I would like to welcome the witnesses and committee members.
First, I must apologize for my French. I'm making an effort, but it's very hard for an old man like me. In fact, I started learning French three years ago.
The mandate of the House of Commons Standing Committee on Finance is to study the budget policy proposals presented to the federal government and to report on them. This year's theme is Canada's place in a competitive world.
We've asked you to limit your presentations to five minutes, knowing that that's not easy, but we're nevertheless going to stick to that limit. If you want to take a look over to me, I will give you a signal when you have one minute or less left. At the end of the five minutes, I'll ask you to conclude so that you can talk with the members and answer their questions.
The first member will be Mr. François Saillant, Coordinator of the Front d'action populaire en réaménagement urbain. Mr. Saillant, you have five minutes.
Good afternoon. I would like to introduce Nicolas Lefebvre Legault, Chairman of FRAPRU's board of directors, who works in Quebec City.
The name “Front d'action populaire en réaménagement urbain” probably doesn't mean much to people from outside Quebec. It's essentially a cross-Quebec association of groups that advocate housing rights. Approximately 120 organizations are members of FRAPRU across Quebec.
When we read the press release describing the theme that you've adopted as a committee, we were struck to see that it referred almost exclusively to economic competitiveness.
We want to add another dimension to the debate, one we think is no less important. And that is the question of compliance with the international commitments that Canada has made with regard to socio-economic rights. Unfortunately, a report published last May by the UN Committee on Economic, Social and Cultural Rights was highly critical of respect for rights in Canada, a country that, as the committee said, has the means to respect all rights. This committee made a series of recommendations, and we're still awaiting the Canadian government's comments on how it intends to comply with those recommendations.
I have submitted a copy of the report to you, which perhaps you've already seen. In it a series of recommendations is made on subjects such as transfers to the provinces respecting income security. These transfers have not increased since 1995, which has had an impact on the level of benefits across Canada. Recommendations were made on employment insurance and the problem of hunger and food insecurity, but also the subject of housing and homelessness, a question we will focus on more.
This past May, the UN committee repeated a recommendation it made in 1998 to all levels of government, that they consider housing and homelessness as a national emergency. In our view, the report that you prepare as a committee must be consistent with those UN recommendations, particularly those concerning housing. We think that should be done through concrete action. First, bigger investments must be made in social housing. The last budget confirmed investments of $800 million across Canada in what was called affordable housing. We heard the same figure of $800 million in the budget agreement between the Liberal Party and the New Democratic Party, and that was confirmed in the last budget. We are anxious to see the colour of that money. We've been hearing about it for a year and a half, and we haven't yet seen its colour. It was confirmed that the money would be paid on September 25, but we haven't yet seen it, at least in Quebec. However, we clearly can't be content with $800 million over a three-year period across Canada. In our view, the problems of housing and homelessness are important enough to warrant much larger investments. FRAPRU and other groups elsewhere in Canada believe that the federal government should increase its direct investment in social housing by $2 billion a year.
In our opinion, a portion of those amounts should come from the implementation of a bill introduced by the Bloc québécois, Bill C-285, if my memory serves me, which concerns the budget surpluses of the Canada Mortgage and Housing Corporation. We feel a portion of that surplus, which currently stands at $4.4 billion, should be used to assist a larger number of people who are homeless or living in substandard housing.
We're also making other demands, including one I won't dwell on because we support it, the Supporting Communities Partnership Initiative, the SCPI, that it be improved and that it continue so that groups that work with the homeless are not required to chase after these grants from year to year. Lastly, we want to draw your attention to the budget cuts that were recently announced and that, among other things, have an impact of $45 million on the Canada Mortgage and Housing Corporation.
In our view, if money is to be saved at CMHC, those savings must remain in the housing and be reinvested so that, among other things, the housing stock we have established is...
Mr. Chair, Laval University has submitted a brief and recommendations. The text explains various matters. So I'm going to do a brief review. The first recommendation, you won't be surprised to hear, concerns transfers for postsecondary education. I believe the federal government contribution to postsecondary education should be restored to 1994 levels, as has been requested. That is fundamentally important for the future of Canada and the province of Quebec.
Furthermore, we have emphasized various points concerning research, in particular the reimbursement of indirect research costs. The fact that the federal government currently grants only 20% is an additional charge for the universities, which are already short of money.
In addition, as regards the granting agencies, I would say that, for the Canadian Federation for Innovation in particular, which has really helped put Canada on the map, some changes should be made, and I'll say more about that, if you wish. Currently we're seeking counterpart funds from the private sector, but that's not always possible, in certain areas of the humanities, for example.
You won't be surprised to learn that we are also concerned about the core budgets of the federal councils. The federal councils are extremely important to research in Canada. We must continue to increase the amounts that are allocated to them if we want research to continue developing in Canada.
But this research must also be useful, and that's why we also recommend that the federal government immediately re-establish, enhance and develop its programs to promote discoveries. If we want the work done at universities to be as useful as possible, we must support the promotion of research. For promising laboratory work to result in a wealth-creating business, there must obviously be a transfer. There is work for governments to do here. I believe it is the role of governments to support this transition.
The sixth point that I would like to raise concerns sports infrastructures. As you know, Laval University has a plan to expand its physical education and sports pavilion. This project has been submitted to the provincial government and to the City of Quebec, and it is well supported. Our suggestion is that there be a dedicated envelope for sports infrastructure projects in the 2007 budget.
There are a lot of sports infrastructure projects in Canada. There's a lot of talk about obesity and health problems these days. Sport is important, and, in my opinion, if the federal government allocated funding to sports infrastructures, that would facilitate work that may well be done in any case, but might take more time.
I would point out that Laval University's PEPS is the most used sports centre in all of Canada east of Montreal. It's a major centre where national competitions are held. This is a very good project that I could describe further, if you wish.
As regards students, we must increasingly help our students go international, open up to other cultures and travel abroad. Laval University is one of the first universities in Canada to establish a student mobility program. The federal government should support this initiative. Not enough students in Canada go away during their education and see what is being done elsewhere. Only one or two percent do so. I think this student mobility program is fundamentally important. Similarly, we must also be able to attract foreign students here. Thinking must be done on this, as Australia and England, in particular, have done.
I'll close by suggesting some reading to you. In The Chronicle of Higher Education, someone in the United States with whom you're no doubt familiar, Richard Florida, has written about the impact of universities on their environment. This is an extremely interesting article which shows how great an impact universities have on all of society. He boils all this down to what he calls the three Ts: technology, talent and tolerance. So the emphasis is placed on the more human and social part.
Thank you, Mr. Pallister.
The mission of the Boîte à science is to stimulate young people's interest in science and technology, and it has been doing that for 25 years. Since 2005, we've been developing the idea of creating a science centre in Quebec City. For people from outside Quebec, these are obvious things because they have one in their city. Quebec City is the only one of the top 20 cities in Canada that doesn't have a science centre.
In anticipation of the project's implementation, we did our homework. We met with 300 persons. We visited some 30 science centres, took part in discussion groups, conducted surveys and studies and prepared briefs. We have a business plan, which will be distributed to you shortly.
Our organization became a member of the Canadian Association of Science Centres, and it was then that we learned there was no Canadian strategy in the area. We are the last city to establish a science centre, and we see that everyone has done it in a piecemeal way, each in his own area. There was no strategy.
And yet science centres are the most useful tools for stimulating young people's interest in science and technology. There are 1,500 of them in the world, including 640 in Asia, where they are experiencing phenomenal growth, because political authorities have understood that grey matter is the raw material of potential prosperity in a community. If young people are interested in it, then they're able to have careers in the field. The centres are the roots of those careers. UNESCO even states that countries that do not make an effort to interest young people in science and technology become poorer. It doesn't say they could become poorer, but that they become poorer. That's a statement.
In our discussion groups here in Quebec City, we asked people to name us five science and technology businesses, five scientists and five patents, and the response rate was 0%. No one was able to name five, whereas we have 800 businesses that conduct research and development. That's not right. People must adopt this in order to dream it, so that children are inspired by it, so that they in turn can contribute to prosperity or even take a position on complex issues such as OGMs or various health problems such as SARS. We'd like people to be able to have an opinion.
The project we're proposing for Quebec would initially cost $30 million. In the world of science centres, this is not a very ambitious project, but it would make it possible to meet the need and to make a difference in the city. The operating budget would be $7 million a year. We ask the federal government to provide 50% of the public contribution to this project. The economic impact would be $43 million initially and $11 million a year thereafter.
We've done our homework. We have 23 prominent ambassadors who believe in the project, and we have the necessary expertise. This is an Economic Forum for the region. Three weeks ago, 160 leaders met at the Château Frontenac and said they believed in it and that they wanted one. So the private sector is mobilizing. We have a government that believes that prosperity depends on the ability of people and families. Lastly, we have an issue that is not a provincial jurisdiction, but that should be part of the Canadian strategy.
We are therefore relying on the federal government to enable the City of Quebec to have a science centre. Canada's other cities have one. The federal government's contribution will be 50% of the initial outlay, which would amount to approximately $18 million, and 50% of the public share over 10 years, which would be $20 million, for a total of $38 million over 10 years.
Thank you. I am available to answer your questions.
Thank you. Good afternoon, everyone. I'm accompanied today by my coalition co-chair Micheline McKay, who I hope will be able to join me for the question period.
The Canadian Arts Coalition is the largest group of arts supporters, artists, arts executives and business leaders ever assembled from across the country. Arts and cultural organizations include opera, orchestras, visual arts, theatre, magazines, museums, writers and dance, among others.
I'd like to begin by recognizing the federal government's decision in the last budget to address the urgent need for arts investment by providing the Canada Council for the Arts with $50 million in new funding over the next two years. Provisions in the budget also exempt donations of publicly listed securities to public charities from capital gains tax. Both these measures are excellent first steps and are welcomed by the arts community. We'd like to thank the government and all parties for this clear demonstration of support.
What is so critically important for the arts community is the need for stable, predictable long-term funding. The $50 million is to be delivered through an increase of $20 million in the first year and $30 million in the second year. This $30 million increase must now be entered in the Council's permanent budget.
The Canadian Arts Coalition has one clear and focused recommendation to make to the committee and that is that the federal government invest in stable, long-term funding that, over time, increases the Canada Council's annual budget by $100 million.
There are two main reasons why stable public investment is so important. First, it allows arts organizations to formulate business plans. It provides the foundation and leadership to lever other funding from the private sector, municipalities, the provinces, patrons, foundations and others.
Second, it allows for the inherent risk of creating and showcasing new Canadian talent and enhancing established artists and organizations. The risk aspect is what leads to innovation, much the same way as it does in business or for researchers. We cannot overstate the importance of public investment which provides that first dollar through the door.
We understand that it can't be all about government support. Canada's business leaders are very supportive and invest in the arts, but they also recognize the importance of public investment. They also understand, along with many municipalities, that competitive cities include cultural and artistic opportunities as well as intellectual life.
The Canadian Council of Chief Executives says this:
||Businesses increasingly recognize that the development of vibrant, creative communities has a direct impact on their competitiveness, in particular by helping them to attract, develop and motivate employees.
The Canadian Coalition for the Arts feels that the Canada Council for the Arts is the key public vehicle for supporting development and innovation in the arts. It is efficient, merit-driven and cost effective and ensures that public funds get to where they can do the most good for individual artists and arts organizations, in communities large and small, in rural and urban areas alike.
The Council's peer review process, which is defended by the Canada Council for the Arts, its eligibility criteria and the fact that it is independent of political influence make it best positioned to promote the rich and diverse talent base in Canada.
The Council is reviewed every year by the Auditor General and issues an annual report to Parliament. Its obligation to report and its transparency are therefore guaranteed. In addition, all grants are available on line for review.
When we consider the questions this committee has put before us, we believe that the arts and our creative economy have an important role to play in the economic health and prosperity of Canadian citizens and businesses. It is widely recognized that arts and culture play an important role in the quality of Canada's cultural and community life. Citizens and businesses will tell you that quality of life factors directly affect their decisions about where to live, where to work, and where to invest. When you have a vibrant community with a strong artistic footprint, it attracts talent, investment, business, and competition.
In terms of Canada's future prosperity, the education of our children and youth is a big consideration. With the decline of arts education in schools, there is already a greater demand for cultural activities in the community. Communities that can offer cultural, artistic, and recreational opportunities to kids and youth will enable them to learn discipline, good values, teamwork, and leadership. We know that youth involvement in arts programs is an important factor in producing healthy, well-rounded, and fully engaged citizens. This in turn creates safe and healthy communities.
Another of the committee's questions asked about securing Canada's competitive place in the world. Over the past fifty years, Canada has refashioned itself from the economy largely dependent on farming and the exploitation of natural resources to become a country that plays on the international stage with an economic record recognized among the world's leading G-7 economies.
I am President of the Association des propriétaires de Québec, which has been in existence since 1933. It was founded in 1933, during the great crisis from 1929 to 1939.
Small- and medium-size businesses could, without subsidies, be created or consolidated by citizen patrons or parents. These parents have property frozen because of capital taxes. Their children are virtually forced into homelessness. It is not normal for a self-respecting society that believes in family, that believes in small towns, villages and citizens not to respect that principle.
That's why I am here as president. These people could sell their property without paying capital gains tax, with a guideline, of course. Jean Chrétien realized the sum of $100,000 in 1996. Stephen Harper and Paul Martin promised to do something about capital gains. It is time to look into this question.
I have here an article by Claude Castonguay, stating that the income taxes of the middle class and corporate income taxes, particularly the capital tax, should be reduced. My presence here is related to that. We have studied this question for a number of years, and a majority of ridings in eastern Quebec have proposed to take another look at capital gains. It is time that both those promises, that of Mr. Harper and that of Mr. Martin, were kept.
Mr. Chair, how much time do I have left?
Good afternoon, ladies and gentlemen. The Réseau Solidarité Itinérance du Québec represents 11 Quebec regional consultation committees that work with homeless people and 200 Quebec organizations that work with individuals who are homeless or at risk of becoming homeless.
Like Mr. Saillant, I am here today to remind you of the urgent need to continue federal funding for homelessness initiatives through the SCPI program, the Supporting Communities Partner Initiative, which will end on March 31, 2007, in approximately 150 days. There is currently no certainty that this funding will continue beyond that date.
The Réseau Solidarité Itinérance du Québec asks that funding for this program be provided in the next budget, for the years to come, but also that an announcement be made and funding released before the next budget to avoid a major break in service to the homeless on March 31, 2007, and that $50 million be granted a year to Quebec, which is three times as much as was granted in Phases I and II of the SCPI program.
According to various sources, there are between 150,000 and 200,000 homeless persons in Canada. According to the 1996 census, 10 years ago, there were 10,266 in Montreal who had not had a fixed address for one year, and 3,589 in Quebec City. Since then, the phenomenon has been constantly growing, resulting in an increase in the use of all resources working with homeless persons.
It is true that, for us, this is a national emergency and priority, and that was part of the May 2006 recommendations of the UN Committee on Economic, Social and Cultural Rights.
Allow me to talk about this program, which will be coming to an end. The general purpose of the program has proven itself since 1999, even though homelessness investments remain below needs expressed by the communities. To date, the SCPI has been a crucial program in preventing and relieving homelessness, permitting a diverse range of action designed to improve the living conditions of homeless persons. By increasing human resources, street work, community support and psychosocial intervention with the homeless, by improving facilities and equipment and permitting the construction of housing units and an increase in the number of shelter beds, the SCPI has enabled many people to get off the street and many others to avoid the slide into the street.
Without the SCPI, the groups would have been unable to deal with the increased numbers of homeless individuals or the worsening of their problems that has been observed in recent years. This program, I recall, is crucial and essential to preventing and relieving homelessness. We think it must be maintained in its generalist form and must be made permanent in order to guarantee continued intervention and long-term solutions for individuals.
In closing, we ask the members of the Finance Committee to take action for the government to announce, before the next election, that the SCPI will be extended and enhanced and to continue its funding. We would like to recall that only a massive investment in homelessness, together with a change in social and housing policies, can significantly reduce homelessness. Thank you.
Science centres are, by definition, investments in youth, in the role youth will play later, in the family and the influence it has on the role that young people play later on in life. They're also an investment for teachers, so they feel comfortable doing science at the primary and secondary levels throughout their lives, because they have trouble doing it. They also make it possible to let young people know what our businesses are doing and to encourage them to be inspired by them so that they too can one day create businesses and wealth.
The aproach to wealth isn't opposed to the approach to poverty. We need the former to address the latter, not to create poverty, but in order to establish social programs. I have to be careful of what I say, because I don't want to get into a dispute. I simply mean that it's like the left brain and the right brain. We need wealth creation so that our social programs are up to our values and needs. It's a response by one and the other. We have to address both.
A science centre is a place where you run, jump and play. You go there as a family, it's fun, you don't feel judged, you don't feel you're not good in science. You feel comfortable learning about everything that's being done and about opening up to wonderful things. It's a solution to problems we experience. For example, we know that one in two boys doesn't finish high school in five years and that one in five boys doesn't finish at all.
The demographic situation doesn't allow us to lose a single young person. And yet, we lose 20% of them. These young people who don't have high school diplomas won't be going to university. We can't afford that. We have to inspire young people and make an effort to prevent the social problem and needs from increasing. We have to be able to respond to those needs.
You've no doubt seen, as I have, that a number of studies conducted by various groups refer, in some cases, to a fiscal return of 200% for every dollar invested by governments. In other cases, they say that every dollar invested, directly or indirectly, in a cultural business can generate $3.20 worth of economic activity. In some cases, we have a multiplier effect of 8.5. Everything depends on the way the calculation is done.
There is definitely an undeniable economic impact. That's mainly because investment in the arts and culture contributes to making the lives of Canadians more complete. Cities are more vibrant, more interesting, more attractive, and we can attract more investment. Businesses choose to set up in a dynamic city where something is going on, where choices are available to us, where we have good schools, good universities and an active cultural life, where, every evening, we have the choice to read a book, to go see a movie or a play, or to go to a museum.
That's how investment in culture should be seen. When governments invest, the private sector invests. We have proof of that in Toronto. That city is dazzling proof of what governments and the private sector can do when they invest hand in hand in arts and culture.
Social housing is a collective form of property ownership. Lower-income households spend astounding percentages of their income on housing. All the money released through access to social housing is directly reinvested in the local economy. A welfare recipient who spends 80% of his income on housing and who enters low-income housing spends only 25% of his income on housing. The money thus freed up for that person is spent directly on essential goods, access to culture and so on. That freed up money will be spent locally.
This helps people and gives them more income to live instead of simply surviving. On another level, we must build and maintain social housing. In the communities, that enables people to have decent housing. This releases energy for doing other things.
When you have a serious housing problem, whether it's because you're paying too much, or you're living in poor quality housing or because you don't have any housing, you have to spend energy going around to food banks, and so on. When people's housing problems are solved, that frees up energy that they can use to do other things. In this way, they're given a chance to break out of the survival dynamic, to experience something else and, eventually, to return to the labour market and contribute to society in other ways.
If I may, I don't like the word “clientele”. This is a diversified population.
A few years ago, they were thought of as persons—mostly men—of a certain age who had alcohol problems. That's how they were viewed. Currently, this concerns increasing numbers of youths, minors, runaways, young adults and women.
Qualitative research is being done right now in Quebec City. What leads these women to exclusion and to life in the streets? This also affects certain families that experience impoverishment, a loss of housing, a loss of social network and so on. These people don't have housing or a social network and often have trouble getting access to public services. Their last safety net is often the community sector, which opens its doors more readily.
These are also people who have problems related to homelessness. This isn't just a problem of living on the street; it's quite complex. These people have physical and mental health problems that are in addition or are the origin of their homelessness problem. We see dependence problems that were there first or that appear, quite frequently among young people, when they smoke on the street. If they aren't drug addicts, they ultimately become drug addicts because they get noticed.
That's what I was thinking. Thank you.
I'll be brief. My question is for Mr. Saillant and Ms. Brisseau.
Last year, the Liberal government, with the NDP's support, passed Bill C-48. Last month, the Conservatives said that they would transfer $1.6 billion to affordable housing. The Bloc did not support that bill. I don't know why it's always said that the Bloc supports this issue. A large amount was transferred as a result of the agreement with the NDP. I don't know whether it's already been done, but last month it was announced that this amount would be transferred to a foundation.
This is for Mr. Pigeon. We talked about transfers for postsecondary education. When we were in Winnipeg, the principal of the school...
Lloyd Axworthy was minister when funding for postsecondary education was cut. The universities apparently requested that certain amounts be transferred to the research councils...
Yes, most people who pay taxes are middle class, mainly in the cities. We really must support these cities where it's said that housing is unlivable. No one seems to stop at anything that's catastrophic here in Quebec City. Half the city should be rebuilt. In 1957, the Laplante Report stated that the “hovels should be regilded.”
Millions of dollars were allocated to Old Quebec, but a lot of parishes now have uninhabitable housing. Are we going to destroy them or are we really going to help renovate these houses? That's the question we have to ask ourselves. Are we going to reduce the people of the middle class to a state of homelessness? That's the problem now.
Rather than start from the bottom with homeless people, we should start at the top and tell those people who are able to do something, who have initiative, who show dedication and who are cultivated, to do their duty. You elected members should pay attention to that.
Our cities have now gotten to such a point—especially Quebec City—that half of each of them should be demolished. Are you going to demolish half of Quebec City? In 1957, the Laplante Report stated that 14 areas of Quebec City were really dealing with hovels. No one is talking about renovations. No one is talking about giving people a chance to be free, or to be constantly supervised by intervening parties. It is really time to do something.
In 1974, together with the Liberal and a Conservative, I visited the University of Moscow and a large part of Russia during the Brezhnev era. It had already gotten to the point where the dwellings we visited were hovels. But socialism creates hovels and poverty.
Today, we must start at the top—not at the level of the homeless—to really create something.
An hon. member: These days the hovels downtown belong to private owners.
Dr. Marcel Tremblay: Affordable housing currently...
Welcome. Order. Pardon my French, but I'm just starting.
I would like to welcome the witnesses and members of the Standing Committee on Finance.
The mandate of the House of Commons Standing Committee on Finance is to study and report on the budgetary policy proposals presented to the federal government. This year, the theme is Canada's place in a competitive world. We've asked you in advance to limit your presentations to five minutes, please, even though we know it is not easy to do so. We will nevertheless respect that limit. If you want to glance over at me, I'll give you a signal when you have a minute or less left. At the end of five minutes, I will ask you to wrap up, all in order to promote discussion with the members and so that you can answer their questions.
We'll begin immediately by turning the floor over to a representative of the Mouvement des caisses Desjardins, Mr. Yves Morency, Vice-President.
Welcome, Mr. Morency. You have five minutes.
Perfect. Good afternoon, everyone.
With some 5.5 million owner-members, consumers and businesses alike, the Mouvement des caisses Desjardins is the leading financial institution in Quebec as well as the largest cooperative financial group in Canada. Because of its commitment to combining assets and values, Desjardins is involved in the community to an extent unmatched by any other financial institution, thereby contributing to the economic and social well-being of people and communities.
As a member of the Canadian cooperative community, Desjardins supports the joint recommendations of the Canadian cooperative sector, which you had a chance to look at last week and which we've also appended to our brief.
Canada is one of the richest countries in the world. However, to maintain this enviable position in an increasingly competitive world, Canada will face over the next few years a number of challenges. In addition to productivity is the challenge of an aging labour force. The federal government must therefore review its priorities and bring in practical measures that will help Canada maintain its enviable position on the world stage. It is important that our businesses enhance their competitiveness, that our labour force improve its skills and that our infrastructure meet present and future needs.
We feel that any views on tax and budgetary measures that the federal government could eventually put forward should first be broadened by challenging the roles of the federal government in the Canadian economy, as well as with the goods and services it provides. Since the federal government's expenditures and revenues account for close to 15% of real Canadian GDP, its impact on the overall economy is obviously major. It is essential that the government prioritize the production of goods and services in a manner more closely related to its mission: one need only think of defence, international treaties, security, diplomatic services and the environment.
We also think it important to give greater focus to private business in the production of public services, particularly through public-private partnerships, PPPs. These partnerships should of course be monitored and governed by strict rules to ensure that the quality of service will respect the standards that are currently in effect in the government.
As regards infrastructures, the federal government should establish a sinking fund not only to help ensure the funding of infrastructure replacement, but also to minimize its financial impact when needs become pressing. It is also important to adopt measures to improve the competitive position of Canadian businesses. We have observed a deterioration in our competitive position, particularly relative to the United States. This can be explained mainly by relatively low growth in the information technology sector since the beginning of the new millennium, by slower development of investments in machinery and equipment and by relatively slow economic growth in some regions of the country.
The federal government must take adequate measures to reverse this trend and in so doing help Canada be more competitive. More specifically, the government should favour tax measures that will encourage business investment. The tax burden of businesses should also be reduced in order to make it more competitive and thus facilitate investment.
In addition, the federal government could put forth tax measures that encourage innovation, which is a vital factor in improving competitiveness. Education and the development of human capital are also sectors that should be promoted.
We believe that Canada's prosperity depends on a fiscal rebalancing between the Government of Canada and those of the provinces. To do that, we feel that it is essential that the federal government restrict its budget spending to its own fields of jurisdiction. It must avoid draining its budget surpluses by increasing spending in every which way and find ways to transfer a good part of its financial leeway to the provinces.
The priorities and objectives of the federal government should also take into account the specific needs of the regions and their SMEs. We also feel that Canada must take even more advantage of its proximity with the United States in many fields, including that of venture capital.
We also believe in the need to encourage partnerships between Canadian and American universities. It would also be desirable for our young businesses, particularly those in the technology sector, to develop their business plans taking into account not only the dynamic of the Canadian market, but also that of the U.S. market.
Ultimately, efforts need to be made for the Canadian economy to increase significantly its productivity and enhance the competitiveness of its businesses and the quality of life of all Canadians.
Ladies and gentlemen, perhaps I could tell you at the outset that the Fédération des cégeps is a free and voluntary association of Quebec's 48 Cegeps. In fact, it is the Quebec counterpart of the community colleges in the rest of the country. Enrolment at our institutions totals 150,000 young men and women and approximately 50,000 adults.
It must be clearly understood that our concern is over the issue of transfer payments for postsecondary education. Committee members must know that, at this time, we estimate that the chronic underfunding of our colleges amounts to $305 million.
Let me cite some examples. Today, in Quebec City and Montreal, year in and year out, 5,000 men and women are unable to attend our colleges to take retraining or development courses. We are waiting to implement new programs, such as the technical electrical engineering program, which has been revised and should be introduced in all our cegeps. That costs $70 million.
So we feel that our financial difficulties are extremely significant at this time. Quebec's colleges are 86% funded by the Quebec government, compared to 53% for the universities. Unfortunately, we have virtually no federal funding at our disposal; funding for the universities is 13%. There are no tuition fees at Quebec's cegeps, whereas Quebec universities receive tuition fees.
Our message today is clear: in the next federal budget, we would like there to be a clear resolution of the fiscal imbalance and, consequently, transfers for postsecondary education.
I would like to remind committee members that it was in Quebec City, in December 2005, that Mr. Harper promised to correct the fiscal imbalance. On January 12 of this year, in a signed letter to the President of the Federation Council at the time, Mr. Klein, he made a commitment to create a Canada education and training transfer. In the federal Throne Speech, there was a formal commitment to solve the problem of fiscal imbalance. That commitment was also reiterated in Mr. Flaherty's first budget last April. And, lastly, Mr. Harper solemnly told Quebeckers, before the Board of Trade of Metropolitan Montreal, that his government would solve the fiscal imbalance problem. He also told the people of the colleges and universities that his government would solve the problem of transfers for postsecondary education.
As I said at the press conference this morning, it is clear in our minds that the time has come to deliver the goods. The government must genuinely shift from words into action and, in the next federal budget, restore the transfer to its 1994-1995 level, plus $2.2 billion current, $4.9 billion constant. We must correct, once and for all, for our colleges and universities, the problem of fiscal imbalance, the problem of transfers for postsecondary education. Let me repeat it before committee members: the goods must actually be delivered, and, in the coming days, weeks and months, we will be constantly watching the government so that the prime minister delivers the goods and meets the commitments he made in this city.
Thank you, Mr. Chair.
I'm also the Director General of Collège Édouard-Montpetit, the largest Francophone cegep in Quebec. I'm here today with Ms. Nicole Rouillier, Director General of Cégep Marie-Victorin. Both of us are members of the board of the Association of Canadian Community Colleges. I am chairman of the board.
Last February, the council held the Pancanadian Summit on Postsecondary Education and Skills Training. At the summit, the provincial premiers, ministers of education, postsecondary education stakeholders and the universities and colleges unanimously reaffirmed that it was important that the colleges and universities have resources enabling them to meet the training needs of youths and adults.
To that end, five priorities were established: promote greater access to postsecondary education—and the country needs that kind of measure; improve and guarantee quality of training and succession; update infrastructures, particularly technological infrastructures; improve access to the labour market for groups such as immigrants, Aboriginal people and persons with disabilities; improve the skills of persons already in the labour market and develop the research and innovation sectors.
The drop-out rate is high among high school students in Quebec and Canada. Many young people are not receiving postsecondary education or occupational training. And yet our country is oriented toward the knowledge economy. It is therefore clear that, as citizens, we must ensure that the largest possible number of young people and adults receive training that qualifies them and opens the doors of the labour market for them.
That said, as you will no doubt guess, we strongly support the Association of Colleges. It has already appeared before the Finance Committee, as have the Fédération des cégeps and all the provincial associations, which are asking the federal government to reinvest in postsecondary education and to ensure that those amounts enable Canadian colleges to provide training that meets the needs of young people and adults.
It is important that we move into action. To that end, the Association is making six recommendations. First, naturally, we must be able to develop a comprehensive pan-Canadian Work Force Development Agenda. We lack skilled labour in businesses. However, many young people are not receiving technical and occupational instruction. In that sense, we have a gap to fill and we must ensure that funding is available to provide this training. Furthermore, we must immediately reinvest in Canadian prosperity, that is to say guarantee the quality of postsecondary instruction and broaden access to it.
We also recommend that the federal government create, in the context of what is called the Canada Social Transfer, a transfer for postsecondary education at the 1992-1993-1994 level. The purpose here is to ensure that these amounts go to postsecondary education. We all know that the most meaningful investment that a country, developed or otherwise, can make is in its education.
We also recommend that there be a new Canadian system of financial assistance that responds more to the problem of student indebtedness. The Association recommends that a fund be created to improve technological infrastructure so as to ensure that our students are well trained and that that training meets the needs of the businesses that employ them. We need national funding to update our infrastructures and buildings.
We also recommend the creation of a research development and commercialization support fund. Colleges are increasingly conducting research. So it is important that we be able to update that research, which is in fact applied research. It enables businesses, particularly small and medium-size businesses, to gain access to research activities which they otherwise could not access.
Lastly, I would remind you that the Association of Canadian Community Colleges represents 150 colleges. I am sure that each of you has one in your riding. We are in more than 1,000 communities across the country. I am delivering this message on behalf of the 150 colleges that represent nearly one million students across the country so that, with the next budget, we can obtain funding reserved for college instruction. The objective is to better respond to the training needs of our youth and adults who need to retrain.
Good afternoon. I want to thank the House of Commons Standing Committee on Finance for receiving us this afternoon.
The union is still very much concerned by the issue of government intervention in the agricultural sector. It is therefore with renewed pleasure that I am tabling this brief today. In our view, the UPA's requests presented in this document come under the responsibilities attributable to the federal government with regard to maintaining prosperity in the agricultural sector of Quebec and Canada. Some of these obligations moreover fall to the Department of Finance Canada.
We therefore seek its financial support, but also its direct intervention to solve, quickly and effectively, the major problems facing producers across the country. As will be discussed in this brief, we ask the Department of Finance Canada to intervene in the following matters: among other things, the net income crisis in agriculture—you have tables that show this—incomes particularly in the pork and grain sectors, international trade, and the entire issue of taxation of agriculture and forestry, where we would like to see improvements that would ensure that agricultural businesses are less penalized, to ensure that they are maintained with the prospects we currently have.
I know that some of you know of the UPA. However, I'd like to remind you that we represent the some 43,000 Quebec farmers who work on 31 farms. Need it be recalled that agriculture in Quebec is the biggest primary sector activity, from an economic and employment standpoint. It essentially contributes to support for economic activity in a number of regions—I wouldn't say they're remote regions, but regions that are farther away from the major centres—and agricultural activity there means that those regions can support themselves.
The Government of Canada should therefore provide significant regulatory and budgetary support in order to maintain this type of agriculture and forestry operation in the country. In Canada, we work in human scale agricultural production structures. We want them to remain competitive and to meet consumers' expectations.
I am here today with Mr. Serge Lebeau, Senior International Trade Manager. Mr. Lebeau will make the summary presentation—a brief summary—of the brief that has been submitted to you. I will be available to answer questions later.
Members of the committee, first I'm going to provide an overview of the situation. You have a summary, which we've sent to you in both languages. I'll mostly stick to that summary. I hope to stay within the five minutes that are allotted us.
First, I'm going to talk to you about the income crisis. The net income crisis that farmers are currently experiencing is undeniably much more structural than circumstantial. The opening of markets and increased consumer demands create an economic movement favouring the concentration of agri-food players upstream and downstream from the farm. All these phenomena exercise downward pressure on profit margins of farm businesses.
Declining incomes have led to growing indebtedness of farms in Canada, resulting in a deterioration of their financial structure. Furthermore, as shown by Tables 1 and 2, which are presented in the summary, Canada's situation is deteriorating relative to that of the United States.
If you look at Figure 1, you'll see that the trend curve of net income has completely changed since 1996, whereas the Americans had a curve that was slightly below ours. Their net income growth has continued, whereas ours has completely declined. That has obviously had an impact on net assets.
Chart 2 shows that net assets have deteriorated in Canada relative to the United States. Obviously, poor income results and higher indebtedness; that's the explanation.
It's clear that energy costs, BSE and the exchange rate have impacted negatively on most farm sectors, particularly grain and hog production. The grain sector, for example, has been unable to recover from the prolonged period of low prices, particularly due to the subsidies paid to American farmers under the Farm Bill. As a consequence, the monetary balance of Quebec grain farms has fallen from a $20,000 surplus per farm in 1996 to a $6,200 deficit in 2005. According to the Canada Border Services Agency, the Farm Bill has an impact of about...
Am I going too quickly?
I'm very pleased to be here today, and I very much appreciate the opportunity to contribute to this discussion.
Let me say, having presented before the Standing Committee on Finance in two provinces regularly over the last decade, that each time I come I'm always encouraged by how passionate Canadians are about the quality of our society, and you hear it in the voices around the table here and in the prior panel. I want to thank the members of the standing committee for doing the work you do. I can imagine that it gets tough at times, but it's extremely important.
In my comments I will add to some of those you've heard already today and, as I understand, in some of the other presentations made to you as you've travelled across the country. Let me say that I speak as an individual citizen, as principal of McGill University, and also as chair of the Standing Advisory Committee on University Research for the Association of Universities and Colleges of Canada. In this regard we have a lot to be grateful for in Canada, having a deeply diversified and high-quality system of universities and colleges, notwithstanding the underfunding that you've no doubt heard plenty about.
Here in Quebec there have been, I think, very creative efforts over the last thirty years to build a very strong system of both education and post-secondary education. McGill is a university within the Quebec system that also ranks on the national and international stage. I believe profoundly as a Canadian that Canada needs and deserves to have at least a handful of universities that do spread the reputation of Canada worldwide, that attract students from around the world, and that have a strong and distinguished alumni group of networks around the world. McGill is also a national university: 57% of our students come from within Quebec and 25% from across Canada; the rest are international.
The federal government has a profound role to play in the research enterprise that is so strongly affiliated with universities in Canada. Canadian universities in the western world provide more R and D contribution to society than any other university sector. If we look south of the border, the differences are quite dramatic.
If you think about the various concerns you've no doubt heard about on this committee, from agriculture and farming, to health care, to nursing, to housing, to education, Canada must have systems that add value and are of high quality. If we don't have this level of quality and preparation of people who compete on the world stage, we won't have the investments, jobs, and activities at home on which we depend. The federal government has always had a role in university research, in graduate education, and in the preparation of highly qualified personnel, and I urge the government to stay the course in that regard.
Just ten years ago we were losing our very best talent. It wasn't a numbers game; it was literally that top talent, field by field, was being lost from Canada, because in the mid-1990s the federal government, along with provincial governments, took out their investments in post-secondary education, and at the federal level they dramatically cut the investment through the research granting councils.
It was only in the wake of understanding the dilemma that was being created--indeed, the crisis that was being created--in having the kind of talent on which we depend for success that reinvestments in the granting councils and new, innovative research programs were created. For the first time the federal level in Canada created the four pillars of investment upon which a great knowledge society depends; that is, research granting councils' support through the Canada research chairs program; graduate programs and the millennium scholarships for highly qualified personnel; and for the first time, indirect costs, meaning that the full costs of research funded by the federal government were beginning to be addressed--though we've not gone far enough in that--and major infrastructure support.
We've succeeded on the basis of that. We've recovered our lost ground. We've gained great advantage, but we now need to stay the course.
I'm happy to answer questions. Thank you.
Good afternoon. Thank you for hearing us today.
When the Department of Canadian Heritage introduced the “Tomorrow Starts Today” program in 2001, the Arts Presentation Canada component embodied, for the first time among multidisciplinary performing arts presenters, recognition of the importance of the presentation link in the creation-production-presentation chain that conveys the works to the public.
We are conveyers. At RIDEAU, we know that the health of presenters guarantees the health of creators and artists, and that this synergy requires a political vision and resulting support.
The Réseau indépendant des diffuseurs d'événements artistiques unis, RIDEAU, was founded in 1978 and today has 138 members.
Over the years, RIDEAU has built bridges to realities outside Quebec. ARDAS, the Alliance des réseaux de diffusion en arts de la scène, links us to French Canada, while AREA, the Association des réseaux d'événements artistiques, permits productive exchanges with French-speaking Europe.
While the RIDEAU network has expanded for nearly 30 years now, the introduction of a presentation policy in Quebec, of which 2006 marked the tenth anniversary, was undoubtedly a decisive factor.
The presentation of performances is a quantifiable activity. The figures of the survey on performance attendance conducted by the Observatoire de la culture et des communications du Québec show that, in 2005, the 103 respondent organizations of the RIDEAU network presented 6,206 paying performances, attracting some 2,954,927 spectators and generating nearly $80 million in ticket revenues, which of course also generates revenue for our governments.
The investments of the Department of Canadian Heritage in our network also correspond to approximately $3 million, in 2005, out of $7 million invested in Quebec. If we exclude the major festivals and member networks, the figure is approximately $2 million. Since that amount has generated $80 million in box office revenue, we can undoubtedly state that it's an investment that has a significant leverage effect on the economic activity it generates.
We believe that, since the presentation of the performing arts is such a vital activity, we can conclude that it responds to a need in our society. The organizations that engage in it are unfortunately poorly equipped to prove this. We are recommending that we be able to encourage organizations that produce statistics to develop statistics on arts and culture, more specifically performing arts presentation.
RIDEAU is also about networking, and that networking is particularly well embodied in an annual event called the Bourse RIDEAU, which will celebrate its twentieth anniversary in 2007. Over the years, it has become the largest market for the Francophone performing arts in America. In 2006, 73 artists and companies from Quebec, the rest of Canada and from Francophone Europe showed their creations to more than 300 mainly Canadian presenters, but also presenters from France, Belgium and Switzerland, and 176 artist representatives who set up their stalls on what's called the Place du marché, which promotes business transactions.
Since the vitality of creation depends on presentation capability, we also hope that programs will be maintained promoting performing arts presentation, which is often the poor cousin of the creation-production-presentation chain, but which gives Canadians access to diversified and high-quality programming. Like the colleges, you probably have an auditorium in each of your communities as well, and that's an invaluable asset.
I'd also like to talk briefly about organization management. It is a well-known fact that the community suffers from a lack of resources, more particularly human resources. In addition, a number of structures rely on volunteer workers, which does not facilitate management. We therefore hope to emulate the Canadian Conference of the Arts in requesting a softening of administrative requirements.
On another topic, since the program was introduced, performing arts presenters have always recommended that a multi-year funding structure be put in place. While the horizon of the first years did not permit it, the announcement that the program would be renewed over five years opened up other prospects. However, the decision to move to this type of funding has recently been suspended.
We therefore recommend that consideration again be given to multi-year funding, which promotes long-term management and which, in our community, is intrinsic to our way of working on a number of seasons in advance.
Having regard to the cycles that govern our actions and the complex operation of matching financial arrangements, we would like organizations that show they are soundly managed to be entitled to a form of multi-year funding.
Lastly, the purpose of this presentation has been to show that the performing arts presentation community is extremely dynamic. We especially hope that one point in particular has emerged.
While the vital nature of creation is expressed across this country, at the end of the chain, one link makes it possible to transmit it to the public. That link is the presentation of the performing arts. Just as a library provides access to reading, as a broadcaster gives you access to your favourite television series, the presentation of dance, music, song, theatre, the circus arts and, increasingly, the interdisciplinary arts depends, in many cases across the country, on performing arts presentation organizations.
And now to Heather Munroe-Blum.... I said in the last session that I agreed with everything the Laval president said, as a former academic, but in the case of McGill, I'm not only a former academic but also a former student, the son of a student, the father of a student, and a former professor. So I might have a little bias in favour of McGill, which perhaps I should declare in advance.
My first question would be this. If one has the choice, better a greater emphasis—I don't think it's an all-or-nothing, zero or positive choice—between additional direct federal funding to universities for research and for research chairs and indirect costs, etc., on the one hand, versus a greater dedicated transfer from the federal government to the provinces, from McGill's point of view, which would you say would be the higher priority, even though I know you want both?
Do I still have some time? I hope so.
My next question is for the president of McGill. I didn't know that McGill is Canada's best-known university, but I'll take that, as written in this thing.
I had an opportunity recently to meet with some of your colleagues from York, McMaster, and Ryerson. They had a meeting with me for discussions. Their issue, at the end of the day, was obviously funding for research, but they had two other things that were of interest to me, and since you're here, I'm going to ask you. First, they were concerned about the quality of education based on overcrowded classrooms and those kinds of things. Quality was an issue. Could you comment on what McGill's feeling is on quality?
Second, they also had an issue with post-graduate work and their ability to attract, again, quality post-graduates internally, but specifically externally, such as international students who may not be able to get here because of some immigration issue, and why we care about whether they go back or not. If you could comment on that, I'd appreciate it.
First of all, let me say that the London Times supplement, which just came out, ranking universities around the world, has ranked McGill as the only Canadian university in the top 25 for many years consecutively, in fact since the ranking came out.
Second, on the quality of education, we suffer from underfunding, and I want to speak about the federal role in this regard.
One way of addressing the quality of education is through transfers. But I'd submit that the other is to pay the full cost of the research that's funded at the federal level, and that's what indirect costs are. It's a terrible name. It's opaque; it's hard to understand. What does it mean? It means that when the federal government gives a grant, they pay a full dollar for every dollar they spend. Right now, they're not doing that, and until we get to 40¢ on the dollar, we're undermining the quality of education, and we're undermining the provincial operating grant, because universities have to pay for that research somewhere, so they do it on the backs of students, whereas university research should enrich the education of students.
On post-grad and graduate students, there are discriminatory practices with respect to work permits for graduate students in the big cities in Canada. We're in a demographic deficit, not a surplus. We're trying to attract and retain people here. You could fix this and it wouldn't cost a penny, and it would mean that graduate students who come from other countries, where other countries have paid for their undergraduate education--they're not all in the developing world, far from it, and in fact the majority are not--would have a better incentive to stay here. So I think it would be a good thing to do.
We ought to also be more actively recruiting graduate students from around the world.
Before continuing, I must ask three questions, including two in French, I hope.
I apologize in advance to the translators, but I will give this a try. Okay?
It's a well-known fact that the five big banks frequently use tax havens to increase their return on investment.
That's a problem, according to the Auditor General. It was also a problem for her predecessor, Denis Desautels.
Is the use of tax havens a technique adopted by the Mouvement des caisses Desjardins?
That depends on what you mean by “funding for grade 12”. The system in Quebec is different. We have six years of primary school.
The Chair: It's separate.
Mr. Serge Brasset: Yes, it's separate. Everything's different.
We have five years of secondary school, two mandatory years of Cegep, then university. It's a completely different system, perhaps more similar to the European system, the LMD, the licence, master's and doctorate, which consists of three years of university.
The difference is that four years of university are subsidized in the rest of the country, whereas, in Quebec, we subsidize three, plus two years of Cegep, which cost roughly the equivalent of a year of university.
It ends up being the same amount.
Mr. Boucher, your message was extremely strong and clear: the time has come to deliver the goods. I'm not here to defend the government.
However, this morning we heard a discussion about how the federal government could reduce Canadians' taxes, the GST or income taxes. In addition, the government could tell the provinces that it has created the room so that they can occupy it by increasing their taxes, if they wish. As a result, and since the federal government has cut its taxes, we could conclude that that's one way of correcting the fiscal imbalance, at least in part. However, that causes a problem: the government promised during the election campaign that it would cut taxes and the GST for citizens, not for the provincial governments.
From your viewpoint, would such an action be a good one in reducing the fiscal imbalance, or not?