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37th PARLIAMENT, 2nd SESSION

Standing Committee on Finance

EVIDENCE

CONTENTS

Friday, October 31, 2003

0835

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

Mr. Stuart Briese (President, Association of Manitoba Municipalities)

0840

The Chair

0845

Mr. Ed Allinott (Second Vice-President, Manitoba Chambers of Commerce)

0850

The Chair

Mr. Verne McComas (Programs Coordinator, Manitoba Schizophrenia Society - Lifelinks)

0855

The Chair

Mr. Roland Stankevicius (Manitoba Federation of Union Retirees)

Ms. Marianne Cerilli (Manitoba Federation of Union Retirees)

0900

Mr. Roland Stankevicius

0905

The Chair

Mr. Roland Stankevicius

The Chair

Mr. Roy Cullen (Etobicoke North, Lib.)

Mr. Roland Stankevicius

Mr. Roy Cullen

0910

Mr. Roland Stankevicius

Ms. Marianne Cerilli

Mr. Roy Cullen

Ms. Marianne Cerilli

Mr. Roy Cullen

Mr. Stuart Briese

0915

Mr. Roy Cullen

Mr. Ed Allinott

The Chair

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

0920

Mr. Stuart Briese

Ms. Judy Wasylycia-Leis

Mr. Roland Stankevicius

0925

Ms. Judy Wasylycia-Leis

Ms. Marianne Cerilli

Ms. Judy Wasylycia-Leis

Ms. Marianne Cerilli

Ms. Judy Wasylycia-Leis

The Chair

Ms. Judy Wasylycia-Leis

Ms. Marianne Cerilli

Ms. Judy Wasylycia-Leis

Mr. Ed Allinott

The Chair

Ms. Marianne Cerilli

0930

The Chair

Ms. Marianne Cerilli

The Chair

Ms. Marianne Cerilli

The Chair

Ms. Marianne Cerilli

The Chair

Mr. Raymond Simard (Saint Boniface, Lib.)

Mr. Stuart Briese

Mr. Raymond Simard

Mr. Stuart Briese

Mr. Raymond Simard

The Chair

0935

Mr. Raymond Simard

Mr. Ed Allinott

Mr. Raymond Simard

Mr. Ed Allinott

Mr. Daniel Overall (Director of Policy and Communications, Manitoba Chambers of Commerce)

Mr. Ed Allinott

Mr. Raymond Simard

Mr. Roland Stankevicius

Mr. Raymond Simard

The Chair

0940

Mr. Verne McComas

The Chair

Mr. Verne McComas

The Chair

Mr. John Borody (President, Canadian Executive Council on Addictions)

1005

1010

The Chair

Mr. Don Giesbrecht (President, Manitoba Child Care Association)

1015

The Chair

Mr. Wayne Bollman (President, Manitoba Home Builders' Association)

1020

1025

The Chair

Mr. Wayne Bollman

The Chair

Mr. Wayne Bollman

The Chair

Dr. Valerie Squire (Program Coordinator, Homoeopathic Medical Education and Research Centre Inc.)

1030

Dr. Kumar Belgaumkar (Homoeopathic Medical Education and Research Centre Inc.)

The Chair

Dr. Emõke Szathmáry (President, University of Manitoba)

1035

1040

The Chair

Mr. Raymond Simard

Dr. Emõke Szathmáry

Dr. Joanne Keselman (Vice-President, Research, University of Manitoba)

1045

Mr. Raymond Simard

Dr. Joanne Keselman

Mr. Raymond Simard

Dr. Emõke Szathmáry

1050

Mr. Raymond Simard

Mr. Wayne Bollman

Mr. Raymond Simard

Mr. Wayne Bollman

The Chair

Ms. Judy Wasylycia-Leis

Ms. Pat Wege (Executive Director, Manitoba Child Care Association)

Ms. Judy Wasylycia-Leis

Ms. Pat Wege

1055

The Chair

Ms. Judy Wasylycia-Leis

Ms. Pat Wege

1100

Ms. Judy Wasylycia-Leis

The Chair

Ms. Judy Wasylycia-Leis

Dr. Emõke Szathmáry

The Chair

Mr. John Harvard (Charleswood St. James—Assiniboia, Lib.)

Dr. Emõke Szathmáry

Dr. Joanne Keselman

1105

Mr. John Harvard

Dr. Joanne Keselman

Mr. John Harvard

Dr. Emõke Szathmáry

Mr. John Harvard

Dr. Emõke Szathmáry

1110

Mr. John Harvard

The Chair

Dr. Emõke Szathmáry

The Chair

Mr. Roy Cullen

Mr. John Borody

Mr. Roy Cullen

1115

Mr. Wayne Bollman

Mr. Derek Thorsteinson (Chair, Board of Directors, Manitoba Home Builders' Association)

Mr. Roy Cullen

Mr. Derek Thorsteinson

Mr. Roy Cullen

Mr. John Daniels (Vice-Chair, Board of Directors, Manitoba Home Builders' Association)

Mr. Roy Cullen

The Chair

1120

Mr. Roy Cullen

The Chair

Mr. Derek Thorsteinson

The Chair

Dr. Valerie Squire

The Chair

Dr. Valerie Squire

The Chair

Mr. Geoffrey Elliott (Vice-President, Corporate Affairs, CanWest Global Communications Corp.)

1135

The Chair

Ms. Debra Mayer (Director, Manitoba Division, Child Care Advocacy Association of Canada)

1140

1145

The Chair

Mr. Harry DeLeeuw (Present Member and Past President of the Canadian Real Estate Association; Winnipeg Real Estate Board)

1150

The Chair

1155

Ms. Judy Dyck (Director of Awards & Financial Aid, University of Winnipeg; President, Canadian Association of Student Financial Aid Administrators)

1200

The Chair

Mr. Robert O'Kell (Dean of the Faculty of Arts, University of Manitoba, As Individual)

1205

The Chair

Mr. Roy Cullen

1210

Mr. Geoffrey Elliot

Mr. Roy Cullen

1215

Ms. Debra Mayer

Mr. Roy Cullen

The Chair

Mr. Roy Cullen

1220

Mr. Peter Squire (Director , Public Affairs, Winnipeg Real Estate Board)

Mr. Harry DeLeeuw

The Chair

Ms. Judy Wasylycia-Leis

Ms. Debra Mayer

1225

Ms. Judy Wasylycia-Leis

Mr. Peter Dueck (Member-at-large (Universities), Director, Enrolment Services, University of Manitoba, Canadian Association of Student Financial Aid Administrators)

Ms. Judy Wasylycia-Leis

Mr. Geoffrey Elliot

1230

Ms. Judy Wasylycia-Leis

The Chair

Ms. Judy Wasylycia-Leis

Mr. Harry DeLeeuw

Ms. Judy Wasylycia-Leis

Mr. Harry DeLeeuw

The Chair

Mr. John Harvard

Mr. Peter Dueck

1235

Ms. Judy Dyck

Mr. John Harvard

Mr. Geoffrey Elliot

Mr. John Harvard

1240

Ms. Debra Mayer

Mr. John Harvard

The Chair

Mr. John Harvard

Mr. Robert O'Kell

Mr. John Harvard

Mr. Harry DeLeeuw

1245

The Chair

Mr. Peter Dueck

The Chair

Ms. Debra Mayer

1250

The Chair

Mr. Harry DeLeeuw

The Chair

Mr. Robert O'Kell

The Chair

Mr. Harry DeLeeuw

Mr. Peter Squire

1255

The Chair

CANADA

Standing Committee on Finance

NUMBER 094

2nd SESSION

37th PARLIAMENT

EVIDENCE

Friday, October 31, 2003

[Recorded by Electronic Apparatus]

¾ (0835)

[English]

The Chair (Mrs. Sue Barnes (London West, Lib.)): Pursuant to the order of the day, we will continue our pre-budget consultations of 2003, starting with the first of four panels today in Winnipeg, on Friday, October 31.

We are very pleased to have with us, from the Association of Manitoba Municipalities, Stuart Briese, the president. Welcome.

From the Manitoba Chambers of Commerce, we have Ed Allinott, second vice-president, and Daniel James Overall, director of policy and communications. Welcome to you both.

From the Manitoba Schizophrenia Society--Lifelinks, we have Verne McComas, the program coordinator. Mr. McComas, welcome.

From the Manitoba Federation of Union Retirees, we have Roland Stankevicius and Marianne Cerilli. Welcome to you both.

Colleagues, our last participant has cancelled, is not coming nor sending a brief.

We will go in the order on the agenda, with up to seven minutes for each presenter.

We will start with the Association of Manitoba Municipalities. Please go ahead, sir.

Mr. Stuart Briese (President, Association of Manitoba Municipalities): Thank you, Madam Chair. Good morning.

The Association of Manitoba Municipalities represents all 199 incorporated municipalities across the province of Manitoba. That includes the city of Winnipeg.

We have a number of issues we'd like to raise with you today, the first being infrastructure renewal. We were pleased to see a 10-year infrastructure program put in place in the last budget. We do believe it needs more funding in it and we would really like to see it front-loaded somewhat. We've been told that it's a down payment, and we hope that is true.

Second, we would also like to thank you for committing $15 million to each territory and province, rather than the old formula that was used. That has a significant impact on the province of Manitoba.

On the issue of a national highways program, we would like to see more money come back to the Province of Manitoba out of the federal fuel tax. At the present time $160 million a year in federal fuel tax goes out of the province. Roughly 3% of that comes back into the province of Manitoba toward roads through the SHIP program and the prairie grain roads program.

We have heard from a number of ministers of government that there is a movement to consider putting some more of the fuel tax back into the provinces and into transportation in those provinces. We are faced with a fairly crumbling highway and roadway system in this province, and the city of Winnipeg also is interested in some rapid transportation issues. We think it's high time that some of that money did come back to this province.

On the issue of airport funding, in Manitoba we have 11 regional airports that were turned back over to the municipalities a number of years ago, and there was funding to follow that through the airports capital assistance program. Unfortunately, that funding has not been adequate to cover all the costs that are necessary.

A secondary issue to that is the CAR 308 regulation on firefighting, which is very costly to some of these airports. At the present time there is only one airport in Manitoba, the city of Thompson, that is affected by the CAR 308 regulation. But we do not want to see that extended to all the regional airports. It's just a tremendous cost, which those municipalities and communities aren't capable of handling.

On rural water infrastructure, we had a task force of our own organization a number of years ago in which we looked at the issue in depth. We have quite a large number of boil water orders across the province into northern Manitoba, into the northern association of community councils and throughout our incorporated municipalities.

We structured a proposal at that time of a 10-year, $180 million program. We knew that money couldn't flow all at once. We've tried to structure something that would indicate that we were willing to work with the other two levels of government to put that infrastructure in place over a period of time.

The infrastructure program that we're just finishing up, the Canada-Manitoba infrastructure program, is addressing some of it, and there is also some money that came out of the agricultural framework policy for drought-proofing, which we in Manitoba have been using to put in rural water lines to the communities with boil water orders.

We think it's critical that more money flow into those types of programs, because clean water is a right of every Manitoban and every Canadian. Once again on the infrastructure programs, in Manitoba our demand for infrastructure dollars is about seven to one for every dollar that we've been able to allocate.

¾ (0840)

I sit on the selection committee on infrastructure programs. We've asked for a separate infrastructure program across Canada to address recreation facilities. Manitoba is maybe a little more unique than some places in that respect. Most of our recreation facilities were centennial projects. They're 50 years old and crumbling on us. They've become very expensive to replace. And recreation is a key component of healthy, clean, good living for people in rural Manitoba.

Those are the infrastructure issues I wanted to discuss.

Another issue is some of the problems we are having in this province with fisheries compliance officers. In the last two years the federal government has moved fisheries officers all the way across the prairies. They have a very strict act. They won't change their ways very much, and they won't negotiate with us very much.

They are adding huge amounts of infrastructure costs to what we're doing. In these times of limited infrastructure dollars we're finding that in projects municipalities are doing--and to some extent even the provincial government is doing--the costs are increasing by as much as 50% on those just to meet the fisheries regulations.

We think there's a lot more room for cooperation in this, and we also think that the Fisheries Act does need a review. It's one of the oldest acts in Canada. It was written in the 1880s, and it needs a review. We've had some indication that this may be going to happen, but we certainly want municipalities to be at the table, probably through the Federation of Canadian Municipalities, and have input into a review of the Fisheries Act.

Last, I would like to touch on what has become our biggest issue in the last short period of time, and that's the BSE crisis and to some degree the drought conditions in some areas of the province. The BSE crisis is huge. It's something we've never been through before. Government's own estimates are that it's cost us $11 million a day in the economy. We're somewhere around 175 days into that crisis now.

There are certain things the provincial government can address, and these are the drought conditions and the shortages of feed. There are other areas the provincial government can only address with the help of the federal government. We feel like we've missed out somewhat on this issue.

We've asked that there be a cash advance program put in place all the way across Canada on animals that have to remain on farms past their normal date. We've been turned down on that. What we're talking about with the cash advance is a repayable loan against the product that we produce, similar to what the Canadian Wheat Board does. We do not understand why that isn't accepted.

Minister Vanclief does say that he thinks his agricultural framework policy will address that. We have communities in crisis right now, producers in crisis, but communities in crisis economically. The agricultural framework policy may address it, but it's somewhat down the road. We're in trouble right now--big trouble.

Second, related to the BSE is the cull animal aspect, or a better phrase is probably mature breeding livestock. With the border closed to live animals, and expected to remain closed to those particular animals for quite some time--and that was in the big market--it is an increasing problem. We know the government is exploring this issue, but those are two issues that are just beyond the provincial government to handle.

That really concludes the things I wanted to bring to the attention of the committee. I thank you for your time and the opportunity to present here. Thank you very much.

The Chair: Thank you very much.

Now we'll go to the Manitoba Chambers of Commerce. Go ahead, sir.

¾ (0845)

Mr. Ed Allinott (Second Vice-President, Manitoba Chambers of Commerce): Thank you, Madam Chair and members of the committee. It's a pleasure to present this morning the Manitoba Chambers of Commerce's presentation, which we've submitted in writing to the Standing Committee on Finance regarding the pre-budget consultations.

The Manitoba Chambers of Commerce is the umbrella organization for Manitoba's chamber movement. With membership comprised of local chambers as well as direct corporate members, the Manitoba chambers represent in total approximately 10,000 businesses in 76 communities across Manitoba.

This morning I would like to highlight just a few key messages in our written presentation. Before I do that, though, I'd like to basically recognize the federal government and say they should be applauded for undertaking the many new initiatives that have enhanced the vitality of Canada's economy and the prosperity of our citizens.

Just to cite a few examples, there are the commitment to reallocate $1 billion per year from existing spending programs and initiatives to help fund new spending priorities for Canadians, the increase in the RPP and RRSP annual contribution limits, the commitment to examine whether the tax pre-paid savings plans could be a useful and appropriate mechanism to improve the tax treatment of savings for Canadians, Parliament's intent that the EI program be run on a break-even basis, and of course the raise in the small-business deduction limit.

The Manitoba Chambers of Commerce endorses the recommendations contained in the Canadian Chamber of Commerce's submission to the standing committee that outline the budgetary plan that Canada needs in order to meet its challenges. The recommendations of the Canadian Chamber of Commerce in relation to the three targeted areas of government spending, debt reduction, and tax reform have been reiterated in full in our submission, with additional comments from the Manitoba chambers as appropriate.

In addition to the three main recommendations from the Canadian Chamber of Commerce on government spending, which was to limit growth in program spending, end the practice of last-minute or fiscal-year-end new spending initiatives, and undertake a thorough review of all programs to identify areas where spending can be reduced or eliminated, the Manitoba Chambers of Commerce respectfully suggests that the government must--we believe they really must--make more effective use of the legislative committees and the Treasury Board of Canada.

The Standing Committee on Public Accounts should review every federal government department. Much can be done through vetting of public estimates. Holding everyone more accountable in these times is critical for our government. In the past three federal budgets, program spending has increased over $29 billion. It is the position of the Manitoba chambers that expenditures have increased to the point that government should be required to explain how its spending has been efficient and effective and justify in a detailed manner why it needs more.

When personal or corporate income slows and there are few places where one can reasonably cut expenditures, the only way to balance the books, so to say, or keep us out of the red, is to reallocate priorities and the spending that goes with those priorities. We challenge the federal government to do so.

The Manitoba Chambers of Commerce also agrees with the Canadian chamber's position on debt reduction, which is to implement a policy of fiscal restraint and continue to allocate the contingency fund, if unused, to debt reduction. You know, while we recognize and applaud the substantial progress that has been made in reducing the federal debt, the reality is the debt is still high by historical standards.

The fact of increased spending on programs that has occurred already and is currently being called for and demanded, the benefits of further debt reduction to make Canada less vulnerable to interest rate fluctuations, and the pressure from the demographic shift in changes that we will see in the next 10 to 15 years, as the senior population as a share of the working-age population almost doubles--all of these things attest to the wisdom of accelerating the planned repayments in debt to ensure that we have a solid future.

The third area that we recognize is taxation. Here too we support the recommendations to allocate most of the planned surplus to tax reductions to make Canada more competitive internationally, for example the marginal tax rate cut for all taxpayers, raising the threshold of the marginal personal income tax rates to $115,000, the EI program premium rate reductions, the increase in the threshold of the small-business deduction limit to $400,000, plus many others that are outlined.

¾ (0850)

The Manitoba Chambers of Commerce fully supports these tax reforms. In fact, throughout the years we have many submissions from local members that have often expressed a desire and a need for these measures, these tax reductions and reforms, to take place.

One of the other things that happens in the chambers of commerce each year is the lobbying effort of our members and chambers. We do this through passing resolutions each year at our annual general meetings. This past year at the annual general meeting for the Manitoba chambers, a number of resolutions were passed that we believe will have implications in relation to the federal budget next year.

The Canadian Chamber of Commerce speaks of Canada's productivity challenge. One way of meeting this challenge is to think smarter--in other words, engage in productive actions. The Manitoba Chambers of Commerce presented a resolution to the Canadian chamber's annual general meeting entitled “Identity Theft”. Essentially, the resolution seeks amendments to the Criminal Code. It will check an element of criminal activity that is growing with the advance of technology and is costing the Canadian economy approximately $2.5 billion per year.

Both the Canadian and Manitoba chambers also endorse productive spending--the investments in education, health care, and infrastructure that are essential to raising productivity and overall economic growth. Over the last five years membership in the Manitoba Chambers of Commerce have passed resolutions calling on the federal government to make the investment in Canada's transportation network that is commensurate with the level of fuel tax it collects. This is a critical issue to our nation's future and it will not go away.

Finally, over the past year we've seen fires, droughts, floods, SARS, West Nile, power failures, BSE--all of significant impact on Manitoba and western Canada. It seems that 2003 could be described as the year of the disaster. The impacts of these issues have served to highlight the importance of an effective partnership between provinces, territories, and the federal government.

Whether they are issues of jurisdiction, responses to crises, or funding arrangements, Canadians would be better served by more productive relationships between the provinces, territories, and the federal government. We encourage that to continue.

I'd just like to close by suggesting that our program spending in the 2002-03 federal budget stands at over $138 billion. The Manitoba Chambers of Commerce recommends that our nation's government not seek out new horizons for overall spending, but seek new ways for the money that is being spent today to be spent better to meet the needs of Canadians as we go forward. This will free up additional revenues and can fund the tax reforms proposed by the Canadian chambers--tax reforms that we believe will meet Canada's productivity challenge as move forward.

The Manitoba Chambers of Commerce thanks the Standing Committee on Finance for this opportunity to present. I look forward to answering any questions.

The Chair: Thank you.

We'll go to the Manitoba Schizophrenia Society--Lifelinks. Go ahead, please.

Mr. Verne McComas (Programs Coordinator, Manitoba Schizophrenia Society - Lifelinks): Thank you.

The society is still concerned about the lack of strong support from the administration for the existing legislation. The members of Parliament have legislated matters that would help people who suffer from schizophrenia, for example, or serious cases of depression, but they don't always result in a lot of use by people who are really seriously ill and become ill when they are in their late teens or earlier and then end up spending a whole life in some kind of support from within the family and from the community.

Today I want to draw attention particularly to the disability tax form, which discriminates between mental illnesses and ordinary illnesses. I would like, first of all, to have you look at the disability form and see that there are cases in the form itself that show that people who suffer from one kind of illness or one distinguishing feature of the illness are not being treated as fairly as they might be. It's a matter of changing one word, “and” to “or”, which was done in the case of other illnesses that are more visible, but the administration tends to ignore their own tax court, as I pointed out at the bottom of the first page of my initial submission.

I won't take up much more of your time. I just want to say that psychiatrists get tired of filling out disability forms and trying to explain to the public and to the administrators of the tax legislation the complexity of the illness--schizophrenia particularly.

We think the legislators can do a little more. I encourage you to take time later to read my presentation and think about it a bit and see whether you can't do something to show support for the people who are trying very hard to raise money and to get support for a very serious illness.

I particularly want to draw your attention to the situation with regard to the psychiatrists. It's not a popular field to work in. It's a very difficult and discouraging field. We need more support, and we need more research. We're not getting the kind of research that's going to result in a very quick answer.

We've looked into the question of the DNA. We can't just lie back and say, well, that will solve it some day. It won't. We have to get involved. We have to get the families involved. One way of doing that is to show the kind of support that you have been giving us, but it's not dribbling down to the level where people are dealing with this illness.

In summary, I would simply say take a little interest in what's happening in the real world, and if you have time, drop in and see some of the people who are living in these residences cropping up around the city.

In Saskatchewan, I found that my sister is living in a beautiful home and the people are caring, but she is, as far as I know, the first person with schizophrenia who's been able to be taken care of. I don't mean that she requires a lot of care, but she does need some care. She is 76 years old, and she is getting that kind of care now.

When she took ill, she was in the air force. She was dropped on the streets of Toronto, 50 or more years ago. She has been suffering all her life, and just now she's gotten into a nice residence--something similar to what most elderly people get, but it's not open to most people with schizophrenia.

¾ (0855)

Thank you.

The Chair: Thank you very much.

I'm sure you're aware that the disability subcommittee of the House of Commons also has a website and takes input at any point in time. I encourage you not only to come to see us, but also, from time to time as appropriate, to try to feed into that process. It's very much relevant, and we agree.

Thank you.

Now we'll hear from the Manitoba Federation of Union Retirees. Please go ahead, sir.

Mr. Roland Stankevicius (Manitoba Federation of Union Retirees): Good morning.

My name is Roland Stankevicius, and I'm substituting for Al Cerilli. My partner here this morning is Marianne Cerilli, the youngest of six children of Al. Al is unfortunately unable to be here because he suffered a stroke on the 15th of October, but he is doing very well at St. Boniface Hospital in rehabilitation. He sends his greetings and hopes you will listen carefully to his presentation.

Ms. Marianne Cerilli (Manitoba Federation of Union Retirees): I know Al would be upset with me, Roly, if I didn't speak for myself.

I just want to introduce myself, Marianne Cerilli, and also say that I have been an MLA in Manitoba for almost 13 years, until this past year—from 1990—and currently am teaching, at the University of Winnipeg, the women, gender, and politics course.

I am pleased to support Al's brief.

¿ (0900)

Mr. Roland Stankevicius: This is the Congress of Union Retirees and Manitoba Federation of Union Retirees presentation for the House of Commons Standing Committee on Finance's pre-budget consultations.

Once again, welcome to Winnipeg, Manitoba.

CURC/MFOUR in past submissions to the House of Commons finance committee has insisted on certain changes to improve conditions of older persons, children, the poor and those in poverty, and to advance progress on issues related to health care, dental care, drug care, pension reform, education, housing, transportation, and corporate taxation.

We in Canada pride ourselves on being a modern and caring society. We are losing ground in world standing simply because those who have wealth will not share, but grab more and more of Canada's wealth while the federal government allows it to happen. Ottawa looks on while some in government, in positions of authority, grab a little change and a few dollars for themselves, perpetuating the corporate greed that has been allowed to thrive and to lower ethical and moral standards and even the perceptions of politicians.

Mr. Paul Martin, in his grab of the Canada Steamship Lines pension, has failed to provide the standard of leadership and care that is expected. I draw your attention to the article from the Financial Postdated Monday, July 14, where it is reported that the accumulated pension surplus of Canada Steamship Lines is being split, and $83 million is going back into the company that in fact should be the deferred wages and earnings of the workers and should be part of their plan for the life of that plan.

CURC/MFOUR in many presentations to your committee has spoken out and remained vigilant and will continue to fight for fair and just pension plans. In fact, Canadian retirees have had to threaten Mulroney and Chrétien with political fights at election time to have those federal governments back off the family income provisions on old age pension plans that would have clawed back old age pension benefits, in particular for female retirees.

The question CURC/MFOUR is asking is what is the position of Mr. Martin on protecting Canadian pensions? CURC/MFOUR has campaigned for real, beneficial pension reforms that include public pensions and private pension legislation. For example, employer-sponsored, defined-benefit pension plans' funds and surpluses are all deferred wages and belong to the pension plan members. The Pension Benefits Act of 1985 and regulations must reflect that, with provisions that no pension plan funds can under any circumstances revert back to the employer. In order to make all the pension plans solvent, the employers must make contributions on a timely basis, and the Pensions Benefits Act and regulations must be amended to delete any reference to contribution holidays by employers or employees when a pension plan shows a surplus.

I'll just draw your attention to an appended document at the back of the presentation dated 1946-47, from the late Honourable J.J. McCann: “Statement of Principles and Rules respecting Pension Plans”. On page 8, that report states as a pension plan principle that:

Employer contributions must be made irrevocably and must not under any circumstances revert to or for the benefit of the employer. Provision must be made in the plan whereby in the event of winding-up, bankruptcy or discontinuance, the amounts which have been paid over to the plan will be used solely for the purchase of pension benefits for employees....

Back in 1946-47 the politicians of the day had the foresight to provide that type of principle for pension plans. CURC reminds the committee of that commitment from the past.

¿ (0905)

In the Canada Pension Plan legislation there must be drop-out provisions for those men and women who because of circumstances are laid off or required to provide unpaid care to family members or to volunteer for unpaid work. The value of that work is conservatively estimated to be $3 billion per year.

Al has commented to me that people in the hospital, many of them volunteers who are no longer working as paid employees, volunteer their time because either of a layoff situation or other commitments. The value of their work should be recognized as a benefit to society, to Canada, and they should qualify for pension benefits based on that unpaid work.

There are groups of workers who are laid off as being redundant at age 50 or 55, and unfortunately these are their best contribution years. These circumstances reduce both pensions and should be rectified by providing for the drop-out provision to count for Canada Pension Plan benefits upon retirement. When paid work is replaced by volunteer work, we should be expecting that these drop-out provisions be recognized by the plan.

Another area of concern for improvement in both public and private pension plans lies in our strong belief that the federal government must lead by providing that the public pension plan boards include representatives from the retired group of workers and union members. CURC/MFOUR is unable to understand the logic in the federal government not allowing for working men and women who are majority contributors and members but who are denied membership upon retirement.

The Chair: You're over your seven minutes, and I notice that you're only on page three of a very long brief. Are there some things you'd like to highlight for us?

Mr. Roland Stankevicius: Very quickly, we'd like to highlight the issue of cuts to transfer payments going back to 1986 through 1996. The concern is reinstituting those transfer payments to provinces, so that public education, public health, infrastructure, and some of the things that were spoken of earlier at this meeting can be addressed by the federal government.

Canada is a confederation of provinces, and we believe that these provinces should have their funding restored, so that we can provide equality of opportunity for all Canadians.

I'll conclude with that.

The Chair: Be assured that everybody has the full brief. Thank you.

Now I'm going to turn to questioning, and I think we'll go with ten-minute rounds.

Mr. Cullen, would you start us off?

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you, Madam Chair. And thank you to all the presenters.

I'll maybe start with the Congress of Union Retirees. I was listening to your comments, and I guess I'm puzzled by your proposition that if there are any surpluses in pension plans, which are usually made up of contributions from employees and the employer, those surpluses would accrue only to the workers and not to the company. Could you explain the logic behind that?

Mr. Roland Stankevicius: I think the point is that the pension plan is the plan's members. I believe that the plan can be evolving over time and that when you have a circumstance where you have surplus, these can accrue additional benefits to plan members.

We are facing a crisis with our pension plans, where we have longevity issues in terms of people living longer, and cost of living issues, so this is not the time for these plans to be raided because of short-term surpluses.

I think we should be looking at the pension plan as an ongoing responsibility to all members of that plan, until there aren't any members. I think that's an issue that CURC would like to address, that these surpluses remain in the plan, until it's decided by all members of the plan that these surpluses aren't in fact required.

Mr. Roy Cullen: The way it normally works is that you'd have an actuarial assessment of a plan. And looking forward, if the surpluses are far in excess of what would reasonably be needed in terms of an actuarial assessment, then those adjustments are made by reducing the premiums. Or in some plans, the surpluses have become so far in excess of what is actuarially required, they require a decision by the pension plan. Though these are different times now, as we also have a lot of unfunded pension plans, that decision usually calls for some distribution to the employers and the employees.

You mentioned Mr. Martin. Of course, he was the person who put the Canada Pension Plan on a sound footing; it had been actuarially unsound. He made that commitment, working with the provinces.

But as for the Canada Steamship Lines pension, the distribution was approved by the Office of the Superintendent of Financial Institutions, and I can only assume that it was made up of employer and employee contributions.

To me, it seems eminently fair that both parties would participate in any surplus. So with respect, I still don't understand the logic of that thinking.

¿ (0910)

Mr. Roland Stankevicius: With respect, I think your confidence in an actuarial report at one point in time may not in fact stand up to scrutiny into the future.

We are facing a crisis in Canada and throughout the world: there are massive problems in Europe and Canada with pension plans. The plans may have been on a sound footing five years ago, and they may be on a sound footing at this point in time, but actuarial science as I understand it—though I'm not an actuary—is only based on what has happened in the recent past and on some assumptions about the future. We don't have crystal balls; we don't understand what exactly will be happening in terms of cost of living and the cost of services.

What we do know is that the trend has been increasing pressure on these plans to provide services to members who would like to live in dignity for the duration of their lives after providing service.

Again, reverting the money back to the company based on an actuarial report I don't think is sound. I would not be willing to just base that judgment on an actuarial report.

Ms. Marianne Cerilli: Can I respond as well?

Mr. Roy Cullen: Yes, I need to move on, though, as I'm running out of time.

Ms. Marianne Cerilli: I think the problem is the assumption that the employer's contribution to a pension plan is not then the responsibility of that pension plan to the pensioners. So that you understand, once the employer makes that contribution to the pension plan, the employer no longer has any rights to that contribution, which is then the responsibility of the pension plan.

Mr. Roy Cullen: I'm afraid we're going to have to agree to disagree, because they're basically trusteed funds.

The one case that troubles me somewhat is Air Canada and the employees there. This seems to me a difficult dilemma, because for Air Canada to come out of insolvency, there's going to have to be--I think--some accommodation on the pension. But if you're an Air Canada employee and you've worked there for 30 years, you've counted on that pension. It's just a very difficult situation, and I've been trying to work behind the scenes to see what kind of solution could be called for there.

I'd like to move now, if I could, to the Association of Manitoba Municipalities.

The idea of an investment in improving our national highway system is something that's become more topical recently. One scenario would be to set up an arm's-length organization, where the federal government, the provinces, and maybe even some other stakeholders would put up some money and set about a program to upgrade our national highway system.

One of the issues that comes up from time to time is the competition between a national highway system and the need for public transit in the urban setting. I wonder how you see those two linkages. Is it one or the other, or should we be thinking about both?

Mr. Stuart Briese: I think we do have to think about both. Certainly the large urban centres do need some attention paid to rapid transportation and how they move people throughout their centres. But keep in mind that in the rural areas of the province, the municipalities are the largest road authority in the province. All our funding comes from property tax, or a great amount of it, and it's woefully inadequate to keep up that infrastructure any more.

We feel that if the federal government addresses the national highways program, it will affect only certain roads in the province. It frees up more of the provincial and municipal money to address some of the other issues.

¿ (0915)

Mr. Roy Cullen: Thank you.

One of the challenges in a province like Manitoba is that we often think of public-private partnerships in the context of toll roads. Toll roads really require high-density traffic, and in areas like Manitoba, apart from maybe around some of the major urban centres, I'm not sure that they're really that viable unless they're hugely subsidized.

So I would like to think that if we're renewing our national highway system, we can involve the private sector in new ways and forms. I'm confident we can do that, but it's going to take a lot of thinking and some hard work. Thank you for that.

I'd like to go now to the Manitoba Chambers of Commerce.

One point in particular that you mentioned was the need to keep our expenditure on track and contained, and I would agree with you on that point.

You made an interesting reference, I thought, to the role of Treasury Board and the committee. I agree with that. I think the Treasury Board should play a more prominent role in resource allocation decisions, and also the committee, because we're going to have to reorder priorities. The fiscal situation is a little tight in the medium term, and there are some new priorities, so things are going to have to be reordered.

I wonder if you could expand on what you see as the role of the Treasury Board and the committees in doing that kind of work.

Mr. Ed Allinott: My position is no one should be surprised. Whether you're in business, banking, government, you shouldn't be surprised, in getting an Auditor General's report, that there's a problem in one department.

So the Treasury Board and the committee is where the work needs to be done. We need to hold the departments more accountable. I spent many years in Ottawa in business, and you look at some of the waste sometimes. We need to hold it accountable at the grassroots. I don't think that's happening enough today.

Hitting the press with problems and issues well after the fact is not the answer. We need to correct it right at the grassroots. So I believe holding the departments more accountable, putting the controls in place, the audits in place, so that they know they will be held accountable on an ongoing basis is what's needed.

There are not a lot of new dollars, and for the next few years we do not know where the economy's going to go. Are we going to be able to get that economic growth and catch on to the strength of the U.S. economy, which, as we saw yesterday, they announced at over 7% for the last month? Will we be able to get our Canadian economy growing on that background? We don't know, but we need to ensure that we're watching every penny that we have today, and reallocate it to the priorities. We have many priority spending items we're talking about here today, and I know you're looking at them, so we have to be more fiscally prudent in the work we do in the government.

The Chair: This committee will be listening to the Minister of Finance Monday in Ottawa at 10:30 for the economic updates to see where Canada is, so we'll hear there.

Thank you, Mr. Cullen.

We'll go to Ms. Judy Wasylycia-Leis for ten minutes.

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

I'm pleased to see everyone here this morning. I'm glad to see such a good cross-section of Manitoba organizations here at our committee.

I wanted to say to Marianne and Roland that I'm very sorry to hear about Al.

Madam Chairperson, you and the committee should know that Al Cerilli has been a formidable force in this province, speaking out for people who are retired, but also more broadly on issues of importance to the quality of life in this province and across the country. So best wishes to Al.

I want to start by asking Stuart something. You've highlighted the infrastructure needs of this country. I think you're a bit generous in your assessment that you've actually got a billion dollars over ten years to play with. Some of our calculations show that in real terms for community infrastructure the last budget gives about $150 million in new money a year. Now, we could argue and split hairs on the actual amount, but I think the point you are making here is that after a lot of promises to finally deal with infrastructure needs at the community level, the last budget was quite a disappointment. I think the challenge for us now leading into this budget year with a new prime minister, a new finance minister, presumably, is how do we make the case that an important aspect of the next budget process should be spending in terms of community infrastructure?

You've heard Mr. Allinott from the chambers express the opposite, suggesting that surplus should go to debt reduction and the accumulation of tax cuts. That means Canadians have to continue to take the hit.

So I want to know from you what trade-offs you would recommend and how we are going to make the case to the federal government that it's time to finally start investing in communities, in cities, in municipalities.

¿ (0920)

Mr. Stuart Briese: I think the best way to make the case is what we've observed through the Canada-Manitoba infrastructure program. And by the way, we have a very good process in the province of Manitoba between the provincial government and municipalities on Canada-Manitoba infrastructure. The best way to make the case, I think, is on the amount of demand we're seeing there, and it's very legitimate demand. It's roughly $7 to every dollar that's available through infrastructure programs.

When we as municipalities depend on property tax and we see the costs of infrastructure going higher and higher all the time, it just gets beyond us to replace that infrastructure. We can see it when we drive around the province. We know the infrastructure is deteriorating. Most of the water and sewer lines in a lot of our urban communities are 40 and 50 years old. Some are a lot older than that.

Most of our roads are built to a standard that gives about a 20- to 25-year lifespan. We're way beyond that on a lot of those--major thoroughfares, too.

We're in a province that can only exist if transportation infrastructure is there. It all starts to fall down around your ears when the transportation infrastructure starts to deteriorate.

That's what we take forward. We won't split hairs over the amount of the program, but what was announced was $1 billion over ten years. If that isn't front-loaded somewhat, it's considerably less than the last infrastructure program that went out on the Canada-Manitoba infrastructure program.

Ms. Judy Wasylycia-Leis: We could end up after ten years actually spending less on infrastructure at that point than we are today, the way the formula works and the way it's back-ended.

Anyway, thank you for that.

To Marianne and Roland, I don't want to put words in your mouths, but I know your organization has been up front and out there with the public in terms of trying to meet the needs of seniors and others. For ten years we've been told that we have to tighten our belts, we have to get the deficit eliminated, and we have to give tax cuts. We've paid out $100 billion in tax cuts since the 1997 budget.

Now we're told, not just by people like Mr. Allinott but by Paul Martin himself, that we have to worry first and foremost about the debt, even though we have, I would say, a very appropriate debt-to-GDP ratio, which is about 36%. We have the fastest-dropping ratio in the industrialized world.

I want to know what your priorities are in terms of the current fiscal year and the surplus that we know will be available and this whole balancing act. What's important in terms of building a future in this country?

Mr. Roland Stankevicius: If I might respond, I think clearly we've seen it with the recent election results in Ontario. There was a rejection of an attitude of getting away from providing quality public service. I think that's the issue. Canada was built on a tradition of public sector involvement in developing this country, developing a quality public education system, quality public health care system, and those are the investments that have to be made. That is the greater good for everybody in Canada.

I don't think there's a shortage of millionaires or billionaires. We're not suffering from that. I know that's some of the mantra from people who want to keep more for themselves, who want to share less and provide less for those who don't have as much.

I believe the role of government is to.... As we have seen, we have the so-called fiscal house in order on the backs of many working and middle-income people. They've paid down the deficits, and I think any surpluses and any growth in the economy should now be directed clearly toward building a quality health care system. We should continue to invest in that.

I'd like to report, not having been involved in the health care system, I see the care that Al Cerilli gets in the hospital is exemplary. It's tremendous. I'm very happy to see that he is well on the road to recovery because of the care he is receiving. But that can be improved. We have an aging population. We're going to have people suffering from disease and stroke, and we need to provide for that quality of care.

Our education system, in the area I work in, requires that too. Our youngest and our most vulnerable require a quality public education system, and I believe that's where we can really direct our priorities.

¿ (0925)

Ms. Judy Wasylycia-Leis: Thank you.

Ms. Marianne Cerilli: Could I just comment--

Ms. Judy Wasylycia-Leis: Will I have time to ask Mr. Allinott a question?

Ms. Marianne Cerilli: Oh, I won't take your time then.

Ms. Judy Wasylycia-Leis: No, that's okay.

The Chair: There are two and a half minutes.

Ms. Judy Wasylycia-Leis: Okay, go ahead, Marianne. Make a point.

Ms. Marianne Cerilli: It's more important for you to ask your question.

Ms. Judy Wasylycia-Leis: Maybe we'll come back to you.

I wanted to say to both Marianne and Roland that your point about the underfunding of pensions with Canada Steamship Lines and Paul Martin is an important one. I met with the retired Voyageur bus folks, and I can tell you, these are folks who have been, for Mr. Cullen's benefit, working for Voyageur bus companies for 30 years plus. They expected a decent pension, and when it was sold by Canada Steamship Lines and Paul Martin, who chose not to fully fund the pension, these folks were left high and dry. I think that's precisely the kind of situation we have to avoid.

Mr. Allinott and I have exchanged on many issues, and he knows where I'm coming from. I do agree, as Mr. Cullen said as well, that we have to have more built-in accountability in the committee system and a more thorough review of estimates. But I would suggest to you that you might want to start with the federal government as a whole, the budget process as a whole.

I want to ask you why you haven't said anything about the fact that this government continues to lowball the surplus, which the Auditor General has said is a serious accountability issue as well, to the point where over the last eight to ten years they've lowballed by $90 billion. That makes it really hard to do proper accounting.

The other issue on accountability is that one of the biggest scandals going right now is with respect to Health Canada. Yet we can't seem to get any comment from the present Governor of the Bank of Canada, who was the deputy minister at the time, who was responsible for millions of dollars being absconded right before his eyes.

Don't you think we should be looking at accountability from that point of view, as well as corporate accountability? If we're going to go after the government, let's go after corporations like Enron, where we have some big issues to deal with.

Mr. Ed Allinott: Thank you.

As a quick response, first of all, let me just comment on the other point you raised. The Manitoba Chambers of Commerce, as a business lobby, encounters that stereotypical suggestion that all business is against all taxes and all government spending reductions. That is a fallacy. We're suggesting that the government really needs to be more efficient, whether it's the budget process, as you said, Judy, or just in the overall control of spending that I talked about earlier. We recognize and believe that we need these programs and we need to increase spending on programs to give back to Canadians and to help those disadvantaged in our country.

So we're not suggesting that, and sometimes it's a fallacy that all business is against that. What we're supporting here is better accountability, especially through the management process.

I guess you can also come back to the point you just raised, to the budget process. To get the economics and forecasters to agree on what it's going to be will be difficult. It's always better to be conservative.

I know in business, the stock market, the analysts like to see whenever you can overproduce and overperform, but in government it's important to be accurate so that you can do this planning. I know in many of the programs.... As I mentioned in our comments, these last-minute expenditures at the end of the year when we find out that we have a surplus are not a good way to do business. It's not proper planning.

So I agree with you that better budgeting and planning in what you're doing and better overall controls on spending are what's needed in government.

The Chair: Mr. Simard.

Ms. Marianne Cerilli: I have to leave, so I'm just going to excuse myself. But before that, I would like to make one comment.

¿ (0930)

The Chair: Certainly, if Mr. Simard would give you some time.

Ms. Marianne Cerilli: I just want to draw to the attention of the committee the section that was left out of the brief, how retirees deal with poverty. I think this committee and the Government of Canada have to make a decision: are we going to deal with poverty in this country, or are we not?

If we are going to follow the recommendations of the Chambers of Commerce or Mr. Cullen, we are not going to deal with poverty. We have to recognize that social services like pensions and legislation in programs, social allowance, public health care, public education, and social housing are the ways we deal with poverty.

The Chair: We have many presentations on these issues too.

Ms. Marianne Cerilli: Those are the ways we deal with poverty.

I just wanted to make sure the Government of Canada recognizes that we have enough money in this country. The issue is how we distribute that money, and the structure of the programs we have in this country that are going to distribute the resources we have.

The Chair: I think if you read this committee's report from last year, you'll see the chapter on vulnerable Canadians, and the demographic chapter. I hope you do take the time, because we addressed that very clearly.

Ms. Marianne Cerilli: Hopefully the federal budget will address it.

Thank you very much.

The Chair: Go ahead, Mr. Simard. I'll give you back your time.

Mr. Raymond Simard (Saint Boniface, Lib.): Thank you very much, Madam Chair.

Welcome to all our guests this morning.

My first question will be addressed to the Association of Manitoba Municipalities.

Since 1993 the federal government has invested $10 billion in infrastructure and we've also leveraged $20 billion from various other parties, other governments and the private sector, for a total investment of $32 billion. I guess that's become part of Canadians' reality today. They expect infrastructure dollars now, because there has been, I think, some neglect over the past.

One of the things I'm hearing is that the current formula of one-third, one-third, one-third is putting a lot of pressure on municipalities. I'd like to know if that is your reality, or if the existing formula works for you.

Mr. Stuart Briese: That is part of the reality, and we've discussed that many times at the Federation of Canadian Municipalities level. There are small rural communities that cannot even scrape up the one-third funding, and we do believe there has to be special attention paid to those communities. We've had some indication that this is being considered, but there has been nothing put in place yet. In most cases, yes, the municipalities are able to put up their one-third funding, but in some of the rural and remote areas there is just no tax base.

Mr. Raymond Simard: I'd like to address the GST issue for a few minutes, because it has been a very strong issue here in Manitoba, obviously. As chair of the Manitoba caucus, I had many delegations come before us.

I'd like your comments on the programs that were put in place by the federal government. What we've been hearing is that the funds that were put forward were adequate, but the problem may rest in the inflexibility of the programs. For instance, Manitoba may have needed a little more flexibility. I'd like your feedback on that, because if we are going to invest substantial amounts of money but are not going to put in the flexibility to allow them to work properly, that's an issue for me. I'd like to know what you think about it.

Mr. Stuart Briese: That certainly is an issue. Manitoba is unique, from the point of view that we do not have a slaughter industry. We were very dependent on the U.S. border and the markets into the U.S., especially on the cull cow or mature breeding livestock issue.

The programs the federal government put in place certainly helped a province like Alberta more than they did a province like Manitoba, simply because they have a very large slaughter industry. Those programs were supportive of it.

I was going to mention, just on a personal note in my presentation on the BSE issue, I am a cattle producer. A week ago I destroyed two animals on my farm and buried them. This is happening across Canada, and it is a very tough decision for any producer to take. It's a very difficult one, but those animals are absolutely worthless on the market right now.

That is why, in our conversations with Minister Vanclief, we were asking for something that would help address that situation. There's a shortage of food in this world, and we're destroying animals and putting them in a hole in the ground.

Mr. Raymond Simard: Madam Chair, are we getting two rounds or one round?

The Chair: It depends.

¿ (0935)

Mr. Raymond Simard: Okay. I'll move on then to the Chambers of Commerce.

Mr. Allinott, I think you indicated that you agree with the way the tax reforms were put into place over the last ten years. I think the federal government has done an excellent job in getting Canada back under control, if you will, when we talk fiscally.

A lot of people are saying we've tightened our belts over the last ten years, and it is now time to reinvest in things like health, child poverty, and literacy, for example. Would you agree? I know you've mentioned it a little bit. I know we're talking about continuing to tighten our belts. Do you not think that now is the appropriate time to reinvest in those kinds of initiatives?

Mr. Ed Allinott: Yes, I think the word “reinvest” is the key word, because again, if you have fiscal prudence and controls in place, if you can take the additional funds that can be saved and reallocate them to these very worthwhile causes and projects, that's what we're supporting. There are millions of dollars out there that can be reinvested to help the poor, the farmers, whatever. There are all these programs. Every one is a beautiful cause, and they're very much needed. The question is, how much is being wasted?

Again--I know Judy talked about this--are we going to have a fiscal surplus? Probably. How big is it going to be? We don't know. What's going to happen over the next two or three years with the economy?

So if we have those additional dollars, yes, let's spend them, but spend them wisely. I guess that's what we are really saying. It is time. The government has done a great job on tax reform, in reducing the debt, and so forth, but we cannot let up on that, because twenty years from now, ten years from now, things will change. We need to make sure we keep our tight fiscal house in order.

Mr. Raymond Simard: With a year such as we've had this year, with SARS and BSE and the fires and the floods and the drought, it was nice to have a surplus to be able to handle that kind of year.

My second question is as a member of the subcommittee on international trade. We just did a study of Asia-Pacific, and one of the things we noticed is that the chambers of commerce out there are very closely linked to the Canadian embassies, and they communicate very well together. I'd like to know what the Chambers of Commerce's relationship has been with the government. Do you find you're being heard enough?

I think it's a very important link. Do you just come before us once a year and give us your feedback like this, or is there a formal link established?

Mr. Ed Allinott: Dan, do you want to talk to that issue?

Mr. Daniel Overall (Director of Policy and Communications, Manitoba Chambers of Commerce): Yes, there are a number of instances throughout the year when ministers will come in and we'll have a chance to submit. We also provide direct submissions. As well, we work with the Canadian chamber, which is our advocate in the national forum. So yes, throughout the year we have a number of avenues to get our message across to the federal government.

Mr. Ed Allinott: In fact, our president of the Manitoba chamber is in Hong Kong right now.

Mr. Raymond Simard: Regarding the Manitoba Federation of Union Retirees I have a couple of questions about structure.

Am I to understand that once an employee leaves his job, for instance, the union that's representing him no longer represents him? How does that work, exactly? Do you represent only retired employees?

Mr. Roland Stankevicius: Again, I'm substituting for Al Cerilli, who is an elected representative of the congress. I don't know the constitutional framework, but I understand that upon retirement, if you're involved in a pension plan or in a retired group, you are invited to join the Manitoba Federation of Union Retirees, which is affiliated with the MFL, which is affiliated with the congress, which is again affiliated with the CLC.

It is a group of retired individuals who are no longer under an active union organization because they are retired from employment. But I'm not an expert on that issue.

Mr. Raymond Simard: My last question is with regard to Air Canada. Mr. Cullen brought it up, and it was one of the questions I had. I think it gave the pension plans really good visibility and showed the issues that are out there.

I think our government has a certain responsibility to look into that, because when you have a corporation that's going into receivership like that, we have to make sure its employees are protected.

I just wanted to make that comment. Thank you very much.

The Chair: Thank you very much.

Mr. McComas, I have just a couple of questions for you.

I am concerned that people with mental illness are having problems with the form that CCRA puts out. Are you aware, through your work with your volunteer organization, of anybody who's having success with the way it currently stands? In your experience, is this a very widespread issue with people who are suffering from mental disability, this disability tax credit, and specifically the form?

¿ (0940)

Mr. Verne McComas: I think there has been a lot of progress, and it might help some people, but many of the people who suffer from a mental illness become poverty-stricken, partly because the parents don't have enough money, usually, to do the things that are necessary.

Try to compare this with an older person like myself, who might need some kind of care at a certain age. But these are young people who develop the illness when they're 19 or 20. With new medication, some of them can make some pretty good progress. It's a very difficult illness, because it's hard to get people who have the illness to fight for themselves.

There's no one else really fighting for them except the people who belong to organizations like the Manitoba Schizophrenia Society and other organizations. There are 17 major organizations in Canada that deal with illnesses that relate to the function of the brain. I know we need to get together--and we're making progress in that direction--because we need to articulate better the illnesses themselves, but we need continued support from people who can help us.

The people who do have a little bit of financing tend not to take advantage of the tax regulations. They're very complex.

We need to raise the level of support for the people in the professional field, particularly the psychiatric nurses and the medical doctors who specialize in psychiatry. My own personal impression is that they feel like they're not in the same stream as general health care.

The Chair: In a prior life before Parliament, I spent six years in a quasi-judicial role in criminal psychiatric work in my province. So this is an area I have a better understanding of, maybe, than a lot of people.

I see the interrelationship in some of the other social issues with mental illness, specifically homelessness and housing issues, just because of ability to cope. I wonder whether here in your province there is support interaction with the mental health authorities and affordable housing and how you would evaluate that.

You know about our homelessness initiative with SCPI. Is that being integrated into some of the support systems you have here?

Mr. Verne McComas: Well, I think there is a move in the right direction. I mentioned earlier my sister, who is still living in Prince Albert. She's quite functional at times, but she was being looked after by her parents until they were no longer living. I tried to get a place in a private personal care home for her, but when you mention schizophrenia, the private people generally don't want to....

There's another issue. I haven't done the research that I should have done, but I just want to mention it.

In Saskatchewan right now there are some excellent private homes being built, but mainly for people who are elderly and need some level of care. She happens to be in one. I think she is the first person with full-blown schizophrenia, which she's suffered with for 50 or 60 years, to be in one of those homes, and she is better than she has ever been since she developed the illness back in 1949 or 1950.

The Chair: Thank you so much for your input today, and thank you for staying. I know you weren't feeling as well as on some days, so we appreciate that.

To the chamber, you showed me in your brief some of those six tests that Treasury Board used on the first realignment. That's actually the first time I've seen that listing. Maybe we could make use of it again. I appreciate that you brought that out.

To the union representatives, on the pension issues, I think it's important to air these issues, but it's also important in our society to have some faith in some of the impartial protective bodies that we have, like the Superintendent of Financial Institutions, the Superintendent of Insurance. I know some of the material in the other house dealt with that issue too, because there has to a belief in the credibility of our institutions to make people feel confident. We--you, the parliamentarians, the general public, the press, everybody--all challenge each other, but at the same time I think at the central core we still need that respect of our institutions, and I think it can give some of us a feeling of confidence that perhaps if they didn't exist, we would not have as much.

So I appreciate your putting the positions and the concerns on the table, but on the other hand we also have to acknowledge that there are some institutions that are here for our protection--for all of us. I think that's important too.

I thank you very much for your input today. On behalf of all the committee members, we wish your leader Godspeed in getting a full recovery and health.

Thank you very much to the municipalities. As we've been stopping in different communities we've had input from Vancouver and I'm sure we'll have it all the way to Halifax, hoping that the federal government will now turn to some infrastructure. As you know, in our last budget it was like the temptation, but not the full delivery. For you to be able to do what you need to do, not only for Manitoba's infrastructure system, but for the country's infrastructure system, I think there has to be some cooperation between levels of government. So we'll be examining that.

In the evidence, I'm glad we're hearing the same echo. I think when we hear the chorus is when we'll know an idea is catching on. So thank you very much for your brief, also.

And to all of you, thank you for taking your time this morning. On this committee we are very limited. In actual fact, we have more support staff to take this program on the road and do our outreach than we actually have members. Our members are in Ottawa and in different parts of Canada. But be assured that all of the members will get your briefs. They are delivered through our clerk to their offices.

Thank you very much.

Colleagues, in about ten minutes we will start the next panel. We are suspended.

¿ (0947)

À (1002)

The Chair: Pursuant to Standing Order 83.1, continuing with pre-budget consultations, we will begin with our second panel of the morning, again in Winnipeg.

Our second panel consists of, first, the Canadian Executive Council on Addictions, John Borody, president. Welcome.

Next we have, from the Manitoba Child Care Association, Pat Wege, and you're accompanied by Don Giesbrecht. Thank you very much. Welcome to both of you.

Next, from the Manitoba Home Builders' Association, we have the chair of the board of directors, Derek Thorsteinson. Thank you very much for joining us. You have with you Wayne Bollman, who is president. Welcome to you, sir. Mr. Daniels, the vice-chair of the board of directors, has also joined us. So welcome to you.

Also, from the Homeopathic Medical Education and Research Centre Inc., we have Kumar Belgaumka, doctor of homeopathy--thank you very much for joining us--and Valerie Squire, who is also a doctor of homeopathy. Thank you.

Finallly, from the University of Manitoba, we have Emoke Szathmary, president, and Joanne Keselman, vice-president, research. Thank you very much.

We're going to go in the order on the agenda. We'll do seven-minute rounds. We'll start with the Canadian Executive Council on Addictions. Go ahead, sir.

Mr. John Borody (President, Canadian Executive Council on Addictions): Thank you.

First of all, I'd like to thank the members of Parliament for putting drug abuse and alcohol misuse back on the agenda this year. I think it's been off the agenda since the early 1990s.

What I want to talk about very briefly is to reinforce the impact that the misuse of alcohol and drugs has on our economy. I want to highlight the importance of a new initiative that's been embarked on, one which I am here representing today, and then talk a little bit about the importance of maintaining addictions on the agenda.

I put together a very brief summary of the presentation, which I think you have. You'll see from this that the last cost study that was done in Canada on the impact of drugs and alcohol on our economy was done in 1992. I'm pleased to tell you that we're in the midst of redoing another one, and I'm optimistic that we'll be embarking on it as early as next year.

Right now, what we're looking at is that conservatively the economy is impacted by about $18.45 billion by substance misuse. If you want to take a look in rough numbers at how that breaks down, it's about 8% of our GDP. It impacts directly on our health care system. About 50% of our HIV cases, and probably around 80% of the hepatitis C cases that we now see, are a direct result of injection drug use in our population. Alcohol abuse accounted for about 1.1 million hospital days annually.

There was a study released in May 2002 that about 50% of the crimes were either directly or indirectly related to alcohol and drug use. Most recently, there's been a study that was done by Corrections Canada, and they're saying that the number could be higher.

CECA's an organization that was brought together by and represents all of the main addiction services across Canada. I'm the current president of CECA, but I'm also the CEO for the Addictions Foundation of Manitoba. So all of us represent our jurisdictions provincially.

Why the need for CECA right now? Addiction programs have experienced a great deal of change in the past five to ten years. The way we look at our services, the way we provide our services, I think are much broader. We recognize now that it's more than just what we used to think of it about ten years ago. We've seen rapid social and economic change.

In the fall of 2000 our founding members got together in Winnipeg, and we had about 40 organizations represented across the country. What we found was that there was really the lack of a national direction. There was no leadership nationally on this issue.

In February of 2001 we wrote a report that was called “Towards a new national focus and drug strategy: Synthesis of the December 5, 2000 Symposium”. It was provided to the federal, provincial, and territorial governments.

The third slide I have in there gives you a visual representation of the groups that are involved. You can see that there's the Addiction Foundation, the Alberta Alcohol and Drug Abuse Commission, the Centre for Addiction and Mental Health, the Regional Health Authorities of Prince Edward Island, the Kaiser Foundation from B.C., and the Canadian Centre on Substance Abuse from Ottawa.

We got together as a forum to influence national public policy related to addictions. In a sense, we're an advocacy group, but we're also a group that I think has been clearly working with Health Canada to help develop the health policy that we're seeing before us today.

Since that time, we've hosted a reception at the world forum, which was our spearhead for who we are. We talked to quite a few nations about our organization. We presented to the Standing Committee on Finance last year. We've also presented to the parliamentary committee on the non-medical use of drugs. We spent a good hour with them last summer.

We've developed a work plan on how we see ourselves being involved with government, and we're in the midst currently of developing outcomes and deliverables.

We're currently implementing a national prevalence drug and alcohol survey. Initially, this was done in partnership with all of the provinces, and most recently, I'm pleased to say that Health Canada has joined that initiative. And it's very much thanks to the government for putting up the money for that.

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We're looking at completing that project in the spring of 2004. The interesting thing is that the last time the study was done was about ten years ago, so it's been ten years since the prevalence of alcohol and drug use by our adult population was actually measured.

We're currently in the midst of trying to work with the provinces to coordinate our youth initiatives in the areas of prevalence of drugs and alcohol. Within the last couple of days, you'll notice, Health Canada's been in the press for releasing a statistic saying that marijuana use currently in the country by youth is getting close to 50%.

What we don't know is all the other factors: alcohol use, alcohol and driving use, marijuana and driving. I can speak to that provincially, but we don't know nationally how we compare. We've never done this.

We co-hosted a national conference a month ago trying to get together all of the research bodies in Canada to try to figure out what our priorities are for a national research agenda. Although it doesn't say it in our brief, Health Canada was a partner in this.

In summary, I think the group I represent offers an opportunity to bring together some leaders across the country in a forum that we can run in parallel with the federal-provincial-territorial process. What we're asking the government to do is to keep addictions on the agenda. Don't let it drop off the radar screen, as it has in the past.

We tend to treat this issue in cycles. We do it for a couple of years, then we figure, because we see some changes in the population, the problem's fixed. This is one of those social issues you can't do that with. You have to keep working at it.

The other thing we'd like to see is an FPT struck with some teeth—i.e., it reports to someone. The last FPT that worked on addictions did not have a connection with the deputy ministers. That's another thing we would ask the government to consider: that when they're working on those kinds of initiatives they make sure there's some accountability.

Thank you.

À (1010)

The Chair: Thank you very much for that presentation.

We would be happy to receive your next report. Whenever it's available, just send it in to the clerk at that time. We'll be able to distribute it. Thank you.

Now we'll go to the Manitoba Child Care Association. Go ahead, please.

Mr. Don Giesbrecht (President, Manitoba Child Care Association): Good morning, and thank you for having us here today.

The Manitoba Child Care Association is the largest child care organization in Canada, representing over 2,900 members made up of boards of directors of full-time child care centres, part-time nursery schools, early childhood educators, child care assistants, licenced family child care providers, academics, researchers, and other interested organizations.

We are a non-profit, membership-funded organization, incorporated in 1974. Our mission is to advocate for a quality system of child care, to advance early childhood education as a profession, and to provide services to our members.

Presently in Manitoba there are fewer than 25,000 licensed child care spaces, but over 128,000 children between the ages of zero and twelve years with a mother in the workforce. Like the majority of Canadian provinces, Manitoba is a very long way from a universally available early learning and child care system. I know from my other life outside of being president of the MCCA, as executive director of child care programs here in Manitoba, the wait lists we have at our centres are incredibly long. While this is anecdotal—we don't have hard facts—when I speak to other directors in Winnipeg and throughout Manitoba about wait lists, it is not uncommon to have a year or a year plus for child care.

In Manitoba in 2001, over 24,000 Manitobans voiced support for the Child Day Care Regulatory Review Committee's report entitled A vision for child care and development in Manitoba. This called for an affordable, accessible, high-quality, and universal child care and education system. As a result of this public support, the regulatory review committee developed a five-year action plan for child care and learning and development in Manitoba. In response, the provincial government announced the first step in April 2002, entitled Manitoba's Five Year Plan for Child Care. It had three major elements: maintaining and improving quality, improving accessibility, and improving affordability.

While the agenda for child care in Manitoba is a high priority with the government, there are still a lot of issues facing us. One of the most prevalent has to be the workforce issue we deal with. One of the things I like to say is that we need to make a career working with children not just a stopover but the destination. Too often we have people who spend a few years in the system and then are moving on, so our child care workforce shortage continues to be an issue even in Manitoba, which arguably leads the country in its child care system.

However, we need to have meaningful growth, which requires the assistance of the federal government through the design and implementation of a policy framework and significant financial contributions targeted solely for regulated child care in centres, family child care homes, and nursery schools that are outside the jurisdiction of the formal school system. We need stringent timelines, accountability, and reporting requirements built in as well.

There is significant public support for a national child care system within Canada. Recently, in fact just this past year, surveys were done in Manitoba and across Canada that showed there was significant public support for a system.

We have five recommendations to the House of Commons Standing Committee on Finance. In particular, we support recommendation number 43 from the report of the Standing Committee on Finance from November 2002, that “The federal government, along with provincial and territorial governments, recognize the urgent need for affordable, high-quality child care in Canada, and take actions to alleviate this problem”. That was formed a year ago, and is definitely a very positive step as far as we are concerned.

We agree that the need is urgent. The European Union in fact recommends that 1% of the GDP be targeted to child care. For Canada this would require an expenditure of $10 billion annually; yet the existing commitment over the next five years is $935 million.

Federal dollars need to escalate significantly in order to alleviate the problem within this century.

Our second recommendation is that we welcome the multilateral framework on early learning and child care as a positive enhancement to the early childhood development agreement, and as an important step toward meeting the urgent need for affordable, high-quality child care in Canada.

The federal government should re-profile the rollout of its funding commitment so a greater amount is available in the first half rather than the last half of the five-year agreement. We in Manitoba are well positioned to leap forward significantly in the priority areas of quality, availability, and affordability. However, the kind of money needed to address this urgent need will not arrive until 2005-06. Yet we are, as we said, well positioned to move forward right now.

À (1015)

We also need to ensure accountability requirements to include a clause that provinces and territories must spend federal funding on child care, on enhancements in the not-for-profit sector that support quality, affordability, and accessibility.

We expect the provinces and territories to use the federal funding for child care to supplement and not to replace provincial spending, as it has been rumoured across the country.

A serious federal-provincial commitment to develop a pan-Canadian child care system should not exclusively rely on the public to monitor it. The government should establish its own internal mechanisms to ensure compliance with the agreement and provide regular outcomes reporting to the public.

Thank you.

The Chair: Thank you very much.

Now we'll go to the Manitoba Home Builders' Association. Mr. Bollman.

Mr. Wayne Bollman (President, Manitoba Home Builders' Association): Thank you, Madam Chair and committee members. We welcome the opportunity to share our views and perspectives related to improving the residential construction industry in the province of Manitoba and ensuring its continued growth for the future.

Much of what we are presenting today is further detailed in the CHBA pre-budget submission, which we understand was provided to this committee in Ottawa some two weeks ago.

Our organization is a non-profit trade association established in 1937, whose mandate is to provide its members, the public, and all levels of government with ongoing education and information relative to the housing industry. The mission of the Manitoba Home Builders' Association is to be the voice for the residential construction industry in Manitoba, to provide a forum for ongoing education of the membership with respect to technology and business practices, to achieve an environment in which the membership can operate successfully, and to promote affordability and choice for housing for all Manitobans.

The housing industry is a strong contributor to the provincial economy in Manitoba. Residential construction is an estimated $1.4 billion industry in the province, creating approximately 15,000 jobs.

Due in part to low interest rates, strong employment growth, and rising disposable incomes, the industry across the country is experiencing one of its best periods of growth in many years. Nevertheless, the industry continues to face many significant challenges and issues that, if not addressed, will impede long-term growth prospects for the sector. As discussed at the federal, provincial, and territorial housing ministers meeting in September 2000, the key issues affecting the industry and directly impacting housing affordability include taxation, development cost charges, regulatory reform, labour supply and training, and housing finance.

Specifically, on taxation, establishing an appropriate and effective tax policy at all levels of government has long been a concern of the residential construction industry. Like many other sectors, those engaged in the various aspects of home building are affected by both the micro- and macro-level taxation policies of the province.

MHBA believes Manitoba must become more competitive with other Canadian provinces in the context of both personal and corporate taxes. In an increasingly global marketplace, Manitoba cannot continue to be outpaced by other jurisdictions in the race to attract individual talent and organizational mass to the province.

By way of example, a company comparing Alberta to Manitoba when looking to establish, expand, or relocate its operations would find the following benefits of our western neighbours: lower corporate tax rates, lower personal income tax rate for its staff, no payroll tax, no capital tax, no PST on both corporate and individual purchases, and education taxes not included in their realty tax bills.

The MHBA, like other home builders' associations across Canada, continues to have a number of concerns about the GST. The GST rebate of 2.5% does not cover the cost of the FST that it was originally designed to replace. The rebate should be increased to 4.5%. The original GST threshold should be revisited, as promised when first introduced in 1991, and indexed to inflation.

For renovation work, the definition of “substantial renovation” should be relaxed. The current definition requires almost a complete rebuild of a home to qualify for the rebate. Further, the GST should not apply to rental housing. Much like investors in retail or commercial office complexes, rental housing investors should be allowed to use the GST paid as input credits.

Moreover, the MHBA, along with its national counterparts, believes the deductibility of land carrying costs, including interest and property taxes, should be restored. Much like a retailer carrying inventory from one fiscal year to the next, the land assets of a developer are future inventories that incur costs each year but are set aside for future development. Expenses are incurred and paid out of the cashflow for the current year. The current policy of capitalizing these costs serves only to increase the cost of land development, both today and in the future, thereby increasing the costs of home ownership for consumers.

To encourage additional investment, MHBA believes the following reforms should be made to the federal income tax treatment of rental housing: deferring capital gains and recaptured depreciation deductions upon the disposition of rental properties if the proceeds are used to invest in new rental properties; extending eligibility for deductions of rental losses created by capital cost allowances against income from other sources; relaxing current restrictions on the deductibility of soft costs; allowing small-rental landlords to use the small business deduction; and clarifying the types of renovation work on rental properties that qualify for immediate deduction.

À (1020)

On the underground economy, the current contract payment reporting system should be eliminated. It has proven to be ineffective in combatting the underground economy, while imposing more paperwork and cost on legitimate contractors. It is time to step in with more practical measures to combat illegal construction activity, such as requiring GST registration numbers for all construction businesses, not just those with revenue above $30,000 per year. This would remove a major loophole for underground operators.

On development cost charges, although the private sector is generally responsible for the costs of local municipal infrastructure, federal, provincial, and municipal governments have long played a role in supplying and ensuring the provision of major infrastructure and ensuring the provision of capacity for future growth. One source of revenue has been the federally imposed gas tax, which has not been directed towards local infrastructure improvements as intended. Continued investment in municipal infrastructure is critical for the long-term success of both the housing sector and our communities in general. However, despite the efforts of all levels of government, there continues to be an infrastructure deficit at the municipal level. As a result, many municipalities are facing an increasingly greater reliance on development cost charges--levies in the form of housing permits, infrastructure charges, and application or processing fees to offload these expenses onto the developer.

On regulatory reform, another concern of the industry in Canada is the government's purported intention to introduce a mandatory R-2000 standard as part of its plan to meet Kyoto targets. The home building industry has made great strides over the last 10 years in increasing energy efficiency in response to market demand. Mandatory R-2000 standards for new homes will have minimal incremental effect on the overall energy efficiency of new homes, while creating greatly increasing construction costs. Creating regulations that require the upgrade of the existing housing stock and bringing older homes up to the current market standard would achieve greater benefit.

Additional provincial regulatory issues that currently affect our industry negatively include rent controls, capital grants, and the inability of new home builders to sell their product due to regulations under the Real Estate Brokers Act of Manitoba.

On labour supply and training, home builders are increasingly faced with the challenge of not having adequate human resources to keep up with the demand, resulting in delays and ultimately higher construction costs. While shortages of skilled labour are evident in the home construction industry across the country, Manitoba has been particularly hard hit by the lack of qualified workers. The MHBA strongly believes greater emphasis must be placed on training and development programs that are targeted specifically at the highly rewarding careers available in home construction.

Longer-term solutions must be developed to attract skilled immigrants, make younger people aware of career opportunities, and provide more comprehensive educational programs. The MHBA looks forward to working with government to attract new talent to this province.

Finally, on housing finance, the MHBA, along with the CHBA and other provincial bodies, does not support subsidy programs. While the MHBA recognizes that this is a serious mitigation measure, these unsustainable stop-gap measures create market distortions and are not a substitute for dealing with the systemic barriers to housing affordability, particularly in the rental housing market.

A key stakeholder in the home building sector, MHBA, along with its national counterparts, strongly supports efforts to maintain a stable financial system for the housing sector. Initiatives such as the 95% low down payment mortgage, which is now available to all home buyers, has improved access to housing by allowing potential purchasers with limited equity to purchase a home.

Financing for rental housing remains a concern, however. Only CMHC provides mortgage insurance on rental housing. While CMHC has taken an action to reduce the insurance premiums for high-ratio loans on rentals and has changed the underwriting criteria to allow for larger mortgage loans for rental projects, the costs remain prohibitive.

While housing starts across the country are up, it remains difficult for first-time buyers and other segments of the population to acquire affordable housing.

À (1025)

The Chair: Mr. Bollman, I have to cut you off here because there are other people who have to do their stuff. I know you have a few more paragraphs, but the committee has that.

Mr. Wayne Bollman: Okay.

The Chair: Thank you. I'd just note that you've also submitted your brief to the provincial Minister of Finance from February of last year. Do you stand by all those recommendations also?

Mr. Wayne Bollman: Indeed we do.

The Chair: Okay, thank you very much.

I will now move to the Homeopathic Medical Education and Research Centre.

Please go ahead.

Dr. Valerie Squire (Program Coordinator, Homoeopathic Medical Education and Research Centre Inc.): Thank you. Good morning, and Hallowe'en apples to everybody.

My name is Dr. Valerie Squire. I am the program coordinator of Dr. Nielsen's Homoeopathic Medical Education and Research Centre Inc., and this is my colleague Dr. Kumar Belgaumkar. We are both practising homeopathic medicine in Winnipeg and in established satellite clinics in Manitoba, Saskatchewan, and Ontario. We have been providing the service of homeopathic medicine since graduating in May of 2000.

My background also includes a diploma in respiratory therapy, where I have worked in a hospital setting for more than 10 years.

Thank you for this opportunity of presentation. We welcome the opportunity to provide our recommendations for integrating homeopathy as a system of medicine into the already existing single system of medicine.

We believe the Canadian population is not only demanding a change in their health care provisions but will also benefit from a choice of treatment. There are growing concerns about the long-term side effects of prescription drugs and the ever-increasing number of prescriptions that are being written today. A long-term funded study has the potential of assessing the following points: One, does homeopathy improve the overall health status of an individual for life?Two, could homeopathy decrease the use of prescription drugs and unwanted side effects—prescriptions that have a long-term detrimental health impact and are debilitating to a person's lifestyle? Three, properly trained doctors in another system of medicine will make more doctors available to the public. Four, long-term data collection can trim the development of chronic disease in the populace, comparing conventional medicine with homeopathic medicine. Five, the cost savings of using a preventive system of medicine can become evident.

To achieve the goal outlined, we have come up with the following recommendations:

First, we recommend that the government recognize or re-recognize homeopathy as a system of medicine. This can be done through the Canada Medical Act, as a new inclusion or by reinstating the right to practise as outlined in the Medical Act until 1953.

We recommend the government support and recognize that a standard of education in homeopathic medicine must be established for the protection of the public. With this recognition accreditation, standards of practice, associations, etc., will be able to evolve, ensuring the safest and highest quality of care for the public.

Third, we recommend that homeopathy and its coverage be available to those Canadian citizens who request it. This can be achieved by allowing deductibles to apply to homeopathy and not only to allopathic prescriptions. After the patient has spent his required deductible, ongoing treatments could be covered under medicare.

Fourth, we recommend the government recognize homeopathy's place in a hospital setting as an adjunct to the conventional care—nothing can replace surgery. For example, homeopathy can provide care that will improve healing and assist with pain control post-surgery.

Fifth, we recommend that the government fund a long-term research project to assess the efficacy of homeopathy as a system of medicine.

We recommend our institutions for the following reasons:

(a) standard of education;

While not everybody will have the package in which I have included our four-year curriculum, those are the standards we are trying to establish.

(b) availability of resources;

We have faculty members with experience and expertise in research. At the back of the handout I have included a copy of some of the biographies and CVs of our faculty staff. The biggest CV I included so that you could see the qualifications of Dr. Halli, who is affiliated with our institution. I have also included a couple of biographies from some of the international doctors from India to whom we also have access, who are doing current and ongoing research in India.

Dr. Nielsen's Winnipeg clinic and established satellite clinics already have over 10,000 patients.

I'll pass this to my colleague, Dr. Belgaumkar.

À (1030)

Dr. Kumar Belgaumkar (Homoeopathic Medical Education and Research Centre Inc.): Good morning. I'm Dr. Kumar Belgaumkar. I've been practising homeopathy for the past four years at Dr. Neilson's clinic. I'm also the research coordinator there as well.

Over the past 10 years we have met with various government officials, both federally and provincially, regarding the regulation and recognition of homeopathy. Each time we met with them their answer was, what reason is there to regulate or recognize homeopathy when there's no substantial evidence to support its efficacy?

Over the past four years of my practice I've seen various diseases cured by homeopathy, and there are hundreds of patients who can testify to these cures. We have successfully treated both chronic and acute diseases through homeopathy. Through research we can clearly demonstrate the efficacy of homeopathy.

Our goal is to provide a safe and effective form of treatment. We strongly request some funding for our homeopathic research, as there is a serious lack of research funding for homeopathic health care.

Thank you for this opportunity.

The Chair: Thank you very much for your presentation this morning. We'll all have some questions, I'm sure, for you.

Now we'll go to the university and the university president.

Madam, go ahead, please.

Dr. Emõke Szathmáry (President, University of Manitoba): Thank you, Madam Chair and members of Parliament, for your invitation to appear before you today.

You should have received a package like this. Within this package there are two documents, which are the briefing notes for the presentation in English et en français. I'm going to stick reasonably close to what is in those. Obviously, in the interests of time, as I have seven minutes and I don't want you to haul me out of it, everything that is in those is not going to be said.

I do want to go on record thanking the federal government for increasing the support to post-secondary institutions in the past few years. The initiatives that have been launched have made a huge difference at the University of Manitoba, but also at other institutions across the country.

Now, some of you may be unfamiliar with my university, so let me begin with some introductory comments.

The University of Manitoba was the first university established in western Canada, and at 126 years of age, that makes us the oldest. We are the largest and most comprehensive institution of higher learning in Manitoba. Currently, we have over 26,000 students, taught and supported by over 4,800 faculty and support staff, spread across two campuses within the city of Winnipeg. Our current operating budget is $358 million. In addition, our total research funding in the last fiscal year was just under $100 million. Directly and indirectly, we generate over $1 billion annually in economic activity in Manitoba.

So as you may surmise, we are a proud provincial university. But make no mistake: provincial does not mean parochial. We are part of a league of national and international research universities, and our mission is deliberately double-pronged, to provide a high-quality education and to serve as the research engine of our province. We believe that an informed, educated electorate is critical for the continuation of our way of life and for the advancement of a just and prosperous society.

A testament to our commitment to educational excellence is the fact that in the past 30 years the University of Manitoba has produced more Rhodes scholars than any other university in western Canada, and by that measure we actually rank fourth in the nation.

At the same time, as the only medical doctoral university in the province, we have a longstanding commitment to accessibility, recognizing that not everyone in Manitoba has an equal chance of earning high grades during their high school years, for reasons other than innate ability.

A special aspect of our commitment to general accessibility is the university's access programs, which are designed to assist those who might otherwise fall through the cracks once admitted, particularly individuals of aboriginal descent. We are very successful, as the numbers in my briefing notes will indicate. Our access graduates are actually leaders and role models in Manitoba and across the country. The impact is significant. To give just one example of the array in your briefing notes, one-third of all of the professional engineers of aboriginal ancestry in Canada are graduates of our faculty of engineering.

Our goal is to be even more successful, but this requires us to deal with the overall issue of increased enrolment. Student numbers at the University of Manitoba have increased by 25% since 1997-98, and our institutional capacity to handle this overload is increasingly challenged. By institutional capacity, I'm talking about both human and physical infrastructure. To teach more students we have to have more teachers. We're not unique in this regard. The Association of Universities and Colleges of Canada estimates a national requirement for 40,000 new faculty members by the year 2011.

In addition to professors and staff, universities must provide the physical and technological infrastructure that learning in the 21st century requires. The University of Manitoba is nearing the end of a very successful five-year, $200-million capital fundraising campaign. The funds obtained will provide for new facilities and greater endowment funds. In other words, they will help provide the infrastructure necessary to deliver an exceptional education. But despite that kind of infusion, our deferred maintenance bill of some $200 million remains.

The current estimate of the cost of our asbestos abatement program alone is on the order of $20 million. Again, in this respect we are not unique. The Association of Universities and Colleges of Canada estimates that across the country universities face an accumulated deferred maintenance bill of some $3 billion.

À (1035)

What can the federal government do about problems related to demand for access to universities, for instructors, and for proper facilities? In the same way that the federal government has helped to revitalize university research, it can play a role in helping universities deliver a quality education. The University of Manitoba supports the AUCC proposal that the federal and provincial governments work together to establish a higher education renewal fund. Such a fund would be in addition to the current Canada health and social transfer and would be used to improve accessibility, hire additional faculty, and help meet physical infrastructure needs. Our government needs to ensure that the institutional capacity exists to provide a quality education, and that will certainly require additional investment of funds.

With respect to our research commitment to our province and our nation, the University of Manitoba can document high achievement. Let me just give you two examples of our worldwide research impact.

One involves the development of canola, the edible cultivar of rapeseed, which has spawned an industry worth $2 billion annually to Canada alone. The second is the development of a method to eliminate Rh disease of the newborn, the value of which is measured not only in dollars saved by the health care system but also in rather inestimable human terms. This particular disorder arises in every generation, so there are in fact people in this room, just on the basis of probability, who would not exist except for the work of University of Manitoba scientists.

Time, of course, doesn't allow me to list all of the university's research strengths, but a key element of the innovation agenda is commercialization of research findings. In a recent Canada Foundation for Innovation study comparing commercialization success relative to research income received among Canadian universities—and you do have to consider the money that goes in, in terms of what comes out—the University of Manitoba ranked fourth in licence income received, tied for fourth in options and licences executed, fifth in U.S. patents issued, and tied for seventh with three other universities, among them Toronto, Alberta, and Calgary, in the number of startup companies that were formed. Clearly we're doing well, and we expect to do better since we have a research park on our campus called SMART Park.

To be blunt, however, research costs money. Indirect costs of federally sponsored research, for example, are at least 40% more than the direct costs of research. The new indirect costs program was worth $5.5 million last year to the University of Manitoba. Unfortunately, that has to be shared by some of our research partners, the research hospitals. Furthermore, the sum only covers 21% of our indirect research costs.

This is in contrast with our American neighbours. The nearest medical doctoral university in the United States is just a two-hour and ten-minute drive away, where on average indirect cost rates are more than 50% of research grants.

The three federal granting councils also have a significant impact by funding research, but there's no question that they're stretched to the limit, with demand far outstripping the supply of research dollars. The funding crunch is particularly applicable to the Social Sciences and Humanities Research Council, which has traditionally received a disproportionately lower share of increases to the council's budget.

I think in a pluralistic nation like Canada we cannot afford to ignore the value of research in the social sciences and humanities, and increased funding to this agency is as important as funding to the others. If we are to meet the government's laudable goal of improving Canada's research and development performance, we must continue to significantly increase federal investment in the granting councils.

In creating the Canadian Foundation for Innovation, the government acknowledged the need to support research infrastructure. Those new dollars have certainly been enormously helpful, but the agency's current funding levels are insufficient alone to meet demand.

In Manitoba's case, as in other small provinces, it's difficult to find the 60% required for every 40% of funding provided by the CFI, because our industrial base is limited and provincial funding priorities may deviate from projects judged meritorious by CFI.

Finally, if as a country we are to continue to expand our research efforts, we need to encourage more young Canadians to pursue graduate studies and research careers. We have more than 3,000 graduate students at our university alone. They're going to be tomorrow's researchers. The Canada graduate scholarships program announced in last year's budget was a step in the right direction, but more will have to be done to support graduate students.

Thank you for allowing me to make my comments, Madam Chair, and we'd be very happy to answer questions.

À (1040)

The Chair: Thank you. My job is to make sure everybody gets their fair time, but it's also hard because I hate cutting you off. You all have such valuable input.

We are going to go to Mr. Simard. I'm going to give eight minutes, as we are running a bit late.

Mr. Raymond Simard: Thank you very much, Madam Chair. Welcome to all the guests.

I think I'll start with the University of Manitoba, since it's so fresh in our minds.

I get conflicting information on the CFI program. Some people tell us that the CFI program is very focused towards certain universities—bigger universities, if you will—and that the benefits to smaller universities such as the U of M aren't that strong. I would like your comments on whether CFI has been a good program for the University of Manitoba.

Secondly, the Government of Canada has also recently announced 2,000 research chairs across Canada. I'd like to know if you have been able to benefit from these chairs.

Dr. Emõke Szathmáry: I'll ask Dr. Keselman, our vice-president of research, to respond to your questions.

Dr. Joanne Keselman (Vice-President, Research, University of Manitoba): Thank you very much.

With respect to your question regarding Canada's Foundation for Innovation program, I'm well aware that there has been a lot of discussion regarding that program.

Certainly with respect to your question regarding impact, it has had a huge impact at the University of Manitoba--huge. If we look at CFI projects and count provincial matching funds as well as matching funds from other partners, we have brought in close to $75 million in support of new research infrastructure at the university. All around the university, on both of our campuses, you will see activity—significant construction—that is a function of that.

But clearly, as the president indicated, it is a real challenge for the University of Manitoba and for universities that are similarly positioned within various regions of the country to put large proposals in place, primarily because of the matching funding requirements.

I think the important point is that programs that are introduced by the federal government need to be introduced in such a way that all regions of the country can benefit from those programs. From our perspective, we think CFI is a terrific program that has had a lot of positive impact for us. But we are, I think, challenged, along with some other similar universities, and perhaps in a different fashion than some of the larger ones, with respect to the matching requirements, which is the way the program has been set up.

À (1045)

Mr. Raymond Simard: With regard to the research chairs?

Dr. Joanne Keselman: On Canada research chairs, our current allocation is 49 Canada research chairs over a five-year period. We have 28 chairs in place, five just recently announced. Again, that has had a very significant impact on work at the University of Manitoba.

The issue around the Canada research chairs program is that of course it's driven by performance, and there are three granting agencies. Again, our ability to access that program depends on our ability to compete for funding from the national granting agencies. That is a function of a lot of things, and a lot of it has to do with regional issues around industry base and provincial funding, etc.

Mr. Raymond Simard: Thank you.

I'd like to move just quickly to the students of aboriginal descent. Given that within a couple of years 25% of our workforce will be from the aboriginal community, I think it's very important. You have a very important role to play.

I would just like to know how we can help you, how the federal government can assist the universities in that respect.

Dr. Emõke Szathmáry: I have to draw a distinction. A large fraction of our aboriginal students—first of all, we ask them now to self-declare. Many don't. We know on the basis of surveys—we belong to a consortium of 30 universities that undertake surveys—that 7% of our students surveyed last year indicated they were of aboriginal ancestry, relative to 3% at the other universities, including medical doctorals. We happen to think that 7% is underreporting. Most of these students come in actually through the normal high school route.

But the access program, from which, as I mentioned, one-third of the engineers of aboriginal ancestry are our graduates, is a very important program that was originally initiated by the province and the federal government in the early 1980s. The federal government withdrew. The province continued. Currently, there is much more funding going into that by our province than, say, occurred in the decade of the nineties.

It's a very important program, because it fulfils two requirements. The students, once they are admitted, are tested for literacy and numeracy requirements. If they require upgrading, then that is provided before they are permitted to take their first university-level course. Then they are admitted into their first university-level course. If they are successful in that course, they then may progress on to take other courses. In addition, they get a lot of counselling. Most of them come from small communities. They are accustomed to having a lot of people around on whom they can rely. The counselling, the little home-away-from-home-type model, is important to them.

But the important thing to remember is that our approach requires them to meet the same standard as any other university student in that program. There is no alteration of program qualifications or standards. And they are not stigmatized, because there is no way to distinguish between an aboriginal student or a refugee, for example, because under that program we also admit refugees or people living in remote locations who may, let's say, be of Ukrainian ancestry. There is no way to tell them apart from other students who come in through the regular route. They meet the same standards and they are not stigmatized. Those two characteristics make this a very valuable program for the students. Their chances of success are great, and obviously they fulfil a need in terms of the education of the particular sectors they happen to come from.

For the federal government to go back and begin investing in access programs such as ours would be invaluable all across Canada, but in particular in those provinces such as ours, or Saskatchewan or Alberta, where there is a significant aboriginal presence.

À (1050)

Mr. Raymond Simard: Thank you.

I'd like to move to the Manitoba Home Builders' Association.

Mr. Bollman, I think you made some very interesting recommendations. A lot of them actually pertain to the provincial government, but at the same time one of the issues you brought up was with regard to the underground economy. I know you just mentioned it briefly, but as a past home builder I know it's a huge issue when you are trying to do things on the up and up and you are competing with a lot of guys who are not.

It's one of the issues that as a human resources committee we want to study, because it's costing Canadians billions of dollars. I'd just like you to expand on that—how it's affecting your industry and how the federal government can assist you in that respect.

Mr. Wayne Bollman: I guess it's multi-pronged. First of all, obviously, the non-licensed individuals, those working under the radar screen, have a cost advantage. Consequently, they're competing against us purely on cost basis.

That aside, they are also affecting the quality of work. They're certainly not going to the City of Winnipeg to obtain the necessary permits and so forth. Consequently, the quality of work issue arises, which then comes back and reflects on our industry.

The cost issue is then translated to the industry as a whole. I think these folks with a pickup truck and a ladder in the back are taking our opportunity to do work in the industry.

Mr. Raymond Simard: You also spoke of the fact that we should be attracting skilled immigrants. You're aware obviously of the provincial nominee program in conjunction with the federal government. That is exactly what they're trying to do, as far as I'm concerned. They're trying to identify needs, and then we bring in the immigrants based on that. I'd just like to know if you're involved with the province in that respect.

Mr. Wayne Bollman: Indeed we are. We just had a meeting two weeks ago with the Minister of Labour and Immigration. We have provided them with a very detailed information package outlining the various skill sets we require.

We think we need somewhere in the range of 150 skilled workers a year for our industry. That's one way we hope to add to this number, to get that number. Another one is our training programs. We have a residential construction training institute whereby we take people off EI and the welfare rolls and give them training in this industry.

So far I think 60 folks over the past year have been brought into our industry though that method.

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

Now we'll go to Judy Wasylycia-Leis. Go ahead.

Ms. Judy Wasylycia-Leis: Thank you, Madam Chairperson, and I'd like to thank everyone for their presentations this morning.

I have a hard time getting all of my questions in in eight minutes in the best of times. This is going to be really hard with so many folks from my own neighbourhood, but let me try by starting with day care, which has been an issue near and dear to my heart.

I want to ask Pat Wege something. And, Pat, you've been involved in this issue as an advocate for, what, over 20 years?

Ms. Pat Wege (Executive Director, Manitoba Child Care Association): Or more.

Ms. Judy Wasylycia-Leis: Or more.

You've been calling for a national day care program for a long time, so I want to ask you, how many times have you heard this promised in elections? How far back does it go?

I'll ask you three questions at once, because she's going to cut me off if I don't do all of them at once. She's really mean!

How long has this been going on? Why haven't we succeeded? Why is the Manitoba model a useful one to look at in terms of a national day care program? We often hear about the Quebec model as the only way to go. I want to hear why the Manitoba model makes sense.

I sometimes hear from government members that we have this great national child tax benefit program, and that it really solves the problem or goes a long way to solving the problem. Why isn't that an answer to a national child care program? I just want you to talk a bit about that.

Ms. Pat Wege: How long do I have?

À (1055)

The Chair: About seven minutes.

Ms. Judy Wasylycia-Leis: But I do have some other questions, please.

Ms. Pat Wege: Okay. I'll try to be brief.

Judy, as for how long, I first got involved in child care in 1976, so it has probably been as long as that. When you asked the question, the first or closest date that popped into my mind was 1997, with the federal Liberal red book promise. I think that promise was for 50,000 new spaces in each year when we had more than 3% economic growth. It is my understanding that we've surpassed that many times over since 1997, so we're not seeing those 50,000 spaces at all, period. So I've heard it many, many times.

As for why we haven't succeeded, I'm going to say a couple of things. I don't think the political will has been there, but I do believe we are making huge progress in that regard. Here in Manitoba we have a government that is wonderfully supportive and understanding of the key issues. I'm going to be bold and say I think we have support because many of the current caucus members are women, who have been there with child care and have tried to be in the workforce without reliable child care. And they get it. They come from the grassroots, their ears are close to the ground, and they know from their constituents, who are trying to be in the workforce and are trying to acquire training, that they can't do those things without affordable, reliable child care.

So it's political will, without a doubt. We have some wonderful advocates now. At the federal level, Jane Stewart pops into mind; so does John Godfrey. It's been a long hard road to do the education.

When I sit at the table here and listen to my colleagues, in particular the gentleman from the Manitoba Home Builders Association, I bet you never gave one single thought—though I'm not scolding you—that when you were trying to recruit refugee families, many of them would require child care, or they would not able to be in your training program. So many of the partners, be they a home builder or not, don't understand how child care is their issue as well.

Mr. Simard, you started to talk about the underground economy for construction workers. Can I just tell you how big the underground economy for child care is? Seven out of ten children in our country today are in the underground child care economy because there aren't enough licensed spaces.

I'm going to be so bold as to say that the tax dollars this country is missing from those people who are not licensed and not regulated, who just have a few toys and a television in their living rooms, and hang a shingle up at the Safeway that says, “Quality child care”, but don't issue receipts and don't pay taxes, would probably pay for that national child care program many, many times over. Until all politicians recognize that our country would collapse if all of those women quit their jobs and stayed home... I hear that sometimes from politicians who don't get it, who say, “Well, if these women would just quit their jobs and stay home, we wouldn't need child care.” But our country would collapse without them. Politicians are very pleased to take the tax dollars from all the working women, but when it comes to child care, you are on your own to find it, to monitor it, and to hold it together.

That's why we haven't succeeded. But there will be a government who's going to do this, and I invite the Liberals to be that government.

The Manitoba model has been successful for a couple of reasons. We have good input from the community. We have a regulatory review committee that was started by the government, with key stakeholders sitting at the table, who are working on taking us forward in a way that's reasonable and respectful and makes sense for Manitoba. We don't want a Quebec model here in Manitoba; we want a Manitoba model. We know exactly what that looks like because we've already done the work.

When Don mentioned the need for a better rollout, it was because of that. We have a government in place that's willing to roll; our government officials went to Ottawa and hammered home that multilateral framework agreement, because they believe in it and they want to take Manitoba forward. So all the right needs are aligned here in Manitoba. The federal rollout of dollars is too slow for us; we are dragging our heels because of that. We are a province that wants to launch and leap, and we can't.

Á (1100)

Do look at Manitoba. Do use Manitoba. We've written to the premier on this. We've written to the finance minister. We've written to Jane Stewart, saying look at Manitoba and use us as a pilot, because we are ready and willing to avail...and have all the pieces right. If you want to start a national child care program somewhere, do it here.

Am I missing anything? Why is the national child tax benefit not really it? Because it doesn't create spaces. That's just the simple answer. The national child tax benefit does not create one child care space in this country. It provides money to families. They're then supposed to go out there and find a child care space. But it does not create spaces. So that's not the answer for a regulated national quality child care system.

Did I miss anything?

Ms. Judy Wasylycia-Leis: Great. Thank you.

The Chair: You have 35 seconds.

Ms. Judy Wasylycia-Leis: Very quickly, on funding for post-secondary education, we've heard from a lot of folks saying it's been shortchanged. We need to actually look at a direct transfer of moneys for post-secondary education into some cash transfer, separate investment, separate legislation, national standards like medicare

What do you think?

Dr. Emõke Szathmáry: Well, I'm supporting the AUCC position. As I said in my particular brief, there is a program that has been described. I don't know to what degree it's been fleshed out, but to me that sounds as if it will hit the three things that really matter for us in partnership with the provincial government.

The Chair: Thank you very much. We've had a lot of discussion over the week on that. My former colleague, Lloyd Axworthy, who's from here, put that child care offer out to all the provinces when we first hit surplus, and we couldn't get... So there was an effort. And I can tell you the women's caucus in our government worked very hard on that. But it was the men and women of this committee last year who for the first time in a finance report put the recommendation out. But again, we need to have a cooperative venture.

We'll move to Mr. Harvard, another Winnipeg-area member.

Mr. John Harvard (Charleswood St. James—Assiniboia, Lib.): Thank you, Madam Chairman.

I have a couple of questions for my friend Emõke.

I am wondering whether we have reached the stage where there is too much dependence on private sector money for research. As you know, not too long ago our friend Arthur Schafer wrote a couple of pieces in the Winnipeg Free Press, raising some rather disturbing questions about the use of private sector money in university research and more or less implying, or directly saying, that some of the work of researchers has been compromised by the dependence on private research money. What would you say to that?

Dr. Emõke Szathmáry: He receives private research money for his centre, but that's another issue.

The fact is, if a university does not have appropriate policies, yes, precisely the kind of thing he's talked about can occur, and the Nancy Olivieri case is an important one in that regard.

But I'll defer to Dr. Keselman, because she knows this better than I do.

Dr. Joanne Keselman: For your information, in terms of research funding to the University of Manitoba, when you look at just the operating funds as opposed to capital funds, that figure would have been about $80 million last year, and 1.5% of that comes from industry. So interestingly, it's actually a very small percentage. We're heavily reliant on the federal government and provincial government for research funds. Some of that relates to the fact that there's a relatively small industry base in Manitoba—but it's still a small portion.

Having said that, the whole issue around having an appropriate policy framework to ensure that when such funds are received they are used in a fashion that is consistent with the principles of the university, including the right to publish and the right to train graduate students and not have their progress impeded, is an important point. We're actually in the process of finalizing the contract research policy that looks at that.

Where most of the money, let's say, for clinical trials research is actually administered is through our affiliated teaching hospital. In that case, there's a fairly high percentage of private sector money going into clinical research. So we've been working with our two teaching hospitals to harmonize our procedures to ensure that the funds they administer, and the funds we administer from third parties, are all handled in such a fashion that they would meet the fundamental principles of the university as a public institution in terms of access to information and training of students.

Á (1105)

Mr. John Harvard: Apart from any possible ethical questions that can be raised in these kinds of partnerships, do you think that government has just got into a bad habit in the last years of starving universities of research funds, causing universities to look for money elsewhere, outside of government?

Dr. Joanne Keselman: I think it is the case that particularly in the mid-1990s, when funding to the granting councils was declining quite rapidly, researchers were turning their attention, by necessity, to other sources of funding, notably the private sector.

In fact, I have had conversations with researchers who have indicated that what they find frustrating is that they have to then orient their research to the problems that are of most interest to industry, as opposed to pursuing problems that they believe in the long term may be more important but are more fundamental in nature.

So I would certainly reiterate and support what the president has said in terms of the need for the federal government to continue to substantially increase funding to three national granting councils so that the research programs at Canadian universities are not unduly directed, if you will, by the interests of private companies.

Mr. John Harvard: Emõke, maybe you can answer this question, because it's perhaps more general or philosophical. In your earlier remarks you made reference to the inadequate industrial base that we have here in Manitoba and the limited provincial funding. When it comes to the CFI partnerships, perhaps we in Ottawa should be developing a more egalitarian model so that we take into account universities like yours.

Dr. Emõke Szathmáry: I think for us the real issue is the definition of “the prairies”, which includes Alberta. Alberta is not a province that requires input from the federal government in terms of what moneys it has available to either match or undertake research.

Saskatchewan, however, is much more akin to us. So when you take a look at the ability of Saskatchewan and Manitoba to find industrial partners for that 20%, each government has a fund created. We have the Manitoba Innovation Fund, which provides 40% matching for CFI, which also provides the 40%, but we have to find the remaining 20%.

The difficulty for Saskatchewan is very similar to ours, and it's very similar to the situation in the Atlantic provinces, where a particular approach was devised to deal with that issue of a small industrial base. It had been suggested for the prairie provinces and then rejected, because of course Alberta doesn't need it; therefore there's a hole in the centre of the country. Canada is shaped like a doughnut, and there's nothing where Manitoba and Saskatchewan happen to exist.

So it really is an issue for me. It is something that I think requires attention in Ottawa, because the good brains are here, and I mentioned very specifically our commercialization success as an example. The fact is that we can do it and we're in the league with the best of them in the country when you take into account the amount of research money we get.

Unfortunately, for programs that do require us to raise that remaining 20% on the assumption that our province agrees that they want to put their 40% match into that program, we may not be able to do it. So we monitor proposals to CFI very carefully. Formally, the university submits them, and in fact we have an excellent record, probably one of the best in the country, in terms of the number of projects submitted that are successful.

But are we getting the amount of money that you might predict on the basis of population size alone? No, because Dr. Keselman and her shop monitors very carefully what projects go ahead, knowing that for some projects, although we're desperate to have them because we need the fixing up of the research infrastructure, we won't have the industrial base to support it. That's a real issue.

Mr. John Harvard: Maybe Maclean's magazine will give you a good story one of these days.

Dr. Emõke Szathmáry: Never.

Á (1110)

Mr. John Harvard: That's all. Thank you.

The Chair: That's fine. Then I'm going to take your 30 seconds.

The Auditor General has a couple of times expressed concern about CFI and accountability. I know in my own province and in my own city, the University of Western Ontario has benefited greatly from the CFI.

Would you care to put anything on the record just briefly as to whether you think this is an institution with adequate accountability?

Dr. Emõke Szathmáry: I'd love to do that. I'll write you.

Incidentally, I just came back from the University of Western Ontario. I was there once for six years.

The Chair: Okay. Great. Thank you very much.

Now we'll go to Mr. Cullen for eight minutes on our final round.

Mr. Roy Cullen: Thank you, Madam Chair. Thank you to all the presenters. There have been some interesting presentations.

I'd like to go to Mr. Borody. As you pointed out, the cost of substance abuse is huge for Canada and indeed worldwide. I'm sure when you do your update, that number is going to increase from $18.45 billion.

I have two questions. I think it was in the 2000 throne speech our government indicated we should launch an anti-drug strategy. Since then the silence has been deafening, but sometimes there is a lot of work going on behind the scenes that we are not aware of. Where are we at with our drug strategy? Presumably, organizations like yourselves are involved in the formulation of that--hopefully.

My second question is, has your organization taken a position on our government's proposed marijuana legislation?

Mr. John Borody: I'll answer the easier one first, and that's the first question.

We have been involved, and I think there's been a lot of work done in the back rooms. When the national drug strategy was finally announced this spring, it was something we were aware of. We have had numerous consultations with the PMO's office as well as through CCSA with Health Canada. So we were pleased to see the announcement of the money. What we weren't pleased to see is that the money got cut in half from the initial discussions. However, anything is better than nothing.

The second point I'd make is I think the success of this national drug strategy will be in the continued input from those people who are involved at the grassroots level, as well as, I think, the taking of advice from those of us working in the field. Partnership is going to be key to this initiative.

What happened in the early nineties when the federal government announced the last one is it was seen as a Health Canada initiative, not a national drug strategy. It fell flat. You can't dictate to the provinces how they're going to operate. I'm pleased to see this new strategy coming out has more words like partnership, cooperation, and getting advice.

On your second question about the marijuana, the bad thing about the national drug strategy is it was tied to the change in the marijuana laws. So what came out in the press across the country were the marijuana laws, and the national drug strategy took second place. If you remember, all the hype was around where we were going to go with the laws.

We are supportive of the laws in the sense that at least now there's recognition that enforcement can do something. What they did with simple possession in the past takes too long to document. It takes too much time in the courts. And probably 99% of the time, simple possession for marijuana is thrown out; nothing happens. So by changing the legislation and actually having a ticket issued, at least now enforcement can do something and can do it quickly.

Mr. Roy Cullen: Thank you. I'd like to go to the home builders now.

Mr. Bollman, in your brief you talked about the regulatory reform, the R-2000 program. If we're going to meet our Kyoto targets internationally, we're going to have to pay more attention to energy conservation and energy efficiency.

I did some work on R-2000 a couple of years ago, and what I discovered, certainly in Toronto, was that it had become very much a niche market because of the cost. There were some players in it, but it was not really grabbing a lot of attention.

I guess I have two questions for you on that. One, if it's a mandatory requirement, doesn't that make it easier for you in a sense, although it does push up the total costs? Part of the problem in Toronto is that it's attractive to only a certain type of buyer because of the cost. But if it's a mandatory requirement.... We don't want to kill the goose that's laying the golden egg, because construction has been a driver in our economy. By the same token, we have these other policy objectives.

That's the first part of the question.

The second part is, does an R-2000 spec affect you differently, like site construction versus factory-built housing? Are you able to deal with it? Does your membership include factory-built housing, and if it doesn't, are you able to meet an R-2000 spec as easily as the factory-built housing operation?

Is that a concern to your members?

Á (1115)

Mr. Wayne Bollman: I will pass that on to our chair, Derek Thorsteinson.

Mr. Derek Thorsteinson (Chair, Board of Directors, Manitoba Home Builders' Association): Thank you.

I think the real issue is this. The success for the new house market—and we've been partners in R-2000, I think, since conception—has been on a voluntary basis. One of the things that concerns us greatly is if you look at greenhouse gas emissions, you'll find that the problem is in housing stock 25 years and older, because the technologies aren't in existence in those houses.

As an industry, we feel our partnering with R-2000 over the years and the transfer of technology that comes into the marketplace because of the promotion of energy efficiency in R-2000 programs, and now EnerGuide, which is being delivered provincially as well and in which we're a partner, has been the most successful way of marketing that product.

As soon as you mandate it and legislate it, the costs for the entire R-2000 program are still significant, and what we find is on the street we're only selling to perhaps 3% of the marketplace. That is not, from our perspective, a successful penetration of the market.

As an example, R-2000 in Manitoba had as one of the major pieces of equipment the heat recovery ventilator. I don't want to make you technical experts in housing, but it's a piece of equipment that does a tremendously good job at indoor air quality. HRVs are already probably in the range of 25% to 30% of the housing market on a voluntary basis, and it continues to grow every day, because that particular piece of technology works extremely well.

There are other factors in R-2000 that don't contribute to the improvement of greenhouse gas emissions and don't provide credits in that area of energy efficiency, but if you mandate R-2000, they are simply going to drive up the affordability of housing.

The other concern we have is we are trying every day to deal, to the best of our ability, as an affordable housing delivery agent, and we have a real fear that the housing market is being supported to a large extent by what I'm going to simply refer to as cheap interest rates.

If money is cheap, you mask a real market. What's happened is industry has enjoyed a lot of success, yes, in the last five to eight years because of that affordability. If rates move in any way, shape, or form, I think you'll see a real adjustment in the marketplace.

The other thing that comes with healthy markets is the continued regulation of building codes and other codes that affect the cost of the house every day. So if we keep driving these houses up in terms of affordability, and then we add on top of that a mandatory R-2000 price tag, I don't think the government and the country are going to reach the Kyoto agreement benefit you're looking for at any kind of affordable price.

That's the only issue I have with it. We have, by the way—

Mr. Roy Cullen: What about the second part of my question, the factory-built versus regular—

Mr. Derek Thorsteinson: I honestly can't comment on the factory-built. I think I'll give that back to Wayne.

Mr. Roy Cullen: Is there no difference? Is it neutral or... Well it's a more exotic point, but--

Mr. John Daniels (Vice-Chair, Board of Directors, Manitoba Home Builders' Association): Yes, I think it would be fair to say that it would be easier to control it in the factory process. I think part of the difficulty, as Derek has confirmed, is that to get an R-2000 certification there is actually an inspection process and a blower test that you have to go through. Right now, if we are servicing 1% of the market, where is the administrative structure to now start doing 100% of the market? There is a huge cost associated with that.

Just generally, though, I think when we talk about barriers to affordable housing—I think Derek has touched on this—what we are really saying is where are our children going to live if we keep driving up the cost of new homes? The rate of home ownership among the young, those aged 25 to 34, over the last 20 years has fallen from 52% to 47%, and that's in spite of decades of low interest rates.

Mr. Roy Cullen: With respect, the home builders organization's real estate people keep coming forward recommending policies to create more homes, but they don't really differentiate between high-end homes or affordable homes. The affordable housing is where the problem is.

I take your point of making it a mandatory requirement in terms of the cost, but it seems to me that to do one and not the other doesn't make much sense either. To say that you only have to retrofit at a huge cost, for citizens who have bought homes, obviously, there would have to be some incentive or some subsidy program by the federal government. To exempt new homes doesn't seem to make a lot of sense to me.

The Chair: And?

Á (1120)

Mr. Roy Cullen: I wonder if they want to have a chance to respond.

The Chair: Do you want to respond?

Mr. Derek Thorsteinson: The only comment I can make is that the EnerGuide program, which is being delivered provincially, already has significant benefits for the retrofit market in it. It is a very economical and very beneficial program for these greenhouse emissions under the Kyoto program. I think we can address that part of the market, and I don't think legislation will improve the issue at all.

The R-2000 issue mandatorily goes right across the board with housing affordability. I don't think you are going to see the numbers come back that you are looking for in terms of the targets. Today if you test a standard house in the marketplace under the EnerGuide program, which has an equivalency rating of 80 for R-2000 specs, you'll find that the typical product is already almost there. The industry is delivering it today.

If you mandatorily legislate it right across the marketplace, you're going to have the first-time buyer paying a $5,000 to $8,000 bill that they can't afford to pay. That's the issue.

The Chair: Thank you.

Before we close, I have one question for the homeopathic group.

Yesterday we heard from your colleagues in Regina. One of the proposals they put in their brief was that they were in favour of keeping your professional expertise using the drug numbers that are currently there. They were not interested in the switch over to the Food and Drugs Act. Is that something you also endorse?

Dr. Valerie Squire: Yes.

The Chair: And you're absolutely on board with this?

Dr. Valerie Squire: Yes.

The Chair: Okay. I presume it would be the same rationale that we've heard. Thank you very much for clarifying that in my own mind.

Thank you to all of you for coming today. We're hearing from literally hundreds of people across the country. This outreach program under the standing orders of the house for the finance committee goes on every fall.

If we are permitted the time this year, we will be writing a report. If we are not, we are very grateful. It's most important that you put what you have to say on the record and that you've been able to answer our questions.

Thank you, all of you. I wish I could give you all an hour and a half, but then my colleagues wouldn't show. Thank you very much.

We are suspended for literally eight minutes, colleagues, and then we'll be back with our third panel.

Á (1122)

Á (1130)

The Chair: We will continue with our third panel this morning in Winnipeg, pursuant to Standing Order 83.1, on pre-budget consultations. This panel has a number of divergent members, as have all of the panels before us.

We'll start with the CanWest Global Communications Corp., Geoffrey Elliott, who is the vice-president of corporate affairs. Welcome to you, sir.

We also have the Child Care Advocacy Association of Canada. Debra Mayer, director of the Manitoba division, is with us today. Welcome.

Peter Squire is the director of public affairs with the Winnipeg Real Estate Board. You are joined by a present member and a past president of the Canadian Real Estate Association, Harry DeLeeuw. Welcome to you both.

From the Canadian Association of Student Financial Aid Administrators we have Judy Dyck, the president of the association and director of award and financial aid at the University of Winnipeg, and Peter Dueck, member at large, universities, and director of enrolment services at the University of Manitoba.

We are also joined by the dean of the faculty of arts, Robert O'Kell, from the University of Manitoba. You are appearing in an individual capacity, so you will have a separate presentation.

We will go in the order of the agenda, so we'll start with Mr. Elliott.

Mr. Geoffrey Elliott (Vice-President, Corporate Affairs, CanWest Global Communications Corp.): Thank you very much, Madam Chair.

As you know, I'm here on behalf of CanWest Global Communications, and we're the owners of—among other properties in Canada and overseas—the Global Television Network, the National Post newspaper, and a chain of daily metropolitan newspapers across the country. CanWest also has significant interests overseas in broadcasting assets in Australia, New Zealand, and Ireland.

I'd like to thank you for providing this opportunity to appear again before the standing committee to present our views and advice for the next federal budget. My brief formal remarks this morning are an abbreviated version of our written brief to the standing committee that we submitted on September 8.

As in previous years, we believe the best way for the standing committee to contribute to its stated goals of assuring greater levels of economic prosperity and the highest quality of life for Canadians is to focus on measures that will support optimum rates of macroeconomic growth. The ability of the Government of Canada to make progress on all its public policy goals is greatly enhanced when the overall Canadian economy is growing, when the private sector is expanding, and when government revenues are thereby increasing.

Building a bigger economic pie is the best way to safeguard the integrity of health care and other social programs; the best way to make our important role in combatting international terrorism more affordable; and the best way to keep an open-border relationship with the United States, by pulling our weight in safeguarding North American security and defence.

Our brief expresses concern that the government, as evidenced in the 2003 budget, may be losing some of its earlier resolve to maintain financial integrity through tight discipline on spending. In this regard, we share the view of the Canadian Chamber of Commerce that budget surpluses in recent years appear to have fostered an increased temptation to spend. The Canadian Chamber estimates in its brief that fiscal 2002-03 spending was $138.6 billion, an astounding average annual increase of 8.2% for each of the last three years. That's much higher than Canada's rate of GDP growth, and it's much higher than the rate of inflation.

As before, the CanWest brief addresses a number of issues that are of general concern in terms of the government's management of fiscal policy. We also recommend a number of measures that are of more specific interest to the Canadian media industry, of which CanWest is a part.

In the interest of time, I'll go directly to the CanWest recommendations this year. Our written brief, of course, provides analysis in support of these recommendations.

First, the current economic environment has become more fragile. The Government of Canada is already facing a period of significantly less financial flexibility. The U.S. economy is now rebounding strongly, with growth exceeding the projected growth rate of the Canadian economy for the first time in several years. Our first recommendation, therefore, is that the federal government should restore the tight disciplines on the expenditure side of the accounts. Our particular concern, as I said, is that the 2003 federal budget appeared to reflect a government that had lost its way, and that the budget included too many commitments to new or expanded spending programs.

Consistent with that concern, our second recommendation is that the government should institutionalize a culture of funding and staffing new programs by reallocating financial, human, and other resources from existing programs that are no longer of the same priority. That would be consistent with the Auditor General's comments in 2001. The Auditor General said that the government needs to build in stricter discipline; it needs to continually challenge ministers and program managers to examine the worth of their programs and how they serve the national priorities.

Investment in infrastructure is important to create the conditions for private sector investment, so our third recommendation is that the government should maintain its prudent investment in essential basic infrastructure that contributes to Canadian competitiveness, makes Canada a more attractive location for private sector investment, and thereby promotes sustainable GDP growth.

Taxes remain too high, so our fourth recommendation is that the government should continue on its path of reducing personal income tax rates and broadening brackets until Canadian tax rates approximate those of our principal competitor, the United States, while also working towards aggregate corporate tax levels that are competitive with those of the United States.

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Although there have been rate reductions, Canadian companies are disadvantaged by the calculation of the income on which taxes become payable. The next budget should introduce greater flexibility and competitiveness in the corporate tax system by enabling the consolidation of annual profits and losses of corporations that are made up of a group of affiliated domestic companies.

The result should be an aggregate taxable income that incorporates both profits and losses in business entities that make up the affiliated corporate group. Canada, in fact, is one of the few countries that does not have a system that enables affiliated companies to consolidate profits and losses. This is a competitive issue with the United States and other advanced countries.

Turning to issues that relate directly to the media industry, as CanWest has said on many occasions, government's financial support of programs for Canadian film and television programming content should be linked more directly to prospects for commercial success of that subsidized programming. Government programs should change the emphasis from rewarding Canadianness to encouraging and rewarding success as measured by Canadian viewership and by the recovery of production costs through international as well as domestic commercial distribution.

The government burns far too much cash supporting program production projects that have little hope of attracting success with viewers and imposing production criteria that almost always guarantee commercial failure.

Finally, the government should review CRTC regulatory fees on broadcasting. Specifically, the Department of Finance and Treasury Board should implement recommendation 8.4 of the report of the Standing Committee on Canadian Heritage, “Our Cultural Sovereignty”, to study the fairness of CRTC part 2 licence fees with a view to bringing fees in line with the actual and reasonable costs associated with the operation of a broadcast regulatory system. Pending completion of that review, we believe the government should institute a freeze on the level of part 2 licence fees.

That concludes my remarks, Madam Chairman. Thank you again for providing this opportunity to appear before the committee.

The Chair: Thank you for your input.

Now we'll go to the Child Care Advocacy Association of Canada. Please go ahead, Madam.

Ms. Debra Mayer (Director, Manitoba Division, Child Care Advocacy Association of Canada): Good morning.

My name is Debra Mayer and I'm a volunteer who represents the province of Manitoba on the board of directors of the Child Care Advocacy Association of Canada. We are a non-profit, membership-based organization dedicated to promoting quality child care that's accessible for all.

We work for the right of all children to access publicly funded child care; a child care system that's comprehensive, accessible, affordable, high quality, and non-profit; a range of child care services for children 12 and under, including full-time and part-time care, group care, family child care, school-age, pre-school, or nursery school care, in-home care, and rural care; care for children with extra support needs; culturally sensitive care; and child care that complements other policies and services for families, including those with a parent at home. And finally, we work for improved parental rights and benefits.

I'm pleased to address the House of Commons Standing Committee on Finance on October 31, 2003. Tonight most parents of young children across Canada will be rushing home after work, stopping at their children's babysitters or child care providers, giving their little ones a quick bite to eat, and then heading out for trick or treating.

So while you listen to my brief presentation, I brought along some Halloween candies. Pass these around, just so you can keep the children of Canada in mind while you listen to my brief presentation. Children's advocates will certainly be hoping for more treats than tricks for our children in this year's budget.

Our reality these days is that Canada remains one of the few highly developed industrialized countries in the world that does not have a federally led, publicly funded child care policy and sustainable child care system. The majority of Canada's young children under the age of 12 have mothers who work out of the home, and the majority of these children are still cared for in unregulated child care arrangements.

In fact, there are only enough licensed and regulated spaces for 12.1% of Canada's children. Many families cannot afford the current cost of using licensed child care, which can cost as much as a year of university. The current funding fragility makes it impossible for most providers to meet the flexible and diverse needs of children and families.

Another serious issue is the lack of capital funding that would allow new centres to be built where they are needed.

Over the last three years there have been two separate agreements related to young children and child care negotiated by the first ministers. They were important first steps, but regrettably, neither of these agreements has led to the progress that Canada's children and families deserve, although some provinces such as Manitoba have moved baby steps forward on this issue. Most new money spent on child care in this province still comes from provincial coffers.

So we have the Early Childhood Development Agreement, which was signed in 2000 and provides $500 million per year to enable provincial and territorial governments to “improve and expand early childhood developmentprograms and services, including child care”. However, with so much flexibility under this agreement, only some of the provinces or territories have actually spent this money on child care improvements that modestly contribute to certain aspects of this regulated system. In other parts of the country, none of the money has been spent on child care and a child care crisis is evident.

Secondly, the Multilateral Framework on Early Learning and Child Care, signed in 2003, promises to improve access to affordable, quality, provincially and territorially regulated early learning and child care programs, but only for children under the age of 6. A pan-Canadian child care system must include out-of-school arrangements for children up to the age of 12.

So as each province and territory develops and implements its own annual spending plan, it's obvious there are some significant weaknesses and challenges. There must be more federal, provincial, and territorial responsibility, accountability, and compliance for spending the money as intended on direct care in provincially and territorially regulated early learning and child care programs and services. All governments should be expected to use the new federal dollars to supplement provincial or territorial spending on child care, rather than using it to replace provincial or territorial child care spending that they're already doing.

Finally, the funding levels and transfer arrangements announced for the next five years fall dramatically short of what's really needed to finally start building a pan-Canadian child care system.

Here's what we know. International research indicates that access to affordable, quality, regulated child care contributes to healthy child development; enables parents to work, study, and participate in communities; and promotes gender equality in employment opportunity.

We need more federal leadership, a social policy framework, and funding for high-quality, regulated, inclusive, and affordable child care that reflects the real needs of today's families.

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I have a few recommendations to share on behalf of our board and our membership and the Canadian parents of young children.

The first is to commit sufficient federal funds to develop a publicly funded pan-Canadian child care system that's fully inclusive and meets the needs of every child regardless of their parents' income and employment status, where they live, their ability, language, or culture.

The second is to provide federal leadership in developing a social policy framework with licensed and regulated child care as the cornerstone of family friendly policy.

The third is to require provincial and territorial governments receiving designated federal funds to spend them directly on improving and increasing access to affordable, quality, regulated, not-for-profit, universal, and inclusive child care.

The fourth is to require all provinces and territorial governments receiving federal funds designated for child care to maintain or increase their spending on child care and use the federal funds to supplement, not replace, current provincial and territorial funding.

The final recommendation is to establish mechanisms that will ensure monitoring and compliance with the terms of the federal-provincial-territorial agreements, develop obligations for public reporting that will ensure clear data detailing improvements and programs, and develop effective processes for dispute resolution.

Thank you.

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The Chair: Thank you very much.

Now we'll go to the Winnipeg Real Estate Board.

Mr. Harry DeLeeuw (Present Member and Past President of the Canadian Real Estate Association; Winnipeg Real Estate Board): Thank you, Madam Chair and members of the committee. The Winnipeg Real Estate Board appreciates the opportunity to share our viewpoints with you during the pre-budget submissions.

Our board is the longest-running real estate board in the country, and it's celebrating its 100th anniversary this year. It has over 1,000 realtor members who are also members of the Manitoba Real Estate Association and the Canadian Real Estate Association. They will carry out over 10,000 MLS property transactions this year that will be worth in excess of $1 billion in total dollar volume.

In addition to the MLS service, the board's commercial division has developed its own commercial property information exchange that has garnered strong interest across the country. The exchange results in commercial realtors handling numerous sales and leasing transactions throughout the year.

The market this year has been very brisk, with many multiple offers and sales going above list price. For what is considered one of the most affordable housing markets in the country, in terms of house prices at least, we have had some strong upward price pressure and have had two MLS areas within our city that average in the $300,000 range.

On the other end of the spectrum, where housing rehabilitation efforts are occurring to help rejuvenate inner-city neighbourhoods, there have been some average sale price increases as well.

For example, in the west end of Winnipeg, where a number of not-for-profit housing organizations are committed to turning around blocks, streets, and neighbourhoods by aggressively acquiring dilapidated homes and either completely refurbishing them or replacing them with new infill houses, the average sale price has jumped 15% this year to close to $40,000. Only a few years ago this area was free-falling to an average sale price approaching $20,000.

One of those not-for-profit housing initiatives working in this MLS area of Winnipeg is the Housing Opportunity Partnership, or HOP. Beginning in earnest in 1998, HOP owes its existence to the efforts of the Winnipeg Real Estate Board and realtors in particular who felt that a public-private partnership could work successfully in combining the practical experience and market expertise of the real estate industry with government commitment of dollars and leadership.

I am happy to say that HOP has invested close to $3 million in a targeted area in the west end and has refurbished over 40 homes. All of these homes have sold to new homeowners for over $70,000, and many of them were in serious states of disrepair with limited value.

The typical HOP home is one that was built around 1910, has two storeys, has approximately 1,300 square feet, has a stone basement, and is on a 25- by 99-foot lot.

Visible signs of a turnaround now exist, and neighbourhood stability in what is still a transient area is beginning to take root. A good example of the renewal going on is the fact that acquisition prices for houses that HOP is attempting to purchase are much higher today, yet the refurbishment costs are more expensive due to increases in building materials.

The Winnipeg Real Estate Board applauds the fact that all three levels of government have come together through the Winnipeg housing and homelessness initiative. All are actively participating in a $68.3-million affordable housing initiative that provides funding and incentives over the next five years to construct up to 1,700 new homes or renovated housing units in Winnipeg. Given Winnipeg's extremely tight rental market, with historically low vacancy rates, any government help to build new affordable housing is very welcome.

The reality, however, is that even with the stepped-up commitment to provide more affordable housing, it is costly and comes nowhere near catching up with our large housing deficit in Canada. Rental units alone are being lost to demolition and conversion at a rate greater than the pace of construction.

Herein lies our solution. We need to engage the private sector much more actively and fully in supplying more affordable housing. After all, the vast majority of low-income earners are housed by the private sector.

Current federal taxation and regulatory practices discourage the private sector from building and maintaining affordable housing. Federal tax policy must recognize that investment in housing is an essential business, not a passive one.

The board heartily endorses the Canadian Real Estate Association's recommendation for the federal government to amend the Income Tax Act to allow capital gains and capital cost allowance rollovers when the proceeds of a sale of an income property are reinvested in another income property. A cap is proposed to ensure the benefit is targeted to small-scale investment. This recommendation also calls for allowing the owners of rental properties to qualify for small business tax deductions under the Income Tax Act.

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This proposal is gathering broad support among a number of organizations, including the Federation of Canadian Municipalities and the Canadian Home Builders' Association, because it will help to increase the supply of new affordable rental housing. The Liberal caucus task force on urban issues and the federal-provincial-territorial housing ministers both support the study of tax deferral in reinvestment situations.

I should add that in March, when CREA representatives from across the country met in Ottawa with their members of Parliament, this proposal was well received. Some members of Parliament even expressed surprise that the rental property owners cannot be treated as a small business for income tax purposes.

I believe you have all received more detail and background on this proposal from the Canadian association and the benefits it will bring to investors, renters, and the economy. The Canadian association has also commissioned a national firm to do a cost-benefit study, and you will get these results as soon as it is completed.

We, as an industry, wholeheartedly support the continuation and increase in financial support to the residential rehabilitation assistance program. Winnipeg has some of the oldest and most decaying housing stock in the country, and this program is always oversubscribed due to the great demand and need in this community. In this respect, we recommend that some of the dollars allocated to Winnipeg be targeted to applicants who are on the same blocks and streets where affordable housing initiative funding is being allocated.

For an initiative such as HOP to be successful in the long run, it needs homeowners in the area it is working in to do their part by maintaining and fixing up their property. RAP can make that difference. The combination of targeted RAP assistance to property owners in need and inducements offered through the affordable housing initiative can only help expedite neighbourhood renewal and ensure the availability of more affordable housing.

I want to mention one more point on affordable housing. We support the concept of Home$ave, as it will assist low-income Canadians in realizing their goals of owning a home. Peter Squire represented the board on a stakeholder consultation in Winnipeg, and he can tell you it has great potential. It leverages a low-income person's savings for purchasing a home through government and other sources by matching their deposit at a rate of $1 to $8 in a structured program that can create a positive savings environment with enough initiatives for low-income Canadians to follow through on.

I'd like now to touch on two other issues. Municipal finance is becoming a real challenge for cities across the country, and you are aware of their significant infrastructure challenges. Statistics Canada reports Winnipeg delivers 67% of Manitoba's GDP, yet has limited revenue-generating possibilities.

Cities like ours have an overreliance on property taxes, and that makes the cost of owning a home more expensive. Winnipeg is presently going through what is called a “mayor's new deal”, a proposal to shift the city away from dependence on property taxes and rely more on consumption taxes. It is generating considerable interest and lively discussion, and the board believes this debate is healthy.

For cities to remain competitive and offer their citizens a good quality of life without punitive property damages, they require alternate sources of revenue. The long-term stable funding provided by programs like the national sustainable infrastructure program is such an initiative.

Finally, with respect to the recent federal announcement to provide homeowner grants for energy efficiency improvements in greenhouse reduction targets under the Kyoto agreement, the board contends that if you are really serious about reducing carbon dioxide emissions, the EnerGuide incentive should not exclude the thousands of rental properties that have been neglected or would benefit greatly from energy results.

I thank you for the opportunity to share our views with you today.

The Chair: Thank you very much.

Now we'll go to the Canadian Association of Student Financial Aid Administrators. Go ahead.

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Ms. Judy Dyck (Director of Awards & Financial Aid, University of Winnipeg; President, Canadian Association of Student Financial Aid Administrators): Thank you. My name is Judy Dyck. I'm director of awards and financial aid at the University of Winnipeg. My colleague, Peter Dueck, is the director of enrolment services at the University of Manitoba. We are both currently on the executive of council. I'm serving as president and Peter is the member at large for universities.

There are certainly many funding issues surrounding post-secondary education. I have no doubt that you have been hearing about these as you cross Canada. We, however, are here specifically as student financial aid administrators. As we talk to students, we experience day to day the realities they are facing and the difficulties they deal with as they try to meet the costs of post-secondary education.

I think the achievements of one's personal career and educational aspirations can be seen as something of a journey. Some of us are fortunate to get on that road a little closer to the end. For others the distance is greater, and they face a lot more obstacles along the way. We can't shorten the journey for everyone. We can't remove all of the obstacles, but we certainly can do things to address the financial barrier.

The principal vehicle in this country for addressing the financial barrier for many years has been the Canada student loans program, as well as the complementary provincial student aid programs that work hand in hand with the Canada program. Each year governments, both federal and provincial, in this country lend $2.9 billion to students in student loans, with direct costs of around $940 million. Of full-time students, 38% do have to borrow, or do borrow, from the Canada student loans program at some time in their post-secondary careers, and two-thirds of these students say that the Canada student loans program was instrumental in their being able to pursue their post-secondary studies.

Certainly, the Canada student loans program is fulfilling an essential function. Increasingly, though, students who borrow through government student loans programs are facing the challenge of unmet need, and we believe this is the most serious challenge currently facing the programs. In 2002, 45% of borrowers through government programs were receiving the maximum loan they could get through the programs. I'm going to give just a fictitious example of what one student might have to deal with.

The student aid assessment system determines that on the basis of that particular student's living situation and the cost of her program, she needs $19,000 to get through the 34-week university year. The maximum loan, and this is Canada student loan and the provincial loan together, she can get is $9,350. This particular fictitious student has a child, so she is eligible for a Canada study grant of $1,360. In addition, most provinces have complementary programs that also help high-need students. In this province this particular student would be eligible to receive another grant of $1,360. This would bring her to receiving around $12,000 of assistance. There's still around $7,000 that she needs. Remember, this is based on the assessment of the Canada students loans program, not a need that she has made up herself. It is based on very modest living allowances. She still needs $7,000 to get through the year. This is not an extreme example. This is not an uncommon situation.

Imagine over a four- or five-year university program every year struggling to make up one-third of what you need to survive, either by cutting back your costs—as I said before, this is based on modest living allowances—or scrambling in some way to put together the rest of the resources.

Recent research conducted under the auspices of the Canada Millennium Scholarship Foundation indicated that a group of students moving from first to second year who had unmet needs were much less likely to persist in their studies than those whose needs were met through financial assistance.

What drives students' needs? Well, the factors are fairly obvious and not surprising: coming from a low-income family; having to live away from parents when conducting one's studies, which is obviously something that all rural and northern students would face; having a child, which is not an uncommon thing; being in a program that has high costs.

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In the so-called real world, it's the wealthiest consumers and individuals, those with the largest assets, who get the biggest loans. In the world of post-secondary students, it's the poorest students, both with the lowest incomes and no assets, who receive the biggest loans. These students are condemned not only to have the highest debts, but to struggle constantly to find the resources to meet their needs. We believe the public student financial system should be providing students with an array of options so that all reasonable living costs and all educational costs of tuition and supplies can be met.

Five of our eight recommendations deal with this particular topic: grants for low-income students so that their debt levels can be kept under control; unsubsidized loans, an additional loan option for students who are in high-cost programs; loans to assist parents in meeting their obligations under the Canada student loans program; greater opportunity for students to help themselves through part-time employment by engaging in employment on their campuses through a national work-study program; and greater opportunities for us in the education institutions to use bursaries to help students out where resources expected by the program are not in fact in existence.

These recommendations are drawn from existing positions of our association. In addition to the five I have cited, we have two that deal with repayment of student loans and one that suggests that the income tax exemption provided to students who receive merit-based awards be indexed.

Thank you.

The Chair: Thank you very much. Some very interesting ideas have been presented.

Now we'll go to Dr. O'Kell.

Mr. Robert O'Kell (Dean of the Faculty of Arts, University of Manitoba, As Individual): Thank you.

I wish to thank the members of the Standing Committee on Finance for the opportunity to present this brief. I am appearing as an individual greatly concerned with the need for increased federal support for research and study in the humanities and social sciences. My urge to speak to you on this matter arises from my professional affiliation as a professor of English literature and dean of the faculty of arts at the University of Manitoba and as a member of the board of directors of the Canadian Federation for the Humanities and Social Sciences. But I am not an official spokesperson for either the university or the federation.

The events transpiring since September 11, 2001, have reinforced for everyone what has been clear to thoughtful observers for some time, that however much progress we make in scientific and technological terms, the most urgent and essential need in our society is for people highly trained in the cultural, historical, political, social, and economic dimensions of the world's civilizations. No amount of material progress can transcend the broader and deeper understanding of the humanities and social sciences upon which the resolution of the world's and our nation's problems depends. Yet we still find a disproportionately large imbalance between the federal support provided for the physical and medical sciences and that provided for the humanities and social sciences. This is all the more striking given the much larger proportion of students and faculty of Canadian universities working in the latter areas.

I would like to acknowledge, however, that the finance committee's recommendation in its 2002 report for an asymmetrical increase for the Social Sciences and Humanities Research Council of Canada did influence the decision to award 60% of the Canada graduate MA research fellowships to students in the humanities and social sciences. I would ask that you now recommend that funds be provided for a similar asymmetrical increase to SSHRC that will provide for doctoral and standard research grants at the same rate of success as currently awarded by the Natural Sciences and Engineering Research Council, NSERC.

The wisdom of such a recommendation follows from the recognition that if we do not understand the persistence of cultural, political, and social imperatives, innovation in all areas of intellectual and practical endeavour, including scientific and medical discoveries and economic policies, may come to a fractious end. To put it conversely, encouraging the development of social and cultural understanding through support for research and study in the humanities and social sciences is a policy that will stimulate the most advantageous synergy between scientific and cultural researchers.

Since the occasion of Dr. Martha Piper's 2002 Killam address, there has been some lively debate among researchers in the humanities and social sciences about the possibility of restructuring SSHRC into various academies, along the lines of the Canadian Institutes of Health Research. This might be a good way of signalling the federal government's willingness to increase funding for research and study in the humanities and social sciences, but I wish to warn the members of the finance committee about the dangers of such a parallel conception. The temptation will be to use the phrase “human sciences” as an easy way of justifying a similar structure for funding such research by masking the fundamental differences between the humanities and the social sciences in these new academies.

In French, the phrase “sciences humaines” refers to knowledge of the human condition, but in English the word “science” has a much more narrow and distinct meaning that does not do justice to the nature of research in the humanities. Most research in the humanities is not scientific in the common or ordinary sense of the word, though its methods have their own rigorous standards to uphold. Moreover, social science research often fits well within the agenda of governments because it is, even at its most theoretical, of obvious applicability to immediate social problems. Research in the humanities, on the other hand, in subjects such as the study of literatures, languages, philosophy, history, and religion, is most often of no obvious immediate application to such problems. Yet I would argue that indeed curiosity-driven research in the humanities does have a crucial role to play in our society's ability to respond to the cultural and political environment in which we find ourselves.

The paradox is that our cultural environment is always changing, yet our understanding of it depends so heavily on our knowledge of the traditions of past experience. For that reason, any restructuring of SSHRC needs to encourage, not just permit, the continuation of curiosity-driven research over the full range of the humanities.

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It will be a great mistake if the misleading conception of the “human sciences” structures future research in the social sciences and humanities entirely by themes, and so distorts all such research into topical concerns with current problems of contemporary society.

Jeffrey Simpson has remarked in The Globe and Mail of August 8, 2003, in section A, page 13, that the federal government's initiatives in establishing the Canada research chairs, the Canada Foundation for Innovation, the indirect costs of research program, and the MA research fellowship program may well have saved Canadian universities from financial ruin in the last decade, at a time when transfer payments to the provinces tied health and education together.

Given the dominating effect of health care costs in all the provincial economies, I think it is essential that the federal government take a further initiative in establishing a Canada post-secondary education act to parallel the Canada Health Act. As proposed by the Canadian Association of University Teachers, such an act should provide dedicated post-secondary education funding transfers to the provinces, with provisions for provincial fiscal accountability.

In my view, such dedicated funding for post-secondary education would enable the provincial governments to address more successfully some of the most urgent problems facing the universities. Perhaps first among these is the leading shortage of faculty members at a time when there is a growing need for highly qualified and well-educated university graduates, especially those from masters and doctoral programs in the government, civil service, and the private sector for the knowledge-based economy.

Also of great concern are the deteriorating physical infrastructures at our universities, which have resulted from deferred maintenance, and the inability of university libraries to keep pace with the cost of essential acquisitions and new technologies.

In summary, our recommendations to the members of the finance committee are as follows: one, we recommend an asymmetrical increase of funds for the SSHRC in the next federal budget that will enable the council to provide doctoral fellowships and standard research grants at a rate of success equal to that found in the annual NSERC competitions for similar awards; two, we recommend that any restructuring of the Social Sciences and Humanities Research Council be done in such a way as to guarantee the continuation of curiosity-driven research in the humanities; three, we recommend the passage of a Canada post-secondary education act that will provide dedicated transfer funding for post-secondary education, with provisions for provincial accountability for the expenditure of these moneys; and four, we recommend the continuation of federal funding for the Canada research chairs program, the Canada Foundation for Innovation, the indirect costs of research program, and the MA research fellowship program.

I thank you very much for the opportunity to say these things.

The Chair: Thank you.

We'll go to Mr. Cullen. We will do ten-minute rounds.

Mr. Roy Cullen: Thank you, Madam Chair, and thank you to all the presenters.

I'd like to go first to Mr. Elliot. In your brief you talked about the CRTC regulatory fees on broadcasting. I'm wondering if you're aware of a recent report from the Standing Joint Committee for the Scrutiny of Regulations reviewing broadcasting licence fees. Those are the fees imposed by part II of the broadcasting licence fee regulations, 1997. What the joint committee said was that “the Committee is of the opinion that the size of the general revenues that accrue to the government from the imposition of these fees discloses an urgent need for adjustments to the current fee structure”. Not to give my own private member's bill an unnecessary plug here, but they then went on to say that “In this regard, the Committee has taken note of the recent adoption by the House of Commons of Bill C-212, titled An Act respecting user fees. Without pronouncing on the merits of this particular legislative initiative”--which is before the Senate--“the Committee notes that it seeks to provide the sort of legal framework that will be required if Parliament is to maintain its traditional control” etc.

First of all, were you aware of this report of the standing joint committee and their request for the government to respond within 30 days? That's the first part of the question.

Secondly, could you describe what value your industry gets from these fees and the costs you think they're recovering? And would you be in agreement with their conclusion that the fees seem to be out of line with the service or the costs they're trying to recover?

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Mr. Geoffrey Elliot: Thank you. That's a complicated question. I'll try to remember the various bits of it that you asked and respond to all of them.

First of all, no, I was not aware of that joint committee. I certainly was aware of the private member's bill that originated with you, Mr. Cullen. Indeed, when I read that private member's bill after it was originally introduced, I was thinking very much of the part II fees of the CRTC at that time and I thought this is just what we need. So I am encouraged by that joint committee report.

As to the level of the fees themselves, we would acknowledge that it's more than appropriate for the CRTC to assess fees to broadcasters that are related to the legitimate, actual, and reasonable costs of regulating the industry. All benefit from that regulation, and fees that reflect the cost of administering the regulation would not be unreasonable, as far as we are concerned.

The problem is that the revenues collected by the CRTC exceed by many millions of dollars the cost of administering the regulation. In effect, it takes the form of a tax on the industry that has never been approved by Parliament. That's one of the reasons we believe your private member's bill is sound, in that it would help to eliminate taxation by stealth.

Mr. Roy Cullen: Good. Thank you.

This was a decision of the committee that's fairly recent. I've taken the liberty of making a copy for you. I'll give it to you at the end of the meeting.

I think the committee is saying that beyond the recovering costs, it's really more in the nature of a tax. We should either call it a tax or review the charge completely.

Thank you.

I'd like to now go to the child care advocacy group. Something you brought up, which has been brought up by others in our travels, is the second program that our government brought out, the multilateral framework, whereby it seems that the provinces are using this money to displace rather than augment child care programs. I find it very disturbing, and hopefully we can deal with that in our report to the government.

One of the challenges we have as a federal government is that we're often accused of dictating to the provinces what's good or bad for them. It comes up now in the discussion about the CHST as to whether we should have these accountability frameworks. We've done it for health care. I think Dr. O'Kell was talking about the need for that in post-secondary education.

If we look at child care, the first agreement was well within the scope of the early childhood development agreement that provinces could do child care, but different provinces placed a different emphasis on child care. Now with this multilateral framework, my understanding is that it mandates a certain level of child care. Again, I guess certain provinces are reacting differently and some are replacing existing programs.

When we asked people in Vancouver why it was happening, they said the provinces were saying that the amount the federal government has provided is a pittance. On that basis they're going to get out of it and allow the federal government to displace that program spending. I find that, again, disturbing.

Could you comment on the principles of mandating?

We've also heard a lot of attention given to the other types of programming, child nutrition, prenatal, etc. Why should child care be up there in the top one or two? How do we deal with the provinces when they're not respecting our intent?

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Ms. Debra Mayer: That's a tough one. It's my understanding that the child care issue, the multilateral framework agreement, is kind of a test case for SUFA, and it does reflect some of the tensions in provincial and federal relationships. You may be aware that currently, the OECD has been reviewing Canada as one of the industrialized countries in the world as to how we are doing with child care compared with what other countries around the world are up to. They're travelling in Canada right now, and their report is coming out in March. What we're hearing informally is that they're shocked that a country like Canada hasn't put child care forward as a federal program, rather than leaving it up to every province and territory to do their own thing. So right now there isn't entitlement across Canada, and it really causes a lot of disparity, not diversity, but real shocking need.

I respect the fact that the federal government has to play by the rules, but it seems to me that this is a place where federal leadership is absolutely demanded. As far as the money goes, with what was announced in the multilateral framework agreement, we were disappointed--a mild way of putting it. The government's national Liberal caucus social policy committee recommended $1 billion to be allocated to that fund in year one, $2.2 billion in year two, $3.2 billion in year three, $4.5 billion in year four, but what we got was less than $1 billion over five years, most of it being back-ended. The first year of funding was $25 million. How do you build a national child care system by giving a few crumbs out to the provinces and territories and saying, okay, go do it? The money was just not enough. The European Union is recommending that 1% of a nation's GDP be allocated to child care funding. In Canada that would be approximately $10 billion a year. That's the kind of investment that's needed to finally do the things that have been promised by government after government of every stripe.

This is a place where the federal government has to take the lead. If we leave it up to the provinces and territories, we're never going to have a system right across our country that families can rely on.

Mr. Roy Cullen: That's our problem to deal with. I appreciate your advice and the context, because it is a bit troubling what's going on there.

Do I have any more time, Madam Chair?

The Chair: Fifty seconds.

Mr. Roy Cullen: Quickly, then, to the Winnipeg Real Estate Board, I'm glad to hear the good stories of the work you're doing in the area of affordable housing and converting communities. That's really good stuff.

We had a discussion with panel before you, with the home builders, on R-2000, and one of your recommendations is that “the EnerGuide Incentive should not exclude the thousands of rental properties that have been neglected and would benefit greatly from energy retrofits.” I think that's something we should look at. Maybe you could expand on that. I don't know how much time we have, but if you have more detail on that as a follow-up, if you sent it to the clerk, it would be helpful. Could you describe briefly what you're talking about there?

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Mr. Peter Squire (Director , Public Affairs, Winnipeg Real Estate Board): We don't have numbers, and we could do more looking into it, but we know from what's happening in Winnipeg that there's a lot of rental housing in very poor condition. We know from the condition of houses in cities like Winnipeg that to exclude that whole area of housing with this program is, I think, an injustice, because many homeowners themselves have taken steps to move more towards an R-2000-like home, replacing windows, using more energy-efficient furnaces, etc. But in the case of these rental properties, we've also got programs that compound that. There haven't been incentives, certainly in this province, to keep them up, given that we've had very strong rent controls. I'm not saying it's good or bad, I'm just saying it's taken away incentives. We've seen a lot of housing that hasn't been retrofitted, and when the federal government has taken a program initiative like this, I think it needs to go beyond home ownership and consider a lot of other housing units that are being neglected.

Mr. Harry DeLeeuw: If you put it in the context of affordable housing and the fact that Canada needs 45,000 new rental units per year, when you look at that number alone and compare it to what is existing, I think you get a sense of what the need is.

The Chair: Thank you.

Judy Wasylycia-Leis.

Ms. Judy Wasylycia-Leis: Thank you to everyone for the presentations this morning.

I again want to start with the issue of child care, and I want to begin by asking Debra Mayer.... First of all, thank you for the candy. I'm surprised you didn't bring peanuts, given that the last budget creates about 3,000 child care spaces over two years, as opposed to the 150,000 we need immediately. I appreciate the fact that we have the Manitoba child care association this morning and you are making a strong presentation.

Would you say that your proposal constitutes what Mr. Elliot has said is needed, a prudent investment in essential basic infrastructure that contributes to Canadian competitiveness, makes Canada a more attractive location for private sector investors, and thereby promotes a stable GDP growth?

Ms. Debra Mayer: That's a great question. The reports that have come out of Minister Jane Stewart's department over the last few years on a knowledge-based economy have really been talking about lifespan education, and it's been identified by the federal government that early childhood education is the place to start. So when we're investing in young children who have access to high-quality programs right across the country, whether they are there part-time or full-time, depending on their parents' work situation, they have an opportunity to get a head start, to begin right from the get go, to be learning the kinds of skills and be strengthening the kinds of techniques that will help them to be learners for the rest of their lives. We find that children who have had an opportunity to participate in high-quality child care do better in school. These are the kids who right through their school life are in the higher percentile of achievement.

Similarly, when parents have the opportunity to have their kids go to a program that is there day after day, a reliable, safe place for their children, where they know they are getting a great experience, it enhances workforce attachment, for the mothers primarily. So there is a gender issue there, and we need women working in Canada to be able to continue to increase our GDP across the country. Also, as child care expands, it's employing all kinds of people, so there is workforce creation there. We have child care centres being built, so our real estate friends will enjoy knowing there is continued construction. Child care is a resource citizens need, just as they need schools, doctors, hospitals.

So it's really about getting with the times. Canada has been really slow on this. Even the United States spends more on child care than Canada does. It is a very wise tax investment, and I think it does continue to build the GDP.

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Ms. Judy Wasylycia-Leis: Thank you.

I'd like to ask Peter Dueck and Judy Dyck a similar question, and then I hope I have time left to ask Mr. Elliot a question as well, because we are talking about hard choices in this coming fiscal year in the budgetary process. We've heard Mr. Elliot say we've got to resist the temptation to spend, but I think we all need to think about where we should invest, where we get spinoffs and benefits for the long term. It seems to me that what you're suggesting with student loan changes and financing is critical for our competitiveness as a nation, for our GDP growth, and I'd like you to comment on that for a moment.

Mr. Peter Dueck (Member-at-large (Universities), Director, Enrolment Services, University of Manitoba, Canadian Association of Student Financial Aid Administrators): I think the government has a bit of an issue here, because the simple thing to do is simply increase the loan limit in such a way that it eliminates much of the need we were talking about earlier. The universities and colleges themselves have some ability to fund students, because of our bursary programs and our private donations and so on, but we can't get anywhere close to what's needed now.

The problem with increasing the loan limits, though, is that it moves debt to students who may already have too much of a debt load, so that you are working against yourself in a way and you may be creating problems for students who might have debt loads of $20,00 to $30,000 when they graduate. That doesn't help the economy particularly. They are not going to be the ones who are buying houses or cars very quickly after they graduate. So that suggests that we should be thinking about more bursary assistance. Also, it suggests pushing money to the front of the program, so that students who might otherwise not even consider going to post-secondary try it in the first year and find out that they can do it, then maybe moving to bursaries, to loans over the four- or five-year period in universities and over the two years for colleges.

So I'd say it's a very delicate balancing act the government would be facing. We are suggesting some additional expenditures in bursaries. Obviously, if you raise the loan limits, you are spending dollars that cost you, the government, a lot less than what is delivered to the student, because they have to make repayments. So it's a balancing act.

Ms. Judy Wasylycia-Leis: I'd like to ask Geoffrey Elliot a similar question. We were told 10 years ago that we had to balance the books, get rid of the deficit, so we did. Then we were told we must have tax cuts, so we did, $100 billion worth. Now we're told Canadians have to take another hit in order to have debt reduction, even though we're at, I think, an appropriate debt-to-GDP ratio. There doesn't seem to be a trickle down, so that if we only do all this, we'll get this payoff in the economy that's going to help us afford programs like child care and university education. I think it's time we tried a new way. We've tried that old way. Could you see the role of government being one of actually investing in such areas, and maybe business right now taking a path to further tax breaks in the coming years?

Mr. Geoffrey Elliot: You raise very good questions. You said before it's a time of hard choices. It's very clear that if you have an economy in Canada where tax rates, both personal and corporate, are competitive, it helps to build the economy and expand the pie by getting more investment, which creates jobs and tax revenues.

I'd like to come back to what you said about hard choices. I'm not going to stand here and say it's not a good idea to make it easier for students to finance their post-secondary education. I have a son who's just graduating from Queen's. He is very fortunate, because he'll graduate debt-free, but he is planning to go into medicine. And I've got another son ready to go to university. So I know exactly what my colleagues are talking about. But you know, last week the government announced that it wanted to spend $700 million on a high-speed rail program from Quebec City to Windsor, and I can't imagine a crazier investment. I have no problem with high-speed rail, but why does the government have to subsidize the development of high-speed rail at a time when it's extracting revenues from the airline industry that would have to compete with high-speed rail? It's absolutely ludicrous. If you have $700 million to spend, I think some of my colleagues sitting next to me have come up with a lot more sensible ways of spending that money than on high-speed rail.

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Ms. Judy Wasylycia-Leis: Do I have time for one more?

The Chair: Yes, one minute.

Ms. Judy Wasylycia-Leis: To the Winnipeg Real Estate Board, what real estate associations have been asking for nationally and everywhere we go is ongoing support for the tax changes that were begun in the last budget--these are the RRSPs. I think, generally, there is this notion of a continuation of the tax cut agenda. It seems to me that we're talking about a lot of money that's really benefitting a small element in society, generally at the higher end of the income scale. It is not something that is universally shared, it is money we should be using to help women get back to the workforce, help students pay off debt, so they can contribute and increase our GDP. Do you see the logic in shifting your thinking that way at all?

Mr. Harry DeLeeuw: Are you talking specifically about the RRSP proposal?

Ms. Judy Wasylycia-Leis: That's one example.

Mr. Harry DeLeeuw: One of the things I think that is the basis of the RRSP proposal is that self-employed people--our industry is like that, and there are several others--don't have the advantages of pensions similar to those of government employees, corporations, that sort of thing. So it's really asking for a tax deferral to increase these limits. I think that's the basis for it.

On the other side of the coin, I think you're bringing up some awfully good questions and issues, but it's a matter of relocation that we're looking at. When we are asking the government to hold the line on debt, we are saying there must be areas within the government that can be cut back. I think one of the gentlemen said there are maybe government departments or programs that have outlived their service. So from our point of view, it's really more reallocation than anything else.

The Chair: Thank you very much.

Now we'll go to Mr. Harvard.

Mr. John Harvard: Thank you.

My first question is to Peter Dueck, because he's a constituent. Peter, we've often heard about the punishing costs of post-secondary education, particularly for students from low-income families. We hear about the huge debts they accumulate through a university career. Do we have solid information relating to young people who simply cannot go to post-secondary education institutions because of cost, in other words, all kinds of kids out there who would love to go to a post-secondary education institution, but just can't because of the costs? Does anyone have that information?

Mr. Peter Dueck: You are asking the hard question. We obviously have a lot of information about the students, the people in the system, and you talk about unmet need and so on, but we do have a lot of trouble when we start talking about people who were not able or, more importantly, I think, did not see themselves as able to enter the system. I think the Canada Millennium Scholarship Foundation is just beginning to do some work in that area. I don't know if, Judy, you have some additional information on that. We are just starting nationally to ask those kinds of questions, and in the last three to five years we are actually starting to do some research in this area, which is a very hopeful sign. If you are looking for some information about that, I think the Canada Millennium Scholarship Foundation is the place to go.

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Ms. Judy Dyck: They have a research section on their website, and their most recent reports, some of which deal exactly with this topic, are readily available.

The whole issue of access to post-secondary studies is very complex, and what often results from these studies--we have a limited number in Canada at this point-- is that financial issues for those who do not go on seem to be a symbol for some deeper cultural issues, lack of academic preparedness, lack of support from families. While finances may be cited and are certainly a reality, they're not the sole criterion that indicates why someone will not proceed to post-secondary.

Mr. John Harvard: My second question is for my friend Geoff Elliott. I want to preface my question this way, Geoff. I'm one politician who believes there is room out there for both public broadcasting, often called the CBC, and private sector broadcasting. I think they have separate and worthwhile goals or mandates. But specifically, on page 5 you mention that government financial support for programs for Canadian film and television programming content should be linked more directly to prospects for commercial success. It would seem to me that would be biased more towards the kind of company you work for, as opposed to the kind of programming I would expect from CBC. If we are going to provide any kind of support to both sectors, should perhaps the funding programs, the subsidies, be linked so that they can be more specifically applied to the particular mandates of each sector?

Mr. Geoffrey Elliot: I think to some extent they already are. CBC has access to funding for programming it produces that is not available to the private sector. I believe one of the problems is that you're looking at entertainment programming, as opposed to information programming, and the CBC is very good at information programming, there's no question about that. The problem is that a whole lot of the Canadian productions, whether they are shown by the CBC or the private sector, have very few viewers. The reason is that viewers expect something in the programs they watch, and in large measure, what they expect is the high production values they experience with imported programming.

The Canadian productions have an important function in providing jobs for the people involved in those productions, outlets for the creative talent, and there is creative talent. Over the years the capacity of the Canadian industry to produce high-quality productions is demonstrated by the extent to which you have what the Americans call runaway productions, with films that are produced in Canada on location rather than in the United States. It's not a question of the skills or the talents of the people working in the industry, it's the thematic material that is imposed on the producers for them to qualify as programs that are labelled Canadian programs that, at the same time, renders those programs less than they should be.

So we're suggesting that a real test of whether the subsidy makes sense is if people are prepared to watch the product, and that includes both Canadian and international audiences. Some of the Canadian programming, for example, the tax credit program that relates to what they call 6 out of 10 industrial product, as opposed to 10 out of 10, which is the “Canadians telling stories to Canadians” product, does enjoy significant commercial success. It is possible to make programming that you can distribute internationally under that program. I think it makes sense to build on that.

Mr. John Harvard: I'd like to pursue that further, Geoff, but I don't have much time.

I have to go on to a question for Debra Mayer. It really comes out of something that Geoff said. He was mentioning that we should be institutionalizing a culture of funding and staffing new programs by reallocating financial, human, and other resources from existing programs. That's what you're always fighting. That's the kind of sentiment you fight. I would assume that if we are going to have a fully fledged, very mature child care system in this country, we can't get it out of just existing programming or existing funding. Am I right?

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Ms. Debra Mayer: I think you are right. I think it does require new funding, and possibly a reallocation of funding from somewhere else. If you say to me, John, where should that money come from, I don't want to antagonize anybody here, but look at the kind of example that was just brought up, where you are looking at hundreds of millions of dollars to build a rapid transit system that's going to benefit people in one particular region of one province in Canada. It seems to me that's not the best choice. That's just one example that was brought up there. Build something that allows all Canadians to benefit, whether they are in Nunavut, northern Manitoba, or the inner city of Winnipeg. To me, that's a better use of federal funding. Let private industry come up with the dollars that are going to link their commuters back and forth more easily. I think it's a matter of making wise choices.

Mr. John Harvard: Can I work in a couple more questions?

The Chair: You have three minutes.

Mr. John Harvard: I was very impressed, Dr. O'Kell, with your presentation. You were pointing out that there are more students who go into the social sciences and humanities than into medical sciences and physical sciences, and yet the funding is in reverse. What accounts for that prejudice or bias? I don't understand that. Is there a ready explanation?

Mr. Robert O'Kell: I think medicine always has a compelling grip on the public imagination, and the physical sciences to some extent as well.

Let me be clear. I'm not asking for equal dollar amounts. I understand that it costs more to train a doctor than a PhD in English literature or history. I'm not asking for equal dollars. I'm just saying we should make the success rates in these grant competitions approximately the same, because that would do much to sustain and support the graduates of these programs as they are going through.

I would say one thing about health care costs, though, in relation to that. Tom Carson, the deputy minister here in Manitoba a few years ago, did a study. He looked at the users of the health care system, and he found that the use of the health care system was inversely proportional to the degree of education of the users: the more education you have, the less likely you are to draw heavily on the health care system for repeated consultations and treatment. So maybe there are some savings if you look at education as an investment in reducing health care costs as well as producing the expertise we need for government, civil service, private enterprise, and so on.

Mr. John Harvard: My last question goes to Mr. DeLeeuw. After all, everybody loves Harry, and I've known Harry for a long time.

Harry, on this suggestion--and it's not new--of revising or amending the income tax act to allow capital gains and capital cost allowance rollovers on the proceeds of a sale of an income property or reinvestment in another income property, bring that down to earth. Give us a better understanding of how the situation works and really doesn't work well. That's why you've called for the change in the Income Tax Act. Just give me an example of an investor who is now inhibited from doing what you really want him to do.

Mr. Harry DeLeeuw: Assume a marginal tax rate of 50%, purchase price $180,000, proposed sale price $240,000. When you take away the capital gains tax, the accumulated capital cost allowance, the personal income tax payable is $52,000. If you remove that from the gain, you are left with minus $4,000 to the investor. So there is no way he is going to be reinvesting in another property. He has already basically lost $4,000 by selling the property. When you combine it with the small business tax credit we are also asking for, somebody who is going to end up in this situation will not put money into a rental property. So they are not going to maintain it, keep it up, whatever.

With the combination of both these proposals we have, what you are doing is increasing your affordable housing stock, which we all know is necessary. We are way behind on that. So implementing this plan allows people to purchase like properties using the rollover basis and using the small business tax deductions. They can't deduct anything, the GST or the PST, on any money they put into the property, so there is no income tax credit at all.

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The Chair: Just before I break up this panel, I have a couple of points.

We heard from the graduate student society yesterday a novel idea I hadn't heard before. I think it was $5,000 forgiveness at the completion of the PhD, with the idea of feeding into the need of the universities and colleges across this country for 40,000 trained people. Has that been discussed with financial administrators at all? What would be your immediate reaction to something like that?

Mr. Peter Dueck: The quick reaction is that we've been talking about what happens to students, the kinds of students John was talking about earlier, who maybe had not considered a post-secondary education, maybe saw a financial barrier and some of the other cultural barriers Judy was talking about. We've been talking less about what happens at the other end, which is the Master's and PhD students. A little incentive to complete a PhD is always a good thing, and to do that with some financial help to reduce the debt load, which can be very significant after completing three different degrees--we've seen the load being higher than $60,000--I think would be a good thing. The investment, because there aren't that many PhDs graduating, would not cost the government all that much. I like the idea.

The Chair: I think it gathered our attention because the statistics they gave us indicate less than 50% completion, and often it's because of money more than anything else. It wasn't that they weren't talented, that they didn't want to, it was just money. I questioned them about incentives, if they forgive so much along the way, and the answer was, no, we want them to finish, because without them, we are not going to have our faculty down the road. So it helps with both ends.

Okay. Thank you very much for that input.

I don't play devil's advocate with the day care, because I was one of those people, when my children were young, who used for-profit day care, and I am very supportive of regulated child care in this country, as are other members of this committee. What happens to the for-profit? Are they set aside, as this is not a viable business enterprise? Those were the originators of the system who made it happen for a couple of generations of individuals. I'm sure you've had those discussions, I'm sure you know the answers, I just need you to put those on the record.

Ms. Debra Mayer: Thanks for the opportunity.

I would not take away in any way from the many dedicated people who have been doing child care in a more entrepreneurial way, including licensed family child care providers, who right across the country fulfil a great part in meeting the demand for child care, especially for babies. The Government of Canada does treat them as self-employed small business owners when they're doing child care in their home.

We have an interesting situation here in Manitoba. When our child care program was founded under the NDP in the 1970s, the child care standards were set so high right from the beginning that it was very difficult for for-profit operators to meet the standards and make a living at doing it. So while in some provinces, like Alberta and Ontario, we've got as much as 50% to 60% of child care being operated on a for-profit basis, here in Manitoba we have less than 7%. So from a viability point of view, it's really hard to make money on child care that's high quality. So most child care in this province is done on a not-for-profit basis, with parent boards of directors.

If you look at Europe, where they have really more progressive ways of handling social policy issues, child care tends to be provided through a governance model that's more like schools boards and hospitals than privately owned enterprises. When you're talking about young children and really meeting their needs, it seems to me that a model that is similar to the way schools and hospitals are operated is the way to go.

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The Chair: Thank you very much.

I'll just mention something to the board. In a former life, when I used to practise law, a lot of the real estate investors you would get on an irregular basis were working very hard not to be treated like small businesses. They didn't want to have their practice taxed. They liked the capital gains scenario. So if you go into that deduction you are talking about and that treatment, it's not for everybody. What are your thoughts on that? It's a bit of a contentious issue, I know, for some people.

Mr. Harry DeLeeuw: Yes. I'm just not familiar with the background.

The Chair: Okay, I'll leave it then. I'll follow it up another way.

Dr. O'Kell, we've had a lot of discussion on getting education active now with different associations that appeared before us. If you've got health taken care of and you've got education taken care of, nobody's talking about the third pillar, which is going to be your social. Again, then you'd have some situations where, with some of the federal-provincial agreements, the jurisdictional issues, sometimes we've done the child care agreements under the health, sometimes we've got the ECE under the social policy framework. From an academic point of view, what's the solution here, as wherever we go, we've got huge jurisdictional problems? Just because people want it and say they want it, it doesn't mean it's going to be delivered by territories and provinces and they're going to go willingly to any table to have this discussion.

Mr. Robert O'Kell: I understand the jurisdictional nervousness in the provinces about having the federal government getting into education, particularly post-secondary education and anything other than a research portfolio, but I'm not wise enough to know how to handle the day care problem with regard to its location in education or health. But I would just reiterate my initial premise. Investment in education is a cost-effective investment, because it produces down the road all kinds of benefits, not only for the individuals, but for the society at large. And that benefit isn't only in the public sector, it's in the private sector as well. I think we've come to an understanding since September 11, 2001, that the human, social, and cultural dimensions of our society have been neglected to some degree in our sense of how we invest in the future. I really feel we need a stronger sense of the importance of that side of the educational sector for the resolution of so many problems that have perpetuated themselves over decades, if not centuries. I think we can make better progress than we have.

The Chair: All right. Thank you.

Perhaps I'll just pose another question to the real estate board. Last year this committee went far in the brownfield redevelopment suggestion. In the city of Winnipeg right now do you know if you have brownfield redevelopment going on, or are people holding back for policy development?

Mr. Harry DeLeeuw: I think they are holding back. I don't know of any brownfield project. Peter, do you?

Mr. Peter Squire: I think there's a site in Transcona. There have been a few sites, but there really hasn't been any activity at this point. I know there's a big session here in Winnipeg on Tuesday with the chairman of the Clean Environment Commission, Terry Duguid, and some others, where they're going to get into that full discussion on brownfield updates from Mr. McGuinty, the chair of the national round table. I think that will probably bring to the fore what Manitoba is going to do, not just Winnipeg. I think in northern Manitoba there are more issues with it than in Winnipeg itself. We're certainly aware of it and supportive at the national association of the initiative.

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The Chair: I think we've got to move faster on something like that. Thank you very much.

Mr. Elliot, we've heard from other cultural and communications groups across the country. The television situation we're very aware of, and most of us know the impact in our own areas with the inadequacy last year. We appreciate your input on that and other areas today.

I'd like to thank you on behalf of all the members of this committee, including those who are not here, but do read these reports and sit with us in our deliberations. We can't afford to go across the country with all of our members, but we do think this is an important process, and we thank you for your involvement in it, especially for getting those materials to us in time so we can translate them and distribute them in both the official languages of the country and be prepared for you today and ask our questions. Thank you very much.

Colleagues, we will meet after lunch again. Thank you.