Thank you, members of the committee, for the invitation to join you this year.
Canada's 130 colleges, institutes of technology, polytechnics, and CEGEPs have campuses in 1,000 Canadian communities. I know many of your ridings have college campuses. We serve 1.5 million learners. The principal attributes of these institutions include sky-high levels of student and employer satisfaction, intimate links with industry, employment placement rates ranging from 85% to 95% within six months of graduation, and educational programs that respond to local economic opportunities. About 20% of college learners have a university background or university degree.
I will speak to measures to address the acute skill shortages pervasive in all sectors of the economy and the contribution of college and small and medium enterprise partnerships to address Canada's innovation ecosystem and productivity needs.
In successive hearings of this committee we have talked about the looming skills deficit. I am happy to report today—or perhaps I am unhappy to report today—that the private sector has come on board this theme very strongly. Both the Canadian Chamber of Commerce and the Canadian Manufacturers & Exporters have said that attracting and retaining qualified employees is the most significant challenge jeopardizing economic growth.
Unless aggressive measures are adopted soon, within 10 years employers will not find qualified candidates for about 1.5 million positions that will be available in our economy. Now 70% of new jobs require a post-secondary credential. Within a decade we foresee that this will be 80%. Our post-secondary achievement rate is 60% in Canada.
Immigration will make a difference, but only a small difference. The real solution is to enhance the capacities of our current population. I want to be very clear on this point. We already have the people we need to replace the baby boomers. They are here, but these people do not have the skill sets that employers require.
We urge the Government of Canada to collaborate with other governments, civil society organizations, and educational institutions toward the goal of equipping every Canadian with the skills necessary to participate in our economy. We have come a great distance here, but we are far short of realizing the vision.
There are many remedies. For example, there are 906,000 people between the ages of 15 and 29 who are neither employed nor in education, and who are obviously at risk of social exclusion. This is the NEET generation. Unless we foster opportunities for disengaged youth, the social costs will be enormous. We should increase access to essential skills and education for employment, which is what colleges do.
The educational gap between aboriginal and non-aboriginal Canadians is vast. Balanced investments in K to 12 and post-secondary education are needed. We made a good start in the 2012 budget. We are very happy about that, but we have some considerable distance to go. We do need to sort out the long-standing impasse surrounding the aboriginal post-secondary student support program.
Immigrants confront barriers to labour market integration, obviously. Their employment outcomes improve through overseas orientation services, occupation-specific language training, and bridge-to-work programs offered at colleges.
Canadian employers report that trades professions are the most difficult to fill, yet apprenticeship completion rates lag compared to registrations. Apprentices would benefit from improved tax credits and interjurisdictional mobility. Despite much self-congratulation about removing barriers for the disabled, the participation of this large sector in the economy falls far short of other groups. We should incentivize employers to engage the disabled through the tax system.
Like Mr. Knight, we are pleased to have the opportunity to appear before the committee this afternoon. My name is Simone Thibault, and I am the executive director of the Centretown Community Health Centre, which is located just a few blocks from your offices.
I'm also a board member of the Canadian Association of Community Health Centres, CACHC for short. It is in that capacity that I'm here today, along with my colleague, Scott Wolfe, who's the CACHC federal coordinator.
The Canadian Association of Community Health Centres supports community health centres across Canada to increase access to high-quality local health care and to improve the health and well-being of individuals, families, and communities as a whole. There are currently more than 300 CHCs across Canada, although they often go by different names from province to province.
Included in these 300 community health centres are the CLSCs in Quebec, such as the one in Rimouski.
They include Saskatchewan's cooperative health centres, such as the Prince Albert Co-operative Health Centre, and they include Alberta's and Ontario's CHCs, such as the Boyle McCauley Health Centre in Edmonton, the Chatham-Kent Community Health Centre in Chatham, Ontario, and the Parkdale Community Health Centre in Toronto.
In fact, examples of community health centres can now be found in all provinces and territories; however, only a small fraction of Canadians to date have access. In nearly every province, Quebec and Ontario being minor exceptions, CHCs are far too few in number, and where they do exist, they are drastically underfunded.
Let us tell you a little more about what CHCs do on the ground and how this informs the five recommendations that we are presenting to you today.
Community health centres are comprehensive, front-line, primary health care centres. They bring health care providers such as family physicians, nurses, dieticians, therapists, and others together out of their individual isolation to work as a collaborative interprofessional team. This means that people receive comprehensive care from the right providers and at the right time. These diverse health care providers are supported to work to the full scope of their training—this is where we count on the colleges—making the best use of our precious health care resources.
But more than simply making front-line care more integrated and comprehensive, CHCs couple these team-based primary care services with health promotion programs, social services supports, and community programs—especially health promotion—that emphasize illness prevention and well-being rather than simply treatment. It means that a health care provider who encounters issues facing the health of an individual or a family that lie outside of his or her capacity to treat someone—for example, poor diet linked to poverty—can connect the patient or family to in-house resources that can pick up the next steps of the journey towards health.
As a result of this integrated approach, various research studies have found that community health centres provide effective and cost-effective care, achieving better overall outcomes than treatment-focused medical models.
Our full budget submission elaborates on these points in further detail, along with further rationale underscoring the need for investment in key areas of health and health care. What we would like to share with the committee here, based upon our work on the ground and what we are seeing in communities across Canada every day, is the following.
We in Canada are veering dangerously toward an interconnected crisis of poverty, inadequate housing, and illness, and a consequent tsunami of demand on our health care system. We must do a better job—that's clear—of preventing these crises and the tsunami.
I'll move it over to Scott.
The good news is that we can change this and we know how.
For starters, we know that an increasing number of Canadians simply do not have the personal and household income and resources required to achieve and maintain health. A widening income gap and the lack of access to adequate and affordable housing across Canada are two key factors. These growing financial pressures and our eroding social safety nets at federal and provincial levels mean that many households simply cannot afford to access the nutritious food, the recreational activity programs, the family supports, and other resources needed to maintain well-being. We must level the playing field and we must give families and communities across Canada the opportunity to access the necessary preconditions for health.
I'm going to move along to our recommendations very quickly. We recognize that these five recommendations don't cover the full spectrum of actions necessary to get us to where we need to go. However, they do provide a launching pad, and we believe they act as key enablers.
The first of these is to design and adequately invest in a federal poverty reduction strategy, such as the one outlined currently in Bill . This plan must complement provincial and territorial initiatives.
Second is to adopt and implement Bill , thereby establishing a desperately needed federal housing strategy.
Third is to negotiate with the provinces and territories a new 10-year health accord, with stable and adequate funding at a minimum 6% escalator over the coming years, and to protect the Canada Health Act within it.
Fourth is to establish a federal pharmacare program and further protect the health and well-being of Canadians by exempting health care—including this new federal pharmacare program—from CETA and other trade agreements.
Fifth is to expand and invest in access for Canadians to high-quality, team-based, primary health care by establishing a federal strategy and funding for a pan-Canadian network of community health centres.
Thank you, Mr. Chair, and good afternoon, committee members.
We are honoured to be here today. FEI Canada is a voluntary membership association comprised of 1,800 of Canada's chief financial officers and senior financial executives across the country. The recommendations we present to you are prepared by FEI Canada's tax committee, whose chair—Peter Effer, vice-president of taxation of Shoppers Drug Mart—is with me here today.
Considering the continuing uncertainty in the world economy, fiscal restraint should remain a top priority. FEI Canada recommends that the federal government retain its objective for balancing the budget in the near term, as this is necessary to be able to maintain Canada's social programs at their current level.
FEI Canada encourages the government to continue its project review to improve efficiency and deliver cost-effective programs and policy development.
If it is determined that additional revenues are required, an increase in the GST rate should be considered, as commodity taxes are viewed by economists as the most efficient and progressive form of taxation.
A few years ago, FEI Canada was one of the first organizations to highlight the need for tax simplification. In fact, I had a bit of fun with it, comparing the little 1917 act that started it all to finance the Great War with today's massive Income Tax Act. Well, unfortunately, I must report that in the last two years, the tax act, like me, has not lost very much weight.
We again recommend that the establish a task force to undertake a comprehensive review of the federal Income Tax Act, with the objective of reducing complexities, because—to be clear—compliance has become unmanageable, and the costs are killing everyone. The act takes the government too much effort to administer, and it is an excessive burden on corporations—particularly small businesses, which are one of the key drivers of the economy. FEI Canada continues to be prepared to participate in this expert panel or assist the government in any manner to achieve this worthwhile endeavour.
So how can we simplify the tax act?
We and other groups have previously encouraged the government to permit consolidated tax reporting for both corporate income tax and GST/HST. In the interests of time, I will simply refer you to our submission for further details on this.
One big step that we could undertake immediately to simplify the tax system would be to introduce legislation to allow and require a process to settle disputes with the CRA as part of the field audit process. Encouraging settlement of issues at the audit level will save resources for both government and taxpayers, especially for smaller entities whose financial resources are scarce.
We should also adjust the CRA's auditor incentive system, as it currently rewards audit issues put forward, not those ultimately proved to be justified. Right now, their system is like rewarding a hockey player for the number of shots taken rather than the number of goals scored.
FEI Canada believes that to achieve a strong and sustainable economy, Canada needs to facilitate the commercialization of innovation. We suggest that in conjunction with the SR and ED program, the government should allow companies engaged in innovation to issue flow-through shares similar to those in the oil and gas and mining industries. As this concept has successfully encouraged exploration and development in Canada's natural resources, it should be applied to support innovation across all industries, especially manufacturing.
Innovation flow-through shares would encourage private investment in Canadian innovation and would not be an incremental cost to the government, since this program only represents transferring deductions and credits from one taxpayer to another.
The demographic structure of our country is changing. We need to ensure that a healthy and vibrant aging population can continue to add to Canadian productivity in various ways, including by remaining in the workforce longer. However, challenges facing our seniors are considerable. They include ensuring that their retirement income is properly planned and is adequate for both known and unknown expenses, and that health care and supportive living costs are provided for. FEI Canada encourages the government to conduct a study and develop a national framework on this issue.
In conclusion, we believe our recommendations will streamline government, reduce time spent on compliance, foster innovation, and ensure that our aging population continues to contribute positively to the economy.
Thank you, Mr. Chairman.
I'm representing the Council of Canadians with Disabilities, a national organization that represents Canadians with disabilities across this country. The goal of the Council of Canadians with Disabilities is to build a more inclusive and accessible Canada and to ensure that Canadians with disabilities have the same access to goods and services of our great country as do non-disabled persons.
Over the years much progress has been made. Together we have removed barriers to transportation systems, created more accessible elections, developed inclusive education programs, and removed some barriers to employment of persons with disabilities. We have created new service delivery models to empower people with disabilities, and we have continually sought incremental ways to improve the lives of Canadians with disabilities.
To be blunt, these improvements came about because people with disabilities, their families, and their organizations spoke out about the barriers. We spoke out about our rights and our responsibilities as citizens of Canada. The catalyst for change has been and will remain the voice of persons with disabilities speaking for ourselves. This voice must continue to be supported, for it has been and is the catalyst for making our communities more accessible and inclusive.
Sadly, 18 national disability organizations have recently been informed by Minister Finley that the grants provided to them through the social development partnership program, as a disability component, will be reduced by 35% in 2013-14 and by 65% in 2014-15.
In April of 2015, these organizations, including our organization, will no longer receive grant funding.
The Learning Disabilities Association of Canada has already announced that they will close their doors at the end of March 2013. More will follow.
The program will remain open, with $11 million for project funding. However, the project application process will be an open, competitive process. Any non-profit charitable organization, local, provincial, or national, or any university, can apply for this funding. We believe this approach will significantly undermine the capacity of national organizations and silence the voice of people with disabilities.
We have asked Minister Finley to reconsider her decision and protect some funds for national organizations in an open, competitive process. We believe the voice of people with disabilities must be supported. It makes good business sense to engage with people with disabilities, their families, and their organizations in public policy dialogue. CCD will be meeting with Minister Finley in the near future to discuss our concern.
The Government of Canada has a substantial role in supporting Canadians with disabilities to identify barriers and to assist in identifying ways of removing these barriers. That has happened many times in the past few years. Much has been done, but much remains to be done. Canadians with disabilities for the most part are poor, excluded from the labour force, and face new barriers every day. It is highly likely that if you are poor in this country, you have a factor of a disability as well.
What is needed are new initiatives to address poverty, including improving the registered disability savings plan and the Canada Pension Plan disability benefit. Issues to be addressed in this area include removing barriers for those with intellectual disabilities wishing to open a registered disability savings plan, expanding the disability tax credit definition, and making the Canada Pension Plan disability benefit non-taxable.
We need new initiatives to improve employment access, including specific targets for the employment of persons with disabilities in the labour market agreements with the provinces, and expanding EI sick benefits—
Welcome to all the witnesses.
I have questions for all of you, but I only have five minutes, so although, Mr. Conway, I don't have time to ask you a question, I agree with you in terms of the complexity of the tax system and the need for simplification. I think that's something the government should look at. We have too many boutique tax credits, and we really need to look at a strategic overhaul of how we approach taxation.
To Mr. Knight, I have a question about the whole issue of community colleges and the skills gap. In fact I raised a question in the House today and talked about youth unemployment. There are many very good-paying jobs that require more skill and expertise, and far too many people of all ages, but especially young people, who today don't qualify for them. I've met with businesses who are very frustrated by the mismatch of skills. Yes, it's university degrees, but it's also trades, as you quite rightly mentioned.
What would be your recommendation, in terms of better marshalling our resources through the community college system, to help meet that gap? I hear employers lamenting it, but how do we make that mismatch disappear?
In terms of community health centres' importance in rural ridings—for instance, the Hants Shore health clinic in my community—and their impact, particularly with an aging population in rural communities, in terms of the difficulty in maintaining and retaining doctors and nurses, these health clinics are critically important.
I'd like to start on the whole issue of training and learning, Mr. Knight, and this emergence of jobs without people and people without jobs, and that skills gap in Canada. It's not unique to Canada. I was at a Latin American conference last spring in Mexico. One of the ministers from Brazil was talking about the need to restore the honour of skilled trades. I thought to myself, well, that's something that really applies in Canada too. Somehow over the 20 or 30 years there seems to have been a diminution in the respect paid to skilled trades. Everyone is put on this track to universities, and in some cases community colleges, and there's been a trend away from the skills that we really need today.
If you look at what Germany has done, at the success of Germany, not only in terms of productivity but also in terms of such things as income inequality—there is less income inequality in Germany, and they have a productive and robust economy. Do we need a national learning strategy working with the provinces, not imposing on the provinces, but working with the provinces, to develop approaches?
You mentioned the interjurisdictional barriers. Is there a need for a national strategy, with a goal, among other things, of restoring the honour of skilled trades and building a national lifelong learning strategy?
Thank you to all the witnesses for being here today.
To Mr. Knight, there was mention of a national learning strategy. In terms of having such a strategy, I would anticipate a number of problems, a number of challenges, with that. Heck, we can't even get a national securities regulator in this country, let alone having a national learning strategy.
I think what we need is more of a belief that education is a lifelong process and not something that ends when you're finished at 22, when you finish college or when you finish university and have your B.A. or master's or Ph.D.; that education continues throughout life. This is the sort of cultural attitude that we need to instill in people as we move forward.
I was very intrigued with a lot of the things you were saying. The access to skilled labour is a monumental problem for our country and it's just going to get worse. You're so right that we cannot depend entirely on immigration to solve that problem for us.
Now, we are making revisions to the immigration process. It's going to be more labour demand-oriented. Nevertheless, it's still not going to solve our problem.
You talked about over 900,000 people between the ages of 15 and 29. Again, it's a huge problem. If you could solve that problem today, what plan would you have for those 15- to 29-year-olds that would address that problem?
Well, solving the problem today would be a big job. Many strategies would be required.
I fear that these people are being overlooked. I fear that we're not giving them options, opportunities. We're not identifying them. We're not giving them the hand they need. They need to be brought into education. Lifelong learning is what they need; I agree totally. In fact, we educate as many adults as we do young people. Some colleges have an average age in the thirties.
It seems to me that your concept of lifelong learning is very much an element of a national vision or a national strategy. There could be a multitude of national strategies, and different ones would apply in different jurisdictions. But this vision of a more highly educated country is really essential if we're going to solve these problems, with many, many strategies.
The prospect for Canadian business is quite bleak. Immigration is just a little bit of help. We need hundreds of thousands of people in different sectors where people are retiring and there's no one bringing up the rear. This is a national problem, and it needs a national vision and a national enterprise to fix it. It needs everybody, all the partners—the provinces, municipalities, educational institutions, and civil society organizations. We have to identify this as the principal economic constraint facing our country and find a way of collaborating toward a solution.
We've fixed many social issues. We've fixed drinking and driving. We've fixed smoking. We can fix education through a national strategy and vision.
I'd first like to thank the witnesses.
I noted that Ms. Thibault took care to mention something related to each of our ridings, including the Rimouski CLSC. That was very well thought out.
However, my first few questions will be for Mr. Conway because I really liked his comments on tax simplification, among others. In that respect, I would like to repeat what my colleague, Ms. Nash, said and that I also pointed out in the speech I gave in my riding, which is that, in 1917, the Income Tax Act was 10 pages long, whereas today, it has 3,300 pages. This is a very important topic, and I will come back to it later.
Something caught my attention. You said that you might be open to a GST increase, meaning it should not be out of the debate. Beginning in 2006, the government reduced the GST by two percent. A number of economists—and I, too, share this opinion—said that, if the government wanted to reduce the tax to stimulate economic growth, reducing sales tax like the GST was not the best way. Instead, they advocated an income tax reduction.
Do you share that opinion?
Thank you very much, witnesses, for coming. I apologize for my tardiness, but I had another committee that I had to attend.
I'm interested in productivity, mobility of workforce, the small and medium enterprises that comprise 60% of our workforce, and possible tax credits, either for training, for travel, or for housing, because of the nature of our economy.
I would especially like to hear from Financial Executives International Canada. I read the answers you provided to the questions, and I have to say that I was impressed with many of them.
It seems that, first of all, you represent a very influential group of individuals, some of the top financial minds in Canada. I would say that most of them would be in your group, as members. Is that fair to say?
Mr. Knight, it's good to see you again.
Welcome to everyone.
You'll probably know a bit of this, because we've chatted about it before.
My own experience is coming out of the Hamilton labour movement. Of course, we've seen a great deal of devastation to our manufacturing over the last 20 years. Amazingly, I'm not going to blame anybody. It's one of those things that's happened. It's history. We have to figure out what to do about it.
I've said here that the expectation of Canadians is for government intervention in a variety of areas. Sometimes that's not about giving dollars. Sometimes it's a facilitating role.
Coming out of labour, I'm a great believer in trades apprenticeship. You've spoken to that to some degree. I took from your comments that you feel today we're lacking that national vision, that strategy or plan, that prepares the workers for these job increases.
Mr. Van Kesteren raised in his remarks about Germany, and I would agree with him, that Germany is one of the best models we can have. They learned a long time ago to work hand in hand with their unions and the educational system. That's why they have been successful at keeping the highly skilled workers in that country and developing them.
But I want to take Mr. Brison's point a little further. In Ontario in the 1990s...and I expect you will recall when the NDP government of the day started the Ontario Training and Adjustment Board. Part of that plan was to put into the local communities an LTAB, which would allow them to spend the provincial dollars and some federal dollars in retraining and that. We had a Conservative government of the day, of course, that cancelled the top end of that and left it in place.
Do you think the government today should reconsider that, and consider reviving the OTAB as maybe a way of coming together with the various groups? That had a labour, business, and educational component.
We have a problem, too, of moving workers across the country. We have the Red Seal for the trades to make sure they're trained to the various levels to meet the needs across the country. Again, that's a place for education, government, and the unions to work together.
Mr. Conway, in your presentation—I'm sure you're probably just waiting for this one—I heard the little tinkle that the GST was a progressive tax. I have a little bit of a problem with that, because a consumption tax, in my view....
I should tell the tale that when Sheila Copps resigned over the GST, I was the guy who came second to her in the race. So you know my opinion on the GST from that.
From our view, a consumption tax affects the middle class and lower class disproportionately from the people who are well off. To my mind, income tax is the fairest way to address the needs of government, the needs of our society, to deliver.
We can debate the fairness of where you place that taxation, but over the last two years in this place, on this committee in pre-budget hearings, we've heard a lot of talk about the need for the government to take a lead on infrastructure. With your CEOs, you're going to be dealing very much with the municipalities, the federation of municipalities and that, with the $124 billion deficit they have.
I'm wondering what you think about at a macro level the federal government directly investing to lever some of the business dollars into infrastructure.
Okay, I appreciate that.
I want to follow up with Mr. Conway.
As you know, I'm very supportive of the recommendation you made with respect to a review of the tax system, and in fact it was a recommendation of the committee last year. I think we do need to perhaps get some detail of what this review should look like, what kind of review it should be.
I think you used the phrase “tax force”. Do you want something similar to, say, a Red Wilson panel, in terms of the review that was done there? We've had a number of reviews, as governments. There are things like royal commissions. Some people are saying it should be similar to the Carter commission many years ago.
Can you put some meat on the bones of your recommendation, in terms of what you see the review doing?
Mr. Chair and members of the committee, economic growth is often framed as a series of options: resource sector or manufacturing, college or university, basic or applied research. These are false choices. There is no single formula for prosperity. Society is too complex, the components of our success are too interlinked.
An economy prospers when the citizens can imagine and seize opportunities to create a better world. As president of the Canadian Federation for the Humanities and Social Sciences, I represent over 85,000 students and researchers. Their work helps us to understand issues that concern us all, including harassment, safety and immigration.
Their research nurtures companies, leads the digital revolution, and fosters innovation in all sectors.
Despite what you've heard, employment for social sciences and humanities graduates does not remain low. Yes, they take slightly longer to settle into a career than engineers or nursing students, but their income trajectories remain very healthy. Indeed, eight of the eleven fastest growing occupations in Canada overwhelmingly employ graduates with social science and humanities degrees.
This is why Chinese universities recently visited Canada for advice on liberal education. They want their graduates to succeed in the knowledge economy and to be more versatile and capable of moving among different careers.
This adaptability requires analytical and communication skills paired with a international awareness stemming from a broad education enriched by research.
Significantly, the “State of Science and Technology in Canada, 2012” report confirmed that we are a powerful force in the global research community and not just in medicine. Canada is in the top four for historical studies, psychology, and visual and performing arts, and an emerging leader in digital media. This success wouldn't be possible without continued direct federal investment in research.
We also need institutions like Statistics Canada and Library and Archives Canada to collect evidence to inform policies, answer questions and form a basis for future discoveries.
A strong research infrastructure is not just nice to have in a digital and globalized world, it is essential. We know that if we stand still, we will rapidly fall behind.
Let me turn to three specific measures that will strengthen Canada's advantage in a globally connected knowledge ecosystem.
First, increase funding for the three granting agencies and CFI. We encourage the government to achieve a more balanced tri-council portfolio by allocating a future share of greater increases to SSHRC, as this government did in Budget 2011.
Because innovation is at its core a complex human process, social sciences and humanities research is essential to improving our national performance.
Second, invest in the next generation of Canadian professionals and leaders through a subprogram of scholarships as well as training.
This includes opportunities abroad, as recommended by the recent panel on Canada's international education strategy. We must build on the good work going on at home that's leading to job creation. Programs like Mitacs and Connect Canada, traditionally industrial research internships, now want to engage students in the humanities and social sciences.
Finally, building on Budget 2012 investments and Jenkins' recommendations, invest in cross-sector collaborations between academic institutions, governments, communities, and not for profits.
We're delivering on previous commitments in this area and reducing barriers to collaboration.
For example, IMMERSe, a program funded by SSHRC, which Minister announced at our annual congress, supports collaboration between the universities and industry partners to better understand the social and economic realities of digital gaming and entertainment.
As the Governor General has said, connections between communities and campuses will help us “ensure that social innovation is a key component of Canada’s innovation landscape”.
Mr. Chair, you asked five important questions on a range of issues. Our three specific measures will deliver on all of these for the benefit of Canada and Canadians.
Thank you, Mr. Chairman.
Natural gas is central to Canada's energy mix, meeting approximately 30% of the country's energy needs, more than electricity. Well over half of the Canadian population relies on natural gas for heat and power in over six million homes, apartments, businesses, hospitals, schools, and other facilities across the country.
Today an average natural gas bill accounts for approximately 0.6%, or six-tenths of 1%, of household spending. That's one-third the money spent on electricity and one-seventh the amount spent on transportation.
This is a significant value in difficult economic times. Add to this the versatility, reliability, safety, and environmental performance of natural gas and you get a significant competitive advantage for Canada in our resource and the infrastructure delivering it.
These key facts provide some context for our responses to the five questions the committee is asking witnesses to address.
When you ask about our thoughts on the challenges of economic recovery and growth, or about the productivity challenge, we believe our product is key to our response. Natural gas, because of its abundance, affordability, versatility, and reliability, is enabling recovery and growth, and delivering on productivity. Backed by a remarkably robust transmission and distribution system of hundreds of thousands of kilometres of pipe in the ground, we're a key part of the economic recovery and growth and productivity solution.
When you ask us about job creation, we have two points to make. First, natural gas resource development is a significant job creator across the country, and a growing one as the abundance of the resource becomes more evident. But there's another job creation benefit that's arguably much greater still. Investors look for the best return on their dollar. Affordable energy helps create that return, so investment often goes where there's affordable energy. With that comes the employment that investment creates as businesses and industry locate to affordable energy markets. Canada, because of its natural gas resource and its safe and reliable infrastructure, is one such market.
When you ask about the demographic challenge, I've little to say here beyond a reiteration of what I know you are hearing from many: the workforce is aging and we need to attract skilled talent. The case is the same in the natural gas industry, and the concern a serious one. Our industry, like most, is prepared to work with government in addressing it.
But on your final question, about other challenges, I wanted to speak in slightly more detail about three we face as a country and about the opportunity we believe the gas industry, working in partnership with the government, has to address them.
The first is with respect to the development of remote and northern communities. This development is increasingly important for realizing the promise of our natural resources, for sovereignty, and for the social and economic well-being of aboriginal and non-aboriginal Canadians in the communities.
CGA would like to work with the federal government to assess how natural gas can reduce the energy costs and improve the environmental performance in such communities for the heating and power generation needs. Together we can leverage investment by Canadian utilities and others to fund infrastructure. We can bring high-efficiency and natural gas technologies, such as combined heat and power and biogas energy systems, to reduce energy costs and the environmental footprint. We can support an information-sharing program that facilitates the development and implementation of community energy systems.
The second is with respect to the broader societal need to drive innovation and efficiency. This government has highlighted these as priorities and is seeking ways to trigger more activity to keep Canada's economy as innovative and efficient as possible.
As global leading energy producers and consumers, we've often been at the forefront of energy, innovation, and efficiency. CGA wants this trend to continue for the gas industry. In this regard, we're extending an open hand to government to cooperate with us on our energy, technology, and innovation Canada initiative to mobilize strategic investment in the demonstration and commercialization of natural gas technologies.
Second, CGA member companies have a long history as leaders in driving energy efficiency. We continue to do this, but now also work with new ventures like QUEST to deepen the understanding of efficiency in order to ensure better delivery of infrastructure. We believe there's a role for government to ensure its efficiency programs are working as closely as possible with utilities and ventures like QUEST.
Third, with respect to transportation, I know you heard yesterday from my colleague Alicia Milner of the CNGVA. As she will have noted, Canadians are significant travellers. Geography, a thinly spread population, and the nature of our economy all help to account for that. Effective transportation is dependent on energy, and natural gas has historically played a very small role in transportation in Canada. The opportunity exists for that to change.
Natural Resources Canada worked with a number of private sector stakeholders to complete the Natural Gas Use in the Canadian Transportation Sector Deployment Roadmap document, which shows that the medium and heavy-duty vehicle subsector is a good starting point in terms of where natural gas can offer significantly lower fuel costs, operating costs, and emissions.
CGA supports the concerns expressed by the CNGVA. We believe the Government of Canada should act on the full set of recommendations in its road map, and partner with industry to determine how to ensure that Canada retains a competitive position in the North American marketplace.
Mr. Chair, we believe that natural gas is smart energy and it is growing in popularity because of its versatility, reliability, affordability, safety, and cleanliness. We believe that CGA's natural gas distribution utilities and natural gas, the commodity, can support the government's economic, energy, and environmental objectives going forward.
Thank you for the opportunity to present to the committee.
Thank you, Mr. Chairman, for inviting Canada's credit unions to be part of the annual pre-budget consultations. We've appeared before this committee in the past and appreciate the continuing excellent relationship we have with committee members and indeed with all parliamentarians.
We are especially pleased that your invitation was scheduled on an auspicious day on our calendars, because today, the third Thursday of October, happens to be International Credit Union Day, a day when we celebrate the continuing achievements of credit unions across Canada. Indeed, this week, the third week of October, is Co-op Week across Canada. As a result, the Prime Minister released a statement that co-ops are a model of excellence. He said:
||Canada's credit unions play an important role in our nation's economic prosperity.... The health of our financial institutions, including our credit unions, has been a critical factor in helping Canada weather the global economic crisis and emerge relatively unscathed.... I commend the Canadian credit union movement for its commitment to advancing the financial well-being of its members while giving back to the community.
Last week, in Quebec City, I attended the International Summit of Cooperatives, which was attended by 2,800 people from 91 countries around the world. It was a once-in-a-lifetime experience. It was a rather inspirational gathering that illustrated the size and the enormous economic importance of co-op enterprise in the world economy. For example, we learned that co-ops employ 100 million people around the world. If you aggregate the revenues of the top 300 co-ops in the world, the result is $1.6 trillion, and that figure is equivalent to the ninth largest economy in the world.
The Quebec City summit arose from the United Nations designation of 2012 as International Year of Cooperatives. Enough of the commercial.
Today, I will be speaking from the perspectives of Canada's credit unions, full-service financial institutions that are cooperatively owned and democratically controlled by their individual and business members.
Canada's credit union system continues to be a keen competitor in the financial services industry. I work for Credit Union Central of Canada, or Canadian Central as it's known, and we are the national trade association for our member organizations and, through them, 359 credit unions.
Canada's credit unions operate a branch network with more than 1,700 locations, and these branches serve more than five million members and employ almost 26,000 people. Almost one-quarter of credit union branches serve small communities where they are the only financial institution in town.
I just want to pause there and emphasize those last two numbers: they employ 26,000 people, and in fully 400 communities they are the only financial institution.
As member-owned financial cooperatives, our focus is unlike the profit motivation of the banks. Maximization of net income or share price is not the driving motivation, rather service and sustainability continue to be our motivations. It is not surprising that, for the seventh consecutive year, Canadians ranked credit unions first in overall customer service excellence among all financial institutions. We're very proud of that recognition.
Financial performance continued to be strong even during the recent economic crisis. Canada's credit unions ended 2011 having increased their assets by 10% while generating record profitability. Our asset size then would be roughly comparable to that of the National Bank of Canada. Our co-op model is a key reason for our solid financial performance: direct accountability to our members, each of whom has an equal say in our operations. With 5.2 million Canadians belonging to a credit union, our growth has been roughly comparable to the population growth in the country.
The focus of my remarks today is the regulatory burden on small financial institutions and the connection it has with the government's red tape reduction action plan. Despite our growth and successes, credit unions remain small businesses in the financial services industry. The median asset size of our 359 credit unions is $79 million. That means that half of our credit unions, or 182, operate as very small financial institutions with less than $75 million of assets. Indeed, 337 of the 359 credit unions have assets less than $1 billion.
A strong regulatory framework, of course, protects the savings and the security of Canadians. We recognize and support that. We really rely on that. However, we share the concerns of members of Parliament that regulations are being applied in the same manner to businesses with 2,000 employees as they are to those with a dozen or fewer employees, resulting in high relative compliance costs.
In the final report, the government's red tape reduction commission emphasized that a one-size-fits-all approach to regulation tends to disproportionately burden small organizations like credit unions. We—
Good afternoon, Mr. Chairman and members of the House of Commons committee on finance. As noted, my name is Robin Bobocel. I'm the vice-president of public affairs for the Edmonton Chamber of Commerce, the largest municipal chamber of commerce in Canada. On behalf of our nearly 3,000 business members, the Edmonton Chamber of Commerce is once again pleased to have the opportunity to provide you with our members' most important federal tax and program spending priorities related to the upcoming federal budget.
In our submission to the Standing Committee on Finance last year, we presented three tax initiatives that were essentially cost-neutral priorities that will improve business efficiency, profitability, and ensure the continuation and growth of small business, small and family owned businesses in particular. Because of this, I'm extraordinarily pleased to present these recommendations to you today as we are in the midst of celebrating Small Business Week across the country.
We were pleased that at least two of our recommendations were included in last year's finance committee report to the House of Commons, but disappointed that the government has not yet acted on those recommendations. As a result, my goal today is to provide further clarification on our positions and reinforce the urgency of moving forward with the recommended changes, which we believe will help stimulate economic growth and job creation, contribute to improved competitiveness and productivity in Canada, and deal with some of the challenges associated with the aging Canadian population.
With the first of the baby boomer business owners having turned 65 last year, the most urgently needed tax changes are those related to the tax implications of business succession. In a recent survey of Edmonton Chamber of Commerce members, 15% of businesses indicated that their most likely succession scenario over the next five years would be to have the business change hands. Assuming chamber members are a true representation of the local business population, as many as 6,600 businesses in Edmonton alone could be changing hands very soon.
The survey also revealed that just 6% of all businesses intend to transfer ownership to a family member, and because under current tax laws that family member is then faced with having to pay capital gains taxes on the assets of that business, there's a real concern that the tax burden will be so high that it will seriously jeopardize the continuation of those businesses.
Our first recommendation today is that the federal government undertake a comprehensive review of the tax provisions affecting estate and succession planning in the next 24 months to determine whether the existing tax regime appropriately considers transfer of family owned businesses.
Reducing the tax administration, compliance burden, and assessment timelines for business is another area that can result in significant cost savings that will benefit everyone and is urgently needed. Ultimately, the myriad of current tax preferences enormously complicate the tax structure, increase compliance costs, and open up avenues for evasion and avoidance of tax. Additionally, broadening the tax base would facilitate lower taxes so that everyone benefits.
We have two recommendations today that we feel will address those concerns. The first is that the federal government immediately establish a royal commission to undertake a comprehensive review of taxing statutes with the objective of identifying, recommending, and ensuring the implementation of ways and means to simplify tax legislation, reduce compliance costs, and ensure Canada's tax system is as neutral, simple, efficient, and fair as possible.
The second of these recommendations is related to a comprehensive review of taxation. It calls for a more fair, transparent, and timely assessment process to provide business with more certainty. With that, we recommend that the federal government introduce legislation requiring the timely assessment of income tax returns wherein taxpayers' returns are automatically deemed to be assessed as filed after 120 days of filing, thereby initiating the statute barred period after which reassessment could be issued.
I won't at this time go into more details concerning these recommendations. However, copies of these Edmonton Chamber policies, including background justification for our recommendations, were delivered to the clerk of the committee for circulation to you prior to today's session.
In closing, I'd like to thank you, Mr. Chairman, for inviting the Edmonton Chamber of Commerce to come and speak today. Our business community is appreciative of this opportunity to have its voice heard by this committee.
I'm eager to respond to any questions the members may have.
Thank you very much, Mr. Chair.
My name is Jeff Hnatiuk. I'm the president and CEO of Sport Manitoba. Ours is a provincial-based organization, but we believe very strongly that some unique models that we have in Manitoba can have implications on sport delivery and programming across the country.
Sport Manitoba is creating innovative partnerships and developing new models of sport delivery so that all Manitobans, no matter what age or skill level, can benefit from their involvement in sport.
We appreciate and applaud the federal government's commitment to sport, and ask that in addition to maintaining its current sport funding levels, it will fund unique opportunities and partnerships that may fall outside of current sport funding models.
I'd like to start by addressing how sport delivery touches on various areas of the federal budget, including productivity, job creation, justice, healthy living, and health care.
According to a Conference Board of Canada report in 2005, health care spending due to physical inactivity ranges from $2.1 billion to $5.3 billion annually in Canada.
A World Health Organization report in 2005 indicates that over 80% of coronary heart disease, and 90% of type 2 diabetes, could be avoided or postponed by a combination of healthy living practices, such as and including regular physical activity.
There was an article in the Globe and Mail just two days ago indicating that a recent study in Britain suggested inactivity is quickly becoming public enemy number one in health care.
Investment in prevention and healthy living models could substantially decrease health care costs.
Sport tourism is an important economic engine in small and large centres across Canada. The sport industry has tremendous potential for growth, resulting in ancillary economic activity.
Sport engages thousands of volunteers. Volunteerism is a critical component in keeping Canada's aging population engaged and active.
Sport-based initiatives can prevent criminal activity among youth at risk, particularly with respect to gangs. However, studies have shown that programming must be very specifically designed and implemented to affect those youth. This is why many drop-in sport programs and centres oftentimes aren't as effective as they could be. Investment in innovative delivery models is very important.
Sport involvement can develop capacity and wellness opportunities and partnerships within the aboriginal community. Sport programming for immigrants assists greatly in integration into our communities.
Investment in infrastructure creates short-term injection into the economy, but the results and effects are long term with legacy projects that increase accessibility.
Critical to sports impact is the accessibility of sport, which means access to facilities, organized and professionally developed programs, and leadership development.
With regard to some innovative programs, work placement and on-the-job education, training, and apprenticeship opportunities result in permanent job placement.
With the adjustments to Canada's pension plan and the slow growth in capital markets and interest rates, it's imperative that we address the challenges of our aging population by ensuring that people are healthy, active, and able to work, as in many cases retirement ages have been increased. There is need to research best practices and motivators to keep Canada's aging population active and productive.
Aboriginal, immigrant, disabled, and low-income families face major challenges at this time. These communities need to be engaged, which can be achieved through sport and physical activity programming as well as leadership development for marginalized individuals and communities.
By creating unique programs and programming, new positions are created, keeping innovative and talented individuals here in this country.
In Manitoba we are creating a unique facility, the Sport for Life Centre, which will affect people across the province—as well as across the country, we believe. The centre incorporates sport research, sport medicine science, sport delivery, and expertise all in one particular location.
The combination of these aspects is unique in Canada. It will allow us to be innovative and flexible in addressing challenges and opportunities across the country. We are currently providing innovative programming opportunities for a broad spectrum of our community, from day cares to drug addiction and rehabilitation programs.
Involvement in our programs has kept our youth in schools, prevented suicides, developed sport opportunities available to urban and northern and remote communities, and developed leadership and program sustainability throughout coaching programs.
In closing, we'd like to recommend that there be committed funding for sport-based research and innovative programs and infrastructure. Currently, sport facilities are included in all other infrastructure programs within the Building Canada fund. This often makes it very difficult for new and innovative facilities to be seen as priorities when included with other pressures that are put on the infrastructure programs.
This investment would underscore our government's commitment to the Canadian sport policies vision to create dynamic and leading-edge environments that enable all Canadians to experience and enjoy involvement in sport to the extent of their abilities and interest.
Thank you very much for your time.
First of all, I would say that we actually do have a very robust distribution grid in place. The issue on transportation isn't about how effective the grid is; the issue is the cost of the vehicles and the cost of building the unique stations that are required for fuelling vehicles, particularly large vehicles, for LNG, liquid natural gas, or for CNG, compressed natural gas.
I think Ms. Miller put two slides in front of you, a very effective visual, as you noted. I'm not sure if she referenced this yesterday, but there was an announcement earlier this week that Irving Oil is building, of its own accord, a series of stations across New Brunswick for LNG. These kinds of things are happening on their own where the market conditions are such that it can actually be economical to do them, but if you're concerned about what more the federal government might do, there are a couple of things.
First of all, on the regulatory side, you don't have authority—these are provincial questions—but you do have a bully pulpit. You can make the point—and it is useful to make the point to regulators across the country—that there is a value proposition associated with natural gas. If regulated entities can be allowed to finance that value proposition on a rate base, then that's a very effective way to ensure that you get the right infrastructure in place.
The second thing you can do is look at other jurisdictions where there are mechanisms in place to lower the vehicle cost, be it accelerated depreciation of vehicles or whatever else, particularly in the U.S., because, as I believe Ms. Miller pointed out yesterday, we potentially face competitive disadvantage in our trucking industry. We need to make sure there is a level playing field in the trucking industry between the two countries.
My next question is to Mr. Bobocel, simply because we have somebody before you who talked about the same issues, and I'm interested in the issue of tax identification.
I didn't get an answer that I was happy with, so I'm asking you the same question again.
In 1917, when the Income Tax Act was adopted, it had 10 pages.
Now it's over 3,300 pages. What are the main reasons for the addition of those pages?
I'll tell you that one of my beliefs is that fiscal expenditures are actually playing a large role, but I want to have your take on it.
Yes, because we had this discussion with the previous panel about a skills deficit in this country.
Some of it is being addressed by changes to what we're doing in immigration, making it more labour-driven, but we have, between the ages of 15 to 29, roughly 900,000 young people who are just kind of bouncing around out there, who don't have a skill, who don't have a trade. We were talking about making education a lifelong learning process, and I just wanted to ask your opinion on that.
Mr. Bobocel, today the government, , introduced the second budget implementation act. In it there is the small business hiring credit, which will help over half a million small businesses. As you know, we've lowered the small business tax rate to 11%, something the NDP voted against. They were also critical today of the extension of the hiring tax credit.
I just want to get your opinion on how that credit has benefited many of your members. The chamber represents a lot of small and medium-sized businesses. Could you speak about how that has been a benefit to many of your members?
Thank you, Mr. Chair, and thank you all for coming here. It's good to see some of you back again, and some new faces as well. I'm going to go to Mr. Egan.
It's amazing, Tim, since you first came, in the first years, how much the attention has shifted to natural gas, and how natural gas has gained such prominence. I remember when I was first elected we talked about peak oil, and we talked about the supply of natural gas as being from 20 to 40 years; today all the estimates are around 100. I think there are even some who suggest we may have up to 200 years of natural gas. I remember the price for a gigajoule of gas being well over $10 when I was first elected, and today it's down to about $3, which is extraordinary.
The biggest factor in energy for natural gas is delivery, if I'm correct. We have such great reserves in northeast B.C., and along that corridor the access to market is becoming so very important. I think I should mention that the proximity of a lot of shale gas reserves in the U.S are closer to the eastern part, especially to Ontario, and we need to find.... I wonder if you could tell us just how important it is for us to get that pipeline to the west coast, to be able to deliver natural gas to the far east, where in Japan, China, and countries like Korea there's such a demand for gas. Tell us where that window is, how closed that window is, and how much time we have.
As I mentioned, we just came off a three-day conference with the International Gas Union, and we had a series of discussions about this. When people talk about 100 years of gas, the estimate is based on approximately 700 TCF, trillion cubic feet, and we produce about six a year in Canada. We consume about three and we export about three, and the export is to the United States.
On a go forward basis, given how shale development has advanced so quickly in the United States, the opportunity of that export market is drying up. There is an enormous alternative opportunity, which is the Asian market, which you've highlighted.
Yesterday I asked some industry colleagues what they thought the window of opportunity was to get to that market, and the rough estimate is five to ten years, because there's natural gas all over the world. It is extraordinary the quantities of it. North America is ahead on the shale gas development track, but that resource exists around the world. Other countries are moving quickly to try to develop it and try to lock down markets, so the sooner we do so, the better the opportunity for us.
Moreover, within the North American context—you highlighted the trade flows—the reality that's emerging is that it's an integrated gas market, and has been for over 20 years. The opportunity is there for eastern markets to more profitably, more affordably, get gas from eastern U.S. supply and for western markets to more sensibly move their product to offshore markets like Asia.
Hello to all the witnesses. Thank you for being here.
I want to first correct the record. I think my colleague misspoke. It's never been part of our platform to advocate for a carbon tax. But I do have a number of people in my riding who come to me to say they want the government to take action on the issue of climate change. That is a pressing need that, sadly, is being ignored by the government.
I also want to raise the issue of the tax credit. Mr. Bobocel, just for your interest, the NDP has advocated for a tax credit for small and medium businesses. My riding is home to many, many small businesses, and we certainly have long advocated for a tax cut and also a tax credit for hiring new employees. It's something we've long advocated.
One of the dangers with an omnibus budget bill such as the government has introduced is that many things get bound together, and if you don't support some things, you end up having to vote against some things that you do support. I wanted to clarify that so you're clear. We do support small business, and this is a measure we've been advocating.
I want to ask a question to Mr. Carr. One of the areas where Canada is doing very badly is in the area of innovation. We're down near the bottom of the OECD in terms of innovation. It affects our productivity and competitiveness. In your response to our questions about the pre-budget process, you talked about innovation and the role of the humanities and social sciences in fostering innovation by taking a collaborative approach with other disciplines.
I'd like to ask you to elaborate on this a bit, because I think we're all searching for ideas to help make our economy more productive and more innovative.
Thank you for the question.
I think what we're fundamentally talking about is a view of innovation that sees innovation as a component of many different activities coming together at once. While we may frequently think of the outcome of innovation as a technology change, in fact, for a technology change to be successful, there needs to be analyses about how workers develop that technology and how technology will be used effectively. Therefore, for technology changes or innovation changes to be significant, you need that broad-based multidisciplinary and intersectoral approach to understanding change.
I could give one example, which might hearken back the question that Mr. Brison asked. At my university—Concordia University, in Montreal—we recently partnered with Dawson College, a community college, a CEGEP, in Quebec, in a provincially funded program, to create an incubator for games research. This provides junior college students with an opportunity to get some familiarity with the complexity of games research, whether that's engineering and technical research into games, research into the kinds of social narratives that are important to use in games, or research into how users use games.
The beauty of that incubation program is that some of those students will go directly into industry—industries like Ubisoft, in Montreal, for example. Others will transition into undergraduate programs, hopefully at our university, where they'll have a further opportunity to study games that are funded, in part, by a research group that received Social Science and Humanities Research Council funding—the IMMERSe grant that I mentioned. That is an industry partnership grant out of the University of Waterloo, involving organizations like Inovatech, in the Kitchener-Waterloo area, and multiple researchers across the spectrum of disciplines in Canada. That, it seems to me, is a real gateway to true innovation.
I find that whenever there's a debate about carbon, people quickly move to a position where they think that because natural gas is a hydrocarbon—it's the simplest hydrocarbon, but it's a hydrocarbon—therefore we have to think about getting rid of it.
I find that the more we can talk about driving efficiency and innovation, the more we can achieve a variety of environmental benefits, including emission reductions—and emission reductions are one of many environmental benefits.
We have a real hurdle to jump within the gas industry because of that carbon debate, so very often we try to jump right over it and make the point that we can deliver on a better environment, if you start considering how this fuel can be used.
I will give you an example. In the city of Toronto—I actually live in Ms. Nash's riding, Parkdale—High Park—the discussion that emerges around hydrocarbons is one that often forecloses any debate about the use of natural gas.
Combined heat and power projects can be built in the city of Toronto using natural gas, which could deliver extraordinary benefits in terms of a reduction of energy costs, a reduction of a variety of impacts, but it is very hard to get to that discussion when the premise is always about carbon.
We look forward to the coming into force of the legislation. It's not in force yet, so that final step will need to happen before credit unions can step forward and express an interest or actually move ahead with that option.
It is one option. We do not foresee many credit unions taking advantage of it right away, but there are some that are looking at it very seriously.
What it does is free up a credit union to move beyond provincial boundaries. There are many reasons it may wish to do so, such as in the Atlantic provinces, where there are a number of small credit unions in close proximity but across provincial borders that may wish to work together. It may be a group of members with a common bond. A number of credit unions, in different provinces, that have a unique employee base or ethnic base may wish to work together more. As well, it allows some economies of scale to occur.
Over time we see some credit unions moving in that direction. We don't see a stampede at all, but we do appreciate the option. It puts one more business option on the table that can be part of a business decision. At the end of the day, it will be a business decision.
Again, thank you. I don't need the whole five minutes.
I appreciate your comments, Mr. Bobocel, in terms of your recommendations. I think we've heard that message somewhat consistently. I want to focus in on that third one.
During the summer I was doing round tables with chambers across the country about “My Business Account”. Most people said that things were working so much better for them.
I know that even when you file your own personal income taxes with the e-filing, the money seems to get automatically deposited much more quickly.
Are you talking about getting that response, but then sometimes six months down the road there is the opportunity to say you're doing checks and balances? Talk a little bit about whether your members are noticing some changes, whether there's enough education out there yet in terms of My Business Account and how people are using it, and whether they're seeing a much more fluid system.