Good morning, ladies and gentlemen. Thank you for your attention. My name is Brian Pallister and I am the Chairman of the Standing Committee on Finance. I apologize in advance for my French. I only started studying French at the age of 50 and I find it rather difficult—but I know that I have to try.
I declare the meeting open and welcome witnesses and committee members alike.
The House of Commons Standing Committee on Finance has been given a mandate to study and report on budget policy submissions. This year's theme is Canada's place in a competitive world.
We asked you all ahead of time to limit your comments to five minutes, although we appreciate that this is no mean feat. Nevertheless, we will be enforcing the time limit. If you care to look my way from time to time, I will let you know when you have a minute or less remaining. I will ask you to conclude after five minutes so that you can dialogue with committee members and answer their questions.
Let us get started. Our first witness this morning is Martin Godbout, President and Chief Executive Officer of Genome Canada.
Welcome, Mr. Godbout. You have five minutes.
Perfect. Thank you, Mr. Chairman.
Good morning everybody. I am delighted to have the opportunity to meet with the members of the Standing Committee on Finance and to provide an overview of some of Genome Canada's most important accomplishments.
Over the next few minutes, I will be sketching a brief outline of some of our major national and international research projects, explaining what we had gained from the investments in research we have been making since February 2000, and discussing the many opportunities that will be open to us over the next few years.
Before getting into the details on the ground, let me first give you the view from the 30,000-foot level. What is genomics really all about? Why is it so important that Canada position itself among the world leaders in this new science and technology field anyway? What kind of return will Canadians get from their investment? Finally, why should you fund it?
To begin with, the kind of knowledge genomics is creating is unlike anything else we have ever known. It's giving us, quite literally, the master key to unlock the basic code of life, all forms of life--human, animal, microbial, trees, crops, almost anything that is living. Because it cuts across the entire range of life forms on earth, it has the potential to change and impact almost every sector of our economy, from agriculture to environment, fisheries, forestry, animal and human health, and many related industrial processes, changing our understanding of our world fundamentally and forever.
It is small wonder that some economists have said that genomics will be one of the major driving forces of the world economy in years to come.
With this in mind, and having understood the potential offered by genomics, the federal government founded Genome Canada in February 2000. In so doing, Canada sent a very clear message to its partners around the world—we will not stand idly by while discoveries, and their ensuing benefits, are made elsewhere. Canada is at the avant-garde of this technological revolution, and our country will become the destination of choice for investors, cutting-edge researchers, and the finest scientific minds.
What has happened since February 2000? To put it succinctly, a great deal. In six short years, Genome Canada has contributed to positioning Canada amongst the best genomics research teams in the world. Allow me to give you some examples.
Genome Canada has supported more than 100 multidisciplinary and multisectorial research projects, both at the national and international level. In addition, it has developed internationally competitive scientific and technology platforms, which provide Canada with the means to discover, develop and deploy new knowledge.
As I am sure you remember, British Colombian researchers sequenced the SARS virus in 2003 within a time period that the world health organization classed as staggering. Other Canadian researchers isolated stem cells linked to breast cancer, thus paving the way for new therapeutic targets and new cancer-prevention strategies.
Between 2002 and 2004, Canada has registered more than 425 inventions and patents relating to applications of genomics research. This means that we rank fourth in the world.
We have entered into partnerships with other countries that recognize genomics as being cutting-edge technology, including, amongst many others, Sweden, Spain, the Netherlands, Estonia and the United States.
If we achieved all of that in the last six years, imagine what we will accomplish in the future.
The fact is that we are now past the point at which the promise of genomics is theoretical and far away. It's here and it's now, offering real solutions to real problems of our day-to-day lives, driving innovation, productivity, and competitiveness; transforming research projects into commercial applications; and creating wealth for the benefit of all Canadians. We see a very bright future if, and only if, we sustain the enormous momentum we have worked so hard to build over the past years. Doing so will require clear commitments and additional funding. Genome Canada is asking for $380 million for the next three years to fuel more breakthroughs, realize more successes, and provide an even greater return on investment for Canadians.
Although our movement began by working initially, since 1999, with the Quebec government to get budget increases for the Conseil des arts et des lettres du Québec
, we have not been able to disregard what was going on in Canada, particularly because the great institution known as the Canada Council for the Arts, which will be celebrating its 50th anniversary next year, in 2007, has played an extremely important role in recognizing emerging arts over the last 50 years, and currently finds itself in extremely difficult financial straits.
Although the current government made some positive announcements last year—an increase in funding of $20 million this year, and $30 million next year—these increases are still not enough to meet the needs expressed by artists, writers, crafts people and others who work in the cultural field, not just in Quebec, but throughout Canada.
You will have noticed that in our paper, we drafted a sort of business plan for Quebec. This is the funding we require to meet the basic needs of artists and cultural workers in Quebec. In this business plan, the role of the Canada Council for the Arts is crucial.
Quebec has played its role, to some extent. In fact, the Quebec government has assumed its responsibilities by providing the Conseil des arts et des lettres with budgets that fall somewhat short of what we requested. Nevertheless, for several years now, we have received some satisfaction in this regard. We are therefore in a very good position to ask Canada to play its role with the artistic and cultural community in Canada.
Why is the Canada Council for the Arts so important for our sector? The reason is that we are somewhat the equivalent for the arts of what Mr. Godbout was explaining for the sciences. The Canada Council for the Arts provides funding for research in various areas such as theatre, music, visual and media arts. Often, this research involves new and fundamental needs. Artists must remain at the cutting edge of new technology.
Often, the Canada Council for the Arts succeeds in responding to these issues, and it is in a good position to do so. As you know, the Council is an arms' length body, in other words it gets its funding from the Canadian Parliament, but its decisions are made by internal committees, advisory committees and juries made up of peers, which are able to assess the value of proposals or the quality of organizations that apply for funding from the Canada Council for the Arts.
For these reasons, we, together with our colleagues from the Canadian Coalition for the arts, are calling for an increase of $100 million in the Canada Council's budget.
Thank you, Mr. Chairman.
My name is Diane Francoeur and I am the President of the Association of Obstetricians and Gynecologists of Quebec. Our association represents all doctors specializing in these fields, and we consider ourselves as experts on women's health in Quebec. In addition, we have many ties to Canadian society.
I am here to talk to you about three major health issues of importance to us which, unfortunately, are not equally accessible in all provinces. We believe very strongly that the federal government should be investing in equal accessibility for all women in Canada.
So I will proceed to the first point. As a result of the discoveries made by our friend in Genome Canada, prenatal diagnostics have developed very quickly, so that tools are now available and accessible in all industrialized countries, except Canada.
The current situation means that women who want access to prenatal diagnostics have to turn to the private sector. It is not always made clear or stated explicitly that these services exist, and they are not always readily accessible. Often, by the time women find out about them, it is too late.
We also do not want to advertise these services, because we want to promote our free system, which is available to all. Unfortunately, women do not have access to this technology and therefore cannot have fetal abnormalities detected early. Given that women have 1.4 children on average, we think they should have access to this technology in order to make the best choices and then prepare themselves for an abnormal baby or, at least, to get the best care for their infant.
My second point has to do with recognizing infertility as a disease. Unfortunately, that is not the case in Canada, so that reproductive technology is reserved only for the wealthy or for older women who have been accumulating money for a number of years. The result is that women will have more multiple pregnancies, often rather later in life, with disastrous medical consequences.
I am also the head of Obstetrics and Gynecology at the University Hospital Centre for Mothers and Children at the Sainte-Justice Hospital, where we have seen an increase in extremely premature infants in the last 10 to 15 years. A study was done in Alberta that approved the idea of subsidizing a program to implant a single embryo, in an effort to reduce the number of multiple pregnancies. This study showed undeniably that there would be an extremely beneficial effect on the frequency of premature births. We believe in this very strongly.
Unfortunately, since people spend a lot on in vitro fertilization, they often require to give themselves the maximum likelihood of becoming pregnant. And since women do not want to take any chances, they have multiple pregnancies, with all the disastrous consequences that go with that.
My third point is the new vaccination about which I will now tell you. It was approved this year, and in our opinion, as gynecologists, it is the best thing that has happened to women since the invention of the pill. This is the human papilloma virus vaccine, and it will do several things. The first objective is to reduce the number of cases of cancer.
Women have become so afraid of cancer that they are having their breasts, uterus and ovaries removed to prevent it. But we now have a good vaccine which, in three injections, will definitely make it possible to reduce cancer among Canadian women. Because the fact is that despite our good health care and accessible services, the fact remains that cancer still happens. So this vaccine is excellent news for us, and we would like the Canadian government to promote access to it for all young girls in Canada. Of course, in order to be effective, this vaccine should be given ideally, together with the vaccine for hepatitis B, before young girls have started to have sexual relations.
This vaccine will also protect them from sexually transmitted diseases. Canada has always been much more effective than the United States in eradicating sexually transmitted diseases. That provides us with an additional weapon for improving women's health.
Thank you very much.
Thank you, Mr. Chairman.
My name is Christian Blouin. I am the Director of Public Health Policy and Government Relations for Merck Frosst Canada. I am accompanied by my colleague Rob Livingston, Ottawa Director of Merck Frosst, who will serve as a resource person for me during the question period.
First, I would like to thank you for the opportunity to speak to you. Since our time is limited, I am going to focus only on the National Immunization Strategy. I would also like to thank Dr. Francoeur, who is giving me an extraordinary opportunity to build on what she had said.
Merck Frosst is asking the government of Canada for three specific things. The first is a commitment to renew the NIS program funding for provincial and territorial immunization programs. Specifically, that means the federal budget should include $100 million per year to continue to fund the existing program. It should also include adequate money to continue to fund the NIS infrastructure.
Our second request is that you expand the NIS. We believe a further $300 million per year should be provided to the provinces and territories under the program to add new and emerging vaccines.
Our third request is that the NIS funding be separated from the Canadian Health Transfer Payments to the provinces and territories, to ensure the funds can be tracked and evaluated, and to guarantee they will be used specifically for immunization programs.
We agree with this committee's view that recognized the need for our country to do what is necessary to ensure our citizens and businesses are healthy. Merck Frosst Canada is the Canadian subsidiary of a major international research-based pharmaceutical company. We invest $120 million annually in Canadian research which improves both the health and economic status of Canadians. We are keenly interested in the health of Canadians, and of our business and the economy in which we operate.
Improving health starts with the prevention of illness. It is well-documented that immunization programs are the most effective method of preventing infectious diseases.
In 2001, the government of Canada understood this and provided infrastructure funding of $45 million over five years for the NIS.
In 2004, it added $100 million per year for three years for the provinces and territories to pay for new immunization programs against meningitis, chickenpox, pneumococcal disease and whooping cough. That funding runs out March 31, 2007 and that is why I am here today.
Because of the NIS, provincial and territorial jurisdictions have expanded their publicly funded organization programs. Now, Canada—like the US, the UK and many other industrialized countries—has virtually universal coverage for these important vaccines.
If the NIS funding is not renewed, some provinces and territories may be forced to revert to the old system and not update the immunization programs for new vaccines. This could jeopardize the health of Canadians. Immunization could fall below the current standard of care we have now in Canada, and below the standards of other industrialized countries. Canada will once again have a patchwork across the country, as was previously the case, resulting in inequitable access for province to province, and we will begin to see diseases we had basically “cured” or prevented rising up again because infectious diseases don't stop at provincial borders. We have seen it with SARS., There the threat of a flu epidemic. We know about the West Nile virus and yesterday, the Minister of Health mentioned botulism.
We see this as a national responsibility. We strongly urge you to consider our request. Why should it be expanded?
New vaccines are imminent. I would like to focus mainly on one of them, Gardasil. Dr. Francoeur alluded to this vaccine which protect against cancer, and we are pleased to have it; Merck Frosst actually discovered it. Each year, 1,400 Canadian women are diagnosed with HPV, and 400 will die.
We are all saddened, with good reason, to hear about the death of a Canadian soldier. I would like to put things in perspective, without taking anything away from Canadian soldiers. But it must be said that one Canadian woman dies every day from cervical cancer. There is a way to end that.
The overall yearly cost of cervical cancer has been estimated at $270 million. The vaccine would be far less expensive.
We are urging the committee to consider expanding the National Immunization Strategy and to ensure there is a mechanism in place to cover new vaccines as they are marketed in the future.
Thank you, Mr. Chairman.
Thank you, Mr. Chairman.
We would like to thank the members of the committee for having invited us to make our presentation today.
Our brief includes eight recommendations which can be found on page 9 and focus on three main priorities: first, reforming and increasing transfer payments for post-secondary education; second, reviewing tax spending on post-secondary education; third, ending discrimination against students.
Today I would like to focus on the issue of transfer payments for post-secondary education.
First, the QFUS is asking for the creation of a dedicated transfer for post-secondary education as currently exists for health. A dedicated transfer would have two main advantages: first, it would clearly define the federal contribution to post-secondary education—ensuring transparency—and second it would make federal funding for post-secondary education predictable, greatly simplifying the provinces' budgetary planning.
Second, we are calling for an unconditional transfer. Each province has unique needs in relation to post-secondary education. In Quebec, for example, the greatest need continues to be funding for the system as a whole. However, in Nova Scotia, where tuition fees are the highest in the country, the biggest problem is accessibility. That is why the Government of Nova Scotia has committed itself to reducing tuition fees at its universities and colleges to the national average by 2011.
Obviously, a national post-secondary education strategy can never succeed if it is based on rigid conditions. That is why the provinces must have complete flexibility in administering their post-secondary education system.
Third, we want the federal government to prioritize transfers as a way to fund post-secondary education. Along with cash transfers to the provincial government, the federal government also contributes to post-secondary education funding through tax spending that provides direct benefits to individuals. Federal tax spending includes income tax credits for tuition fees, tax credits for education savings, and the education savings grant.
Generally speaking, those programs are based on tuition fees. Provinces that opt for accessibility, as Quebec does, therefore receive less than their fair share of the tax spending.
Still, cash transfers remain the most equitable form of federal funding for post-secondary education. They also do less to interfere in areas under provincial jurisdiction and provide the provinces with the flexibility they need to respond to their own specific problems.
Finally, we ask that cash transfers for post-secondary education be considered a first step in resolving the fiscal imbalance. In view of the health agreement signed in 2004, the first priority in any resolution should be targeted at the provinces' second largest fiscal burden, post-secondary education.
The 1996 reductions in transfer payments are the most often cited cause of the present imbalance. It seems logical to conclude from this that restoring those cuts should be the first step towards resolving the fiscal imbalance. To restore funding to where it was before the cuts, an increase of $4.9 billion for post-secondary education must be provided by the federal government.
In addition, an increase in cash transfers for post-secondary education is certainly not controversial, and is rather the subject of a broad consensus among provincial governments. In a joint statement issued after the Summit on Post-secondary Education and Skills Training held by the Council of the Federation, the provincial premiers called for increased federal funding for post-secondary education. More specifically, they called for an increase of $4.9 billion in cash transfers.
That concludes my testimony today. I look forward to answering any question you may have in either official language. Thank you.
Thank you, Mr. Chairman.
I am Vice-President of the Quebec section of the Union des artistes. The UDA represents performing artists working in French. It currently has 11,400 active members and interns.
The UDA's mission is to identify, study, defend, and develop artists' economic, social, and moral interests. It currently manages more than forty collective agreements covering sectors such as advertising, cinema, recordings, dubbing, the stage, and television.
In 2001, the cultural sector employed 611,000 people, or 4.1% of the workforce, which is more than agriculture, forestry, mining, and the oil and gas industry combined. Its workforce is one of the most highly educated: 40% have a university degree, compared with 22% in the general population.
Economically speaking, Canadians spent $22.8 billion on cultural goods and services. Public funding to not-for-profit performing arts organizations generate tax revenues in the order of 176%.
We believe that the importance of culture for our economy and our identity is what encouraged the government of Canada and Quebec to ratify the Convention on the Protection and Promotion of the Diversity of Cultural Expressions and to promote it.
Those are good reasons for attaching significant importance to culture during prebudget consultations. However, the socio-economic conditions of performing artists in Canada in the sound recording, theatre, and audio visual fields have not progressed over the past 20 years. They stand out because of their inferiority in comparison with other category of workers.
The economic and cultural health of our country is however closely linked to the social economic health of our performing artists, which, in turn, is dependent upon their receiving full royalties for their artistic productions.
The time has come to at least recognized copyright, as Canada promised to do in 1997, by signing the World Performances and Phonograms Treaty, and to extend the notion of private copy to audio visual works.
To ensure a more profound impact on artists' incomes, tax measures such as an exemption from copyright revenues could be considered. Measures that are adapted to self-employed cultural workers must be put in place. The Employment Insurance Commission should be able to come up with creative ways of enabling self-employed artists to benefit from some form of income insurance.
The government must move as quickly as possible to double the budget for the Canada Council for the Arts and ensure that the substantial portion of the new funds go to artists. Funding must be increased for cinema, given its success here and abroad.
The government is however proposing $4 million in cuts to the Museums Assistance Program, under dubious pretexts, and a reduction of approximately $12 million to the Department of Foreign Affairs's Public Diplomacy Program which funds the international activities of university and cultural organizations.
The government is currently studying, considering, and wavering on providing assistance to cinema, at a time when it is hugely popular. If the government wants to meet its objective in terms of taxation, equal treatment, innovation, and common values, it must invest in culture and above all in artists.
Artists are leaders in promoting Canadian identity throughout the world. They are better than anyone else at saying who we are, what space is ours and how we inhabit it. It is time for the government to recognize this contribution and to enthusiastically support these embassadors.
Thank you, Mr. Chairman.
Thank you very much, Mr. Chairman.
I would like to extend a warm hello to you and to all members of the committee, and to thank you for giving us the opportunity to address you today on behalf of Rx&D, the association representing Canada's Research-Based Pharmaceutical Companies.
My name is Gilles Gagnon, and I am President and Chief Executive Officer of Aeterna Zentaris, a global biopharmaceutical company whose corporate headquarters is located in Quebec City.
With me this morning, is Brigitte Nolet, the Vice-President of Federal Affairs at Rx&D.
Rx&D is an association composed of over 50 research-based companies throughout the country. Its mission is to improve the quality of life of all Canadians and enhance our health care system by fostering the discovery, development and availability of new medicines and vaccines.
Rx&D member companies represent a significant economic lever for Canada, generating more than 100,000 direct and indirect jobs country-wide and contributing significantly to industrial R&D growth. Every year, we inject no less than $4.5 billion into the Canadian economy, and invest $1billion in research and development.
By the way, $1 billion is the average cost of developing just one new, innovative medicine for patients, that will take 12 years to get onto the market. Innovative patented medicines, although one of the most cost-effective aspects of our health care system represent only 8% of the total budget. In the public's view, pharmaceuticals and spending often seem to go hand in hand. In my opinion, this is a misconception; the connection instead should be in terms of investments and pharmaceuticals.
For instance, since 1985, despite the aging population, pharmaceuticals have succeeded in reducing hospitalizations by 35%, not to mention the radical drop in mortality for those stricken with terminal illnesses such as cancer or AIDS. This is absolutely incredible! Incredible, yes, but not magic.
That is all very well, but Canada is now evolving as part of a global system. We are facing a world-wide reality: we must face up to the competitiveness of emerging countries such as China and India, where investments are increasing all the time. The challenge facing subsidiaries of Canadian pharmaceutical companies is to attract investments here, to Canada, in order to continue promoting research for the benefit of patients. We are facing significant challenges.
Since Rx&D's members operate in a global context, our ability to increase investments in human capital, physical capital and innovation obviously depends on our commercial environment. Of course, in order to have a commercial environment, there are some measures we would like to see implemented.
With respect to intellectual property we were very pleased that the government passed legislation on October 4 of this year that would protect research data. We are very proud of that. We were very eager to have this new measure passed, and that has now been done. The next matter we will be discussing together will be the extension of the patent period.
We must continue to benefit from attractive tax measures that can attract investment. In a global context, the income tax credit must be extended to cover collaborative international R&D work conducted in Canada. The part of the work done by the Canadian subsidiary, in a global research context, should be eligible for the Canadian tax credit.
In addition, there are other disciplines that are now part of research according to the definition of the OECD, and yet these disciplines are not recognized for the purposes of certain tax measures in Canada. More specifically, I am referring to research in the social sciences, more particularly in health economics. For example, studies on pharmacoeconomics should be eligible for tax credits.
I also represent a very important biotechnology industry. We do have tax credits, but they are not payable in Canada, particularly in the case of public companies.
Biopharmaceutical companies invest a great deal of money. It is very expensive to develop drugs. This is the same area in which the major pharmaceutical companies are involved. R&D companies are not in a position to generate revenue quickly enough to be able to claim tax credits and cover their research costs. Refundable tax credits should be available to these companies just as they are to Canadian-controlled small private companies, with taxable revenue of less than $200,000.
In addition, it would be important to stimulate alliances between pharmaceutical and biotech companies. That's part of the recognition of a favourable environment. The milestone payments paid by pharmaceutical companies to biotechnology companies should also be part of the tax credits.
So all the measures that I've just discussed, be it recognition of research in Canadian subsidiaries, milestone payments to biotechnology companies to ensure a strong industry in Canada and the recognition of refundable tax credits for biotechnology, represent a minimum of $100 million.
Thank you, Mr. Chairman.
I wish to thank all the witnesses for your presentations. They are always interesting. Here in Quebec, it's quite special because all the groups took less than their five minutes, therefore we're running a little bit ahead of schedule. I will therefore take the time remaining to them, Mr. Chairman. All right?
Trevor, I think that my colleagues will ask your this question,
but I couldn't help myself.
In your first recommendation, you asked for the reform and increase of the transfer payments for education, but you didn't say how much more money you are asking for nor how this is currently distributed between post-secondary education and social and health programs.
Do you have the breakdown of the two amounts as currently allocated by the Government of Canada?
It depends on the position you want to take. We can let the provinces take on the burden of decreeing what is important for the women in that province. To my mind, if we have a Canadian vision, women from coast-to-coast should have access to the same standards.
For example,with regard to prenatal diagnostic, Canadian society is introducing standards that Quebec can never achieve. I've already made many representations in this regard to the Quebec Health minister, Mr. Couillard. He said this was interesting and it would desirable for women to have access to the same things as they do in Europe, but that the money simply wasn't there.
Unfortunately, one can acknowledge that free access no longer exists in Canada, but women have to be told this. In my opinion, the proportion of women of reproductive age who do not require a lot of care compared to younger and older women must be protected and must have access to the available technology.
We are an organization dedicated to defending women's rights. We will try in every way possible to have contemporary, comparable health care to that provided in other countries these days.
When we as doctors, and especially as specialists, go in tertiary centres in other countries, our training is impeccable and the care that's provided is excellent. However, we don't follow the progress and development, be it in terms of reproduction, the genome or prenatal diagnosis, the gap will widen more and more. Unfortunately, this gap quickly becomes exponential, and we'll never catch up. It will be women who suffer, quite simply. Since women represent 50% of the population, they should not be forgotten.
Mr. Robitaille made reference to 50% cutbacks to the Museums Assistance Program. Indeed, there were no justifications for this. As you mentioned, there was also an $11.8 million-cut to the public diplomacy program.
My question is for Ms. Hébert, Mr. Robitaille and Mr. Gilbert. The minister has stated that these cutbacks, particularly those for the public diplomacy program, would have no impact on tours by ballet, theatre or orchestra companies. She clearly stated that this would have no impact.
I'd like to hear your opinion on this.
To answer your question regarding $380 million requested, a strategic plan was prepared for Industry Canada and, upon request of the department, as is the case for any budget or grant application. The costs are assessed line by line, request by request.
Right now, the financial situation of Genome Canada is simple. Genome Canada is not a federal organization, so we are not part of annual budgetary allocations. We receive money to cover term periods. The last time, it was $225 million for three years. That period ends around September 2007.
As is more or less the case for the Canada Council, when researchers or companies file applications with Genome Canada, there is a process which lasts about a year. They have to describe a grant application, a jury of peers must analyze this, and all that takes a year. The process cannot be started if you don't have the money in the bank.
Right now, there are $7 million left in the coffers of Genome Canada out of the $1.4 billion that we collected over the past six years. We will therefore not be able to operate like this in the future.
It also has to be remembered that Genome Canada—
I believe that would agree with me on my next question, because we are both economists and also because, as the former Dean of the Faculty of Arts at McGill University, I was very pleased to see that you wanted to include research in social sciences in the definition of the tax credit for research and development, which is not presently the case.
Can you explain to us why, in this case, research in social sciences is important?
Mr. Pierre Paquette: That is a good question, John.
I have one final question, this time to Mr. Godbout. I believe that, obviously, it is very important for Canada, in order to be able to compete with China and India, to be aware that it is not our salaries that count, but rather ideas, creativity, innovation, research, etc. The previous government had invested billions of dollars in this area. We heard from witnesses that some researchers who came from the United States were thinking of going home, because of the lack of funding.
What has the government's response been up until now? Do you have the impression that the government supports the innovation program, or is it too early to say? What is the situation?
I saw your third and fifth recommendations. The third indeed asks that cash transfers be given priority rather than tax credits; you spoke about that.
In your fifth recommendation, you asked that compensation be granted to the provinces that chose accessibility for the various credits paid out to them. Finally, it is linked—I knew it; I have often talked about it with the members of the committee—to child care, an area where Quebeckers are penalized because they have made that choice.
Are you telling us that the federal system currently penalizes provinces, including Quebec, who have chosen accessibility, and do you want there to be compensation?
Good morning. My French is terrible,
so I will speak in English.
I'm very excited, Mr. Blouin, about what can only be described as a huge development on the cancer front, in my personal opinion. Can you talk about what the impact would be of this immunization?
There's a number of people on this committee whose lives have been really affected by cancer. To me, this is much bigger than a women's rights issue; this is an issue that affects families, it affects people from all walks of life. Can you talk about what type of impact this will have on cervical cancer?
Absolutely. Thank you for your question.
I think for women's health, it's a very important breakthrough. In fact, pap testing many years ago, in the 1940s, was probably the most significant achievement in the prevention of cervical cancer, but even with pap testing, there are still 1,400 women in Canada suffering from cervical cancer and genital warts. In fact, 400 women die from it every year, so the vaccine will have a tremendous impact in the long term.
I don't think we're going to see the 400 women not dying a year from now if there are immunization programs, but it will have a long-term impact. I think we should have the vision of implementing an immunization program as soon as we can.
Dr. Francoeur has mentioned it and most medical societies have clearly mentioned that it is a breakthrough. We're not talking about something that is a “me too”, we're talking about something that is innovative and deserving of funding to ensure that women in Canada will be protected, not only with pap tests but with a vaccine against cervical cancer.
Order, please. Take your places, committee members.
I will now call the meeting to order. I would like to welcome our witnesses and committee members.
The mandate of the Standing Committee on Finance of the House of Commons is to study and report on the budget policy proposals put forward to the federal government. The theme this year is Canada's role in a competitive world.
We asked our witnesses ahead of time to limit their remarks to five minutes, even though we know that this will not be easy. Nevertheless, we are going to stick to that timeline. If you would just glance up at me, I will give you a signal when you have one minute or less left, and at the end of the five minutes, I will ask you to wind-up. The idea is to allow time for a dialogue with members and to give you time to answer their questions.
The first witness is Denis Juneau, the President of the Regroupement des cégeps de la région du Québec.
Welcome, Mr. Juneau. You have five minutes.
The Regroupement des cégeps de la région du Québec (association of CEGEPs of the Quebec City region) is pleased to participate in this consultation with the Standing Committee on Finance of the House of Commons, and it thanks the members for their attention to this brief. The topic of this year's public hearings, "Canada's place in a competitive world" is very close to home for the CEGEPs of the Quebec City region.
No one would dare dispute the important place that must be reserved for the education system, and especially post-secondary education in order to meet the challenges that are already facing Canadians and will only intensify in an economy that is now based on knowledge, technology and performance. In this context—and you will certainly agree with this—a well-educated population and a highly competitive labour force will be indispensable advantages in ensuring the country's prosperity. The CEGEPs of the Quebec City region play a major role in this in their community.
The CEGEPs of the Quebec City region will have their work cut out for them over the next few years to meet the development needs of their community. First, they will need to work at training a sufficient number of graduates to meet current labour market needs and close the growing gap between the supply of graduates and businesses' demand in the areas of science and technology. They will also need to adapt their study programs to the new realities of the labour market and develop new ones to support the region's development projects and modernize their infrastructure.
We note that a number of companies linked to the high tech sector, including some very large ones, have recently opened here, and our economic development and coordinating bodies have now received a clear mandate to promote the development of the high tech industry. This focus will now be given priority in the region and certain high tech markets to be developed, such as nutrition, pharmaceutical, health care, optics and photonics, electronics, geomatics, intermodal transport, to name just a few.
The CEGEPs' growing difficulty in meeting the current and foreseeable needs of companies and in supporting their growth threatens our competitiveness and risks weakening a fragile economy in Quebec. In order to maintain and improve our quality of life it is urgent that we invest more in post-secondary education, especially now when countries like China and India are investing massively in education, particularly in the sciences and technology.
The CEGEPs of the Quebec City region would like to make three recommendations to the Government of Canada to conclude this brief. They propose that the Government of Canada respond favourably to the urgent demand of the Quebec government, which seeks a substantial increase in federal transfers of funds for post-secondary training; undertake the transfer to Quebec of substantial, recurring and stable funds that are predictable from year to year; and ensure that these funds are equitably distributed among the CEGEPs and universities.
How will this money be used? To maintain the accessibility and quality of services, to update technological infrastructures, programs and human and material resources, to consolidate CEGEPs within their communities, to welcome immigrants and train them in French, to increase the skills of people already in the labour force, and finally to ensure the durability of buildings and the quality of the learning spaces.
In its next budget, the federal government should set out clearly the solutions it intends to introduce to correct the fiscal imbalance. In one of the budget documents that came out at the time of the last federal budget, the government acknowledged the existence of a fiscal imbalance and made a commitment to take steps to correct the problem over the next year. That was good news, because it suggested that the respective roles of the federal and provincial governments within the federation might be reviewed.
However, as the months go by, the more it seems that the federal government, and consequently the provinces, are missing out on this opportunity. Despite recent reports by experts on the fiscal imbalance and equalization, meetings among the provinces on these matters are breaking down and the federal government seems to claim that this lack of agreement among the provinces means that nothing can be done. I would simply like to point out that the provinces may agree on the fact that they want more federal transfers, but that they cannot necessarily agree on the way in which they should be provided. It goes without saying, for example, that the provinces that do not receive equalization payments are opposed to any increase in these payments to the provinces that do receive them.
Sooner or later, even without unanimity among the provinces, the federal government will have to make a decision about how to deal with the famous fiscal imbalance. It must rely on certain principles in doing this. Principles are the main thing lacking when it comes to determining federal transfers. Over the years, the way in which the payments have been calculated has become increasingly arbitrary.
In his speech on the fiscal imbalance in Quebec City, Stephen Harper judiciously mentioned that at stake was the functioning and the spirit of the federation. I use the term "judiciously", because the objective of federal transfers is to give the provinces the resources they need to pay for the public services for which they are responsible under the Constitution. So these principles must be restored. There is no shortage of ideas. For example, the report of the Séguin Commission could be used as a basis, without being considered the Bible.
The federal government should avoid certain traps in its negotiations with the provinces. Some of them could try to take advantage of the situation to get special advantages that would be detrimental to the proper collective functioning of federal transfers. The introduction of federal transfers distributed simply according to a per capita rule must be rejected. This does not take the needs of the provinces into account.
I will now give you the most striking example of this. Since the federal government has been giving the provinces funds for social assistance based on the per capita rule, provinces with the greatest number of welfare recipients are receiving less money for each welfare recipient than provinces where there are fewer welfare recipients. The Quebec Ministry of Finance has calculated that Quebec was receiving less than $3,000 from the federal government for each welfare recipient, while Alberta was getting close $10,000. It is essential that needs be taken into account once again. For social assistance and education, for example, the amount should be based respectively on the number of welfare recipients and the number of students. In the area of health care, the demographic profile should be taken into account. The population of Quebec is aging. As people age, there is an exponential increase in the demand for health care. Therefore, it is inadequate to merely count the number of inhabitants in a province.
Furthermore, the federal government must never repeat what it did in 2005, namely sign individual agreements. At that time, the agreements were with Newfoundland and Nova Scotia. Under agreements of this type, money is given to the provinces without taking into account their fiscal capacity.
We must also stop saying that Ontario and Alberta are financing equalization: it is financed by the income tax and other taxes paid by all Canadians, throughout the country. The fact that Ontario and Alberta do not receive equalization payments does not reduce their fiscal capacity. We have to put equalization back on the rails, go back to the 10-province standard and take into account all sources of revenue, including non-renewable natural resources. In order to restore good intergovernmental financial relations, we must respect federal and provincial areas of jurisdiction under the Constitution, rebalance fiscal capacity among the provinces and, of course, increase the financial resources of the provinces. There are two ways of doing this: transferring tax room or increasing federal transfers.
Restoring a properly functioning equalization program requires an increase in federal transfer payments. The promise to reduce the GST must also be used to help correct the fiscal imbalance. To do this, the federal government must work in cooperation with the provinces, by giving them an explicit opportunity to recover this tax room. The federal government has already reduced the GST from 7% to 6% and has promised to reduce it to 5% during this mandate. Why does the federal government not consider withdrawing completely from the GST and offering these funds to the provinces? It goes without saying that substantial amounts of money are involved here.
The provinces should show their good will by playing fair, that is, to agree to having their federal transfer payments for social programs withdrawn, to make compromises and agree to a progressive implementation. That is what should happen.
I would like to thank you for giving the Chambre de commerce the opportunity to express its views during the pre-budget consultations.
The Chambre de commerce de Québec, whose some 4,000 members are drawn from all sectors of the economy, is the largest organization of business people in Eastern Quebec. As a grouping of the dynamic forces in the region, the Chambre enables the business community to participate actively in the development of the region and to express its opinion on matters with a potential impact on its development. Whether on issues regarding the economy, the workforce, immigration or regulation, the Chambre has always felt duty bound to express and assert its views in the interests of its members.
We have several recommendations which address issues such as assistance to business in the area of interprovincial trade, university funding, corporate family succession, local economic development and income tax.
Assistance to businesses.
In our view the federal government's support to businesses must be increased. In addition to the tax incentives for research and development, a new program should be designed specifically to enhance corporate productivity and competitiveness. With this aim, the Chambre proposes that, for SMEs with fewer than 100 employees, all equipment, machinery and production-related computer equipment to be 100%t deductible in the first year following its acquisition or eligible for a refundable tax credit on the investment, valued at 25% of the cost of the goods.
With regard to workforce training, on which corporate productivity and competitiveness essentially depend, the Chambre proposes that the deductible training expenses of SMEs with fewer than 100 employees be eligible for double the amount invested by the company or for a refundable tax credit equal to 50% of the cost of the training.
In light of the substantial labour force requirements in Quebec, and specifically in the Greater Quebec City area, the Chambre recommends that action be taken by the federal government to promote the hiring of immigrant workers, in particular by facilitating access to work visas.
Since the environment is a concern of the greatest importance in increasing the competitiveness of our businesses, as well as communicating and disseminating new business values throughout the world, the Chamber is asking the federal government to give more credit to companies for their environmental initiatives. Such initiatives could, among other possibilities, take the form of a refundable tax credit for any investments intended to improve the company's environmental performance.
Since interprovincial trade is all too frequently hampered by restrictive measures which have a detrimental impact on the national economy, the Chambre recommends that the federal government reduce the barriers to interprovincial trade. National conferences on sectoral issues bringing together federal and provincial trade ministers would help to reduce the irritants.
As institutions of higher education and advanced research—the true producers of business people and businesses in the new economy—universities occupy a commanding position in the national economy. The Chambre believes that training is a crucial element in corporate competitiveness and accordingly recommends that the federal budget include a substantial increase in the amounts allocated to the university network in order to maintain the quality of teaching and to develop research activities. The Chambre also proposes that federal transfers for post-secondary education revert to the levels that prevailed during the early 1990s.
Corporate family succession.
The tax collected when a business is transferred to the next generation constitutes a major obstacle to the preservation of family businesses. The Chambre accordingly recommends that the Minister of Finance postpone the imposition of the tax when the succession takes place between members of the same family. The Chambre supports the federal government's initiatives to create a capitalization for corporate succession.
Local economic development.
The Chambre recommends that the government maintain the community investment assistance program, which is an important economic lever for launching local projects with impact potential. The program should be continued since it supports the development of targeted intervention strategies and of the tools to sustain them.
Income tax. With a view to increasing the ability of individuals to consume and stimulate the local economy in Quebec and elsewhere in Canada, as well as helping us to remain competitive and retain our workforce and our brains, the Chamber proposes that the government reduce income tax.
Good morning, Mr. Chairman and members of the committee.
The Fédération des Chambres immobilières du Québec represents over 12,000 members, who are all major socioeconomic leaders in their respective areas, and who advise Quebeckers who are trying to meet an essential need, namely housing, on a daily basis.
This year, the House of Commons Standing Committee on Finance chose Canada's place in a competitive world as the theme for this year's pre-budget consultations. In that regard, access to rental housing and property ownership are directly linked to competition. To illustrate this fact, you simply have to look at the problems encountered by the chambers of commerce of several American metropolitan areas to see that affordable housing is a significant threat to their economic development.
Of course, the situation in Canada and Quebec is completely different from the problems faced by a metropolitan area like New York city, for instance. Yet the increasing lack of affordable housing will make it harder for Canadian cities to meet private sector manpower needs. The gap in affordable housing in urban areas as compared to resource rich regions will make it harder for workers to move from a low employment area to one which is experiencing rapid growth.
In light of this situation, we would like to present, in the brief time allotted to us, several measures which may increase the number of rental housing units and make home ownership more affordable. In Quebec, the data speaks for itself. Construction on new affordable housing units, that is, rental housing which costs about 30% of average income, has stagnated. The only rental units actually being built in Quebec today are basically social housing, luxury housing and retirement homes. Without new rental housing capacity, with rents between $800 and $900 a month per family, the situation will continue to deteriorate. Clearly, access to affordable housing must be improved.
We therefore recommend that transactions involving the sale of low-income rental housing be exempt from the capital gains tax if the income is ploughed back into rental real estate. When an owner re-invests money from the sale of a rental property into another real estate property, he in fact did not realize a gain which would generate enough money to pay the capital gains tax.
This proposal addresses specific problems associated with the ownership of real estate as an asset class, such as the lack of liquidity, the difficulty of selling and the inability to increase the size of the asset, which are otherwise advantages in the securities sector and which apply, for instance, to stocks and bonds.
Rolling over a capital gain when an income-generating asset is sold, in our view, is a real way of increasing the number of rental units in Canada's largest cities; the fiscal rollover is just a way to temporarily delay paying the capital gains tax.
In order to strike a better balance in the rental housing sector and to help people become home owners, we believe the Home Buyer's Plan, the HBP, needs to be improved. Let's be clear: if you pay between $800 and $900 a month in rent, you would not be paying much more for a mortgage. The Home Buyer's Plan lets new buyers dip into their RSPs to qualify for a mortgage earlier. But the maximum amount under the HBP has been frozen since 1992 and in no way reflects real estate trends since then.
We therefore propose that the government first increase the amount allowable under the program from $20,000 to $25,000, and then to index it. In 1992, the cap represented about 20% of the average value of a home in Quebec. But today, it is only 11%. The popularity of the program is obvious: over one and a half million Canadians have used it since 1992, for a total investment of $15 billion.
For many years, the Canadian housing sector was recognized as being an integral part of the country's competitiveness. Canada stood out from other developed countries because housing, whether it was rental housing or outright ownership, was affordable.
Our ideas are based on the fact that there is a disconnect between our historic advantage and reality, based on various data provided to us by our research organizations and financial institutions. We therefore strongly recommend that the committee ensure that affordable housing remains a positive trait of the Canadian federation.
Very well. Thank you very much, Mr. Chairman. I want to thank the Standing Committee on Finance for having invited the CSN to express its views.
The CSN is a union representing 300,000 members located throughout Quebec and Canada, working in most economic sectors.
It should be said that Canada's economic situation has been very positive since the mid-1980s. The IMF estimated that for the period between 1998 and 2007 Canada would have the highest economic growth of all G7 countries. This is due to increases in consumer spending, corporate investment and real GDP per capita, which is once again the best amongst G7 countries. There has been a decrease in unemployment and increase in the average job growth rate. Here again, we have shown the best performance of all G7 countries. Finally, inflation remains relatively stable.
Nevertheless, despite a good performance Canada-wide, it must be said that there are significant variations in economic performance from one province to the next leading to glaring inequality. Some regions are experiencing significant hardship.
With respect to the fiscal imbalance, we cannot forget Prime Minister Harper's commitment. In fact, in Quebec City, during the last election campaign, the Prime Minister undertook to correct the fiscal imbalance, which he then reiterated in the throne speech and in the 2006-07 budget. Unfortunately, things have been very slow to progress.
The fiscal imbalance is reflected in various ways. First, federal transfers to the provinces, which stood at over 23% in 1993-1994 totalled only 18% of revenues for 2005-06. Despite health care re-investments, federal transfer payments to the provinces only amount to 23% of revenue, which does not meet the targets set out by the Romanow report.
Federal transfers in the field of post-secondary education, social assistance and other social programs today represent only 11.5% of provincial expenditures, a far cry from the peaks of the mid-1990s.
Mr. Godbout spoke quite eloquently on the issue of social assistance. Currently, in Quebec, federal transfers for social assistance amount to $2,846 per claimant, whereas in Alberta they amount to $9,422 per claimant. That is both unfair and harmful.
The federal government has cut back in other areas, despite the fact that it has money. We need only consider the numerous encroachment on provincial areas of jurisdiction in the areas of health and education, where the federal government spends heavily.
The CSN believes that the fiscal imbalance needs to be addressed. The ideal solution would be tax transfers to the provinces. Otherwise, there would need to be a considerable increase in financial transfers to the provinces, with respect for provincial areas of jurisdiction. There is near consensus in Canada on the size of the fiscal imbalance. The Council of the federation assessed it at $9.5 billion, representing $3.4 billion for Quebec. This is a far cry from the $20 billion mentioned by Prime Minister Harper to explain why he considers the provinces' requests to be excessive.
The $3.4 billion figure is fitting given the size of the budget surplus noted over a number of years. It is also compatible with the Bloc Québécois' demand. The Bloc assesses the fiscal imbalance at $3.9 billion: $1.2 billion for post-secondary education, $2.1 billion for equalization, $400,000 million for health care in order to reach the 25% set out by the Romanow report, which, I might add, has already been achieved in the past, and $270 million to offset the day care services shortfall.
We believe that the Government of Canada must act in its next budget to correct the fiscal imbalance, and Quebec cannot demand any less than $3.9 billion.
I'd quickly like to address a few other points. With respect to employment insurance, the year 2005-06 showed an astronomical surplus. The program needs to be enhanced by lowering the eligibility threshold, and increasing benefit rates and benefit periods. But mainly, an independent non-government fund must be created, as supported by the Conservative Party in the past, which voted in favour of Bill C-280, introduced by the Bloc Québécois in 2005, if I'm not mistaken.
The government must also vigorously support the sectors which are struggling, by allowing them to develop recovery and restructuring plans. On that front, what the government implemented and announced to help senior workers in insufficient. Income support measures and assistance programs for the most vulnerable workers need to be developed to help those who will unfortunately not be finding other work, despite the possible corporate recovery and restructuring.
Thank you, Mr. Chairman.
Thank you for your presentations. It is always interesting. I only have seven minutes, so I may have to interrupt you at times.
My first question is for Mr. Godbout.
The fiscal imbalance and equalization issues are complex. Two years ago, there was a presentation made before the Standing Committee on Finance in order to explain the existing formula. I understand there may be only 12 or 15 people who genuinely understand the equalization formula. I think there may be one person within the Department of Finance of each province and a few academics in universities who understand it.
As I mentioned, it is a complex issue. Several studies have been carried out, namely this year, on equalization and the fiscal imbalance. You referred to the Séguin report. I don't know if it's the most recent report.
You also referred to the GST and the fact that provincial governments could perhaps access part of it. Has the fact that the Conservative government decided to decrease the GST from 7 to 6% meant that the Government of Quebec, for instance, could take that 1% difference? Is there a reason why it could not access that 1% immediately and 2% later on?
Equalization is indeed a complex issue, but let's be fair. It is a bit like an income tax form: it could be far simpler, but then it would be less accurate.
I referred to the Séguin report, but I also referred to the Council of the federation document as well as that of a panel of experts whose report was commissioned by the federal government. So, although it may not be simple, there is a way to find a solution.
As to whether the provinces should have or could have access to the 1% resulting from the July 1st decrease in the GST, that would have been feasible. Legally speaking, there is nothing precluding their accessing that amount. But if we want to properly settle the fiscal imbalance, Ottawa will have to lend a hand and offer a 3% reduction in the GST.
During the last election campaign, Mr. Harper was standing by a cash register when he talked about decreasing the GST. He did not say he was going to give the money to the provinces, he said he was going to give it to the people.
Technically speaking, the provinces could have done that.
My next question is for Mr. Langlois.
The real estate market in Quebec is different from the one in Canada. The Canadian Real Estate Association has already explained that to us. Personally, I am more interested in the issues in Quebec. What role does the association play in terms of affordable or low-cost housing?
We have just returned from Halifax, where there is a shortage of affordable housing. I am the member for Saint-Léonard—Saint-Michel, in Montreal. There is an agreement, here in Quebec, between the provincial government and the municipal governments; as a result, we will have fewer problems within two or three years.
What is your role in this area?
Thank you, Mr. Chairman.
Thank you all for your presentations. They are paradoxical. In fact, when we hear witnesses in Ottawa, they rarely talk about fiscal imbalance. Yesterday, I was pleasantly surprised to hear the topic mentioned in Nova Scotia. It was interesting to see that those who need to see their public finances rebalanced are concerned about the issue. Perhaps the matter is less urgent in Ottawa.
My question is for Mr. Pierre Patry and Mr. Godbout.
On December 19, here in Quebec, Mr. Harper made a commitment to deal with the fiscal imbalance in his government's first budget in February or March.
In your opinion, is that an attainable goal? Is the government prepared to announce measures, a timeframe, and an overall settlement?
That is what we wanted to show in our comments to the standing committee.
First of all, if we reminded you of the commitments made by Prime Minister Harper during his speech in Quebec, and as you mentioned, during the budget and the throne speech, it is because they raised expectations in Quebec.
For several years, we have seen a rather centralizing federalism. If the Conservative Party gave Quebec some hope, it was the hope of seeing the issue of fiscal imbalance resolved. Fiscal imbalance is a reality. Resolving it will mean that the provinces will have more money to invest in higher education, health and social programs. We know that huge cuts were required in those areas to meet the budget objectives set in the mid-1990s.
Knowing the state of the surplus for 2005-06 and the state of the Canadian economy, the CSN is convinced that the Harper government can take action in the 2007-08 budget, in other words in the next budget.
So Quebec is eagerly awaiting the budget. Moreover, there is a consensus among the left, the right, federalists and sovereigntists, to resolve the issue of fiscal imbalance in Quebec in the next budget.
Thank your, Mr. Chairman.
I thank you for your presentations, which are very important.
If we want to discuss the issue of productivity and competitiveness in Canada in the context of globalization, education remains the most important factor. Could anyone disagree with that?
It is been almost 10 years since the federal government really broach the issue of education and its funding. In the first budget, apart from bill as put forward by the NDP, and regarding which the conservative government finally tabled the motion, the federal government simply granted a tax credit for text books. That's it.
It seems to me that transfer payments must be increased by least 25%. Moreover, we must ensure that funds are made available for colleges, CEGEPs, as well as universities. So how could we convince the Conservatives to solve this problem of transfer increases?
I am putting that question to you, Mr. Juneau, Mr. Godbout or Mr. Patry.
We believe the choice is quite clear. Earlier, we talked about productivity issues. Obviously education, especially higher education, is a significant factor in improving a given country's productivity. In our view, there is no doubt we should opt for reinvesting in education.
That is why we are asking for the fiscal imbalance to be remedied. Education is under provincial jurisdiction. If the federal government were to inject more money into the provinces, the provinces would be able to fulfill their educational responsibilities properly.
With respect to education spending, in 1977 the federal government covered 25% of costs through transfer payments. Today, with social assistance and other factors taken into account, that figure has dropped to 11.5%. It is half of what it was.
Even if we were to ask for $3.4 billion or $3.9 billion to correct the fiscal imbalance, we would not be asking the federal government to go back to its 1977 spending levels, but just to its 1994 or 1995 spending levels, which were 18 or 19%.
In our view, that must be the top priority. The government has been bringing the debt down for several years now. Nonetheless, we believe it would have been preferable to put more money into the provinces and enable the provinces to cover their education costs better. That would have been much more productive, both socially and economically.
I would try to do both.
Rather than trying to achieve a single goal, I would try to achieve both. I would increase transfers to the universities to help them regain their rightful place as educational institutions of note in our regions, and as contributors to business development. I would also provide funding or tax credits to help businesses become better equipped, be more productive, and compete better in the international market place.
Productivity has dropped. We are not competitive enough. People have waited too long, or have been unable to invest in modernizing their equipment and becoming more competitive.
I would also take the opportunity to provide subsidies, to increase transfers to organizations that promote exports and economic development.
I share that view. There is no clear link between reducing corporate taxes and investments.
As a manner fact, in Quebec, for the past few years, investments are down, while the tax burden of corporations has been reduced.
From a tax standpoint, we must therefore make sure that we properly target the measures that we put forward. We are prepared to examine some accommodations. We do not think that overall, the tax burden on corporations should be reduced, but we could consider some accommodations in order to increase productivity and foster job creation. Moreover, one of the important factors in terms of job creation is education. It has been proven that the more people are educated, the less likely they are to be unemployed, and if they have to collect employment-insurance benefits, they will have more opportunities to upgrade their skills because they will have acquired a solid foundation of knowledge.
If I had to make a choice, I would not hesitate: I would opt to reinvesting transfer payments in education rather than tax cuts.
Thank you, Mr. Chairman.
My question is for Mr. Patry. It does not necessarily deal with one of the subjects in his actual brief, but rather in the Chambre de commerce de Québec.
Over the weekend, the Bloc Québécois held the forum Québec, an international forum where business people were invited to present projects supported by the Quebec City region. For instance, la Boîte à science came to present a science centre project for Quebec City; it is the only major Canadian City which does not have a science centre. A centre of excellence also made a presentation on global warming. Several projects were presented and supported mainly by the Chambre de commerce de Québec and the business community as a whole.
Yet, in the days following this event, instead of supporting these community projects, some conservative politicians focus on discrediting them as being far-fetched, pie in the sky, et cetera. There was also a project for a high speed train which the Quebec business community has been asking for a long time. These trains exist in Europe and the United States.
Why should we not have a profitable high speed train between Quebec, Montreal and New York, given our similar population density, distances and clienteles, when the United States does?
Are these Quebec City projects, as proposed during the forum, really far-fetched and not worthy of consideration, as conservative politicians from Quebec would have it? Are these not realistic projects? Instead of trying to destroy them, these people should support them and defend them in Ottawa in order to make them happen for the advancement of the Quebec City region.
Thank you very much, Mr. Chairman.
It is a pleasure for me to participate in these meetings of the Standing Committee on Finance. As a conservative member of Parliament from the Quebec city region, I feel doubly fortunate.
Twice, while listening to you, I felt as though I had been present at a historic moment, because I was there, last December, when Mr. Harper delivered a speech in which he committed to settling the fiscal imbalance within the Canadian Federation. I have also personally announced, six month prior to the Bloc Quebecois, that the conservative team from Quebec supported the Boîte à science project, the Centre d'interprétation scientifique et technologique, that we are in regular contact over and working on. We are pleased to have the support of the Bloc Quebecois for this project.
We wonder why the previous government over the last 13 years and despite opposition representations at the time failed to ensure that Quebec City would have a science centre when the 20 biggest cities in Canada have one and Quebec city is the seventh biggest in Canada.
So, yes, I am feeling though I am part of history in the making, even more so because in our most recent budget, $3.3 billion were granted by the federal government as immediate assistance to the provinces to settle the fiscal imbalance. Along with the budget, well, yes indeed, this was the first time any federal government was willing to recognize that there was a problem within the federation.
However, I would have one critical thing to say to our panel of academics, union and business representatives.
Mr. Pierre Patry: We can take it.
: You did not discuss the imbalance at the municipal level. As a member for Lévis—Bellechasse, I can tell you that municipalities are having a hard time when it comes to infrastructures, drinking water, waste water and roads. The needs are pressing. I think that these are things that should also be considered.
Mr. Patry, I think we must also consider the burden for taxpayers, which is also part of the imbalance within our society. Moreover, we have to wonder how much of the public burden individuals should shoulder.
My first concrete question is for Mr. Juneau. The Lévis-Lauzon Cegep is in my riding. You draw a relationship between restoring post-secondary education funding and productivity issues. We know there are problems, namely in the field of science and technology, in the Quebec city region.
How can increased funding of post-secondary education contribute to improving scientific training in the Quebec city region, where there is a need?
I'm going to ask my question in English, I'm afraid, so if you need assistance.... It's not that my English is good, but my French is a lot worse.
Monsieur Patry, Pierre Patry, I'm surprised to see that you say the recent reduction in the rate of the GST would seem to be a potentially worthwhile way of focusing primarily on low- and middle-income households. Every anti-poverty group, every group that's appeared before us that deals with people who are of a disadvantaged social or economic condition have indicated that the GST reduction is virtually a waste of time for low-income Canadians. The government says that the lowest-income Canadians don't pay tax, so reducing personal income tax is not a way to go. There are lots of other ways of doing it, such as through the child tax benefit, particularly the low-income supplement to the child tax benefit, or by investing in things like tuition access or even social housing and things like that.
Can you explain to me whether you have done any studies to indicate that cutting the GST is a good way to help the lowest-income Canadians?
I did not criticize lowering the GST. I did not mention that in my presentation. We said that consumer taxes are generally more regressive than other taxes. It is not something that we criticized. I would not want to be misquoted.
However, in answer to a question, I mentioned that if I had to choose between reinvesting in post-secondary education through federal transfer payments and tax cuts, I would favour federal transfers.
While I have the floor, I would like to point out that we want to help Mr. Blaney go down in history. But in order to do that he would have to do more than delivering speeches on the fiscal imbalance. The fiscal imbalance actually needs to be settled, as early as the next budget.
The CSN would be pleased to contribute to our going down in history together for having settled the fiscal imbalance in Canada.
I think it's interesting to note that there's quite a bit of concern about the so-called fiscal imbalance and the federal government's progress on it. In fact, as the panel is aware and we're all aware, the former government denied there was fiscal imbalance and refused to deal with it in any way, shape, or form.
Our government has taken on that task. We have not only put out a paper just a few months after we were elected as to some proposals for this, but we are engaging in very intensive discussions with all the provinces in order to bring together a pan-Canadian proposal that will resolve this issue as best as possible. We know that whatever comes forward, there will be naysayers, and we want to make it as good as possible. We are targeting the next federal budget to bring forward some proposals.
So I would caution the panel about being too negative about this process. In fact, I think it's moving along with amazing quickness, because there are a lot of people to consult and a lot of work that has to be done in order for a truly good proposal to come forward, remembering that we started from ground zero on this. So this is going ahead, this will go ahead, and we are hoping that all the players in Quebec will work constructively with us instead of simply making negative comments about a very good and very reasonable process that is moving as quickly as possible.
That's a statement, not a question, Mr. Chairman, but I think it's very important that we do put that on the record and do get that in front of people.