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37th PARLIAMENT, 2nd SESSION

Standing Committee on Finance

EVIDENCE

CONTENTS

Tuesday, November 4, 2003

1330

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

Mr. Jeff Morrison (Executive Director, The Road and Infrastructure Program, Canada)

Mr. Ron Legere (Board Member, The Road and Infrastructure Program, Canada)

1335

Mr. Jeff Morrison

1340

The Chair

Mr. Gregory Kealey (Vice-President, Research, University of New Brunswick)

Ms. Gwen Davies (Associate Vice-President, Research; Dean of Graduate Studies, University of New Brunswick)

1345

The Chair

Mr. Don McIver (Director of Research, Atlantic Institute for Market Studies)

1350

1355

The Chair

The Reverend Bob Britton (Chancellor, Archdiocese of Halifax, Halifax Cluster of Kairos)

The Reverend Jack Risk (Program Coordinator, Diocese of Nova Scotia and Prince Edward Island, Halifax Cluster of Kairos)

Rev. Bob Britton

1400

Rev. Jack Risk

Rev. Bob Britton

Rev. Jack Risk

The Chair

Ms. Karen McGrath (President, Canadian Mental Health Association)

1405

Mr. Jim McMorran (President, Canadian Mental Health Association, Nova Scotia)

1410

The Chair

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

The Chair

Mr. Rahim Jaffer

Ms. Gwen Davies

Mr. Rahim Jaffer

Ms. Gwen Davies

Mr. Rahim Jaffer

Mr. Gregory Kealey

Mr. Rahim Jaffer

1415

Mr. Gregory Kealey

Mr. Rahim Jaffer

Mr. Gregory Kealey

Mr. Rahim Jaffer

Mr. Don McIver

Mr. Rahim Jaffer

Mr. Don McIver

Mr. Rahim Jaffer

Mr. Don McIver

The Chair

Mr. Shawn Murphy (Hillsborough, Lib.)

1420

Mr. Don McIver

Mr. Shawn Murphy

Mr. Don McIver

Mr. Shawn Murphy

Mr. Don McIver

Mr. Shawn Murphy

Mr. Don McIver

1425

Mr. Shawn Murphy

Mr. Don McIver

Mr. Shawn Murphy

Mr. Don McIver

Mr. Shawn Murphy

Mr. Don McIver

Mr. Shawn Murphy

Mr. Don McIver

Mr. Shawn Murphy

Mr. Don McIver

Mr. Shawn Murphy

Mr. Don McIver

The Chair

Mr. Scott Brison (Kings—Hants, PC)

1430

Mr. Don McIver

Mr. Scott Brison

Mr. Don McIver

Mr. Jeff Morrison

Mr. Scott Brison

1435

The Chair

Mr. Don McIver

The Chair

Mr. Bryon Wilfert (Oak Ridges, Lib.)

Mr. Don McIver

Mr. Bryon Wilfert

1440

Mr. Jeff Morrison

Mr. Bryon Wilfert

1445

The Chair

Mr. Jeff Morrison

The Chair

Mr. Jeff Morrison

The Chair

Mr. Peter Stoffer (Sackville—Musquodoboit Valley—Eastern Shore, NDP)

Ms. Karen McGrath

1450

Mr. Peter Stoffer

Ms. Karen McGrath

Mr. Peter Stoffer

The Chair

Mr. Gregory Kealey

The Chair

Mr. Jeff Morrison

The Chair

Mr. Don McIver

The Chair

1455

Rev. Jack Risk

The Chair

Ms. Cheryl Brown (President, Literacy Coalition of New Brunswick)

Ms. Jan Greer Langley (Executive Director, Literacy Coalition of New Brunswick)

Ms. Cheryl Brown

1505

Ms. Jan Greer Langley

Ms. Cheryl Brown

Ms. Jan Greer Langley

The Chair

1510

Mr. Mark Smith (Director of Sport Development, Sport Nova Scotia)

Mr. Ken Bagnell (President, Canadian Sport Centre Atlantic)

1515

The Chair

Mrs. Manon Cormier-Viel (Spokesperson, Parents for Quality Care)

1520

Mrs. Jody Dallaire (Spokesperson, Parents for Quality Care)

1525

The Chair

Mrs. Linda Gould (Vice-President, Early Childhood Care and Education in New Brunswick)

Mrs. Monique MacMullin (Treasurer, Early Childhood Care and Education in New Brunswick)

Mrs. Linda Gould

1530

Mrs. Monique MacMullin

The Chair

Mr. Rahim Jaffer

1535

Ms. Cheryl Brown

Mr. Rahim Jaffer

Ms. Cheryl Brown

Mr. Rahim Jaffer

The Chair

Mrs. Linda Gould

Mrs. Monique MacMullin

Mr. Rahim Jaffer

Mrs. Monique MacMullin

1540

Mr. Rahim Jaffer

Mrs. Monique MacMullin

Mr. Rahim Jaffer

The Chair

Mrs. Monique MacMullin

The Chair

Mrs. Monique MacMullin

The Chair

Mr. Shawn Murphy

Mr. Ken Bagnell

Mr. Shawn Murphy

1545

Mr. Mark Smith

Mr. Shawn Murphy

Mr. Mark Smith

Mr. Shawn Murphy

The Chair

Mr. Ken Bagnell

The Chair

Mr. Scott Brison

1550

Ms. Jan Greer Langley

Mr. Scott Brison

Ms. Jan Greer Langley

Mr. Scott Brison

1555

The Chair

Mr. Bryon Wilfert

The Chair

Mr. Bryon Wilfert

1600

The Chair

Mrs. Monique MacMullin

Ms. Jan Greer Langley

The Chair

Mr. Ken Bagnell

Mr. Bryon Wilfert

The Chair

Mr. Peter Stoffer

1605

The Chair

Mr. Ken Bagnell

The Chair

Mr. Mark Smith

The Chair

Mrs. Manon Cormier-Viel

The Chair

Mrs. Jody Dallaire

1610

The Chair

Mrs. Monique MacMullin

The Chair

Mrs. Linda Gould

The Chair

Ms. Jan Greer Langley

The Chair

Ms. Cheryl Brown

The Chair

CANADA

Standing Committee on Finance

NUMBER 098

2nd SESSION

37th PARLIAMENT

EVIDENCE

Tuesday, November 4, 2003

[Recorded by Electronic Apparatus]

· (1330)

[English]

The Chair (Mrs. Sue Barnes (London West, Lib.)): Pursuant to Standing Order 83.1, we are in pre-budget consultations on Tuesday, November 4, in Halifax, with our first panel of the afternoon.

We have as witnesses from the Road and Infrastructure Program, Canada, Jeff Morrison, executive director, and Ron Legere, board member of TRIP Canada. Welcome.

From the University of New Brunswick we have Greg Kealey, vice-president of research, together with Gwen Davies, who is the dean of graduate studies and associate vice-president of research. Welcome to you both.

From the Atlantic Institute for Market Studies we have Don McIver, who is the director of research. Welcome.

The Halifax Cluster of Kairos is today represented here by the Reverend Jack Risk, who is the program coordinator for the diocese of Nova Scotia and Prince Edward Island. Welcome to you. You are joined by the Reverend Bob Britton, chancellor of the archdiocese of Halifax. Welcome to you also.

From the Canadian Mental Health Association we have the national president, Karen McGrath, and Jim McMorran, who is the president of the Nova Scotia division of the same association. Welcome.

We'll start with the Infrastructure and Road Program. Go ahead, Mr. Morrison.

Mr. Jeff Morrison (Executive Director, The Road and Infrastructure Program, Canada): Thank you, Madam Chair, and thank you to the committee for inviting us here to Halifax instead of Ottawa. It's always great to make it out to the east coast. In fact, I'd also like to thank Mr. Brison for his assistance in bringing us here.

As mentioned, my name is Jeff Morrison. I'm executive director of The Road and Infrastructure Program, otherwise known as TRIP Canada, which is a special committee of the Canadian Construction Association.

I'm joined by Mr. Ron Legere, who is a member of our board, and in his day job he is the contracts and sales manager of Industrial Cold Milling Ltd. Surface Treatment & Microservicing, located across the way in Dartmouth.

The way we'd like to proceed, Madam Chair, is for Mr. Legere to provide this committee with a snapshot of the state of our roads and infrastructure in Canada, using this province as an appropriate case study. I then want to talk a bit about the concept of a dedicated gas tax, which, as you know, has been endorsed by our soon-to-be Prime Minister, Mr. Martin, and by you in the House of Commons, as the best means to address these issues.

Mr. Legere.

Mr. Ron Legere (Board Member, The Road and Infrastructure Program, Canada): Madam Chair, over the past two months, other witnesses before this committee have talked about the shortfalls of our infrastructure system: a $57-billion deficit in core infrastructure and another $17-billion deficit in our national highway system. I'm sure each of us would agree this is simply unacceptable.

To give a better idea of the scope of this program, I'd like to talk about our home province of Nova Scotia. In a report prepared in 1999, it was revealed that Nova Scotia had the oldest infrastructure in Canada. The average age of a bridge in this province in 1999 was 51 years, and some 250 bridges are now older than 100 years. The average age of pavement in Nova Scotia is 21 years, even though engineers state that the average age should not exceed 15 years.

At the same time, traffic levels are growing at 3.4% per year, with large trucks accounting for some 25% of all the truck traffic on Nova Scotia roads, which is something highways were not originally designed to handle.

The people of Nova Scotia recognize these deficiencies. Some 70% of Nova Scotians polled indicated that immediate action was required to deal with highway deficiencies.

I should add that in a report released last month, even the federal Liberal Atlantic caucus recognized the state of roads in this region when it stated in its report entitled “Rising Tides” that “road...links to major markets in the United States and the rest of Canada are primitive by today's developed world standards”. Furthermore, a report released by the Conference Board of Canada last month stated that massive spending “would be required to rebuild what is generally perceived to be serious deterioration in the quality of municipal infrastructure”.

Clearly, the reason for this state of affairs is the decreased levels of investment and attention paid to our highways and infrastructure by both provincial and federal governments over the past several decades. Every year the federal government collects over $5 billion in federal fuel taxes but on average returns only $180 million of that to our nation's highways. Nova Scotians contribute some $99 million in federal fuel taxes and are only returned a small amount from the federal government.

Let us be clear that there have been costs associated with this inaction. The chief actuary for the Province of Ontario stated that the cost of basic maintenance on a road over the first 10 years of life is $500 to $1,000 per lane-kilometre. If no work is carried out, that cost skyrockets to $80,000 per lane-kilometre, and if no work is done by year 15, the cost of repair goes up to $250,000 per lane-kilometre. Considering that most roads have not been properly maintained in their early life, taxpayers face much higher bills to repair and maintain those roads than if there had been a proper investment to start with.

Thank you.

· (1335)

Mr. Jeff Morrison: Madam Chair, what are the solutions to these problems? On October 7 of this year, you, in the House of Commons, took a bold step in addressing these concerns when you overwhelmingly voted for a motion that would see the federal government begin discussions with the provincial and municipal levels of government on sharing a portion of the federal gas tax. We endorse this approach, and we are committed to working with the next federal administration, which could only be a few weeks away, as well as provincial and municipal governments, to ensure that a dedicated gas tax becomes a reality.

In fact, just three weeks ago TRIP Canada, organized a policy symposium in which over 15 national organizations, including the president of the Federation of Canadian Municipalities, were invited to brainstorm policy implications and policy questions dealing with implementation of a dedicated gas tax. I've provided the clerk with a summary of the recommendations of these joint organizations. I want to very briefly touch on a few.

[Translation]

First off, we all agreed that provincial and municipal governments should be involved in the negotiations pertaining to a gas tax. In light of the eight provincial elections held this year and the new federal administration headed by Mr. Martin that will soon take office, there is no better time than now for all levels of government to reach a fiscal agreement on a new dedicated gas tax.

[English]

Second, we've discussed whether funds should be transferred in the form of a tax transfer, an outright grant, or through the use of an independent foundation. We recognize that the foundation model would offer a level of reliability that could not be ensured from other models. However, we left that question open, subject to future negotiations with other orders of government.

Third, and the last point I'd like to address, is that we recognize that there is a potential role for the private sector to play in leveraging federal funds. With an infrastructure deficit that was mentioned of some $57 billion and a highway deficit of some $20 billion, we recognize that public funding alone will not be enough to address these concerns.

Although private sector funding, or “triple Ps” as we know it, is not a panacea nor the answer for every project, governments at all levels should take the time to consider their applicability on specific projects, and where a determination is made that they are of value, they should proceed with their use.

Madam Chair, I'd also like to mention one recommendation that received wide support at our symposium, although not unanimous support, one that I think is extremely important, and it is that TRIP Canada believes that gas tax funds should be used for two distinct yet very complementary purposes.

We concur with the House that a portion of the dedicated gas tax should be used for municipal infrastructure. However, we also believe that a portion should be set aside for the national highway system, which is very logical considering that gas taxes are paid solely by motorists and therefore are a form of user tax. If 3¢ of the gas tax were to be devoted to municipal infrastructure and 2¢ to highways, I think we would agree it's an ideal solution.

To wrap up, Madam Chair, the ideas we're bringing to this table are not very revolutionary. They're not very sexy. In fact, their beauty lies in their simplicity. But I think every one of us would agree that investment in infrastructure and highways is by far one of the best investments we can make. We hope this government and other orders of government will turn this dedication into a reality.

Thank you, Madam Chair. We'll be pleased to answer any questions.

· (1340)

The Chair: Merci beaucoup.

Next is the University of New Brunswick. Who would like to start? Go ahead, Doctor.

Mr. Gregory Kealey (Vice-President, Research, University of New Brunswick): Thank you, Madam Chair, and thank you for the invitation to address the committee as part of the pre-budget hearings. We'd also like to commend the committee for what we see as its consistent support in previous years for university research and for such excellent programs as the Canada graduate scholarships and the permanent indirect costs of research.

I'm going to skip over a little bit of our story to try to get to recommendations, but I would note that our enrollments are at an institutional high, our research revenues are at an all-time high, and a relatively new knowledge transfer program that we implemented in the late 1990s is already bearing considerable fruit. Hence we feel we are doing our part to help Canadian universities reach the targets that the AUCC has entered into with the Government of Canada of doubling research and tripling commercialization revenues as part of the innovation agenda.

We would also commend the recent increases in the federal research council budgets, but we would strongly endorse that the growth needs to be ongoing. We note and applaud this committee's previous support for an asymmetrical increase to the SSHRC budget. We would recommend that you re-emphasize that support this year.

In addition, we would recommend that you endorse SSHRC's efforts to transform itself. The social sciences and humanities are crucial to our society and have taken a back seat in research funding for far too long.

We would add that such a transformation, including asymmetrical increases, would significantly and differentially impact Atlantic Canadian universities because of their particularly strong focus on the liberal arts. Simultaneously we would endorse the Canadian Institute of Health Research's quest for augmented health research funding. Particularly important for New Brunswick and Atlantic Canada are applied health research, including the health policy and health and wellness agendas.

Finally, we would note NSERC's new vision for the 21st century and especially commend its focus on regional capacity building and its intention to open regional offices for the first time in the history of any of the federal research councils.

We have already noted our support for the permanent indirect costs of research program, but we would recommend, in line with the Atlantic caucus's recommendations, that the sliding scale that is currently there to build capacity be expanded to further benefit small and medium-sized institutions.

Recent federal policies have begun, I think, to restore a truly national vision for post-secondary education and research, one in which all Canadian universities can participate regardless of size and region. We commend this approach as one consistent with the vision of the 1960s when the current post-secondary system was originally created.

In light of the creation of a Canada health transfer, and consistent with its underlying principles, we recommend that two new transfers be created: a Canada social transfer and a separate Canada education transfer. The Canada education transfer should establish standards of accountability, transparency, and equity. It should also bring core federal funding for post-secondary education back to the levels of the early 1990s and simultaneously address key issues of deferred maintenance through a mechanism such as AUCC's proposed higher education renewal fund. I might note, for example, that the University of New Brunswick currently estimates its deferred maintenance bill at about $100 million, which is almost as large as our annual budget.

A new national strategy should also articulate broader visions of accessibility to incorporate students from disempowered social groups and to promote a lifelong learning environment. Similarly, a new national strategy should build increased internationalization into the Canadian post-secondary system, both for Canadian students through extensive study abroad programs and for international students by national recruitment programs.

I'll turn it over to our dean of graduate studies.

Ms. Gwen Davies (Associate Vice-President, Research; Dean of Graduate Studies, University of New Brunswick): On behalf of the University of New Brunswick's school of graduate studies, I want to acknowledge the importance of the Canadian government's overall investment in graduate student research as part of a larger national research agenda. Furthermore, UNB joins the Canadian Association for Graduate Studies in commending the government for funding the Canada Graduate Scholarships proportionately to the number of graduate students enrolled in the humanities and social sciences.

To build on what has been begun, UNB would strongly endorse the following.

First is continued and increased funding to the federal agencies for direct graduate student support through scholarships and fellowships so that a sufficient number of excellent students can be trained to meet Canada's innovation agenda and the hiring requirements of Canadian universities.

Second is asymmetrical funding to SSHRC to raise the funding levels of graduate students in the humanities and social sciences, and as probably many of you noticed, in University Affairs in February 2003 it was noted that graduate students in the humanities and social sciences have the lowest levels of graduate funding in the university system. This results in longer completion times and the lowest rate of post-baccalaureate graduation in Canadian universities.

Three, we would endorse the transformation of SSHRC to enable new configurations of humanities and social sciences collaboration and research, including mobility or group initiatives that would break down the isolation of many doctoral students in the humanities and social sciences currently working on their dissertations outside of support structures. Again, as CAGS points out, this is a major cause of doctoral attrition in the SSHRC disciplines.

Fourth is the inclusion of graduate student scholarship or fellowship funding in the calculation of the base amounts of indirect-cost money to the universities, given the fact that graduate student research is a significant dimension of what indirect-cost money supports.

And finally, the initiatives of Citizenship and Immigration to expand employment possibilities for international students who are currently unable to work off campus and the facilitation of employment possibilities for the spouses of international students is something that UNB very much endorses.

I might add that reports from the recent CBIE conference held in Charlottetown indicate that the federal government is also looking at speedier visa processing at selected overseas postings. I think this is a move that all the universities, as we recruit internationally, will applaud.

I'd like to thank the Standing Committee on Finance for its support of graduate student initiatives and research and for helping our graduate students to shape the social and technological future of the country.

· (1345)

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

Now we'll go to the Atlantic Institute for Market Studies.

Mr. McIver, the floor is yours for seven minutes.

Mr. Don McIver (Director of Research, Atlantic Institute for Market Studies): Thank you very much.

I think every Canadian federal government has sought to reduce the discrepancy between the wealthier provinces and the less well-off regions, such as Atlantic Canada. I obviously applaud the objective. The goal is well intentioned, as an increase in the economic vibrancy of any part of the country makes the entire country better off. But Atlantic Canada has the necessary human and physical resources to compete strongly in the North American marketplace and does not accept any justification for the persistent gap between incomes in the region and those in the economically better-off provinces.

Misguided policies—many of them at the federal level—have been the cause, rather than the cure, of the very same problems they have been attempting to mediate. I will review some of those, specifically, equalization and social welfare programming, including EI and the fishery. They have operated so as to stunt the potential of Atlantic Canada's economy and to retard the process of convergence.

Equalization was originally designed with the very best intentions to provide reasonably comparable public services at reasonably comparable levels of taxation in all provinces, regardless of the strength of the local tax base. Equalization's effects go far beyond the intentions of the program's designers. Of the many practical effects of equalization that we should be concerned with, I would like to discuss two: the counterproductive effect on growth and the incentive it provides to recipient provinces to maintain high tax rates.

Surely what is desirable is that economic growth will allow the region's tax base to expand, so that provincial taxpayers pay the cost of the public services they choose to have their governments provide. The system of equalization undermines that goal. Developments that result in a higher provincial tax base, whether the results are deliberate provincial incentives or plain serendipity, have a simple outcome: Ottawa withdraws equalization payments in most cases, virtually dollar for dollar, leaving the provincial coffers better off. Similarly, provinces find it worthwhile to forego revenues and to take their share of new economic activity in the form of low-value, but politically popular, short-term job creation.

Thus, equalization subsidizes poor economic policy, especially the diversion of economic activity to lower rather than higher levels of value added, and it rewards provinces for remaining dependent on federal transfers rather than rewarding them for reducing their dependence by generating more genuine economic activity.

Equalization has also been shown to create incentives for less developed provinces to keep their tax rates higher than they would otherwise be. By manipulating their tax rates, poorer provinces affect the size of their equalization payments and receive compensation for the debilitating effects of those higher taxes.

Another well-intended federal program with devastating outcomes for the prospects of convergence has been employment insurance. Federal wealth transfers have increased public employment in the region and bid up wages in competition with the private sector. Private sector employers not only have to bid against government employment opportunities and the multitude of make-work projects and government-subsidized jobs, but they also have to bid against the EI system, which gives generous year-round benefits for a few weeks of work.

These circumstances distort the local economy and have thrown it into a vicious downward spiral. In the short term, wages are artificially inflated, raising the costs of doing business and thus suppressing investment. In the long term, such distortions suppress normal increases in pay rates—the opposite of the short-term effect—by keeping the capital-labour ratio lower than it would otherwise be and by suppressing the skills that workers would normally have acquired by working.

The greatest distortion of Atlantic Canada's economy is the fishery. In many communities throughout Atlantic Canada, the fishery has been regarded as the employer of last resort and the means for as many members of the community as possible to stand up for EI benefits, providing them with income for the year in a crude kind of workfare program.

Prior to the collapse of the northern cod stocks, UI provided a larger share of income than fishing did in fishing communities dependent upon the cod fishery. The result was that large numbers of people became trapped on seasonal EI cycles, which kept them locked into low value-added economic activities, and it impeded reforms to the structure of both the fishing industry and social welfare programs.

· (1350)

Much can be said, and much has been said, about the capricious nature and deleterious impact of federal efforts to directly stimulate regional economic activity through subsidization.

On this occasion I will constrain my remarks to the following. A review of the effects of regional development policy over the past 30 years shows that it has inflated the cost of labour, especially relative to its productivity, and reduced returns on capital, partly through policies designed to prevent improvements in productivity by substituting capital for labour. The entire edifice of regional development policy, including the activities of the regional development agencies, such as the Atlantic Canada Opportunities Agency, has been based on exactly this understanding of the operation of lagging economies. Unfortunately for residents of Atlantic Canada, and for Canadian taxpayers, who have financed a massive array of well-intentioned transfers for the region, this vision is wrong.

What do we do? Start at the beginning: politicization of decision-making in what are essentially business endeavours must be eliminated. I would include in that, notably, the fishery.

We need to reduce taxes. The region's problem is not market failure, but failure to use the market. The removal of these obstacles to investment will set convergence back on course. Key to this package of measures will be the reduction of taxation levels in the region.

An alternative strategy—which is gaining considerable attention in Atlantic Canada—to the existence of spending programs would be to see the federal government wind down such programs in favour of reduced federal taxes, allowing the market system to be more effectively employed.

We would like to see employment strategies reformed. We believe that policy-makers remain too wedded to an outmoded vision of Atlantic Canada's chief challenge being unemployment, whereas that challenge is really the coexistence of large pools of unemployed and underemployed labour on the one hand and significant labour shortages on the other hand.

We also think there needs to be a rethinking of fisheries policy. The future of the fishery as a sustainable and profitable business can only be realized by removing policies from decision-making at all levels. Ownership of the resource must, as a matter of urgency, be transferred to those who live from that resource.

In summation, the focus of government must be shifted from supporting consumption, or the direct provision of income and jobs, to supporting investment and the creation of opportunity. Building genuine infrastructure, such as high-quality highway links to the region's fast-growing markets in the United States would be a good example of where an activist government could profitably put its efforts to hasten convergence.

Thank you.

· (1355)

The Chair: Reverend Britton, go ahead, please.

The Reverend Bob Britton (Chancellor, Archdiocese of Halifax, Halifax Cluster of Kairos): Madam Chair, Jack Risk and I thank you for this opportunity, on behalf of the Halifax Kairos Cluster, to present to the Standing Committee on Finance.

Kairos is the Canadian ecumenical justice initiatives movement and is broadly represented in the Christian churches. This fall, Kairos will be launching a national community-based campaign called “Just Peace...True Security”. The brochure is attached to the presentation by our committee, and it deals with human rights, nurturing social security, controlling arms exports, increasing aid, and cancelling debt.

Our presentation this afternoon is going to be directed to issues of housing, income support, military spending, official development assistance, and Kyoto implementation. In all of these areas we feel the federal government has a strong role to play so that conditions can be created that foster peace and prosperity built on justice.

The Reverend Jack Risk (Program Coordinator, Diocese of Nova Scotia and Prince Edward Island, Halifax Cluster of Kairos): The first theme in our presentation is that of housing, and I just want to make some comments to point you to key points here.

Since 1980 there's been a drastic cut-off or decline in federal funding for social housing, particularly in 1993, when it came to an abrupt halt. The crisis in homelessness that became apparent in the late nineties has not gone away at all, and currently there are 1.7 million people in core housing need. The social costs of this are extreme.

The federal government is to be commended for forging the affordable housing framework agreement with the provinces and territories, but to date, outside of Quebec, only 200 units have been built across the country. In Nova Scotia the figure is 15.

In our recommendations we are asking that the federal government take on what is called the 1% solution, which would raise the federal component to $2 billion and make $4 billion available for affordable housing. We are asking for some pressure to be applied to the provinces and territories on compliance with the framework agreement. Failing that, we would like to see the flow of funding freed up to municipalities and community groups.

Rev. Bob Britton: In regard to the income support programs, in 1989 the House of Commons passed a resolution to eliminate child poverty by the year 2000, yet in the current year, 1.1 million children remain in poverty. We've seen a decade of reduced benefits to unemployment insurance, of cuts to social services, and generally welfare benefits have declined so that those affected in our society are the weakest and the most vulnerable.

In addition, we've seen the growing need for early childhood education and care programs. What we're proposing is that the Canada child tax benefit should be consolidated into a single program, and up to $4,200 per child should be provided for families of low and middle income, irrespective of their other sources of income. This action should be taken in conjunction with the declared target of reducing child poverty by 50% within five years.

The fact is we know if we want to deal with poverty we put money in people's hands. I would suggest that the old age security program is a prime example of something that was effective, and a similar program dealing with children will prove to be effective.

In addition, there's a need for a comprehensive strategy for early childhood education and care in this country, with the allocation of the resources that are needed to achieve that, probably in the neighbourhood of about $1 billion a year.

¸ (1400)

Rev. Jack Risk: On the subject of military spending, we are simply reflecting submissions that have been made earlier by Project Ploughshares in particular, one made to the dialogue on foreign policy. The general approach taken here is one of human security, and there are principles outlined in our report quoting from Project Ploughshares, principles that could guide the formation of a made-in-Canada military policy.

The recommendations, again, are coming from Ploughshares, and I'll go over those very quickly.

The first is that procurement decisions should await an overall review of defence policy in Canada. Procurement should be determined by this policy and not by political or economic objectives.

Steps should be taken to wean Canadian industry from export dependency. Any joint procurement programs should be made in accordance with a made-in-Canada military policy. There should be no buy-in to the ballistic missile defence or joint strike fighter programs.

Rev. Bob Britton: Official development assistance is sadly lacking. There continues to be about 1.2 billion people throughout the world in developing countries who live in absolute poverty, a condition that virtually nobody in North America can come close to imagining.

The United Nations, in December 2000, launched the millennium development goals, with the objective that countries should be contributing 0.7% of 1% to a gross domestic national income towards overseas development.

Our Kairos Cluster would recommend the Canadian Council for International Co-operation's target of achieving that 0.7% by the year 2015, and to do that would mean significantly increasing the rates of assistance to developing countries that are being proposed by the federal government.

There's a need to target aid to key areas for poverty eradication and greater partnerships with Canadian NGOs and their overseas partners. These will be the most effective ways, we feel, of achieving and moving towards poverty eradication in the developing countries.

Rev. Jack Risk: On implementation of the Kyoto Protocol, we definitely wish to congratulate the Government of Canada in ratifying the Kyoto Protocol. Several announcements have been made on programs intended to reach the Kyoto targets, and we compliment the government on those.

We accept that they've not all been announced as yet. When they do, we question whether they would meet the Kyoto targets. The bigger question is whether the Kyoto Protocol goes nearly far enough in reducing greenhouse gas emissions. And there is a whole page of recommendations coming from the Climate Action Network, which we endorse.

I want to thank you and the committee for this opportunity.

The Chair: You have a very good brief. Thank you.

Now we'll go to the Canadian Mental Health Association and Ms. McGrath.

Ms. Karen McGrath (President, Canadian Mental Health Association): Thank you very much.

The Canadian Mental Health Association is pleased to assist the Standing Committee on Finance in formulating its recommendations for the next federal budget. The way we will proceed, with your indulgence, is as follows. I will talk about the cost of mental illness, this being a finance standing committee, and ask Jim McMorran to identify some of our recommendations.

Being a Newfoundlander I can talk fairly fast, so I'm sure we'll be okay within the seven minutes.

Access to mental health services is an issue of broad scope and complexity that significantly impacts Canadians of all races, cultures, classes, and gender, young and old, whether living with a mental illness or not. Due to this vast and comprehensive problem, the Canadian Mental Health Association believes that the next federal budget must address, in concrete terms, strategies to deal with issues elaborated on in our document.

History has taught us that mental health and mental illness transcend pure health boundaries and intersect many social policy areas, such as housing, income support, social services, employment, and justice. As one of the most costly groups of illnesses, mental health problems place second only to cardiovascular disease in its economic impact on Canadian society.

In the year 1999-2000, mental illness resulted in 9 million hospital in-patient days, with the average length of stay being 45 days. In 1998 hospital care costs for mental disorders totalled $2.7 billion, one and a half times more than hospital care costs for cancer.

The average cost of hospitalization for suicide and attempted suicide is about $5,500 per admission, and it can range from $3,000 to $31,000, depending on the length of stay, the type of hospital, and whether the patient died in hospital or not. In 1997 suicide cost Canadian hospitals $100 million. In 2003 we declared that the prevalence rate for mental health problems in our society was just shy of 12%.

Some costs go unmeasured in concrete terms. Mental illness is the primary reason for absenteeism and lost productivity in the workplace. An estimate of the cost to Canadian business and employees is $8 billion a year. The Canadian Chamber of Commerce considers this to be a conservative estimate. Their research shows that the direct medical costs of treating mental health problems and mental illness, combined with the indirect costs associated with production costs, absenteeism, downtime, wage replacement, and disability payments produce a staggering figure of $18 billion.

Unmet mental health needs hurt our economy. Our brief addresses a number of priorities; however, today we will talk about areas of critical need, starting with the shortage of mental health professionals. Canada is facing a shortage of health human resources in every sector of the health system. In particular, the need for trained mental health professionals from a variety of disciplines is increasingly apparent.

Long waiting lists and significant delays in diagnosis, treatment, and support are direct by-products of a mental health system that lacks the specific human resources to effectively deliver care. An Edmonton-based study revealed that high-priority children, some of whom are suicidal, wait an average of 72 days for service. Somebody who is suicidal does not wait on a waiting list.

In Ontario, where 500,000 children require treatment for mental health problems, only 1 in 6 is receiving the help they need from the formal care and treatment system, and at any given time, 8,700 children are waiting an average of five months to get much needed services. According to the Ontario Federation of Community Mental Health and Addiction programs, about half of the adult population needing service must wait for eight weeks or more.

Here are our recommendations.

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Mr. Jim McMorran (President, Canadian Mental Health Association, Nova Scotia): We ask you to recommend that the federal government target funds for the establishment of a national health human resource plan that supports the training of additional mental health professionals. As with other health concerns, mental health services are especially lacking in rural and remote areas of the country.

In Newfoundland, the cod fishing moratorium and other socio-economic stressors have led to escalating mental health issues province-wide. In the Yukon, there is at present no resident psychiatrist. Many Canadians are forced to travel away from their home to receive needed services. When individuals are removed from their communities, they are often separated from the natural support systems and informal caring networks that provide the kinds of financial, emotional, and social support for recovery not found in formal services.

We ask you to recommend that the federal government provide tax incentives, such as forgiving student loans, to attract mental health professionals to rural and remote areas.

As well as access to a mental health professional, prescription drugs are a medically necessary component of treatment for the majority of people with mental illness. The cost of these drugs when they are prescribed outside of hospitals is not covered under the Canada Health Act. The result is that Canadians do not have uniform coverage for prescription drugs. There are extreme regional variations nationally, with the residents of the Atlantic region receiving the least coverage.

An estimated 3 million Canadians do not have any drug coverage and an additional 3 million have only inadequate coverage because of high deductibles and co-payments.

Mental health consumers can access medically necessary drugs in three ways: through provincial social assistance programs, through workplace private health benefits, or by hospital admission. Those who cannot access the necessary medications and supports in the community often go into crisis and get admitted to hospital, where prescription drugs are available at no cost. But as soon as these individuals are released back into the community, without a guarantee of access to medications and psychosocial supports, they are at risk of being reinstitutionalized again and again.

Many consumers choose to stay on social assistance and not seek competitive employment in order to ensure their access to medically necessary drugs. If they enter the workforce, they are at risk of being denied employee health benefits due to their employment station or due to the fact they have a pre-existing health condition that places them at higher risk.

We ask you to recommend the federal government prioritize funds to ensure universal access to medications that are deemed medically necessary.

To conclude, we leave you with these thoughts.

Achieving mental health is about striking a balance in the social, physical, spiritual, economic, and mental aspects of life. The 20% of Canadians who will suffer from some form of mental illness in their lifetime must find their footing again to function in a positive way within Canadian society.

There is an urgency to act now and ensure the federal government's commitment toward mental health is reflected in the upcoming budget. Disability will continue to garner 4% to 12% of payroll costs. Employers currently pay out $5,000 to $10,000 per employee per year in the cost of prescription drugs, sick leave, and average wage replacement.

Canada can ill afford not to deal with mental health issues.

Thank you, Madam Chair and members of the committee, for allowing us to meet with you today.

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The Chair: Thank you very much. We appreciate both of you coming.

Now I'm going to start with seven- to eight-minute rounds. Maybe if I give you a range, you'll stay within it.

Mr. Rahim Jaffer (Edmonton—Strathcona, Canadian Alliance): I'm pretty good, usually, Madam Chair.

The Chair: That includes the answers, by the way.

Okay, go ahead.

Mr. Rahim Jaffer: All right. Thank you for that welcoming remark for the questions.

I want to thank everyone for being here today, and thanks for your presentations. Many of them were very insightful. It's unfortunate that we don't have too much time to get into the meat and potatoes of your presentations, but I'll do my best in the time I have.

I wanted to address Mr. Morrison and Mr. Legere. In your presentations, as I think both of you have identified in the House, there obviously seems to be support for moving in the direction with discussions on how to allocate the potential reduction of fuel taxes, or how to reallocate some of that income to provinces and municipalities, specifically to highway development. In all of those areas, I look forward to the discussions in the future.

I do appreciate the suggestion of how to potentially break those down within the 5¢ range. I think you said 3¢ to the municipalities and 2¢ to the highways, if I'm not mistaken. I think that's a useful suggestion and a useful starting point as we move forward on the debate. Thank you for that.

Mr. Kealey, I wanted to address an issue that I want to applaud you for pushing forward. It's the issue of the ability for foreign students, who are coming here to study, to actually be able to get visas to work outside university campuses. I think it's something that has been a big issue for many students who come. They pay quite high levels of tuition to be here and fund their education, but unfortunately they don't get the visas to work off university campuses.

What sorts of barriers are you currently facing with the government? Is there an open approach when it comes to immigration to work with you on that, or are you finding that it's still a big challenge?

Ms. Gwen Davies: Do you mean for our students?

Mr. Rahim Jaffer: Yes, to allow visas to be given to those foreign students to work.

Ms. Gwen Davies: It's still often a very long process for many students. We have many graduate students internationally. For example, 2% of our graduate students at UNB are international students. We admit them for September and often they cannot come until at least January because of a holdup.

I think anything that can be done to speed up the process, such as was suggested at the CBIE conference recently, would be very welcome for all universities in Canada.

Mr. Rahim Jaffer: Yes, I find that too. The University of Alberta is in my riding. I find that I deal with them on a regular basis on immigration and these issues particularly. I applaud some of the work that's being done. I hope it will continue.

Did you want to add anything?

Mr. Gregory Kealey: Yes. We might add that Minister Coderre has entered into an agreement with the New Brunswick government for a pilot project that is allowing students to stay for two years rather than the previous one. It actually gives them, after graduation, additional time to find real employment and to become permanent residents.

I think we are quite enthusiastic about the initiative in New Brunswick and hope it will prove to be something that can be spread nationally.

Mr. Rahim Jaffer: On another issue you mentioned, I know that in the last budget there was some money allocated over I think a period of time towards infrastructure maintenance for universities and things like that, if I am not mistaken. I know there was a fund put aside. Maybe you can enlighten me. I know there is a challenge at universities, certainly in the case of the University of Alberta, to divert costs on maintenance.

Where are we today on that? Has the government addressed it at all? I thought there was some advancement made.

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Mr. Gregory Kealey: There has been discussion with the government. AUCC has certainly been promoting that, but no, there was nothing in the last budget.

I think you are probably thinking of the indirect costs of research moneys, which are not intended for deferred maintenance purposes. They are intended to offset the additional costs that the increased research revenues bring with them in terms of such things as administering the moneys, renovating the laws, etc.

Mr. Rahim Jaffer: That's right, but there wasn't anything attached to maintenance.

Mr. Gregory Kealey: No, there is no infrastructure.

Mr. Rahim Jaffer: Okay.

Mr. McIver, I appreciated your presentation as well. I think you have challenged the committee and others, especially in this region, to look at things slightly differently, at least from a perspective you bring to the table. I understand the effects of reducing taxes and looking for ways to attract investment here.

I think Scott will probably address the issue of subsidies and regional development. It's something he talks about.

There was one area I was interested to hear more about, and I'm sure it's in your brief. In the proposal you put forward on how EI tends to distort the market, it's supposed to help people during a transition period get into other employment during the time they are off, whatever it is or whatever sorts of circumstances they fall under. I was interested that you say it ends up causing distortions in the market, driving up wages and causing labour shortages.

How do we deal with that, if the intention of EI was to help people in the short-term period, if it's causing these kinds of problems? I don't think you were suggesting that we eliminate it completely. What process would you say we should look at?

Mr. Don McIver: For starters, I think probably one of the best, most sensible suggestions is to make EI experience-rated. As it stands now, across the country we have a lot of concentration of EI recipients in certain industries or certain resource sectors that are not reflecting the cost to the economy of supporting those industries, nor the costs, of course, to the taxpayer in terms of moving those funds around the country.

A very simple analogy that comes to mind is to think in terms of the United States, and they do income support programs there, obviously. For the last 30 years the unemployment rate in Canada has been significantly above that in the United States.

I and many other economists have made the suggestion that a lot of that may have to do with the discouragement the current system of EI provides to labour mobility across the country. It's counterproductive. At the margin, in terms of an area that is suffering high unemployment, it's important to have some fallback or some support. To make it a long-term support program is counterproductive.

Mr. Rahim Jaffer: On the issue we've been dealing with to some extent, there have been some people who feel there hasn't been a surplus, particularly in EI. I don't know if your institute has done any studies on that.

Mr. Don McIver: Not specifically.

Mr. Rahim Jaffer: Whether that should in fact be returned, if it would do more good than collected....

Mr. Don McIver: Let me just step out of my AIMS hat, as it were, and make an observation, because I know this has been a burning issue for a long period of time. I know business groups often feel the surplus should be returned in terms of lower premiums.

I think we get a little hung up on one source of revenue to government as opposed to another. I think we were just talking about that in terms of the gasoline tax. Once you start earmarking these types of funds, there are some good reasons for doing so, but once you say, for example, that the gas tax should go to transportation issues, it sounds sensible.... If you talk in terms of EI premiums being dedicated to employment programs, that begins to make sense, but it also makes sense, on the other side, to say, well, if industry is paying the cost of producing a surplus, industry should get a rebate on that. I'm a little leery myself about defining narrow ranges of taxes and applying them to certain programs.

So it's a little vague, I know, but that's a personal view.

The Chair: Now we'll go to Mr. Murphy.

Mr. Shawn Murphy (Hillsborough, Lib.): I want to follow up with you, Mr. McIver. I find your whole presentation on the EI program very interesting, and certainly I agree with you that it has negative implications on skills training, literacy, mobility, and probably, most importantly, productivity, really.

We're talking about a region that's around 85% of the national average, or less than that--you'd know the exact figure. In Prince Edward Island, where I come from, I think it's 70% of the national average. Do you think that's one of the biggest impediments of enhanced productivity?

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Mr. Don McIver: I think it's a very serious one. I'm not in a position to give an estimate as to what proportion, but I would think that some of the other issues I raised are also applicable in terms of direct subsidization of industry. Both the EI program and the subsidization tend to encourage labour-intensive jobs as opposed to capital-intensive jobs, which of course affects productivity. It tends to reduce productivity.

Without trying to judge, off the top, which is the more serious, I think that whole range of policies, including equalization...all the policies I've touched on that discourage labour mobility, that discourage investment, that encourage labour intensivity, as opposed to the employment of capital, come into play in diminishing the economic prospects of the region. They're all deleterious. They're well intended, but the end product is deleterious.

Mr. Shawn Murphy: To follow up on that, perhaps the policy that's the poster boy for this deleterious end product is the TAGS program, which really didn't help anyone, I don't think, in the long run.

You mention the fisheries as being a culprit, and I don't disagree with you, but another real culprit that I see out there in this whole situation is the provincial and municipal governments. They're into this thing whereby they hire people for 16 weeks. I'm not talking about one or two people; they hire them by the hundreds, if not thousands. And of course when the 16 or 17 weeks are over, they're all laid off, and then there's another crew who start, and of course at the end of the next 17-week cycle, they're all laid off. It slows down productivity and we all suffer as a region.

Having said that, just to play the devil's advocate for a second, there are some what I consider to be very legitimate industries in the region that require seasonal workers, and the best example would be our tourism industry. It's a growing industry; it employs a considerable number of people. Nova Scotia has a vibrant tourism industry, as does Prince Edward Island. Newfoundland is growing. Parts of New Brunswick.... And because of our climate, it's basically a seasonal industry.

Our numbers go way up in the summer months. There is quite a shoulder season now going into September, October, but by January it's over, and it doesn't start again until probably June, when it gets going on a gradual basis. The employers in that industry need seasonal workers. They generally hire them...three and a half months would probably be the average. It would be shorter than that in a lot of instances where you're dealing with resorts.

Some of your major resorts here in Nova Scotia, Digby and one in Cape Breton, need trained people. You can't run the Digby resort by hiring 100 new employees every May. You can't do it. You have to have a core of trained staff to go in there every May and open up your operation. How do you deal with that issue?

Mr. Don McIver: You're playing the devil's advocate; let me play the devil's advocate as well. Let's assume that this is one of the largest and most vibrant industrial sectors in the region.

Mr. Shawn Murphy: I didn't say it was one of the--

Mr. Don McIver: No, I'm making an assumption there.

Mr. Shawn Murphy: It is a large sector and it is a vibrant one.

Mr. Don McIver: My question is, if you want to encourage the growth in that sector, do you want to encourage the growth of an industry that can only support work to your populace for three months of the year?

Perhaps you do, and perhaps there are ways to resolve it. I'm really thinking off the top of my head right now. Obviously you rely for a substantial portion of your labour in that industry on students. Perhaps you can do something in terms of arranging the school year so as to provide the maximum pool of employment.

Other suggestions for increasing mobility, I suppose, would be to seek opportunities for employment of those people outside of the province during the non-tourist season.

Those are difficult issues.

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Mr. Shawn Murphy: When you're modelling and you're projecting future demographics, do you see in this region--and we're certainly seeing it in certain trades--what I consider to be a fairly severe labour shortage, and it's right here in Metro Halifax, in dozens of different trades and occupations? Do you see it in your modelling, going out seven or eight years, that this problem may take care of itself? There will be such a labour shortage that we will require people to work more than 17 weeks a year?

Mr. Don McIver: I think that's undoubtedly true at the national level. As the population ages, of course, and as people leave the workforce, when you do your modelling you do come out with shortfalls in terms of available labour.

What you also see, though, is a dichotomy right now, where you have an excess of labour in certain skills or certain skill sets and a crying demand, as you're suggesting, for skilled individuals in other areas.

As to how that will pan out in terms of whether or not the region would be fully employed, my suspicion would be no.

Mr. Shawn Murphy: I want to follow up with you, Mr. McIver, on this whole concept of lower taxes. I've looked at this closely. Are you suggesting lower taxes on a federal basis, regionally administered?

Mr. Don McIver: No, no, not necessarily.

Mr. Shawn Murphy: So you're not advocating lower federal taxes for Atlantic Canada versus the rest of Canada?

Mr. Don McIver: Well, yes. Sorry, I misunderstood you.

I think there is, for example, the operation of the tax system vis-à-vis Quebec and the national budget that allows this type of regional differentiation to take place.

What I am suggesting, though, is not a sort of national gift to the region, but let's reduce some of the subsidies. Let's reduce the equalization or the effect of the equalization process, and let's rechannel that through lower taxes, which are much more likely to have a positive impact in terms of productive economic growth.

Mr. Shawn Murphy: Whether the thesis is correct or incorrect, I just can't comprehend how you could, in a federation....

The people who work on Bay Street are smart; they can have production in Cambridge, Ontario, and the office in Halifax, and there are all kinds of games you can play here. But I just can't comprehend how you can, in the Canadian federation, have a lower federal tax rate in one province...although the provinces have different rates, with Alberta having a lot lower rates than Nova Scotia. That's fine, but how can the federal government, the Government of Canada, have a lower tax rate in Nova Scotia and a higher one in Alberta?

Mr. Don McIver: Is that the issue? You're talking about the complexities of managing it?

Mr. Shawn Murphy: How would you manage the administration of it?

Mr. Don McIver: You can choose a different avenue. There's no reason why you couldn't have a GST lower in the region. It doesn't have to be an income tax.

Mr. Shawn Murphy: That's a consumption tax, but I'm talking about a business income tax.

Mr. Don McIver: Indeed, as you've already indicated, different provinces have very different taxation schemes. If you look, for example, at national companies like the banks that operate across the country, you see that they face very, very different circumstances in different regions.

The Chair: Thank you very much. Perhaps somebody else will follow up on that.

Mr. Brison.

Mr. Scott Brison (Kings—Hants, PC): Thank you, Madam Chair, and thank you to all of you.

There are a wide range of issues presented here, and I wish we could delve into all of them.

On the infrastructure issue, it ties into both the highway construction and infrastructure issue and Mr. McIver's presentation on behalf of AIMS. Most of the successful regional development programs anywhere in the world over the last 20 years have involved investments in infrastructure as well as a focus on tax-driven levers, but less on agency and subsidy-driven models, whereas in Atlantic Canada we've been relying for 40 years on the same sort of agency- and subsidy-driven model.

First, to Mr. Murphy's point on various tax rates according to the ability of the federal government to provide various corporate tax rates in different regions, all a corporate tax is, to a corporation, is the opposite of a subsidy. We do have subsidy programs available in various regions, and I would argue that it would be less of a distortion to have it on the tax side, because at least the market would then select the participants as opposed to politicians and bureaucrats doing so, who do a better job of picking losers than winners.

On the issue, for instance, of regional development in Atlantic Canada, ACOA's budget is $447 million a year. If we were to take a great deal of that money and invest more in infrastructure, for instance, in highways, airports, and other infrastructure critical to a modern economy, and focus on your Atlantica concept, for instance, in terms of north-south trade routes, and take quite a bit of that money and use it to reduce business taxes in the region.... I'd appreciate your feedback on that sort of approach.

Total federal corporate taxes in Atlantic Canada are only $380 million a year. ACOA's budget is $447 million. So the capacity exists for us to eliminate federal corporate taxes in the region, leaving us with a corporate tax rate on the provincial side of around 12%—roughly identical to Ireland's—and at the same time with $70 million extra per year to invest in infrastructure. That amount alone over a four-and-a-half-year period would clean up the Halifax harbour, just as an example. We'd have to view environmental infrastructure as being as critical as industrial infrastructure.

I would appreciate your views on that.

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Mr. Don McIver: I appreciate very much where I hear you coming from on this issue. I think it's exactly the type of case that AIMS and its researchers have been making for some time.

On the issue of infrastructure, I'm very glad you are aware of the Atlantica concept, which other members around the table are perhaps not familiar with. AIMS has been devoting a fair amount of attention to the concept of Atlantica, which is that the region, Atlantic Canada, eastern Quebec, and the northeastern part of the United States, shares a lot of common economic problems and development issues that may suggest there are possibilities for improved policy coordination across the region.

As part of the brief I gave you, I suggested the importance of a link between Atlantic Canada to its natural markets in the northeastern U.S. It's a very important issue.

For the state of Maine, a very important issue is getting a highway across the northern part of the state, which would provide Atlantic Canada with a significant advantage. It would provide a way of linking this region, through the United States to central Canada to Montreal and on to Toronto, that would be more effective than the current trucking route that is available and utilized at this time.

There are a lot of areas in the region, which happens, coincidentally, as a consequence of history, to be bisected by an international boundary that would give the promise of improved economic advantages on both sides of the border. There is certainly a role in which the federal government can play an important role because of the importance of the international boundary.

Mr. Scott Brison: Even investment, for instance, in a port facility in Halifax, again, would represent infrastructure. It would make a lot more sense than just individual corporate subsidies. Right?

Mr. Don McIver: Yes.

Mr. Jeff Morrison: Also, Mr. Brison, I'm very pleased to hear you link ACOA with infrastructure and highway development, because at the end of the day, the mandate of ACOA is economic development of the region. I think for too long politicians at all levels of government link infrastructure and highway development with things like job creation and—I hate to say this—perhaps even pork-barrel politics.

I think when we start looking at infrastructure and highway development as in fact a form of economic development, and one that benefits not only one industry but a whole range of industries, then I think governments would be more willing to make the necessary investments.

To answer your specific question, would we be in favour of a portion of the ACOA budget going towards highway and infrastructure development, absolutely; however, I don't think you can stop there.

We've talked about a gas tax. There are other means, though, of really investing. That's why we need to start coming up with a strategy to bring all of these pieces of investment together. We have looked at triple Ps, as we mentioned in our presentation. I think we can also look at the idea of municipal bonds.

There is a range of issues and ways of doing it, but it does involve governments at all three levels sitting down and really planning it out.

Mr. Scott Brison: Thanks very much.

On the issue of EI reform, again, to go to Mr. Murphy's points on some of the perverse impacts, and your points, Mr. McIver, the fact is it can actually hurt industries, like tourism or seasonal industries, in a perverse way. I'll give you an example.

In the area where I live and where I'm from, Cheverie and Hants counties, along the Minas Basin, my grandfather was in the pulpwood business. In the winter, people worked with him to cut pulpwood in the woods. These same people would fish or farm in the summer. He told me late in his life, about 15 or 20 years ago, that he doubted whether it would be possible to find enough people to cut pulpwood in the winter because of EI effectively providing an out. I think it can have a perverse impact.

The idea of individual EI accounts, I think, has some potential. It would work something like this. You'd pay into EI for ten years and then you would qualify. If you didn't draw from it for ten years, you would then qualify for an individual EI account. For whichever year that you didn't draw anything, it would increase marginally. If you did draw from it, it would be depleted, but over a period of time, you could build up some capital that would reward you. You could roll it into your RRSP upon retirement. Also, it could be used to withdraw money from to upgrade your skills.

The issue of underemployment in Canada today is large and perhaps even a greater issue, in terms of productivity, than unemployment. Yet there is really no vehicle to help people who are working Canadians pay for upgrading their skills. If you are unemployed, HRDC will help you. But if you are working and underemployed, there is no real vehicle.

I'd appreciate your feedback on the notion of individual EI accounts from which individual working Canadians could draw to upgrade their skills and go from being underemployed to more fully employed.

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The Chair: Please answer.

Mr. Don McIver: It sounds to me like a very sensible suggestion. I think there are a whole range of possible ways of remediating the current system. It probably is the most crude method of providing income support as it stands, and I just mention in passing again the notion of experience-rating the fund. I think it would be an important advantage.

The Chair: Thank you.

Mr. Wilfert, please.

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

I want to thank everyone for their presentations.

On the issue of SSHRC, I would certainly concur with your comment. It's one the minister has certainly noted, as well as the previous minister, in terms of it being a building process. But clearly over $13 billion now goes to research and innovation in universities across this country, and the results have been quite significant.

Too often we have groups that come to the committee looking at a one-shot deal, they want it all, now. I must say, the universities consistently have come looking for incremental increases. When they have been received, we hear very positive things back from them. And lo and behold, the next year, more money arrives--because it's an investment.

So I certainly appreciated the comments you made.

Mr. McIver, with regard to equalization, as the parliamentary secretary responsible for the equalization bill before the House, I was very interested in your comments. I assume you've shared these with the provinces that receive equalization. If you have, I would be interested in their feedback.

Mr. Don McIver: I have not spoken to them personally. Our documents are of course public documents and would have been made available to them.

I've been with AIMS now only about four or five months, but I can tell you we make every effort to disseminate our views to as wide a range of interests as possible, and I can be very sure, without knowing the when and where, that it has been shared with the provinces.

Mr. Bryon Wilfert: Well, I certainly was interested in your comments, as I come from Ontario, which is one of two provinces that don't receive equalization.

As to what you see the impediments of equalization being, obviously it's only a thumbnail sketch of what you've said, but I found it very interesting. I will let you know the equalization bill's second reading will have passed the House of Commons after 3 o'clock today, and then it will probably die. The provinces, of course, are negotiating with the federal government, and we'll see where that goes.

But if we took the suggestion of your organization, it might be quite a radical departure, because even during program review, equalization was not cut in the 1990s.

As far as infrastructure is concerned, it's always my favourite subject. The issue of dedicated taxes is not something the finance department supports. It never has, never will. As a former president of the Federation of Canadian Municipalities, I don't support the gas tax going to cities without the proper mechanism in place. I don't think we're ever going to get it, because I don't intend to write cheques to the provinces and have them decide where the money would be best spent.

There are discussions going on with the minister and his counterparts, but the reality is we need to invest in our cities; we need to invest in the roads in this country. But in your brief, and maybe I read this wrong--when you've seen over 500 presentations, your eyes start to play tricks on you--on the recommendations, issue 3, number 2, it says there should not be an expectation for municipal or provincial governments to contribute new funds above and beyond existing budgets.

Are you suggesting then that the federal government should pay more, instead of the one-third, one-third, on municipal infrastructure, and that the provinces, which have the same fiscal capacity as the federal government, should not?

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Mr. Jeff Morrison: First of all, on your comment about FCM, I appreciate your views; however, I found it rather striking that your predecessor, Mr. Knight, who flew back from Africa on something like a 24-hour flight, spent the whole day with us on October 20 and was very much in favour of gas taxes, as is FCM.

You're correct in suggesting that the question of accountability and ensuring the provinces actually spend the money they get is a big challenge, and in fact we devoted at least a good hour and a half to it. We do think there are ways that could be built into the mechanism. Perhaps it would rely on some sort of contractual obligation. Perhaps through the use of third-party foundations it could be done. However, at the end of the day it is still a challenge, and I do agree with you it's something that needs to be worked out with the provinces.

On that one recommendation, you did read it correctly. You haven't seen too many presentations. We are recommending that provinces and municipalities match federal funds under a gas tax, but that matching funds, similar to the one-third, one-third arrangement in the 1993 program, not be made a precondition of dedicating the gas tax.

Quite frankly, part of the reason for that is, as you know better than I, being with the FCM, municipalities are absolutely cash-strapped. They do not have the means to invest in additional infrastructure. In many of the provinces it is the same case. However, I think in particular because we support the notion of bilateral arrangements, the federal government should look at those provinces that are better off fiscally and perhaps arrangements should be made for conditional matching funds.

Mr. Bryon Wilfert: Again, without having the appropriate mechanism to get to those that need it, which are the cities, it won't work, and obviously provinces like Quebec don't even allow for the federal government to directly deal with the cities on that type of issue. So again, we'd have to look at the type of mechanism. I would support the gas tax only under that basis.

Mr. Knight, being the executive director, is obviously entitled to his opinions. But the reality is I have always favoured the empowerment of cities to raise additional dollars if they need them, so they're accountable for those dollars.

The problem is, as a federal politician I would love for somebody else to pay for all the programs I'd like to see happen and not have to account for the money. That's the problem in this country: we have too many people expecting other people to pay for it.

That is one area, when I was president, that I didn't agree with. I still don't agree with it. I may be out of step, but the reality is if we're going to give money to the cities that don't raise their taxes, that use the antiquated...unfortunately, some provinces are more progressive--Manitoba, for example. They allow municipal governments to have a greater tax base in terms of...I'm not saying increasing taxes, but if they want to put a hotel tax on, they can. At least the citizens would know who's levying the money, whereas in this case, Ottawa would provide the cheque and there would be no accountability.

I can go back to health care. We give cash and tax points. Today the premiers never talk about tax points. They continually, in my view, lie up and down by saying we give them only 14¢ on the dollar. That's absolute nonsense when you add in the tax points.

So I support you on the issue of trying to rebuild our infrastructure in this country. Whether the mechanism that is suggested is the right one, I'm not sure, but it is under this government, under this minister, under the previous finance minister, and under this Prime Minister that we got a national infrastructure program in 1993. It sat dormant for 10 years under my friend's party over there--the Tories--and we're still not getting the credit for it. I remember the days when we had no one who showed up from the federal government to deal with the cities on this issue.

Also, would you do one other thing? Then I'll shut up. Use the word “leverage”. This is something I told the mayor of Halifax this morning. It's gone from the lexicon of my municipal colleagues. They never mention leveraging. We're not the ATM machine. We're not going to hand over money. We need to have it leveraged, and I expect the private sector, the municipal government, and the provincial government to be heavily involved.

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The Chair: Mr. Morrison, I'm going to give you 10 seconds.

Mr. Jeff Morrison: Sure, and there are so many issues there. I wish I could address them all.

The Chair: But he didn't give you any time to.

Mr. Jeff Morrison: Very quickly, I'll address your last point.

In fact at our October 20 session, our fourth session was entitled “Leveraging Opportunities”, and perhaps I didn't use that word in my presentation, but I can assure you it was one of the key issues we addressed. I did refer to triple Ps as one means for leveraging.

As I mentioned to Mr. Bryson, there are lots of ways of leveraging. Because you are right, even if the federal government were to look at a $2.5 billion gas tax transfer, that wouldn't be enough. We need to leverage. There are a lot of ways to do it, and perhaps out in the hallway we can talk about some of them.

The Chair: I'm going to go to Peter as our last round, unless you don't get to two of the very good organizations here that have not been asked questions yet, and then I will do it.

Mr. Peter Stoffer (Sackville—Musquodoboit Valley—Eastern Shore, NDP): Thank you, Madam Chair. I have several questions, and I'd like to ask all the questions first and then get the answers to them after if possible.

To the folks from the university, do you support the Canada Millennium Scholarship? That's one question.

To the folks from the mental health organization, I want to ask you about your last recommendation, which was services that are universally available to publicly funded systems. As you know, we have a constitutional monarchy in this country, and right now we have 10 different provincial systems with regard to mental health strategy as well as three territorial ones. I'd like your viewpoints on how we can make that a more national program.

To the folks with the gas tax, I agree. Unlike Mr. Wilfert, I think a dedicated municipal gas tax would be very helpful. But the question is, how do we assist those in the rural areas, not so much the powerful municipalities, but the Cansos and the Cheticamps of the world? Also, do you believe in toll highways as a part of a three-P system?

On the question of how do we deal with a province similar to Quebec, because you can't just have one in the regions there, I agree that ACOA should be the approach where infrastructure should flow through.

One of the ideas I've always thought of is that the five different agencies throughout the country--the Western Economic Diversification Canada, FedNor, Quebec, and ACOA--should be lumped into one for streamlining efficiency in terms of infrastructure, in terms of the fact that a gas tax has to go through a particular department and other approaches. If you merge those together and make it strictly an infrastructure assistance-based department in that regard so that universities--not just highways, but universities, etc.--would apply to this particular department for funding, I believe that would be an approach.

To my friends at AIMS, how are you? I never went after things before, but you said here in your brief on page 9, “The most successful provinces in Canada--Ontario and Alberta--both are pursuing an aggressive policy on tax reduction.” My question to AIMS is, do they support deficit financing? If they don't, then how can they support Ontario, which left the Liberal government with close to a $5 billion deficit, and the B.C. government, which immediately gave a 25% tax cut without looking at the books, increasing their deficit over $2 billion--and that's deficit financing?

Madam Chair, with the greatest respect, I cannot see the AIMS institute supporting deficit financing in this country. So my question then--and I could go at length regarding the fishery, but I don't have time--is on the reality that tax cuts in these particular areas led to great deficits.

You also mentioned that the United States is similarly engaged in significant tax reductions, and they're running at about a $450-billion deficit. That cannot be good. I'm not an economist, but that cannot be good. Are you supporting those tax reductions, for example, in the United States and Ontario? And I don't consider Alberta in this because they have such approaches of gas revenues and oil revenues that they have a different set of circumstances.

I would like your comments on that if possible. We'll start off with the original questions first, please.

Ms. Karen McGrath: We were actually second, but I'll answer first.

The issue we have argued for is a national set of standards with respect to mental health, and we--

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Mr. Peter Stoffer: How?

Ms. Karen McGrath: The federal government has to have leadership on this issue. There's no question about that. The federal government has to take the lead role. I've worked in health care long enough to remember when psychiatric hospitals were federally funded--directly federally funded.

With respect to a mental health strategy in this country, the federal government has to take the leadership. We have decided in this country that hospitals are the way we provide health care. And we have hospitals from one end of this country to the other, in every nook and cranny. We do not have the same system for people who have mental illnesses.

We don't have community mental health clinics. We don't even actually have agreement on what constitutes a minimum set of mental health services in a community. For that kind of issue, we believe, and we have long argued as the organization--we didn't put it in our brief because we've made this argument elsewhere--and we will continue to argue, that we are looking for the federal government to take leadership on this issue.

Mr. Peter Stoffer: I may say, Madam Chair, to the folks here, I support your recommendation of not joining the ballistic missile defence shield, by the way. That's a good one.

The Chair: Mr. Kealey.

Mr. Gregory Kealey: On the millennium scholarships, I think we'd say a couple of things. One, of course, is that it's an undergraduate-only program, and certainly the Canada graduate scholarships help on the graduate side, but graduate support is extremely important, especially as we worry about finding future faculty as the academic labour market changes significantly.

Secondly, there is some interesting stuff they're doing about accessibility that's simply not part of the actual scholarship program. They are about to announce a pilot project in New Brunswick that really focuses on trying to increase accessibility. They're working with various groups of high school students on that, and I think, again, this kind of pilot project is interesting and it's something outside of the normal scholarship program.

Third, I suppose the obvious thing, and one of the biggest problems with it, from a federal perspective as well as from a university perspective, has been that this is a real accountability issue where the provinces--some provinces, I probably should be careful--were less than responsible in terms of their own student assistance programs.

A kind of downloading took place. I think that's one of the reasons why we...I return to our position about trying to increase accountability for federal programs through separating the transfers into a specific social transfer and a specific education transfer, which would allow more transparency, and in the process prevent the ability of the provinces to be less than wholly responsive to what these moneys are transferred for.

I suspect not all provinces would respond well to that, and I should add that the New Brunswick government was not one of the governments I was alluding to.

The Chair: Go ahead, Mr. Morrison.

Mr. Jeff Morrison: You asked the question, would we support toll highways, and the short answer is yes. Toll highways are a form of user fee for a public service, and frankly, we wouldn't have a problem with that.

I'll go you one further. Would we support increasing a gas tax by, say, a cent, a cent and a half a litre, if that incremental funding were to go directly into highways? I would answer yes, we would. It's not the preferred option, but it's better than nothing.

You also asked the question, how do we assist rural municipalities, and you're absolutely right, that is a big issue and we have to ensure that not all the money goes to the Torontos, Montreals, and Vancouvers of the world. I think, first of all, the provinces would need to take some responsibility to ensure that this money does get channelled through to rural municipalities.

I think as well the municipal associations, who you'll notice in our recommendations from the October 20 session, should be essentially the voice of municipalities in each province.... I think those municipal associations in each province need to play a key oversight role to ensure that in fact that money does go to those rural towns.

The Chair: I think the last question is, do you support deficit financing, Mr. McIver?

Mr. Don McIver: No.

The Chair: I thought that would be a short answer.

I'm going to give Reverend Risk and Reverend Britton the last words, because I don't think you had sufficient questioning here today. I can tell you that if you go to our finance committee's reports, a lot of your environmental recommendations were contained in our report last year, a number of them, and some of the other ones were.

If you want to look at the chapter called “The Priority of Helping the Vulnerable”, you will see some of those issues from last year.

Go ahead, Reverend Risk.

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Rev. Jack Risk: I think I will take up the issue of ballistic and missile defence, which Peter Stoffer raised.

I'm speaking for myself, but as a participant in the peace movement in Canada--and I think I'm also reflecting Ploughshares' approach to this topic, and it's been published in some documents--the first thing to say about it is that it is not defence, and I don't think it can be sold to the Canadian public as a defensive strategy. Clearly, the impetus behind it is the theatre use of small-scale nuclear weapons as part of the American doctrine of the pre-emptive use of force.

It is not part of our requirements under NORAD for the defence of Canadian airspace. I would also say it's not true in any way, shape, or form that we owe anything to the United States over our refusal to take part in the invasion of Iraq, and I think the Canadian people understand that quite clearly.

BMD would lead inevitably to an arms race on the scale we had in the early 1980s. Rather than see that take place, we think it is more rational to pursue a strategy that is based on disarmament, on human security, and on international treaties and institutions.

The Chair: I think if you'd listened to the Iraq debate in the House you would have heard many of those same sentiments expressed even by members of this committee.

So thank you all for being part of our discussion today. I know it takes a lot of effort to put a document together, to do the travel, and to take your half day and more to come to these meetings. We appreciate that effort.

We will suspend, colleagues. I am told that we have to be on the bus for 4:15, so I am going to give a five-minute break. We will start at 3 o'clock. So you might want to gather your goods.

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The Chair: We are starting again with our fifth and last panel of the day in Halifax.

We are very, very pleased to have with us representatives from the New Brunswick Coalition for Literacy, Cheryl Brown, president, and Jan Greer Langley, executive director. Welcome to you both.

Sport Nova Scotia, Mark Smith, director of sport development, is joined today by Canadian Sport Centre Atlantic, Ken Bagnell, president. Welcome to you. I understand you are doing one joint presentation. That's good.

For Parents for Quality Care, Jody Dallaire and Manon Cormier-Viel are the spokespersons. Welcome.

From Early Childhood Care and Education in New Brunswick, we have Linda Gould, who is the vice-president, and Monique MacMullin, who is the treasurer. Bienvenue.

Thank you for making the journey here today.

We'll go in the order of the agenda. You'll have seven minutes, and we'll hear from all of you. Then we will go into a round of questioning--which will be shorter, colleagues.

So to the New Brunswick Coalition for Literacy, the floor is yours for seven minutes.

Ms. Cheryl Brown (President, Literacy Coalition of New Brunswick): Thank you.

Madam Chair, committee members, fellow witnesses, good afternoon.

The Literacy Coalition of New Brunswick Limited is a provincial not-for-profit charitable organization that has been in existence since 1988. It is funded federally through the National Literacy Secretariat to carry out literacy projects in partnership with others.

The coalition is made up of representatives of the federal departments of Human Resources Development Canada, the Department of Justice, and the Correctional Service of Canada; the provincial departments of education, the public library system, and the New Brunswick Department of Family and Community Services; community-based literacy programs that include family literacy programs, the Learning Disabilities Association, Laubach Literacy, Frontier College, the Saint John Learning Exchange, and the community academic services program; as well as learners, adult literacy practitioners, representatives of labour groups, and two universities.

Ms. Jan Greer Langley (Executive Director, Literacy Coalition of New Brunswick): The Literacy Coalition works provincially and nationally to promote literacy as a basis for a better quality of life for all.

Statistics Canada tells us that 29% of adults over the age of 16 in New Brunswick have extreme literacy challenges. This is called level-one literacy in the international adult literacy survey. The challenges faced by these citizens are serious enough to keep them from working and progressing in their lives. An additional 30%, in what is called level-two literacy, have literacy challenges serious enough to keep them from adapting to an ever-growing, sophisticated information-based society. New Brunswick's low literacy rate is one of the worst in Canada.

Ms. Cheryl Brown: We believe addressing literacy challenges is an investment in a more prosperous, innovative, healthier, safer, and more democratic society.

Although many organizations have worked side by side for a number of years to meet the literacy challenges head on, we face a literacy crisis in New Brunswick. Research from a recent study called “Comprehensive Training Needs Assessment for Literacy in New Brunswick” tells us that literacy delivery structures in our province are disintegrating.

The volunteer sector, which works primarily with those in level one, is increasingly stressed. Financial support from the provincial government is waning, and volunteers are burning out under the pressures of ever-increasing burdens.

Those in level two are steered into a provincially mandated program called the community academic services program, or CASP, a classroom setting located in communities across the province. This program is impoverished in human and material resources. Family literacy and workplace literacy programs are almost non-existent due to lack of funding, and there is an emerging trend in New Brunswick. Youth are graduating from high school with diplomas from modified programs and are entering our adult literacy programs. In some cases, they are being counseled to do so by staff at the school. Our colleagues across the country tell us they are seeing the same trend.

We therefore urge the Standing Committee on Finance to support the creation of a pan-Canadian strategy on literacy and essential skills development, as recommended by the Standing Committee on Human Resources Development and the Status of Persons with Disabilities in June of this year. In particular, we ask for support from the Minister of Human Resources Development Canada to meet with provincial and territorial ministers of education and labour market ministers to develop a pan-Canadian accord on literacy and numeracy skills development.

¹ (1505)

Ms. Jan Greer Langley: We are heartened to learn that there is a proposed strategy for a strong investment in Atlantic Canada called “Rising Tides”, which stresses literacy and lifelong learning as part of an investment in human skills infrastructure as well as an investment in improved communication structures, transportation, research and development, immigration, and capital and financial infrastructure.

We would call on the Standing Committee on Finance to support this investment initiative. It is our plan to work along with our literacy colleagues in the Atlantic provinces and with the federal government in the development of the literacy and lifelong learning cluster in the development of this initiative to ensure that resources are wisely put to use. We believe this investment, used properly and funnelled into the right hands, will produce a payoff in the 10-year investment.

New Brunswickers are no longer hewers of wood and drawers of water. Technology in our province is advancing. However, due to its rural nature and low literacy skills, technology is being underutilized. We believe investment in the area of computer technology will enhance New Brunswickers' access to learning opportunities.

As an example, the Literacy Coalition has just set up an adult learners network. In a few short months, four of the twelve learners on the network have become computer literate. They are utilizing their new-found literacy skills using the tools of the Internet and e-mail. We open the doors by providing access and training.

We need to be able to do more of this on a much broader scale, which is why we're happy to see “Rising Tides” support Internet access in rural areas, accompanied by programs that support their use. We hope the federal government will work with non-governmental organizations like ours to further electronic access to people with low literacy skills.

Ms. Cheryl Brown: Literacy and health is another area we would like you to look at. With almost 60% of adults in our province facing literacy challenges, imagine the missed appointments and ill preparation for procedures. For many procedures at a hospital there is a text-based instruction sheet. Most citizens do not have the literacy skills needed to read these. Therefore, we believe clear language programs with health institutions would at least help to alleviate some drain on the system.

It might be interesting to note that people with literacy challenges are more than twice as likely to be hospitalized, and patients with low literacy skills cost the system four and a half times more than the average person. Because of low self-confidence and limited resources, people with low literacy skills often wait to seek medical help until a health problem has reached a crisis state.

Correctional Services Canada should be supported to enhance literacy and education services in federal institutions. It is our understanding from discussions with our partners that there have been cutbacks to education within the correctional system. We believe education is the key to preventing criminal activity and reoffending.

It would benefit us if the National Literacy Secretariat had greater access to funds to distribute to provinces like New Brunswick, where literacy challenges are the greatest, so that effective programs could be funded and carried out for more than one year and would also include a research component. An example of this is the family learning and health literacy program. The setting was a public housing neighbourhood. The program addressed issues of low literacy, violence, and health. The program was set up to specifically look at barriers and obstacles to learning and how to overcome them. We could not access multi-year funding. We had a one-year federal pilot grant, and then the program ended with no further opportunities for funding.

There are many examples of programs with positive outcomes that go dormant because of the one-year funding issue, but we do not have time to discuss them all today.

Ms. Jan Greer Langley: It would make a positive difference for our colleagues across the country and us if the National Literacy Secretariat could provide core funding instead of project funding, with a policy change that would see successful projects funded for more than one year. We feel that resources are being wasted by not doing so.

Finally, all government departments should examine their policies through a literacy lens. Often policies are developed with the best of intentions, but once implemented are flawed with institutionalized barriers. For instance, people on EI should be able to attend educational programs without penalty, and people receiving disability payments through CPP should also be able to attend educational programs.

Literacy is the key to attaining a better quality of life for adults, children, and whole families. Improved literacy skills will often lead to work and a paycheque. It is imperative that we ensure that all Canadians have opportunities to reach their fullest potential. By doing so, more Canadians can contribute to the social and economic well-being of the nation.

On behalf of Cheryl and the Literacy Coalition, I want to thank the Standing Committee on Finance for holding these important discussions.

The Chair: Thank you very much.

Now we'll go to the two sports organizations.

Who will start? Mr. Smith.

¹ (1510)

Mr. Mark Smith (Director of Sport Development, Sport Nova Scotia): Madam Chair and members of the committee, thank you for this opportunity to speak with you today. My name is Mark Smith, and I am the director of sport development for Sport Nova Scotia. I'm also the head coach of Canada's men's national softball team.

I'm here today to congratulate the federal government for its efforts to promote physical activity in sport and encourage the continuance of this support. Youth inactivity in Nova Scotia has reached epidemic proportions. A study released by the provincial government shows that roughly 13% of grade 11 males and 7% of grade 11 females achieve the recommended 60 minutes of moderate or vigorous physical activity on most days of the week.

Sport delivers thousands of benefits, not simply by improving the health and welfare of participating Canadians, but by injecting millions of dollars into the economy, building stronger communities and families, providing positive activities for youth, and making our population more productive.

As you consider the budget, please keep this in mind. If just 10% fewer Nova Scotians were physically inactive, the total economic savings to the province would amount to $24.7 million annually. If we include direct and indirect health care costs, the total economic burden of physical inactivity in the province is estimated at $354 million annually.

In February of 2003 the provincial and federal governments announced an innovative bilateral agreement to co-fund the sport futures leadership program. This program is designed to provide community sport organizations with the tools to modify and deliver quality sport experiences for children and youth.

Year one of the program has impacted more than 100,000 school-age children and youth. Physical educators throughout the province have been exposed to new and creative ways to deliver quality sport experiences to children and youth on a daily basis.

Programs such as sport futures leadership represent a paradigm shift in terms of quality program delivery. This program in particular is proving to be an effective way of ensuring young people are playing and staying in sport.

Supporting the development and the delivery of inclusive physical activity, a proactive approach to health care should be a priority. It should also be a commitment shared by the community taxpayer all the way to the Prime MInister of Canada. Currently, annual sport funding does not reflect its value and its importance in Canadian society.

The bottom line is that it is far cheaper to invest in sport than it is to pay the costs that arise out of inactivity. These costs include such things as health care and youth incarceration. With increased funding we can build a healthier society in a country with a reputation for supporting its athletes from playground to podium.

At this point I'd like to introduce Ken Bagnell, who's the president of the Canadian Sport Centre Atlantic.

Mr. Ken Bagnell (President, Canadian Sport Centre Atlantic): Thank you, Mark.

Madam Chair, committee members, and fellow guests, thank you for providing us with this opportunity to discuss the value of investment in sport.

As Mark has indicated, the benefits of sport are in a number of areas, in health in particular. I'd like to point out a couple of other elements of sport in our country that lead to another variety of important factors.

First of all, sport is about building national identity. We have a tremendous opportunity in 2010 in Vancouver, Whistler, and possibly in Hamilton at the Canadian Commonwealth Games, if they're successful in their bid, to provide an opportunity to showcase our Canadian athletes and physical excellence.

As we clearly saw in Salt Lake City, Canadians enjoy and embrace our country's sport heroes, hoping to see them reach the podium. Undoubtedly, success at the international level by our athletes has played a role in the increase in various sports' registration. The connection between our elite athletes and our grassroots athletes is clear. We can look at the growth of women's hockey as well as the triathlon as two prime examples of that.

Domestically, the Canada winter games and summer games are unique events that occur every two years and bring the youth of our country together. Over 1,000 Canadians from all provinces and territories participate in this tribute to physical activity and sport excellence. Tens of thousands of athletes are involved in the journey to qualify for these events. It is our responsibility to ensure opportunity and necessary funding are available to permit this process to evolve even more clearly.

There's also a clear and documented connection between participation levels in sport for youth and long-term participation in physical activity. Again, we must make that pathway clear and accessible for all Canadians.

Sport is also about economic development. Sport activities put millions of dollars into the Canadian economy each year, and in 2010 that number could be billions of dollars.

According to the 2001 census, over 100,000 Canadians are employed in the sport sector. In order to ensure the province can continue to benefit financially and otherwise from the sport events, tourism, infrastructure development, and hosting, we need this sector to be supported in a strategic manner. The Government of Canada is already, through some initiatives under the secretary of state for physical activity and amateur sport, developing a hosting policy for major events. If given proper financial consideration, this policy can drive this effort.

Sport is about leadership. A more coordinated effort to develop employment programs for sport and physical activity leaders is necessary. While the volunteer base in sport continues to excel beyond expectations, the lack of professional coaching is creating challenges, especially in the quality and consistency of programming. That leads right back to some of the comments Mark made.

Sport is about strategic investment in partnerships. We have many lessons to learn from our colleagues in Quebec, who have a high activity participation rate as well as significant funding for sport, including infrastructure programs, tax incentives, and investment in sport governing bodies.

A coordinated effort consolidated across departments could ensure that these investments are strategic and produce the best possible outcome. A ministry responsible for youth and sport, which exists in most other countries, would be a means to achieve this consolidation.

We encourage the Government of Canada to commit to these investments, which will save money in the long run, develop new economic opportunities, and build the identity and pride of Canadians.

Madam Chair and members of the committee, we'd like to thank you for this opportunity to speak with you today, and I look forward to seeing the results of your work.

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The Chair: Thank you very much.

Now we'll hear the Parents for Quality Care. Who will start?

Mrs. Manon Cormier-Viel (Spokesperson, Parents for Quality Care): I will, and I would like to speak in French.

[Translation]

Madam Chair, members of the committee, we thank you for the opportunity to discuss the important issue of childcare facilities.

Who are we? Parents for Quality Care is a group of New Brunswick parents concerned about the challenges faced by child care facilities in our provinces. We are working toward a better child care system in New Brunswick by advocating quality, accessible and affordable services. We believe that all children should have access to the child care services they need, regardless of their family income, special needs, parental employment status or geographical location.

Let me review briefly the situation in Canada, before I focus on the situation in New Brunswick. We'll conclude by presenting our recommendations.

In terms of Canada's reality, two separate agreements have been negotiated over the last three years: the Early Childhood Development Agreement and the Multilateral Framework on Early Learning and Child Care. Regrettably, neither agreement has led to the progress that Canada's children and families need and deserve.

In terms of the situation in New Brunswick, on the issue of accessibility, in 74% of New Brunswick families with young children, both parents are employed in the labour force. There are approximately 112,000 children aged 12 years and under in the province and 11,100 licensed child care spaces. This means that only 1 in 10 children have access to government regulated care. Consequently, there is a serious shortage of licensed child care spots throughout the province.

On the issue of quality, quality child care requires well-trained early childhood educators, low staff-to-child ratios and staff consistency. In New Brunswick, less than 20% of educators have a degree in early childhood education. The staff turnover rate is alarmingly high—anywhere from 50 to 60%—making continuity of care virtually impossible. Staff turnover upsets a child's sense of security, disrupting his ability to benefit from the learning opportunities provided at the child care facility.

On the question of affordability, although the New Brunswick government subsidizes the child care costs of low-income families, fees remain beyond the reach of many New Brunswick families. Subsidies have not increased over the past five years, while the cost of living continues to rise.

In 1999, New Brunswick parents paid $87.1 million in child care services. Nationally, the province fares poorly, since child care facilities in New Brunswick are the third most reliant in Canada on parents' fees for their funding, with 68.7% of their revenue derived from parents. New Brunswick daycares need additional funds to offer quality child care services and to recruit and retain qualified staff.

I'll now turn the floor over to Ms. Jody Daillaire who will present our recommendations.

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[English]

Mrs. Jody Dallaire (Spokesperson, Parents for Quality Care): I'm going to be speaking in English.

I want to thank Madam Chair and the committee for inviting us to attend and to present, and to say hello to all our colleagues here as well.

As you can see from the statistics outlined by Manon, the situation in the child care system in the province leaves a lot to be desired. Just going over some more statistics, I took the liberty of calling some facilities throughout the province in all of the different areas—Moncton, Saint John, and rural areas. Everybody has about the same situation to report. There are huge waiting lists, especially for infant care. Some of the programs accept six infants, and they have up to 45 infants waiting to enter care. As you go throughout the system, it's pretty much the same situation, with children waiting to get in.

As a province with limited financial means, in New Brunswick we would definitely require the leadership of the federal government to develop a pan-Canadian child care system, with a structure in place that would mandate the province to invest those dollars in quality child care spaces that would be accessible to all children—not just the 1 in 10—and that would be affordable to all New Brunswick families.

I know a lot of parents on our committee, and the population at large in our area, are forced to make decisions. When they're on maternity leave, they need to take their children out of child care services, because once they're not working, they don't have that second income and they're not able to afford the service.

So with an investment of public dollars, it would alleviate some of that burden on New Brunswick and on Canadian families in general.

Also, the service throughout the country today is not necessarily similar. Child care services in New Brunswick are not necessarily the same as child care services in B.C. Going back to the You Bet I Care! study, it found that quality is not necessarily there in child care services in the province of New Brunswick, because of lack of dollars or funding. Directors and owners are unable to pay their staff equitable wages, so people are working at poverty level wages at $15,000 a year. So they don't go to get the training they need because they can't come back to those wages. We would need, once again, federal investment to ensure that the staff are paid equitable wages to ensure quality.

As parents, we are asking the standing committee to recommend that the upcoming budget include funds to develop a national, publicly funded child care system for children aged zero to 12; that they put in balances and checks to ensure that the provinces use the funds to allocate quality, accessible, and affordable child care spaces; that the moneys be invested in regulated spaces; and that the funds do not replace the moneys currently being invested by the provincial government.

Thank you.

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The Chair: Thank you both.

Now we go to Early Childhood Care and Education New Brunswick.

Go ahead, Madam Gould.

Mrs. Linda Gould (Vice-President, Early Childhood Care and Education in New Brunswick): Thank you, Madam Chair, for allowing us to be here this afternoon to speak on behalf of early childhood care and education.

Early Childhood Care and Education New Brunswick/Soins et éducation à la petite enfance du Nouveau-Brunswick is a non-profit, bilingual membership-based association that was incorporated in 2001. We represent the province's child care sector. Our mandate is to promote child care through supporting the child care sector in developing and maintaining a high standard of early childhood care and education.

Through international research in the child care sector, we do know that access to affordable, quality, regulated child care contributes to healthy child development. It is a significant factor in a parent's ability to work, study, and participate in communities, and it promotes gender equality in employment opportunities.

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 a sustainable child care system.

Mrs. Monique MacMullin (Treasurer, Early Childhood Care and Education in New Brunswick): I'm Monique MacMullin, and I'm going to repeat a little bit what Parents for Quality Care has said, because we are doing the same thing, basically.

As they already said, 74% of New Brunswick families with young children have both parents employed in the labour force, and only about 1 in 10 children have access to regulated child care. Also, 15% of preschool children before the age of five go into the school system with no access whatsoever to public health, child care, or any form of introduction to early childhood education. Therefore, when they get to school age, there are a lot children with developmental delays. This is something that government is looking into at the moment.

As on quality, when we talked about the You Bet I Care! study, it's the same thing. New Brunswick came out being the worst province in Canada for children in child care. Only about 20% of our educators employed in the child care sector have received certification. There is a lot of staff turnover.

Before 1999 there were no standards regulating the training of educators; therefore, anybody could work in a child care facility without any education. So in 1999, the new standards that were introduced asked for at least the director or the assistant to be trained—or one in four staff—which is very minimal to offer in quality child care.

Staff turnover since that time has not been better but has become even worse, because we can't pay the staff the wages they need. In the study of 2001, early childhood educators were at $6.87 an hour, which comes to $14,289 a year for a 40-hour week—plus an additional five unpaid hours weekly. Then with the introduction of moneys through the provincial quality funding improvement initiative, wages have risen to an average of $7.46 an hour. It must be noted that the quality funding improvement initiative has only been guaranteed for five years; therefore, we don't know what will happen after five years. If that's out, the wages will drop again, because we depend on that amount of money to be able to function.

Mrs. Linda Gould: Again, I will continue to mention some of the same things the parent committee did.

In 1999, New Brunswick parents paid $87.1 million in child care services. Although the New Brunswick government subsidizes the child care costs of low-income families, the fees remain outside the reach of many New Brunswick families. Increases in subsidies have not taken place in the past five years, while the cost of living continues to grow. Also, the parent fees that are paid have seen very little increase in the last five years. We are looking at child care centres having the same revenue while their expenditures continue to rise.

Child care centres in New Brunswick are the third most reliant in Canada on their parent fees. They receive up to approximately 70% for their funding. In some non-profit centres, it can be up to 95% of their revenue coming from parents.

In order to sustain, as Monique was saying, the increased wages that have been seen through the quality improvement funding initiative, without further investment through a national child care initiative, child care centres will be hard pressed to maintain that wage increase without looking towards increasing parent fees. It is going to place an additional burden upon parents.

One item I wanted to touch on briefly, when we are looking at child care choices, is the reasons why child care has become so necessary to today's society. Family dynamics of the Canadian family have changed. We see more single-parent families, more dual-income families. Families tend to be more mobile, and parents may not reside in the same area as extended family members. Therefore, they are looking outside of the family unit for child care.

Their choices have been able to be changed because of this. The knowledge of early childhood education has increased the choices parents wish to make in providing their children with the best possible beginning to their lives and in the financial status of what they can afford to provide for the children.

In looking at recommendations, we would hope that there would be federal funds committed to support the development of a publicly funded pan-Canadian child care system for children from birth to 12 years of age. That would be inclusive and meet the needs of every child, regardless of ability, language, culture, family income, status, or where they reside.

We would also hope that federal leadership would be demonstrated in developing a federal, provincial, and territorial social policy framework with licensed and regulated child care as the cornerstone of Canada's family friendly policies. Each provincial-territorial government would be required to use federal child care funds to build a publicly funded child care system that provides high quality and is inclusive, affordable, universally acceptable, and accountable.

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Mrs. Monique MacMullin: In the fourth one, we'd require that all provincial-territorial governments receiving designated federal funds spend them on improving quality, accessibility, and affordability to regulated child care.

We would require that all provincial-territorial governments receiving federal funds designated for child care maintain or increase their spending on child care and use the federal funds to supplement, not replace, provincial-territorial child care funding.

In the last one, we would establish mechanisms to ensure compliance with the terms of a federal-provincial-territorial agreement and develop obligations for public reporting that will give clear data, detailing progress in improving access to affordable, quality child care programs and services that meet quality standards and are monitored by provincial-territorial governments.

The Chair: Thank you very much.

Now I'm going to move to a round of questions for six or seven minutes.

First, Mr. Jaffer.

Mr. Rahim Jaffer: Thanks, Madam Chair, and thanks to all the presenters for your submissions this afternoon. I appreciate the information. I have some questions and comments some of you might like to respond to. I'll start with Ms. Brown and Ms. Langley.

I was a bit astounded by the one figure I think you had in your brief, that youth are graduating from high schools with diplomas from modified programs and then entering adult literacy programs. It is a significant problem, obviously, if there are students going through the whole education system and still having problems with reading and writing.

One of the other things you talked about, among solutions to try to deal with literacy, is not having systems that are there for social support—for instance, EI or CPP—penalizing people who are relying on those but still trying to further their own abilities and skills. I think yours is an excellent suggestion and one we have to look at very closely in the committee.

One of the things I'm interested to hear your opinion on is why it is that in our education system—because I think it's not something that's a problem only here in New Brunswick, but in other provinces as well—there are people unfortunately falling through the cracks in the basic system. Do we need to give more attention, through our provincial governments, to education and the systems that are in place? Why is there this problem where people are falling through the cracks? It seems to me quite alarming, and we should be concerned that it's happening through our education system.

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Ms. Cheryl Brown: There are several reasons. We identify a large number of people whom the system does not work for, and my personal experience is that the curriculum is delivered in a style that doesn't meet everybody's preference for receiving information.

My youngest child is a very kinesthetic learner. It means he prefers to get information while moving, and he's not afforded that opportunity in the classroom. Therefore, even though he's very intelligent and has very high literacy skills, he doesn't do well in the system for that reason.

That's one reason.

Mr. Rahim Jaffer: I guess aside from looking at the problems that are a challenge involving literacy, there needs to be a little more sensitivity within the education system to try to prevent these rates of illiteracy from stemming from the negative effects of people not being able to learn. That's where we should also be focusing some attention.

Ms. Cheryl Brown: Some modified programs or classrooms would be very beneficial to those individuals who don't have the same learning style as the teaching style of the curriculum and the teacher delivering it.

Mr. Rahim Jaffer: I appreciate that clarification. Thank you very much for your excellent submission as well.

I want to make a comment, Mr. Smith and Mr. Bagnell, related to when you spoke about the importance of sport. I agree. In the area I represent in Edmonton, I've worked in the past with Dr. Bob Stedward, who is quite a pioneer in trying to engage governments on sport policy. That is something still in the works that we'll continue to do. I'm sure you've worked with him or dealt with him in the past.

It's something I think we need to continue to be reminded about. I appreciate your presentations today, and I hope to continue to work with Mr. Stedward on coming up with certain policies to engage governments in a positive way to keep active participation. I appreciate your feedback today.

The issues of child care and a national strategy from the government perspective are linked by the two child care organizations. One of the things I would like to know from your own perspective is.... First of all, there's obviously a need for a federal strategy to work with the provinces. You people have the best experience in the field: you work with the challenges that parents have.

Currently, my concern is—or at least the information I'm trying to gather relates to the fact—that there are seemingly huge differences from province to province in the way provincial governments deal with child care. Is the idea of a pan-Canadian agreement to address some of these issues something that is supported in all the provinces, from your experience with the organizations you deal with?

Maybe you can address that and say what sorts of efforts with other provinces we could make to try to bring in a national standard, and how we can engage our energies, in my home province of Alberta, to work and push this with the federal government. We can make recommendations here, but what can we also do to try to ensure that all provinces are working as well towards this pan-Canadian idea?

The Chair: Who would like to start?

Mrs. Linda Gould: We are beginning to work closely with the Canadian Child Care Federation, which sees how all of the provinces could pull together to develop a child care strategy that would span the entire country. I believe there's representation in each of the provinces now.

Until our child care association was formed, New Brunswick was the only province that didn't have a voice on that board. It may be worthwhile to go back to your province and speak with your Canadian Child Care Federation representative to have their input into what routes could be used within your province.

Mrs. Monique MacMullin: They have done a lot of work already towards—

Mr. Rahim Jaffer: Right. And there are those huge differences currently that exist within provinces—staggering, it sounds like, from what you're saying.

Mrs. Monique MacMullin: Yes. In New Brunswick there are very limited funds being invested. They totally depend on the federal level. There's no input from the province itself. From what I understand, it's mostly money being transferred from the federal government. That makes it hard to get this child care program on.... It's turning around.

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Mr. Rahim Jaffer: So it does need the federal leadership?

Mrs. Monique MacMullin: It needs federal leadership. We've met with government officials, and it—

Mr. Rahim Jaffer: I appreciate that. That's really all I had.

The Chair: Thank you. You probably realize it was the finance committee report last year that pushed for this program too, but it is a shared jurisdiction area. At the federal level it was Minister Jane Stewart who dealt with it through HRDC.

Mrs. Monique MacMullin: You're probably aware also of the study that was done by the United Nations. I believe it was one of their recommendations that really pushed it.

The Chair: That came out just before our hearings.

Mrs. Monique MacMullin: In October.

The Chair: We had some of that evidence at our committee in Toronto at this time last year.

Now we'll go to Mr. Murphy for six to seven minutes also.

Mr. Shawn Murphy: Thank you very much, Madam Chair.

I want to follow up with Mr. Smith and Mr. Bagnell on this whole issue. I think it is a tremendously important issue, this whole area of what's going on with our younger people.

I agree with your submission; this is a big issue. We read the statistics about the level of obesity in our young people, the level of diabetes. We're even reading now about heart disease in our younger people. You're into the health envelope and you're into the economic development envelope. The implications in Canadian society are far-reaching as we take this down the road a few years.

Although I agree with your paper, I'm still grasping for the solution. I'm not convinced money is the answer here. If you delve into it deeper, I think money may be the problem.

This all happened in a generation. If you go back a generation, we had larger families, they lived in small homes, the things they had in common were.... They had no Internet, no TV; they had none of these elite sports that you travel all over the country and spend thousands and thousands of dollars to play; and of course they had no money. But they didn't have the problems we're talking about.

We're federal politicians. Everyone would like to do something about this, but we're talking about behavioural modification here to change society's behaviour. I just don't see, if there were $500 million in the next federal budget, that it would make one tick of difference in the whole problem. You're talking about a major change to people's behaviour. You either have to legislate it—and I don't see how that could happen—or you go into a major public education initiative, which might be more successful.

But to give money to host some major events and build a new rink...? We have lots of rinks in metro Halifax. I've been in most of them. I think the problem has been identified, but really, this is a major problem. What is the solution?

You two are both experts. What is the solution? I don't think more money is the answer.

Mr. Ken Bagnell: I agree with you about the allocation of current money, of course. If efficiently used, more money is always good, but the first thing that needs to be done is a consolidation of the efforts from the federal and provincial levels under one heading, whether it be youth, whether it be youth and sport—whatever it may be.

A coordinated approach from the federal government, especially from the health agenda, I think will have very significant consequences, but the number one thing is that we need daily physical education. That's the bottom line. That, I know, is provincial jurisdiction, but I truly feel we need some federal leadership in this area, somehow, to make it happen.

We know that when people form positive physical activity habits when they're young, they maintain them when they're older. They also develop blueprints, as they do in reading, as they do in science, for things they'll be able to do naturally and successfully through their lives. I'd say that's the number one cornerstone.

What we can do in the short term, though, is organize ourselves better federally, and therefore provincially, to tackle this problem, as opposed to having 14 different departments tackling it.

Mr. Shawn Murphy: I'm now going to go back to your suggestion to turn the clock back and put more physical education programs in the public school systems. That's probably not a provincial priority; it's probably the school board's. Is it a cost issue? I wouldn't think it would be any more expensive to have a physical education program than to teach physics or to teach chemistry or to have a music program. I don't see any big cost differential.

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Mr. Mark Smith: I think part of it is the mindset. We don't seem to value sport in this country.

Mr. Shawn Murphy: That's not a money issue. That's the point I'm trying to get at.

Mr. Mark Smith: We don't seem to place the value on sport that we should, and perhaps it's because sport hasn't done a very good job of really beating its chest and talking about all of the spinoff benefits, in addition to the physical activity piece.

I do think, from a cost perspective, that the department of education would argue that when it comes time to cut or slash budgets, the phys. ed. guy or the phys. ed. girl would become the easiest place to start.

More and more in our public school system in this province we're finding people who are being empowered to teach physical education who aren't physical education teachers. So it becomes a matter of opening the door, throwing a ball in the gym, and hoping no one gets hurt for the next 45 minutes, as opposed to teaching kids how to be physically active.

On your comments around the fact that if we do go back a generation, I would agree with you, life was simpler, there were fewer options, and you went out and you did something. Our parents very much encouraged us to get out, get fresh air, and you fell into a sport and you learned an activity.

I think we really do need to reteach some of those values. Our sport futures leadership program is a wonderful example of that. We have leaders who go into communities and work with school teachers and with community leaders around engaging kids in sport, at their level of sport.

No longer is it about bigger, stronger, faster. It's about this. We'll modify and adapt the skills so that any child can participate. We're seeing great success with that in a 10-month period, because little Johnny or little Susie, who were very intimidated by the other kids, are now getting off the stage, coming into the gym, trying it on at their own level, at their own speed, so that they can become involved.

We really almost have to reteach this generation the value of getting out and doing things, as opposed to sitting on a couch and sitting in front of a computer. It's a sad but true state that we're in.

Mr. Shawn Murphy: How can we as members of the finance committee solve this problem in the next federal budget? What would you like to see in the next federal budget, not even to solve the problem but to just take one step further?

The Chair: Your time's up.

Mr. Ken Bagnell: We need leadership, and we need leadership at the community level. That can make a difference. We know the efforts at a federal or a provincial level will be helpful, but it's community by community that we can make an impact. I'd say Human Resources Development Canada programs that emphasize hiring physical activity health professionals who can work in the community will make a difference.

I want to mention that today in the Globe and Mail there was a column on the impact of parents on the obesity levels of children, and that includes their physical activity level. So I think there can be programs targeted at today's parents that will influence tomorrow's parents as well. I think if we miss the boat there, we'll be trying to play catch-up all the time.

There are great minds in sport, whether in the university domain, as practitioners in the field, or as participants; I think there are a lot of answers out there. I think we can come together on those solutions if we're collectively working on the same agenda.

The Chair: Mr. Brison.

Mr. Scott Brison: Thank you, Madam Chairman, and thank you to all of you for spending some time in presenting to us today.

My first question is on the issue of literacy and education. Would you support, for instance, the notion of the federal government providing to individual Canadians and to Canadian families an opportunity for them, on a voluntary basis, to participate in national testing, whereby a family in Nova Scotia could compare the educational standings of their child to that of a child in British Columbia or Alberta?

We could identify core areas, and it would be on a voluntary basis. As such, it wouldn't violate the sanctity of federal and provincial jurisdictional division and it would provide an opportunity for parents to compare the education system and the standing of their child across the country.

I'd be interested in your view on that.

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Ms. Jan Greer Langley: I'll answer that.

I'm not entirely sure what the benefit of that would be. We're always concerned about these kinds of testings because people's experiences are so different across the country. I think it is unfair to compare one child's outcomes to a child in British Columbia, to a child in Nunavut, or to a child in P.E.I.

Mr. Scott Brison: In certain core areas a child can either read or can't read. A child can either do multiplication tables or can't. There are certain core areas.

I do recognize there are differences in cultural and regional issues that have to be taken into account.

On testing methodologies, one of the criticisms of old-style testing was that it wasn't that sophisticated and that teachers could even teach around strengthening results on tests. Testing methodologies have advanced to such an extent that it's hard to make those criticisms. They are quite sophisticated today.

I'm not saying it would be perfect, but it would be helpful to at least know.

I've heard some horror stories of parents moving from one province to another and finding that the difference in educational standards was so significant that it was devastating to the child.

Through parents who are voters, and provincial elections, it would ultimately create an extra level of pressure on provincial governments to compete through education. If provinces are competing with each other in terms of trying to improve outcomes in education, they are going to be more likely to take seriously things like early childhood intervention. They are going to take more seriously issues of head start programs and quality child care. But everyone talks about accountability.

If provinces, ultimately, are accountable to an electorate that every three to four years makes a decision as to whether or not those provincial governments are returned or voted out, it strikes me as making sense if we can find ways whereby parents and families can compare the education system of their province to other provinces. That ought to be one of the standards by which we judge provincial governments and decide whether or not....

I couldn't agree more in terms of the importance of early childhood intervention and head start programs, whether it's the Fraser Mustard studies or the rest of them.

It's difficult for a federal government to intervene directly in an area of education, but there are things the federal government can do, leadership testing being one of them. Providing stable and consistent funding through transfers and addressing the fiscal imbalance is another area.

I appreciate your thoughts on the idea of finding ways to make provincial governments more accountable through information so that families and voters are more aware of how the education systems stand up against each other.

Ms. Jan Greer Langley: I think, then, you would be ultimately testing the curriculum from one province to another and the teaching abilities from one province to another. I wouldn't want to put the blame on the student, if that student didn't compare well with a student from Ontario.

I have heard from people who have had those very nightmares, and they were not necessarily from grades 1 to 12. Even a university student going from one province to another would find that what they thought was a high standard in one province turned out to be a low standard in another province.

Mr. Scott Brison: Can it exist even within a province? If you consider public education in some parts of rural Nova Scotia and compare it to the public education system that would exist in the south end of Halifax, it's different in terms of the quality and the types of programs that are available.

I grew up in rural Nova Scotia. In 1979 I was in grade 6. There were 23 students in that grade 6 class. Of the 23 students, only 8 ever graduated from high school. Consider that. Of 23 students, only 8 graduated from high school or had the opportunity. I realize there are a lot of factors that go into it.

Even when we talk about child care and intervention, it's usually focused on urban areas. We think of it as an urban issue. In fact, rural poverty has as much of an impact in terms of the issues.

Sometimes, on the federal side, I wish we had a greater ability to get involved in some of those issues. We strive all the time in finding ways to work with provinces and take a leadership role.

On the sports side, a tax deduction or tax credit for expenses incurred by families participating in amateur sport or extracurricular activities outside of amateur sports, such as music, I think makes an awful lot of sense, if you consider the long-term benefit of having young people engaged in positive activity.

Do you remember the ParticipACTION ads of 20 years ago that the federal government used to run, showing the 1,000-year-old Swedish person or whomever it was? It was something like that. There was a 75-year-old Swede who was in better physical shape than a 35-year-old Canadian. Now the 75-year-old Swede is in better shape than the 15-year-old Canadian.

We're going in the wrong direction. I think the federal government can play a role in terms of promoting the advertisement of these types of lifestyle choices. I think that is one thing that perhaps we really ought to revisit.

Thank you.

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The Chair: Thank you very much.

Now to Mr. Wilfert, and then to Mr. Stoffer.

Mr. Bryon Wilfert: Thank you very much, everyone, for coming.

To the New Brunswick Coalition for Literacy, as a former educator, I don't think there's enough we can do with regard to literacy and lifelong learning. I'm very familiar with your issue on core funding and not project funding.

I think the issue is on how we change that. You mentioned the Standing Committee on Human Resources and their recommendations on this particular issue. I have no idea where the status of that is, but I can tell you that it is one thing we really need to look at. Too many agencies, whether it's dealing with literacy or other areas, unfortunately, get project funding. Then after one year, they either find the money or the project dies, which is, of course, not very helpful.

It's also important to keep in mind that the federal government put out a fabulous binder the other week for National Literacy Day. It was wonderful, full of all sorts of great things. Unfortunately, I got it on Tuesday; National Literacy Day was on Thursday. It was of no use to me in terms of promotion. Now, of course, I'm going to use it anyway, but to really focus on the issue, we put out such wonderful things in the federal government and nobody knows about it. It's a dark secret. The problem is it either comes too late or it's of no use. That's a problem.

As a former president of the Canadian Parks and Recreation Association, my good friend is Bob Suffron. Of course, Bob is going to be, if he isn't already, with what used to be called RAN, Recreation of Nova Scotia.

I have to say that I was very much involved a number of years ago in the development of the benefits of recreation. Do you remember that commercial, the oil filter one, which said “You can pay me now, or pay me later”?

The more we can do to invest in recreation and sports, the better. I don't necessarily talk about sports because people think they have to get out there in a jogging suit or something. It can be gardening, walking, or whatever, and being physically active.

The difficulty is when, again, you talked about the local level. That's where it's so important to build up through the ranks. For the federal government, we need to have more of a lead agency. We're not sure whether this is under Health Canada. Is it HRDC? Where does this fall? We used to have a secretary for...? That shows you how much it registered with me, because--

The Chair: He has no money.

Mr. Bryon Wilfert: He has no money. That's why it doesn't register with me.

The fact is we need to have someone...we're talking about a champion, a lead agency. It's not always about money, but it is about making members of Parliament, in particular policy-makers, much more cognizant of the kinds of issues you're all dealing with. You can't deal with it if it comes late and you can't deal with it if there's no one there to champion.

I think it is about value. I think value is extremely important. But it's also educating the parents who allow their children to sit in front of the television set or the computer. They don't have to join organized sports teams, but as a former municipal politician, I can tell you there are so many recreational programs out there, and so many wonderful playgrounds that go unused, because people clamour for these things and then they don't get used. And that, of course, is a problem.

I don't know how we solve that, but I do think your presentation and the notion of how we continue to promote it and how you will be working with Bob here in Nova Scotia is so important in terms of that unified front. So I would agree with that.

On the issue of child care, where's the money? We don't have the money. If you read the headlines yesterday, we don't have the money for much, it seems. I don't know how we do that, because we propose these things to the provinces, and the one thing we do say is that we want national standards. The provinces continually say, give us the money; we know better. Then you don't have a national standard.

I think it's important that those moneys get to those who need it, but the difficulty is getting the right mechanisms.

I don't really have so many questions as I have comments, because I'm really touched by sports, and I'm touched by the issue of skills development and how we address those kinds of issues in the long term.

I think one of the things we're going to have to do is put some heat to the fire under the Minister of Human Resources on your issue of literacy and have her meet with her provincial counterparts. But you know, when they meet with her, as when they meet other ministers, they always say, where's the cheque?

You saw Ralph Klein in the paper today saying thanks for the additional health care money, but no health council.

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The Chair: Ms. MacMullin, first of all, and then Ms. Langley.

Mrs. Monique MacMullin: I can make a comment in reference to literacy. It starts at a very early age. We don't do that after they finish their grade 12. We have to address the problem within the preschool years in order to make sure they can get through the system, get to the end of their grade 12, and be functionally literate. That's my comment on that. We work together, but it needs to start at the very base in order to get up there.

Ms. Jan Greer Langley: I'm sorry Mr. Brison has left the room, because I just wanted to get back to his notion of testing. It occurred to me that the Canadian Council of Ministers of Education has carried out a number of studies comparing the reading skills of children across the country, and as always, New Brunswick seems to come in dead last.

I would like to somehow revisit that with him and explore it a little bit further.

The Chair: In my province, Ontario, all the kids are tested at various levels. I'm not sure what happens with those results.

Mr. Bagnell.

Mr. Ken Bagnell: I have two quick points.

The fact that everybody remembers the promotional campaign about sport and physical activity from 20 or 25 years ago shows it's something we should get back into again, because we've been out of it. So if you're looking, Mr. Murphy, for a direct way the federal government can invest, that's one.

I did fail to applaud Mr. Stoffer's efforts with the private member's bill, as far as the tax--

Mr. Bryon Wilfert: I had to oppose it, but I'll tell you why later. In principle, it was a good idea.

The Chair: Hold it. We're going to have to go to Mr. Stoffer, because we do have to catch a bus.

Mr. Peter Stoffer: Thank you, Madam Chair.

I can't let this go without saying it. You know, Cheryl, the very first girl I ever had a crush on was named Cheryl Brown, in grade 4. But she's not from B.C.; she's from New Brunswick. I just had to say that.

For you folks from New Brunswick, we have treats in the back, so grab them before you go.

Thank you all very much for your presentations.

My dad told me years ago that if a kid could run and if a kid could read, that kid would be okay--or in the case of a disabled person, if he could wheel. We seem to be getting away from that.

One of the things, Madam Chair, that I think I've gotten from this session today is that every single person is after the federal government to show leadership, and the challenges, of course, are in our constitutional democracy. How can we, as Scott said, interfere in the provincial jurisdiction of education and some parts of health, etc.? That is something that I think needs a pan-Canadian solution, with the premiers getting together, along with the federal government and municipalities, and asking how we solve these big problems. I think cooperatively we can do that with the kind of input we've heard today.

First of all, on Bill C-210, the sports bill, which basically says if you register for sports, if you have costs incurred by sports, you should be able to claim them as a tax deduction similar to that of a charity donation, I have received wide support throughout the country on that, because it offers people an opportunity to afford to get their kids in the sports that they normally can't afford. For people on low or no incomes, it offers from the federal, provincial, and municipal jurisdictions an opportunity for their children to play. I hate the idea of private recreation grounds, like P3 schools, where the fields are closed and kids can't even play any more. We have taken that away.

So I'd like your input on the sports issue.

On the terms for child care, as you know, in 1993 the federal government made a promise in the red book to provide child care. They didn't. So I'd like your input on what you think. If you could talk to Mr. Martin right now, the next Prime Minister, what would you say to him?

Also, on the literacy aspect of it, where is Peter Gzowski when you need him? I mean, it's true.

But one of the concerns I have--and you mentioned technology--is that we have CAT sites throughout this province, and while they are a great asset, one of the things I find is that kids are on the computers and the computers are doing the learning for them. They learn Internet technology and they learn how to do all that, but if I put three numbers above, like 22, 16, and 17, and ask them to add them up, they can't do it. The computer can do it, but they can't. So the very basics of education--remember, Madam Chair, see Spot, Dick, and Jane and all that stuff--were great. When I was a kid I used to collect pop bottles for Archie comics and those kinds of things.

But are you at all concerned that technology is advancing so much that kids are not even beginning to learn the very basics of math, education, reading, etc?

My last comment is, what would you say to a politician who says physical education should not be a core program in schools today? I mean, that happened just recently at a provincial election here, where the Minister of Education said that physical education--and you should know this--should not be a prerequisite as a core program in schools. Jane Purves said that. I couldn't believe she said it, but she did. And many people believe that.

I'd just like your input on that, because if a kid can run and if a kid can read, that kid is going to be okay.

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The Chair: We will go through the chair, and we'll start at this side of the table. So quickly comment, and then move down.

Mr. Ken Bagnell: Well, on the first thing, whether a tax credit is too expensive to do, I'd argue it's way too expensive not to do. We have to start somewhere.

The second point is as far as the physical education is concerned, it has to be a priority and there has to be leadership. Maybe in 14 different jurisdictions there can't be that common leadership in vision that an investment now in physical education can lead to a fiscal saving for everybody down the road. We have to make that argument.

The Chair: Mark, did you want to say something?

Mr. Mark Smith: Yes, two things.

These gentlemen here spoke of the importance of educating parents around physical activity, and I would certainly agree with that. But I think the most pressing need is to ensure that we find ways to make sure kids are active. I've spent the last four years as the Fair Play coordinator in this province, travelling to every nook and cranny of Nova Scotia, and I can assure you 100% that it's not about educating the parents as much as it's about educating kids. There are many parents who have made their chosen lot in life regarding physical activity, but if we don't do something about making the kids active now, and provide the resources for programs like Sport Futures so that we can engage kids, if we don't take leadership, if teachers don't take leadership--and those in sport--we are going to have more than an epidemic on our hands in another 10 years.

The Chair: Thank you.

Manon, si vous voulez.

Mrs. Manon Cormier-Viel: I'm currently working with people with disabilities, but I'm a teacher, and I've worked with public schools and in literacy as well. We can't afford not to invest in child care.

The Chair: Thank you.

Jody.

Mrs. Jody Dallaire: I know from a provincial perspective that although child care does fall under provincial jurisdiction, our province unfortunately does not have the funds to allocate to ensure that every child has access to child care.

We definitely need federal leadership, and if I could get Mr. Martin in a room, I would definitely say, go back to the national Liberal caucus social policy committee's recommendation on building a national child care system.

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The Chair: Just for the record, because I feel obligated as one who was there working on this policy, Mr. Axworthy, when he was at HRDC, went to all the provinces with a letter that I've read with my own eyes, saying “We have a child care program; we need a partner,” and they didn't want to go there. Granted, it was a fiscal situation, but we're back again, and we do have an agreement that needs to be built upon.

Let's go to Monique, si vous voulez.

Mrs. Monique MacMullin: I'd have to agree with them, but I'll also add that within our own centre we start physical education at age three. It's a program that's geared towards that, so we started very low. We think it's very important.

We also do literacy and all these other things that need to be there. So it's very important to have child care.

The Chair: Linda.

Mrs. Linda Gould: I think I could add to what Monique has said. I also am the administrator of a child care centre. Within our program--we have children from ages 2 to 12--we focus on all areas of development: physical, social, emotional, and cognitive. I believe those skills that are learned in the early years are carried through life.

The Chair: Ms. Langley.

Ms. Jan Greer Langley: I can't tell you how many times those of us in the literacy field have said we wish we could find a way for the federal government to intervene in the provincial government jurisdiction of education, but I guess that probably won't happen--maybe not in my lifetime anyway. But then again, it might, and that would be good news.

I think also, whether it's physical fitness or literacy, it's really important that we give parents the tools they need to help their children develop in healthy ways.

The Chair: Cheryl Brown.

Ms. Cheryl Brown: Thank you.

With regard to the computer question, that's the reality of our society today. So even though there are difficulties with learning the basics, we need to focus on that as well, but we need to include all forms of literacy. That includes computer literacy, domestic literacy, family literacy, street literacy, functional literacy, and so on.

Literacy encompasses much more than reading and writing, and it involves every aspect of our daily lives.

The Chair: Thank you very much.

Mr. Stoffer, we're now over time.

I want to thank all of you for sending in briefs, especially if you sent them in early so that we could translate them. They have also been distributed to all the members of our committee, the ones who are in Ottawa and the full component. They also find their way into the finance department. So thank you very much for participating today.

We are now adjourned.