I call this meeting to order.
This is the 81st meeting of the Standing Committee on Finance. Our orders of the day, pursuant to Standing Order 83.1, require continuing our 2012 pre-budget consultations.
Colleagues, we have two panels here today. We have six organizations in the first panel: the Alliance of Canadian Cinema, Television and Radio Artists; the Canadian Association of Retired Persons; the Canadian Institute of Chartered Accountants; the Chemistry Industry Association of Canada; Engineers Canada; and the Kamloops Homelessness Action Plan.
We want to thank you all for being with us today.
We'll start with Mr. Blake. Please begin, Mr. Blake.
Good afternoon, everyone. My name is Barry Blake. I'm a professional Canadian actor, and I'm also a national councillor with ACTRA, the Alliance of Canadian Cinema, Television and Radio Artists.
I'm speaking today on behalf of our 22,000 members across the country, professional performers whose work entertains, educates, and informs audiences in Canada and around the world.
Canada's cultural industries represent over $85 billion, which translates to 7.4% of our GDP. They generate over 1.1 million jobs. In 2010-2011, screen production alone created 128,000 jobs and generated $2.6 billion in exports. That's significant.
Make no mistake: Canadian content creation is a very serious business. Content is at the heart of the digital economy. Canadian content creation is also synonymous with Canadian job creation. Building a mature, digital infrastructure requires smart investments that reinforce our cultural economic drivers.
To do that, we are proposing a three-point plan in terms of a sustainable digital economy strategy.
First, public investments are needed in content creation. I want to congratulate the government on maintaining the budgetary commitment to the Canada Media Fund in budget 2011.
I must say, it's a great start. It means we share our own Canadian stories at the same time as we create jobs. It's win-win.
With our changing industry, we need to make sure the proper tools are in place to seize all new opportunities. In addition to your support for the CMF, we urge you to commit to renewed and stable long-term funding for Telefilm Canada, the CBC, and the National Film Board.
Telefilm Canada's feature film fund is crucial to making sure that Canadian films get made. Each dollar invested in a Telefilm production triggers two dollars in additional financing for digital media projects, and three dollars for feature film projects. With the last budget's cuts to Telefilm's parliamentary appropriation, its mandate to foster the development of Canada's audiovisual industry and track its export value around the world is in jeopardy.
We recommend restoring Telefilm's full parliamentary appropriation and giving Canadian creators the support they need to excel on a competitive international stage.
Insofar as the CBC/Radio-Canada is concerned, a recent study by Deloitte determined that for every dollar the federal government invests in CBC/Radio-Canada, the corporation puts back more than three dollars into the Canadian economy. These are investments, not really costs.
We ask you not only to restore the previous parliamentary allocation but also to increase that allocation by seven dollars per capita, from $33 to $40 for every Canadian. That would bring it in line with the funding of public broadcasters in other industrialized nations.
The National Film Board is recognized around the world as one of our great cultural workshops. For over 70 years, it's created groundbreaking documentaries, animation, and digital media productions. It has pioneered many technical innovations. Unfortunately, the 2012 budget saw $6.68 million cut from the NFB's parliamentary allocation over three years. We urge you to reverse the cuts and put the brakes on future budget reductions.
Our second point would be increasing private investment. Our cultural industries don't want to rely on government funding alone. We need to build on incentives to increase private investment in content creation. We urge you to look at tax credits, expanding the Canadian film and video production tax credit, and allowing production services tax credits to count against the entire budget, not just labour costs. We're also looking at labour-based tax credits for digital and interactive media at the federal level.
Our final point is on income averaging for artists. Simply put, performers and artists are small businesses with very spikey or lumpy income, as we call it. The model we face is an employee-centred model, not really one that meets the needs of independent businesses.
We urge you to support the current bill before the house, Bill , reflecting the realities of Canadian artists. This is one way to redress the inequity that performers face, and it would be lovely if it was supported by all parties.
Thank you very much.
Thank you, Mr. Chair. Thank you for the opportunity of presenting our pre-budget recommendations.
CARP is a national non-profit, non-partisan organization with over 300,000 members across the country with whom we are in constant communication.
Retirement security continues to be a major concern for our members, especially for their children and grandchildren, and now increasingly for themselves. This concern is justified by some troubling statistics and trends, especially if we translate those statistics into the people behind the numbers.
Poverty rates among seniors have stopped improving. Poverty now stands at just under 7%, at 6.7%, leaving nearly a third of a million seniors in poverty today. If the rate of poverty stays the same, then in 2023 there would be nearly half a million seniors living in poverty.
The 680,000 seniors eligible for the much-welcomed GIS top-up in last year's budget are predicted to grow to one million by 2023. Today 1.6 million Canadians receive the GIS, people who by definition are in need of income support, and that number is projected to grow to 2.6 million by 2023.
Women and single seniors have higher rates of poverty. There are twice as many low-income women as men. Single seniors as a group experience twice as much poverty as those in couples. Single women living in poverty outnumber single men by about 30%
The incidence of living alone is increasing with age, and twice as many women over 70 live alone. Women seniors are more likely to face poverty because of lower career earnings. They're less likely to have a workplace pension as they withdrew from the workforce to care for children and now for a spouse or a parent. These numbers are sufficiently appalling that many CARP members have called it a national disgrace.
People are also not saving enough for their own retirement, and that problem is growing: 8.4 million workers do not have a workplace pension. Canadians are using just 5% of their available RRSP room, leaving an estimated $630 billion worth of tax room unused. While the number of eligible taxpayers has increased, fewer actually contributed to RRSPs in 2010 compared to 2009. The proposed pooled registered pension plans are not attractive enough to change this dynamic, but we believe that they can be improved.
Consequently, CARP recommends three major items. First, replace the OAS and GIS that will be lost by the most financially vulnerable seniors as a result of the changes to OAS as the first step to restoring OAS eligibility to age 65; second, support single seniors, with particular regard to older women, with an equivalent to spousal allowance for single seniors in financial need; and third, make the welcomed caregiver tax credit refundable.
We should help people to save for their own retirement. We recommend that we improve the PRPP, notably with a mandatory employer contribution, and recommit to working with the provinces to advance on the promise to enhance the CPP.
CARP is on the record as opposing the changes to the eligibility age for OAS. More than two-thirds of CARP members strongly oppose the change and want us to continue to work to reverse the changes, notwithstanding that most of them will not actually be affected by the change themselves. They see it as an earned benefit they paid for in their taxes and they want it to help the worst off. They also want to protect this important part of the social safety net for their children and grandchildren.
The government has acknowledged the need to protect those who cannot wait the two extra years for their OAS and GIS—and the GIS is dependent on being eligible for OAS—and among other things has committed to reimbursing the provinces, which are called upon to make up the difference. It is this category of seniors that the government sought to assist with last year's very welcomed GIS top-up and the same people who will be most at risk of having to wait the extra two years.
Now there are discussions with a few of the provinces, and it appears that they have no plans to bridge this gap, either with a special program or by just letting needy seniors apply for welfare. In fact, some of them would have to change their program to let seniors apply, which still carries enough stigma that many who need it will not apply.
Given that the government has already acknowledged the need to look after this category of people and has already committed to reimbursing any provincial programs that come to pass, we are recommending that the government now commit to funding this gap to relieve the anxiety of the most vulnerable.
For single seniors, an equivalent to spouse allowance is something that we have recommended.
Finally, the PRPPs, as presently constructed, are inadequate to fill the gap for retirement security.
Thank you very much.
My name is Gabe Hayos, vice-president of taxation for the Canadian Institute of Chartered Accountants. On behalf of Canada's 82,000 chartered accountants, thank you for the opportunity to appear before this committee. I would also like to acknowledge the committee's 2011 report, which included a number of the recommendations made by the CICA.
At the outset, I want to underscore the crucial role that strong management of government finances plays in achieving a sustained economic recovery and enhancing economic growth and applaud the government for balancing the budget over time through expenditure controls.
Easing the personal income tax burden will enhance economic growth by helping to attract and retain talent. However, rather than personal income tax credits that add complexity, we believe broad-based tax reductions represent a more meaningful approach and should be examined.
There is also a need to consider the appropriate mix of personal income and consumption taxes. Compared to other OECD countries, Canada obtains a significantly higher proportion of revenues from personal income tax than from consumption tax. We recommend that the government consider changing the revenue mix to bring it closer to OECD averages.
In order to stay competitive and create employment opportunities, the scientific research and experimental development tax incentive program should be improved. Although many of the modifications to the program are focused on encouraging small business, large business also contributes to SR and ED. The program should be focused on encouraging those companies, whether small or large, that increase their investment in SR and ED.
An amendment to reduce the general tax credit rate and exclude capital expenditures should be repealed or deferred, and the investment tax credit should be made partially refundable for all business in order to encourage foreign investment. An angel tax credit for innovative start-up companies would be an important addition to this program.
Simplifying Canada's complex tax system will increase productivity and improve competitiveness. We recommend a two-staged approach.
First, the government should establish an independent office that would provide advice on reducing both legislative and administrative complexity of our current tax system. The U.K. Office of Tax Simplification could serve as a model for a similar office in Canada. This independent office would investigate and provide recommendations on matters such as general federal and provincial tax harmonization and a formal loss transfer system for taxation of corporate groups, and continue to adopt policies recommended by the advisory panel on Canada’s system of international taxation.
We also believe that an expert panel should be established to examine major structural changes to simplify and improve the long-term efficiency and effectiveness of the tax system, looking at a wide range of areas such as the language, the costs and benefits of various provisions, and the use of anti-avoidance rules, with a view to permanently simplifying the system.
We recommend that standard business reporting, and specifically XBRL, be adopted for use by business for all government filings to reduce compliance costs and enhance the government's data collection.
We recommend that the capital cost allowance rates on all classes of equipment be continuously adjusted to correspond to the true economic life of the asset in order to encourage investment in productivity-enhancing equipment.
In promoting job creation, we support the government's focus on enhancing trade by reaching a trade agreement between Canada and the European Union and its entry into the trans-Pacific partnership negotiations. Both hold opportunities for expanding trade in the professional service sector.
Maintaining low corporate tax rates in Canada plays an important role in attracting new investment and creating jobs. We applaud the government for having fulfilled this commitment to lowering corporate tax rates to 15%.
Ensuring the adequacy of retirement savings is fundamental to addressing the challenges associated with an aging population. Individuals must have the skills and knowledge to save for their retirement. We are an active participant in improving financial literacy, offering home- and workplace-based educational tools and community workshops by volunteer CAs and conducting awareness campaigns. We urge the government to continue its commitment to financial literacy in the 2013 budget.
We also believe the government should provide further incentives to save for retirement by reducing or eliminating the income tax on personal savings. Increasing limits on TFSA contributions and reviewing the limits for RRSP contributions would further this objective.
We welcome the government's efforts to help internationally trained professionals, as they are vital to Canada's future. We are pleased to have the federal government support initiatives to create online assessment tools that validate foreign education and workplace experience and customized bridging programs to help internationally trained accountants become CAs in Canada. We recommend that such funding be continued.
Mr. Chairman, thanks for the opportunity to appear before the committee. I would be pleased to respond to any questions.
Thank you very much, Mr. Chairman, for the invitation to speak to your committee.
I'll start with a very brief introduction to the chemical or chemistry industry, and then I'll talk about my three main messages.
First of all, our membership includes about 40 large, medium-sized, and small chemistry companies across the country. We're the fourth-largest manufacturing sector in the country, and a very important link between manufacturing and natural resource development.
Chemical companies basically apply knowledge and chemistry to take resources such as natural gas, oil, biomass, electricity, and minerals and convert them into high-value products, thus producing jobs for Canadians and for communities. These products are also critical inputs to a range of industries across the country, including auto, plastics, textiles, etc.
I have three main messages today to share with you. All are focused on growth and investment in our industry and the industries that depend on our products. I have basically only one request, and that is the extension of the accelerated capital cost allowance, the ACCA.
The first message is a very positive message. We're finding in our industry that the policy environment is extremely positive for investment in our country. I'd like to note that over the last five to 10 years, the Government of Canada has embraced a number of changes that really are helping that environment. The fiscal direction, the economic direction, tax policies: they're all clearly making a difference to the investment environment for our industry and for other manufacturing industries.
Within North America—you may notice this as you're reading in the press—there are some clear trends to revitalization of manufacturing and investments in our sector and across manufacturing. We can benefit enormously from those trends and the revitalization of manufacturing, but we probably have to do it now, in the next couple of years.
My second point is that the combination of a positive policy environment and the resource development that is occurring all across our country is resulting already in new investments in our sector, which will build a stronger, more diversified, and regionally balanced economy. Over most of the last decade when I've come to speak to you, I've been complaining about the fact that we're losing plants, we're losing industry, and the manufacturing floor is moving to China. Well, some of those trends are actually changing, and I'll give you a couple of examples.
The most visible one is the Nova plant in Sarnia right now, which is the first plant in North America that's actually planning to take shale gas from, of all places, Pennsylvania, and is planning to upgrade its facilities and produce petrochemicals.
Second, we have a major investment going on in southern Ontario by Cytec, and one of our newest members is a biomass producer called BioAmber, which is building a chemical plant in Sarnia, which should lead to the development of what we call the biohybrid cluster. Just those investments, which are happening right now, total $455 million. We're already a $46-billion industry, but we're seeing with these trends the possibility of an increase in investment of $5 billion to $10 billion, which would produce great advantages for our resource-based economy linked to manufacturing.
Third, what do we need to really make sure we get these investments? The accelerated capital cost allowance does make a difference in attracting these investments. In fact, without it we would have great difficulty attracting the incremental investment to Canada as opposed to the U.S. Since it was first introduced in 2007 as the number one recommendation of this committee—and I remember, James, your chairing that industry committee—this measure has been very helpful for a number of our companies, including the three I just mentioned, that are making investments. In fact, our companies, when we survey them, claim that $3 billion in benefits have resulted from that in terms of investments. This has resulted in the revitalization of Sarnia and has spurred growth in many other sectors.
I think you know, and I know Mr. Brison knows, this is not a tax cut. This is tax deferral. What the accelerated capital cost allowance does is allow you to make a $100 million, $200 million, $500 million investment and write it off when the equipment is delivered over three years as opposed to eight, nine, and even up to 14 years.
That puts cash in the hands of the people making investments, particularly before they're able to get any revenue from those investments.
We think the ACCA would make a significant difference to attract these large investments to Canada, and we hope that you would support it again.
Thank you for the opportunity to appear before the House of Commons Standing Committee on Finance.
My name is Kim Allen, and I'm the chief executive officer of Engineers Canada.
Engineers Canada is the national body that represents the 12 provincial and territorial regulators of the engineering profession. Our constituent association represents over 250,000 professional engineers in Canada, protecting and serving the public interest. It also includes a new generation of over 60,000 undergraduate students attending the 43 accredited engineering schools. Engineers Canada accredits these engineering programs to ensure that graduates meet the academic requirement for licensure with those 12 provincial and territorial regulators.
Engineers are committed to public safety. Today we are offering long-term solutions to government on issues to which the engineering profession can lend its expertise, education, and experience to help create a safer, more sustainable, and prosperous future for Canada.
I will offer recommendations on three topics: infrastructure, foreign credential recognition, and skills. The federal government should include these as part of a viable, long-term economic solution for Canada.
Concerning infrastructure, provincial and territorial statutes obligate professional engineers to work in the public interest. Engineers have a responsibility to manage the risks associated with their work and the impacts on the public and on the environment. Strict adherence to standards, codes, legislation, and regulations ensures that Canadians enjoy a high standard of safety and reliability in their infrastructure. There are needs for additional, constant investments across the country to maintain this standard.
Engineers Canada believes that continued economic recovery and enhanced economic growth are possible through a sustainable, strategic, long-term infrastructure plan. This will help ensure Canada's economic competitiveness and maintain our quality of life. The plan must include requirements to properly manage assets of core public infrastructure. This plan must also consider the vulnerability of key assets to extreme climate events, support increased investment, and attract talent. It should be put in place for the 2014 fiscal year.
Core public infrastructure such as roads, bridges, buildings, water, waste water, drainage, and flood control systems are the backbone of the Canadian economy. When Canadians can safely and efficiently get to work, move goods that they produce, and provide the services their clients need without being impeded by congestion or the results of infrastructure neglect, productivity increases.
The availability of predictable funding for proper operation and maintenance of these assets is essential to protecting the quality of life and the safety of Canadian communities. These investments extend the useful life of infrastructure. Pay now or pay more later.
We believe that it's the responsibility of the federal government to take the lead to work with provincial, territorial, and municipal governments to ensure that predictable funding is available for building and maintaining core public infrastructure over the life cycle of these assets.
Engineers Canada also believes that governments must work to prioritize projects receiving funding to ensure that deficiencies in core infrastructures are addressed first. While public infrastructure extends beyond the roads, bridges, buildings, and water systems we all rely on, those core assets keep Canadians safe and healthy and must be considered first.
Engineers Canada also believes that the federal government must work with its provincial and territorial partners to attract and retain the talent that is necessary to grow our economy. Improvements in the immigration system and measures to address specific skills shortages across the country will help put the right people in the right jobs at the right time. That's good for the engineer and that's good for the country.
Recent plans put forward by the federal government to change how credentials are assessed for the purpose of immigration may help. In consultation with stakeholders, including regulated professions like engineering, the federal government must align applications and assessment practices efficiently to integrate immigrants into our economy and society in a timely manner.
More than 20% of professional engineers in Canada were internationally trained. Our constituent associations process over 5,500 applications annually for internationally trained engineering graduates. This is the highest among the regulated professions.
Engineers Canada supports the licence-ready concept for immigrants in regulated professions. In practice, this means that the federal government must work with the regulated professions to make sure that the assessment of credentials for immigration is recognized by—
Hello. Thank for having me here today.
My name's Tangie Genshorek. I'm the coordinator of the Kamloops Homelessness Action Plan.
Like a lot of homelessness action plans across the country, our goal is to end homelessness. In order to do that, we need a lot of different answers to the range of housing questions. We need a lot of different housing all along the continuum, but I'm here to focus on one area, and that's rental housing.
We have been talking to a lot of stakeholders. We, like other homelessness action plans, get cross-sectoral representation at our community table so that we can get the business perspective on homelessness. We want to motivate the private sector to be part of the solution. We've been looking at this for several years, and we think we've found a way to involve the private sector.
Professor Marion Steele, from the University of Guelph, has to be credited with all of the work that I'm going to talk about here today. I'm not a tax expert—my background's in architecture—but for a long time Marion Steele has done a lot of work on the issue of tax incentives to create housing. She had her master’s degree before I was born. I wish she could be here today, but unfortunately she's in Europe.
The idea of a tax incentive is, I think, a realistic and feasible measure that we could readily implement. It's been in place in the U.S. for over 25 years. It was implemented under the Reagan administration, and it's been highly effective in creating rental housing, affordable rental housing specifically. We know there's a long list of housing needs and that a variety of people require affordable housing, but we see a glaring gap in the housing continuum in regard to rental housing. There really is no way for the private market to make those numbers work. There's no way for them to get involved in creating rental housing. A tax incentive at the federal level could help make that happen, and is doing so in the U.S., so we have a model there in the U.S. to build on.
We have some well-researched ways to integrate that model for Canada. We have good research into what it would cost. It would be as little as $50 million in the first year and up to $500 million in the tenth year, a quarter of what the federal government is spending on the CMHC affordable housing initiative right now.
That's not to say that the affordable housing initiative should be gone, but we do know it's under the microscope right now for re-evaluation, and a piece of that funding could be used to create a tax incentive to fill that rental housing gap.
We also need to look at HPS and what's happening there. We don't want that to go away in lieu of a housing tax credit. This is just another tool to add to the roster of things we need to do to create affordable housing.
A syndicator creates housing tax credits that are sold to the private market, and those housing tax credits then become the funding for affordable housing, whether it's by a private developer or a non-profit developer.
A lot of people talk about MURBS. That was axed about 20 years ago. This would be different from MURBS in that it would be applicable to the non-profit sector, so a portion of the housing would be truly affordable. A portion of it would be lower-end market rental, which we need as well to stem the flow of people into homelessness. That's a key piece of the issue. We're not just picking people up at the shelter end of the continuum; we need to stop the flow of people there, and there's just no reason for anyone to build rental housing right now.
That's what I wanted to focus on here today. It's really well researched, as I say, by Marion Steele, a University of Guelph emeritus professor. She's well published. You can find her work at the C.D. Howe Institute as well.
Thank you to all of the witnesses for your presentations. Five minutes goes by so quickly.
Mr. Allen, let me start with a question to you. I notice in your presentation you talk about Engineers Canada believing there needs to be a sustainable, strategic, long-term infrastructure plan in place by 2014 to maintain our economic competitiveness and to maintain our quality of life.
I can tell you I live near the Gardiner Expressway in downtown Toronto. A report has just come out that says our fears and anecdotal evidence are very indicative of the fact that this structure is crumbling and could fall on our heads and injure us, or worse, when we go under it. Not a week goes by when we don't have a broken water main and numerous problems because of a lack of basic infrastructure investment. We have many witnesses come here and talk about this.
Can you elaborate on why you believe this will improve Canada's competitiveness, our productivity, and our quality of life, and why this is not just an expenditure but an investment in our country that has to be made?
Sure. Thank you very much.
I think the Gardiner Expressway is a very good example, a very visible example of infrastructure that is crumbling. Lots of our infrastructure is subsurface, and you don't see those things. The same types of problems are going on with various systems.
Those who are just recently moving back from Toronto to Ottawa recognize all of the traffic congestion we have to deal with, and the constant activity going on really impedes traffic. Reliable supplies of water and electricity are very key to some of the manufacturing sectors. We've heard from manufacturing sectors today that without those types of things to be able to get their goods to market—and we deal with a global market now—we're just not going to be able to compete in the world. Canada is a big country. That's one of the challenges we have. How do we connect people, how do we connect goods, how do we connect services? We have to deal with those questions.
One of the other main pieces in there is tied into extensive work we have done--and the federal government has supported it--on how to deal with the critical infrastructure and climate change. Pipelines ran across permafrost, and there isn't permafrost now. There are many, many different things that affect those ones.
Obviously actors are at the wrong end of the totem pole, if that's an expression to use. We do create, and there are more and more opportunities with new technologies for individual artists--individual actors in this case--to create products that we couldn't do.
I have been in this business for over 30 years. When I started, there was no individual creation of that time, but it has always been a factor in theatrical and musical areas and others. Certainly painters and writers work on their own to create, so that's part of the job and wealth creation. That's one of the reasons those artists and writers....
If you talk about spikey income and how you try to level it out, a writer could spend, as a friend of mine just did, four years writing a book, which has now been published, and he's now on his second book. However, during that time, there was a lot of money going out and not a lot coming in. For him to be successful, and then taxed on top of that, and have some of that not averaged across the time he was spending on it is, I think, unfair.
On the issue of the OAS, 40% of the people collecting OAS make less than $20,000 a year, and 53% make less than $25,000, so I agree with you that it's a regressive decision. If there were an issue around sustainability, there would be more progressive ways to approach it, including clawbacks.
We proposed a supplementary voluntary CPP so that people would have access to a well-managed, low-fee structure and a diversified Canada Pension investment pool, and we proposed having it voluntary so that people could decide how much they would contribute.
Do you think that would be, in addition to PRPPs, an improvement in the choices for our future retirees?
Thanks to all the witnesses for being here this afternoon.
I think I'm going to talk to you, Mr. Blake. I'd like to talk to all of you, but I only get five minutes.
You brought out some interesting ideas that I want to address with you a little bit, but before I get started, I want to commend you. I was reading your biography this morning. It's nice to see somebody giving back to their sector, as you're giving back through education and training. I want to commend you for doing that. I think it's a good example for more Canadians: to not only take from the sector but give something back. I want to commend you on that.
The Conservative government has been very active in the arts. It's been very supportive of the arts and culture. In fact, we've increased the funding for the Canada Council for the Arts by 20%, to $180 million.
Compare this with other places around the world. For example, in the United States, the National Endowment for the Arts runs on less money now than it did 20 years ago. The State of Michigan, for example, had an 80% reduction in the budget for culture. If you go across to England, funding was cut by 30%. If you turn to Australia, the budget for the Australian arts council was only $163 million last year; Canada's is $180 million.
I know you talked about returning funding to CBC and about increasing spending. I'd love to do it. I don't think there's anybody around this table who would not agree with you. We'd like to do that in a perfect world, but we're not in a perfect world; we're in a world in which you have this thing called a deficit over our heads. We need to get that under control, so we have to be responsible.
Therefore, I'm curious about priorities. When we look at CBC versus something like, for example, the Canada Council for the Arts, should we be redirecting some of that increase to the council towards CBC/Radio-Canada?
Again, if we have one dollar to spend, where's the best place to put it? Do we put it into the delivery of Canadian programs or do we put it into increasing the content of Canadian programs?
When we look at Telefilm Canada, for example, their budget is approximately $110 million, so they have a substantial number of dollars just for the creation of new productions. I think $73 million is allocated for the development and production, and approximately another $25 million, give or take some change, is meant for promotion and marketing of Canadian products around the world.
Do you find problems in getting access to delivery for Canadian content? For example, you have the CBC, which used to be the main deliverer of Canadian content—that would have been in the 1960s and 1970s—but now, when you look at all the channels on the networks that we have on any of the cable companies, are you getting fair access, whether on Showcase or other channels like that? What are your members saying about that? Do they feel they still need to have one mechanism to get their content on TV?
I love this system, as it allows us to talk about really different issues. However, these issues are totally relevant to the budget that will be presented. Thank you for being here and making your presentations.
My first question is for Ms. Eng.
You briefly touched on what kind of improvements to Old Age Security you would like to see. We know that the Prime Minister made an announcement about that in Davos, Switzerland. Afterwards, the amendment was discussed in the House, included in the latest budget and adopted. I am talking about the fact that the eligibility age was raised from 65 to 67.
Was that a surprise for you when it was first announced in Davos? Had you already heard about that possibility?
Well, we realized there was going to be an increasing number of people reaching aged 65, and that's a fact. However, the burden of that group is a set amount. We estimated some $2 billion to $3 billion a year, which is a sizeable amount, of course. However, our recommendation was that there were other places in the budget to find such an amount and that there was no need to go after this particular program. Some of the examples we gave were the massive savings that could be garnered in the health care system, through withdrawal from military spending in Afghanistan, and so on.
We raised the point that there were other places where you could find the savings, if the issue was an issue of budgetary strain. However, the changes, as they have now been put through, actually postponed the effect until the bulk of the group that's causing the problem, purportedly the baby boomer generation, has mostly passed through. Therefore, the actual factual support for making this change has minimized.
Nonetheless, from our members' perspective, in addition to not accepting that it was absolutely necessary for the fiscal health of the country, they also felt this was something they had paid into, something that was an earned benefit. It was part of our social safety net. They found this was an important value that they wanted to see maintained.
Thank you, Chair. As the keeper of the time, would you let me know when I have roughly a minute and 30 seconds left? I'd appreciate that. Thank you very much.
Welcome to all of the witnesses who are here today. This is a very interesting panel, and I would like to pursue questioning with all of you. I would like to engage all of you, but I can't, because of limited time, so I'm going to start with Mr. Hayos.
I want to talk to you about tax as an instrument of public policy. We use different instruments of public policy to achieve various outcomes. Using the tax system is a very coercive one, but it also has the opposite effect. In your submitted brief, you say, “We fully support the reductions made to the general corporate income tax rate over the past few years, and applaud the government for having fulfilled the commitment to lowering the rate to 15% this year”.
I would like you to give the committee, and particularly the members of the NDP, a basic lesson about how, first, corporations do not pay tax, people pay tax, and that bird has been plucked; and second, about how lowering the tax rate to 15% has led to jobs, has led to growth, and is leading to long-term prosperity, making Canada a very attractive destination for investment. Could you please comment on that?
On the OAS eligibility change, we're hearing today that there might be a windfall of as much as $10 billion for the federal government in that change. Using Ontario as an example, people on a disability pension from Ontario or Ontario Works through a municipality were hoping to go to OAS at 65, which is a modest increase for them. Now, with this two-year change, they're going to carry the burden of two years of the costs of the government. As well, in these two cases, with it being left on that much longer, it's an added cost to municipalities and the provinces.
I would suggest that this hasn't been about sustainability, but about offloading costs. That's pretty apparent to us now. How concerned are you about the impact this is going to have on our broader community?
In fact, we're very concerned about it. It's not so much on the off-loading between the jurisdictions, but that individuals will be hurt by this.
We appreciate that the government, in announcing the changes, acknowledged that there is a category of people who would be affected and promised to reimburse any provincial programs that came into play that would look after that group of people, but of course in our meetings with these provincial premiers and finance ministers, we found they have no plans. They have not planned to put anything in place, so people are worried as to what's going to happen.
Given that the government has already committed to reimbursing any provincial expenditures that do come into play, they should now set aside the money, commit to doing it, and take credit for it, frankly, so our members and other older Canadians will be at rest that those who are the worst off, at least, are looked after.
Thank you, all, for coming before us this afternoon.
Ms. Eng, it's good to see you again. We've had the opportunity to speak to you over a number of years.
I want to do a bit of crowing, if you'll engage me, as to some of the government initiatives since 2006.
There was $76 billion this year, through the Canada public pension system. We have provided $2.3 billion annually in additional tax relief to seniors and pensioners, through measures such as pension income splitting and increased age credit. We've removed 400,000 seniors from the tax rolls completely.
We've implemented automatic renewal of GIS; I know that was something you had asked for. We're providing $400 million over two years, over budget 2009, for the construction of housing units for low-income seniors. We've appointed a minister of state, which I think is probably something you've asked for in the past as well—I'm skipping a few here because the chair is going to ask me if there is a question—and we created $13 million over three years in support of the federal elder abuse initiative, all good initiatives.
There's the largest guaranteed income supplement, or GIS, top-up benefit in a quarter century, to help Canada's most vulnerable seniors while ushering in an automatic renewal of GIS. There's been $10 million over the last two years to increase funding for New Horizons, and $50 million over the two years to extend the targeted initiative for older workers until 2013-14.
On top of that, I believe The Globe and Mail had an article recently on a new study that compares public and private pension systems in 11 countries. It has placed Canada fourth in the world. We're behind Netherlands, Australia, and Sweden. If you consider the size of those countries and the pressures we have on our country, I think we're doing very well—not that we can't get a little better.
Finally, I want to tell you about this. I don't know whether Canadians are aware of it, but governments are on the hook for private pensions. To that effect, there was $11 billion that went to the Detroit Three. The majority of that—I don't know if you're aware of this—which I think was $8 billion, the GM portion, went for legacy funds. That's pension and health care.
I'd better add one other thing. I'm sure you're aware that the last quarter returns for CPP were 0.5%.
Do you have any actuaries working in your organization, and are they focusing on future pension drawers? Could you straighten that out for me?
I haven't been here to listen to all the testimony today, but I appreciate your giving me the opportunity to ask a few questions.
Ms. Eng, I'll start with you.
Of course, you probably remember the last time we were together. It was at an announcement in my riding. I think it was at the Yee Hong Centre. It was a positive announcement. I was bit thrown. You were campaigning for the Liberal candidate in the riding at that time. It was days before the election, and there was, of course, a great deal of Liberal campaign literature strewn throughout the event at the same time that a minister was there announcing some great news for seniors.
I was a little worried at that point, in the sense that the organization you lead now had become so political in nature. As opposed to advocating on behalf of seniors, you were advocating on behalf of a political party or your ideology. Looking at some of the things on your website, I find some of that same type of attitude. I know at that time you were there with Moses Znaimer, who's the head of Zoomer Radio in Toronto, AM740.
When you look through Canada's economic action plan for the last few years, are you able to take off your partisan hat and put on a hat to advocate on behalf of not only today's seniors, but those of us who, in the future, will become seniors?
I look at something like the old age security. You have a poll on your website that asks people if they would vote for a party that cut Old Age Security. Now, I'm not a—
Mr. Chair, it's quite an accusation, and it's inaccurate.
At the meeting, which was held at a nursing home with which I had some relationship, the then minister for seniors, Julian Fantino, was one of our headliners. We had members from all parties deliberately, because it was during the federal campaign. Mr. Ignatieff, who was there at the time as well, worked the room, as candidates will, and the other members who were there were also welcome to do the same. The fact that the minister was there was not on account of anything that I did.
In any event, I think you'll see from our work that we're not partisan, and I think our members also see that we are not. If our members, who vote across the spectrum, were to think that we were acting in a partisan manner, I can assure you they would let us know.
I think our record speaks for itself, in terms of the kind of work we have done. We're grateful for the response that the government has provided to us and all the things that Mr. Van Kesteren has mentioned, in addition to what he hadn't mentioned, including the action recently with the advance on elder abuse sentencing and a number of other things that I don't want to use up the time to mention. They are all on the record, and we're looking forward to further response from the government, with the help of the opposition, to move these things through the House.
Anything we have ever done is, for the record, on the record. People can make their own judgments as to whether or not we're acting on behalf of any political party or on behalf of older Canadians generally.
I will call this meeting back to order. We are continuing meeting number 81 of the Standing Committee on Finance on our pre-budget consultations 2012.
We will have a shortened panel, unfortunately. I want to inform our witnesses that we have votes, and bells will ring in about 30 minutes, I understand. I'll just point that out to our witnesses and colleagues.
We have with us here today the Canadian Chamber of Commerce, the Canadian Federation of Students, the Fédération des communautés francophones et acadienne du Canada, the Mining Association of Canada, and the Petroleum Services Association of Canada.
You each have up to five minutes for an opening statement. We'll make our way down the row, starting with Mr. Everson, please.
Thank you very much, Mr. Chairman.
I will try to keep my remarks very brief. I will start by thanking the committee for calling us, noting that I know this time of year becomes very gruelling for members when you have an assembly line of witnesses. Please be assured that the opportunity to come before you to talk about the priorities for the upcoming budget, and indeed for the country, is very much appreciated.
Canada' s economy, as everyone here will know, is a case of bad news and good news. We are all familiar with some of the bad news elements: the uncertainty in Europe, the slowdown in China, and continuing problems with U.S. recovery. Those problems are starting to impact hiring and investment decisions among the members of the chamber. This morning's forecast from the Bank of Canada affirms a very modest growth forecast in the near term, and that's the bad news.
In a larger context, it's clear to us that Canada is very strongly positioned as a desirable investment location and an increasingly effective international trader. A succession of governments have taken the boring doctrinaire decisions that every economics textbook recommends, and to some extent they are working.
I will mention two critical areas where we think Canada is making the right moves. Eliminating the deficit is the single most important thing the government can do now to strengthen our economy and create jobs and protect what Canadians have created. It's debt that is creating so much uncertainty in the United States, and in Japan and Europe. Canada, free of deficits, will be a standout among nations.
To enhance economic growth and our job creation, we also have to diversify our international trade portfolio. Canada trades as a lifeblood issue; two-thirds of our GDP is trade-related. Our traditional trade agreements are out of date, and the government can be commended for aggressive pursuit of new deals in the Trans-Pacific Partnership, in Japan, in India and, of course, in Europe.
Emerging market economies remain the engines of global growth, despite some recent slowdown. We need to seize the immense opportunities available in market economies that are emerging in our time.
One area we are not doing so well in is innovation. This is a key issue for a Canadian economy that does not want to compete on cost. We don't want the low wages and deficient social programs and the careless environmental standards that are sometimes associated with cost-competitive emerging economies, so we have to compete with our brains, yet when it comes to the capacity for innovation, the World Economic Forum ranks us 25th, and we rank near the bottom of OECD nations in getting innovative products and services to the market.
To foster innovation, the government must focus on implementing a new, reinvigorated national strategy, with the spotlight on research, commercialization, training, and retraining. The budget 2012 decision to cut a quarter of the SR and ED tax credit was, in our opinion, a step in the wrong direction. With so many of our trade rivals in so much trouble, there's an opportunity now for Canada to steal a march on the rest of the world. Cutting supports for research and innovation is a counterproductive move.
Generally I would say, Mr. Chairman, that the single most pressing issue for members of the Chamber of Commerce this last year and in the year going forward was Canada's labour and skills shortages. It's a very complex issue. We'll be working on it, and Canada needs a myriad of tools to address it.
We commend the government for action on immigration and for worker mobility in reform of the EI program. Changes to the unemployment insurance program are painful, for certain, but it's a step in the right direction.
I will end my remarks here and welcome questions. I commend the committee for your deliberations.
My name is Adam Awad, and I'm the national chairperson for the Canadian Federation of Students.
The Canadian Federation of Students is Canada's largest and oldest national students' organization, representing more than 600,000 students in all 10 provinces. Our organization advocates for an accessible, affordable, high-quality, public post-secondary education system.
Our budget recommendations focus on how to make education more affordable for students and address mounting student debt in Canada. Ensuring that all people in the country are able to pursue a higher education and training must be part of any significant, stable, long-term recovery for our economy. Relatively high youth unemployment, record levels of personal debt, low levels of industry research and innovation, and a rapidly growing income gap all compound the problems of the global financial crash and subsequent recession and must be addressed.
In its most recent global economic competitiveness report, the World Economic Forum ranked Canada 15th in the ability to compete economically with other countries around the world, down from 12th last year and 8th the year before. This is a worrying trend. In its explanation, the forum noted that Canada's disjointed and inefficient post-secondary education system was one of the main reasons for this slide.
The OECD has also highlighted that participation rates will have to grow significantly if Canada is going to address changing labour market demands and an aging workforce. Unfortunately, the cost of post-secondary education continues to be downloaded onto students and their families, despite the significant public rate of return on investments in post-secondary education: every dollar invested into post-secondary education brings in $1.63 in return, so there is a 63% return on that investment.
As a result of high tuition fees, student debt has increased substantially. Average public student debt is now over $27,000 after an undergraduate degree alone. Paired with rising tuition fees, it's easy to understand how we've arrived at a situation in which Canadians collectively owe $15 billion to the federal government alone, not including the billions more that they owe to provincial and private loans.
Credit agencies and major banks are now warning that student debt has reached unstable levels. The long-term impacts of carrying such debt include delayed participation in the economy, the inability to invest or save for retirement, choosing to move out of the country in order to find work, starting a family later in life, and the aversion to taking on further financial risks, such as starting a business. Those in finance have finally caught on to what students have been saying for years: that debt is an issue, and it's not going away.
Today, over 25% of the Canada student loan borrowers are on the government's repayment assistance program, meaning that they do not make enough money to make their monthly loan payments. Over 147,000 Canadians are currently unable to make any payments on their loans from month to month. In conditions like these, how could we possibly expect students and graduates to participate fully in the economy?
Students are putting forward a vision that would work to address the root cause of the debt crisis and address the debt itself.
First, the government should implement a federal post-secondary education act modelled on the Canada Health Act and create a dedicated cash transfer for post-secondary education. Provincial governments must be accountable for the transfers they receive from the federal government, and an act would ensure that federal funding to the provinces for post-secondary education would actually be spent on just that. The lack of a national vision has resulted in significant disparity in tuition fee levels and per-student funding across the country, with students in Ontario paying almost three times more than students in Newfoundland and Labrador and students in Alberta receiving almost double the rate of per-student funding than those in Quebec. Students are calling on the government to ensure that merit, and not geography, determines whether someone can go to college or university.
The government also needs to address the historic underfunding of post-secondary education that results from the cuts to federal transfers in the late 1990s. By filling the gap left by two decades of inadequate funding, the federal government could take action to reduce high tuition fees, which are the heart of the student debt crisis.
We're also recommending that in order to stop the federal student loan debt from increasing, government should redirect the $2.52 billion currently allocated in ineffective education tax credits and savings schemes into the Canada student grants program. This simple solution would remove the need for the $2.3 billion the Canada student loans program gives out every year, and such a change would have a significant impact on students' ability to both get an education in the short term and to contribute meaningfully to Canada's economy and society in the long term.
In order to address the existing debt, we recommend reducing student debt by half, bringing it down from $15 billion outstanding to $7.5 billion by 2015. By consulting with the provinces and national stakeholders, the government would be able to effectively distribute this debt relief to have the greatest measurable impact.
I certainly appreciate the opportunity to address the committee this evening. Five minutes is not quite enough time to do justice to all of the recommendations included in the book that was handed out, “Public Education for the Public Good”.
I am more than happy to answer any questions, should members have any.
Good afternoon. Thank you for inviting the Fédération des communautés francophones et acadienne du Canada to participate in the pre-budget consultations.
I am appearing before you today on behalf of 2.5 million French-speaking citizens and taxpayers living in nine provinces and three territories.
The Canadian government's priority is to create jobs and stimulate economic growth. That objective is shared by the citizens of francophone and Acadian communities. We contribute to that goal in a concrete way. Recently, the Conference Board of Canada carried out another study that showed the full contribution of those francophone citizens to our country's economic growth.
However, there is still much to be done. Although a large portion of French-speaking citizens seem to be doing well on an individual basis, the same is not true of francophone communities, where there are still discrepancies in access to services and economic vitality.
By creating favourable conditions for francophone communities to be able to thrive in French, the government will be much more successful in reaching its economic growth objectives. We recently presented those conditions as part of the consultations on official languages held by the Minister of Canadian Heritage and Official Languages, the Honourable James Moore.
First, the government should invest in our population. I am talking about support measures for young families and young people to enable them to pass on the French language and strengthen their sense of identity through increased access to cultural and heritage activities, and child development support programs. But that is not all. Like all of Canada, our francophone communities depend on the contribution of newcomers who settle among us to succeed and help our regions grow. That requires investments in the promotion, recruitment, welcoming, economic integration and retention of French-speaking migrants and immigrants.
Second, we recommend investing in our space. To be successful, francophones must have access to a wide range of services and activities covering all areas of our daily life—from education to health, from justice to culture, from young people to seniors.
Third, investments should be made in our development. We need measures to create thriving francophone communities where people can be successful. Communities play a role in regional economic development. That involves investments in workforce training—be that in terms essential skills, such as literacy, or post-secondary education—and support for entrepreneurship, and for cultural and heritage tourism initiatives.
For those investments to produce the anticipated results, emphasis should be placed on strengthening the capacities of organizations and institutions on the ground. They deliver those services and activities, and achieve that development by and for the community. Francophone citizens increasingly want to live in French, and they want to have those services and activities provided in that language. Organizations and institutions that produce results for Canadians have not received additional support for doing that work. They are trying to meet a growing demand, with resources that, in most cases, have not increased since 2005.
That has prompted us to issue two recommendations.
The first recommendation is for the next federal budget to announce the renewal of the Roadmap for Canada's Linguistic Duality with investments in the three major priorities we have just presented—our population, our space and our development.
The second recommendation is for the budget to announce increased support for organizations and institutions that ensure the provision of services to francophone citizens. That increased support would involve, among other things, improvements to the Community Life component of Canadian Heritage's Official Languages Support Programs.
However, creating favourable conditions for our communities to contribute more to Canada's economic growth is not limited to investments. As I have already pointed out to this committee, very often and too often, the Canadian government's investments—through federal, provincial or territorial agreements—did not benefit the French-speaking citizens we represent.
Currently, nothing is stopping provincial and territorial governments from being accountable when it comes to the way funds from transfers in areas such as health, education, immigration or labour have translated into concrete services for francophones. We are talking about taxpayers' money and services for all citizens.
Improvements must be made in order to ensure efficiency and responsibility. That is why the FCFA recommends that, in future federal/provincial/territorial agreements, the Government of Canada identify an amount dedicated to services specifically intended for French-speaking citizens of the province or territory with which an agreement is being signed.
We also recommend that those agreements systematically include strong linguistic clauses that make provinces and territories accountable.
I'm here with my colleague, Brendan Marshall, the director of economic affairs for the Mining Association of Canada.
In 2011, the mining industry contributed $35.6 billion to Canada's GDP, employed 320,000 workers, and paid $9 billion in taxes and royalties to both levels of government, an increase in all three areas over the previous year, reflecting the strong performance of the mining industry in recent years.
According to recent MAC research, Canada's mining industry is poised to invest some $140 billion in projects across the country over the next decade.
The government has contributed positively in recent years with policy developments and investments supporting the growth of our sector, including geo-mapping, exploration financing, capital investment in critical infrastructure, and a responsible resource development plan in budget 2012.
To ensure that the mining industry's contribution to Canada's economy remains robust, a competitive and predictable domestic regulatory environment is key. To this end, the government should continue upholding Canada's economic fundamentals by maintaining low inflation, eliminating the deficit, preserving and improving our tax levels, and decreasing the national debt.
Continued forward thinking, such as the promise of regulatory reform displayed in budget 2012, is essential. Canada has the opportunity to capitalize on a growing mining sector and the many economic benefits that flow from it. Though many improvements are anticipated to result from the federal government's responsible resource development plan, uncertainty currently exists over how relevant authorities will work together to enact the legislation. Governments should continue working with each other and stakeholders to ensure that the intended outcomes are achieved.
Further, the government should implement a functional permitting system for the Species at Risk Act and should modernize and complete the environmental legislation governing Canada's north.
On the human resources front, it is estimated that the mining industry will require 140,000 new workers over the next 10 years. Governments must work with industry, schools, aboriginal groups, and other communities to address the skills shortages facing mining and other sectors and to address issues such as mobility and immigration needs.
Despite the abolition of the mining industry human resources sector council, the mining industry, through MAC, will be stepping in to secure the future of MiHR. Replacing government core funding with our own, we are hopeful that MiHR's proposals for specific program funding to support labour market research, labour certification, and aboriginal inclusion will be supported.
The mining industry is the largest private sector employer of aboriginal people, and the recent discontinuation of the aboriginal skills and employment partnership program has created a gap that needs to be filled. The potential for significant aboriginal employment opportunities in our sector is strong, but essential training to develop the requisite skills is needed.
Innovation is key to addressing declining ore reserves, meeting increasing regulatory standards, and managing higher operating costs. To capitalize on a pan-Canadian research program, the Canadian Mining Innovation Council is requesting $18 million per year over five years in support of the industry's R and D priorities. Mining already spends some $500 million annually on R and D in Canada, but not through CMIC's collaborative model. Support for CMIC, which is the Canadian Mining Innovation Council, would bring federal investment in mining R and D closer to levels already enjoyed by other major Canadian economic sectors. It would also bring Canada in line with what some other major mining jurisdictions, such as Australia, Sweden, and Norway, have done, recognizing the potential that exists in their countries for mining but recognizing that more R and D is needed to capitalize on that.
Given the remote location of many mining projects, infrastructure remains a key challenge in making the economics of multiple projects across the country viable for development.
Ongoing investment in transportation and power, including through public-private partnerships, is crucial. Fulfilling the government's commitment to restore market balance between shippers and railways is also critical.
Canadian-based metal reserves have been in decline for 30 years, putting our smelters at risk. Without sustained exploration, mineral production will outstrip reserve additions, which will have serious consequences for our economy.
Given current challenges in raising capital for Canada's junior firms, we strongly recommend, again, that Canada's mineral exploration tax credit and flow-through mechanisms be maintained and extended.
Thank you for your consideration.
Good afternoon, and thank you for the opportunity to speak with you here today.
As mentioned, my name is Elizabeth Aquin, and I'm the senior vice-president of the Petroleum Services Association of Canada, or PSAC—the other PSAC.
Joining me today is Kathy Marasco, vice-president of corporate human resources, a representative from one of our member companies, Sanjel Corporation.
The Petroleum Services Association of Canada is the national trade association representing the service, supply, and manufacturing sector of the upstream petroleum industry. PSAC represents a diverse range of over 260 member companies, employing over 76,000 people, and contracting almost exclusively to oil and gas exploration and development companies. PSAC member companies represent approximately 80% of the business volume generated in the petroleum services sector.
PSAC is having statistics updated this fall on the economic contribution of the petroleum services sector; however, for the purposes of perspective, a study by the Canadian Energy Research Institute revealed that in 2006 the sector contributed $65 billion to Canadian GDP, paid $9 billion in personal and corporate taxes, and employed 800,000 people across the country directly and indirectly. In 2009, 36 Canadian-based companies alone exported almost $13 billion worth of products, technology, and services.
We believe that the oil and gas industry in Canada is, and will continue to be, a major source of economic growth. Arguably, however, one of the biggest obstacles to this growth is the shortage of labour. This issue will require a combination of remedies, some of which I would like to highlight here today.
The first one is with respect to the overseas employment tax credit, OETC. When companies have valuable employees who have gained experience and are now able to help Canadian companies diversify and grow internationally, the main issue is retention. Retention involves continuing to provide those employees with career or personal development opportunities, compensation incentives, or perhaps a combination of both. The OETC is one example of such an incentive. Work assignments in foreign countries are typically rotational in nature. For example, employees are requested to work 30 days in the foreign country, and receive the next 30 days off in Canada. This type of arrangement causes significant disruption to family life. The OETC has been a very effective tool in enticing employees to accept such work arrangements.
The benefits of the OETC are several. The company is able to expand internationally, earning revenue for itself and for Canada and providing increased jobs to Canadians through such growth, as well as the portion of income tax paid by those employees working internationally, over and above the OETC. As those employees return home, they also contribute to the Canadian economy as they spend their disposable income in Canada. In addition, the company is able to retain the employee to deploy as needed. The phasing out of this tool, as indicated in the 2012 budget, removes an important arrow in the quiver of Canadian competitive advantages.
On another topic, as PSAC member companies search for new employees, they most certainly seek Canadians first. This makes the most business and economic sense, as international recruitment is expensive, time-consuming, and often beyond the HR capabilities of many small and medium-sized enterprises. Placing an ad in the local paper is always the first choice. As much of PSAC's membership operates within Alberta, more and more member companies have started to expand their recruitment searches across the country, aware that—
—unemployment is higher outside of Alberta.
In doing so, work arrangements to encourage people to work away from home, in another province, are being created. Offering work schedules of 21 days on and 14 days off is one example, allowing workers to have their families remain in place until they are confident that their skills are truly transferable and that this new industry will work out for them.
The issue with this arrangement is the uncertainty for companies as to whether the travel and accommodation costs for workers are taxable benefits. Under subsection 6(1) of the Income Tax Act, all benefits received by an employee from their employer are taxable. There are certain exceptions under subsection 6(6) that many offer relief, but only under specific circumstances and criteria.
A key criterion is that the work assignment must be temporary in nature. Since it is not usually the intention of the company, this would appear to render employees ineligible for relief under this section.
Employees, however, do not see travelling to work as a benefit that should be taxed. Without the help of subsection 6(6), the entire interprovincial distance travelled could be considered as travel from home to work. As such, it's a taxable benefit.
The amount of this taxable benefit is extremely large, and quickly erodes the employee's net pay. This—
Thank you very much. I appreciate that. You'll get more time during questions.
Members of the committee, can I get consent, under Standing Order 115(5), to sit through the bells for maybe 15 minutes?
Some hon. members: Agreed.
The Vice-Chair (Ms. Peggy Nash): Thank you.
In the absence of the chair, I'm going to take my five minutes right off the bat and then go into the rotations.
I want to thank all of the witnesses for being here. Some of you had very similar comments. Many of you spoke about R and D and innovation. You spoke about labour shortages. You spoke about debt, both government debt and personal debt.
First, Mr. Awad, you have a proposal to help alleviate student debt. Can you tell me, from the perspective of students, what role reducing student debt would play in helping with economic development? Are there overall economic advantages to Canadians for reducing the debt, particularly to students?
Absolutely. As I made reference to in my remarks, what we're seeing more and more, particularly with high youth unemployment—at the moment, it's double the general rate of unemployment—is that youth, particularly graduates, are having a harder time finding employment right afterwards, so it makes it difficult to repay that amount. We're also seeing lower levels of youth entrepreneurship. If you graduate with $25,000, $35,000, $40,000 in debt, then taking on an additional debt from a bank loan in order to start a business is often way too much in terms of actually being able to pay that all back.
When we see the rising number of students using the repayment assistance program as part of the Canada student loans program, that means.... This year there are 147,000 people whose interest in being covered by the federal government, which means they aren't able to invest locally in their economy. They aren't able to put money away for economic stability. They aren't able to start families, often, because that requires greater resources.
Actively reducing the debt would alleviate a number of those issues and would provide students an opportunity to reinvest in their local economy, to be creative, and to start their own industries and businesses. It would allow them to be able to plan much further ahead, rather than from week to week and paycheque to paycheque.
I notice you also raised in your report the issue of aboriginal youth. That was also mentioned by you, Mr. Gratton. Mr. Everson, you mentioned the whole issue of labour shortages.
As I understand it, there will be about 300,000 aboriginal youth joining, or potentially joining, the labour market over the next 15 years.
Mr. Gratton, I'd like to start with you. What is the mining sector doing to reach out to aboriginal youth to address the skills shortage and to bring those youth into the labour market?
Then I'll open it up to anyone else who would like to get into that specific question about aboriginal youth.
Through our sector council, one of the projects we've done in partnership with the Assembly of First Nations and the Inuit is on aboriginal inclusion. It's been taking to companies the skills and systems they need to make the workplace a better place and more attractive for aboriginal people. That's not just youth, but since they have the youngest population in Canada, they're often fairly young people. That's something we've been doing.
As you know, any major new mining development in Canada will typically come with an impact benefit agreement, or something like that, with the local communities. It will typically have employment targets, and often also training arrangements to help encourage aboriginal participation in the industry. That's another aspect.
I would be remiss if I didn't mention an excellent program in British Columbia, where I used to work, that just recently got new funding. It's called the BC Aboriginal Mine Training Association. They just got renewed funding for the next three years. That's been a remarkable partnership between industry, communities, governments, and first nations to provide work experience and training for them.
Thank you, all, for coming this evening.
Mr. Gratton, I will continue with you on the issue about the aboriginal workforce.
I was up in Alberta, in the Teck coal mine, and they did in fact have a program through which they engaged the aboriginals. We do know, of course, that in a lot of these areas—the Ring of Fire, for instance—there are large groups that can be tapped into. It's good to see you are doing that.
What I was fascinated to hear you talk about was needing 140,000 workers in the next 10 years. When you talked about 140,000 workers, were you talking directly? If we're talking about the extraction industry, which I understand is indirectly responsible for 20% of our GDP, were you talking about direct requirements in the extraction industry, or were you talking about the spinoff—the unguided hand principle?
Thank you, Mr. Chair. Thank you to the witnesses for appearing.
I'm just going to ask a quick question to the Canadian Chamber of Commerce and to the Canadian Federation of Students, because I think you guys were saying the same thing.
Mr. Everson, you were saying that government's not moving when it comes to innovation, and it has to do a bit of a better job. Mr. Awad, you were saying that Canada does not have the ability to compete, that Canada's not competing, and we see it in the statistics.
Are you both saying the same thing, or am I misinterpreting what is being said? I'd like your comments.
You also talk about reducing high and uncompetitive marginal personal income tax rates that discourage people from working, saving, and upgrading their skills. I agree with you 100%. In fact, most of the things that you put forward in this brief I agree with.
What I want to talk about with the three groups that I've mentioned is labour mobility. Let's just leave the foreign workers issue out completely. I want to talk about how we can get improvements in labour productivity, which you mention in paragraph 4 specifically, and how it can mitigate the negative impact of aging populations and a declining workforce, which we have. In Fort McMurray, we have a very declining workforce; we have a lot of people retiring and a lot of problems.
I'm going to start with Ms. Aquin. Could give me your top three initiatives that this government could concentrate on to get labour from one part of this country to another? I mean things like a travel tax credit, which you've mentioned, or an educational achievement outcome tax credit for universities, etc. What do you think are the three most important?
Thank you very much, Mr. Chair.
I want to thank our witnesses for being so patient while we were voting.
My question is for Ms. Kenny, from the Fédération des communautés francophones and acadienne du Canada.
In Quebec, great efforts are being invested into protecting the French language, but across Canada, that must not be an easy task either, especially when it comes to bilingualism issues.
You really insisted on the roadmap. You made that request last year before the Standing Committee on Finance, and you have repeated it. Can you tell us how important it is for the Standing Committee on Finance to keep that in mind for next year?
In terms of linguistic duality and the available services, the roadmap goes beyond investments. It provides funding for various sectors, and it really does a lot of good. We are talking about investments totalling over $1 billion.
As for the showcase for cultural organizations, the roadmap contributes not only to culture, but also to the Canadian economy, and to our francophone artists. The francophone industry contributes significantly to the GDP. People shouldn't think that the investments are funds allocated only for French-speaking people. We are full-fledged citizens. We work in areas such as health care. I was just talking to this gentleman about how necessary it is to have access to francophone doctors and nurses across the country. It is not just about the fact that we contribute to the economy, but also the fact that, if someone like me is in a panic when dialing 911, they will want to speak French, no matter how bilingual they are.
Funds were invested in the cultural showcase, youth, and immigration in the case of Citizenship and Immigration Canada. Those funds are combined with those provided by the Official Languages Support Programs Branch. That is significant. We are talking about a $1-billion investment. Without the roadmap, many programs and communities would struggle. Some of the smallest communities may disappear.
Thank you, witnesses, for indulging when we went to vote and do more of our work.
I come from Saskatchewan. The extraction industries in Saskatchewan are huge. It's a very exciting place to be right now, compared to what it was in 2003-2004, when it was the place that provided Alberta with a whole pile of young employees. Now we're taking all those young kids back and trying to grab some Albertans. I notice that our chair is ignoring me on that.
We now have a lot of the same issues in Saskatchewan that you have in Alberta as far as education of youth in the extractive sectors is concerned. I'll talk to both the mining association and petroleum association.
I know that the University of Saskatchewan's College of Engineering is doing some work in the extractive industry sector. As far as corporate social responsibility and the development of engineers and expertise around the extractive industries are concerned, how much more do we need to develop here in Canada?
I'll leave it to both of you.
Well, I don't know how to say what she just said any better; I would agree with what she has just said.
We face a lot of the same issues. It has been noticed that our two industries are doing very well right now, so it's certainly easier to recruit young people than it used to be in earlier times when growth industries weren't doing as well, but still, we do face a lot of challenges.
In mining, a lot of the jobs are often in very remote locations. Not everybody wants to do that. On the other hand, we are finding that we are now able to recruit people who actually think that it's kind of exotic to work not only in parts of Canada that you may not have known existed, but in parts of the world that you never thought you'd see.
We have to do a better job of marketing our business to young people and to show them just how incredible the opportunities are around the world.
Thank you, Mr. Rajotte.
Once again, I want to thank the witnesses for joining us today.
I will now address Ms. Kenny.
We know each other very well. I am really happy to see you here. Official language minority communities are very important. As I am the member for Saint-Boniface, I know how important it is to have the government's support. I have a few questions about your presentation.
You specify that risk capital investments are very important for francophone companies. An announcement was just made in budget 2012 about a $400-million venture capital investment. A $100-million amount was also earmarked for the Business Development Bank of Canada.
I would like to know, as far as you and your organization are concerned, what kind of criteria the government should impose to meet the demands of your community and help you.
Before we move to Mr. Awad, I want to ask you another question.
We are talking about unprecedented roadmap investments, but the roadmap also allocated funds in areas such as those you have mentioned—immigration and health. In Saint-Boniface, the community health board, with Annie Bédard, carried out a survey that really helped the francophone community.
In the past, have there been any specific years where investments in our communities were higher? People are always saying that this is unprecedented, but if we take into account agreements with provinces and territories on French-language education, the contribution of the roadmap and projects developed by Canadian Heritage and so on, is that still true?