples. So many of our solutions in the future are going to be derived from hundreds of millions of years of evolved solutions, and rural Canadians have a role to play in not only the protection of that biodiversity, but ultimately, it's careful exploitation.

So we are getting to the rural question largely though nature, by asking some sober, tough questions about where those trade-offs begin and trying to find the mechanisms, working with the pulp and paper industry and other players in those working landscapes to see how we can come up with a balance.

Jean, do you want to add something?

Mr. Jean Bélanger: We've also been looking at how we can help in the fiscal reform area with regard to agricultural landscapes. We have the results of our study looking at how environmental, ecological farm plans could be developed and give a sounder basis for farmers to protect sensitive areas from an ecological standpoint, looking at conservation cover programs and so on. We believe that in those areas much more could be done from a fiscal responsibility perspective, using fiscal measures to help out in those areas.

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Mr. Bob Speller: We do too, and we've been promoting that idea. It would be good to see a very important national organization such as yours out in the public promoting that too.

Mr. Jean Bélanger: Yes, and we have been passing it through the committee of the ministers of agriculture and environment.

The Chair: Thank you very much.

Every day we learn something, something stands out. I was interested in your statistic on the brownfields today; that was one I had never heard, that leveraging statistic. So again, each and every one of you brings a lot to the table for us to consider as we write this report and hear all the witnesses, and I thank you for your expertise and for taking the time out of your schedules to join with us. I thank my colleagues, and I'll see them in a few hours again around this table.

We are adjourned for this morning.