We'll commence. We will not punish those who are on time by waiting for those who are not.
Welcome. Thank you for being part of this process.
The committee and I have been hearing consultations for the last month, and we look forward to hearing your input today. We thank you for the preparation, the presentations that you've prepared for us, and the material you submitted in advance.
We'll keep your presentations to five minutes. You'll understand that's to allow an exchange with committee members. I'll give you an indication, if you wish. If you wish to look up during your presentation, I'll give you an indication that you have one minute or less remaining. I will ask you to conclude right at the five-minute mark.
Very good. We'll commence with Patricia Devine, Atlantic Canada Airports Association.
Welcome. You have five minutes.
Good morning, Mr. Chairman, committee members, ladies and gentlemen.
I believe you have our brief in front of you. I won't bore everyone by reading the brief, but I will speak to our recommendations that are in the brief.
I'd like to thank you for this opportunity to meet with the committee and present the recommendations of the Atlantic Canada Airports Association for budget 2007.
The Atlantic Canada Airports Association represents 14 airports in total, with members in each of the Atlantic provinces. Each provincial government and Transport Canada's Atlantic Region belong to our association. Most of our association and our airports are also members of the Canadian Airports Council, which you heard from last week.
ACA airports vary in size and cover a broad range in terms of passengers served from our largest airport, which serves 3.25 million passengers per year, to our smallest, which services about 15,000 passengers per year. But regardless of size, our airports play an integral role in the economies and the quality of life in the communities served by these airports.
Our recommendations to the committee today relate to the competitiveness of our airports and, by extension, to the businesses and communities that they serve. Each area that I will speak about is directly impacted on by Government of Canada policy and specifically by the choices the government makes in its investment priorities.
Our first recommendation concerns the Canada Border Services Agency, which has a significant impact on the ability of our airports to grow by attracting transborder and international air service. The problem is that CBSA's customs services at airports don't meet the demands.
At some airports, CBSA offers customs service at only certain hours, and at other airports there are none at all. In our region, for example, customs services are offered 24/7 at Saint John, New Brunswick. There are none at all at Deer Lake, and there are services only until midnight at Halifax, which is one of the country's eight largest airports.
If an international flight arrives outside the regular working hours of CBSA, the airport or the airline must cover the costs of having passengers from the flight clear customs and enter our country. As such, Fredericton airport pays $200,000 annually to cover seven Delta Airlines flights that arrive outside CBSA's regular working hours.
When an airport has to contract with CBSA for additional service, the airport may end up losing money because the customs fees paid for customs service may be greater than the revenue from the landing fees. If the airport passes the costs on to the airline, the airline may choose to land at an airport where there are no customs costs. Ultimately, the airport's ability to attract new air service to the community suffers.
The council of ministers responsible for transportation and highway safety agrees that the CBSA cost recovery policy causes a competitiveness problem for Canada's airports and as such have written to the Minister of Public Safety to ask him to address this issue and consider elimination of the policy as one option.
The ACA recommends, because customs is a federal responsibility, that the government allocate increased funding to the CBSA so the agency can provide sufficient customs service to meet the demands of the travelling public at all Canadian airports at no extra cost for after-hour service.
I would next like to address the need for adequate and predictable federal funding for the infrastructure needs at small airports in Atlantic Canada and across the country.
Small airports are those serving fewer than 200,000 passengers. These airports play an important role in the overall transportation system and make significant contributions to local and regional economies. By their nature, airports require extensive and ongoing safety-related capital improvements, for example, for lighting and snow removal.
Accessing capital from operational sources is unrealistic for airports with operational deficits. The airports capital assistance program was created to provide for the infrastructure needs of small airports and was meant to be funded by lease revenue from the airports in the national airports system.
Our recommendation is that the Government of Canada recognize the vital role played by small airports, increase the funding to the airport capital assistance program to a sustainable level, and create a infrastructure program for small airports.
I would finally like to talk about airport rent. Essentially, ACA echoes what the Canadian Airports Council said last week. As an industry, we don't believe in the rent in principle and we believe it should be eliminated.
Our recommendation is that the federal government eliminate airport rents, or at a minimum see the rent tax decline over the life of the leases. As an interim measure, we also support the recommendation that revenues raised by airports to cover debt servicing costs be excluded from the total revenue used to calculate rents, and in particular—
Thank you, Mr. Chairman, committee members, ladies and gentlemen.
Our province's mines will create $2.6 billion of new wealth for Canada this year. Of course, a lot of that will end up in various government coffers through taxation. We have the potential to increase this contribution to the economy through higher levels of investments in exploration, which will lead to new mines.
In this province, all our mines are located in rural and remote areas—of course, that's true for most of Canada—and most of our mineral production comes from Labrador. I'd like to highlight the Voisey's Bay mine in Labrador, as an example of the enormous positive impact that mining can have on rural, northern, and aboriginal communities.
This project alone has stimulated resolution of the Labrador Inuit land claims and progress on the Innu claim. It has resulted in the creation of a large number of aboriginal companies that have received over $500 million in procurement and construction contracts for the project. Some of these companies have continuing contracts with the mine, and some have gone on to seek other opportunities. Currently 52% of the Voisey's Bay Nickel Company workforce in Labrador is aboriginal. Clearly this mine has made a significant difference to the outlook for the aboriginal and other communities of the region.
Now we must stimulate investment in Canadian exploration. We need new discoveries to maintain Canada's pre-eminent position in the global mining industry, and we need to expand the economic opportunity that mining creates for our rural, remote, and aboriginal communities.
There are two things that the federal government can do to help. The first is to invest in geoscience, since up-to-date geoscience data is critical for successful exploration. Unfortunately the resources provided for geoscience surveys by both federal and provincial governments have declined significantly over the past 10 to 15 years. Updated geological information is important for areas of current interest, while parts of Labrador, for instance, have never been adequately surveyed.
We urge the federal government to fund the cooperative geological mapping strategies, CGMS, as soon as possible. It's a 10-year, cost-shared plan that has been developed by the provincial, territorial, and federal governments to fund geoscience. Our provincial government has indicated strong support for this project, and I'm sure if it were approved by the federal government, they'd have their chequebook open.
The second thing is to adopt a mineral exploration tax credit on a permanent basis. This program is often called the super flow-through program, and it is due to expire in 2007. The reason for this is that these days most exploration is conducted by relatively small exploration companies that are dependent on the capital markets to fund their projects. There's fierce global competition for this high-risk capital. The super flow-through program provides a significant incentive to invest in the high-risk grassroots exploration that is critical for new mine discovery. At the same time, this program ensures that the capital remains in Canada to ensure our domestic industry's future.
I'll conclude there. Thank you very much for your attention.
Thank you very much. It's a pleasure, Mr. Chair, and all the honourable members.
One of the distinct features of Canada is that we are not focused solely on material gain but on quality of life for both our own citizens and those in other countries. We are a reflective people who embrace understanding. This understanding of ourselves and our world comes from an understanding and respect for culture and how that shapes the individual and society.
The difficulty that has arisen in identifying ways to support this industry has come from trying to look at it through the lens of for-profit business. Profit is not what drives culture. It is necessary to make that shift in focus in order to build a support network that will address the needs of the citizens who work in this industry. Our culture is a growing industry, both within the country and abroad. As the nation continues to grow both in population and richness of culture, it's important to make sure this growth is supported and nurtured wisely.
The very nature of culture is that it's not fixed in stone. Therefore, when you look to citizens who are ready, willing, and able to adapt to growth and change, you need only look at the artists and cultural workers of our country. They have much experience and understanding about being proactive, flexible, and dedicated. Now they are looking to the federal government to think proactively and flexibly to enable them to reach their full potential, a potential that will affect not only each of them but all Canadians everywhere.
We would like to take this opportunity to encourage the federal government to consider and implement federal programs and tax incentives that support the growth of the social economy. Status of the artist legislation is something that the federal government is currently addressing, but immediate action can be taken through tax benefits for those citizens.
Furthermore, we would like to request that the federal government work specifically to address funding programs that would provide core support for the not-for-profit grassroots associations, which are the main infrastructure of the cultural industry.
Thank you very much.
Good morning, ladies and gentlemen. My name is Nancy Griffiths, and I am the executive director of the Newfoundland and Labrador Science Centre. I am here to describe the vision of the Newfoundland and Labrador Science Centre, to talk about the role that science centres play in a knowledge-based economy, and to request your support not only for our local science centre but also for all Canadian science centres.
The Newfoundland and Labrador Science Centre was founded in 1993 to deliver science and technology programs to school children around the province. In 1997 the science centre established a permanent home to host hands-on exhibits, school workshops, and public programming. With a mission to spark curiosity and inspire interest and participation in science and technology, the science centre continues to focus on science promotion and learning through interactive activities both in the centre and around the province.
While the current facility has allowed the science centre to grow, the needs now exceed the available space. Because of this constraint, the science centre has examined redevelopment strategy. The City of Mount Pearl has emerged as a partner that wishes to include the renewed science centre in a proposed multi-purpose recreation complex to be located in that municipality. The Newfoundland and Labrador Science Centre asks the federal government to support this infrastructure project, which will provide inspiring and stimulating experiences for the young people of this province.
Unique in the field, science centres engage children in truly interactive activities. We know that hands-on is the best way to learn, and that through positive education experiences, children are more apt to become confident students who are interested in post-secondary studies in science and technology. Developing a culture of entrepreneurship and inventiveness includes increasing participation in science and technology careers. This is critical for maintaining and improving Canada's competitiveness in an international knowledge-based economy.
The success of the Newfoundland and Labrador Science Centre is largely due to partnerships that have been forged with educational institutions and other like-minded groups. The science centre has long-standing partnerships with many agencies, but most notable are Memorial University and the province's school boards. The Newfoundland and Labrador Science Centre is not alone in its quest to establish a lasting relationship between Canadians and science. The Canadian Association of Science Centres' mission is to increase the capacity of science centres to enhance public understanding and enjoyment of science and technology. The Government of Canada can help, too, by supporting this network of 40 centres that deliver science and technology to new generations through seven million visitors a year.
Thank you, Mr. Chair. Good morning, ladies and gentlemen. Thank you for the opportunity to address this committee today.
I am Ted Howell, president and CEO of NOIA. We're an industry association representing the petroleum supply and service sector in Newfoundland and Labrador and in the Atlantic region.
In 2006, Newfoundland and Labrador's budget projected almost a billion dollars in revenue from oil production, translating into some 20% of provincial spending. Beyond direct revenues to the treasury, the petroleum industry provides much-needed economic stimulus to the province. In 2004, the last year for which detailed economic analysis is available, petroleum activity accounted for 24.3% of provincial GDP and 17,000 direct and indirect jobs.
These fiscal and economic benefits are helping and can continue to help the province become a stronger contributor to the Canadian federation. While strong reserves of bitumen are concentrated in Alberta's oil sands, Canada's reserves and production of conventional oil are declining. To foster a secure and diversified conventional hydrocarbon energy supply, continued exploration and development of Canada's highly prospective frontiers here on the east coast and in the Arctic is much needed.
Therefore, NOIA maintains that a portion of royalties and other government revenues derived from petroleum production should be reinvested in the industry in order to contribute to its growth and success for the benefit of the province and the country as a whole. Although the Atlantic accord enables the Government of Newfoundland and Labrador to manage key aspects of petroleum resources off our shores, the Government of Canada retains significant areas of responsibility and authority, and therefore can establish policies and target investments to stimulate offshore activity, foster development, and strengthen the industry.
NOIA recommends that the federal government invest in three key areas: attracting exploration through geophysical marketing initiatives and appropriate fiscal incentives, providing new resources to the Canada-Newfoundland and Labrador Offshore Petroleum Board, and establishing a petroleum-focused office of Natural Resources Canada in St. John's.
On exploration attraction, our offshore is critically under-explored, with 132 wells drilled, as compared to 3,500 wells in the North Sea, an area of approximately comparable size. Without exploration, development cannot occur and no new production comes on stream to replace rapidly depleting reserves. To encourage replacement-level reserve growth and avoid a gap in development, new investment is urgently needed.
Consistent with Gerry's comments, NOIA recommends that the Government of Canada provide direction and targeted funding to the Geological Survey of Canada for collection and analysis of geophysical data on Newfoundland and Labrador offshore for distribution to potential investors.
Further, as matured jurisdictions around the globe are implementing changes to their fiscal regimes to attract exploration, Newfoundland and Labrador is at risk of falling further behind in global competition for its investments. NOIA recommends that the Government of Canada work with industry to develop and implement an appropriate and effective fiscal incentive program, with the goal of attracting exploration investment to the east coast offshore region.
With respect to the C-NLOPB, the C-NLOPB is the federal-provincial authority that administers, monitors and regulates every aspect of offshore petroleum operations to ensure that our resources are developed safely, strategically, and to the best benefit of the people of the province and the country.
The industry has grown substantially since 1985, when the board was established. NOIA recommends that the Government of Canada provide funding to ensure ample resources for the C-NLOPB, matched to the growth of the industry.
With respect to the Natural Resources Canada office, the Atlantic accord recognizes the important role the Government of Canada plays in offshore development. Section 49 of the accord commits to establishing regional offices with appropriate levels of decision-making for all departments directly involved in activities relating to offshore areas. The department most directly involved is Natural Resources Canada, particularly in terms of its role of providing input to the C-NLOPB. NOIA recommends that a Newfoundland and Labrador office of the energy branch of Natural Resources Canada be established to facilitate decision-making and industry growth.
In conclusion, by investing a portion of revenues derived from oil and gas production, the Government of Canada can strengthen the province's petroleum industry, stimulate activity offshore Newfoundland and Labrador, and foster sustainable resource industry development for the benefit of the province and the country as a whole.
Thank you, ladies and gentlemen.
Thank you, Mr. Chairman. Thanks for the opportunity to address an important economic development issue for Atlantic Canada.
I would like to request that the federal government increase the tax credit limit so that a purchase size of $10,000 would maximize the tax credit limit for investors in the GrowthWorks Atlantic venture fund. Atlantic Canada has a growing need for increased venture capital to be raised and invested in this region. While we have 8% of the population of Canada, we have less than 2% of the venture capital assets under management available to our entrepreneurs; $1.2 billion leaves this region annually during RRSP season, and for the most part, those funds are managed and invested outside Atlantic Canada. Our young people are receiving outstanding educations at our universities and community colleges, which have great reputations, but then they are forced to leave for job opportunities elsewhere, particularly in western Canada. We need to provide greater economic opportunities both to keep our young people here at home and to draw back those who have already left. Fostering more venture capital in the region is one of the best and most effective ways of doing this.
GrowthWorks Atlantic venture fund was started in January 2005 and is truly an Atlantic Canadian initiative. We raise all our funds from residents here in Atlantic Canada and we invest exclusively in businesses located here in the region. The fund has local management, has a local board of directors, and we have offices in Halifax, Fredericton, and here in St. John's. We have broad support from the governments of Nova Scotia, New Brunswick, and Newfoundland and Labrador, and all four provincial federations of labour serve as the fund's sponsors. We have $28 million in assets and we currently have 12 companies in our portfolio. We are committed to investing in entrepreneurial Atlantic Canadian companies, helping to grow and diversify the economy and provide jobs here at home.
To increase the amount of venture capital raised and invested in Atlantic Canada, the tax credit limit for GrowthWorks Atlantic venture fund should be increased from a purchase size of $5,000 to $10,000. Since the program was established in 1985 nationally, there has been no increase in the purchase size to maximize tax credits for investors. The RRSP contribution limit, however, has increased from $5,500 in 1985 to $15,500 today and will increase to $18,500 in two years. Part of the problem with the $5,000 maximum tax credit purchase size is the compensation grids brokerage firms now use to pay investment advisers. A recent survey, which we just had done, of 200 investment advisers across all four Atlantic provinces revealed a common complaint for advisers who are not selling the fund due to the small ticket size. There have been changes in recent years to these grids that now result in advisers getting paid up to 75% less on a $5,000 purchase compared to a $10,000 mutual fund purchase. A number of the large investment dealers are also proposing to remove purchases under $10,000 from the compensation grid completely, effectively cutting off any source of income to the adviser for the purchase of our fund.
We are concerned that if the tax credit is not increased to apply to a purchase size of $10,000, the amount we are able to raise and therefore invest in Atlantic Canada may effectively be cut off. By increasing the tax credit limit on the maximum purchase size for our fund, we will be able to raise larger amounts of capital for investment in Atlantic Canada, enhancing the economy and providing more and better job opportunities in the region. We estimate the cost to the federal treasury to be approximately $20 million, due largely to sales caps that are in place across the country, with the exception of Ontario and here in Atlantic Canada. If Ontario dramatically increased in sales--something we don't think will happen--a cap could always be instituted there as well.
We would be happy to work with Department of Finance officials on studying this issue. By encouraging and raising the investment of venture capital here at home, in Atlantic Canada, we can provide economic growth and better job opportunities for the entrepreneurs in our region. To ensure that the capital is raised here, we need to have an increase in the tax credit limit to a maximum purchase size of $10,000, so that advisers are not discouraged from selling our fund to their clients, and so that we can continue to raise money for investment in the Atlantic provinces.
Just to set the table, there is over $22 billion of venture capital in Canada under management, and more than a third of that is represented by the labour-sponsored asset class, and over a million Canadians have invested in labour-sponsored funds to date. A number of studies have been done to show the payoff back to both federal and provincial treasuries in terms of the benefits that accrue to the economy as a result of the number of companies that have been helped, the number of jobs that have been created.
In our case, in Atlantic Canada, our goal is to raise the fund to be in the area of $100 million. We think it's going to take five to seven years in order to do that. When we looked at the historical fundraising in the rest of Canada relative to the population size here, we thought that number was very doable. However, what we have experienced, as I mentioned earlier in my presentation, is resistance, particularly by the larger brokerage firms, to dealing with purchases in the $5,000 range.
This is an opportunity to enable, particularly here in Atlantic Canada, residents of the region to invest back into their own region. It's very unusual for retail investors such as you and me to get exposure to venture capital as an asset class. We're not suggesting that people over-weight in venture capital. It would form a very small percentage of an individual's portfolio. But because the asset class, because the purchase is RRSP-eligible, what you find is a lot of folks investing in venture capital through their retirement savings. We have to be very diligent in terms of the kinds of companies we invest in. But in GrowthWorks we have a philosophy—and I think this is very welcomed by governments—that we play at the early-stage end of the spectrum, because we think that's where the real longer-term opportunities are for us in terms of returns to our shareholders.
So given the work we've done nationally, and regionally here since we have started the fund, I think folks are really believing that there will be a stable supply of VC available now in Atlantic Canada that wasn't available before. I should say that VDC is active in the region as well. Quite often, we partner with their venture capital division when we look at investment companies.
I'm certainly glad you asked the question. Thank you very much.
It's the number one issue for Atlantic Canada airports and, in particular, for small airports.
As an example, in Moncton we received a call last year that Air Canada Vacations—we had a sun destination airline—called and said they probably wouldn't be back in 2006. They were true to their word and didn't come back because of the fees that were being charged.
For example, we have a flight from Germany, from Hanover to Moncton, and it's being charged $3,500 a landing. We're in danger of losing that.
Perhaps the most explicit example is Fredericton paying $200,000 a year to the Canadian Border Services Agency for after-hour services on a Delta flight, which is a daily flight to Boston, seven days a week. As a community and as an airport, they were successful in attracting that particular service. With the kind of money they're now paying, they are actually not making any money because of the fees they're expending in support of the Canadian Border Services Agency.
The other thing that's not known is that this isn't a fee that you pay for coverage, for example, from five o'clock until midnight, and it covers the entire spectrum. This is a fee that is charged every time you bring a service in. If they bring in another service, they will pay another $200,000. It's very expensive.
At a time when airports, small airports in particular, are struggling to attract these types of fights, and you have to tell them they have to pay $3,500 or $200,000 a year to come into your community, they certainly look around to see if there are other airports that don't charge these services for after-hour fights.
Finally, this is something I did in Vancouver. Our responsibility was to produce a report recommending the overall thrust of the budget, including its components. As matters now stand, the second point of the GST cut, costing $6 billion per year, risks crowding out virtually everything else.
If you don't mind, I would like to do a very quick poll, and I'd ask each of you to give an answer of yes, or no, or no comment.
The question is this. In your view, do you think going the route of the second point of the GST cut is a good idea or not, with “not” being if you think there are better things to spend the money on?
Maybe we could start with Mr. Hayes. Could you answer yes or no, or would you rather not say?
I foresee some interesting talk on the bus. We really do appreciate being here and experiencing your fine Newfoundland and Labrador hospitality. Even though it is raining outside, it's beautiful country, and we're really learning a lot just being here, especially talking to you.
I do want to correct my friend Mr. McCallum. I find that's happening more than it should. I think it's important to put on the record that tax reductions are not crowding everything else out. In fact, program spending increased in the last budget. There's lots of money for everything. And we know that, especially for low-income Canadians, tax reductions, especially GST cuts, are very helpful because of course many pay no other tax, so the GST reduction is the only reduction we can give them.
There are also no cuts to the delivery of literacy. The reductions are made in things like round tables and other tangential activities that do not directly affect the delivery of service. Please be assured that some of the myths around these reductions.... The reductions are actually designed to give more programs to people who need them, and maybe there is a little less activity for people who just want to talk about the delivery of literacy.
I want to get to the airports first. For some reason, airports are on our minds. I don't know if you know the story, but it was quite a challenge getting here, and that has been interesting.
Everywhere we've gone, though, we have heard concerns about airport rents and the fact that people feel that it is basically a tax, because the cost of the infrastructure, the land, has long been met, and now it's just a revenue stream. There has been tremendous concern about that. I'd be more concerned in this part of the country, where this is even more of a lifeline.
There has been some talk from some people about the federal government simply transferring land to an airport authority and letting the airport services regulation left locally. Is that something that you've been looking at, or are you happy to have the status quo, with the reduction in the GST, in airport rent—[Technical difficulty--Editor]
Thank you, Mr. Wallace.
It's my turn on behalf of the committee to thank you all for your time and to tell you that from a personal perspective, unlike my colleagues, I personally did get a chance to enjoy your hospitality. I've had a great time. My family and I arrived on Friday, and I can tell you we have had a glorious time. Where else could you go in Canada and experience the romance of Witless Bay, Dicks Head, Harbour Grace, Heart's Content, Heart's Desire, and Quidi Vidi. I can tell you that the next time we come here, it won't be by chance, it will be by design.
You should also be very proud, and I know you are, about—[Technical difficulty--Editor]—tremendous accomplishment. As a former provincial curling champion in Manitoba, I tell you that I've been so impressed by that young man's skills and success.
You have a wonderful and unique part of the world, and we're all very proud to have had a chance to visit your city. Thank you.
We'll adjourn briefly and allow some technical problems to be addressed. We would invite the next panel to get comfortable and come forward when they wish.
I want to thank you all for coming here and accepting our submissions. I represent a provincial sectoral organization called Visual Artists Newfoundland and Labrador. It's the provincial affiliate of CARFAC, which is the national organization Canadian Artists' Representation/le Front des artistes canadiens. We have included ten recommendations in our brief, and I will highlight a couple of points from those recommendations.
Looking over the whole presentation I want to make, I would like to underline the importance of the arts in strengthening our sense of place, nation, and community. I'm speaking specifically on behalf of the visual arts in some of my recommendations, but the cultural sector as a whole would be affected by several of these recommendations.
Our motto at VANL and CARFAC is “artists working for artists”. We have a volunteer board of artists, and I'm an artist myself. I have work in the National Gallery of Canada collection, and I currently have a large exhibition touring across Canada that was funded by the touring program of the museums assistance program of Canadian Heritage. I mention that to give you some indication of the context that these national programs have on our local artists here.
Our recommendations are roughly in two sections. The first four recommendations come under taxation, and the second set comes under what you might consider social economy.
Taxation is one area where the federal government can directly impact the income flow of self-employed artists. The arts and culture sector has one of the highest rates of self-employment in the Canadian economy. As we know, traditional employment models are decreasing, and self-employment is becoming one of the largest sectors of the whole economy.
Under our recommendations for taxation, we'd like to see a tax exemption on grants to individual artists. We'd like to see a minimum exemption on revenue derived from copyright and residual payments. There are some inequities in the employment insurance program and the Canada Pension Plan that adversely affect artists. Just as a small example, people in the performing arts generally receive paycheques from the companies that employ them for rehearsal time and performance time, and those paycheques include EI deductions and Canada Pension Plan deductions.
In comparison, if you're in the visual arts you do not receive any employment cheques, and visual artists are never in a position to collect EI. In terms of the Canada Pension Plan, we have to pay both halves. So I have to pay twice as much Canada Pension Plan as someone employed in the performing arts whose employer pays their half.
We'd also like to see income averaging brought back. This is an important factor in the cultural sector, because as artists our income can vary wildly from one year to another. If we could have income averaging, again that would relieve some of those problems.
Under the second set of recommendations that I'm calling social economy and the Canadian government's investment in that, the regional organizations here in the Atlantic region and individual artists benefit greatly from the national programs that are available in the cultural sector, specifically the Canada Council for the Arts. As I mentioned, the museum assistance program helps individual artists circulate their work outside of the region. One of the main challenges here in Newfoundland and Labrador is for artists to be able to show their work outside the region.
We'd like to see a permanent funding commitment to the Canada Council for the Arts in the realm of $5 per person per capita, as well as Canadian Heritage's Tomorrow Starts Today program made permanent.
We'd like to see the cuts made to the museums assistance program reinstated.
We'd like a federal museums policy.
We'd like the completion and opening of the National Portrait Gallery of Canada in Ottawa.
We'd like an extension of the $500 children's fitness tax credit, which is given to parents who enrol their children in sports, extended to those who enrol their children in artistic activities.
I'm here on behalf of our 36 Mi'kmaq, Maliseet, and Passamaquoddy chiefs in Atlantic Canada, from the Gaspé of Quebec, and we have representatives of the Passamaquoddy in Maine in the United States.
Our focus is trying to get out of poverty and really become players in the economy of Atlantic Canada. Our strength is the strength of our people, our language, our culture, our aboriginal and treaty rights, as well as a young and rapidly growing population. Our treaties, which have been recognized and affirmed by the Supreme Court, are paramount in our relationship with provinces, the feds, and municipal governments. Our treaty rights apply to all our people across our traditional territories, including the Mi'kmaq of Newfoundland.
Under our treaties, the Supreme Court of Canada agreed that we have constitutionally protected right of access to the commercial fishery, to obtain a moderate livelihood. But we can't understand why today so many of our people still live in poverty. People living on $74 a week is not a livelihood, and we must take action to address this situation now and for the future.
The Marshall decision in 1999 provided hope for our people and provided much-needed access and economic development for our communities. Our chief vision of the future is to regain the self-reliance we once had in the past. We want to enhance and realize our own economic, social, and cultural objectives through actions of our own design. We envision having vibrant, prosperous, entrepreneurial-minded communities and understand that we must balance development with the right social and economic change. Economic development must be compatible with our people, respectful of the environment, and inform the needs of future generations, ie., sustainable economic development.
Our economic developments must be based on gaining access and control of our traditional land and resources, consistent with our rights, and we expect to be respected partners in all sectors of the Atlantic economy. Today, we have communities like Miawpukek in Newfoundland, St. Mary's in New Brunswick, Tobique in New Brunswick, Lennox Island in P.E.I., Millbrook in Nova Scotia, and Membertou in Cape Breton that are representing the leading edge of rebuilding our economies in our communities.
We really want to get away from dependence, and we really do want to become part of the economy. And we want, basically, to allow our young people from our communities to become the real potential of our future in terms of the economy, and to participate fully in the Atlantic economy in a way that we're contributing a great deal to society in general in Atlantic Canada.
The other issue we have is long-term funding sustainability for our communities. Our communities provide basic services. We need to ensure that long-term sustainability of these programs provided by the federal government be maintained over the next decade, to ensure that we do have the opportunity to become part of the economy and contribute to the future of Canada.
In closing, I want to tell you that the health status of our communities continues to be quite low. Things like hypertension, diabetes, cancers, addictions, and mental health illnesses have become a death sentence for many of our community people. Reductions in certain services, whether it be medical, transportation, eligible prescription drugs, or lack of mental health services, has drastic negative effects in our communities. Both Canadian and international health studies have shown that poverty and poverty conditions correlate to poor health status.
We need jobs, opportunities, education, and an economy to help improve our overall health status. We cannot sentence our children, our young people in our community, to another generation of poverty. And our chiefs, our leaders, and our communities want to contribute greatly to the Atlantic economy and become prosperous Canadian citizens in Canada. We want to contribute our values to everybody else in the country, and we need to do this by building an economic agenda and targeting activities to increase our access to natural resources, to build on the potential of our young people and build a strong, vibrant community for now and into the future.
Thank you, Mr. Chairman.
Thank you, Mr. Chairman and honourable members. Thank you for the opportunity to appear before your committee to speak on behalf of the Society of Rural Physicians of Canada.
My name is Michael Jong, and I am a rural family physician in Goose Bay, Labrador. I am the president of the Society of Rural Physicians of Canada. I'm joined here today by Dr. James Rourke, who was a rural doctor in Goderich, Ontario, for 25 years and is now the dean of a medical school here in Newfoundland.
I consider it a privilege to be here today to speak to you all about the problem of rural health access and the solutions we are proposing to ensure that our rural citizens are healthy, for their own benefit and for the benefit of their employers and the economy of this country. We cannot ignore the links between health care and the sustainability of rural communities.
Having access to health care is important in ensuring that people will be willing to live, and companies will be willing to develop industries, in rural communities. Limited health care access is forcing rural Canadians to relocate to urban centres. From sovereignty, self-sufficiency, and economic perspectives, rural depopulation has negative long-term economic consequences for our country.
The primarily rural-based natural resources sector accounts for approximately 40% of our national exports. Canada's rural natural resources provide employment, forest products, minerals, oil, gas, food, tax revenue, and much of our foreign exchange. Rural health and our national economy are closely linked.
Rural health is in need of repair, as evidenced by the higher overall mortality rate and shorter life expectancy amongst rural and, of course, aboriginal residents. Efficiency is not the problem; the cost per capita in dollars spent and health care providers engaged in rural Canada is well below urban standards. The rural health problem is one of access, not wait times.
Dealing with the issue is one of the most complex and challenging aspects of health care policy. Mr. Romanow suggested that we devote $1.5 billion to developing a rural health access strategy. For 10% of this cost, the Society of Rural Physicians of Canada is proposing a comprehensive list of solutions to address these needs: to enhance rural medical student recruitment; to provide specialized rural skills training for students, residents, and practising rural physicians; to bring medical education to a rural setting; to do rural research; and to bring all national rural health planners together to identify a collaborative strategy to improve rural health and health care. These solutions are outlined in the package you have in front of you.
I believe that we health care professionals, legislators, and policy-makers all have a responsibility to ensure that all Canadians, whether rural or urban, have reasonable and equitable access to health care. A two-tier health system, the lower for rural Canadians and the higher offering better access for urban Canadians, is not acceptable in Canada. I believe that with your help we can implement the proposed solutions and that we do have a moral obligation to do so.
Thank you very much for your attention. I know you're in big rush, but Dr. Rourke and I would be happy to answer any questions you may have.
I am Ken Birmingham, and I am the chair of the finance and taxation policy committee with the St. John's Board of Trade. I also sit on the board of directors with the St. John's Board of Trade. I'm joined today by Mark King, our assistant general manager with the St. John's Board of Trade.
I want to begin by thanking you very much for making St. John's a stop in your consultation process. We appreciate the opportunity to present today.
Today we'll cover a few different topics. Of course, the challenge is to get it in within five minutes. We're going to touch on competitiveness and productivity, equalization, personal taxation, corporate tax, small business income tax, debt, spending, public-private partnerships, and federal presence.
Of course we begin with competitiveness and productivity. That's the engine that drives the machine that produces the money that helps to pay for all the different programs. Ensuring Canada's long-term competitiveness in the global economy should be a top goal, especially given the surging new economies of China and India and the increasingly acute skill shortage and demographic challenges faced nationwide.
Canada's productivity gap with the U.S. has been pegged at about 15%, and we run the risk of falling behind there, so productivity is an important topic. Clearly, productivity growth will be increasingly important if we want to provide the fiscal resources to support critical investment in the future of education, health, and infrastructure, all of which are tied into the quality of life and competitiveness. The federal government must respond by making strategic policy decisions. Fiscal policies must include a competitive tax system and must encourage work effort, savings, investments, and risk-taking. There must be an emphasis on further reduction of federal debt and on program spending.
I'll turn it over to Mark now to speak briefly on the topic of equalization and taxation.
When we look at corporate income tax and surtax, obviously the competitive tax structure is important. We think the federal government is on the right track with accelerating reductions in corporate tax rates, but we believe the pace is too slow. We'd like to see the pace of the step-down tax rates stepped up by a few years. We also think the federal government should carry through with the elimination of corporate income surtax for all corporations by the start of 2008.
When we look at small business income tax, we think, again, that the federal government is on the right track in raising the threshold. We should continue on that trend by increasing the incremental relief for Canadian small businesses by committing to raising the threshold even further, as well as accelerating the reduction in the small business tax rate. Small business is the machine that drives the country, and we need to create further incentive there for them to create employment and increase productivity.
Debt reduction is obviously important. Demographic challenges that we face coast to coast are not going away any time soon, and we believe it is prudent to step up and take responsibility for the debt we currently face. An increasing emphasis on paydown on debt is the right thing to do.
From our members' perspective, the opportunity to take part in government-related work and projects is attractive. Public-private partnerships are obviously an important way to streamline the efficiency within government. We think that government should continue to look at those more closely as a means to streamline processes and create efficiencies at the government level.
Governments should ensure fair and proportionate levels of federal government employment and procurement activity on a provincial basis and correct any unwarranted imbalances that disadvantage particular provinces.
Thank you, Mr. Chair, honourable members, staff, and colleagues.
My name is Mervin Wiseman. I'm the president of the Newfoundland and Labrador Federation of Agriculture, and I'm also co-chair of the newly formed Canadian agriculture sector council, which is a council that was formed to address some of the human resources issues we have facing us in the Canadian agriculture industry.
I want, very succinctly, to tell you about the value of agriculture in this province and opportunities for growth challenges, and give you a few recommendations to see how we can move this file forward.
The industry in this province is worth $0.5 billion annually, which is something that comes as a bit of a surprise to a lot of people, I believe. It employs about 6,200 people. It is the most significant growth seller in the resource sector, including forestry, fishery, and mining in this province, and has a potential to double the industry over the next four or five years, given the proper investment and the proper attention.
Where do we see some of the opportunities for growth? It is in the diary industry, worth $100 million at the moment. We have 32 million litres of industrial milk quota allocated by the national quota system, which we're now just starting to utilize because there's a chance to get into value-added processing, secondary processing, and so on. There is the chicken industry, horticulture, vegetables. There is the red meat sector, currently an industry with a consumer value of about $100 million. In the fur sector we've gone from less than $0.5 million two years ago to an industry worth $40 million as we speak. We have nursery and landscaping. The life science industry is an industry where we're going to have tremendous growth in the future, especially in the area of functional foods, nutraceuticals, and primarily we want to get into cultivating and harvesting northern berries.
By way of example, last year for just blueberries alone, there was $82 million in direct sales in Nova Scotia. That was just on blueberries. We have many varieties of berries in this province, of course, not the least of which are blueberries, cranberries, what we call the bakeapple, and lingonberries, and all these berries can bring tremendous health benefits. We have spoken about the issues of health. Agriculture can work into the health equation.
Some of our challenges are lack of infrastructure, for meat inspection and slaughter facilities, for example. Farmers in this province cannot market their produce locally. We can't get into wholesale supermarkets, retail chains. We can't export to other provinces. We can't export internationally. So of the $100 million industry, at the moment we have 1.5% of that industry because of the lack of infrastructure to be able to do it.
On feed self-sufficiency in terms of forage and so on, developing forages for our dairy industry, our livestock industry, land development, it's just so darned expensive. The average cost of developing land in this country is about $600 per acre. In Newfoundland and Labrador the cost to develop an acre of land is $3,200.
On fair market return, lack of framework, some might say a regulatory framework to ensure that farmers get fair market return is one that we're trying to deal with right across this country, and of course we have that critical issue in this province.
On liabilities, we're faced with environmental food safety, animal welfare liabilities. The issue of food safety has caused great stress and anxiety to farmers, particularly marginal farmers who simply don't have the ability to meet the standards required of them.
On research and development, if we're going to get into the life science industry, it just speaks and is totally synonymous with having the wherewithal to do research and development, particularly applied research. The big investment that we have to move for research and development, the food safety pillars and all these very important pillars for agriculture forward, is of course the agriculture policy framework agreement, which we all know about across this country. That $32.5 million federal-provincial agreement has been all committed. Three years into the agreement, we have two years left, and of course it's going to be very difficult to work and have any strategic growth funded through that particular stream.
I have just a few recommendations.
We certainly will be needing assistance for strategic growth, certainly along the lines of what we can do on our federal-provincial agreements and APF.
The land development issue has to be factored into the equation. There is a Canadian policy that we won't develop land anymore. We've fallen into that particular trap in the case where land is critically underdeveloped, so we think it's a question of trying to fit a square peg in a round hole, as they say.
We feel there should be government funding for public good initiatives, especially for food safety, environmental enhancement, and animal welfare issues. The liability that's being passed on to farmers to carry is simply too much for them to carry. Given the liability issue there and the fact that it can't be taken back from the marketplace, because we are so far removed from the marketplace and the consumer, it's just something we can't do.
I mentioned infrastructure development. The cold climate crop research station, along with others across Canada, was going to be cut and slashed in the federal budget the year before last. One of the rationales for that was that the infrastructure was now at its life expectancy and had gone past it. We've now turned the policy around on that, and the federal government will continue to engage in these kinds of facilities, yet no assurance has been given that we're going to bring these facilities up to standard. We need—
Thank you very much, Mr. Chair. I welcome you and the rest of your group to St. John's. We appreciate the opportunity to present to you.
Let me just say that I represent the Community Services Council Newfoundland and Labrador, which is a non-profit, charity-registered social planning research organization. A lot of our activities are involved with national organizations as well, so a lot of my comments relate not only to my experience here but to my experiences with the non-profit, voluntary, community-based sector across the country.
The main point I really want to make is to lay the context for the importance of the non-profit, community-based sector in our country, particularly as it relates to the terms of reference that you have before you, in terms of citizens' quality of life and prosperity.
A recent study across Canada indicated that 91% of Atlantic Canadians view voluntary organizations as the key determinant and the most important element in quality of life in this country. That figure is almost similar to the way Canadians feel across the country, yet in Canada we have no overriding strategy for working with the non-profit, voluntary, community-based sector. There are many relationships between individual departments and individual organizations, but in essence we don't have a broad view of how we should work with the sector as a whole.
In Newfoundland, for example, we have 2,200 registered organizations, all of which are working at a local community-based level to provide support to Canadians. In many instances, they're also providing support to economic development, whether it's through community economic development or by providing Canadians with the skills that they need to be able to participate more fully in our economy. In fact, we know that 62% of organizations in Canada work at a local level, yet the federal government plays an extremely important role in its relationship in supporting those organizations. In other words, it's not just a federal or municipal responsibility.
The other thing we know is that the voluntary, non-profit, community-based sector, whatever you call it, is different from the private sector and the public sector. We all operate with volunteers. Volunteers govern our policies and make our organizations function.
I believe we have to find new ways of working with this sector in Canada, and I think any new government obviously wants to find its own approach to working with the non-profit sector. We know that organizations are under huge stress to recruit qualified board members, qualified volunteers, qualified staff, so I want to make a particular recommendation here today. It has to do with how the federal government and the sector could work more effectively through technology.
At the moment, there is no technology platform within the federal government for relating to the non-profit sector. In fact, there is no vision within the federal government for how technology can be used with the non-profit sector. We may have a strategy for government services online, but it's silent when it comes to how we relate to this huge non-profit sector, which is in fact the locus of over 10% of employment in this country.
So in my remaining minute or two, I would like to suggest that we look seriously at how the federal government and the non-profit sector can provide support to these hugely important organizations in much the same way as we provide support to small and medium-size enterprises. For example, there are sites that provide support to the business sector when it wants to figure out how to do its job. There is no such site in Canada for the non-profit sector. There is, however, an emerging voluntary gateway, and I have circulated information about that particular platform portal, which is just being developed.
The Community Services Council Newfoundland and Labrador is now operating this national portal through a competitive process that we embarked upon with the federal government. The portal has the potential of streamlining relationships with the non-profit sector. I recently presented to the blue ribbon panel on grants and contributions that this would be an extraordinarily good way for you to be able to work more effectively around grants and contributions, which are nothing more than a patchwork at the moment in terms of how we relate to the federal government.
So I recommend that you learn more about lack of platform within the federal government and the use of voluntarygateway.ca to streamline our relationships, thereby building the ability of Canadian citizens and their organizations to serve us all better for our own prosperity.
Thank you, Mr. Chairman.
I thank all of you for your presentations.
We're very excited about being here. Most of us don't get here very often. We had a little technical difficulty getting here, so we're glad we made it.
I want to start with the board of trade.
Professor Martin, who is the dean of the Rotman School of Management at the University of Toronto, commented just today on the study by the World Economic Forum, which showed that since 1998 Canada has slipped in its global competitiveness rating from 6th to 11th. There is concern about our drifting down in these rankings.
I wonder if you could give the committee your perspective on how we can reverse that and thereby give our citizens a higher standard of living and more ability to afford some of the programs we're hearing about from other presenters.
I certainly never think that federal government funding is a problem. I don't think it gets in the way. I think what we've created, however, is this huge patchwork of how we relate to organizations. The ability of some organizations to acquire federal government funding is very different from that of other organizations.
I have tried in my presentation today to stay away from individual organizational support. I could spend 10 hours talking to you about details, but I think the important thing we need to understand is that we do not have any kind of framework whatsoever in this country for working government as a whole, sector as a whole, and that's where we need to do our work. We need to continue to fund the kinds of activities that individual organizations do.
I don't think government gets in the way. To assume that government gets in the way and therefore to reduce funding, or for government to say we're not going to fund you and you have to fly on your own is grossly unfair. In a community like Calgary, the ability of organizations to attract revenue and donations is very different from the ability of organizations in Atlantic Canada.
I will give you one example. Corporations contribute only 1% of the funding to the non-profit sector in Atlantic Canada, compared to 3% across the country. That 3% is still not very high, but it's a huge gap—that 1% to 3%. Because Atlantic Canada has less ability to get funding from provincial and municipal governments, we are more reliant on the federal government. Yet, we generate more of our own income in this part of the country than anywhere else in Canada.
We need to find ways to help organizations be entrepreneurial when that's appropriate and to deliver services that are fully funded by government when that's appropriate.
That is correct. If you look at personal taxation from a Newfoundland and Labradorian perspective, nobody knows about paying tax the way we know about paying tax. If it's a question of capacity and how much we can afford to give, we are more than definitely giving our fair share.
When we look at the tax structure nationally, on a provincial basis we look at Newfoundland and Labrador as most certainly being tapped out in terms of what it can contribute. So when we look at programs and the ability to contribute, the question is who's paying for this? The reality is that it's being paid for by the individuals and businesses.
It's very important to look at the tax structure of the personal tax and at what threshold Canadians are paying. If you compare ours with the U.S. model, for example, it's a very real issue, because reducing personal income taxes has a definite effect on disposable income, savings for retirement, savings for education. This trickles right throughout the whole economy. When we turn to capacity and who has it, if we look at the federal government and the surpluses that are run year after year, the question is, are you collecting on a level that's appropriate?
The GST cut is most definitely welcomed, as is any tax cut. GST is a consumption tax, and people arguably in some cases have the option whether to pay it or not. Everyone has to pay provincial personal and federal taxes.
No, not necessarily, but I think the percentage differences are fairly small.
When we talk about the voluntary sector, I'm not just referring to volunteers, I'm talking about everything: the goods, services, what we produce, what we purchase, and the people who work in the sector. As I said, we are a big industry; we employ at least 10% of the employed people in Canada.
But there's still this notion that whenever we make a contribution of government money to the non-profit sector, it's a drain, a handout. We don't see it as an investment that reaps extraordinary rewards. Every time you support a local organization in some small way, you're doing exactly what Dr. Coleman suggests: you're building a level of social capital, you're enabling people to enter the workforce in a different way than they might have opportunities to do otherwise, and you're supporting a huge return on investment in terms of building skills and engagements.