Thank you, Mr. Chair and members of the committee. My name is Jay Thomson. I'm the CEO of the Canadian Communication Systems Alliance. I'd like to thank all of the members of the committee for inviting me here to Saint John today to present our recommendations.
While I'm based in Ottawa, actually in Wakefield, our head office is very close to here in nearby Quispamsis. CCSA represents more than 110 independent companies that provide Internet, television and telephone services across Canada. Our members serve hundreds of thousands of Canadians in communities generally outside urban markets all across the country. In rural areas, CCSA members are sometimes the only source of essential communication services.
I come today with three recommendations that our members believe would support Canada's commitment to growing the economy, job creation and broad-based prosperity.
Our message today is essentially the same as it was when we appeared before your committee last year. In today's connected world, continued development of our broadband infrastructure is crucial to Canada's global competitiveness and economic success. Therefore, Canada's fiscal policy should support the government's objective of extending broadband service to all Canadians.
To that end, first, we ask that the Canadian government increase its investments in the country's broadband infrastructure. CCSA is pleased that the government has made important progress in this respect with the connect to innovate program, but more investments are needed. We recommend that the government continue to work with our members to identify where broadband investment can have the greatest positive impact on the lives of Canadians.
Second, we ask that the government, in making its fiscal policies, recognize the vital role that local entrepreneurs with existing networks and expertise can play in achieving Canada's broadband goals. By directing funding for locally based companies, the government can more efficiently extend broadband capabilities and increase the potential for economic growth and diversification, creating jobs and other opportunities. That's because smaller, locally based companies really know how to stretch a dollar to serve their communities.
Third, we caution the government against creating any avenue for Internet service providers to be taxed to support the production of Canadian television programming, as some parties seek. We believe that any new tax aimed at the providers of broadband services would be harmful to the government's objective of spurring economic prosperity by extending broadband services to parts of the country that currently are underserved. We, therefore. urge the government to not impose any new taxes on Internet service providers in Canada.
In conclusion, we believe that the Canadian government is well on its way to continuously growing the economy through ensuring that all Canadians regardless of where they live have access to critical broadband connectivity so that they may share in the benefits of the digital economy. By increasing investments in broadband, funding directly to locally based providers and not adding any more tax burden on those companies, the government will be able to achieve its goals more efficiently and quickly.
The CCSA and our members look forward to continuing to work with the finance committee and the government in ensuring that policies developed help grow the Canadian economy. Thank you once again for the time and I look forward to your questions.
Honourable Chair and esteemed members of the committee, thank you for inviting us to participate today.
The Canadian Crafts Federation represents a broad sector of artisans and makers from a wide variety of disciplines. Craft is a vibrant and active component of the larger cultural sector in Canada, and a significant contributor to the cultural economy. The culture satellite account showed that the craft sector contributed $2.8 billion to the cultural GDP in 2010. That's more than the performing arts, at $1.7 billion; architecture, at $1.2 billion; books, at $1.1 billion; and photography, at $1 billion.
Our recommendations will impact the sector's work to increase homegrown, sustainable jobs for Canadians. Rather than ask for extensive financial investment, we are largely asking for clarity and the reduction of impediments to growth for the craft sector.
First, we recommend that the government implement fair taxation regarding grant income. For years, artists have faced unclear guidelines and confusion regarding this income. This difficulty was brought to the public eye earlier this year when sculptor Steve Higgins received a $14,000 tax bill after receiving only $20,000 in grants for a specific project. This funding was then recategorized as a personal endeavour rather than a source of business income and deemed ineligible for related expenses. This is one example of wasted productivity, for Canada Revenue Agency staff and for the artists who face these audits. These could be rectified with only slight shifts in policy and training at the CRA.
The CCF also recommends that the government recommit to, and finalize, the budgetary increases already slated for the Canada Council for the Arts through to 2021. Since 2017, the CCF has directly benefited from this increase, as have many of our partner organizations and individual members across the country. We know this funding has increased employment numbers and artist fees paid out across the sector. We have seen first-hand the impact that this increased funding has already had in its first stage of implementation, and we are grateful for this long-needed injection of funding to further support our sector.
Funding for mentorship and apprenticeship programs and increased access to the federal financial incentive and tax credit programs through the Red Seal trades system could greatly assist craft artists looking to transition from training to professional practice. In August 2017, a Canadian Crafts Federation study identified 36 colleges offering 84 craft programs. The demand exists to open Red Seal opportunities to the craft sector. By encouraging Employment and Social Development Canada and the Canadian Council of Directors of Apprenticeship, the federal government can play a role in opening this door.
In order to create a new taxable income for artists in Canada, the government could amend the Canadian Copyright Act to include an artist resale right. This copyright royalty would increase income for craft artists whose work is resold, often at a higher price point as their career advances. This would come at no cost to the federal government. This type of program currently exists in 93 other countries worldwide. As average artists' incomes are below the poverty line, this amendment to the Canadian Copyright Act would have a direct impact.
Finally, the Canadian Crafts Federation recommends that the government modernize the national museum policy and identify new financial support for programming to advance indigenous reconciliation, inclusion and diversity; digitization; and infrastructure. Much like the recent review and transformation of the Canada Council for the Arts' model, Canadian museums need to be supported in their endeavours to renew and refresh their structures, content and relationship with the modern Canadian and international audience.
Craft is a sector that touches every single region in Canada, from community spaces like the Eptek Art and Culture Centre in P.E.I., the Shadbolt Centre for the Arts in Burnaby, and the Woodland Cultural Centre in Brantford, to excellent craft training programs such as the Alberta College of Art and Design in Calgary and the renowned collections in public and private galleries like Hull's Canadian Museum of History, the Jonathon Bancroft-Snell Gallery in London, and the McMichael Canadian Art Collection. Craft and culture are alive and well.
I highlight these specific cultural institutions not just because you are familiar with them, but because they are excellent examples of diverse cultural industries. They are employers, community developers, keepers of our history and place-makers of our modern time. All these organizations would benefit directly from the recommendations presented today.
Government support of artists and the cultural sector is a hand up, not a handout. Supporting the creative industries in this country creates jobs, supports small businesses, and provides opportunities for children, youth, seniors and everyone in between, regardless of their backgrounds. Statistics Canada confirmed the cultural sector generated approximately $25 billion in taxes for all levels of government in 2007, more than three times higher than the $7.9 billion that was spent on culture by all levels of government that same year.
Cultural investment has an excellent return.
Thank you very much.
Equity between mental and physical health care is fundamental to ensuring productivity and economic competitiveness in Canada. The Mental Health Commission of Canada and the Canadian Mental Health Association have been very vocal on the urgent need to act.
The 2015 Provincial Mental Health Forum, held in New Brunswick and attended by more than 350 community participants, established the importance of holding a societal debate on all mental health issues, such as the need to overcome stigma and legal barriers and promote equity in access to services.
Such a transformation of services requires the participation of families, loved ones and the community. It is important to intervene early while respecting the safety and jurisdiction over culture of first nations, immigrants, refugees and linguistic minorities. Transforming mental health services is based on the values of respect, transparency, collaboration, evidence, best practices and research.
According to the Mental Health Commission of Canada, the economic losses from mental illness and substance abuse are estimated at $51 billion. For Canadians suffering from depression, the loss of productivity is estimated at $8 billion.
Mental health issues are the primary reason for disability claims. Seventy-five per cent of short-term claims result in significant costs. Only 50% of employees will return to work after a six-month disability period. The costs associated with mental health issues represent 4% to 12% of the payroll. Fifty-seven per cent of Canadian employers have made it their top priority.
According to a survey conducted by the Canadian Mental Health Association, whose report has just been published, access to mental health care, unavailability of appropriate services and stigmatization are the main barriers to good mental health.
The mental health needs of 1.6 million Canadians are not being met. The opioid crisis is the result of physical, spiritual and psychological suffering and pain related to, among other things, social inequality, colonialism, intergenerational trauma, stigmatization and inaccessibility to appropriate and effective services, as well as a lack of consistent treatment services.
In Canada, 7.2% of the health care budget is for mental health, compared to 13% in England, while the economic burden of mental health, as estimated by the OECD, is to the tune of 23%. Historically, community mental health services have been underfunded. The Government of Canada has demonstrated unprecedented leadership by recognizing significant gaps in mental health and has committed an additional $5 billion over 10 years.
Mental health issues are preventable and manageable with personalized, equitable and effective access to appropriate services and support. Eighty per cent of people depend on their family doctor for services that are usually limited to drugs and referrals.
Psychological therapy services are inaccessible in the public system, as the majority of people do not have access to private insurance plans to cover part of the costs.
We recommend the following strategies: providing evidence-based therapies from public funds; improving the quality of care; investing in promotion, prevention, early intervention, and the resolution of stigma and discrimination issues; ensuring equitable access; and increasing funding for mental health research and impact assessment. For each dollar spent, the health care system saves two dollars.
We propose to hold an Atlantic forum bringing together all community participants and decision-makers in the formal system, as a follow-up to the provincial forum held in 2015. The purpose of such a forum is to engage people with mental health challenges in their institutions, to engage their natural support networks such as family and friends, and to engage employers, professionals, researchers and policy-makers.
This is also an opportunity to demystify mental health, mental illnesses and addictions, to share evidence and best practices, but more importantly, to overcome stigma. Working with partners is essential to implementing innovative strategies, deploying appropriate and effective services, intervening early and building a healthy and dynamic economy.
The following issues cost society dearly: the rate of homelessness related to mental illness; the dependency rate related to mental health issues; the rates of chronicity and economic dependency of people who do not have access to appropriate and effective services; and the inaccessibility of care and services for those living with mental illness, as well as for their families and loved ones. The status quo has an impact on the economic health and productivity of communities.
A forum bringing together all stakeholders from the formal systems of public services, training and education institutions, community organizations, immigrant communities, first nations and the linguistic minority, in a spirit of collaboration and evidence-based information sharing, paves the way for demystifying mental illness, promotes best practices and ensures continuity of care.
A forum is a societal intervention that informs, raises awareness, and mobilizes people. It overcomes stigma and engages our communities in a partnership with formal systems and policy-makers.
The Canadian Mental Health Association recommends that legislation be passed on parity between mental and physical health, which would clarify that access to mental health services is not a privilege, but a right.
The purpose of the coalition will be to represent the interests of communities, individuals and formal services in the transformation of mental health services.
Thank you, Mr. Chair and members of the Standing Committee on Finance for giving me the opportunity to appear before you today. I'm very pleased that the committee chose economic growth ensuring Canada's competitiveness as its topic, as this is a critical issue for our great country. As the gentleman from B.C. mentioned this morning about the pipeline being sanctioned or going ahead with a green light by the owners, that's just what we need in this country, more of that. That's first class.
By way of background, our organization employs approximately 18,000 people in Canada and the U.S., with the majority being in Canada. Last year we purchased goods and services from more than 4,600 businesses here in New Brunswick alone, at 1.3 billion dollars' worth of local purchases in 2017. The majority of these businesses were small, which is a critical component of the social and economic fabric of this country. In order to stay in business and continue to buy from smaller local suppliers we, as a company, need to be globally competitive. That's absolutely critical.
Exports are critical. Our New Brunswick sawmills produce enough lumber in seven days to satisfy all of New Brunswick's home construction for a year. For tissue products, it's about 50 days, and for magazine paper, it's about 12 days.
I sat this last year on the 's resources of the future economic strategy table, and there were a number of interesting statistics that came out of that, which I wasn't fully aware of. I don't want to be negative, but I'm going to read them because I think it puts things in context about where we're headed on a competitiveness basis.
Canada ranks 34 out of 35 among the OECD countries in terms of time required to obtain a permit for a new construction project. Canada's export growth has declined significantly in the last 15 years. The productivity gap between Canada and the U.S. has more than doubled since the late 1980s. Canada ranks last of all advanced economies when it comes to the burden of government regulation and efficiency of government spending.
In a recent survey of large firms, the Business Council of Canada found that 64% of CEOs said Canada's investment climate had worsened in the last five years. Noting the growth in tax and regulatory burden, increasing red tape can discourage companies from making large investments in Canada. Meanwhile, confidence among small businesses has plummeted, according to the reports from the Canadian Federation of Independent Business. Foreign direct investment in Canada plunged last year to the lowest level since 2010.
As you undertake your pre-budget consultations, I would like to raise a few ideas for your consideration. I don't mean to be negative with those previous comments, but that's the state of affairs. We're in a great country. We have a massive amount of natural resources. The job is to know how to move forward to help ourselves be more competitive.
Taxation issues, the subject of accelerated capital cost allowance, is something I'm sure you will hear across the country from different people in the manufacturing sector, in any case, suggesting the acceleration of capital cost allowance on machinery and equipment. The U.S. currently now has 100% depreciation in the first year, an enormously important requirement because currently Canada's depreciation rate runs about seven years. At one time we could buy equipment for our manufacturing plants and it would last. It would run out its useful life. Today, with technological changes, oftentimes equipment still has a useful life but is no longer technically competitive because of the fast pace of change in the global sector of manufacturing. That's quite important.
We might even consider changing the ready for use rules. Today the capital asset has to be in production before you can claim the depreciation. In New Brunswick at one time the federal government had allowed for ready for use rules, which meant they would be waived. Once you committed to the project, you could claim the depreciation while it was under construction. This further accelerated the rate of investment in particularly hard depressed areas of the country.
We think the depreciation is quite important, and we ask that due consideration be given for the whole country, for all kinds of reasons.
As to carbon pricing and environmental regulations, we support the federal government's efforts to reduce carbon emissions. In our organization in the pulp and paper sector, we've reduced our carbon by about 50% over the last 15 years. This is a cost of doing business that rarely pays for itself, but it's something we have to do. We don't dispute that. One way to mitigate the carbon tax on companies is to separate another class of depreciation.
Where we're going to invest.... The federal government now is rewriting the environmental rules on water, air and so on, in a number of different sectors. You can only spend a dollar once. Once you've spent it on reducing your environmental footprint, you haven't got the dollars to spend on the modernization of your plant.
Perhaps we want to have a different class of depreciation, perhaps double depreciation, for those things that are specifically for environmental improvements to the country. We have to do them, fine, and the federal government will get all of its taxable revenue. It might be a year or two later, but then you're fully exposed from a depreciation point of view, and you'll pay your full tax. We think it perhaps signals the right message to the rest of the community.
With regard to analytical capacity, governments often introduce...and when I refer to governments, I mean federal and provincial. I know this is about the federal government here today, but it overlaps. Governments often introduce policy and legislative changes that may negatively impact business, although not directly. They have the best intentions but they are perhaps a bit misguided sometimes. These may be changes to environmental regulations, labour laws or a number of other government initiatives.
We need to make these changes, but the government really needs to understand the impact—what we are doing on the outcome—because it all gets back to being competitive. We often see the provinces putting regulations through with no analytics of the impact. That's particularly true in the resource sector.
That's why I am glad to see the pipeline going ahead. The did the right thing. He bought Kinder Morgan, and he's going to make that happen. It's the right thing. We have to make things move.
We recommend that the federal government create an internal competitiveness task force with the analytical capacity to clearly understand the impact of any policy or legislative changes in terms of global competitiveness. It affects our input cost if we put the power rates up or the gas rates up, or we change the regulations on transportation. It all adds up to how we compete globally, and that's so important.
The task force would be sector-specific. We're not talking about thousands of people. These would be people who are very familiar with the mining business, the forestry business, the oil and gas business, who really understand the global inputs and what it takes to make those businesses attractive to capital investment here in Canada. As we've often said to the premiers of New Brunswick over the last 10 years or so—as New Brunswick has lost approximately half of its pulp and paper mills—these folks didn't leave the industry, they left New Brunswick. They went and put their money where perhaps it was easier to do business.
That's gone on across Canada in these very competitive sectors. Today Canada has the Competition Bureau. We think we need a competitiveness bureau. We think we really need to understand it. Obviously being competitive keeps the standard of living up in this country. That's what we have to be able to do. We have to be able to have the tax revenue generated to pay for all the social programs and look after people who need help.
We've heard from a number of young folks here this morning who spoke very well about how we have an obligation to look after things. The only way we're going to do it is to generate cash—income for the country. The only way we're going to do that long term is to be competitive. We're blessed with all the resources in the world, so it's up to us as a country to step up on that.
Competitiveness should be the watchword on many things we're doing today.
Chairperson Easter, committee members, fellow witnesses, good morning.
Thank you for the opportunity to appear before this committee to discuss what the Saint John Region Chamber of Commerce, the chamber, feels are considerations that should be included in the next federal budget.
During the recent provincial election, the New Brunswick boards of trade, chambers of commerce and other associations created a platform called We Choose Growth, which has five pillars that lay out what our members, the province and the country need to be successful. These five are private-sector driven economy, responsible resource development, responsible financial management, improved export performance, and labour force development. I will try to focus on most of these this morning.
First I'll talk about private-sector driven economy.
New Brunswick is the best place to live in Canada. However, a competitive tax and regulatory environment is needed to attract new businesses, as well as allow current businesses to grow in this current global competition for capital and talent, regardless of the size of the organization. Our federal small business tax rates are competitive when you look only at the corporate level of taxation. However, with the additional consideration of personal tax rates and a top marginal rate in excess of 50%, there is a disincentive for business owners to achieve their full potential when more than 50% of what they earn will be paid in tax. This disincentive is worsened when a business is subject to the general tax rate of 29% in New Brunswick.
The recent changes in the small business deduction rules related to the amount of passive income one earns can double the income tax burden on many successful small businesses and remove growth capital from that business. As well, the wide-ranging changes that have occurred over the last several years have increased every business owner's accounting and legal fees just to remain compliant. Therefore, we recommend all recent tax changes be put on pause and a robust and complete review of the tax system, including tax rates, be undertaken to ensure that it is fair and equitable to all. Any review will, and should, take time.
However, New Brunswick and Canada need immediate action now to encourage investment, to stop the capital drain and to encourage growth. We suggest an immediate writeoff of capital expenditures as a start. This can be enhanced with a super deduction of 125% of the expenditure to allow a further incentive for investment and growth. For everyone, a reduction in the top marginal rate to below 50% would be positive. Further, a positive amendment to the recent changes to the tax on split income rules would be to provide for a spousal exemption, or raise the age it applies to for those under 25, and revert back to the rules that had worked effectively since the early 1990s. This would eliminate complexity and reduce risk for the business owner who wants to do things right, but has no idea how to apply the new, overly complex rules.
As New Brunswick is an aging society, current business owners are faced with succession issues. Many would love to transfer their business to family members, but the current rules make it nearly impossible, as most business owners cannot efficiently transfer their business to the next generation without significant tax costs. We suggest that a mechanism be introduced to allow the rollover of a family business to the next generation that would allow the current owner to enjoy the same benefits as if they sold to an arm's-length person.
Next is responsible resource development.
New Brunswick was built on the riches that the land and sea have provided to us, and the hard work of those who took risks with no guarantee of success. The current regulatory framework appears to be in constant flux and causes significant issues for anyone trying to start or grow a business utilizing these natural resources. The creation of any major piece of infrastructure, such as a pipeline, would draw in more business opportunities and give local businesses the opportunity to gain valuable experience that they can then take and use elsewhere. It would grow New Brunswick's tax base.
With this uncertainty, it is not surprising that we have no new private projects that bring new enterprises to New Brunswick that not only create immediate jobs but the lasting infrastructure that attracts additional new investment. Rules should be established that are reasonable and realistic, in collaboration with industry and stakeholders, and that don't pit opposing parties against each other but look at the national good. These rules should then be consistently applied to any project review in its development so that we can get something built in Canada.
To confront climate change by offering beneficial tax treatments, immediate writeoffs, super deductions or better refundable tax credits for modernization of pollution control equipment, upgrading to new efficient equipment or the installation of renewable energy sources, as opposed to charging carbon taxes, would create better results. Everyone in Canada is taxed out and can't afford any new taxes. Incentivize behaviour. Don't punish when there is no alternative.
Next is responsible financial management.
A fiscally strong, stable federal government helps Canada sell itself as a good place to invest. Running extreme deficits and accumulating debt with no clear plan to return to a balanced budget is not sustainable. Neither is trying to balance a budget through tax increases as we have passed the point where more taxes generate more income.
Therefore, we recommend that the government work to live with less, focus on the expenditure side of the income statement and don't balance the budget through tax increases. Every year that goes by that we are not dealing with this makes it harder to correct and puts Canada at risk of not being able to ride out the next inevitable downturn.
As for improved export performance, we are an export-focused economy, primarily through the U.S. We must expand to other markets. The federal government should provide better financial backstops for businesses wishing to enter new export markets.
However, it will take years to develop any new markets. The trade issues between Canada and the U.S. must be stabilized to maintain the free flow of goods to the U.S. Many New Brunswick companies that employ thousands currently depend on the U.S. market for their survival. Any disruption to cross-border trade would be devastating.
In the five minutes we've had, I have only touched on four of the five pillars of growth. There is much more to discuss.
Thank you for this opportunity to appear before you. I welcome any questions you may have.
Thank you very much for the invitation to appear before you. It is much appreciated.
You are consulting with us on issues with respect to economic growth, and I want to speak to you about what I believe to be the critically important role of universities and colleges across the country in helping with economic growth. In particular, I am going to focus on New Brunswick and my university, and the role that we are trying to play in returning New Brunswick to sustainable economic growth.
For me, a minimum bar of achievement for our province would be to become a “have province”. I think that's actually a pretty low bar, but let's recognize that 36 cents of every public dollar that is spent in this country is from equalization payments. I think that part of our political discourse should be around how we wean ourselves off that dependence on our friends in the rest of the country.
Our university has some 10,000 students—2,000 of them here in our campus at Saint John, and another 8,000 in Fredericton. We are 233 years old, the oldest English language university in the country, and we were found to be the country's most entrepreneurial university by Startup Canada in 2014. They've never held that competition again, so we'll wear that title forever, I hope.
It is a challenge for us to maintain the activities that led to that award. In particular, I want to tell you about the development of clusters in engineering and computer science, and in fact, in our faculty of arts, where we have built alliances with industries, both global companies and local firms.
For example, in the smart grid, we have a collaboration between Siemens Canada, New Brunswick Power, Emera—the Nova Scotia holding power company—and IBM. The smart grid is all about the efficient and best use of electricity as we build micro-generation facilities that will feed power back into the grid. There are very complicated intellectual and technical problems involved in that. The president of Siemens Canada, Robert Hardt, articulated the vision for this group as building the global utility operating system for the future, right here in New Brunswick.
This is the kind of ambition that we have. We believe we have many solutions in hand. We are working with a JDI firm to build an advanced manufacturing cluster. We want the manufacturing sector here in New Brunswick to be globally competitive. As Jim was suggesting earlier, we have to keep our eye on that ball—being globally competitive. That means our manufacturers need access to the latest and greatest in technology, in materials and in manufacturing techniques.
Our faculty have that expertise, and it can be brought to bear on their needs. We believe we have solutions in hand. Our challenge is to scale them up.
I would argue that economic growth and competitiveness across the country demand sustained investments in research and development by our federal government. You have many programs that are doing that and doing very well. I would suggest that they do need attention, and they can always be tweaked to make them better.
I would particularly mention the Atlantic Canada Opportunities Agency. It has been around for a long time. It has been viewed here in this part of the country as largely successful, to the point where the previous government, in fact, duplicated those economic development agencies in other parts of the country. I would suggest to you that a very good idea on the part of the federal government would be to increase investments in ACOA.
They know what they're doing. They know the players. They have their established and understood systems of due diligence, and they are becoming better and better at making the right investments in the right people and the right institutions, particularly since—I have to say this —Francis McGuire has become the president. There is somebody who's doing a really great job for the federal government at the moment, on the economic development front.
Finally, we have an economist at the University of New Brunswick by the name of Herb Emery. He has done some work on what he refers to as the innovation gap. There is about $100 million in additional investment flowing into Nova Scotia, a province of similar size to New Brunswick. We are $100 million down in investment in R and D in our province, and we refer to this as the innovation funding gap. Again, I think this could be usefully addressed through ACOA.
There's a whole system of innovation support that we have here in Atlantic Canada, and the federal and provincial governments co-operate very well on that front.
I welcome any questions you may have. Thank you for your time and attention.
It's on the edge. It's on the fringe.
Voices: Oh, oh!
Mr. Jim Irving: It's coming. We're working through our changes with the government. We would particularly give credit to the Province of New Brunswick on this one, and Nova Scotia and the federal government. We've had a good partnership. We're bringing a lot of folks in. I'll tell you, though, we're missing a workforce here a little bit. We're trying at this one. We're involved in a thing called “new boots”, which is women in the workforce going into trades.
Not to slight Eddy here, but we believe strongly that we need to get the community colleges to be a bigger part of our economy. I'd give free tuition to people who want to go to a community college to learn a skill we need. I think that's quite important.
In Nova Scotia we have the shipyard. We have African Nova Scotians. We have a program going with the indigenous community. We have an untapped workforce. We're getting recognition in Ottawa tomorrow for our tugboat crew of all women.
We have to tap into those parts of society. A lot of people who are unemployed are underemployed, making $12 an hour at Tim Hortons. That doesn't work. They can't afford to go to community college and get trained. We've advocated to the federal government for some time—I can leave a copy with you—on EI. There's about $2.6 billion or $2.7 billion in the employer fund in Ottawa. We advocated making New Brunswick a model for Canada. If you go to community college for a skill that we need, you will get your full EI. It's difficult to qualify for EI benefits and go to community college, so draw your EI at $525 a week, get the full EI pop, and get your tuition paid for.
Right now the Province of New Brunswick pays two-thirds of the tuition for community college. The other third, roughly $3,000 a year, is paid for by the individual. Take some of the money out of the employers fund and top it up. Now you have free tuition. You have a base income. The burden is not all on the government. The employer would have to sign up for the work term. Who signs up? We'd sign up for truck drivers, welders, or whatever it might be.
When somebody gets exposed to the workforce, they get up. We have to give people a chance to get up. We have to give them a hand up. I think we have the pieces here. I was talking about what it takes to be competitive. If we get those things, I think you'll find that Canadian employers will step up. They don't want to deal with all the morass of this problem and that problem. They want clarity. They want to move fast. They want to get it done.
I'm rambling a little bit here.
Mr. Peter Fragiskatos: No, not at all.
Mr. Jim Irving: Those are all pieces, we think, on the unemployment piece and on the women piece. It's not all successful from day one, but you have to try. You have to start. We're working away at it here as a New Brunswick company.
Thank you. Sorry about that.
Our Atlantic Canada airports move nearly eight million passengers per year. We're not only moving a substantial number of passengers and important cargo in and out of Atlantic Canada; we are moving the fly-in, fly-out workforce and enabling the growth of the regional economy. Atlantic airports generate over $4 billion in economic activity every year, supporting 46,000 person-years of employment.
While air transportation and airports have come a long way, some challenges remain. The creation of the national airports policy back in 1994 resulted in the transfer of the financial responsibility for airports from the Government of Canada to the community. This financial model has resulted in a net transfer of funds from aviation to the Government of Canada, which, for example, in 2017 was $368 million in the form of airport rent.
However, only a small fraction of those funds that are contributed to government go back into the aviation system. In fact, in 2017, approximately 10% or $38 million was invested through the airports capital assistance program, ACAP.
Since 2000, the funding in this program has not changed, while the cost of doing business over this time has risen considerably. The airports capital assistance program needs a dramatic increase in funding to support small airports across the country, many of which have runway refurbishments coming due.
As I mentioned, Canada's airports pay $368 million a year to the federal government in airport rent. Canadian airports are recommending eliminating rents for all airports with fewer than three million passengers, which would amount to approximately $10 million of the $368 million paid to the federal government last year. In addition, we would like to see a cap on rent for other airports, so that it no longer continues its upward climb.
Airports are closed-loop systems. Any reduction in rent would be passed on through lower airport charges and debt requirements.
To put airport rent in context, in Atlantic Canada in 2017, Halifax Stanfield International Airport paid over $7 million, and St. John's International Airport paid over $2.6 million. As well, five additional airports began paying rent in 2016, creating an additional financial burden, which will continue to grow over time for these smaller airports. For example, Greater Moncton International Airport paid $450,000 in federal rent in 2017, and that is expected to rise to $540,000 in 2018.
Meanwhile, with the introduction of new regulations expected this year, each airport with more than 325,000 passengers will be required to add 150-metre runway end safety areas, or RESAs. To complete this, Greater Moncton International Airport will need to borrow over $4 million to meet this new regulatory requirement.
While our airports fully support initiatives designed to improve safety, the regulatory cost burden is becoming exorbitant for smaller airports. For airports with under three million passengers, rent paid to the federal government could be better invested into airport safety infrastructure requirements like RESAs.
In regard to improving trade and export at airports, many airports across the country and here in Atlantic Canada have applied to the national trade corridors fund, proposing projects that reduce bottlenecks and address capacity issues for national trade. However, the NTCF is heavily subscribed. With a budget of $2 billion over 11 years, the government received $27 billion in applications with the first call for submissions, and only 37 projects across the country were approved in this first phase. The funding envelope in the program should be increased to assist with worthwhile projects that improve trade in Canada.
Again, thank you for your support for airports in budget 2018. We look forward to working together to further the economic prosperity of our region and this country.
Thank you Mr. Chair, committee members, and fellow presenters. Thank you for inviting the Atlantic Salmon Conservation Foundation to present to you today on your pre-budget theme, “Economic Growth: Ensuring Canada's Competitiveness”.
I'm Robert Bishop, vice-chairman of the foundation. With me is Stephen Chase, our executive director. We are pleased to outline why our foundation is a prudent and cost-effective government investment that successfully and permanently helps improve the environment.
We're a non-profit, volunteer-run organization at arm's length from government. We operate under a very solid business model to provide a permanent source of funding for salmon conservation projects in Quebec and Atlantic Canada. We do this from income earned on a $30-million trust fund created by the Government of Canada in 2007.
Since 2007, our foundation has granted $7 million to 475 separate river conservation projects. Our funds have also leveraged other sources of funding, for an overall project value of $36 million, giving an impressive leverage ratio of 4:1. Millions of square metres have been improved, and several thousand people have been engaged across the five provinces. Projects we have funded have sustained nearly 2,000 full-time-equivalent jobs. Full-time and seasonal workers have found employment, and hundreds of students have gained valuable work experience.
While Atlantic salmon may be our focus, from our 12 years of experience we know that it's not just wild salmon that benefits from our program. The work done by the community and indigenous groups we supported has improved the environment. Clean rivers are important to Canadians and visitors to Canada. Habitat is restored, and salmon and other wildlife species are sustained, which strengthens the ecotourism industry, a key economic driver in rural areas.
Earlier this year, we assessed the value of ecotourism associated with salmon rivers across the five provinces. We learned that several hundred million dollars are contributed annually to regional economies by ecotourism on rivers. Much of this economic activity is generated by, or associated with, the work of our recipient groups.
The foundation provides a permanent and well-managed source of funding for communities and volunteers engaged in environmental improvement. Our fiscally prudent process is bound by a detailed funding agreement approved by Treasury Board. We are annually accountable to the . We are required to maintain the inflation-adjusted book value of our trust fund. We cannot erode the capital, and rents and operations are funded only from investment income. The trust fund must be returned to the government if the foundation ceases operating.
We work with our recipients to agree on project outcomes, performance measures, and dates. The process is rigorous. Funding is granted quickly, and projects are subject to foundation oversight. It's an effective business model that works very well.
Our trust fund has its limits. Each year, we receive almost 200 high-quality funding proposals. Based on available funds, however, we can offer grants only to approximately half of these excellent proposals. This is regrettable, as it leaves many good projects unfunded, and others underfunded. We do encourage groups we can't fund in any particular year to stick with us, as we can't afford to lose good applicants.
Let me stress how critical the volunteer element is to the environmental improvement Canadians need for fish and wildlife, and also to sustain and grow ecotourism. This work cannot be done without the volunteer community. We work closely with the mainly volunteer recipient groups to help them succeed. We enjoy helping our recipients do good work. We want them to be successful, and we have a reputation for assisting them in this regard.
We have three recommendations we'd like to present to the committee.
First and foremost, a larger trust fund would increase the capacity of the foundation to fund more of the high-quality applications that we receive annually from Atlantic salmon grassroots organizations throughout Atlantic Canada and Quebec.
Second, instead of creating new mechanisms for delivery of wild Atlantic salmon conservation project funding, the government should work with established programs such as the Atlantic Salmon Conservation Foundation to avoid overlap and duplication. I can assure you that this does happen.
Finally, the Atlantic growth strategy should support river conservation projects contributing to the improvement of ecotourism opportunities by partnering with the Atlantic Salmon Conservation Foundation. By that I mean joining us in partnership on some of the projects we fund.
Good morning. Thank you for the opportunity to present today.
I'm Dr. Steve Beerman, and I am co-chair of the Canadian Drowning Prevention Coalition. I am here with Mr. Bobby White, a member of our board of directors. We're here to ask the government to make a new strategic investment in the Canadian Drowning Prevention Coalition to reduce drowning risks and enhance drowning prevention.
The Canadian Drowning Prevention Coalition is respectfully requesting that the Government of Canada invest $25 million over five years to support drowning risk reduction in Canada. This investment would improve research and data collection, thus improving effective prevention, policy development, reporting and governance.
The Canadian Drowning Prevention Coalition is a new, non-governmental organization that brings together many multisectoral stakeholders with key focused targets, inclusion and shared leadership. The coalition was created to enhance the focus and impact of this effort after the World Health Organization's “Global Report on Drowning”. That report identified drowning as a multisectoral public health issue in all nations and recommended that each nation create a national strategy and plan for drowning mortality risk reduction and non-fatal drowning risk reduction.
Mortality data in Canada has been collected and analyzed by the Canadian Red Cross and the Lifesaving Society for more than 20 years. This has focused on drowning mortality.
Non-fatal drowning data and reporting are more challenging and most needed. This impacts Canadian rescue services, health services, social support systems and employment and economic capacity for families and communities. The assessment of the drowning burden is currently incomplete. We need to improve the data, the reporting and the learning. A full understanding of this burden will inform legislation, policy and community actions and behaviours.
We know that more than 400 Canadians are victims of fatal drownings each year. This accounts for more than 8,000 fatal drownings and more than 40,000 non-fatal drowning events in Canada over the past 20 years. This is not the full picture. There are exclusions from this data, including drownings from suicides and homicides, and drowning deaths involving complex circumstances. We need to understand this drowning burden more fully and with all its impacts, to speed the rate of decline and improve the inequities.
The drowning mortality burden disproportionately impacts indigenous Canadians—that is, first nations, Inuit and Métis—new Canadians, rural and northern residents, children and young males. These key targets align with many Government of Canada priority target areas.
The Government of Canada's investment would improve our understanding and the reduction of tragic, preventable drowning. That investment would be put to use to enhance data and research-gathering and support.
We would like you to implement survival swim training for all Canadians, and very specifically for new Canadians. This would reduce the drowning risk.
We would also like you to amend the small vessel regulations for vessels under nine metres to require PFDs or life jackets to be worn by each person on or in the small craft. This would make small craft vessel recreation and vocation safer.
We would like you to implement mandatory CPR training as a prerequisite to obtaining a motor vehicle driver's licence in Canada. This would empower Canadians to save lives.
We would also like the Government of Canada to assist in the creation and establishment of a drowning review board for drowning mortality in supervised settings and in single events involving more than five deaths. This would better inform and protect Canadians.
As well, we would like you to implement consistent, evidence-based pool-fencing legislation and compliance across Canada. This would make our homes, our residents, our schools and our institutions safer.
Multiple Government of Canada ministries and agencies have a mandated interest in this issue. Canada should be a leader in multisectoral drowning prevention, with collaborative shared leadership. This collaborative partnership would accelerate the impact of drowning risk reduction and burden reduction.
Canada can do a better job of reducing drowning risks, deaths and the burden felt by our health care system, our economy, our families and our communities. Government investments in research, data collection and proactive prevention are reasonable requests and would greatly assist in reducing drowning among Canadians who are at greatest risk.
Thank you. We look forward to answering questions when the time is appropriate.
Thank you, and good morning.
Thank you for the invitation to speak here today. I'll be happy to answer any questions I can.
I'm the president and CEO of the Nova Scotia start-up company Maritime Launch Services Ltd. My nearly 30-year background in the aerospace industry includes 16 years working at the NASA White Sands test facility in New Mexico, testing rocket engines for the space shuttle, which is kind of cool. During that time, I was honoured to receive several safety awards as part of my work there, including the astronauts' Silver Snoopy Award.
For the past 14 years, I've been an independent consultant, working directly in the U.S. commercial space industry on building and licensing spaceports, and working with launch vehicle operators from around the world.
In 2016, in partnership with two other small businesses, we started Maritime Launch Services Ltd. to provide launch services to the growing commercial satellite market. I'm now living in Nova Scotia with my wife, two daughters, five cats, and a dog. We just moved recently to the Halifax area.
We are focused on delivering on the development of what will be Canada's first-ever orbital launch capability.
There is a new space race across the globe. Ever since the retirement of the space shuttle in 2011, and coupled with the significant changes in technology that have miniaturized the typical satellite, private industry has stepped in to utilize low-earth orbit for a host of communication and science-related activities, to study our earth and its changing environment.
Many new start-up companies are developing and maturing their launch platforms to serve this growing market. These start-ups recognize that the global space industry is on the cusp of major change, one characterized by more frequent launches of smaller, short-lived satellites, many of which will go into what's called sun-synchronous polar orbits.
This appetite for space-based services and information is growing asymptotically. This is especially true for Internet-related developments, and there is a need for more precise information about specific localities, including agronomic, economic, meteorological, and hydrological data.
Perhaps most important, space-based remote sensing is now much more dynamic, with information becoming more perishable and the demand for frequent resampling growing geometrically. Being able to support the new demands of the market will require low-cost solutions that can be rapidly tailored to individual customer preferences—in other words, a customer-focused launch site in support of commercial satellite customer needs that could put the satellites where they're needed in space instead of just as ride-shares on government missions.
Moving quickly is the key to capitalizing on this market—in the areas of launch vehicle design and construction, launch services, and engineering—and expanding those programs as they currently exist in Canada, including in Nova Scotia. The rapid establishment of a brand/reputation, initially within the context of the first Canadian spaceport and eventually worldwide, will cement the positioning of Nova Scotia as a pathfinder model in the emerging scientific, economic, commercial, and strategic global relationships.
The global space economy reached $340 billion USD per year in 2016, and is growing at 2% to 3% per year. The launch industry segment of this economy—that's where the rockets launch and satellites get put on these payloads, which is the backbone of the industry—is only about $5 billion USD per year, and is the bottleneck for the industry.
MLS recognizes that the commercial global satellite market needs additional reliable launch capacity in a trajectory that the eastern shore of Nova Scotia can provide. We also recognize that the numerous start-ups developing rockets today will take time to fully mature, and that partnering with world-class, experienced, cost-effective, and reliable launch vehicle manufacturers—Yuzhnoye and Yuzhmash in Ukraine—will bootstrap our spaceport and deliver to our growing list of satellite customers in a timely manner. By maturing our launch service offering based on the Ukrainian technology first, we can then provide the opportunity for other launch vehicles, including Laboratoire Reaction Dynamics Inc., based in Montreal, to be folded into our global offering.
With the launch vehicle offering defined and planned, that leaves finding the best location as the other key piece, and not just any location will do. The key attributes that our location near Canso, Nova Scotia, provides are a launch trajectory in the direction desired by our clients, our satellite customers; an expanse of several thousand kilometres of open ocean underneath that trajectory; and available land that is both remote from the general public and close to seaports, airports, roads, power, water and infrastructure. Most importantly, it is a location with local community support.
The best site is preferred to be in North America, where the largest satellite manufacturing community exists globally, and in a country with a mature space industry and robust global partnerships. The site in Canso has all of these key determinants, above more than a dozen other sites that we studied across North America before selecting this location.
We believe this commercial spaceport development to be a groundbreaking and timely addition to Nova Scotia and Canada as a whole, and it fits in directly with many federal government initiatives. Your progress on the Canadian innovation agenda, the Atlantic growth strategy, connect to innovate, the strategic innovation fund, the implementation of the Canada Infrastructure Bank, and the revised space policy initiative through ISED all align perfectly with our goals of introducing a new industry to Atlantic Canada and the economic benefits it will bring to the rural community and economy in the municipality of Guysborough.
The communities of Canso, Hazel Hill and Little Dover, where we'll be located within the municipality, played a vital role in transatlantic cable communication over a hundred years ago, and are now at another key intersection for Canada. We will be a pivotal part of the solution to provide broadband service across Canada and the globe, with the constellation platforms being developed by industry, including corporations in Canada. It will offer a natural priority to domestic launches, in part due to our location and in part due to our launch capacity matching our clients' needs.
With our medium-class rocket launch vehicle based on heritage proven technology manufactured in Ukraine, and with a satellite payload capacity of over three tonnes, we're positioned to meet the global market demands. Our vision intersects key initiatives in Canada, with global broadband, high-end employment in a rural community in Atlantic Canada, supporting Canada's growing role in the commercial space world community, and showcasing the strong ties between Canada and Ukraine.
The other key aspect of the collective initiative to build rockets and launch them is the effect it has on our youth. The enthusiasm for Canada's space program has always been strong, and many of our youth are seeking opportunities in science and engineering as a result. Unfortunately, to date, most of them have had to leave Canada in order to pursue their careers.
Imagine an operational domestic launch site that has internships and employment, domestic CubeSats being launched, domestic broadband satellites being launched, domestic rockets delivering them to space, domestic student rocketry programs holding annual competitions, and more.
Once it is operational, payload customers from across the globe will be bringing their satellites to Canada. Then the anchor tenancy that we offer and that the spaceport represents will be surrounded by other economic opportunity and employment for our youth. There will be opportunities to design, develop, test and manufacture satellites, adding to the existing segment of job opportunity for our students to grow into.
Our collective request of the Government of Canada is to actively focus its support on the budding industry so that Canada can capture the market share that is obviously ours for the taking. Spaceport development and launch vehicle development initiatives in other countries, including New Zealand, the U.K., Australia, Mexico and others, are just now gearing up, and those governments are finding ways to support the infrastructure development and launch vehicle development. All the assets are here and in place, except for active and streamlined government support for this global opportunity.
As with the other countries and programs mentioned, there are significant numbers of investors ready to participate in the development of the opportunity, now that their governments have openly supported and seeded the initiatives with investment dollars. For Maritime Launch Services, and as was defined in the connect to innovate program that I researched, we see ourselves as part of a new backbone infrastructure in rural and remote communities across Canada for our launch site development and our mission to support global broadband priorities.
Building this initiative, this infrastructure, is the modern equivalent of building roads or railway spurs into rural and remote areas, connecting them to the global economy.
This backbone infrastructure is the basis for the launch vehicles and satellites that are needed in today's connected world. For our budding launch vehicle development initiatives, more streamlined opportunities to seed their development through NSERC, the strategic innovation fund and others are needed.
In all aspects, MLS has been glad for the positive response to our initiative to date across the country, and we look forward to collaborating with the government and industry to see our vision succeed.