I'll call the meeting to order. This is our last day of pre-budget consultation as far as listening to witnesses is concerned, and then we'll be deliberating and looking after our report.
We want to thank the witnesses for coming forward. We're looking forward to your presentations. We have full panels all day long, so we do ask that you respect the five-minute time limit, and we'll try to keep it as close to that as we possibly can.
That's not the end of the time. After that, we'll get into the questions and answers. It's just that if we give more time for presentations, there will be less time for questions and answers, and my colleagues get a little nervous when I don't give them enough time, so we will respect that.
I'll introduce you and yield the floor to you in order. I think that works out the best.
We have, first of all, BIOTECanada, with Mr. Peter Brenders, who is the president and CEO.
Thank you. You have five minutes.
: Bonjour et merci
to the committee for the opportunity to appear before you today.
Here with me today is the chair of our emerging companies advisory board at BIOTECanada, Dr. Paul Wotton, who is the CEO and president of Topigen Pharmaceuticals, located here in Montreal.
This is our third presentation to this committee in recent years, and we appreciate the attention and support that you have offered our recommendations in the past. In particular, we appreciate the leadership this committee has offered in terms of LLC recognition and the scientific research and experimental development, or SR and ED, representations.
Biotech now comprises one-third of the global economy. That's according to Dr. Gurinder Shahi, from the University of Southern California. It initially kind of caught us a off guard, but we thought about it a bit, and taking a look at the breadth of the technology, we've come to realize that in fact this is the reality that technology is bringing to the world.
The biotech industry is the 21st century catalyst for a breadth of all our industries. For example, in the auto industry, we're now seeing soybean oil used to make car seat foams and plastics for bumpers. The forestry industry is finding new technologies to improve their environmental footprint and actually make new products such as nutraceuticals. In health care, we hear of new vaccines and new treatments for debilitating diseases, but also new diagnostics; in food processing, healthier foods with omega-3s and alternatives to things such as trans fats; and in the energy sector, renewable supplies for energy. Biotech is a driving force in modernizing our traditional industry and allowing them to grow their ability to be competitive.
As a country, Canada has long been regarded as an early innovator in leading biotech research and capacity. What we see today is every country in the world racing to catch up and exceed what we have built. Nations that a few short years ago were deemed to be developing economies have launched into capturing the potential of biotech. China has 200 government programs comparable to those of our CIHR and Genome Canada, employing 20,000 researchers. Malaysia has created a research tax incentive program offering 100% tax exemption for 10 years. South Korea has launched a $60 billion investment into its R and D infrastructure.
We cannot afford to be complacent about our ability to compete and win attention. This is why we've focused on modernizing and improving our competitiveness with the SR and ED program.
We are a research-intensive industry. Our biotech industry contributes more than 12% of the entire Canadian business expenditures in research and development. Other countries want this activity. In fact, more than 30 other nations have created research-based investment incentives within their tax regimes. Our Canadian government needs to signal to the world that it means business when it states that it wants to make our economy more globally competitive. Simply put, let's align our incentives with our objectives.
We're recommending two changes on the SR and ED tax credit program: one, remove the Canadian-controlled private corporation, or CCPC, restrictions; and two, increase the expenditure limits that were set in 1985 at $2 million, raising them to $10 million.
Let me explain in a little more detail.
Today the CCPC restriction for refundability is counter-productive to the original goals of the SR and ED program to build capacity here. Our life sciences industry forecast earlier this year highlighted that more than 40% of our companies are looking to secure more than $20 million in their next round of financing. Canada's capital market is simply too small and too risk-averse to provide this assistance directly, so our companies look for other forms of financing such as going public or getting foreign investors. As a result of that, they lose their CCPC status and their refundable credits. So the irony is, just when they get the capital they need to succeed, they lose the business case to keep the jobs here in Canada.
Our second recommendation focuses on the expenditure limit. As I said earlier, this $2 million expenditure limit for refundable credits was established in 1985. It does not accurately reflect the cost of research today, 20 years later. We're recommending that this be raised to reflect inflation and other costs of research, to $10 million.
In summary, a tax system that is entrenched in 1980s economic models is not what Canada can offer the world. We can do better. We must do better.
Good morning, ladies and gentlemen. I am William Curran, the Library Director of Montreal's Concordia University. This morning, I am speaking on behalf of the Canadian Association of Research Libraries.
I want to thank the committee for this opportunity to address issues of importance not only to the research libraries but to the government's own agenda of ensuring competitiveness and fairness.
The Canadian Association of Research Libraries, known as CARL, compliments the Government of Canada on its continued commitment to enhancing research and research infrastructure. The government recognizes that Canada's edge in this global economy is tied to its investment in education, to its support for the way knowledge is transmitted, and to how it helps enable Canada to adapt to changing technologies.
To maximize these investments, CARL proposes modifications to the tax system to enhance access to research materials and to promote the development of a skilled and knowledgeable workforce through the promotion of e-learning.
As Canada moves towards a knowledge-based e-economy, it will be increasingly important to create first-class, pan-Canadian networks of online learning resources. It's important to support the increasing demand for online education, instruction, and training and to increase Canada's competitiveness internationally.
The use of e-learning, or technology-assisted learning, by Canadian institutions has increased by as much as 30% over the past five years, and library participation, of course, has kept pace. Academic librarians, faculty, and staff are providing direct access to many thousands of online journals and databases and are increasingly integrating curriculum development, electronic library resources, and learning technologies in online courses.
In its Advantage Canada document, the Government of Canada demonstrated its understanding that talented, creative people are critical to a successful national economy over the long term. In this context, lifelong learning is vital to skills development and personal upgrading. E-learning is a dynamic way of providing these skills. It provides the key to access and delivery of high-quality educational materials anytime, anywhere.
CARL proposes that the government implement tax credits as an incentive for individuals to pursue their education by electronic means. To make e-learning accessible to all Canadians, the government must also continue its commitment to initiatives such as CANARIE, a not-for-profit corporation that manages CA*net, a sophisticated research broadband network that links Canadian universities, research hospitals, and other science facilities in other countries. The budget of 2007 provided money to allow CANARIE to maintain the CA*net for the next five years, and CARL strongly supports this investment in this first-class Canadian network of online learning resources to serve the needs of the country's learning communities.
CARL supports the position put forward by the Association of Universities and Colleges of Canada that the government must continue its investments in university research in a balanced manner that addresses equally basic research, human capital, leading edge infrastructure, and support for the indirect costs of research. Canadian research libraries benefit from the indirect costs program. Funds are used to access information resources that are vital to any researchers in any given field.
Previously, the indirect costs program covered approximately 25% of the overall research grants made to universities. The increased investments in budget 2006 and 2007 have raised the average reimbursement rate. However, for Canada to be internationally competitive, a 40% reimbursement is the target to aim for. CARL asks the government to continue to increase its investment in the indirect costs program.
On tax fairness, the government has the opportunity to make a small but significant tax change to make Canada's research community more competitive. Currently a university library receives a full rebate on the GST it pays on printed books and subscriptions to magazines and periodicals containing less than 5% advertising. However, scholarly research material is now overwhelmingly delivered in the electronic format. Because of the way the scholarly research material is defined in subsection 259(1) of the Excise Tax Act, such material in electronic format does not qualify for the full rebate. There is no evident justification for this discrepancy. The funds that could otherwise be freed up could be used for the acquisition of additional information resources, thus supporting the government's agenda to develop a skilled and knowledgeable workforce. The government can ensure tax fairness by providing the GST rebate to scholarly material in electronic format, as it presently applies to printed material.
On delivering value to Canadians, this government has shown in its past two budgets that it is committed to delivering new opportunities to ensure a brighter future for Canadians. In its Advantage Canada document, the government stated that by creating these choices it was also providing the educational opportunities Canadians needed to thrive in a knowledge economy.
Good morning, and thank you.
The Government of Canada uses part of its tax revenue to put in place the infrastructure that supports the quality of life that we enjoy here in Canada. My submission today addresses the need for an investment in a piece of our infrastructure that is critical for both science and industry.
Since I wrote my original brief back in August, events have overtaken us. The current crisis in the medical isotope supply, especially for moly-99, now underlies the critical role that the NRU reactor has been playing for at least 20 years. The maintenance-related shutdown that has precipitated this crisis highlights the urgent need for a replacement.
Although NRU is now 50 years old, the world depends on it for one-half to two-thirds of all of its medical isotopes. The innovative and flexible design of the NRU has enabled it to dominate an industry that was invented by Canadians and that barely existed when NRU was originally built.
A new research reactor will provide medical isotopes, enable cutting-edge materials development and engineering research, and provide a solid knowledge-based foundation for the development of next-generation power reactors. It is a national issue that transcends the mandates of individual departments or agencies. It relates to science, energy, health, environment, international relations, and education. It is a fundamental piece of Canada's infrastructure for science and industry, and it represents an opportunity for leadership in vision from the centre of government.
I believe that we now stand at a crossroads in neutron research. Science and technology are poised to change in many fields, and we have an opportunity to be leaders, building on the legacy of those who designed and built NRU.
Generation IV is an international collaboration to develop advanced fuel cycles and radically new reactor designs to increase our utilization of nuclear fuels by up to 100 times. The proven uranium reserves in Saskatchewan will last us 60 years at the current usages, but under a Generation IV system they could be supplying our electricity power needs for thousands of years. A flexible research reactor would provide a crucial test environment for the development of fuel elements and materials that would withstand the extreme conditions that will exist in a Generation IV core. We have led the world with CANDU; we can be at the front with Generation IV.
We have already dominated the world supply of cobalt-60 and moly-99, providing treatments for up to 20 million patients per year out of Canadian reactor-derived isotopes. The new compounds and isotopes are constantly being developed for more targeted treatment and diagnoses. We invented the medical isotope business, but we need to continue to innovate if we are to continue to create new markets and develop new products. A flexible research reactor capable of both production of existing products and development of new ones will keep us at the forefront of this critical field.
The foundations of neutron beam research were laid by Canadians working at the NRU. The triple-axis spectrometer, which earned Professor Brockhouse his Nobel Prize in 1994, and the engineering stress scanner were both invented at NRU and are now to be found in every single neutron beam research facility in the world. Canadians are taking the lead in new fields, using cold neutrons to study biological systems, using reflectometry to investigate corrosion and bio-compatible codings for medical implants, and developing neutron holography to study the structure of proteins in their native functional state. A powerful state-of-the-art facility is essential to keep this research alive and in Canada.
Eight hundred million dollars is a lot of money. If we build the CNC, it will generate 2,500 person-years of engineering design work, 2,500 person-years of manufacturing work, 4,000 person-years of construction and administration work that will appear here in Canada, generating tax revenues and jobs within Canada. Approximately $160 million of business will be generated for small and medium-sized enterprises developing and producing reactor components. This is expertise that is technically advanced, and that will be developed within Canada, allowing us to compete in the growing world market for nuclear power reactors.
NRU cost $500 million in current money and has clearly paid back its investment very handsomely. When the CNC is operating, Canada will have a state-of-the-art research facility that will enable innovation in reactor design, medical isotopes, and materials research. Thousands of researchers, scientists, engineers, and students will bring their products and ideas to the new facility. They will build on the strong tradition of excellence established at the NRU.
Where will the CNC lead us? To be honest, I have no idea, but when the NRU was built, nobody was thinking about advanced fuel cycles. Nuclear power was just starting to be adopted, and nobody was concerned about global warming or the environmental impact of our overuse of fossil fuels, yet it has underpinned the development and export of CANDU nuclear reactors that generate clean, reliable electricity around the world.
The CNC will continue Canada's leadership in the peaceful use of nuclear power, a role we adopted when we became the first nuclear-capable nation that did not build a nuclear bomb.
When NRU was built, Canadians were just inventing the medical isotope business. The world had never heard of moly-99. Now everyone knows at least one person who has benefited from either treatment or diagnosis from medical isotopes. The CNC will enable both the production of existing products and the development of new ones.
When NRU was built, most of the materials and technologies that have transformed our lives were unknown. The first silicon transistor was made the year before NRU came online. High-Tc superconductors would not have been believed. The shape-memory alloys, central to many medical implants, were unknown. Plastics were just junk.
Good morning, and thank you for inviting us to present our brief.
The Catholic Women’s League of Canada, founded in 1920, is the largest national organization of women in Canada, with nearly 98,000 members represented in every province and territory and in the military. The league is organized and committed to serve all citizens and has often received the commendation and keen appreciation of federal, provincial, and municipal authorities for the voluntary services ably performed by its nationwide membership.
The league’s main concern is justice for all, being mindful of the needs of the most vulnerable in society. League members believe that the guiding principle behind taxation law should be the welfare of each and every Canadian citizen. The goals of our tax law would be to ensure that the basic needs are met for each citizen, including a healthy standard of living and a sustainable ecology. Taxation should be based on the idea of, from each according to means, to each according to needs. There must be a just balance between personal and corporate tax. Corporations do not need to be gouged, but neither should they be given tax breaks at the expense of individual taxpayers. In terms of activities funded by the government, social programs that benefit citizens and that care for the voiceless and the marginalized need to be priorities, not the improvement of bottom lines.
A country as rich as Canada should not have the level of poverty that it has, especially among children, single parents, and the elderly. Child benefits should not be taxable in order to ensure that the money goes to families and is not clawed back through income taxes.
We would like to suggest a tax credit for stay-at-home parents. Such benefits and tax credits would put more money in the hands of parents, thus ensuring that children do not go hungry. Unfortunately, in Canada today too many families are forced to rely on food banks and clothing depots.
The same is increasingly true for seniors. We have serious questions as to whether the guaranteed income supplement and the old age security pension meet the needs of seniors. The lack of adequate affordable housing for low-income families, the disabled, and many seniors is another concern that needs to be addressed by the federal government.
Literacy is a major factor in breaking the poverty cycle. Literacy programs in schools are all very well, but there is a high rate of illiteracy among adults, particularly with recently arrived refugees and in aboriginal communities. Literacy programs for adults are essential. Literacy skills can lead to job opportunities, self-sufficiency, and thus more people contributing to the tax base. In a related matter, the league supports tax exemption for post-secondary school textbooks.
Poverty and poor health often go hand in hand in Canada. Canada’s publicly funded health care system must be maintained for all. One enhancement of the system would be an effective, cost-efficient national pharmacare program. National home care standards and a tax credit for caregivers should save health care dollars in the long run. Palliative care must be an integral part of the health care system. Quality palliative care does not call for costly high tech intervention and respects the dignity of the dying.
The statement in the second question by the committee, “given that corporations provide employment… and contribute to the economic growth of the nation” raises some flags. What kind of employment is being provided--full-time with benefits and a decent wage or part-time at minimum wage and no benefits? If the latter, such employment is of little or no benefit to Canadians and does nothing to enhance family life and health. The proliferation of part-time employment saddles many Canadian workers with the burden of multiple jobs at long hours for little pay. Family life inevitably suffers.
There appears to be a connection between the deteriorating health of the environment and rapid economic growth. Tax incentives for fostering environmental protection, reducing greenhouse gases, and using renewable energy sources would be of great benefit to both the Canadian environment and ultimately the economy. Care for the earth at the present time will ensure a viable future for our children.
While much concern relates to Canada, the league recognizes that members live in a global world and that they have a responsibility towards their neighbours and other countries. Once again, the league stands in solidarity with the marginalized, requesting debt relief with burdened developing countries, and the re-establishment of funding to MaterCare International, for example. A resolution adopted at our 85th annual national convention in August this year asks the government to link financial support, i.e., tax breaks, to Canadian registered mining companies adhering to international and Canadian standards of mining practices while doing business in developing countries. The premise “do no harm” should be kept in mind in all financial considerations in connection with underprivileged countries.
Be assured that league members across the country will continue to follow these issues closely to ensure that the most vulnerable in society are protected. It is our hope that the outcome of these pre-budget consultations and the resulting effect on our tax laws will reflect these concerns.
Good morning, Chairman and members of the committee.
I would like to start by thanking the Standing Committee on Finance for this opportunity to present on behalf of our members in the diverse communities that we represent. The IMAA is a non-profit national arts service organization that promotes and advances the interests of a vibrant media arts community. We represent over 80 independent film, video, and new media production, distribution, and exhibition organizations in all parts of Canada, serving over 12,000 independent media artists and cultural workers.
First and foremost, I would like to acknowledge the federal government for recognizing the value and importance of the arts in Canada through its investment in the Canada Council for the Arts, with the additional $30 million in annual support. This is an encouraging first step towards accomplishing the many vital goals held by the arts and cultural sector. Still, the IMAA wants to underline the fact the $30 million does not go far enough to relieve the pressures faced by the smaller artist-run organizations and independent artists.
To prove this, we can look at how the supplementary fund was allocated in this 2007-08 fiscal year. These funds barely addressed the needs of the larger traditional performing arts organizations and did not even come close to addressing the needs of the smaller organizations outside the urban centres, specifically organizations that support media arts practices. This is highly problematic, considering that the stated plans and priorities for both the Canada Council for the Arts and the Department of Canadian Heritage are for cultural and creative development in the 21st century, with an investment in new practices. The current reality is that more artists are working within the media arts, with a new focus on mediums such as electronic, Internet, video, and multi-disciplinary practices.
We urge the federal government to increase funding to match the needs of these diverse practices. Therefore, our first recommendation is for the increase of funding to the Canada Council for the Arts by an additional $100 million annually.
The second point I would like to make is our often-stated claim that cultural funding must be made statutory. Cultural spending should be acknowledged in all aspects of Canadians' lives, from health to education, leisure, technology, and the economy. Arts organizations are the backbone of the independent arts sector and provide a multitude of services within our communities. These include access to equipment, resources, and training, provision of dissemination and exhibition opportunities, as well as help in creating healthy, thriving communities.
Programs such as the Tomorrow Starts Today program help to create stability within the Canadian arts and cultural sector. As we approach the end date of this multi-year funding initiative, we emphasize that these funds are indispensable to the arts in Canada. We strongly recommend that the federal government make permanent the Tomorrow Starts Today initiative.
This fund supports programs such as Cultural Spaces Canada. This support must be sustained and developed further. The Cultural Spaces Canada program is essential for assisting organizations to establish permanent venues for the creation and presentation of artworks, be they theatrical plays, exhibitions of visual arts, musical performances, or cutting-edge screenings of media art. We need to create stability within our cultural organizations.
Arts funding contributes positively to the economy in many different ways, including through creation of cultural vibrancy in cities and towns that attract corporations to these centres. Given this, by instituting a portion of the federal budget as statutory funding, the government would be making a significant move towards showing its commitment to and investment in the arts in Canada.
The 2006 report by the Standing Committee on Finance identified that a region's artistic and cultural life is an important factor in attracting and retaining employees and businesses, who may be drawn to locations with artistic and cultural amenities that enhance well-being, quality of life, diversity, and prosperity. As the finance committee this year examines the Canadian tax system for its 2007 report, it is essential that you be reminded that businesses and corporations directly benefit from a healthy arts and cultural community.
We would like to see the level of taxation, fees, and other charges take into account the benefits a corporation receives within the global picture. By funding arts organizations and art activity across the nation, the government is stimulating increased economic activity while enhancing the cultural vibrancy of a community.
Arts organizations do not solely depend on federal funds to operate. An incredible amount of time is spent seeking alternative sources of funding, such as corporate sponsorships, foundation support, and other funding initiatives. However, there is not enough incentive for donors to fund arts and cultural organizations.
The IMAA thus urges the federal government to provide a cultural donation tax initiative for donors, to encourage the funding of arts and cultural organizations. This tax initiative should be supportive of the arts and culture communities of Canada, should not require undue pressure on the part of the staff of these organizations to maintain that support, and should not limit or lessen the amount given to any funding body for the purposes of supporting the arts.
Our final recommendation speaks about the urgent need for support for the preservation and archiving of media artwork. The preservation of film, video, and new media work is a major concern among all organizations that have media art collections, including the National Gallery of Canada. The works in question are audio, video, and film collections and include experimental, narrative, and documentary works by artists. The vast majority of these works have been financed by public money and are degenerating rapidly. It stands to reason that public money should be invested in the preservation of these works.
So we urge the federal government to increase support to the Audio-Visual Preservation Trust of Canada, the Canada Council for the Arts, and the National Library and Archives Canada, specifically to expand the process of preservation, archiving, cataloguing, and collection maintenance of Canadian artworks.
Thank you. I would be happy to answer any questions you have.
I am here to talk about a major problem which affects every community with fewer than 2,000 inhabitants and who live in areas which do not have access to an important tool today, namely the cellular phone.
To truly occupy the land, a country must really be everywhere and work with the tools of its time. Today, working with the tools of the time means having access to computers, amongst other things, cell phones, and means of communication for visitors, residents, workers and people who want to move to the area. But in our area, which is the Regional County Municipality of Montmagny, located close to the U.S. border, we cannot use cell phones, we cannot communicate that way.
We received funding from the federal and provincial governments under phase I of the Internet project. That was under phase I. So there is only one connection in the village. They did not connect people's homes, but only the municipalities and the schools. Perhaps you were told that everyone across the country would be connected, but that did not happen. Municipalities and schools are not citizens. That was under phase I, and we were happy with it, but it's not enough.
Today, I want to focus on cell phone communication. Small communities are making super human efforts to keep people, to get them to live there, which many people do, but professionals who want to create their own businesses and work from home are leaving, because of a lack of access to Internet and cell phone connections.
We created a regional park, and people come from everywhere to hike, canoe on the rivers and indulge in other sporting activities. There is one tool which would make these people feel more safe, but it is unavailable, and I'm referring to cell phones. Something might happen while you're out hunting, hiking in the woods or canoeing. Today, everybody carries a cell phone. But when you don't have a cell phone, it's too bad, but you won't get any clients. This situation did not exist in the past, but it does now, and it is preventing our municipality from growing.
We are asking the federal government to develop a program to help small communities attract businesses. We are not asking for cooperatives, or our own antennae, or for the government to change the world or to change technology. That's not what we want. We want to attract businesses to places where they would normally not come because it would not be profitable enough. But these places are not profitable right now and that is not about to change. There are not enough people and we need help. We believe that it is in the federal government's interest to make every part of its territory accessible. If it does not do so, people will leave these areas, which is quite understandable.
People are concerned about security. As you know, everyone wants to live in affordable housing, have access to health care services, to good roads and communication. If one of these things is missing, people will leave small communities. You need to provide a minimum of basic services. People need access to these services, otherwise they will leave our area. Politicians can work and give as many speeches as they like, but that won't help. We need these basic services, and the federal government must help us, otherwise people will leave. In the RCM, we can support each other, we can invest some money, but on our own we cannot really make a difference.
Today, strange as it may seem, I have done the federal government a favour. The government must make basic services available everywhere. It would cost less money than buying a large frigate for the Arctic, and it will allow people to stay in their communities.
Thank you very much.
Thank you, Mr. Chairman.
The National Council of Women of Canada thanks the committee for the opportunity to present some observations about our brief. We've been making annual briefs to this committee for years, so I will refer to the fact that some issues have recurred year after year.
The National Council of Women, founded in 1893, is a non-denominational federation of women's organizations, taking in organizations and individuals. It works on a very broad, holisitic approach and has presented to the government steadily. We were known as the Parliament of Women when women had no vote and no representation.
We also wish to congratulate our sisters in the Catholic Women's League on the excellent presentation they just made. We agree with everything they said this morning. You'll be interested to know that women present a very unified front on some very basic issues.
On taxation, the National Council of Women notes that the government has once again forecast a large surplus in revenue but has only incrementally increased the basic personal income tax for all taxpayers. I note that it's around $8,800 for the coming tax returns. There's been no real attempt to address the growing gap between the well-to-do and the lower-income citizens. The reduction in the GST, which is a consumption tax, benefits higher-income persons more, since only the most basic needs--food and children's clothing--are not subject to this tax. NCWC would like to see the basic exemption increased to $15,000 per year.
We remind the government of the continuing case of our aboriginal peoples. Their housing, health care, and educational needs are not being met. We urge that the Kelowna accords be reinstated. Prolonged and continuing negotiations while aboriginal children live in third world conditions will not meet their needs and is unacceptable in a country as rich as Canada.
Recently publicized reports also establish that a child raised in poverty will have more illness as an adult, costing our taxpayer-supported health care system more.
We also repeat our support for the Canada Health Act. We remind this consultation that we wish to have a single-payer system, a one-tier system.
On child care, the National Council urges most forcefully the reinstatement of the early learning and child care agreements. Canada, as a state party to the UN Convention on the Rights of the Child, has a binding obligation to facilitate the implementation of such programs for all children, regardless of their parents' level of income.
On the social safety net, the National Council strongly supports maintaining the gun registry. We also urge greater and assured support for a comprehensive approach to alleviating the causes and effects of violence on women and children in Canada.
Speaking on the environment, the National Council has asked for programs designed to assist and encourage individual citizens in alleviating air and water pollution. We are aware that Canadians are the greatest producers of greenhouse gases per capita in the world. We believe that strong action is needed, with government leadership setting firm goals now for all players and stakeholders to reach.
Pay equity is an issue that concerns us greatly. We note that Canada still falls short in this important step to implement its commitment under the UN Convention on the Elimination of all Forms of Discrimination against Women. Statistically, we know women still earn 72¢ for every dollar earned by a man for work of equal value.
Connected to the whole issue of pay equity is that of maternity leave benefits. The National Council reminds the government again that self-employed women and those in part-time or seasonal employment do not have equal access to this benefit. This does not maintain an equal earning field for them.
The recognition of unpaid work in the national accounting system is also part of this whole question of pay equity. National Council deplores the failure to recognize the value to the economy of unpaid and often uncounted work, which is done mostly by women, to the gross domestic product. It is a grave shortcoming. We need pro-rated benefits for part-time workers.
I wish to call particular attention to the justice issue. We're part of a stakeholder group examining the treatment of women in Canada's federal justice system. We repeat our support for the recommendation of the stakeholder group that an independent, external oversight mechanism be established for federal prisons for women. We note that although there are fewer than 500 federally sentenced women, almost 50% of that group are aboriginal, an indicator of racial prejudice in our society.
Thank you, Mr. Chair.
I want to thank Ms. Noble and Ms. Dorner and Ms. Laidlaw-Sly. A lot of the comments you made I think we agree with, our party especially. We put some moneys toward the Canada Council for the Arts and I think we had promised them additional moneys, and I think we're a little bit behind. You're asking for $100 million for the council, and I think it's money that's required.
Ms. Noble, my question to you is this. In your brief you talk about tax breaks that are being given to corporations. Can you come up with a specific example? We'd like to see what specific example you have a problem with, what the Government of Canada is giving in terms of tax breaks that corporations shouldn't be receiving.
You can think about that. If you have the answer now, I'll take it. But if not, you can forward it through the clerk.
Thank you, Mr. Chairman. Thank you to everyone who came to Montreal.
Since this is our last day of consultations, I would like to take this opportunity to thank the committee staff, who helped us all week, be it the people sitting at the table, the interpreters or the people responsible for logistics. Our staff has done an excellent job, and thanks to them we were able to travel through Canada and Quebec to meet with the people and to better understand their reality.
The situation Mr. Thibaudeau described was quite striking, interesting and real. In fact, it deeply affected me, because my parents live close to Saint-Donat, in the forest near a tall mountain. When I visit my father, he never fails to mention that he is “sick” of low-speed Internet and that if he wants to speak on his cellphone, he has to stand near the window, on tiptoe while smiling and without moving his head.
To a large extent, people have to deal with real problems. I also liked the parallel you drew when you said that Canadians have to be present everywhere throughout the land. It was as if the idea came to me spontaneously, and I had to smile when you talked about the frigates we are buying to protect our sovereignty in the Arctic, when in fact what we need to do to be present everywhere is to help people live and stay in their communities.
You did not ask for any specific or concrete measures in your brief. But we need your help to make recommendations which will be contained in the report we will present to the House. We hope the minister will read it. What would you like to see in this report? Do you need grants, tax credits or incentives? What would you like us to do?
Thank you very much. I will continue with Ms. Laidlaw-Sly.
Recommendation C of your brief concerns child care. I would like the committee to review the measures which were implemented, including the Universal Child Care Benefit in the amount of $100, which is paid each month to the caregivers of children under the age of 6. However, the person with the lower income who receives the benefit must pay tax on it, and I've often heard that this is ridiculous.
In cases where family income is very high, for example a member of Parliament who earns $150,000 and whose spouse stays at home, no tax will be paid on the benefit. On the other hand, a single mom earning $30,000 will have to pay several hundred dollars on her $1,200 benefit. It leaves me stunned. Yet we had suggested that the government tax the family income and not the income of the lower earner.
Do the people you represent have to deal with this situation? What do the members of your council think?
As I told Ms. Laidlaw-Sly, the objective remains the same. I can assure you that I will always be there to help a homeless person, to help someone who is in a truly bad situation, or even a disabled person. However, there are different ways of helping these people.
This government's main priority is to create a business-friendly climate. There is also the international context. Everyone is aware of the competitive pressure which comes from China because of its very cheap labour costs. Chinese workers work under conditions we cannot possible provide. China pays its labourers $1 a day, something no one can compete with.
Let me give you an example. GlaxoSmithKline is a European company which moved into my riding; it spent $1.2 billion because it was offered what it needed; and 1,000 jobs were created. Our goal is to create tax measures to not only attract large-scale investment from big corporations, but also to create good jobs.
I believe you talked about low-paid, part-time jobs. But when Canada's tax system makes Canada as a whole more competitive, all Canadians of all classes benefit, including lower-educated Canadians, Canadians with graduate degrees, and Canadians who are very adaptable. We do not want to lower taxes to help property owners become richer, but to make Canada a more attractive place for foreign investment.
You also said that we should invest more in the environment. Canada has invested $9.1 billion in the environment. It is one of the countries which has done the most for the environment. I can guarantee you that the reduction objectives of 20% by the year 2020 are binding, and that Canada's greenhouse gas emissions will fall by 20% by 2020.
Ms. Catherine Laidlaw-Sly also talked about the firearms registry. Of the 498 murders committed with a firearm, three were committed with a registered firearm, which means that the remaining 495 murders were committed with illegal firearms. I would invite my colleagues of the Bloc and the Liberal Party to work with us in a more cooperative manner to create legislation which would impose minimum mandatory sentences for firearms-related offences.
Thank you, Mr. Chairman.
I am very pleased that you are all able to testify before the committee. I am also very pleased to be here with you this morning.
Everyone agrees that the federal government has a huge budget surplus. Paradoxically, everyone knows that some sectors in certain areas are in a crisis, including the manufacturing, forestry and agriculture sectors. Corporate tax credits may be a good thing, but they only benefit companies which make huge profits. However, many companies will not be able to take advantage of these tax credits.
So rather than making tax cuts a priority, as they will only benefit wealthy companies, and reducing the GST, the government should have invested its huge surplus in infrastructure, education and health.
I know that the high Canadian dollar has greatly affected the competitiveness of Canadian companies, especially in the manufacturing sector. I would like to hear what you think about that situation.
Mr. Chair, members of the committee, on behalf of Bioniche Life Sciences, thank you for this opportunity.
Bioniche Life Sciences is an innovative Canadian biopharmaceutical company based in Belleville, Ontario. Our mandate is to act on innovation and to improve the quality of life. We are publicly traded, invest heavily in research and development, and are currently employing 200 people in highly skilled, science-based jobs.
I'm here to speak about a vaccine against E. coli O157:H7, a deadly bacteria that continues to affect Canadians and consumers worldwide. The associated disease was originally termed “hamburger disease” as outbreaks were traced back to undercooked hamburger. It's hard to believe this was first identified 25 years ago, and yet huge recalls of hamburger still occur. This germ can also be present in produce, as you may recall the outbreak due to contamination in spinach in 2006.
Of greatest prominence, however, would be the tragic outbreak in Walkerton, Ontario, in 2000. Thousands fell ill, seven died, and 27 will never return to normal health, all due to this bacteria. At the time, governments at all levels vowed to ensure that tragedies such as Walkerton never happened again.
The development of this vaccine resulted in an international award, and it is truly an across-Canada success story with genuine thanks to R and D funding from the Government of Canada. Initial discovery: UBC. Scale up: Alberta Research Council. Testing: VIDO at the University of Saskatchewan. Commercialization: Bioniche Ontario. The Bioniche research group is based in Quebec and we are considering some supplementary manufacturing in P.E.I.
Ruminants, particularly cattle, are the primary reservoir of this E. coli as these animals have no receptor for the bacteria's toxin. Consequently, this strain lives within the intestines of cattle without any ill effects to them, and exits their body regularly in the manure. When people are exposed, this germ causes common diarrhea in most. However, intestinal hemorrhage and severe bloody diarrhea develops in about 10% to 15% of cases, and 5% to 10% of these progress to kidney failure and/or death.
Perhaps the scariest hidden threat is how this E. coli, when present in water, can be drawn up through the roots and be inside fresh produce such as spinach and lettuce. Consumers should not have to fear that fresh produce could cause disease.
Although this innovative vaccine could easily be defined as a public health vaccine, as it reduces the public health risk, it is not given to the public but, alternatively and more strategically, to cattle. This way the vaccine can work to prevent the E. coli strain from entering the environment and the food and water supplies right at the source.
This breakthrough could not come at a better time. Just recently the CFIA recalled numerous beef products, and immediately prior to this was a huge recall for 22.7 million pounds of hamburger in the U.S.A. that was linked to Canadian beef. Needless to say, this attracted the attention of the USDA, and the negative publicity was yet another blow to Canada's beef industry, which frankly is still struggling to recover from BSE or mad cow disease.
An independent economic report estimates that vaccinating Canada's entire national herd would provide a two-to-one return on investment, with benefits of $63 million--a $30 million reduction in health care costs and a $33 million benefit to the agricultural economy. Canada is currently the only country in the world where regulators have granted cattlemen access to an E. coli O157:H7 vaccine. One might assume that cattlemen would quickly move to vaccinate their animals; however, it's not that simple, and hence the reason for this presentation.
Cattlemen receive no direct benefit for incurring this cost. Unlike animal health vaccines, this vaccine will not benefit cattle in any way. Canadian cattlemen are willing to administer the vaccine, but really cannot justify incurring any added expense without an offsetting increase in revenue. A Government of Canada program that encourages adoption of the E. coli O157:H7 vaccine over a period of three years would provide leadership for the agricultural sector, use innovation for the benefit of public health, and position Canada as a global leader in food safety. The goal of this program would be to vaccinate the national herd by 2010.
I'm asking this committee to recommend that $50 million be allocated in the next federal budget to facilitate adoption of a cattle vaccination program over three years. After three years, the benefits of inoculating cattle against this E. coli are expected to be readily evident and justify continuation based on normal marketplace forces.
In summary, this Canadian vaccine is a world first and a shining example of innovation. Widespread adoption will position Canada as a global leader in food safety and provide much needed assistance to the agricultural sector, particularly the beef industry. It will also preserve consumer confidence in Canadian food and benefit public health.
Thank you. I'll be pleased to answer any questions.
Thank you, Mr. Chairman.
Good morning, Mr. Chairman, and ladies and gentlemen. My name is Sam Barone. I am the President and Chief Executive Officer of the Air Transport Association of Canada, an organization which represents commercial aviation in Canada.
Before I begin my formal remarks, Mr. Chairman, allow me to apologize for the lack of translated copies of my remarks. We will be making those available as soon as possible.
Indeed, it is an impressive and important system that we are talking about today, the commercial airline system. Every day our members, representing companies as diverse as Air Canada, WestJet, Air Transat, as well as regional players like Air Québec and First Air, connect tens of thousands of Canadians and their products to each other and the world. Put simply, commercial aviation is a vital input to every segment of the Canadian economy, in particular travel, tourism, and trade.
As you might imagine, Canada's commercial aviation industry very much welcomes this theme of prosperity insofar as our industry is being dragged down by a highly punitive, industry-specific taxation regime that limits investment in new service and fair options for Canadians. Instead of enacting policies designed to spur such investment, the aviation industry in this country and our passengers are being asked to pay additional input taxes that drain approximately $0.5 billion a year out of our sector and the rest of the Canadian economy.
The airport rent regime continues to stand out as the most egregious example of penny-wise pound-foolish policy. Every year the Government of Canada collects between $200 million and $300 million in rents from not-for-profit airport authorities for simply having the facilities that they entirely built and paid for on crown land.
Let us recall that the Government of Canada transferred control of these assets to local authorities in the 1990s as a deficit-fighting measure. Transport Canada used to lose millions of dollars a year running these airports and had no financial means to invest in the upgrades. In one fell swoop, they transferred complete responsibility for the airports and their employees to these local authorities and absolved themselves of financial responsibility, while simultaneously guaranteeing themselves a perpetual revenue stream. To date, these airports have collectively been valued at over $295 million, when they were transferred, and have paid over $2 billion in rent to the crown. Toronto alone has paid over $1 billion.
While we clearly think it is only proper to eliminate the airport rent policy entirely, Canada joins Peru and Ecuador as the only developed nations with an airport rent policy regime. At the very least, we think this committee ought to immediately recommend that the rent formula used to calculate payments to the crown not include debt-servicing costs.
The air travellers security charge represents another critical element of taxation policy deserving of reconsideration. Although some may challenge my characterization of this fee as a tax, as there is a service provided in return, I would humbly suggest that our passengers are not actually receiving a unique service from which only they benefit. In fact, aviation security is clearly in the broader national interest. Securing our skies from threats, internal or external, is central to any country's broader national security plan.
In audited financial statements released by the Department of Finance this past summer, the air travellers security charge shows a surplus of revenue over expenses of $80 million. Since it's inception in 2002, we estimate that the federal government has collected approximately $200 million in excess revenue from this charge, which was used by CATSA to provide the screening services. This is, pure and simple, overtaxation. It's unfair to our passengers and shippers, and it should stop.
The last item of industry-specific taxation policy that should be reconsidered is the federal fuel excise tax. Originally introduced in the 1980s as a temporary deficit-fighting measure, this surcharge imposes a 4¢-per-litre levy on jet fuel, in addition to other such levies imposed provincially across the country. This rate is almost four times the rate applied in the United States, our largest bilateral aviation partner, where the charge stands at 4¢ a gallon or 1¢ per litre. We estimated last year the Government of Canada took in over $100 million from this tax, and with fuel approaching $100 a barrel, this is a very regressive one indeed.
In regard to all of these industry-specific taxes in our sector—rent, the security charge, and the fuel excise tax—we suggest that this committee ask one fundamental question: should government tax the inputs of doing business, as they are doing now in the aviation sector, or should they instead help lower the costs of doing business to encourage a healthy competitive industry, which should then be taxed like other industries on the outputs of their business activities, namely profits and wages?
You should receive, Mr. Chairman, a very receptive audience from the Minister of Finance. In various government policy statements, programs and initiatives, we hear the right kind of messaging that is very much reflective of what we are calling for here today. Minister Flaherty stated in his last budget that the government wants to create an infrastructure advantage for Canada as part of its Advantage Canada plan. However, they are perpetuating the single greatest infrastructure disadvantage for Canada through its rent policy.
If we can agree that developing gateways to move goods efficiently from overseas through North America is a worthwhile exercise, why is there no similar vision to facilitate the movement of goods and people through our airports? Are we just prepared to let Toronto and Montreal be beaten out by the Buffalos, Detroits, and Plattsburghs of this world when it comes to connecting travellers?
If the global commerce strategy is an important tool to identify and target new international competitive opportunities for Canada, why in our industry do we continue to permit security charges and fuel taxes that are out of line with what our international competitors are charging?
Finally, if we all agree that open skies and increased global liberalization is a worthy goal for our aviation sector--and let me stress, Mr. Chairman, that we definitely agree with that goal--why are we charging ahead with one hand tied behind our backs?
We are proposing--
Thank you. The pressure is on.
Good morning. I'm Alex Baumann, the executive director of the Road to Excellence program, and I'm here on behalf of the Canadian Olympic Committee.
I would like to begin by thanking you for inviting us to the prebudget consultations of the Standing Committee on Finance.
I'm here to ask you to support the allocation of $30 million annually in the next budget in support of the Road to Excellence program, designed to help our Summer Olympians compete with and win against the best in the world.
Less than one dollar per Canadian a year will create role models who will inspire activity in our youth and put them in recreation centres instead of malls. Less than one dollar a year will unite this nation as we share in the pride of our athletes' achievements from coast to coast. Less than one dollar a year will help create heroes who are a metaphor for excellence in all dimensions of Canadian life.
I would like to share some of my insights as a former Canadian Summer Olympics gold medallist.
During my swimming career, Canada's team was strong and competitive with the rest of the world, but Canada has failed to hold its position in relation to other countries. In recent years, every other G8 nation has significantly increased its investment in sport because they recognize the social and health benefits of that investment. Sadly, Canada's support for sport has not kept pace with these nations and we lag far behind in funding high-performance programs that allow our kids to reach their maximum potential.
I was proud to represent Canada during my competitive career, as are athletes today. Canadian athletes want to be the best in the world, and there is a renewed focus on excellence in this country.
When I decided to return to Canada last year after helping build Australia's exceptional high-performance sports system, I made a commitment to Canadian summer athletes that I would try to give them every opportunity to succeed on the international stage.
But I can't do it all myself, and neither can our athletes. As you all know, the Canadian government and the Canadian Olympic Committee work hand in hand to help Canada's Olympic athletes perform at the international level.
This partnership has to be a priority for Canada through the Road to Excellence program. The program is unique and consistent with the government's objective of implementing shared responsibility structures. It relies on a partnership between the Canadian Olympic Committee, the Canadian Paralympic Committee, private sector partners, and the federal government to deliver high-performance summer sports programming and Olympic podium results in an accountability framework that provides a demonstrable return on investment for Canadian taxpayers.
Road to Excellence is a program that will give Canada's most talented athletes leading-edge support services, technology, equipment, science, and coaching in both daily and competitive environments to do this country proud and continue to inspire Canadians to achieve excellence, pride, and health in sport.
I'd also like the members of this committee to consider the fact that every Canadian on an Olympic podium means more community enrolment in sport. Let me give you an example. When the Canadian women's hockey team won gold in Salt Lake City in 2002, community enrolment in girls' hockey increased by 12% the following year. Kyle Shufelt's gold medal in Athens in 2004 inspired explosive growth in men's gymnastics throughout Canada.
Our athletes want to achieve podium results, and I want to see more young people committed to sport across this country. I want those who have the talent and the dreams I had to get the support they need and deserve to climb the podium for their country after years of hard work and sacrifice.
Increased community involvement in sport is consistent with the government's agenda of promoting sport through the sport tax credit and ParticipACTION. It is consistent with recent recommendations of the health committee, the Public Health Agency, and Health Canada to remedy the obesity crisis Canada is facing. In fact, last year the health committee presented a report to Parliament and stated that one study estimated that “obesity in the overall population currently costs Canada about $1.6 billion annually in direct health care costs.” If Road to Excellence can cut $1 in health care costs per Canadian because communities become more active, it will have generated a positive return on investment.
You have each received a copy of the Canadian Olympic Committee's brief, along with a copy of the Road to Excellence program. The program details a path for Canada's athletes to finish in the top 12 nations at the Summer Olympic Games in 2012 in London, and in the top five at the 2012 Paralympic Games. We will do that by making smart investments with measurable returns in research and training.
We know that the Road to Excellence program works because it's built on a proven template of the Own the Podium 2010 program, an equivalent program for winter sport. We all saw the results from that investment when our winter athletes finished third in the medal count in Torino, Italy, last year, which was Canada's best performance ever. The Own the Podium 2010 program will lead us to finish first in Canada's home games in Vancouver 2010.
The investment in the Road to Excellence program will put more Canadian athletes on the podium. It will give Canadians something to be proud of and will inspire more Canadian communities to get active. I think you will find that this is a sound investment, and I urge you to recommend in your report ongoing funding of $30 million per year for the Road to Excellence program.
Good morning, ladies and gentlemen. Thank you for giving us the opportunity to participate in the 2007 pre-budget consultations.
International health experts, including the World Health Organization, have warned that an influenza pandemic is inevitable; it's just a matter of time. The WHO is currently at phase three of six of their pandemic alert status. A movement to phase four would mean that avian flu influenza has gained the ability to spread efficiently between humans.
SARS taught us that we are vulnerable to the health, social, and economic consequences of a public health emergency. From a financial perspective, SARS cost the Toronto economy close to $2 billion, and according to the Toronto Dominion Bank it cost the national economy an additional $1.5 billion to $2 billion.
While harmful, the cost of SARS pales in comparison to the projected impact of an influenza pandemic. The Canadian Manufacturers & Exporters have predicted that Canada's economy could suffer by as much as $60 billion in lost productivity and medical expenses. Earlier this week the World Bank told the international conference on avian flu that the global economic impact could be up to $2 trillion. This economic downturn could result in a serious erosion of federal tax revenues. However, unlike SARS, the world has been made aware of the possibility of the next influenza pandemic. This provides government and the private sector the time to adequately prepare for this community-based illness.
Canada should be commended for its early action. It has been a recognized leader in pandemic preparedness around the world. However, according to published government figures, our national antiviral stockpile remains at 17%--sixth place among G7 countries--with no antiviral medicines allocated to prevent the spread of infection before treatment is required.
All other G7 governments clearly understand the value of preventative measures and have planned accordingly. France presently has the highest stockpile, with enough antivirals to cover over 50% of its population. Most recently, the United Kingdom announced its intention to double its antiviral stockpile to 50% of its population. Those countries' stockpiles allow for a strategy that incorporates both prevention and treatment. A prevention strategy is in line with and can help Canada achieve its pandemic planning objectives to minimize serious illness, death, and social disruptions.
Given the potential impact of a pandemic on the economy and our society overall, Hoffmann-La Roche recommends the committee adopt three key recommendations in its report.
First, the Government of Canada should expand its pandemic plan beyond treatment to include the preventative use of antiviral medications, or prophylactic use, especially during this initial six-month period when effective vaccines will not be available. Governments must be prepared to prevent the spread of infection before treatment is required, to mitigate health impacts and reduce worker absenteeism.
As an example, a recent public opinion survey of Canadian health care workers learned that more than 40% would not report to work if a pandemic hit. Health care workers claim that if proper preventative measures were in place by their employer, up to 90% would in fact report to work. The take-away message is that proper preparation and preventative strategies need to be in place to ensure essential workers are able to remain on the job in the event of a pandemic.
Second, the Government of Canada should be clear about its role with the private sector during a pandemic. At present, the government's Canadian pandemic influenza plan for the health sector does not provide clear direction to the private sector of their pandemic preparedness responsibilities. We are hearing from the private sector that this absence of clear direction has created a climate of confusion amongst businesses as to their responsibilities in the event of an avian flu outbreak.
The pandemic could significantly affect human resources and the ability of many businesses to maintain normal business operations. The Public Health Agency of Canada has estimated that during a pandemic, up to 35% of the population will become sick enough to miss work, and up to half of those people will require additional medical care. Providing clear direction to the private sector is needed for businesses to prepare effectively and maintain business continuity during an outbreak, thereby minimizing the impact of a pandemic on the overall economy.
Finally, the Government of Canada should assist small and medium-sized enterprises in their pandemic planning. SMEs play an integral role in our economy. Collectively they are the largest private sector employer, yet they do not have the financial resources or the skills and knowledge to effectively prepare for an pandemic on their own. This is why the government should introduce a targeted tax credit for the SME sector. This credit could be used for developing an organizational pandemic plan; acquiring a stockpile of antiviral medicines; and purchasing basic medical supplies, such as masks, gowns, and gloves.
Thank you very much for your attention to this recommendation. I will be happy to answer your questions during the question period.
Thank you very much, Mr. Chairman, for inviting us.
My name is Lorraine Hébert and I represent the Regroupement québécois de la danse. This morning, I am speaking on behalf of the Mouvement pour les arts et les lettres, which represents eight national and thirteen regional organizations, and this includes over 15,000 artists and workers in the cultural sector of Quebec.
In the fall of 2006, we asked for exactly the same thing we are asking for this year. Indeed, we asked specifically that the annual budget of the Canada Council for the Arts be increased to $300 million. To which you might say that last year, that is, in July 2007, Minister Bev Oda announced $30 million in ongoing funding for fiscal 2008-2009. We therefore felt that last year, our message was heard.
The reason we are before you again today is to ask you to continue to make the and the Department of Canadian Heritage aware that artists need public funding to respect and support standards of excellence, to consolidate existing organizations, and to help develop new artists in every field of endeavour. Today, the arts sector is being squeezed, and young artists cannot break through, and don't have the means to do so.
We are dealing with a problem of generational in equity, and with the fact that funding is not spread fairly throughout Canada. We are facing a very though challenge from our international competitors, despite the fact that we have extraordinary artists everywhere in Canada.
We have an institution, the Canada Council for the Arts, which was created over 50 years ago and which, year after year, funds Canadian artists in a transparent manner. Since 2006, the Council estimates that with a budget of less than some $300 million, it will not be able to meet the demand, which has been growing since 1998. The Council will not be able to help our large institutions consolidate, and it will not be able to help young artists break through in every area of artistic endeavour in Canada.
I will end my presentation here. Thank you.
Good morning. My name is Nathalie Rech and I am the Coordinator for Réseau SOLIDARITÉ Itinérance du Québec. This is the third time we have appeared before the Standing Committee on Finance. I would therefore like to thank the members of Parliament and the staff of the Standing Committee on Finance for having given us an opportunity to speak to you about homelessness.
The Réseau SOLIDARITÉ Itinérance du Québec represents 200 organizations in Quebec. These organizations work on a daily basis with people who are homeless and people who are at risk of becoming homeless in a dozen regions in Quebec. Our mandate is highly political, whether that be at the federal or provincial level. I would like to point out that our role is truly that of an advocate for the homeless and we carry out that role by drawing on expertise that exists in all the regions.
I wanted to begin my remarks by reading you a few lines, in English. This is an extract from the preliminary recommendations made by the United Nations Special Rapporteur for Housing, who came to Canada on an observation mission less than two months ago:
||Everywhere that I visited in Canada, I met people who are homeless and living in adequate and insecure housing conditions. On this mission I heard of hundreds of people who have died, as a direct result of Canada’s nation-wide housing crisis. In its most recent periodic review of Canada’s compliance with the International Covenant on Economic, Social and Cultural Rights, the United Nations used strong language to label housing and homelessness and inadequate housing as a “national emergency”. Everything that I witnessed on this mission confirms the deep and devastating impact of this national crisis on the lives of women, youth, children and men. Canada has ratified numerous international human rights instruments that not only recognize the right to housing, but also create an obligation on the Government to take steps for the progressive realization of these human rights with the maximum of its available resources.
I think that gives a good picture of the situation. Our work is being done at a time when there is an enormous budget surplus. We are talking about a $13.8 billion surplus for this fiscal year and a cumulative $100,000 billion for the past ten years.
We have three recommendations. The first is that the federal government extend investments in the fight against homelessness. There is currently a program called the Homelessness Partnership Initiative which ends in March 2009. An extension of the federal government's investments means a commitment of at least five years by the federal government.
The second recommendation is that the government establish a national housing program. Canada has no longer been investing in new social housing units for more than 13 years. We feel that it is absolutely necessary to be ahead of the homelessness issue. This implies not simply working with people who live on the streets but also building housing for low income individuals. If we increase the social housing stock we will prevent many people from ending up on the streets of Canada and freezing to death.
The third recommendation is that the government undertake extensive review of the tax system so that all sectors of the population are treated fairly. The current tax system puts the poorest Canadians at a disadvantage.
I would like to go back to be the federal homelessness program.
How much time do I have left?
Thank you, Mr. Chairman.
Good morning to all. My name is Munir Suleman. I am the senior vice-president, Scotiabank, but I'm here today on behalf of Tax Executives Institute in my capacity as TEI's vice-president for Canadian affairs.
TEI is the pre-eminent association of business tax professionals. We have 7,000 members who work for 3,200 of the largest companies in Canada, the United States, Europe, and Asia. Our Canadian members contend daily with the provisions of the Income and Excise Tax Act, and with chapters in Montreal, Toronto, Calgary, and Vancouver, make up approximately 10% of TEI's membership. Although my comments today reflect the views of the institute as a whole, those views are guided by TEI's Canadian members and other members whose firms have significant operations in the U.S. and in Canada.
TEI has several recommendations for the committee's consideration for tax policy and administrative changes that will foster economic growth and job creation.
The budget package introduced November 21 built upon the trend of incrementally reducing the corporate income tax rate and eliminating burdensome tax rates such as the federal capital tax and corporate surtax. TEI agrees with Minister Flaherty's corporate tax reduction proposal to strengthen the Canadian economy and promote job creation. We urge the government to stay the course or even accelerate proposed corporate income tax reductions. By 2012 Canada's corporate income tax rate will be the lowest among major industrialized nations. The standing committee should ensure that other countries do not leapfrog the Canadian timetable.
The federal government has undertaken initiatives to encourage provinces to promote Canada's competitiveness and improve the administrative efficiency of the provincial tax systems. We commend the federal government for doing so. We also commend the recent agreement whereby Ontario will conform its corporate income tax base to the federal base, eliminate its capital tax, and the federal government will administer Ontario's corporate income tax system. To maintain the momentum of provincial changes, we urge the standing committee to consider providing additional incentives to the provinces in order to eliminate or accelerate the elimination of capital taxes.
TEI is also supporting harmonization of provincial-federal sales tax systems. Substituting a value-added tax system for the current provincial retail tax systems would eliminate the cascading effect of retail sales taxes on most business inputs and promote a neutral and competitive business environment. In order to be fully effective, harmonization of the federal and provincial sales tax systems would require that financial services and services provided for financial services be treated as zero-rated supplies by the provinces, just as they are treated under the Quebec sales tax regime. To achieve harmonization, TEI would be pleased to consult further with the committee, the Department of Finance, and the provincial governments about crafting a workable system.
Bill , the Budget and Economic Statement Implementation Act, will eliminate withholding tax on all outbound interest payments on arm's-length debt, effective January 1, 2008. In addition, a recently announced protocol to the Canada-U.S. Income Tax Treaty will reduce withholding tax on non-arm's-length interest payments to nil over the next three years. Again, TEI applauds the measures undertaken by the government. Elimination of withholding taxes on interest paid on arm's-length and non-arm's-length debt will ensure that Canadian businesses have access to global capital debt markets at the lowest possible cost. We recommend, however, that the goal be to eliminate all withholding taxes, especially on the payment of dividends to related group companies.
Since 2003, the United States has negotiated a nil withholding tax rate for dividends to group companies with a number of other countries. TEI believes steps should be taken to accord Canadian residents benefits similar to those enjoyed by residents of other U.S. treaty partners, so they can effectively compete for increased capital investments, exports, and jobs.
In line with the government's intention of having the lowest effective tax rate among the G7 group, we urge the committee to recommend to the Department of Finance to consider negotiating the elimination of withholding taxes on dividends to related group companies equal to a most beneficial rate negotiated with other major trading partners.
incorporates draft provisions to restrict interest deductibility on certain outbound investments for periods after 2011. The bill will make significant revisions to foreign affiliate regimes and functional currency rules. TEI commends the government for acknowledging the excessive breadth of the March 2007 proposal curbing the deductibility of interest for investment in foreign affiliates. Regrettably, Bill C-28 resurrects many features of the March proposal and afforded taxpayers and their advisers very little time to comment on the draft legislation. The significance of these provisions to Canadian business and their far-reaching effects warrant more than the circumscribed three-week consultation period. As important, the current rules governing treatment of interest expense and earnings of foreign affiliates have been the cornerstone of the Canadian system for many years and have been crucial in promoting the global expansion and competitiveness of Canadian companies.
Any proposal to restrict the deduction of interest must be narrowly crafted to target the perceived abuse or unfairness. We urge the committee to recommend that interest deductibility proposals be removed and considered separately, to give taxpayers more time to study its effects and to give the government an opportunity to weigh taxpayer concerns about the proposed rules.
In conclusion, TEI commends the committee for holding pre-budget consultations again this year. On behalf of TEI, we thank you for the opportunity to participate.
I would be pleased to respond to any questions you may have during question period.
Thank you. That's a great question.
We have a very robust pandemic plan at Hoffmann-La Roche. The objectives really are to protect the health and safety of our workers, to ensure business continuity, and then to ensure a recovery of business. The plan does include both treatment and preventative strategies. Our feeling is that treatment is important, but prevention is key to ensuring that there's no absenteeism or that it minimizes absenteeism and we can continue to operate.
Obviously, when we talk to other corporations, they're very interested in what our plan is, and we share that with them. As I said in my brief, one of their biggest challenges is understanding what kind of support they are going to receive from government; will they have access to the current stockpile of antivirals that exist or not? At this point in time, we're not able to really respond to that, and that's really the nature of our second recommendation.
Yes, I would appreciate it. I think all members of the committee would appreciate getting that.
Mr. Baumann, I have a couple of questions for you as well, and first, a comment that it's great that you've come back and accepted this position, obviously, to help out the Canadian Olympic team. I'm sure you knew when you accepted it that the first thing you were going to have to do was come to the federal government and ask for money. So my congratulations. Maybe it is part of being truly Canadian, I'm not sure.
One of the things that came to mind that I wanted to ask you is about your experience—you touched on it a little bit—in Australia. Could you comment on whether the program that you've brought forward today is modelled under that system? You spoke a little bit about the successes, but your experience there obviously gives us a bit of an advantage in that regard.
Secondly, you talked about the private sector aspect and component, and we've seen the companies and corporations across this country stand up for our athletes—no question. One of the things we've tried to do at the federal and provincial levels is certainly to try to build teams together, whether it be with government or whether it be with the private sector, specifically in infrastructure, and we talk about including municipalities--and I don't know whether you're at this point yet, but an understanding of the commitment that the private sector is prepared to make, whether it's dollar for dollar or whatever it might be, to the commitment that our federal government would make of $150 million over the five years.
About the first question, in relation to the attributes of the Australian system, I don't think you can replicate systems; you can take particular aspects of systems. And what I take from Australia certainly is that there is a need to prioritize and target effectively. Post-1988, there was a concentration in Australia on a number of sports, eight sports initially, and targeting those sports that had the highest success at the Olympic Games and at the international level.
In the end, I don't believe we can be everything to everyone. So we do have to target and prioritize.
I think the other aspect is the whole issue of Canadian sport centres and moving to an institute-type model, where you're creating a high-performance centre or high-performance precincts where you have coaches, support service providers, and running programs. I think that will raise the bar as well.
So there are certain things that you need to take in order to have a leading-edge system, but I wouldn't replicate the Australian system. We need to have a Canadian model, and that's what we're trying to do now.
In relation to the second aspect, yes, it's true, if you take a look at the 2010 OTP program, where there's $11 million committed by the federal government and $11 million committed by the private sector, we are certainly looking at that. The Canadian Olympic Committee has set up a foundation to fundraise. So it is a partnership; we're not asking the federal government alone.
In the end, we need to have the resources if we want to be successful in the future. Right now, there exists an inequity between summer and winter sport, and we're trying to address that.
Mr. Barone, you referred to the cost that you incur in airports and elsewhere. In fact, I have always thought it was a bit strange that the total cost of air transport security is shouldered by the users, whereas it is not the case, for example, on roads. We don't pay for the police services on our roads; those costs are shared.
I see you are taking notes but that was just the preamble. I would like to talk about something else, as I did with Mr. Baumann, and that is bilingualism in our airports. The committee has just spent a week in Canadian airports. I assure you that it is not easy to obtain services in French, even in Ottawa, whether that be from federal government staff or transport company staff.
Thank you for the question.
One of the things that are very important for us as national and international carriers is the ability to have multilingual staff. The market does dictate that, especially when we do have carriers based in Quebec, such as Air Transat and Air Canada, who have an interest in serving the market in the official languages.
We are making continuing efforts. This is a very serious issue for us in terms of serving the Canadian public, first and foremost, safely and securely—which goes to your point—but also in the language of their choice. We try to do that across the country, especially where there is a large presence of francophone passengers, especially in western Canada, for example, as well as in Ontario, of course, and the rest of the country. It is something we do in serving all our customer segments.
The $30 million. As I mentioned a number of questions back, the focus needs to be on coaching and technical leadership. Approximately $9 million of that $30 million would be spent on ensuring that we get the best coaches in this country to provide not only the right daily training environment, but also the right competitive environment. We can't be shy in terms of trying to get the best people in the world, and that costs money.
The second aspect is ensuring that we provide quality support services, whether it's sports medicine, physiotherapy, strength and conditioning, or sports science, to be leading edge in the world. And those support services, particularly in the daily training environment, ensure that our athletes are well taken care of, that when there are injuries we take care of those injuries. And there's approximately $7 million allocated for that.
There are some additional funds for the national sporting organizations. I think it's about $6 million for training competition, because a lot of things that are coming from the national sporting organizations are about the fact that they don't have enough competitions to actually attend, and that's critical, particularly in the lead-up to the Olympics. There's a component there for research, and there's also a component for team sports, because I don't think that at this point in time we have a team sport strategy. So there's approximately $2 million for that. And I think that adds up close to the $30 million.
Yes. It's a great question, and obviously as a Canadian and a taxpayer, I would have the same concerns and questions.
Tamiflu is approved by Health Canada for the prevention and treatment of influenza. As a result, it has gone through the rigorous clinical trial program that all drugs that get approved in Canada, or for that matter across the world--United States, Europe--need to go through to prove their efficacy and safety. Through the clinical trial work, that has been done. The evidence is that Tamiflu reduces the signs and symptoms and outcomes of the influenza virus and also some of the complications that might occur from that, like bronchitis. So the data shows clearly that there is a net positive effect, and that's the reason the drug was approved by Health Canada.
As far as the H5N1 virus, which is the avian flu virus, is concerned, there are case studies across the world, where that virus has infected human beings, that indicate it is an effective medication to treat individuals who are infected with the avian flu or, for that matter and probably more importantly, to prevent them from getting it in the first place.