Thank you, Mr. Chair and members of the finance committee.
My name is Daniel Perron. I am a member of the board of the Canadian Association of Fire Chiefs, division fire prevention chief for the regional municipality of Marguerite-D'Youville and retired chief of the Ville de Sainte-Julie in the suburbs of Montreal. I am joined here today by Dr. Tina Saryeddine, the CAFC's executive director.
My colleagues and I appreciate this opportunity.
In our August pre-budget brief, we offered four recommendations. I will touch on each of these, but first let me tell you about the people and organizations that make up the CAFC.
There are about 3,500 fire departments in our country—metro, large, small, medium, urban and rural, career and volunteer—and within them are about 155,000 firefighters. About 85% of both departments and firefighters are volunteer or paid on call.
When we talk about fire departments, flames might come to mind, but fire departments are “all-hazard”. Many have responsibility accorded from their municipality for emergency management, whether it's by formal mandate or informally, because of the expertise held within the fire department.
About 20% to 30% of a typical fire department's caseload is fire suppression, 30% to 50% is emergency medical response and 20% to 30% is all-hazard response. Why is this?
With roots in fire suppression, we've worked as a country to reduce the number of fires through public education and prevention. The skills needed for fire suppression and the culture of training within fire departments are transferable to all hazards, and the numbers and complexity of and demand for all-hazard responses are increasing. Remember, an effective response to fire, flood, dangerous goods or other adverse events mitigates further environmental and economic damages.
I recall my own department's experience during the 1988 Saguenay earthquake, the largest earthquake registered in Canada. It registered 6.0 on the Richter scale, the largest earthquake in Canada in the last 50 years.
Here is where I'd like to illustrate one of our asks. Today, the country's heavy urban search and rescue teams would most likely be called upon to assist in earthquakes. They are a source of national pride, consisting of multiple professions from fire to police, search and rescue, paramedics and medicine, nursing, IT and others, able to operate 10 days autonomously off the grid.
Four of Canada's six HUSAR teams are housed in fire departments. The federal and provincial governments provide significant funding to them. However, unlike in the United States, where all HUSAR teams are coordinated through the federal emergency management administration, FEMA, our coordination nationally still has gaps.
While Canada has agreements and has experts who, as one HUSAR leader said, operate easily on a “call us and we'll come” basis, we have no centralized emergency management agency to coordinate at the interfaces between policy and operations and between different levels of government, the fire departments and the public.
Our model, which consists of various acts, agreements and experts, has many virtues. It ensures that those closest to the emergency are responding unencumbered. However, consider FEMA's stated mission of helping people before, during and after disasters, making the linkage between mitigation, response and future planning.
The U.S. Fire Administration, under FEMA, also performs five functions: public safety information, including official messaging to the media; data; operations support; research; and, grant administration. These are intimately coordinated with the fire departments.
We need all of these in Canada. Through various initiatives at all levels of government, we have them. However, we don't yet have a whole-of-government approach. It could begin with a small investment. Consider that more than 14 federal departments have policy functions relevant to fire departments and are doing commendable work.
A national fire adviser secretariat linking all fire departments, the municipalities, and different levels and parts of government would further improve mitigation, response and resilience.
CAFC members can assist in scoping this out with a large cross-section of the country's fire chiefs and all of the provincial, territorial and national affiliate fire organizations at its national advisory council. Aside from this, we are also asking the federal government to consider a modified and improved form of the joint emergency preparedness program that was intended to provide aid to emergency response capacity in small and rural departments. The program had difficulties because of its execution, which can be improved. Remember, micro investments matter.
In addition, as a nation interested in innovation, we need to ensure capacity for emergency response involving innovations. Examples are electric cars and tall wood buildings. This is why we ask for a fire-driven research and innovation fund. It would allow us to match innovations with training on the emergency response side. It would also allow us to call the research priorities that will bring the evidence to bear on our experiential knowledge. Remember, federally funded research is driven mainly by researchers. Finally, we commend you and ask you to continue your regular efforts on mental health for first responders.
Thank you for hearing us today, and we look forward to your questions.
Thank you and good morning. I'll be making our remarks, and then we'll both be fielding questions.
Thank you, Mr. Chair and members. I am Bruce Ball, vice-president of tax at Chartered Professional Accountants of Canada, known as CPA Canada. As mentioned, Rosemary McGuire is with me. She is director of external reporting and capital markets at CPA Canada. While the focus of my work is mainly with respect to tax and fiscal policy, Rosemary's portfolio includes some of CPA Canada's work related to sustainability.
CPA Canada is one of the largest and most respected national accounting organizations in the world. Our membership includes more than 217,000 Canadian professional chartered accountants who work in diverse roles, in all kinds of organizations, in all sectors of the economy.
I believe you have all received a copy of our pre-budget submission. We thank the finance committee for agreeing to accept our written submission in your consultations.
Your colleagues in the last Parliament chose the theme of climate emergency and the required transition to a low-carbon economy. This theme is timely and important, and yet climate change is one of the global forces that may make the next decade or two a period of unprecedented change. Those other global forces—economic, technological, societal and geopolitical—are just as powerful, and often work in interconnected and complex ways. For that reason, our submission brings a broad perspective to the theme of transitioning to a low-carbon economy.
My comments today will focus briefly on our pre-budget recommendations.
First, we encourage the government to carefully consider the recommendations of the expert panel on sustainable finance. The government has set ambitious climate targets for 2030 and 2050. Canadians are wondering how we will achieve those targets. The expert panel's report does not contain all the answers, but it offers a clear direction forward and good ideas for addressing some of the specific problems. It does so while recognizing the challenges and opportunities this presents for the country's economy.
Second, digital technologies and the rise of big data are outpacing our ability to properly govern and regulate them. Canada's digital charter, introduced last May, is a welcome start to addressing this challenge. Building trust in the digital economy should remain a priority of this government. That includes creating the right environment for businesses to embrace digital technologies and capitalize on the opportunities of a data-driven economy.
Third, tax policy cuts across all topics. It's one of the most important policy levers of the government. The tax system itself is being buffeted by global drivers of change. For example, the rise of digital commerce presents monumental challenges for a tax system that was designed for a bricks and mortar world. Our pre-budget brief makes a couple of specific recommendations for taxation of the digital economy. More fundamentally, though, the digital economy is just one more example of why it's time to undertake a comprehensive review of Canada's tax system. It's not equipped to meet some of these new challenges and needs of the 21st century.
As the government turns its attention to a tax expenditure review, CPA Canada welcomes the commitment to transparent reporting. In addition, and as our research has shown, for the best results, the process should be independently led, with public consultations; should consider the complexity and effectiveness of tax expenditures; and should produce a set of achievable recommendations for the government to act on.
Finally, we urge the government to work with the provinces and territories to strengthen Canada's anti-money laundering regime. Money laundering hurts all Canadians. Addressing it is a multi-jurisdictional challenge, though. We recommend that the federal government encourage collaboration with the provinces and territories in building consistent beneficial ownership requirements and also a new national framework around whistle-blowing. The challenge for budget 2020 will be to empower Canadians and Canadian businesses to confront the global drivers of change head-on. This includes the need to transition to a low-carbon economy.
Thank you again. Rosemary and I look forward to answering your questions.
I am Carole Saab, executive director of policy and public affairs at FCM.
FCM is the national voice of local governments, with 2,000 members representing 90% of Canadians from coast to coast to coast.
Joining me today is Daniel Rubinstein, the manager of policy and research at the FCM.
We are grateful for every opportunity to discuss how our two levels of government can work together to improve citizens’ quality of life.
Budget 2020 is key. It's where this minority government needs to show it can get things done for Canadians. FCM is preparing a formal short list of recommendations, and I'll offer today a preview in three priority areas.
The first is climate action. With the federal government’s support, municipalities are ready to fight climate change by adopting measures that build better lives for Canadians.
With your support, municipalities are ready to deliver climate action that builds better lives for Canadians. Budget 2019 recognized this by investing nearly $1 billion in FCM's world-renowned green municipal fund towards lower-emission community buildings, affordable housing and other family homes across Canada.
Budget 2016 enabled the FCM's municipalities for climate innovation program, empowering local leaders to conduct climate risk assessments, work with neighbouring communities and build GHG reduction plans. It's worth noting that, three years into this program, municipal demand for the program's tools far exceeds the funds remaining.
In budget 2020, the opportunity for transformational climate action starts with implementing a bold election commitment: to launch a permanent funding mechanism for public transit. Removing the 2027 sunset date from the federal transit plan will empower cities to continue designing system expansions, cutting commutes and emissions.
Expanding on a second election commitment to support zero-emission transit vehicles will cut GHGs faster. In fact, FCM's proposal on this front will cut 10 million tonnes in a decade, which is equivalent to 13% of Canada's climate targets.
Also, this budget can help communities protect Canadians from climate extremes by topping up the effective but depleted disaster mitigation and adaptation fund.
Finally in this area, we're proposing ways to incent landlords to repair and retrofit lower-cost market-rental homes, to keep them not just available but also more energy efficient.
That brings us to FCM's second focus area for this budget: housing affordability.
You've heard mayors call the national housing strategy a breakthrough on the housing crisis. It's not the end but a major federal re-entry into the social and affordable housing space. Truly claiming this space means delivering on the NHS while also continuing to grow it to meet the challenge.
We have identified key opportunities to bolster the NHS in budget 2020, namely, in the areas of affordable housing for indigenous households in our communities and supportive housing for those living with mental illness and substance use.
Finally, we're recommending additional measures to strengthen communities of all sizes. Topping the list is building on the success of the direct and reliable gas tax fund transfer. Every year it empowers municipalities, big and small, to deliver thousands of infrastructure projects.
That's why budget 2019 funded a one-time doubling of the GTF transfer to get more done, and it has, like in Prince Albert, Saskatchewan, where those funds have enabled vital upgrades to the water treatment plan, and in London, Ontario, where a new system transforming heat from waste-water treatment into electricity will cut emissions and generate $600,000 in annual savings.
Right across the country, those gas tax dollars are building better roads, bridges, water systems and more. To build on this proven model, we're proposing a basic step for this upcoming budget: to boost the GTF's annual escalator from 2% to 3.5%, in essence to keep pace with real construction costs on a go-forward basis.
We'll have more proposals in our formal pre-budget submission: for instance, on railway safety and ideas flowing from FCM's western economic solutions task force, where municipal leaders are uniting to tackle economic challenges head-on in the region, because whether it's tackling economic uncertainty or fighting climate change, local leaders are problem-solvers.
These are the governments closest to daily life. Rural and urban, east and west, we are united in our resolve to get things done and to bring Canadians together.
That is what budget 2020 needs to be about. From coast to coast to coast, local leaders are ready to continue working together with our federal partners to build better lives for Canadians.
Thank you very much.
We would be pleased to answer any questions you have.
Thank you, Mr. Chair and members of the committee, for time to speak about opportunities in Canadian taxation in advance of the 2020 budget.
I'd also like to congratulate new members of the committee. I'm excited and hopeful for all the things you can do for Canada.
My expertise is Canadian income tax. For nearly a decade my software company has been building advanced algorithms for tax planning and tax compliance, specializing in the integration between individuals and corporations. In that time, I have computed countless tax outcomes for taxpayers in all jurisdictions and at all income levels. As Mr. Ball recommended, I suggest that the Government of Canada undertake a detailed review of the tax system with the intention of introducing thoughtful tax reform. There are many elements within the tax system that warrant discussion, but I'd like to share two of those for your attention today.
The first is that the effective tax rate on income earned by individuals is often drastically higher than the intended tax rate. The second is the complexity of the current TOSI legislation, which presents ongoing challenges to all concerned parties.
The behavioural response of taxpayers to varying marginal tax rates is an often-discussed topic. In Canada the top personal income tax rate on ordinary income ranges between 44.5% and 54%. We intuitively expect that these are the maximum rates that will be paid on income. We also expect that they will be paid by those earning relatively high amounts of income.
For a comprehensive view, we must also include the impact of income-tested government policies. Taxpayers with average incomes can face higher effective tax rates through a combination of progressive tax rates and things often overlooked in basic calculations, such as material differences in various benefits and payroll amounts. After all, a dollar lost to taxes and a dollar of benefits lost are directly equal.
The example I'm using today is a spousal couple living in Ontario with two young children. The parents have identical employment income and they deduct allowable child care. This is a completely ordinary scenario, not some exotic fabrication.
I tested the net cash outcome of their earning an additional $1,000 of employment income, starting at $25,000 of employment income for each parent. The lowest effective marginal tax rate was 44.19% in taxes, payroll costs and reduced benefits, and the worst result was 93.09% in taxes, payroll costs and reduced benefits. This 93% tax rate arose at $37,000 of average income. Many would be surprised to learn of a rate so high but would be more surprised at the income level to which it applies.
Considering effective rate peaks and valleys stemming from overlapping tax rates, credits and payments, testing $1,000 additions might yield some unusual figures. To confirm the general results, I repeated the exercise testing the effective marginal rates of earning an additional $5,000 of income. While normalizing the extremes, a family is subject to a 73.44% marginal rate at only $35,000 of average income. If they earn a bonus or work some extra shifts, would this really be the intended outcome?
Continuing with this $35,000 of income per parent, the effective tax rate on $1,000 and $5,000 was approximately 42% to 53% across all provinces and territories. These take-home amounts are relatively aligned with the top federal and provincial tax rates of each province. This is to say that on a cash basis, someone earning $35,000 will experience approximately the same effective tax rate as someone earning $300,000.
Changing details such as self-employed income versus employment income, or increasing the income of one parent at the expense of the other normally leads to higher overall tax rates even when the overall income earned remains the same.
Let's look at another example, considering a CCPC in Nova Scotia with one shareholder who earns interest income. This interest is taxed in the corporation, then paid out as dividends to the shareholder where it is taxed again. Once all corporate and personal taxes are paid, the total tax paid at 2020 top rates is 61.98%. That's compared to the highest marginal rate of 54%. Other provinces also near 60% integrated tax rates in this scenario.
These types of incomes are not limited to individuals. An example would be a CCPC facing the clawback of the small business deduction, which will face temporary cash impacts ranging from 117% to 144% of income, depending on the province.
There are more examples, but these here may justify a closer look at Canada's tax system to ensure that legislation achieves the intended results. There are rational behavioural responses to effective marginal rates: whether to invest, enter the workforce, take an extra shift, or look at which country to start a business or seek employment in. The government could take steps to review clawback rates or legislate maximum clawbacks. The government could also review integrated tax rates to ensure reasonable corporate and personal tax integration. The government could also take a look at tax rates of other countries, specifically the United States, to ensure that our tax system is competitive for businesses and taxpayers.
I'd now like to discuss the tax on split income rules, commonly known as TOSI.
The TOSI rules continue to represent a challenge for businesses, shareholders and their advisers. The topic since their introduction has become a staple at Canadian tax conferences across the country due to its complexity and scope. It impacts every CCPC and their shareholders. Advising on TOSI should only be done by advisers who specialize in this area, but due to its wide impact on small businesses and the cost of hiring specialists, it's common for more direct approaches to be taken while decisions are made.
I'll share with you a common scenario that advisers are facing. I hope this will help the committee understand the results of the legislation.
Let's assume that spouse A and spouse B operate a trucking business that each is actively involved in. They are not subject to TOSI due to their active involvement. Due to a medical emergency of spouse A, they sell the trucking business, spouse A retires, and spouse B actively manages the investments inside the same corporation. Since spouse A is not actively managing the investment business, which was funded by spouse A's and spouse B's direct efforts in the trucking business, spouse A could be subject to TOSI at the highest personal tax rate on subsequent investment returns. This is one of many unintended consequences that the tax community has seen. There have been many submissions to CRA and Finance identifying a multitude of other scenarios.
I'll also share that in a recent article by Stan Shadrin, Manu Kakkar and Alex Ghani, it was shown how the TOSI rules can create double taxation scenarios, subjecting individual taxpayers in Ontario to a tax rate of 107%. Again, as I said earlier, we find presumably unintended tax consequences that lead to these exorbitant rates.
If there is a willingness to reopen the discussion about TOSI, I would recommend an alternative approach to complex guidance. To achieve the perceived key outcomes as outlined by Finance, many of Canada's top tax experts have suggested raising the kiddie tax from 18 to 24 in lieu of the current legislation. This change would significantly simplify the tax system and reduce the administrative cost, legal challenges, and burden on the CRA and taxpayers.
If there is an appetite by the committee and others in Parliament to explore comprehensive tax reform to address these issues along with several others, such as Canada's SR and ED program, stock option deductions, the small businesses deduction, and a few things that I heard Mr. Ball speak to, I would be happy to provide relevant information and viewpoints to explore these opportunities for improvement.
Thank you for listening to my ideas. I would be happy to answer your questions afterwards.
Thank you, Mr. Chair and your committee colleagues, for having me here today. My name is Brady Fletcher, and I am the managing director and head of the TSX Venture Exchange.
The Toronto Stock Exchange, or TSX, and the TSX Venture Exchange together represent the world’s premier two-tiered capital formation platform, with over 3,200 public companies listed between the two markets, representing $3 trillion in aggregate market cap. Our markets support companies early in their life cycle by providing access to public venture capital through TSX Venture and then graduating the companies directly onto the TSX. In the last 15 years, we've had some 670 companies graduate off the venture exchange up to the TSX.
This two-tiered structure enables the average Canadian investor to participate in the early phases of growth of Canada’s next global leaders. Companies that have included the likes of Canopy Growth Corp., Wheaton Precious Metals, and Boardwalk REIT have provided the average Canadian with opportunities for life-changing wealth creation by supporting the growth of Canadian-built businesses—businesses that have gone on to employ thousands, all supported by private sector investment.
I am pleased to be here today to share some of our organization’s advice and recommendations as they pertain to the Government of Canada’s upcoming 2020 budget.
In order to continue fostering the Canadian capital markets, the democratization of growth capital and Canada’s competitiveness, we have broken our recommendations into three broad objectives, the first being the need to support Canada’s public markets in an increasingly competitive global landscape while facing increasingly growing pools of private equity supported by a low interest rate environment.
When companies remain private for extended periods of time, it means that the average Canadian investor is precluded from participating in the greatest phases of growth, which are often the best opportunities for wealth creation. In order to support Canada’s markets, we advise adopting a policy of “fairness for growth”, whereby the federal incentive programs afforded to Canadian private companies, or CCPCs, are equally offered to companies that elect to fund their growth through public venture capital and the private investment sector.
Currently, there are a number of different programs that disadvantage the public markets, including scientific research and experimental development credits, support for the private equity and venture capital community and continued delineation between the stage of company based on CCPC status.
In Canada, according to Statistics Canada tests, two-thirds of all public companies are classified as small to medium-sized enterprises of fewer than 500 employees and less than $50 million in revenue. By electing to finance their businesses' growth through public venture capital, these companies are providing the average Canadian with an ability to participate in the growth of Canada’s emerging leaders.
These are firms that in the past have included BlackBerry, first financed by GMP Securities, or Canopy Growth Corp, which went public five years ago and now employs over 2,000 people and is doing $250 million in revenue and boasting a market capitalization of $8 billion. If you had been an early investor in Canopy Growth Corp at one point you could have returned over 3,000%. This is life-changing wealth creation for the average individual.
It's imperative that our government seek opportunities to support these companies that list early in their life cycle, create new jobs, grow Canada’s economy and democratize the wealth creation of a company’s earliest phases. Again, a specific recommendation in this regard is a full exemption of publicly traded SMEs from the new employee stock option taxation regime.
Second, we call on our federal government to seek opportunities to encourage private sector investment into Canadian companies. While initiatives including reducing capital gains inclusion rates would incent Canadian investors to support the growth of Canadian companies, we believe that Canada must maintain a competitive capital gains tax regime in order to foster investment into our Canadian companies by the private sector. We also believe that the evaluating of expanding the flow-through tax credit program to include other capital intensive sectors with long paths to commercialization would be an elegant way to leverage existing federal structures to encourage private sector investment.
We propose the expansion of the flow-through tax regime for the following reasons. Flow-through shares allow Canadians to invest their money in clean technology companies that are driving job creation while accelerating climate and energy solutions. Flow-through shares will help clean technology entrepreneurs focus on developing innovative solutions that grow their companies while helping them achieve Canada’s climate goals, and they will do this by simplified market-led access to capital. This new capital will complement existing grant and funding programs without creating additional transaction costs, reporting burdens, missed timing cycles or other frictions sometimes associated with government-led programs.
Finally, section 11.3b) of the “Final Report of the Expert Panel on Sustainable Finance—Mobilizing Finance for Sustainable Growth” called on ISED to develop “tailored structures” that help capital providers invest in projects that are capital intensive, or don’t necessarily meet provider timelines for returns. Flow-through shares are a proven Canadian financial tool that accomplish this goal, having had lots of success in establishing Canada as a leader in the resource sector.
During the election the Liberal Party promised to have the corporate tax rate for clean-tech companies as a means of growing Canada's clean-tech sector. While laudable, this incentive does not help clean-tech companies in the critical pre-revenue development phases, as they are not yet in a taxable position.
For over 60 years flow-through shares have helped Canada's mining and energy sectors become global leaders by offering access to private capital at an early, often exploratory, stage of development. This innovative financial structure has helped to defray risks and establish Canada as a leader in these industries. The same mechanisms that have built the economy of today can be improved and leveraged to accelerate Canada's energy transition and establish Canadian companies as leaders in the low-carbon economy of tomorrow.
Like Mr. Ball and Mr. Goodis, we appreciate the committee's time, and our final recommendation would be for a wholesome review of Canada's tax act with a view to global competitiveness.
Canada is already very attractive in the global market for entrepreneurship. As global pools of capital have only become more mobile, we must continue to reinforce our reputation. Technology entrepreneurs have ever more choices as to where they incorporate and where they build their businesses. Top talent will tend to pursue the best opportunities available.
Stock options are a critical tool for attracting and retaining talent at the earliest stages of a company's development. Many entrepreneurs rely on options to get the best out of their employees, and even for their own retirement savings. Policy leaders should look toward having a holistic review that develops a detailed understanding of how options can be framed to protect and incentivize both entrepreneurs and investors.
Simply increasing taxation on options could have unintended consequences, including increasing costs to public shareholders, as companies would need to gross up to compensate top-tier management at competitive levels on a net, post-tax basis.
We must seek opportunities to recognize and reward private individuals who fund and support Canada's economic growth and leadership in new industries, ranging from clean technology in battery metals to blockchain to cannabis.
I hope this committee will carefully consider the important issues and recommendations I have raised today. I wish you the best of luck with your ongoing deliberations, and we welcome any questions you might have.
Thank you for your question.
As I mentioned in my presentation, 85% of the country is covered by volunteer or part-time firefighters. Not only do these firefighters cover a massive amount of territory, but the service they provide is also essential. Just imagine if all of them were paid full-time workers. That would require an enormous investment; it would cost a fortune.
You hit the nail on the head. One of our biggest challenges right now is retaining part-time and volunteer firefighters. Times have changed; the context is no longer the same. Nowadays, it’s hard to retain young firefighters, and that’s a problem facing not just municipalities in Quebec, but also those around the country.
Some municipalities have already set up initiatives to retain firefighters. Measures do exist, including the volunteer firefighter tax credit. However, it’s confusing because, as I just mentioned, there are two types of firefighters: part time and volunteer. Part-time firefighters receive some benefits for their service, but volunteer firefighters do it purely for the love of the job. True volunteers are harder and harder to come by. While they do have access to the volunteer firefighter tax credit, the applicable definition of a volunteer firefighter isn’t clear.
You asked me whether additional efforts could be made. More credits would certainly be welcome. Firefighters and people who live in the regions often have seasonal jobs, and that can be a headache for them. In Gaspé or on the west coast, for instance, people work as fishers, and when the season ends, they collect employment insurance, or EI, benefits. They are penalized, however, when they are called to respond to a fire: their EI benefits are cut depending on what they receive for their firefighting service.
This is something the federal government could work on to help us hold on to our part-time firefighters.
Thank you very much, Mr. Julian, for both those questions. I'll take them in order.
To your question on the necessity of significant investment in infrastructure on an ongoing basis, certainly the communities you're referencing in your part of the country are not alone in looking to really advance transit system expansions, in continuing to grow their public transit systems and in doing a lot of work to that end, using, where they can, the gas tax fund transfer dollars and also the public transit fund dollars. Our recommendation is, quite clearly, to continue to double-down on the direct investments to municipalities in the areas of infrastructure through a tool that gives that long-term predictability municipalities can plan against, like the gas tax transfer, but also to implement the commitment that we saw from the federal government in the last election around a permanent transit fund on an ongoing basis.
The current plan will sunset in 2027. There is a commitment to make the public transit fund permanent, which would give municipalities across the country the certainty they need. Part of what was so significant about this transit fund, which we would recommend continue on an ongoing basis, is that it was allocation-based. Systems across the country were aware of what their allocation was, what it was going to be for the foreseeable future, and were then able to plan long-term transit expansions, like what we're seeing happen out west, which is significant.
We believe that there is a necessity for continued and significant investment in infrastructure in the country, with a particular emphasis, from our perspective, on the necessity of its being predictable and as long term as possible, and allocation-based to provide that kind of certainty to communities.
To your second question, we agree with IBC. We watched its testimony with interest and have done some work together to try to continue to assess the impact of new weather extremes and climate change on communities across the country. Municipalities are on the front lines, both in terms of being the owners and operators of this kind of infrastructure for which there is a significant dollar bill attached to upgrades to be more resilient and to adapt to climate change, but also in terms of response. As we see more floods, as we see fires continue, it's the municipalities that are on the front lines dealing with these new kinds of weather extremes.
Our recommendation, specifically, is to continue to invest in the disaster mitigation and adaptation fund. It was heavily oversubscribed in the previous iteration. We know across the country that the demand far outstrips the dollars that are available. Our recommendation is to increase it by a further $2 billion over the next four years, because the risks are real and we are seeing them unfold in communities across the country. The necessity to upgrade infrastructure to be more resilient is critical.
Thank you very much for the question. I think it's certainly one that we anticipated, given the events over the last week.
Off the top, it's important to acknowledge that ICIP, the investing in Canada plan, really did raise the bar, both in scale and scope, in terms of investing in infrastructure for communities across the country. From our perspective, and certainly as is noted, there have been challenges with implementing the projects across the country, and it's important for us to be very clear on this point. What is available by stream to provinces across the country is very clear. It's articulated and there's not a lot of confusion about that.
Where we are having challenges and what is less clear from a municipal perspective, and it differs from province to province, is around provincial intake processes. It certainly has been hard for communities in various regions of the country to find the kind of clarity that they are looking for or that they need to be able to have their projects implemented, which is certainly why you consistently see from FCM and from mayors across the country and councillors across the country a push toward more direct allocation-based funding tools like the gas tax transfer.
It's worth noting that of the various ICIP streams, where we are seeing more substantive progress is in the public transit stream. Again, that is the stream that is the most direct and is allocation-based, comparable to the other streams of the ICIP program.
Certainly, it's clear that there are some challenges with this program. We would say, again, that it's quite clear from the federal government what is available to each province by stream and we're going to continue to advocate, with our members and with our provincial and municipal associations, and to work with provinces where there is less clarity around the provincial intake process, because that's certainly the nub of the issue in a number of areas in the country.
Thank you, Mr. Chair, and thank you to the witnesses. I apologize for not being here for your testimony. I sit on another committee and had to be there this morning.
Ms. Saab, if I could, I'll speak with you and Mr. Rubinstein. I come from London, Ontario. I'm a member of Parliament there, and yesterday we heard from our mayor, Ed Holder. By the way, hello from Josh Morgan, one of our councillors, who I know is very active in the FCM.
London now has embarked on a discussion about electrifying our bus fleet. I know that other cities have moved in this direction and I think it would be really appropriate, to say the least, for the federal government to assist cities as they transition their fleets from diesel to electrification. The emissions cutback alone would be very significant, along with the financial savings for municipalities across the country, which obviously, in terms of fuel not being spent, are going to be significant as well.
Does the FCM have a position on electrification? Certainly your positions on transit are well known, and thank you for all your advocacy on that, but on the electrification of bus fleets, do you have a particular view on that and any ideas on how the federal government can assist municipalities with some of the costs? Admittedly, they are expensive.
I thank you, Mr. Chair, for the invitation to appear before the finance committee, but first I'll state my disclosures. I do not consult to anyone or anything anywhere in the world, directly or indirectly. I do not belong to or contribute to any political party or post lawn signs for any political party.
Unlike almost all the witnesses before the finance committee for pre-budget consultations, I'm not appearing on behalf of any organization, any interest group or any lobby, and not my university and not my school. Consequently, I'm not going to argue that the government ought to provide a particular benefit for some particular interest group, such as an environmental group or a business group, etc., because I'm not a lobbyist.
Indeed, my presentation in the next few minutes could be characterized as an “anti-lobbyist presentation”, for I'm going to argue that the government should do less and spend less—not more—in the 2020 budget.
Now I'll provide the logic. Canada, as with all western countries, is facing an aging tsunami coming straight at us in very short time, one that is inexorable, inevitable and transformative, and not in a good way. We are transforming very rapidly from about 12%—roughly one in 10—of the total population over 65, which is very manageable, to 25%—or one in four—over 65, which is extremely challenging and may not be manageable.
Worse, the dependency ratio of workers to retirees or, as I like to colloquially refer to it, millennials to boomers—not completely accurate, but good enough—will drop from what it was in 1970, at seven to one, or seven workers to one retiree, to two and a half to one in about 10 years or less. These driving forces will significantly reduce the overall Canadian economic growth rate. Note that from 1981 to 2016 per capita income grew on average by 1.3% per year for all of us, but it is forecast that from 2017 to 2045, per capita income is only going to grow by 0.9%, which is a roughly 50% reduction from what we're used to.
In plain English, the growth of all government revenues will significantly decline relatively, while government expenditures, principally health care, will skyrocket, per CIHI stats. Very quickly, the average per person government spending on people from ages 15 to 64 is $2,600 per person per year, but for us over 65, our annual average per capita health care cost is $11,600 for every person over 65. That's 4.4 times bigger than it is for younger people. Also, the number of taxpayers to pay the bills is going to collapse from 7 to 1 to 2.5 to 1, meaning that we cannot continue to steadily increase taxes.
For the first time in Canada since the Depression, we're going to be faced with very hard choices due to the emergence of relative scarcity. Yet in the last election, every political party competed with promises to spend far more money, but with no serious meaningful discussion concerning the funding of these promises of very large permanent future commitments, such as universal pharmacare.
Moreover, there was no serious discussion of the very high standard of living in Canada that already exists, notwithstanding that Canada is one of the 10 wealthiest countries in the world on a per person basis amongst 200 countries; notwithstanding that Canada has an average income per person higher than Germany's, which is the wealthiest country in the EU, which is one of the two wealthiest regions in the world; notwithstanding that poverty in Canada has collapsed to the lowest level in Canadian history at 8.8%; notwithstanding that elder poverty, once the core and face of poverty until the mid-1960s, has collapsed in Canada today; notwithstanding that Canada has a sharply progressive income tax system, unlike the U.S., where, contrary to another urban legend that the top two quintiles don't pay their fair share, the top two quintiles, per Philip Cross of StatsCan, pay approximately 80% of all personal income taxes, while the bottom quintile, after transfers, pays less than 5%; notwithstanding that the OECD data reveals that Canada is below—I'll repeat “below”—the OECD average for income inequality and below all other English-speaking countries; and, finally, notwithstanding the steady rise in real incomes of the middle class for the last two decades, per Stats Canada and Professor Stephen Gordon's multiple op-eds in multiple media—newspapers.
However, the aging tsunami, an enormous iceberg in a very strong current, is coming straight at us in less than 10 years, and it's going to change everything. Yet successive Ministers of Finance—Liberal and Conservative—steering the ship have told us repeatedly that we have nothing to fear, that Canada, like the Titanic, is unsinkable because, as we are told, we have the lowest federal debt-to-GDP ratio in the G7. But they have neglected to tell Canadians that we have the worst total government debt— federal, provincial and municipal—in the G7 as a percentage of GDP, at roughly 90%, and two of our provinces are de facto insolvent: New Brunswick and Newfoundland and Labrador.
Going forward, ministers of finance must provide leadership by preparing Canadians for the inevitable collision with the monster iceberg just in front of us by lowering, not raising, our expectations concerning the false belief that the future will be just like the last 70 years, and confronting uncritically unanalyzed promises for extraordinarily expensive programs such as universal pharmacare, which will provide free drugs for such high-income Canadians as professors like me, MPs like you, senior public servants and superior court judges making a third of a million dollars a year and, worst of all, medical doctors making half a million to a million dollars a year.
We cannot continue to go forward like this.
[Witness spoke in Innu-aimun as follows:
kuei! nutam etishiek? tshipushukatitunau nimiluelitan ute minat peikuau e tain tshi pitshitiniman nitaimunan nete e ishikapuiat ninan nete uetshiat mak e ishi-pakushuenitamat
[Innu-aimun text translated as follows:]
Hello everyone. It is a pleasure to appear before you again to outline our position and put forth our expectations as First Nations.
Thank you very much, Mr. Chair and distinguished members of the finance committee.
I certainly want to acknowledge the Anishinabe nation, since we are their guest today on their unceded traditional territory.
I’d like to start by thanking the committee for this last-minute invitation. In particular, I’d like to thank the Bloc Québécois for the opportunity to appear before the Standing Committee on Finance. It means that the voices of Quebec’s first nations and Inuit communities can be heard when it comes to important issues that concern our region.
The Assembly of First Nations Quebec–Labrador, or AFNQL, is a regional consultation body made up of the Chiefs’ Assembly as well as a political and administrative office. The assembly is composed of the chiefs from the 43 communities of the first nations of Quebec and Labrador, and represents a total of 10 nations: Abenaki, Algonquin, Atikamekw, Eeyou—or Cree—Innu, Huron-Wendat, Maliseet, Mi’kmaq, Mohawk and Naskapi.
The Chiefs-in-Assembly elect the AFNQL chief for a three-year mandate. I am the elected chief, and I was re-elected in January 2019. The Chiefs-in-Assembly created a regional body to assist and support the regions, which includes regional administrative organizations for all the first nations. They are the First Nations of Quebec and Labrador Health and Social Services Commission; the First Nations of Quebec and Labrador Economic Development Commission; the First Nations Education Council; the Institut Tshakapesh, an institute for the Innu nation of eastern Quebec; the First Nations of Quebec and Labrador Sustainable Development Institute; the First Nations Human Resources Development Commission of Quebec; and finally, the First Nations of Quebec and Labrador Youth Network, which ensures representation of a vital group, youth.
The contribution of the AFNQL and its commissions is intended to benefit, first and foremost, Quebec and Labrador’s first nations governments. Given how closely connected our network is, we are in the best position to provide direct support to our communities. Despite that closeness, there is a need for strategic investment in knowledge building, an area where we can make an even greater contribution to all first nations governments, as well as to the federal and provincial governments.
Our interdependence supports the case for key investments that will have a positive impact on the health determinants of our population. I want to stress that the issues facing first nations are transpartisan. While we have a collective responsibility to improve the long-neglected living conditions and welfare of Canada’s first nations, we above all have a duty to give our children, our youth and our families a future with dignity. And that dignity will only come once full and total self-determination has been achieved.
An area where the neglect is most visible is housing. It’s an area where key investment is needed. In the year 2000, the state of housing was deemed a crisis. Today, 20 years later, nothing has changed: we still face a housing crisis. The underfunding of the first nations housing sector in Quebec is alarming. The population is growing, the sector is underfunded, and the gap between needs and actual construction is widening. The links between housing and other spheres of society have been demonstrated. Investing massively in first nations housing would contribute to reducing the social problems observed, while benefiting all partners seeking to stimulate economic and social development.
Over the years, federal budget allocations have not kept pace with needs. On average, between 225 and 250 housing units are added to the communities’ housing stock each year. Existing federal programs meet less than 15% of on-reserve housing needs. In a 2019 analysis, the AFNQL estimated that an investment of $3.9 billion was needed over 10 years—in other words, $390 million per year—to build new units, renovate, repair and decontaminate existing units, and service land in order to address the current backlog and respond to the growth of first nations households and families.
The federal government must help first nations develop and manage new regional housing entities accountable to first nations for managing housing and related infrastructure programs.
Child and family services is another key sector—and this is not in order of priority. An act respecting first nations, Inuit and Métis children, youth and families received royal assent on June 21, 2019 and came into force on January 1, 2020. Sustainable and predictable federal funding over the long term to implement the act is paramount if we are to exercise our inherent right to self-determination and self-government.
It will be essential to establish a regional authority to support communities and organizations wishing to develop their law. This will involve legal and technical aspects, negotiations and any other costs related to the full implementation of this new law and the creation of an independent entity to advocate for children's services.
The current annual budget for child and family services in Quebec ranges from $100 million to $105 million, $50 million of which covers child placement. This is the minimum required, and more accurate cost estimates using tangible data will need to be established.
Education is another key sector. The first nations policy proposal to transform first nations education was adopted by resolution by the Chiefs-in-Assembly and cabinet in 2019. It calls on the minister to take the necessary steps to strengthen first nations elementary and secondary education through regional models that provide adequate, predictable and sustainable funding, while promoting good student outcomes.
Now I'll turn to public safety. It's impossible not to mention the National Inquiry into Missing and Murdered Indigenous Women and Girls or the Public Inquiry Commission on relations between Indigenous Peoples and certain public services in Québec, known as the Viens commission, which calls into question public authorities in relation to the safety and security of first nations women. That safety and security hinges on the development and implementation of a legislative framework that recognizes first nations policing as an essential service, with equitable funding and capacity support. It is essential that robust and culturally appropriate policing services for local first nations governments be adequately funded.
On a regional scale, the funding needs are as follows: $200 million over five years to enhance and expand first nations policing services; $50 million over five years to modernize safety infrastructure in first nations communities; and $50 million over five years to create safety and security programs for first nations communities.
Impossible to overlook, indigenous languages are another key area of focus. First nations want to ensure the survival of their ancestral languages, in accordance with the UN guidelines set out in the resolution proclaiming 2019 the International Year of Indigenous Languages.
Bill gave rise to the Indigenous Languages Act, which seeks to reclaim, revitalize, maintain and strengthen indigenous languages in Canada. It received royal assent on June 21, 2019, and funding is necessary to implement the act.
Lastly, I'd like to mention an extremely important issue. On January 21, we found out that the number of indigenous inmates, especially women and youth, had hit a historic high; they account for 30% of the federal inmate population.
We have to talk about justice. The federal government must act swiftly to end the overrepresentation of indigenous people, youth and adults alike, in the criminal justice system. That's what indicated in a letter to the Assembly of First Nations Quebec–Labrador on April 1, 2019, and that is our position as well.
The First Nations of Quebec and Labrador Health and Social Services Commission conducted a study culminating in the report entitled “Portrait of the Criminalization of the First Nations in Quebec: Providing Impetus for Change”. The findings are troubling. First nations populations are decidedly more criminalized, primarily those under the age of 25. The rate of criminalization is five to six times higher in first nations communities than in all of Quebec. Adequate funding of justice initiatives and community justice programs such as justice committees in our communities can only result in a reduced prosecution rate of our members.
The justice committees already in existence in our communities are underfunded because there has been no increase in the federal budget since 2008. In addition, it is important to consider that the provincial budget is also capped. The lack of resources—causing inadequate working conditions—in the existing justice centres in our communities is at such an unacceptable and unsustainable level that it impedes the exercise of our right to develop our own justice systems.
I would say more, but I will leave it at that for now.
Good afternoon, Mr. Chair, honourable members of the committee and witnesses.
I would like to begin by acknowledging the traditional and unceded territory of the Algonquin and Anishinabe people, where we have the privilege of gathering today.
My name is Adam Brown. I am the chair of the Canadian Alliance of Student Associations, or CASA. I'm also the vice-president external of the University of Alberta Students' Union and a fifth-year student completing a bachelor of commerce degree, focusing on business economics and law.
CASA is a non-partisan, not-for profit organization that represents over 360,000 students at colleges, polytechnics and universities from coast to coast. Through a formal partnership with the Union étudiante du Québec, we are a trusted national student voice.
I'm thankful to have been invited to appear before the committee, representing students at a time when there are ongoing challenges to student autonomy and organizing. I am hopeful that in the future, students will continue to have opportunities like this one to be included as respected partners and stakeholders and to have their voices heard.
A public opinion poll commissioned by CASA in March of 2019 highlighted that dealing with climate change and the environment is a top concern on students' minds. It was equal to creating good jobs for young Canadians and making colleges and universities more affordable. Not only are students in Canada concerned about climate change but we are a crucial part of the solution. In order to tackle the climate emergency that is facing our country and the world, we need an accessible, affordable, high-quality education system that produces graduates with the skills to create the innovative solutions our society needs. Unfortunately for Canada and its students, many barriers to acquiring the type of education needed continue to exist.
For example, graduate students are key to driving an innovative economy. Their research has the potential to find sustainable solutions to transition to a strong low-carbon economy. Unfortunately, thousands of students in Canada every year choose not to pursue graduate-level education because of their debt levels. The average student with debt in Canada is carrying about $28,000, and four in 10 graduates report that debt prevents them from pursuing further education. The federal government can reduce financial barriers and anxieties about debt loads by allowing graduate students to access Canada student grants, which are a form of up-front, non-repayable financial aid at a cost of $58 million per year.
CASA also envisions highly skilled tradespeople to be part of the solution. A low-carbon economy is going to require new technologies and new infrastructure that will require new skills. There is already a strong market demand for these skills. In Ontario, 41% of employers report requiring a skilled tradesperson. In the transition to a low-carbon economy, one can only assume that this demand will increase.
That being said, apprentices in trades training face significant financial barriers to completing their education. An apprentice in their first year can have start-up costs for equipment of as high as $8,000. The Government of Canada provides apprenticeship incentive grants of $1,000 a year, but the first year of apprenticeship is not covered by this grant. Extending the apprenticeship incentive grant to cover the first year of an apprenticeship would reduce barriers for students in the trades. We estimate this would cost $72 million a year.
CASA further views Canada's international students as a source of potential skills development in the fight against climate change. Every year Canada attracts thousands of bright, talented students from all over the world. According to a 2018 report, international students make up about 13% of all post-secondary students in Canada. Canada is a country in need of skilled individuals, and it has a vested interest in retaining these students when they graduate.
In 2020 a high-quality education includes work-integrated learning opportunities, but international students face unnecessary barriers to participating in these experiences. In addition to applying for a study permit, international students must apply for a no-fee co-op and internship work permit to be eligible for many work-integrated learning opportunities. The processing times for these permits differ in length, a situation that has led to international students missing out on valuable hands-on experience during their time in post-secondary.
Easier access to work-integrated learning opportunities would increase our ability to retain more international students in Canada and foster a broader community of innovative thinkers, which is needed to combat the climate crisis. We recommend that the government allow international students to participate in an internship or co-op under their study permit rather than requiring them to get a separate permit.
Thank you once again for the opportunity to participate in this pre-budget consultation.
As you plan for the effective transition to a low-carbon economy through the forthcoming budget and beyond, I would urge all members of Parliament to consider the massive potential of Canada's students in addressing our global challenges.
I look forward to your questions.
Good afternoon. Thank you for allowing me to appear remotely. I have to apologize, but I have a little bit of a cold.
My name is Sarah Petrevan. I'm the policy director for Clean Energy Canada. We're a climate and clean energy program within the Morris J. Wosk Centre for Dialogue at Simon Fraser University.
The 2020 budget is an opportunity to turn climate ambition into climate action in Canada by prioritizing areas that provide benefits to Canadians, such as helping them save money, supporting jobs and, of course, cutting carbon pollution. I want to briefly focus my comments on three initiatives that do just that: increasing the deployment of electric buses, enabling more Canadians to drive electric vehicles, and building our infrastructure in a way that reduces pollution.
Transportation accounts for almost one quarter of Canada's emissions. Based on recent Government of Canada estimates, we know there are at least 1.5 million tonnes of pollution to be saved by electrifying public transit buses and trains. Depending on where you are in the country, an emissions-free bus will pollute 40% to 90% less than its diesel counterpart.
Right now, a fully electric bus costs $500,000 to $600,000 more up front than a diesel bus, but less if you factor in fuel savings over the life cycle of the bus. Estimates have these buses reaching price parity with their diesel counterparts in as little as five years, but in the interim, budget 2020 should include a rebate program fashioned after the popular program for electric cars.
The government should put in place a dedicated fund from which cities and transit authorities can receive rebates towards zero-emission buses. This fund should be very simple to access for municipalities, and it should help transit authorities save money over the life cycle of their new, clean buses, allowing them to reallocate their dollars towards other priority areas. Budget 2020 should also provide the infrastructure required to support electric transit buses, from charging infrastructure to new retrofitted bus depots.
Canada is home to four electric bus companies. Of the 298,000 jobs in the clean energy sector in Canada, 58% of them are in clean transportation. Electrifying public transit not only will cut pollution, it will create careers for Canadians in our evolving economy.
Now, what about passenger vehicles? The Government of Canada's iZEV program has spurred electric vehicle sales upwards by 32%, providing rebates to more than 30,000 Canadians. This program has surpassed expectations in terms of its popularity, and budget 2020 is an opportunity to both renew and expand its noble aims.
The government should move forward on its commitment to offer incentives for purchasing used electric vehicles. The purchase incentive could be retooled so that the scale of the incentive correlates with income level. Low-income Canadians benefit most from the cost savings that come from owning an electric vehicle, but low-income Canadians are not always in a position to spend more up front even if they see the long-term benefit.
Finally, budget 2020 is an opportunity to reduce pollution in the infrastructure we build. Each time we construct something—a road, a bridge, a building—we generate pollution in the manufacturing of building materials, in transporting those materials and even in tearing buildings down when they no longer serve their purpose.
Within Canada and internationally, policy-makers have designed policies that help us waste less energy through energy efficiency, policies that consider the fuels we use to heat our homes, our office towers and the stores we visit. What we in Canada have thought less about is the 11% of global carbon emissions that come from just constructing these assets, which is equal to half of the entire carbon footprint of new construction between now and 2050.
The good news is that there are many products and materials in existence today—low-carbon cement, steel and mass timber—whose production generates less pollution. These low-carbon versions are being used across the U.S., the U.K. and even most recently in a project at the Calgary airport. Simply changing the type of cement we use in Canada can save us one million tonnes of pollution, and in this instance it's at no extra cost. The lower carbon option costs exactly the same as what is currently being used.
While policy-makers consider the broader opportunities associated with infrastructure in Canada, budget 2020 should establish a low-carbon infrastructure fund to help municipalities and other jurisdictions that want these well-commercialized, less-polluting building materials in their infrastructure projects. This would be a demonstration fund and therefore time limited, supporting the most ready products and materials. The fund would increase demand and the prioritization of lower-carbon domestic materials in cleaner construction.
With more than 1.2 million Canadians employed in the construction industry alone, infrastructure supports the jobs that will help build Canada's sustainable economy.
We should be building the future with the best materials available today.
Thank you for your time. I would be pleased to answer any questions you may have.
Mr. Chairman and honourable committee members, thank you for inviting the Green Budget Coalition to speak to you today.
The Green Budget Coalition, active since 1999, is unique in bringing together the expertise of 22 of Canada's leading environmental organizations, that collectively have over one million Canadians as members, volunteers and supporters.
The Green Budget Coalition's 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.
As you noted, I am joined today by Florence Daviet, the national forest program director from the Canadian Parks and Wilderness Society, to help answer questions later.
In November we emailed each of you copies of this document, the Green Budget Coalition's recommendations for budget 2020, which provides more detail, refinements and updates on the submission we made to the committee in August 2019.
The Green Budget Coalition's most important message to the committee today, in line with the theme of the committee's pre-budget consultations, is the following: Canada and the world face a climate emergency and a biodiversity crisis. Canadians are already experiencing floods, fires, ecological disruption and a rapidly warming Arctic, and scientists project that these and other impacts will intensify if climate change remains unchecked.
The Green Budget Coalition urges the Government of Canada to step up to this defining moment in history with the necessary investments in budget 2020 to enable effective action.
Our recommendations for budget 2020 will help Canada make rapid progress. We draw upon the expertise of Canada's environmental movement as well as global knowledge and experience to provide detailed, costed, strategic budget recommendations addressing critical environmental challenges. Implementing these recommendations would furnish economic health and environmental benefits for Canadians.
The GBC welcomed progress in recent federal budgets on climate actions, protected areas, building and vehicle energy efficiency, food policy, water, transit and natural infrastructure. However, we now need to scale up action before it is too late to address the closely related climate and biodiversity crises.
In this context the Green Budget Coalition has developed its recommendations for budget 2020, addressing four themes.
First, the coalition urges scaled-up fiscal action to address the climate emergency, including eliminating fossil fuel subsidies and allocating major funding to nature-based solutions, and building energy efficiency, transportation, community energy, international climate financing and marine shipping, plus a number of complementary measures, including those on carbon pricing, the sustainable finance report, and a just transition for energy sector workers.
Second, the coalition urges continued and ongoing investment in nature conservation and biodiversity, with a focus on protected areas on public and private lands; habitat restoration, including wetlands and grasslands; oceans and migratory birds.
Third, our recommendations regarding sustainable agriculture call for investment in agri-environmental programs, research and development, and a new facility for the national insect collection to improve the agricultural sector's sustainability, resilience and competitiveness.
Fourth, on toxics and pesticides, we point to the need for regulatory departments to receive sufficient resources to meet and exceed the legislative requirements for managing toxic substances, including pesticides, to protect the health of Canadians and our environment.
Last, in our document we also outline a number of complementary recommendations regarding environmental data and science, governance, plastics, water monitoring, collisions of wildlife and vehicles, as well as first nations water infrastructure.
Implementing these recommendations together would lead to dramatic progress in advancing a healthier future for Canadians from coast to coast to coast.
Thank you again for inviting the Green Budget Coalition to appear today. We look forward to your questions and we would also be happy to arrange for other experts to follow up with further information.
Thank you very much for the question.
The first thing I want to say on indigenous land stewardship is that it's key to understand that if there are no standards for indigenous traditional knowledge, then we're missing the point. We certainly agree with and are supportive of a national program that was launched just last week. Yes, we need to have more of that.
Now, to your question, I think it's very important to understand—we've been saying this for years—that if you don't concentrate on and invest in key determinants, you're bound to spend more on health, education and other areas. To me, it's very important that housing be considered as a central determinant because of population growth, for one. You don't see that anywhere else in Canada.
In response to your question, as a region, we get our share from the national budgets in housing, but the problem is that we always seem to be in a catch-up situation. I heard Mr. Lee's testimony and I respect it, but I don't necessarily share it, in the sense that there needs to be more spending when it comes to our people. When you look at the social and economic conditions, you see that Canada is faring equally or more than any of those other countries, but when you single out the situation of indigenous people in this country, Canada is losing ground. I think that's something that we don't know enough about.
In some communities.... I could drive with you just four hours into northern Quebec. There is a community there of 450 people. They have a sanitation utility which is collective for the whole community because they don't have electricity and don't have running water. They're just 45 minutes away from Val-d'Or, the closest city, and six kilometres away from the main highway. Why is it that we still have situations like that today?
Essentially, that's why we're saying that if we don't ensure that we catch up, then we're certainly condemned to be spending more in other areas. On housing, in Quebec alone we should be building 7,000 new homes in indigenous communities, just to catch up to the rates that we know of anywhere else in the province or even in the country.