Good afternoon. Welcome to the 84th meeting of the Standing Committee on Finance. Pursuant to Standing Order 83(1), we are continuing our pre-budget consultations for 2012.
I want to thank all the witnesses for joining us here today.
We have two panels of witnesses. In the first panel, we have five organizations that are presenting: Karen Leibovici, from the Federation of Canadian Municipalities; Andrew Van Iterson, manager of the Green Budget Coalition; Terrance Oakey, president of Merit Canada; Serge Buy, the CEO of the National Association of Career Colleges; and Nobina Robinson, the CEO of Polytechnics Canada.
We welcome all of you here today and look forward to hearing from you. You each have five minutes for your opening statements, and then we will have questions from the members.
We begin with Ms. Leibovici.
Thank you very much. It's a pleasure to be here this afternoon on behalf of the Federation of Canadian Municipalities, representing almost 2,000 member communities across this great country of ours. We represent 90% of the Canadian population.
I would like to thank you all for working to create jobs and making critical infrastructure repairs in the last few years.
Right now, the federal government is developing a new long-term infrastructure plan to replace the Building Canada plan, which expires in 2014. This new long-term plan is a once-in-a-generation opportunity to build the on-ground conditions for a strong, growing, and competitive economy. It's also a chance to give Canadians what they need: good roads, clean water, and solutions to the traffic gridlock that costs our economy billions of dollars every year.
There is no surer way to create jobs today and strengthen our economic foundations of tomorrow than investing in municipal infrastructure. When provincial, territorial, and local partners bring money to the table, no other investment goes as far or achieves as much. With the right long-term plan, we can put an end to the long decline in Canada's municipal infrastructure once and for all.
However, local governments don't have the tools to do it alone.
We have to do this together. We own and operate 60% of Canada's core economic infrastructure, but we collect just 8¢ of every tax dollar paid in Canada. In a couple of weeks, the FCM will be releasing a formal proposal with fully costed recommendations, but in the short time that I have here today I want to tell you where things stand right now.
The government has said it will have new infrastructure programs in place for the 2014 construction season. To meet that deadline, the new plan must be part of the 2013 federal budget and must be a plan that we can all endorse.
Getting the plan ready and making sure it meets the needs of our economy and our communities has been FCM's top priority. We've worked with the government, other stakeholders, and thousands of municipal leaders in every province and territory. Based on all that work, I want to share three points with you today.
First, there is broad support for an affordable plan that achieves the key federal objectives of supporting job creation and long-term economic growth, leveraging matching dollars from other orders of government, and expanding the private sector's role where it benefits Canadians.
Second, there's a strong agreement that the new plan must make the most of every tax dollar that we invest together. Also, it must show Canadians measurable improvements in the state of Canada's infrastructure, build the capacity of local governments to maximize efficiency through best practices and innovation, and minimize bureaucracy, red tape, and costly project delays.
Third, the final and most important point is that the new plan must make secure, reliable, and truly long-term investments in Canada's local infrastructure that are flexible enough to meet different regional needs. Every city and community is facing an infrastructure challenge. The nature of their needs may vary, whether it's roads, water, or traffic gridlock, but in every case the solution is long-term planning and long-term funding. Without investments it can count on, no community can meet its infrastructure needs.
Also, in a world full of economic uncertainty, Canadians want to know that we're taking action to build the conditions for a competitive economy and strong communities. As well, Canadians want to know that all orders of government are working together to make progress on practical priorities.
The new long-term infrastructure plan must benefit Canadians.
Local governments have worked closely with our partners in the last few years, and we want to keep working together for all Canadians.
We want to keep Canada on the road to jobs, growth, and a future we can count on.
I'd like to thank you for your time. I look forward to your questions.
Thank you very much.
Mr. Chairman and honourable committee members, thank you for inviting the Green Budget Coalition to speak to you today.
I am pleased to be joined by Nathan Lemphers from the Pembina Institute. I expect Alison Woodley, the national conservation director for CPAWS, the Canadian Parks and Wilderness Society, to be here later. We can all answer your questions.
The Green Budget Coalition, or GBC, is unique in that we bring together the expertise of 16 of Canada's leading environmental and conservation groups, collectively representing over 600,000 Canadians, including groups such as Ducks Unlimited, the Nature Conservancy of Canada, and the Pembina Institute. Our mission is to present an analysis of the most pressing issues regarding environmental sustainability in Canada and to make a consolidated annual set of recommendations to the federal government regarding strategic fiscal and budgetary opportunities.
Please note that my presentation today reflects revisions and more details with respect to the brief online submission that we made at the start of August. All the details were in this preliminary set of recommendations, which was sent to you on September 25 and again last Thursday.
We want to thank the government again for its progress in Budget 2012, including funding for renewing the Species at Risk Act and funding for the Great Lakes, the Rouge National Urban Park, and Lake Winnipeg. These are all important steps forward.
To build on this progress, for Budget 2013 we have identified and developed four feature recommendations as well as seven complementary recommendations. Our feature recommendations address the national conservation plan, subsidy reform in the extractive industries, green infrastructure in first nations communities, and federal environmental law and science capacity.
First, we are recommending that Canada's national conservation plan—a throne speech commitment that was affirmed by the House environment committee's report in June—focus on scaling up efforts to value and conserve nature for the benefit of current and future generations of Canadians and on ensuring that all parties work together in a coordinated way to achieve this goal. We have specific recommendations addressing oceans, national parks, and migratory birds.
Second, to build further on the government's subsidy reform momentum and to increase tax neutrality and support the government's strategy of responsible resource development, the GBC recommends three targeted measures: enabling the Canadian exploration expense only for unsuccessful exploration; removing the accelerated capital cost allowance for the mining sector, as the government has done for the oil sands; and not renewing the mineral exploration tax credit for flow-through shares. These were all identified as subsidies for potential reform by the Deputy Minister of Finance in a March 2010 memorandum.
Third, there are major opportunities to further pursue economic health and quality-of-life benefits for first nations communities by integrating green infrastructure thinking into the programs and policies that are needed for planning, building, updating, and repairing first nations infrastructure. While progress has been made in many first nations communities, there are still dire needs around improving drinking water systems and housing stock. Our recommendations address water and waste water systems, deep measures residential and non-residential energy conservation and efficiency programs, and reducing dependence on diesel fuel through increased green energy use.
Fourth, we want to emphasize that the Government of Canada's environmental laws and science capacity are fundamental to its ability to protect Canadians' economic prosperity, health, and quality of life, and the ecosystems and natural resources on which they depend. To support these laws and this science capacity, the GBC recommends establishing a comprehensive web-accessible and continually updated database of all federal environmental enforcement and compliance data, and financially supporting the provinces and territories, where intergovernmental agreements are in place, to effectively deliver environmental laws in their jurisdictions.
We also have further complementary recommendations in our document addressing energy sustainability, climate action, and healthy communities, including Canada's infrastructure future, as my colleague just highlighted. We will send you our final recommendations near the end of November.
To close, I would like to quote the man who will be delivering the budget, I assume, four or five months from now, the Minister of Finance, who emphasized that
||...the environment and the economy are inextricably linked, and that by ensuring that Canada has a clean and healthy environment we will be able to build an economy strong enough to maintain the enviable standard of living Canadians have come to expect.
Thank you, Mr. Chair and members of the committee. I'd like to thank you for this opportunity to add Merit Canada's voice to the pre-budget consultations.
You will be pleased to know that, unlike many organizations and witnesses you've heard at this committee in the past, I am not here to seek more government spending or more of your money. I am here, though, to ask for your assistance in ensuring that the money you do spend creates maximum value for taxpayers and creates more jobs.
First a little bit about Merit Canada. We are the national voice of Canada's eight provincial open-shop construction associations. Open-shop companies and their workers build more than 70% of the industrial, commercial, and residential construction projects from coast to coast. Simply put, employees in open-shop companies build Canada, and we are proud of their record.
I am here today to speak to an issue of fairness for hundreds of thousands of these workers who choose not to belong to the building trades unions. Some of those workers may choose to be union-free or belong to another union such as the Christian Labour Association or other independent unions. Unfortunately, in many cases these workers are barred from working on projects that are funded with their federal tax dollars.
Our message is very simple: when government funds infrastructure, all qualified contractors should be allowed to bid on those projects. Unlike the building trades unions, we are not asking for rules to be written so our employees have a greater chance of working on these projects; we just want the ability to compete. We believe that fair and open competition is what ensures the best project for the best price.
A degree in economics is not needed to understand what happens when you shut out 70% of the construction industry from competing on public infrastructure. Costs increase and quality decreases. Some U.S. studies suggest that closed tendering rules increase the cost of construction between 12% and 18%.
Federal procurement rules would never allow union-only schemes for projects that it exclusively funds, but this is not true across the country. Far too many jurisdictions have rules that limit competition. For example, the federal government recently contributed $28 million in stimulus funding to a project for the City of Hamilton. Of the approximately 260 qualified contractors, only 17 had workers registered with the union that the city rules require, so the other 243 contractors, or 94% of the available workforce—some of your constituents—were not even allowed to bid on this project. We believe this is unfair, and it only serves to increase costs and keep some of your constituents from working on these projects.
Recent media reports about the Toronto District School Board's problems with repair work show all too well the consequences of such restrictive bidding. Costs are inflated: $143 was billed for installing a pencil sharpener. Productivity is reduced: bills were inflated to pay for people who didn't even bother to show up for work. Taxpayers are ultimately the ones left paying the price.
Closed tendering rules ultimately harm workers. Companies they work for aren't even allowed to bid on these projects, and we must remember that it is their tax dollars that are paying for these projects. Therefore, those employees are at a significant disadvantage.
All Canadians pay for federally funded projects; therefore, we believe that all Canadians should have at least an opportunity to provide services that these tax dollars pay for. It makes no sense for federal funds to be spent, with restrictions put in place that would never be allowed on a project that was exclusively funded by the federal government. In the end, fewer projects get funded and fewer jobs are created.
We all have a responsibility to hard-working Canadian taxpayers to ensure that each dollar the government spends goes as far as possible. Therefore, our members feel that the federal government should ensure that all construction projects financed with federal funds be tendered in an open and competitive manner, and that union-only schemes should not be allowed, as they simply drive up the cost and harm the majority of workers in the industry.
The Canada–Nova Scotia Building Canada Fund Communities Agreement could easily serve as a template. Let me quote from that agreement under schedule A, “Mandatory Criteria”:
||The contract award process will be competitive, fair and transparent (e.g., no sole-source contracts, no union-only processes).
Our members and their employees could not agree more with this language, and we think this clause should be inserted in all agreements with the federal government.
Thank you, and I'd be happy to answer your questions.
Thank you, Mr. Chairman.
Good afternoon, ladies and gentlemen. I would like to thank you for allowing the National Association of Career Colleges to make this presentation on such an important issue, the 2013 budget and how it can help our country move forward.
Let me first thank this committee and this government for the work done in previous budgets, especially the measure that in 2011 enhanced and extended the eligibility for the Canada student loans and grants programs for part-time and full-time students.
For the past 116 years, the association has represented career colleges in Canada. We are the oldest post-secondary educational association in our country. We represent over 500 career colleges located throughout our country.
Career colleges in Canada fill a need; they train students for jobs that exist. Our students range in age and socio-economic and ethnic backgrounds. They're the young person coming out of high school who wants a career as a skilled tradesperson, the unemployed single mother who would like a career in officer administration, or the lawyer trained in another country who wants to use his legal knowledge and become a paralegal in Canada. The average student is 29 years of age. While their backgrounds differ, they are all united by the same desire: to succeed in a new career and have a better life.
Our 160,000 students have chosen to attend our institutions. They've made a conscious decision that is based on the access to our programs in the region in which they reside, the types of programs offered, the quality of the institution, and the availability of condensed programs.
A graduate from MC College Group based in Edmonton, Mr. Chairman, is well known for being the hairdresser of a number of senior ministers in Ottawa.
Graduates of the Trebas Institute regularly win prestigious awards, such as Jutra Award and Grammy awards, and they occupy important positions, such as production manager for Céline Dion.
Others work on the oil platforms near the shores of Newfoundland, in the skilled trades sector in Saskatchewan and Alberta, in health care in British Columbia, and in business in Ontario. Our members' programs were accredited by professional bodies, such as the Law Society of Upper Canada, the Canadian Medical Association, and many others.
Employers come to us, as our members' programs are current. Their instructors still work in their profession, and their graduates are uniquely qualified to immediately apply their skills in their new careers.
We are a dream partner to a government that wishes to get unemployed Canadians back to work or that wants to help underemployed Canadians obtain more productive positions.
You would think that we would support students who wish to quickly re-enter the workforce by upgrading their skills and attend institutions that offer condensed programs. However, that's not the case. The Canada student grants program will offer a grant to the student who wishes to attend a program of 60 weeks or more in length. But low- and medium-income students attending institutions that offer condensed programs that allow students to graduate within 60 weeks are not eligible for the Canada student grants program. We believe that needs to be changed. In a society increasingly focused on getting things done now in a very competitive world, it is our opinion that the government should be encouraging students to get back to work faster and not discriminate against them.
What's the cost? We estimate this measure would benefit the government by diminishing reliance on social assistance programs and by allowing Canadians to become more productive members of Canadian society faster, and therefore pay more taxes.
We presented a proposal to HRSDC, and to date they have not contradicted our numbers. Actually, it was fairly well received.
Our members are regulated by provincial governments. They do not receive grants or contributions, and they do pay taxes.
We're not asking for a special deal. We're just asking for fairness for our students. We're asking that you help us get our students to employers who need to fill jobs in important sectors, such as the skilled trades and the health care and IT sectors.
On another topic, we know this government has put special emphasis on attracting international students to Canada, and we agree, but if this committee is going to make a recommendation regarding the funding of the government strategy to attract international students, we hope the recommendation will include a statement about the need to include funding for the private educational sector. Too often our sector is ignored or receives crumbs, when compared with our colleagues in the public sector. However, an international student attending a career college benefits Canada the same way had he or she attended a public institution.
When the government states that it wishes to promote education, it should state that clearly, and it should state that the private education sector should not be ignored or given ridiculously low support when it comes time to fund initiatives.
In conclusion, we respectfully ask that this committee recommend that the 2013 budget include measures to reduce the number of weeks for the Canada student grants program to match the Canada student loans program and to fund a strategy to recruit international students with no difference between the public and private sectors.
My greetings to the members of the committee as you undertake your important annual deliberations.
I'll dispense with the 101. You have our final submission from August about Polytechnics Canada and our members.
Polytechnics Canada suggests that the urgent priorities you must consider are the talent needs of our employers and the innovation needs of Canadian firms.
The five targeted solutions we propose are designed to link the benefits of the polytechnic model of applied education to the persistent challenges of innovation and of skills. The talent I refer to is the people who innovate, make high-value products, deliver high-quality services for the country, and work at jobs that will stay here. Currently, federal programs are doing a poor job of supporting these people. The firms I refer to are the 1.1 million small and mid-size firms in all industrial sectors, with an average of six to seven employees, who need encouragement to grow, to commercialize products and services, and who are underperforming when it comes to global competition.
Many of the challenges of mismatched skills and innovation lag emerge from policies and programs that exclude these people and businesses from access to important government support, either through benign neglect or outdated assumptions and, frankly, models that no longer work.
Let me list a few of these broken models and suggest the fixes. That basic research alone will get you innovation is a broken model. Canada does a poor job of commercializing the results of billions of dollars invested in basic research each year. The current 20-year-old model of academic-industry partnerships pushes ideas onto the private sector—whether they have asked for them or not—in hopes that industry will be able to turn them into commercial successes. Yet the payoffs are elusive. The next budget needs a laser-like focus on business innovation.
The first fix is to invest in the sole program in the granting council suite that addresses market pull, solving industry-identified problems: the college and community innovation program administered by NSERC. It is bursting at the seams. The very modestly funded program cannot keep up with demand from industry for applied research solutions that colleges provide. A modest $15 million increase in CCIP's budget will enable the program to meet the backlog of demand from SMEs forced to put innovation on hold because the program ran out of annual funding.
A second fix for innovation is the national voucher program for late-stage commercialization support at approved R and D service providers. SMEs are cash-strapped. The SR and ED tax credit doesn't cover late-stage applied research. Investors won't open their wallets unless there is a guaranteed return. Commercialization vouchers require companies to put a skin in the game, leverage that contribution to get the R and D project done on an accelerated timeline, and get the innovations to market where customers with cash in hand are waiting. It works in Alberta and in other provinces as well. It is used by the Dutch and the Australians. A national version with national definitions, but delivered regionally, will help Canada bridge the commercialization gap. The OECD recommends this.
Now to turn to skills. The brain drain is no longer the problem. It's yesterday's fight that today's programs are still trying to win. Critical concerns abound about the complex labour market conditions facing new entrants to the labour force—chiefly, the low completion rate for mature learners enrolled in our apprenticeship programs and the lack of connection to the work world for graduates of general arts and science university programs.
The fix? We need to develop the same sense of urgency for the skills shortage that we had for the brain drain of the nineties. The mistake back then was leaving skilled trades people on the sidelines when all the investments were targeted at post-secondary attainment and building top talent. As we advocated last year, we need to treat apprentices as post-secondary learners, not employees, and provide them with access to the same supports that other students receive.
There are three specific fixes: adjust the terms of the Canada student loans program; offer tax credits to companies willing to see an apprentice through to completion of their certification; and ensure that procurement projects award points to firms that maintain registered apprentices as part of their teams.
Finally, the bias that BA degrees are the purview of the university sector alone needs to be broken. Today, 144 bachelor degrees are on offer by the entire college sector. Those students should be eligible for the same support as other undergraduates, be it through granting council research awards or international scholarships.
Some of you have inquired about the German model of post-secondary education and training. Features of that German approach to talent development that are relevant to our considerations are a highly differentiated education sector that is responsive to the needs of industry and an economy that values practical experience and instruction and respects applied education. As with Germany, Canada needs a manufacturing culture built on engaging a wider pool of talent for innovation.
I look forward to your questions. Thank you.
I was basing it on your presentation. I that it was the immediate bill for the municipalities' most pressing needs.
If we are talking about $20 billion, we are talking about an infrastructure replacement program over the longer term. In fact, we need not only to restore what is in a poor state, but we also need to ensure that, gradually, we can ensure the quality of the infrastructures. A plan over 15, 20 or 30 years would be ideal.
However, your suggestions deal only with the municipalities. If we think about what is in between the municipalities, we're talking about highway overpasses, for example. Anything that isn't the responsibility of the municipalities is included. If we're talking about infrastructure deficit in the country, it goes beyond what you are talking about.
Is what you are talking about only for municipalities?
Mr. Van Iterson, you probably know that there's been a little game being played since the session resumed in September. In fact, there are three possible carbon policies for dealing with climate change.
The first is imposing a carbon tax, which was favoured by the Liberals and others in 2008.
The second is instituting an emissions cap and a carbon exchange, which is the solution favoured by the NDP.
The third is a sector-by-sector regulatory approach, which the Conservatives have decided to set up, but that is not free, and the partial costs to date have been estimated by The Canadian Press and by Maclean's at over $16 billion.
Do you think the sector-by-sector regulatory approach, as advocated by the government, is the solution to go with? Should there instead be a price on carbon, as put forward by the NDP? It would be a carbon exchange with an emissions cap.
Thanks to the members.
I'd like to focus on the Federation of Canadian Municipalities and some of the issues around infrastructure. Certainly, as a former mayor, I remember waiting desperately for a program to come along when there was need. I think the fact that we had a program and that we've started the planning for the next one is going to be very significant. I'm really pleased with that.
I also recall with our economic action plan a number of very important programs that needed to be done. But I can also remember the municipalities and the provincial governments saying, “Halt, we have no capacity.” So they were actually not in a position....
Could you speak briefly about the provinces and the municipalities and whether there are challenges that are going to come to fruition as we look at the long-term infrastructure planning?
Well, on the whole national strategy issue, we hear it every year, and yet it doesn't happen, so I'm becoming more and more pragmatic about what we can do within the fact that there is this shared jurisdiction.
One of the things is that we should look to the U.K. and to Australia, and not just to Germany, because Germany is a very different model—you can't just transport Germany into the Canadian model—and we should convene expert panels for the problems that we're trying to solve.
If the problem is skills shortage, every Tom, Dick, and Harry will tell you that there's a skills shortage, but what kind of skills shortage? Now we're getting into where the shortage is: it's in the trades, and it's in skilled production workers, in technicians and technologists. Let's convene expert panels to go at those sorts of issues.
I'd like to welcome you all here this afternoon. It's great to see you.
I'm going to direct my questions to Mr. Oakey and Ms. Leibovici. I'll be referring to one or the other.
Mr. Oakey, you talked about transparency in the tendering process. Of course, you understand that a lot of times the federal government is the sole provider of the financing for a tender, and then the province or the municipality will go out and actually be the contractor, for lack of a better word, in the tendering process.
How would you see the government getting involved to that level? How do you see that working? What would that look like?
Mr. Oakey, we probably could have a fairly spirited discussion around unionized shops, since I was 44 years in the trade union movement before coming here.
You mentioned a Hamilton contract. As I represent Hamilton East, I really have to speak to the fact that good, solid union wages built our city. Good union wages put our workers' kids through college, and through university, in a lot of instances, where they would not have been able to do that. But I don't want to get into that. As I say, we could have a coffee and do that sort of thing.
Who do you see as your direct competitors? Are they other companies? From listening to your presentation, it sounded as though you were describing unions as your direct competitors as opposed to companies.
The reason that began—to go back to Mr. Hoback's question—was that for a long time there was a superior skill level with the unionized workers. As part of being part of a union, workers had their training in-house and they got to a Red Seal level of training, which provided a broad range of skill sets that many people would like to use and contract in for the long term.
They don't represent housing. They just represent the construction trades for big developments and manufacturing.
By putting that on the table, nobody is saying the workers you employ are not skilled workers, but that was the reason for those original contracts; it was to lock them in.
The other problem you have in the eastern part of the country, as we know, is the loss of these workers headed west now. There is a real effort on the part of unions to match up the work here that still needs to be done, so there is plenty of work to go around now.
I think that does my time.
Thank you, Mr. Chair, and thank you to the witnesses for being here.
I want to pursue my initial line of questioning with Ms. Leibovici. You mentioned in your submission that the property tax is a 19th century tool, and I would tend to agree with you there. The sort of golden era for Canadian cities I guess lasted up until about 25 years ago. I remember certainly in Toronto where we had garbage pickup twice a week, recycling once a week, and city services were all there, all free—well, paid through the property tax. But for a variety of reasons over the last 20, 25 years or so, cities are finding themselves with less and less cash.
As you know, in Toronto now, within the 416, the land transfer tax is double. They've been able to generate a lot of money through the doubling of the land transfer tax. Cities are having to become more and more creative in ways to raise revenue in order to deliver the services that citizens require. We also hear in Toronto that they're talking about a casino to raise money.
Could you talk a bit about the ways in which cities are going to have to think outside the box in terms of raising revenues to maintain the existing infrastructure, but also to expand the infrastructure they have currently, plus maintain a quality of life that the citizens of each city have been accustomed to? Could you please discuss that a bit?
That's a tall order for however much time we have.
You're right in terms of the property tax base. The ways cities raise revenue is an old model, and there's lots of discussion happening with our provincial governments with regard to different forms of revenue sharing.
With regard to the infrastructure plan, one of the areas that we're looking at is the asset management capabilities of communities across this country. If we can measure and define the condition of assets across the country, then in fact we can start to look at how we deal with the infrastructure deficit that's there. Not all municipalities are doing that now.
However, it's something that is starting and is a good move forward. I think Ms. McLeod mentioned the three Ps. It is not a solution to every way going forward with a project, but it is perhaps one way that can be looked at in terms of moving forward in meeting our infrastructure needs. Obviously, some thinking out of the box and looking at innovative ways to do that will hopefully be part of a new plan as well.
That's a huge question and I know a very topical one, because our colleagues at HRSDC currently are thinking this through in many ways.
Where I am best suited to answer is to tell you that as part of the stimulus spending through the LMA, things were done to encourage, for example, pre-apprenticeship programs getting into secondary school, promoting the awareness of the trades.
The problem with all of this is that it's chaotically delivered. There isn't a national standard. There isn't a national outcome. It's that whole decentralized nature of the spend, and the shared jurisdiction issue, which came up in my discussion with Mr. Brison.
I would say that as we look at renewals for the labour market agreements, one of the things is to come to some common data sets as to what is the problem and what is the goal that we all want. For example, there is a lot of concern right now around the issue of, well, we have to get more young people interested in the trades. That is valid, but it's equally important to get the people in the third and fourth year, before they get their ticket, to complete.
There could be targeted uses of the LMAs if we could agree on the problem.
Oh, I absolutely agree with you. I think the issue that comes down—I talk about this issue all the time—is that there are very distinct motivations for the different actors in the education systems. We've actually tried to peanut-butter the problem and ascribe to every single actor the same motivation.
Universities are motivated by something very different from colleges and different from unions in training, but we all have something to contribute. If we understood a highly differentiated system, which is the German system, I think we'd actually get collaboration and better outcomes.
I will tell you on the streaming issue, though, and this is anecdotal, that we actually do a kind of streaming in our secondary school systems. The high school teacher decides, well, you're not so good at math, so you do the lower-level math; and you, you're going to go to university.
We're making some streaming decisions in grade 10. I know. My brother-in-law is a grade 10 math and grade 12 math and science teacher. Who is making those decisions, and why haven't we then said to that student who is going to the lesser math, hey, did you know you could do X, Y, Z that is also productive?
When you get into the data that 69% of parents want their kids to go to university and only 15% of the parents want their kids to go to college, and yet we don't have the labour market information in the hands of the parents and the high school counsellors, that is the kind of national discussion we need in terms of the long-term bias.
I will need just a few seconds.
I think you raise an interesting question. The problem we have I think is that with education having many players, including the provincial government, it's going to be really hard to change everything. However, the government has the ability and the capacity to direct funding where education is needed and workers cannot be found for jobs that exist. In Alberta we have employers who cannot find workers. In Nova Scotia we have companies that now, with the huge shipbuilding that is happening, are scrambling to find education.
In terms of our funding for the Canada student loans program and the Canada student grants program, we're going to keep giving money to people who are making their choice to go to universities and get a degree and a diploma where no jobs are there. In articles in the media, you have journalists asking why we are funding professions where there are no jobs—
I didn't get into too much discussion in my statement today about the scholarship issue, but it is in our submission, and this is the case. Currently the federal government has supports for undergraduates, but when you get into the fine print, it's for university undergraduates. There is an industrial undergraduate student research award program at the Natural Sciences and Engineering Research Council, and college undergraduates of four-year college degrees are to date not yet able to apply for that, yet they are the ones working on applied research and development for companies.
For me, the scholarships for undergraduates are an inequity. Treat undergraduates equally. A college undergraduate from a publicly approved four-year degree is as important and as relevant as a university undergraduate. Similarly, if the government considers funding a new undergraduate scholarship program for international undergraduates, my concern is that it be open to undergraduate programs in colleges and polytechnics as well. So it's a question of equity on that one.
On your second one, I think we need to narrow it down. The issue here is for the world of apprentices, so this is the world of the various Red Seal trades. We have said that the country created an employer job creation tax credit of $2,000. That's getting the apprentice in the door. We believe that if the issue is how you get the apprentice to complete, then we should probably incentivize employers to get that apprentice to complete their certification under their watch and offer a tax credit for an employer who sees that apprentice through to certification. Does that make sense?
In fact, there are people looking for work who want to improve their skills, and there are employers who are desperately looking for employees. There is also a certain amount of snobbery where we must only support certain programs offered by a given university for a certain number of weeks, and so on.
I have no objection to continued support for those programs. However, if you are training an engineer to work on an oil rig, but there is no one to install the pipes, the plumbing and the electricity, that engineer will remain without work. In Alberta, in Ontario, in Quebec and in the west, some sectors need people whose skills can be applied rapidly, be it in private colleges, polytechnic schools or elsewhere. What's important is that it be done rapidly. These programs should be easily recognized. To do this, it should only require a very simple change in the budget. It would involve recognizing programs where the number of weeks of learning is not as long. This investment wouldn't cost the Canadian government a thing.
I call the meeting back to order.
Welcome to our witnesses, and welcome back to our members. We're going to resume the 84th meeting of the Standing Committee on Finance.
Welcome back, Mr. Turk. It would have been tragic if the representative of the Association of University Teachers was late for class. You are always punctual, and we're looking forward to hearing from you.
We have today from the Association of Universities and Colleges of Canada, Paul Davidson. We have Mr. Turk from the Canadian Association of University Teachers. From the Canadian Cooperative Association, we have Shawn Murphy. We have Jay Myers from the Canadian Manufacturers and Exporters. And we have Terry Audla from the Inuit Tapiriit Kanatami. Welcome to all of you today.
You have five minutes each, and we're looking forward to hearing from you.
We're going to start with Mr. Davidson.
Thank you very much, Chairman.
Good afternoon, everyone. I am very pleased to be here today. I would like to congratulate the committee for the advice it provided to the government on the budget.
Last week, 65 university presidents from across Canada came to Parliament Hill to show how universities are putting ideas to work for Canadians. I'm pleased to say there was widespread recognition of the role universities are playing in communities across Canada in conducting leading research, fostering innovation, and ensuring that Canada has the talent we need to succeed in the global knowledge economy. Our members were joined by university champions from the private sector—from student entrepreneurs building “born global” companies to CEOs who have invested in higher education for their workforce to up their company's game in a competitive world.
Universities are centres of ideas and innovation. Whereas a 20th-century Canada could prosper from its natural bounty, today's global knowledge economy demands that we must compete on our brains. Canada's students and their families know this and are making smart choices. Over one million students are pursuing an undergraduate education in 2012.
The 2013 budget gives the federal government the opportunity to make strategic investments that will allow universities to continue to increase Canadian economic prosperity within the global knowledge and innovation economy. The AUCC specifically recommends that the federal government invest in university research, international education and renewing post-secondary education for aboriginals in the 2013 budget.
Specifically, we recommend enhancing support for the federal research granting agencies and the Canada Foundation for Innovation, including the institutional cost of research. Quite simply, these are foundational to everything that universities can do.
We also recommend more graduate student internships and employment experience in a broad range of interdisciplinary sectors. This would enable more companies to take advantage of the highly talented graduates that Canada's universities produce.
As you've heard from several witnesses, the recent Council of Canadian Academies' report highlights the outstanding quality of Canada's university researchers and points to Canada's growing influence on global knowledge. Additional investments are required to sustain and accelerate the pace of research.
Canada also needs a strong national and coordinated approach to international education, one that involves governments working in concert with the education sector. International education should be a pillar of the Government of Canada's foreign policy and economic growth objectives.
Over the course of the summer, you may have seen a recent report from DFAIT that indicated international students contribute close to $8 billion a year to Canada's economy. When I say that, I'm thinking of communities like Nanaimo, Kamloops, Brandon, Sudbury, Chicoutimi, and Moncton, which all benefit from international students. International students actually contribute more to Canada's economy than the export of softwood, wheat, and aluminum. To think of this sector as a lever for Canada is important, especially in new and emerging markets.
Attracting international students to Canada gives us an edge in global commerce and trade. But it's about much more than attracting international students to Canada. We must also ensure that this generation of young Canadians gains study abroad experience to prepare them to meet the needs of the global economy. We think of ourselves as an open global nation, but American students are twice as likely to study abroad as Canadians, and German students are three times as likely to study abroad. We have lots of work to do.
We also need to position Canada as an international leader in higher education, not only as a recruiter but as a partner in education and research. International research collaboration amongst universities, governments, and industry builds the strong people-to-people ties needed to attract the best and brightest talent and to expand our trade and investment ties around the world.
To support international higher education, Canada should implement the recommendations of the Chakma report. In brief, these are funding international research collaboration at scale, investing in initiatives to support study abroad opportunities for Canadian students to gain global skills, and investing in initiatives to enhance marketing and branding efforts to attract international students to Canada and leverage existing investments.
Our final recommendation is to invest in post-secondary education for aboriginal people. If I can, let me be blunt for a moment. I have come before this committee four years in a row now, saying that this is an urgent national priority. We welcome and support the government's efforts and the crown-first nations gathering, and the particular focus on the K to 12 system, but we have to do more. Canada needs to go further and we need to go faster.
Universities have also made strides in attracting and retaining aboriginal students over those four years. We have proven projects that can be scaled up to increase aboriginal participation and graduation rates. Action and investment are needed now.
AUCC recommends advancing aboriginal post-secondary education measures that can be delivered by a third party with a proven track record in aboriginal matters in conjunction with private sector partners. The partnership of aboriginal leadership, universities, and the private sector will help close the higher education gap between aboriginals and others in Canada.
Thank you, ladies and gentlemen. Canada will benefit from these investments.
Thank you, Mr. Chair. There's nothing like having five minutes to concentrate the mind.
I begin by observing what I'm sure everyone in this room agrees with, and that is the importance of post-secondary education and training, not only for the future of our economy, but also for the future of our society. We're not only training people who are going to be making economic contributions, but we're also educating people who are going to be family members, community members, and citizens.
Something everyone would agree with, I assume, is the vital role the federal government plays in post-secondary education and training, both in the transfers to the provinces for post-secondary education and training and in funding research.
We congratulate the government for sticking to its commitment of having a 3% escalator in its transfer for post-secondary education on a continuing basis. But we would note that with the rising costs—that is, with inflation and with the increasing enrolment—that 3% escalator is not keeping up with the costs that provinces, universities, and colleges are facing.
With respect to the spending on research—and this is where I'd like to focus my remarks—again, the government deserves credit, because it has been spending more on research than its predecessor, but we would suggest that it's been investing that money badly. I don't know who the government's advisers are and how it should be spending research money, but I'd strongly urge you to get new advisers. It's time to get a new crew to give you advice.
Let me give you a few examples. The government allocated close to $200 million for 19 Canada excellence research chairs. Each gets $10 million over a period of time, as well as more money provided by their own institutions, and there are another 10 in the works. This is a huge amount of money concentrated in a very small number of people. We'd suggest that this is not the best way to advance science. It's the same mentality as some sports teams who think that by spending the bulk of their capital on a few high-priced stars, they will build a sports franchise. It doesn't work.
For example, instead of $10 million per, some very vital research centres have had to close, for example, the Polar Environment Atmospheric Research Laboratory, which is closing because it can't get $1.5 million a year. That money supported the work of 60 scientists doing a vast range of high Arctic research. Given how expensive it is to do research in the high Arctic—it does cost money—what's being lost is not only the work of those 60 scientists, but also the $8 million or so in equipment that the government has financed for that centre.
There is the Experimental Lakes Area, the best in the world in freshwater study. It's been compared to closing the world's most powerful astronomy telescope, or closing Los Alamos. The cost is $2 million a year.
There is also the Kluane Lake Research Station, a legendary research centre more than 50 years old, uniquely positioned to study the largest non-polar icefield in the world and the effects thereon in global warming. That costs a million dollars a year, and yet we have $10 million per person for each of the Canada excellence research chairs.
The Minister of Industry.... I can make available to committee—and hopefully you've seen it—a letter signed by more than 48 of the top scientists in the country deploring the kinds of cuts that NSERC had to make that resulted in these closures. The NSERC website is very clear that it's having to make these closures because of the government's cut to its funding.
A second area is in terms of the funding of the three granting councils: the Social Sciences and Humanities Research Council, NSERC, and CIHR. Over the last six years, since this government has come to power, in terms of real dollars—that is, after inflation—the funding for all three granting councils has fallen: SSHRC by 12.9%, NSERC by 3.1%, and CIHR by 6%, and indirect costs have fallen by 2.5%.
In terms of who gets funded with granting council money, if you look at NSERC, where we look at the balance between targeted research—that is, research directed by third parties—and basic research, the amount in real dollars that is being spent on basic research has fallen by about $80 million since 2006-07, while that being spent on targeted research has increased by an equivalent amount.
We also see the destruction of our knowledge base, the dismembering of Library and Archives Canada, the serious cuts to Statistics Canada that are crippling a lot of social science research, and the cuts to Parks Canada, which looks after 167 historic sites as well as countless archaeological artifacts.
In short, you're spending a lot of money. You could spend it better. We encourage you to put in an initial $500 million from the three funding agencies, have the funding agencies be more at arm's length, and introduce the Canada Post-Secondary Education Act, as we recommended in our submission to you. And we join with AUCC in encouraging much more substantial funding for aboriginal education.
Thank you, Mr. Chair.
I wish to begin by thanking you and the committee members for inviting the Canadian Co-operative Association to appear before the finance committee as you undertake your pre-budget consultations.
As you are undoubtedly aware, the Canadian co-operative sector has received a lot of attention over the past months. In May, the House of Commons debated a motion to establish a special committee to look into the co-op sector.
To our surprise, the committee was formed in June and they held numerous hearings over the summer. In September, the special committee tabled their report in the House. The report and the recommendations from the special committee have been very well received by the co-operative sector, and we see this as an opportunity to develop and grow our partnership with the federal government.
The special committee report made eight recommendations; however, CCA believes that there are three that stand out.
The first recommendation was that the government study the possibility of consolidating the responsibilities for cooperatives under a suitable department such as Industry Canada. We are not looking for another study, but rather we would like to see co-ops housed in Industry Canada. Currently co-ops are housed under Agriculture and Agri-Food Canada—not a natural fit.
So why should we go to Industry Canada? Cooperatives are businesses—businesses in your riding. They employ Canadians, they pay taxes, and they create jobs. Cooperatives can be found everywhere, including your riding, small villages, big cities, and every region of Canada. They exist in virtually every sector of the economy, from retail and financial services to agriculture, housing, and health care.
Cooperatives are more durable than other types of businesses. Research has shown that new co-ops are more likely to remain in business than other new enterprises and are more resilient in economic downturns.
Finally, cooperatives are rooted in their communities and in your ridings. The jobs and wealth they create remain in the communities in which they are located.
These are a few reasons why we believe the co-op sector can help Industry Canada deliver on its efforts to create jobs, stimulate growth, and invest in the future.
The Special Committee on Co-operatives also recommended that the government explore the feasibility and cost of allowing Canadians flexibility to invest RRSP funds in cooperatives. The current RRSP rules do not encourage investment in the cooperative sector. The so-called 10% rule prevents members of certain cooperatives from using their RRSPs as investment vehicles to recapitalize their co-ops. Therefore, in the spirt of the committee's recommendations on RRSP contributions, I would suggest that you revoke the RRSP measures enacted in the 2011 federal budget.
The third recommendation revolves around capitalization of cooperatives. Co-ops are businesses. However, because of their unique business model, co-ops often find it difficult to raise capital.
The special committee recognized this and suggested that potential solutions could be found. One solution could be a national investment fund. The fund would be a national pool of financing available to support the growth and development of existing and new individual co-operatives.
Our sector is already moving forward with the development of a national investment fund. This would be a great opportunity for a partnership between co-ops and the federal government.
Finally, if you remember nothing else from my submission, I want you to remember our three recommendations that would create jobs, stimulate growth, and invest in the future: first, the co-op sector belongs within Industry Canada; second, we suggest that you revoke the RRSP measures enacted in the 2011 federal budget; and third, the development of a national investment fund.
Thank you, Mr. Chair.
I am very pleased to be here today to make a few observations about Canada's economic recovery.
As you know, the Canadian economy is slowly recovering from the impacts of the steepest collapse that global asset markets have experienced since the Great Depression. Canada's manufacturers and exporters were particularly hard hit, but since 2009, Canada's manufacturing and exporting sectors have been on the rebound.
Government tax policies have played an important role in supporting Canada's economic recovery, because the profitability of Canadian businesses determines the employment prospects of Canadians. Every percentage point increase in after-tax profits as a per cent of GDP leads to a 0.8% decline in Canada's unemployment rate. Corporate tax rate reductions have made businesses more profitable, and that's a good thing. If tax rates had not been reduced, Canada's unemployment rate today would be higher than that of the United States, and about 200,000 fewer Canadians would be employed.
Now, with consumers and governments needing to borrow less and growth in international markets slowing down, business investment has become the critical factor in sustaining and strengthening economic growth in Canada. When companies invest in productive assets, new value-adding production technologies, new product development, and workforce training, they boost their productivity and become more competitive in domestic and export markets. They grow their businesses and employ more Canadians in high-paying jobs.
Fiscal policy is a decisive factor in influencing business investment decisions and our economic future. Deficit reduction and responsible financial management are essential to maintaining investor confidence. Our lower business taxes have made Canada a more competitive location for investment, but countries around the world, most notably the United States, are taking aggressive steps that will further reduce effective tax rates on business investment.
We need to stay in the game, and in order to do that, Canada's fiscal policy must ensure that our tax treatment of business investment remains internationally competitive. We must encourage businesses in Canada to invest more in new and improved products, processes, technologies, and skills training, and we need to reward the companies that are taking the risks to make these investments.
Business investment is highly dependent on operating cashflow performance. Since the recession, all businesses, and manufacturers in particular, have had to rely more heavily on cashflow in order to finance investments in new facilities and in machinery and equipment. While the cash balances of manufacturers and many other businesses have increased, so too have their investments in value-adding capital assets.
Cash is not “dead money”. It is what businesses use to pay off short-term liabilities and invest in—or finance their investments in—new facilities, machinery, and equipment.
The accelerated capital cost allowance for investments in manufacturing and processing machinery and equipment that was introduced in 2007 has been instrumental in assisting Canadian manufacturers to make investments in the new technologies they've needed to survive the recession and to grow. The ACCA encouraged investment and capital turnover by raising the after-tax rate of return on eligible investments by 10.4% during the first three years of use.
Since 2007, the ACCA has contributed about $2 billion in additional cashflow to manufacturers, and it has generated an estimated total of $3.1 billion in additional investment. The annual level of manufacturing investment in machinery and equipment has increased by $5 billion since 2010.
It's important to note that other countries, most notably—again—the United States, have also implemented rapid writeoffs for their manufacturing sectors. Short of providing an investment tax credit, accelerated appreciation is the most important tax measure the government has to encourage direct investment in new technologies.
CME recommends that the ACCA for manufacturing and processing machinery and equipment now be made a permanent part of Canada's tax system. Our recommendation is supported by 50 other industry associations that are members of the Canadian Manufacturing Coalition, by other business groups, and by labour leaders.
We also need to take steps to strengthen business investment in innovation. Recently, the government introduced legislation that will change Canada's scientific research and experimental development—SR and ED—tax credit system. It will, among other things, reduce the tax credit rate from 20% to 15% and eliminate eligibility for capital expenditures.
These changes will significantly increase the taxes paid by Canada's top R and D performers, especially for more capital-intensive manufacturers, and it will erode the international competitiveness of Canada's tax system for business investment. For companies using SR and ED, the cost of investing in R and D will increase by 5.9%, dropping Canada from 13th to 17th position among 30 OECD nations in terms of international tax competitiveness for R and D investments.
We're working closely with Finance officials to develop alternative mechanisms that will encourage businesses to invest in research, development, and commercialization, and to do that in Canada. To that end, we recommend that CRA simplify the SR and ED tax credit program. An accelerated writeoff should be provided for investments in capital equipment used in R and D. The SR and ED tax credit should be made partially refundable.
As well, direct funding should be made available for supporting strategic manufacturing and technology investments, and a voucher program should be established to allow businesses—
Thank you very much for the invitation to appear today. I will take a few moments to summarize the major themes of our written submission, and then I would be more than happy to take your questions.
As many of you know, Nunavut, the Inuit homeland in Canada, makes up approximately one-third of Canada's land mass and half its shoreline. This area, governed by a set of five modern, constitutionally protected treaties, contains much of Canada's non-renewable and other natural resource potential. The Government of Canada is relying heavily on resource development projects to propel economic growth in Canada, including increased wealth, expansion of employment, and improved levels of productivity. In the Arctic, such projects must strike an appropriate balance between economic development, social development, cultural continuity, and environmental protection, and they must actively engage Inuit.
This is starting to happen, particularly in Nunavut, where I'm from. But the federal government has the power to enhance Inuit contributions to Canada's economic performance. The key is education and training. Parliament and the federal government have the authority and capacity to take far-reaching and imaginative measures to bring about greatly improved Inuit education and training outcomes. This authority and capacity is drawn from a variety of constitutionally anchored sources, including Parliament's power to make laws in relation to Inuit under section 91.24 of the Constitution Act, 1867; special federal powers in the territories over such things as marine areas, fisheries, and cross-boundary matters; and Parliament's unqualified spending powers. A radical improvement in Inuit education and training will not be achieved without the use of targeted federal funding. The scope of what is needed is large.
In 2006, a federally appointed conciliator reported during the process of updating the implementation of the Nunavut Land Claims Agreement that even a five-year effort aimed at making modest headway in Inuit participation in the Nunavut workforce would require $100 million in federal funds. That projected undertaking was just in relation to Nunavut. Other regions of Canada have similar needs, and existing funding is simply not enough to meet these needs.
The Inuit population in Canada is much younger than the general Canadian population. While fertility rates are gradually declining, the number of Inuit in the prime employment cohort aged 20 to 60 will show steady growth in coming decades. This presents both a challenge and an opportunity. It is a challenge in that public sector policies and private sector initiatives need to be fashioned so as to generate adequate employment and other economic opportunities for Inuit, particularly young Inuit joining the workforce for the first time. It is an opportunity in that successfully attracting and sustaining optimal Inuit participation in employment and other economic opportunities can contribute in tangible and important ways to both Inuit economic self-reliance and Canada's overall economic performance.
There is one other aspect of Arctic demographics that needs emphasis. This aspect is effectively summarized in the text of the Circumpolar Inuit Declaration on Resource Development Principles in Inuit Nunaat, released in May 2011, which says:
||Inuit are committed to safe-guarding Inuit culture against excess adverse pressures and impacts that could be brought on by an overly ambitious, ill timed, or poorly planned and implemented staging of major resource development projects, particularly insofar as such a scenario precipitated a major influx of non-Inuit while failing to impart the technologies, skills and training, and business opportunities needed by Inuit.
Inuit are among Canada's youngest citizens, with a median age of 22, about half the Canadian median age of 40. The bulk of this population is now moving through the education system, yet too few are graduating. The stark reality of Inuit education today is that roughly three-quarters of the children are not completing high school, and many who do graduate find that their skills don't compare with those of non-aboriginal graduates.
Low educational outcomes are associated with adverse social implications, including greater unemployment, greater numbers of youth entering the criminal justice system, and greater incidences of illness and poverty. Existing socio-economic conditions will worsen unless more Inuit children graduate from high school with equivalent skills and the same opportunities to succeed in post-secondary education as their non-Inuit peers.
There's a long, graphic, and unhappy list of economic and social development indicators revealing the pronounced and enduring gaps in basic well-being between Inuit and other aboriginal peoples on the one hand and the general Canadian population on the other.
To conclude, the growing international interest in the rights, interests, and conditions of indigenous peoples should give Parliament and the Government of Canada added incentives to improve economic circumstances for any aboriginal peoples, a core reference point in determining and measuring the economic circumstances of Canada.
I'll leave it at that.
I noted from your answers to the written questions under “Other Challenges”...you wrote about youth unemployment. That's something that has rippled through almost all the presentations we've had here. The last presentation was great, speaking very directly to the youth of the north.
Committee members will tell you that I go on and on about the $128 billion infrastructure deficit we have, and how we believe there's a place for the federal government to take a leadership role in that. Coming from a labour background, I talk about craftspeople. If they're working on these jobs and they have apprentices with them, they can give them on-the-job skills training you can't get elsewhere.
Countries like Germany—we had a previous speaker, Ms. Robinson, talking about how it shows, at least I believe, a right mix of public investment with market solutions in a green economy.
What measures do you feel the federal government should take to move Canada more in that direction—the greening of our economy?
You began by observing the need for training our young people to deal with that issue. The federal government has a very important role. As several of us mentioned, part of it is in better education and training funding for aboriginal students in this country. In the Prairies, they are the largest demographic.
English as a second language training: the federal government has been moving more toward a voucher system, which has privileged the private, for-profit trainers who often have less qualified teachers, a high turnover rate among their teachers, and uneven programs, at the expense of public colleges that have built up a wealth of experience and credibility and high-quality educators over a period of time. The federal government is investing public dollars, and we think one of the ways you can get more bang for your buck is to see that they go to public institutions.
You also made reference to apprenticeship. Measures have been taken to assist those in the Red Seal trades—the apprenticeship incentive grant that gives a $1,000 each year for the first two years, and a completion grant for when they complete their apprenticeship training. More needs to be done in that regard. There are a number of important trades in Canada that are not under the Red Seal that need to be recognized, whether it be X-ray technicians or whatever.
In addition to reaching beyond the non-Red Seal trades, I think the federal government also has to provide more of an inducement for employers to take on apprentices. As a country we've lagged in apprenticeship for as long as you and I have known each other. One of the reasons is that it was always cheaper for industry to bring in a skilled tradesperson as an immigrant than to train a young person. I think there have to be more incentives for business to take on apprentices so that we grow our own and provide opportunities to our young people to acquire these trades.
Mr. Murphy, I'm intrigued by the idea of using RRSP amounts to liberate some of that foreign investment into cooperatives. That's something we could take a look at as a committee.
I have a question on the education side, because we have university teachers here, colleges and universities represented, and we also have Mr. Audla's presentation. I think it's important. Regarding Inuit people and the aboriginal and first nations people in Canada, this whole issue of education and the imperative of having your fastest growing and youngest population—also the most economically and socially disenfranchised.... What level of investment does it really take to fix this? If we don't fix it now, it's a time bomb, demographically, socially, and economically. Do we need to go back to a Kelowna-type discussion again? Call it what you may, but do we need that kind of partnership again, and what level of investment is it going to take to really address this in a substantive way?
First, as to attracting international students to Canada, we are known around the world for a very high-quality system. We can never lose sight of that. Things can be improved, but it's a very high-quality system. Second, it's an affordable proposition for families around the world to come to Canada. Third, they're welcomed into safe, secure, and welcoming communities right across the country. So those are elements of our competitive advantage in attracting international students to Canada.
I also want to underscore the importance of what those international students bring to Canadian classrooms. Students who will never travel abroad get the chance to meet people from another country, learn another language, and be engaged in research and learning activities.
With respect to opportunities, you mentioned the Governor General travelling to Brazil. We were delighted that he led a mission to Brazil, along with 30 university presidents. It's interesting to see what Brazil is doing. The Government of Brazil committed 75,000 scholarships for Brazilian students to study abroad, and their private sector immediately kicked in another 26,000 scholarships. They're doing that because they recognize that to take their economy to the next level they need a generation of young people who have those kinds of international and transnational skills.
In Canada, we have a long way to go. In Amit Chakma's report this summer, the expert panel looking at an international strategy for Canada, he and his colleagues recommended that Canada aim by 2022 to initiate a program that would move 50,000 Canadian students annually internationally, and that's a goal that we endorse strongly.
Thank you, Chair, and thank you to all the witnesses for being here today.
I want to begin my questioning with Mr. Myers, if I could.
I'm looking at page 6 of the management issue survey, and I'm seeing that in terms of relations with foreign markets.... As you know, we've been very aggressive on the trade front, negotiating nine free trade agreements since 2006, and we have a number of others in the hopper that are currently under negotiation.
What I'm seeing here in these two charts is exactly what I'm seeing in my home riding of York Centre, in that we have a lot of smaller manufacturers, not the General Motors kind, but very small kind of niche marketing manufacturers who are exporting more and more outside of the country. They're not relying so much on the domestic market. There's very aggressive growth beyond Canada's borders. I see that's a general trend throughout.
I assume you're seeing that throughout your membership?
First, I would like to say to Mr. Myers that a number of us feel uncomfortable because we tried to use you in a partisan war when, on the other side, you were asked to comment on partisan activities. Hearing them ask you to take part in a squabble when you are appearing to share your expertise is fairly embarrassing.
My question is for Mr. Murphy.
You mentioned in your intervention that co-operatives were sometimes required to request that their files be processed, but that they were not understood by the person they were dealing with.
The fact that you asked for a transfer of skills from one department to another, so from Agriculture to Industry, does that have something to do with your comment?
My next question is for Mr. Davidson.
You said that we should make more of an effort to attract international students to Canadian universities. I am all in favour of that.
There is another aspect that has perhaps been discussed less. It's the case in Quebec, but I don't know if this is the case in other provinces in Canada. I think we should try to attract more boys to Canadian universities.
Do you think this problem is typical for Quebec, or is it the same thing across Canada? Do you think the federal government, in its budget and through the Standing Committee on Finance, could help the provinces ensure that boys are more interested in going to university and that they drop out less, as is currently the case?
If I may, I'd say that one of the great advances in post-secondary education in the last 30 years has been the full participation of women in the post-secondary sector. In many cases, in many programs, women are outnumbering and in many cases outperforming men.
So that's interesting to observe. I don't know if there is an underlying sociological reason for that.
If I may, though, I would add that one of our biggest concerns is that there is a lot of discussion about whether we have too many people in PSE, too many people in university. The short answer is no. We need every student who is in the system now to stay in the system, and we need a whole lot more.
Yes, we have a skills crisis for skilled trades. We need to do more on the skilled trades side. But there are job shortages in Alberta right now because of their not being able to find the university grads who are needed for the economic conditions in that province.
With respect to the situation in Quebec, everyone should be concerned that the post-secondary participation rate in Quebec is amongst the lowest in the country. That's a challenge for Quebec. It's a challenge for all of Canada.
Thank you to all for being here. It's good to see some of you again. You've been here a number of times.
Mr. Davidson, I want to touch on what you were just saying to Mr. Brahmi. You mentioned that we don't have enough students. I'm looking for a clarification, because we've heard other testimony—and I think it's statistically proven—that we are having a large number of graduates out of universities who can't find jobs. Is the problem maybe that we're not putting them in the right programs?
I say that very carefully, because now we're almost starting to talk about social engineering, to some degree.
I see that Mr. Turk is agreeing with that as well.
How do we find that balance? I'll shift over to Mr. Turk later, but perhaps you could answer this question.
I welcome the question.
Let me just say, first off, in terms of jobs, that from July 2008 to July 2012 there have been 700,000 net new jobs for university graduates. There have been 320,000 jobs for college graduates. There have been 640,000 jobs lost for those with only high school. So we do have some issues to face.
The idea that university graduates are not getting jobs is not borne out by evidence: 94% of graduates in Ontario report having a job within six months of graduation.
For anyone who doesn't have a job, it is a terrible issue to face. There is more we can do to make sure that young people connect to the labour force. There is more that universities are doing to prepare students for careers. But to suggest that too many people are going to university is really a strategy not for success but for failure.
I might add, because we look at international rankings and standards, that university enrolment in Canada ranks 15th in the OECD. Although we've increased enrolment by about 60% in the last 15 years—the equivalent of creating the largest university in each province again, and then building another University of Toronto—other countries are increasing enrolment further and faster.
We're looking at our competitive countries. I spoke of a million graduates in Canada. China increased enrolment by a million graduates in the last 12 months.
None of these questions that persist year after year is easy to solve. It starts with an analysis of where you think the most important outcomes arise from. It's a self-evident, but wrong, conclusion to say that the way you get those kinds of outcomes, whether they are commercial advances, innovation, or whatever, is by directing research to that target.
If one looks historically at most of the things that have come to be recognized as having commercial, economic, or even social value, they've come out of basic research, where the researchers at the time they undertook the research had no idea. One of the most respected scientists I know in the country says that every time they fill out a grant application, they have to lie because it asks where the research is going to lead. They don't know where it's going to lead.
We addressed this briefly in our report. The discoveries of X-rays, nylon, Teflon, GPS technology, and so forth, all came out of basic research. It's not just giving the money to let scientists do whatever they want; rather, it's giving the money to granting councils so there's a rigorous peer review process. It should be a scientific and research community that makes the determination as to what looks valuable, not political officials, not bureaucratic officials, and not bureaucratic university officials. It should be the scientific community that makes those difficult judgments.
I would like to thank my Conservative colleague for raising the issue of basic research because that is also what I wanted to ask about. So Mr. Turk, could you continue?
In your presentation, you denounced the various cuts to university research and in the area of government scientific research. I usually sit on the Standing Committee on Official Languages. We can already see the effect of the cuts on Statistics Canada with respect to the reliability of data on mother tongue and on the language of use at home.
Mr. Turk, could you please elaborate a little on what your real needs are in terms of basic research in the university setting?
If anyone else has anything to add, they may do so.
As I explained, within the co-operative sector, we have known for several years now that obtaining funds for the development of new co-operatives or smaller co-operatives was our responsibility. In other words, it was up to us to begin the process.
Today, we would like to begin this process, to create a fund and start establishing it. In an ideal world, we would like to develop a partnership with the federal government, which could come to our table and, in a perfect world, bring money and increase the fund. The idea would not be to provide money every year, but to start to put money in the fund.
For example, in northern Canada, there is a fund. They started 15 years ago with $2 million. Today, the fund is up to $10 million or $13 million. This was—
one shot and that was it.
After the start, things went well. The fund made headway and grew.
That is what we would like to do, but at a national level.
From my perspective, what I've seen be successful in my area of Fort McMurray, which I think.... Listening to Mr. Audla, it seems that he's 30 years back from where Fort McMurray was, or Fort McMurray 30 years ago was where his community is. I would encourage you to look at Fort McMurray's model.
Hard work, creativity, and results should be rewarded. I think that's ultimately what I take as a difference of opinion from what I read in some of the book's contents. I'm wondering what your comment would be on that. Fort McMurray, for instance, just over the last little while, has the highest employment rate for aboriginals in the country—15% for some plant sites, and some have 10%. They employ literally thousands of aboriginals who have grade 12 or grade 10 educations, and they do a proactive aboriginal training program with the high schools and with the colleges, and in fact it is commercially driven.
The success rate, for instance, of aboriginal populations is tremendous. The highest household income in the country is there in Fort McMurray, and those are people who do not have university educations or jobs. They're adding 7% or 8% to the GDP.
I see Mr. Myers is nodding his head in agreement.
Could you comment on that, Mr. Myers?