FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Monday, November 3, 1997

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[English]

The Chairman (Mr. Maurizio Bevilacqua (Vaughan—King—Aurora, Lib.)): I call this meeting to order.

As everyone knows, pursuant to Standing Order 83.1, the finance committee is holding pre-budget consultation hearings to hear from Canadians from coast to coast as to what measures we should take in the upcoming budget to essentially improve the quality of life for all Canadians and represent the interests of various individuals throughout our country.

Today we have representatives from the Canadian Association of Broadcasters, the Canada Television and Cable Production Fund, the Canadian Film and Television Production Association, l'Association des producteurs de films et de télévision du Québec, the Specialty and Premium Television Association, the Canadian Broadcasting Corporation, and the Canadian Cable Television Association.

I'd like to welcome you all. I think there's a new set-up for this one. One person will be speaking and then everybody will be participating in the question-and-answer session.

I'd like to introduce Mr. Peter Herrndorf. Welcome, sir. You may begin your presentation.

Mr. Peter Herrndorf (Interim Chair, Canada Television and Cable Production Fund): Thank you very much.

Mr. Chairman and members of the committee, I'm Peter Herrndorf, the chairman and chief executive officer of TV Ontario, and I'm here today as the interim chairman of the Canada Television and Cable Production Fund.

I'm joined this morning by a number of colleagues representing Canadian production, broadcasting, and cable industries, and if you wouldn't mind, I'll introduce them one at a time.

First of all, Elizabeth MacDonald is the president of the Canadian Film and Television Production Association, and she is representing the APFTQ today as well.

André Provencher is the vice-president of programming for the TVA network, representing the Canadian Association of Broadcasters.

Loren Mawhinney is the vice-president of Canadian production for Global Television, also representing the CAB.

Phyllis Platt is the executive director of arts and entertainment programming for the CBC.

Charles Ohayon is the general manager of programming for Radio Canada.

Jay Thomson is the vice-president of legal and regulatory affairs for the Canadian Cable Television Association.

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Jane Logan is the president of the Specialty and Premium Television Association.

Garry Toth is the executive director of the licence fee program of the Canada Television and Cable Production Fund.

And finally, Danny Chalifour of Telefilm is representing the equity investment program of the CTCPF.

I want to thank you, Mr. Chairman, for making room for our group in what I know is a very busy schedule for your committee. We are pleased to have this opportunity to talk to you about the Canada Television and Cable Production Fund.

We want first to thank the Government of Canada for its vision in creating the fund, and secondly to reflect on the fund's value to Canadian television viewers and its importance to the indigenous production industry. Through that process, we want to explain why we believe it's absolutely essential for the government to maintain its commitment to the fund.

I know our time this morning is limited and you'll want to ask us a number of questions, so let me briefly give you some background on the fund, how it operates, and what it has done to date for television in this country.

The Canada Television and Cable Production Fund, known as the CTCPF, was launched by the Honourable Sheila Copps, Minister of Canadian Heritage, in September 1996. It is a unique public-private partnership that delivers good public policy through a unique combination of private sector dollars and public investment.

When the CTCPF was created, the government added $100 million a year to the financing of the two existing organizations, one private and one public, each of which had an annual operating budget of approximately $50 million before then. That created an annual fund of some $200 million for the CTCPF.

The CTCPF operates two distinct but complementary funding programs. Both programs share the objective of increasing the ability of Canadians to make and watch their own high-quality television programs. These programs must be vehicles for Canadian cultural expression, they must reflect all parts of Canada, they must be of consistently high quality, and they must enhance the continued economic impact this industry has on the Canadian marketplace, particularly in the area of job creation.

Let me give you a quick overview of each of the funding programs. The equity investment program, known as the EIP, accounts for roughly half of the total fund. It was based on Telefilm Canada's broadcast program development fund and continues to be administered by Telefilm on behalf of the CTCPF. As the name indicates, the EIP invests in the development of production of television programs and feature films, which allows it to revolve its dollars to contribute to the replenishment of the fund. The EIP applies subjective criteria to its funding decisions. Those decisions are influenced by both the qualitative merits of the program proposals and their potential to perform well in the commercial marketplace.

The licence fee program, the LFP, has its origins in the cable production fund, a private financing initiative begun in 1994 by the Canadian cable industry. The LFP employs objective eligibility criteria established after consultation with the industry. The program uses a first-come, first-served process and augments the licence fees paid by Canadian broadcasters. It is managed by the organization that previously ran the cable production fund.

That's the structure and those are the guiding principles. But why is it necessary to stimulate television production in this country with a $200 million fund, not to mention the various provincial and other private funds and tax incentives? The answer is quite straightforward.

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The plain fact is that Canadian television markets, English and French, are too small to support the creation of all the kinds of programs, the quality of programs, and the quantity of programs our audiences and competitive realities demand. I know you've heard this before, but it can't be overemphasized.

From a purely commercial perspective, acquiring a foreign program costs only a fraction of what it takes to produce a comparable Canadian product, and the hard reality is you simply cannot expect to recoup the costs of a home-made, prime-time drama by relying entirely on licence fees and advertising revenues, even over the long term. You have to be able to sell it abroad, and to do that it's often necessary to dilute its unique Canadian characteristics.

The Canadian television marketplace, particularly the English-language part of that marketplace, is the most competitive on earth. In an environment in which three-quarters of the population is cabled and direct-to-home satellite services are growing quickly, Canadian programs have to compete with virtually everything the U.S. system has to offer and with each other.

To put that into a statistical context, you should know that less than 40% of the programming that Canadian viewers see on their own screens is made in Canada, and that includes all our Canadian news and sports programming. When it comes to the culturally significant drama category, the number drops to just 7% of the total drama available on our screens. To put that in slightly different words, if you're a Canadian viewer and you want to see Canadian drama on your own screens, it represents only 7% of the drama available.

The CTCPF was created to do something to adjust that balance and to help us reclaim our own airwaves, and I have to tell you it's been remarkably successful in pursuing that goal. Let me give you some of the highlights from the past year.

The CTCPF helped finance 376 program projects in 1996-97. Those projects resulted in the production of 2,221 additional hours of high-quality, prime-time Canadian programming, and that's prime-time programming for both adults and children. That's an increase in Canadian program production through the fund of 92% compared to what has been possible for the predecessor funds in the previous years.

All of the supported programs were in the under-represented categories of drama, which makes up 29% of the total; documentaries, 24%; and children's programming, 33%. Variety and arts programming added the final 14%.

Without the CTCPF's support, many of those programs would not have been produced. We would not have had drama successes such as Due South, Black Harbour, Omertà, Traders, Urgence, North of 60, and Riverdale. We would not have produced acclaimed children's programming such as Dudley the Dragon, Pimpon, and Theodore Tugboat. We would not be laughing at ourselves through the antics and satirical comments on Red Green, This Hour Has 22 Minutes, and the comics on Just for Laughs or Juste Pour Rire. And we would not have seen a whole host of documentaries on Canadian issues, Canadian events, and the lives of some of our most fascinating personalities, who, thanks to this funding, are now a little better known to our viewers than they were before.

While Toronto and Montreal remain the country's principal production centres, more than 28% of the CTCPF's funding went to projects based in the regions, and some of the incentives we initiated for the 1997-98 year are encouraging regional production still further.

This production activity has a very significant impact on the employment of Canadians. The money the CTCPF invested in Canadian productions in 1996-97 assisted projects with budgets totalling $625 million. That expenditure in turn supported some 19,600 full- and part-time jobs for Canadians, split between direct production functions and indirect employment in related goods and services. And you should note that production industry jobs tend to be highly skilled and heavily oriented to younger people.

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There's a great deal more to say about the benefit this funding has had for the film and television production industry, for our viewers, and ultimately for our collective sense of who we are as Canadians. I'm sure my colleagues will amplify those benefits in response to your questions. However, I'm sensitive to our time constraints, so let me end my remarks by coming directly to the point of our presentation here this morning.

If the government's current plans are followed, the 1996 infusion of $100 million in funding for the CTCPF will be reduced to $50 million next year, and to zero a year later. Were that plan to be followed, the critical progress we have made in the first two years of the fund would be essentially negated. We'd be back to where we started, when these funds could offer only half the current level of support and maybe even worse. That, ladies and gentlemen, would have serious consequences for this industry and we believe for the country.

So we are here representing the entire industry to ask you to recommend to the Minister of Finance that the planned reduction of support be set aside, that the Government of Canada commit to at least its current contribution of $100 million a year, and that it do so on a long-term basis. This funding has delivered a host of highly tangible cultural and economic benefits to Canada. Telling our own stories from coast to coast in both official languages is something that only we can do. But the job of repatriating Canada's airwaves still has a very long way to go, and that's something that simply can't be done without your help.

Mr. Chairman, thank you again for taking this time this morning. We would be pleased to answer your questions.

The Chairman: Thank you very much, Mr. Herrndorf.

We will now move to the question and answer session, beginning with Mr. Harris.

Mr. Dick Harris (Prince George—Bulkley Valley, Ref.): Thank you, Mr. Chairman.

Mr. Herrndorf, thank you for your presentation.

First of all, I want to acknowledge some of your comments. The TV business is very competitive, with the abundance of cable, with cable programming coming in from the U.S., and with the direct-to-home satellite. I would think that before too long, we're going to have direct-to-home satellite as sort of commonplace and coming from all over the world into Canadian homes. So it is a very competitive market.

Let me preface my question this way: Someone coined a phrase back when they were building Las Vegas, and it was sort of like “If we build it, the people will come”. I guess my question is that if you have the money to produce the shows, will people watch them in the numbers that would be significant, given the choices that people have out there? Will maintaining the funding that would enable you to carry on with the productions throughout the whole industry necessarily mean that the market share could and will increase? In other words, are the dollars spent reflected in increased viewership, or is there anticipation of increased viewership, given the competition we're subject to now?

Mr. Peter Herrndorf: Mr. Harris, I'm delighted you asked the question in the form, “If you build it, will they come?” I think what all of us representing the production industry, the broadcasting industry and the cable industry believe—and my colleagues will speak to it in a moment—is that we have been building it for many years, and they have been coming for many years. The purpose of this fund is to allow us to in fact produce more high-quality Canadian programs from more parts of the country for more viewers. We have many examples, and we believe that when given the opportunity to watch high-quality Canadian programs, Canadian viewers will flock to those programs.

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Let me start by asking Elizabeth MacDonald, who heads the producers' association, to make some comments.

Ms. Elizabeth MacDonald (President, Canadian Film and Television Production Association): I think there are several issues that have to be addressed here.

The first issue is that as a result of the governance body that oversees the CTCPF, the board of which we're all members, we've developed new relationships in this industry. That means we're talking about the priorities that broadcasters have linked to their audiences. When my producers speak to the CBC, or talk to Loren at Global, Loren talks to them about her audience needs, scheduling opportunities, etc. That is because collectively the industry meets at the CTCPF, and we leave our egos at the door for the benefit of the Canadian broadcasting system. That certainly changes the kind of programming you get.

The second thing is that we're investing in quality programming, and that's a big issue for all of us on the board. The better the programming is, the better we can compete with our U.S. counterparts. We have to be quite honest: we are the country that shares the border with the largest entertainment machine in the world.

I think we've also been able to invest in the thing that makes us competitive, and that is more episodes of drama. Thirteen episodes of Canadian drama up against 26 episodes of ER or Chicago Hope don't have the same kind of chance, but 22 episodes of Traders give it a chance to capture its audience. What we had beforehand were 13 episodes that died at the beginning of December, and to find out what those guys on Bay Street were up to, you had to wait until next September. This year, Canadians will be able to follow that show all the way through, and they're doing it.

We think this is an opportunity to create the kind of programming that can compete. The Canadian production industry has certainly matured to the point where it is able to create that programming that we can all be proud of, with our partners the broadcasters. So I think all of those things come together to do that.

We are also starting to work on promotion. That's outside of it. If you look at some of the networks that are represented here, you will see they are promoting that Canadian programming because they've put their heart and soul behind it, and they want to make sure Canadians watch it. One of the challenges we face is always making sure people know it's there.

The Chairman: I believe Ms. Lill had a question as well.

Ms. Wendy Lill (Dartmouth, NDP): I'm pleased to hear your presentation today. I'm sitting in for Nelson Riis, who is on the finance committee. I am the New Democrat critic for culture and communications, though, so it's very appropriate.

Is $100 million enough, in your estimation? Over the years we have seen massive cuts to the infrastructure of our cultural industries, with cuts to CBC, cuts to NFB, cuts to Telefilm. I know all of these things are having a huge impact on your work. I guess I would like to know where your wish list would end. Is $100 million enough for what you know the task at hand is now?

Ms. Phyllis Platt (Executive Director, Arts and Entertainment Programming, English Television, Canadian Broadcasting Corporation): Perhaps it's important to put that question in the context of the current environment and to ask some questions about the support of culture through this kind of program and how important it is to us as a society.

As the wash of American culture becomes almost a tidal wave across our border, I think finding ways of making sure that Canadians see a reflection of their own culture on their own airwaves becomes increasingly important. My feeling is that this is a wonderful beginning. It has made a huge difference. It has absolutely been essential to the CBC. But as time goes on, I think the question of how to compete in a growing thicket, how to promote adequately, raises the question of how important it is to us to have, for example, our children see our society.

One of the things we've done at the CBC is put a great deal of emphasis on children's programming in the last few years. We've seen our children's programming numbers go up by almost 50% as a result of giving them Canadian children's programming that reflects their culture in some different ways. We also Canadianized our prime-time schedule last year, and discovered that Canadians did come. Our share actually increased rather than decreased.

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We believe that if you build it they will come, but if you build it stronger, better, more expensively and at a time when we are facing this competition...I believe it is an important addition to the program, if I could put it that way.

Mr. Peter Hernndorf: I wonder if I could also ask André Provencher, the head of programming for the TVA network, to give his perspective on that.

[Translation]

Mr. André Provencher (Vice-president, Programming, Télé- Métropole Inc., Association des producteurs de films et de télévision du Québec): The francophone component of our broadcasting system has always been based mainly on Canadian content. I believe this is a strategy that has greatly contributed to the phenomenal success of French television in Canada.

With regard to the question raised by Mr. Harris, it is clear that today, if conventional broadcasters have managed to maintain a market share of 75 or 76 % of all francophone viewers, it is definitely because they use Canadian producers or Canadian creators to supply high quality programs to their audiences.

I believe that without the contribution of Canadian programs, it would be next to impossible to maintain an efficient French- language system reflecting the experience of Canadians in all parts of the country and offering programs that are both distinctive and of high quality.

The Chairman: Mr. Loubier.

Mr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ): I would like to complement what Mr. Provencher said. Contrary to Mr. Harris, I am fully convinced that if we have a high quality product, there is a market. We only need to look at the enormous successes of the past, as you mentioned earlier, Mr. Herrndorf, when you spoke of Omerta and Urgence. There can be no doubt that the ratings are there, the market is there as well as the desire to identify with characters and with programs produced in Quebec and Canada. So I do not have any problems with any of this.

When I look at the fund set up by Ms. Copps, I have to admit that it is a major success. There has been funding for 376 projects, an increase of 92 % in production in some areas where we had serious gaps in our national production. I think this is a tremendous performance. So you can rest assured that the Bloc Québécois will support your call for maintaining the $100 million fund for programs made in Québec and Canada.

I have a question. You mentioned 376 projects and a total budget of $625 million. What would be the respective share of French and English programs in this total?

Mr. André Provencher: First of all, one third of the funding administered by the two components of the program is channelled to French-language productions. Therefore, at least $66 million are used to support and generate French-language projects in the country. The impact of this investment is real and significant. So, in the figures that are being presented here, the breakdown is one third and two thirds.

Mr. Yvan Loubier: If the fund did not exist, this $625 million investment would not exist either, if I understood correctly what Mr. Herrndorf said earlier.

Mr. André Provencher: Certainly not and Charles Ohayon may want to elaborate . It is clear that without the investment in French-language production... You know, it is extremely difficult because the French-language market in Canada is quite small in terms of demography. There are only six or seven million francophone consumers. It is also difficult to design and produce high-quality programs because French-language shows are not easily exportable.

Therefore, production costs can be recovered only from the French-language market. While some drama programs may reach the international markets, I would say that the majority of programs produced in Quebec, namely soap operas, comedy shows and some types of documentaries, are only seen by francophone viewers. The challenge is therefore even greater. It is a big economic challenge. Being able to recover the cost of quality productions from an audience of only six million people is almost a miracle.

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Over the last 25 or 30 years, the evolution of the broadcasting system in Quebec has been, I believe, exceptional. The greater the competition becomes, the more our territory is being invaded by foreign signals, and the greater the choice faced by our viewers, the more important this investment in French-language production becomes.

Mr. Charles Ohayon (Director general, Programming, French Television, Canadian Broadcasting Corporation): To add to what André just said, I want to say that television is the reflection of a culture and therefore it must first and foremost be geared to its audience. When you look around the world, you see that television products are not imported on our airways. We do not have programs from France, very few British programs, mainly because television is not exportable. Television talks to a people.

What we do in Canada is produce programs that are highly regarded by their audience. It is television that works. It is television that is being watched. When we talk about French- language programs for six or seven million potential viewers, as André mentioned, it is obvious that we cannot be compared with what is being offered in most countries of the world. The only valid comparison would be with countries having similar population figures, i.e. Belgium and Switzerland. When you look at the results, we must say that we are extremely successful.

So we need some support and this support is what we get from this fund that allows us to keep producing high-quality programs, programs that Canadians will keep on watching.

Mr. Yvan Loubier: Once again, I can assure you of the enthusiastic support of the Bloc Québécois.

The Chairman: Thank you, Mr. Loubier. Mr. Jones.

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Mr. Jim Jones (Markham, PC): Sorry I was late. I missed my flight this morning.

I have a quick question on the capability of tapping into the U.S. market. What percentage of your revenues is where you sell productions to the U.S.? Are you able to recover quite a bit, or is your production so exclusively Canadian that they don't want to...?

Mr. Peter Herrndorf: Maybe I could ask Elizabeth MacDonald to comment generally on our ability to export our programs around the world and the impact it has on the fund.

Ms. Elizabeth MacDonald: Overall, our statistics show us that the independent production sectors were able to recover about $1.2 billion in revenues from the export market, but that's over all production done in Canada and not that that is made exclusively for this fund.

The primary purpose of this fund first and foremost is to create for this marketplace. However, I think the board has worked hard to add other aspects to it, particularly in terms of the number of episodes. I keep going back to that issue, because that's a big issue in terms of being able to compete and hold an audience.

For example, you'll see a program like Traders in South Africa now, which is a new emerging English-language television market. People are anxious to see it; they'll be very glad to see the 22 episodes this year and we'll be able to hold them every year.

Beyond that, we do sell aggressively to the U.S. market, particularly the U.S. cable market. The reality is that we ceded probably over 85% of our market to the Americans, and then to reclaim even a small percentage of their market is quite a challenge to us. If you look at the Cable Ace Awards, etc., I think you will find that a lot of Canadian programming is in the lead, but that particular marketplace is perhaps the hardest to crack, because they're not open.

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In terms of the British marketplace, in terms of the Australian marketplace, which has a 50% Australian-look aspect to it but they still buy Canadian and are looking for it, compared to other European markets, I think you'll find we're quite aggressive.

Due South, you'll notice, got money from this fund so it could resurrect. It also has additional money from many foreign markets who have put into it. So they will be replaying it.

So we are as aggressive as you possibly can be in the U.S. market. We're being particularly successful now with children's programming, with some of the FCC regulations concerning the kind of programming that is family-oriented. That's a really new marketplace for our people, and we're really taking advantage of it.

So that's the general export capability.

Mr. Peter Herrndorf: May I ask Loren Mawhinney from Global to jump in?

Ms. Loren Mawhinney (Vice-President, Canadian Production, Global Television; Canadian Association of Broadcasters): I would just like to add to what Elizabeth was talking about.

The growth and the maturity of our whole production sector have been enormous over the past ten years. A statistic is bandied about that Canadian producers are the second largest exporter in the world, second only to the United States. Now, there's a huge gap between us and the United States, but that's still something to be very proud of. Partially, it's a curse and a blessing to live next door to them, because we know what works in commercial television, we know how to produce things well and less expensively.

So I just want to second what she is saying. First, that market is the most difficult to crack, because it's the hugest industry right there and there tends to be a not-in-my-backyard philosophy: if they don't invent it, they don't really want to see our stuff. But we still are very successful at selling to that market.

Due South, however, sells to Britain and to Australia and gets huge money from those territories, which helps to make up that part of the financing. Those budgets are $1.2 million to $1.4 million per episode, and you can't finance that out of Canada. We just don't have the money.

Further to what she is saying, it's really important that our Canadian shows have as many episodes as we can possibly get, so we won't end up in the same situation as we were in last year. Traders ends in December and ER continues right on until the early spring. So you're trying to create a level playing field for our wonderful indigenous shows.

Further to Mr. Harris' point about our people watching these shows, Due South is very successful in our domestic market, in addition to being a success internationally; Traders works very well for us domestically. In fact, over the last three years at Global our audience to domestic product has increased by 100%. So (a) we don't want to order something that nobody is going to watch, because there's no point in wasting everybody's time and money, and (b) I think we're getting better and better all the time at creating quality product.

Ms. Paddy Torsney (Burlington, Lib.): Mr. Herrndorf has clearly identified that without this fund there would be a huge impact on English and French television. But I wonder, specifically to Ms. Platt, about the impact of not having this fund in such a large amount, or not at all I guess in 1999. What will that impact be on Canadianizing CBC's English programming?

I assume that you're going to say that it has a huge impact. How does that relate to your competitors? What does Global think about that, if there is such a new market for Canadian production? Also, what are the under-represented groups that you're specifically trying to target with the fund?

My last question: Are you included on Team Canada trade missions? We heard the other day that we wanted to have more culture from some of the culture industries, that they thought there was a viable market and that they should be included in the trade missions. I just wondered if you already are.

Ms. Phyllis Platt: It's not hyperbole at all to say that I don't believe we will be able to accomplish full Canadianization without the fund. When we Canadianized PrimeTime last fall, it was, again...

To put things a bit in context, at the time when we were downsizing, our funding had been reduced overall, the three-year period, by about 25%. So we were both trying to move toward becoming the distinctive Canadian network and dealing with major cuts. We managed to get the initiative to air, but to sustain it and move into full daytime Canadianization will be absolutely impossible without the funds.

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Canadianizing is terribly important, not just in terms of clearly defining the CBC and the role of CBC television, but for the country. I honestly believe that when Canadians are watching over 23 hours of television a week, that is where they're getting a huge amount of their information about their world. If they don't see Canadian values reflected, how will we hold together as a society?

I mentioned children before, and I would also mention new Canadians. How do people become citizens in this country rather than simply consumers? A large part of the way they do that now, because television is such a preponderant medium, is through watching, we hope, more and more of their own stories on television.

The under-represented groups are primarily drama, documentary, and children's programming, as well as arts programming and variety programming. The fund has allowed us, for example, to increase arts programming on the CBC very significantly, partly because the fund is designed really to go to independent producers. This isn't the case across the board, but the CBC cannot directly access this money. Independent producers access the fund and co-produce in collaboration with us. It has increased the arts programming through the independents because they now have additional funding that allows them to produce arts programming without having to export it necessarily.

Just to go back quickly to the export issue, I think it is important to note that, as Elizabeth said, we are very aggressive in the field in terms of export. But there is some programming that simply isn't made for export. This Hour has 22 Minutes is a perfect example. It won't travel, but it's very important here and gives us all a lot of laughs too.

In terms of social cohesion and connection and reflecting the regions of the country, we've increased our regional programming significantly as a result of the fund. We were producing in arts and entertainment in five provinces before the fund. We're now producing in nine and increasing the level of production in regions outside the major centres.

If the fund is not renewed we won't be able to Canadianize, and the type of programming that gets produced by the independent community will certainly have to be more and more reliant on export, and therefore potentially less and less distinctively Canadian.

Mr. Peter Herrndorf: Let me just add, on the question of the trade delegation, this is an industry that has taken a very active role on trade delegations all over the world. To go back to the question that was asked earlier, we have been proud to plant the Canadian flag in every part of the world, showcasing what it is to be Canadian, and I think this industry will continue to do that.

The Chairman: Does anybody else want to answer that question? Okay.

That concludes this round table. On behalf of the finance committee, I certainly would like to thank you very much for a very thoughtful presentation of the facts. I think you made a very strong case for the fund. You've illustrated clearly the social, economic, and cultural benefits of the fund.

I have one question in relationship to what you referred to, Mr. Herrndorf, as the long-term basis support of the fund. What does long-term mean to you?

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Ms. Loren Mawhinney: We'd like to see the fund as a permanent institution. We think the fund works enormously well in putting money directly on the screen and not generally to people's overheads or whatever. We also think it's a very interesting collaboration between public and private mind-sets. There's been a lot of information back and forth about what everybody's needs are. Our hope is that it's a permanent fund, and my understanding is that translates into five-year allotments or something.

The Chairman: So it's five years. The question is how do we deal with this in the finance committee? As you know, Mr. Martin gives budget projections for every two years, so we're a bit challenged by that particular scenario.

I find it very difficult to talk about Canadian culture and a balance sheet at the same time, because, as you're all aware, we're faced with challenges and choices and a country like Canada provides some special challenges when it comes to the whole area of cultural industries. Once again, on behalf of the committee, thank you so much for making this a very strong case for the fund.

Mr. Peter Herrndorf: Mr. Chairman, thank you very much.

The Chairman: I will suspend the hearings for approximately five minutes.

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The Chairman: I would like to call this meeting to order and welcome everyone back.

For this round table we have presenters from the Canadian Council on Social Development, the Council of Canadians with Disabilities, Dialogue Canada, Canadian Policy Research Networks Inc., the Child Care Advocacy Association of Canada, REAL Women of Canada, the Sierra Club of Canada, the Canada Family Action Coalition, the Canadian Living Foundation, and the Pembina Institute.

I welcome everyone. As you know, you have approximately five minutes to make your presentation and then we will proceed into a question and answer session.

To begin, we will hear from the representatives of the Canadian Council on Social Development, Mr. David Ross. Welcome.

Mr. David Ross (Executive Director, Canadian Council on Social Development): Thank you very much, Mr. Chairman.

Participants of this round have been asked to consider appropriate new strategic investments at a time when some are saying there is no need for public investments because the economy is booming. However, Finance Minister Martin has already responded to this objection through the apt use of his metaphor that a rising economic tide does not lift all boats.

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The CCSD also finds imagery useful. The engine of economic growth is under full steam, powered largely by private sector forces. But while the train has left the station, too many people are left standing on the platform sadly waving goodbye. They haven't been able to secure seats, not even standing room, in the well-appointed coaches.

Who is left on the platform? The long-term unemployed, involuntary part-time and temporary workers, young entrant workers with huge student debts, laid-off older workers, mothers and their children on welfare, persons with disabilities, first nations peoples and the homeless. Unfortunately, the private sector train engineers are not much concerned with those left off the train. Only public investments will get them aboard.

The CCSD believes the 1998 budget must clearly spell out investments that address two goals: first, the enhanced well-being of all children, and second, expanded job opportunities. It is pointless to talk about the benefits of global competition, the knowledge economy and the information highway if we don't provide a sustainable social platform for our economy. Much of this platform rests on the health of our children. By providing children with safe communities and nurturing family environments, we improve the likelihood that this platform will be in place and that our future prosperity will be secure.

Governments are expressing deep concerns about education, but support seems mostly targeted to children age six and over. While formal education may begin at age six, learning begins at birth, and we know that children deprived in their early years perform less well later on in school and in life. This means we must get the environment right for all children in their early years. How? Through the following: affordable and high-quality child care; public kindergarten programs; greatly expanded resources for child protection services; a much enhanced national child benefit; improved access to a full range of drug, medical and dental services; more stable and better-paying jobs; expanded leave provisions for working parents; and national measures to track the progress of our children's well-being.

The CCSD is quite aware that although strategic public investments cannot solve all social problems, these investments remain the most important instrument for expressing and protecting the national collective will.

Canadians need strong public investments that are made for the social good and largely without regard to family income level. The private sector is not motivated to make investments for the social good, but for private profit. We don't expect it to invest in needed areas such as income security programs, universal education and health care, subsidized child care and elder care and freely accessible cultural and recreational facilities. Public investments also provide good quality jobs.

Increasing the support for the voluntary sector is another important investment we will look for in this budget. The finance minister himself has expressed the need in a recent speech, and I quote:

...the volunteer sector is poised to have a growing impact on social and economic policy because it offers the greatest hope for maintaining social programs and job creation in an era of financial restraint.

But without new public investments there is faint hope this growing impact will occur. A national survey shows that while most registered charities have experienced an increased demand for their services, only a third have mustered the resources to hire new staff, and 90% said no when asked if they would be hiring staff in the near future.

In Metro Toronto a survey last year of 382 human service agencies pictured them trying to meet rapidly rising demands even though one-third had just laid off workers. Thirty-three agencies had been closed, and the remainder had suffered revenue cuts averaging 4%. Obviously the growing demands of many people in need will go unmet.

How can governments invest in the voluntary sector while at the same time creating good jobs and expanding needed social services? They can create permanent funds that community councils would distribute to community agencies. They can expand wage subsidy and intern programs, allowing voluntary organizations to hire additional staff, and they can enhance tax credits for charitable giving.

In conclusion, we seem to be approaching the debate on defining strategic public investments indirectly, by asking Canadians how they would distribute the fiscal dividends. They are being asked to divide the pie into three pieces, public spending, tax reduction and debt elimination, as if there are no connections between the slices. In reality every public investment affects all three and vice versa. The correct approach is to ask what our ultimate public investment strategy is and then consider how it is to be financed. That is how we should approach the fiscal dividend.

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As part of this investment strategy, the CCSD has proposed two important goals: enhancing the well-being of all our children and expanding job opportunities. These are not narrow goals. They would help ensure that Canada remains the best country in the world in which to live for all of our citizens.

Thank you.

The Chairman: Thank you very much, Mr. Ross.

The next presentation will be made by the Council of Canadians with Disabilities, Mr. Laurie Beachell. Welcome.

Mr. Laurie Beachell (National Coordinator, Council of Canadians with Disabilities): The council is pleased to have the opportunity to address the finance committee. We find it somewhat ironic, however, that we are here discussing a fiscal dividend at the time when cuts to social services in this fiscal year as a result of the 1995 budget are the greatest.

I'd have to say the current environment for persons with disabilities is rather bleak. People remain unemployed. People basically have been cut from a number of programs. We see revisions to the disability tax credit. We see changes to the Canada Pension Plan that will limit disability benefits. We continue to see deregulation of industry that ensures access for our members, again resulting in less service for our members. We see the federal government devolving responsibility for numerous programs to the provincial governments, devolving to municipal governments, devolving to private corporations in many instances.

Even today we face a fundamental right to human life. We have court cases in this country where individuals who are disabled have been killed, and the general attitude seems to be that those who have killed them should be somehow compassionately sentenced. So it is difficult to talk about fiscal dividend at this time.

We also have to say that our fundamental concern remains the need for national standards. While the federal government has protected national standards in health care, standards in social services are diminishing. The only standard we have under the CHST is a non-residency requirement. Issues around appeal mechanisms, workfare, etc., continue to diminish.

For our people, mobility generally is an issue. Mobility across the country and ensuring some standard of access is also a critical issue as we continue to devolve services to municipal levels. We have individuals who wish to move from Saskatchewan to pursue a degree at Carleton University but cannot do so because they cannot get an attendant care program in Ontario that they would have had in Saskatchewan.

We are interested in exploring with the federal government the issues of pharmacare. For many in our community, drug costs are one of the disincentives to employment. With diminishing benefit plans within the private and public sector, or with jobs now being much more self-employed and part-time with reduced benefit plans, drug costs become a real disincentive for individuals to get jobs.

We were beginning to make some inroads with the federal government in relation to job creation for people with disabilities. However, as we moved forward responsibility for labour market training was devolved to the provinces and we now find ourselves having to negotiate with 12 different authorities around labour market standards for persons with disabilities. Also, for your information, within the federal civil service the persons-with-disabilities employment rate has dropped from 3.8% to 3.2% in the last few years. So we're finding, not only in the private sector but in the public sector, we're losing jobs.

CCD is pleased to see the minister's comments in regard to partnerships with the voluntary community. We believe we have much to offer in the way of finding innovative solutions, but that partnership has to be backed up with support for what has become termed special interest groups. While we do not support that label, it seems to be one that people use in regard to organizations like ours and others. To us, we are a citizenship coalition seeking to regain full citizenship rights. We are not a special interest group.

The federal government in the past has initiated a number of tax reforms related to persons with disabilities to offset additional costs. While these are helpful, they must be undertaken in an air of co-operation with provincial governments. For example, there is discussion of a refundable tax credit, the disability tax credit. However, if provincial governments treat that refund as income, not one person with disability will gain benefit. All we will do is line the coffers of provincial governments.

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Tax reform is a blunt instrument and has to be looked at very carefully as to what issues can actually get to individuals. We would encourage within the next budget an expansion of the court challenges program funding to allow for challenges to provincial legislation. As the federal government devolves responsibility to the provinces, without a challenge to provincial legislation we do not have the recourse we require.

We'd also encourage the government to look at the establishment of accountability mechanisms to determine how dollars transferred from federal to provincial governments are being spent through the Canada health and social transfer. The debates around social union principles and standards seem to be continuing in limbo; we are unsure where that is going. At the same time, billions of dollars are being spent and we're unsure as to how they're being spent.

The other thing for our community that is critically important is looking forward for the next census to include a post-census survey that will gather data on Canadians with disabilities. This was done in 1986. It was done again in 1991. It was not done in 1996. We hope that in 2001 we will see a post-census survey.

To sum up, for Canadians with disabilities federal-provincial collaboration is probably the most critical issue, in that most of our issues remain within a provincial realm. We would like to see greater work between federal and provincial ministers of finance, not just federal and provincial ministers of social services, to address the fundamental needs of people with disability.

Thank you.

The Chairman: Thank you very much, Mr. Beachell.

We'll now move to representatives from Dialogue Canada, Ubald Laurencelle and John E. Trent. Welcome, gentlemen.

[Translation]

Mr. Ubald Laurencelle (Dialogue Canada): Thank you, Mr. Chairman, for this opportunity to share our views with the committee and to talk, with all the forcefulness we can muster, about priorities for Canada that, today more than ever, seem unavoidable, even in an era of budgetary restraint.

Dialogue Canada, whom we represent, aims at promoting understanding and mutual respect between our citizens.

[English]

We know that this committee is particularly interested in our opinions on economic assumptions, strategic investments, tax changes and job opportunities. While not claiming to be experts in these areas, Dialogue Canada believes it is best for the country if we use any possible budgetary surpluses first to make selective social investments, secondly to reduce the national debt, and thirdly to selectively reduce taxes. Our major argument is that a major exchange program is a crucial investment in maintaining the Canada goose that lays the golden egg of mutual understanding and prosperity.

If we had the threat of separation during three decades and the failures of all our attempts to resolve regional and community differences, it is because at the root the Canadian population has not had the opportunity to learn about each other and their country so as to provide greater understanding and generosity.

[Translation]

Today we would like to convince you of the need for a wide- ranging permanent program of exchanges and educational visits to help Canadians to gain a better knowledge of their country and of themselves, so that they may continue working together to produce the wealth which is the basis of the very surplus everybody wants to spend in the most efficient way possible.

In our country, citizens of all ages need the opportunity to travel within Canada and to visit other regions than their own. Every child, before leaving school, should have an opportunity to take part in an educational visit or an exchange to another region.

Dialogue Canada is not accustomed to dealing with economic issues. However, we firmly believe that, in order to ensure our economic future, we must create a social climate that will allow us to go further than what we have already achieved.

As a citizens' group concerned with the well-being of all Canadians, wherever they live and whatever their origin, Dialogue Canada believes the government should pursue its objective of budgetary restraint and sound management. However, it also has the duty to provide the required leadership, both moral and financial, to other governments, to the private sector and the voluntary sector.

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Just over two years ago we had a harrowing experience that I personally am not ready to forget. We came within a hair's width of losing our country as we know it. We must recognize with humility that this situation did not arise by chance. It was not due to the great understanding we have of our fellow citizens from sea to sea. It is not due either to our great knowledge of our great country, nor to the frequent and sustained relationships we have among ourselves. Canada is in many ways a complex country and its economy is regionalized. It was not due either to our understanding of our bilingual and multi-ethnic character, nor to our great knowledge of our history and our specific form of government.

What Dialogue Canada is urging you to do today is to provide Canadians with the means to continue building their country for the future, if we believe that Canada deserves to live and to flourish into the new millennium.

In order for this to happen, we ask the government to establish, firstly, permanent exchange programs between Canadians of all regions and, secondly, projects aimed at fostering consensus and improving mutual understanding. Thirdly, to set up a new agency to support projects emanating from grass roots organizations who are chomping the bit to play a more active role in making this country move forward but who cannot do so for lack of money.

Dialogue Canada proposes to create a wide ranging partnership in order to establish, in a permanent way, a large and ambitious program for exchanges, twinnings, media productions in both official languages and the translation of literary works and educational material in order to put Canadians in touch with each other. Dialogue Canada proposes therefore that the government set up a permanent fund of more than $30 million a year to this end.

It is time to invest in ourselves because we deserve it. This investment in our collective future would be only a drop in the total federal budget. It would also be a minuscule proportion of total spending on education in our country.

I personally worked for close to 30 years as a federal public servant trying to make my small contribution to the renewal of Canada through education. I had to travel across the country from sea to sea several times. With each trip, I learned a bit more about a country that has much to offer to who wants to look, to who wants to hear and to listen. As an Arab proverb says, eyes are of no use to a blind brain.

It seems to me we need in Canada a vision of what we want to become. I beg you, ladies and gentlemen, to give us this enlightened leadership we are expecting of you. Make sure the budget provides funding on a permanent basis for the survival and the development of our country.

The document before you provides greater spending detail. I would like to draw your attention to Section VII, page 9, and Appendix A, page 15 in the English text and page 17 in the French text, where you will find a cost estimate.

I thank you for your attention and the interest you will bring to bear in considering our request. It is not so much for us. It is mainly and mostly for Canada. Thank you.

The Chairman: Thank you, Mr. Laurencelle.

[English]

The next presentation will be made from the Canadian Policy Research Networks Inc., Ms. Judith Maxwell, president. Welcome.

Ms. Judith Maxwell (President, Canadian Policy Research Networks Inc.): Thank you, Mr. Chairman. Good morning to you and to committee members.

I would like to focus on the strategic investments question. It seems to me that now that Canada is on the threshold of a post-deficit world, our situation is rather parallel to the situation of 1945, when we were at the end of the Depression and the Second World War. A lot of strategic decisions made at that time shaped what happened to the country for the next 30 years.

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I think we should be encouraged by the fact that over that 30-year period we paid down the debt, we built a comprehensive social security system, and we created the foundation for the strongest period of economic growth and rising standard of living that we've experienced in the history of the country. So it's very important to understand that one can walk and chew gum and read a book at the same time. We don't have to focus on a one-only solution here.

I do feel, though, that in a sense this is a once-in-a-lifetime opportunity as we face the post-deficit era. It's important that governments take the time to work this through with Canadians in a thoughtful way. We will, in a sense, shape the way in which the country evolves over the next few decades. To do that, I think we need to begin to imagine some new forms of consultation with citizens that will enable them to reflect on what's really important to them and give some feedback or some input to the decisions processes of government.

I think there probably would be general consensus around this end of the table that the focus of the strategic investments should generally be in the areas of human development and social cohesion. Indeed, one of the specific questions you asked us to address today was the question of the best way government can help to ensure that there is a wide range of job opportunities in the new economy.

On that note, I'd like to share with you the results of some in-depth research we've been doing on workplace training and training systems in Canada, and how they connect with business strategy and economic growth. What we are learning is that possibly the process of job creation is being turned upside down in the new economy.

For example, it is the nature of the local labour force that determines a lot of the critical decisions about not only where jobs are located but also what kinds of jobs are being created. There's clear evidence now that when firms are making investment decisions, a high priority in those decision will be finding a location where there is a highly qualified workforce. Communities that don't have that are not getting the job creation.

At the same time, for an employer that is expanding within a community, there's evidence now that if there are mainly poorly qualified or low-skilled workers, then that employer is pretty much required to follow a strategy of what we would call “cost minimization”, designing jobs in such a way that they are minimizing the payroll costs. Those tend to be insecure, low-paid jobs. But if there is an abundance of highly skilled workers in the community, employers tend to choose what we call a “high-performance strategy”, where they design the work differently and are actually creating good jobs. I think there are very important lessons from that for the way in which we think about the investments we're making in the development of skills of the population here in Canada.

On that front, over the past decade we have seen the emergence of what we call a “training market”, in the sense that it's now no longer primarily focused in community college; in fact, a wide diversity of players are supplying training to the Canadian workforce.

This is a relatively recent development, and that training market is not fully developed. My sense is that the role for government, federal and provincial, in the future is going to be focused on trying to get that training market to work as well as we possibly can. That will require a focus on information systems, the signalling mechanisms that give individuals the information they need to decide what skill requirements they need or what courses to take, and the signalling mechanisms for educational institutions to decide what courses to offer. But there are also important questions to do with making it possible for people to attend courses by providing, in some cases, income support, or in other cases the ability to trade their time back and forth between work and study.

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One of the critical questions that comes out of our work is that typically people who are already well educated have good access to training and skill upgrading, that the big gap in this country is the access of contingent workers or people in non-standard jobs, that they don't have the means or the access to be able to determine what courses to take or to be able to dedicate the time to get into those courses. So I would see that there is a role for government here in thinking about how we develop a training market that will provide the foundation for job creation in the longer term.

Thank you.

The Chairman: Thank you very much, Ms. Maxwell.

Now we have a representative from the Child Care Advocacy Association of Canada, Ms. Wendy Atkin. Welcome.

Ms. Wendy Atkin (Advocacy Coordinator, Child Care Advocacy Association of Canada): On behalf of the Child Care Advocacy Association of Canada, I thank the finance committee for inviting us to appear today.

On September 23, 1997, the Liberal Speech from the Throne declared that children and youth will be a national priority, arguing that a country that invests in its children successfully will have a better future. Over the last four years, federal cuts to child care spending have de-invested millions of dollars from a sector that is a cornerstone of Canadian social policy. This is in spite of the consensus among experts in child development that investment in the early years yields the greatest return.

The government's promise to devote one-half the budget surplus to social spending offers some hope of reinvestment in the early years. This investment need not start from scratch. There is currently a patchwork of early childhood programs with varying goals: regulated child care; kindergarten; community action programs for children; aboriginal head start initiative; aboriginal and Inuit child care initiative; the child care expense deduction; dependant care allowances; and several others. Funding and administration of all of these programs crosses sectoral and jurisdictional boundaries.

The national children's agenda, also announced in the Speech from the Throne, holds the possibility of integrating these various measures in a policy framework for early childhood designed to meet the needs of an industrial nation. We know the national children's agenda has not only been introduced at the federal level but is also being discussed at the provincial and territorial levels of government. It bears tremendous potential to capitalize on the broad consensus that public investment in the early years of child development is vital to our collective future.

Therefore, we propose three goals for a national children's agenda for Canada. The first is a coherent system of early childhood education and care services as the essential cornerstone for building a national children's agenda. Second, a strong early childhood education and care system can be a key building block for meeting other commitments to children. Finally, an early childhood education and care system is most likely to succeed if it is based on principles similar to those of the Canada Health Act: universality; affordable and available; comprehensive; a variety of service models planned at the community level; high quality; well regulated; publicly funded; and accountable—that is, not for profit.

Over the last decade, our collective capacity to meet social needs in our communities has been undermined. The federal government has reduced its financial contribution and has failed to develop guidelines for spending under the Canada health and social transfer. This has left child care services in a vulnerable situation. Last year's 33% federal spending cut produced shrinkages in the child care infrastructure in several parts of the country. Child care is emblematic of a profound disruption in social cohesion in this country. Offloading of social services from one level of government to the next, weighting the deficit above social investment in our political priorities, and slashing programs designed to even wage disparities has increased polarization such as rich and poor, waged and unwaged.

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A paper released last week at a Laidlaw Foundation symposium in Toronto said a fissure is opening at the centre of the country that threatens to recast opportunities for the next generation and to create deep divisions in national and civic life.

This Laidlaw research and numerous other studies, government task forces, and international charter commitments all highlight the importance of quality child care in the early years as a key investment and a movement towards fulfilling multiple social and economic goals.

The national children's agenda presents an opportunity to move forward on this cornerstone of Canadian social and economic policy, and I urge the members of this committee to consider recommending that spending be directed towards meaningful content for the national children's agenda, which this government is now designing.

Thank you.

The Chairman: Thank you very much, Ms. Atkin.

We'll now move to the representatives from REAL Women of Canada: the national president, Cecilia Forsyth, and researcher Diane Watts. Welcome.

Ms. Cecilia Forsyth (National President, REAL Women of Canada): REAL Women of Canada agrees with the 56% majority of Canadians who favour debt and tax reduction. Economic assumptions in budget planning include debt, spending and taxes. The prudence factor is the fact that Canada has a $600-billion debt. The only true physical dividend from a balanced budget is the decreased expenditure on interest that comes from a reduction in the size of the debt. Paying down the debt will free revenue for tax cuts and for future increases in social spending for health and education. On the other hand, to hide debt burden discourages job creation, limits social program spending and keeps upward pressure on interest rates. Debt reduction will benefit all Canadians.

On the spending side, government still spends more than it takes in, and there is still far too much waste and duplication in government spending and programs. Each year grants and contributions are given to numerous special interest groups. These handouts totalled $11 billion in 1994-95. Discretionary government spending to special interest groups and to obsolete crown agencies should be eliminated to make room for funding increases for the necessary social programs. Overspending hurts all Canadians.

The biggest bill in a household is the tax bill. In the past 12 years the federal government has raised taxes 108 times. High taxes hurt people, businesses, and the economy. Tax relief for all Canadians must be put ahead of any spending initiatives.

My comments on new investment and changes to the tax system focus on family taxation.

Children live within a family unit, and the focus of government policy should be to support Canadian families by reducing taxes, not by increasing government spending on selective programs. The best way to reduce child poverty is to assist the family by leaving earned income in the hands of the taxpayer.

Second, single-income families pay substantially more income tax than double-income families. Splitting the total income between the two spouses would result in a lower rate of tax. The policy of taxes based on family income already takes place in determining the CPP and the GST credit. The needs of the single-income family should be given the same consideration.

Three, the current spousal deduction is inadequate and does not reflect the value of work done in the home. It must be increased.

Four, Revenue Canada allows double-income families tax breaks and deductions that are not available to single-income families. All children are of equal value, and their care should be so treated in law. The child care deduction must be changed to a refundable tax credit available to all parents.

Five, government plans to raise CPP premiums to 9.9% must be scrapped. Canadians should be given the choice of managing their own pension investment or staying in the government CPP. Leaving money in the hands of the taxpayer is true government investment in the new economy.

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Fostering the new economy for all Canadians requires economic growth and job creation. Increased spending, coupled with high taxes and debt, is more likely to impede economic growth, rather than encourage it. Alberta and British Columbia prove that point.

Tax cuts and lower debt are the critical factors in true job creation. Debt reduction frees revenue for purposes other than interest payments. Tax cuts are stimulative. Money left in the hands of the taxpayer increases consumer spending and investment, which is a direct boost to job creation.

In conclusion, the future of our country depends on the strength of our families. The family, which is the foundation of a nation, should be central to the formation of all public policy. The long-term goal of any government should be to balance the budget, spend the taxpayer's dollar prudently, reduce debt, and lower taxes. These measures will lead to a lasting prosperity for all Canadians.

Thank you.

The Chairman: Thank you very much, Mrs. Forsyth.

We'll move now to the representatives from the Sierra Club of Canada. Welcome, Ms. Louise Comeau.

Ms. Louise Comeau (Director, Energy and Atmosphere, Sierra Club of Canada): Thank you, Mr. Chairman.

In recent weeks the subject of my presentation may have gone completely over your heads, but I suspect that when I say the words “climate change”, everyone in the room will today know what I'm talking about. I'm very delighted to see that after many years of working on this issue, we now have political engagement.

Governments around the world are moving to caps on carbon emissions. The U.S., Japan and the European Union, our largest trading partners, will soon want products that are efficient and advanced, and that minimize their use of carbon.

Canada must meet these market demands. Unfortunately, in the last few years, our rate of emissions per capita and our rate of improvement with respect to emissions per unit of GDP are declining, not improving.

In meeting these market demands, Canada has the potential to benefit the economy, the environment, and human health. This win-win agenda of reducing greenhouse gases will not come without effort at the policy, fiscal, and political levels. The next federal budget provides an opportunity, if Paul Martin does not fall victim to the myth-making about an economic Armageddon now being perpetrated by the Business Council on National Issues.

The Sierra Club co-ordinated an analysis of a rational energy program with the co-operation of Natural Resources Canada. NRCan analysed a package of measures aimed at improving energy efficiency, expanding the use of renewable energy, and reducing transportation demand. The analysis found that we could cost-effectively reduce greenhouse gas emissions. Informetrica conducted the macroeconomic analysis. They found that up to 1.5 million person years of work could be created by stabilizing and reducing greenhouse gas emissions in Canada.

Climate change targets can help the federal government meet many of its priorities for this mandate: job creation, technology innovation and creativity, support for communities, and improved health for all Canadians. The use of fossil fuels causes acid rain, smog, and climate change. It releases particulate matter that affects human health.

Reducing emissions improves local air quality, promotes community economic development, and reduces economic costs in terms of health care budgets and damage to agricultural crops, forestry, fisheries, and tourism.

The Sierra Club proposes the following for consideration by Paul Martin. The federal government must take a lead on addressing climate change post-Kyoto, which is the meeting we have all been working toward that takes place from December 1 to 10 in Japan. The federal government must take the initial lead because we are not yet at a place where federal-provincial relations are at a co-operative level.

We require a prop start by the federal government that should focus on carrots rather than sticks: use the deficit-reduction approach, set achievable targets for the penetration of renewable-energy and advanced-technology vehicles, put in place the policy framework for achieving the goals, review and correct, and take a step-by-step approach.

Incentives should focus on laying the groundwork for achieving the mid-term goals of phasing coal out of the electricity-generation sector and in redesigning vehicles to eliminate the internal combustion engine. This will drive a technological revolution that can and will benefit the Canadian economy.

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Incentives include tax incentives or rebates to encourage the purchase of green power and advanced technology vehicles. Companies committing to purchasing 10% of their electricity and vehicles for fleets that are renewable and advanced could qualify for a credit to offset some of the higher initial costs. The incentives should be designed to sunset after five years or once a certain percentage increase has been achieved. The target would be set at the level needed to reduce the cost of these new technologies by 25% to 50%. This could be the next phase in your voluntary challenge and registry program.

The technology partnership fund at Industry Canada should be expanded to focus on investments and new car technologies. Targets work. Give the sector—the manufacturers—seven years to introduce low-carbon-emitting vehicles.

Establish a national atmospheric fund, which would facilitate investment and energy retrofits in buildings in the residential, small industrial, commercial and municipal sectors. This is not government spending in the sense of doing the retrofits themselves. What we've been told is that project development costs can be very heavy upfront. We're looking for a fund that provides and supports that project development and leverages private sector capital.

The fund could operate on a fee-for-service basis, which would be paid for from energy savings or from the interest earned through investments of the fund. The fund could be used to launch a national green communities program focusing on the residential sector.

Provide tax incentives to encourage the purchase of the most energy-efficient products. The finance minister could start with a tax incentive or rebate on the purchase of high-efficiency windows. Finance officials have indicated that they may support an incentive with a focusedtime horizon. Linking the purchase of high-efficiency windows to, for example, a national home energy rating system NRCan is now developing and to a national green communities program could be acceptable.

If you sign up to green communities, then have an energy audit of your home completed, proceed with a retrofit and install high-efficiency windows, you could qualify for the rebate. Windows are rated for their efficiency levels, so this works absolutely from a technical point of view.

In the “sticks” category, the Sierra Club proposes the following:

Negotiate with the provinces so that competitive electricity markets are regulated to ensure investments in renewable energy technologies, in co-generation in industry and in energy efficiency. This is now happening in almost all U.S. states that are proceeding with electricity competition. If negotiations fail at a national level, the federal government does have the capacity to set a national carbon cap and launch a trading system.

At a tax level, the rational energy program analysed the impact of imposing a 2¢ a litre gasoline tax in 1996, 2000, 2005 and 2010. In addition we analysed a $20 a tonne carbon charge, which was applied in the year 2000 and then rising to $25 a tonne in the year 2005. The money was recycled. We used the money to reduce the GST from 7% in the late second half of the 1990s to a rate of 5.5% in the year 2000. The reduction of the GST was the significant factor contributing to the 1.5 million person-years of work.

Consumers who invest in energy efficiency in response to the price signal win through both lower energy costs and the tax dividend.

The federal government could generate $75 billion in revenue, which would pay for tax incentives and research and development, and then could be applied either to the deficit or to a smaller reduction in the GST. All options are on the table. Both initiatives, reducing the deficit and reducing the GST, are clearly shown in polling to be preferred by Canadians.

The Sierra Club does not believe it's necessary to engage in a political debate over a carbon charge. Taxes could be applied to all energy forms. They all have environmental impacts. The issue is that any revenues raised must be recycled to invest in new technology development and job creation.

Progress will require a realistic assessment of the Canadian economy of the 1990s, not the Canadian economy of the 1950s. Seventy percent of today's GDP comes from services. Only 30% of our exports come from energy-intensive industries.

Exports, manufactured goods and telecommunications are where the growth is. Only natural gas exports are growing. Oil, coal and wood products are stagnant. Canada's strategy should be to enhance export potential for our star products and to give an incentive for new investments to those industries facing the transition.

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Over the next 15 years there will be adjustments to the Canadian economy as we reduce greenhouse gas emissions. Moving from coal and the electricity sector is already expected as a result of competition. Greenhouse gas reduction will accelerate that trend.

The coal industry employs 9,000 people directly and contributes less than 1% to GDP. The Sierra Club urges that governments provide for retraining and transitional support to this sector, which is more than what was done for Canadians during the adjustments from the NAFTA agreement.

Canada is second only to Russia as an exporter of natural gas, and natural gas will supply the new electricity market and it is secure. Oil sands development is greenhouse-gas-intensive and it is risky. The federal government may have to consider over the next 15 years some type of compensation mechanism for this investment.

Thank you.

The Chairman: Thank you very much, Ms. Comeau.

We will now move to the representative from the Canada Family Action Coalition, Mr. Peter Stock. Welcome.

Mr. Peter Stock (Director, Policy and National Affairs, Canada Family Action Coalition): Thank you, Mr. Chairman.

The Canada Family Action Coalition is a national non-partisan grassroots political action organization dedicated to defending and promoting Judeo-Christian principles in Canadian society. We are especially interested in issues that affect Canadian families.

The current fiscal projections of the Department of Finance indicate the government is on track to eliminate the deficit soon. There's a real danger, however, in relaxing our attention on controlling spending. A jump in interest rates or in unemployment, or both, could severely cripple the progress that has been made to date.

Debt should be reduced immediately through the sale of unneeded assets including crown corporations. Liberals, Tories and Reformers have all traditionally subscribed to the principle of subsidiarity. There's no need for the federal government to be running businesses. Just as airlines and oil companies have been divested, so should banks and postal services be sold to pay down some of that national debt.

Modest spending reductions have been made, but much remains to be done. Great savings remain to be utilized in many areas, including in several departments and in the area of funding for special interests. Funding some organizations and businesses at the expense of others is unacceptable.

In our opinion, no new spending is needed, but existing funds should be invested more wisely and more sensibly. We are spending some funds in a very negative way. Those same funds could be used for more positive items. Let me give you one example of both.

First, the negative item is the reprehensible funding of Health Canada for the production of homosexual pornography through the so-called national AIDS strategy. I brought a few pamphlets with me. I won't read them to you. They're full of four-letter words, although I'll give you a very brief description. In one, there are two naked men, one performing oral sex on another. Then there are two naked men in some sort of sexual embrace, full genitalia exposed. And the final one has two naked men engaged in anal sex.

This pornography is directed at young people and is distributed in our schools. It aims to desensitize children to homosexual behaviour and is used for the purposes of recruiting the vulnerable into the harmful homosexual lifestyle.

It's sad enough that such material is being produced and distributed, but extremely disturbing is the fact that the federal government is paying for it. And to the Ontario MPs who are here today, the Ontario Education Act gives you the right to enter schools in this province. I would challenge you to take a look down at your local high school guidance counsellor's office and see what's on the rack there. Take a look for yourself and see what the federal government's funding.

As a counterpoint to that, I'd like to give you a positive example of where we could be funding something in the fight against pornography. The distribution of child pornography over the Internet has emerged as a horrific new criminal activity striking at the heart of the family unit and requiring the dedication of new police resources. The police need more manpower and faster, more powerful computers that can aid them in cracking down on this sickness. Let's spend the money better.

The biggest change we desire to see in our tax system—and there are many, but I'd like to mention one here in particular—is an end to the discrimination under the tax system against stay-at-home parents. The benefits of day care subsidies and tax deductions for a minority of parents should be shared equally among all parents with dependants. Parents should be given the financial tools they need to give their children the best-quality child care possible, and that is care from the parents themselves.

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So on the final question that was asked by the committee, about fostering the new economy for all Canadians, a general area is government intervention in the economy. We believe that the government can remove itself from the economy and foster an environment for job creation and growth. The government has to stop picking winners and losers through things such as subsidies and regulation. Those, coupled with high taxes, remain the largest problems facing Canada in the new economy. Taxes cannot be eliminated or halved overnight, but government can remove itself from intervening quite quickly. Long-distance telephone deregulation, for example, has resulted in lower consumer cost and higher sector employment.

An example of further deregulation in this area that could result in immediate job creation in Canada is an end to the discrimination against single-faith broadcasters, currently the policy of the CRTC. An end to this discrimination would result in immediate employment of hundreds of highly paid technical workers in the Canadian cultural industry. Their programming may also result in millions of dollars worth of export business.

The CRTC as regulator costs $33 million annually. Their restrictive regulations cost tens of millions more. What benefit does the CRTC as a regulator produce for $33 million a year? I think that's a question Parliament and this committee need to look at. It's a question about whether we should be spending that kind of money.

In conclusion, the Canadian family is facing ever-increasing taxes and government policy that restricts family choices, such as in the area of child care, and advocates and funds harmful activities such as what I mentioned with Health Canada. Canada is generally a good country to live in, but we believe it can be an even better place to live. We believe the finance committee can do more to direct the limited spending available in ways that will foster healthy families and a better society in which to live.

Thank you, Mr. Chairman.

The Chairman: Thank you very much, Mr. Stock.

We will now move to the representative from the Canadian Living Foundation, Ms. Martha O'Connor. Welcome.

Ms. Martha O'Connor (Executive Director, Canadian Living Foundation): Thank you, Mr. Chairman and members of the committee, for the opportunity to appear before you and present the views of the Canadian Living Foundation.

The foundation's breakfast-for-learning program is Canada's only national child nutrition program. Since its inception in 1992, the foundation has assisted communities in establishing over 1,800 nutrition programs serving in excess of 22 million meals to children. Through our community partners—parents, volunteers, corporate sponsors and other levels of government—we assist communities in providing food for school children who are not getting sufficient nourishment. Our experience in delivering a national nutrition program is the context from which the foundation's views have evolved.

I'll now turn to the three issues of interest to the committee. First, with respect to the opinion of the foundation regarding economic assumptions and prudence factors that should influence budgetary planning, the foundation can offer little technical advice in this respect. Other organizations that have and will appear before this committee can speak more authoritatively. We do, however, wish to reinforce the importance of budgetary decisions that direct current investment particularly to children as a means of ensuring future prosperity.

The second issue we considered is the question of strategic investments that may be incorporated into the upcoming budget. Currently, government officials in consultation with members of the policy community are developing the national children's agenda. We commend the government on the wisdom of making children a priority, and encourage them to take bold action in protecting and promoting the interests of Canadian children.

The Canadian Living Foundation recommends that action be taken within the framework of the national children's agenda to ensure the nutritional health of children. We further recommend a strategic investment in the health of children be made by announcing your commitment to a national school nutrition program. Canada remains the only western industrialized country without a national school nutrition program delivering meals to children in school. The Canadian Living Foundation, in partnership with parents, private sector sponsors, other governments and volunteers, extends an invitation to the federal government to join our existing program delivery and extend the capacity of the foundation to deliver nutrition programs to all Canadian school children.

In the summer of 1997 the foundation was the recipient of a child hunger survey donated by Thompson Lightstone. The survey results confirm in public opinion what we at the foundation have known for a number of years: child hunger is a pressing concern, with serious costly social and economic consequences.

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The recently released survey shows 60% of Canadians believe that child hunger is worse than it was five years ago. The survey further demonstrates that 70% of Canadians believe that child hunger in Canada is more important than national unity or the deficit. According to these results, Canadians believe that parents, corporations, volunteer groups and governments should play active roles in reducing child hunger.

Research has demonstrated a child's capacity to learn is reduced in the absence of proper nutrition and child hunger increases the likelihood of poor school performance, behavioural problems, school drop-out and criminal activity.

The survey reveals that the Canadian public has a comprehensive understanding of the prevalence of child hunger and its longer-term implications, as described by current research. It also demonstrates the willingness of Canadians to address the issue of child hunger as a priority, even in the context of other serious national challenges like the deficit and national unity.

The Canadian Living Foundation suggests that the results of the Thompson Lightstone survey reflect a call to action from the Canadian public on the issue of child hunger. I'd like to reinforce the importance of framing this issue, however, in terms of child nutrition rather than child hunger.

Our experience in delivering nutrition programs, public awareness of the necessity to address child hunger, and child nutrition research conducted by such experts as Dr. Lynn McIntyre, dean of health professionals at Dalhousie University, has led us to one inevitable conclusion: increasing opportunities for child nutrition ensures optimal learning and growth for all Canadian children. Thus, a strategic investment in a national school nutrition program is an investment in the future of all Canadians.

The third issue I've been asked to address is the role government can play in ensuring Canadians acquire the requisite skills and knowledge to participate in the Canadian economy. As I've stated, the government's commitment to develop a national children's agenda is an important step in addressing the social and economic barriers facing our children.

Health Canada has clearly articulated the contribution proper nutrition makes to Canadian society: a healthy productive population, reduced health care and social costs, and better quality of life. Our research further demonstrates the critical importance proper nutrition plays in a child's capacity to learn, and the public's clear understanding of this.

The Canadian public supports a government role in addressing child nutrition. Canadians are also acutely aware of the longer-term cost of not addressing nutrition as a barrier to a child's ability to learn. The Canadian Living Foundation proposes that government can support Canadians in acquiring the education and skills required to participate in the new economy by reducing some of the current barriers to learning. Among the most pervasive obstacle faced by Canadian children is poor nutrition.

The foundation invites the federal government to play a role with our partners—parents, other governments, corporations and volunteer groups—in alleviating inadequate child nutrition. The foundation and its partners offer the federal government an opportunity to contribute to the CLF's existing successful national nutrition program.

The capacity of the foundation and its partners are limited not by commitment but by resources. We are of the opinion that an appropriate role for the federal government lies in a financial commitment to a national nutrition program that would expand the delivery of the breakfast-for-learning program, ensuring all children have optimal opportunities to grow and learn to their potential.

In summary, Mr. Chairman and members of the committee, the Canadian Living Foundation recommends that in preparing its report the committee consider prudence, specifically in evaluating the longer-term implications of addressing today's problem of inadequate child nutrition; announcement of a national school nutrition program within the policy framework of the national children's agenda; and commitment of federal program funds to deliver nutrition programs nationally.

Finally, I invite members of the committee to see firsthand what these programs mean to Canadian children. On November 20, National Child Day, I invite you to join the children of Cambridge Street Community School, less than a mile from the Hill, to share a breakfast for learning.

Thank you for your consideration.

The Chairman: Thank you very much Ms. O'Connor.

The next group is from the Ontario Council of Agencies Serving Immigrants, Mr. Carl Nicholson. Welcome.

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Mr. Carl Nicholson (Ontario Council of Agencies Serving Immigrants): Thank you very much.

The Ontario Council of Agencies Serving Immigrants is a coalition of over 140 community-based immigrant-serving agencies across Ontario. Our agencies can be found in all regions of this province, from Kenora to Cornwall to Windsor. Our agencies provide a wide range of settlement services that assist immigrants and refugees in their settlement process, ranging from official language training to job placement to skills training for families to individual counselling and community education. We serve more than 400,000 clients per year.

In terms of the question around prudence, we'd like to ask that the finance department take into account the issues of equity, access, fairness, justice and the creation of economic opportunities. But we'd like to spend most of our five minutes on your third area, that of strategic investments.

We too have looked at the job market. We realize that each year, Canada accepts about 205,000 immigrant newcomers, about 100,000 of whom come to this country with, on average, 10 to 12 years of education that someone else has paid for. We're not making good use of the investment someone else has made and we are supposedly benefiting from.

We think a strategic investment would be that the federal government develop policies and strategies to improve our economic position as a country by realizing the full economic potential these people bring with them. Too often the contributions of immigrants and refugees are held back by racism, language barriers, lack of Canadian experience, and the inability to obtain accreditation. Federal expenditures support a range of programs in the areas of multiculturalism, immigrant settlement and human resource development.

These provide some of the needed tools, but it's not enough. We see far too many people with far too much education, far too many skills, driving taxis. This is not a good investment for us as a country or for these people. We should leave them where they are, to provide a return on the investment to the countries that have paid for their education, or we should make good use of them here. It's a travesty. There are 100,000 such people every year.

We recommend that the federal government commit to provide, on an ongoing basis, an enhanced level of support across Canada to immigrant settlement programs. These programs are effective investments with a longer-term pay-off for all of us.

In your fourth area, that the federal government support Canadians in acquiring the education and skills needed, like other speakers before me I'd like to suggest that this area of human development and social cohesion should be a major focus for the federal government. The federal and provincial governments should work together to ensure that new employment and training programs include components that specifically address the employment needs of immigrants. A national labour force development strategy should be developed to provide employment skills development opportunities to socially and economically disadvantaged job-seekers. That includes a coherent and integrated training system.

We need some national standards that are applicable to all publicly funded programs. Provision of support measures—child care, literacy programs, language training, bridging programs, mechanisms for prior learning assessments—are tools that will unleash people's potential. There should be a clear separation of funding for training from funding for income support.

We recommend federal government support to ensure that federal-provincial agreements contain these national standards and accountability mechanisms to ensure quality services, accessibility and non-discriminatory programming.

Thank you.

The Chairman: Thank you very much, Mr. Nicholson.

The final presentation will be made by the representative from the Pembina Institute, Robert Hornung, director.

Mr. Robert Hornung (Director, Climate Change Program, Pembina Institute for Appropriate Development): Thank you, Mr. Chair, and thank you to all committee members for their patience and stamina this morning.

I'm also here to talk very briefly to you about initiatives that can be taken in the federal government with regard to the issue of climate change.

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In December, Canada will be adopting a new commitment to control greenhouse gas emissions. There has been a lot of debate in the last month or so about what that commitment might be. I can tell you that no matter what the level of the commitment is, Canada is going to have to adopt some new initiatives to deal with this problem. We're going to have to move beyond the purely voluntary approach that we have taken to this point.

The first step the federal government can take to move us towards meeting whatever commitment comes out of Kyoto is in next year's budget. I think there are a number of approaches the government can take, and they're approaches that are consistent with the government's other priorities of job creation and strategic investments.

Any strategy to reduce greenhouse gas emissions must rely primarily on energy efficiency improvements and renewable energy. Study after study shows that investments in energy efficiency produce three to four times as many jobs as equivalent investments in new energy supply. That's because energy efficiency activities are more labour-intensive, and it's because they produce savings that people re-spend in the economy in areas like the service sector, thus creating more economic activity in jobs.

Investments in these areas are also strategic investments. There are growing concerns about the environmental impacts of fossil fuels. It's not just climate change; it's the acid deposition and the urban smog that is putting kids in hospitals in the cities. The energy economy of the 21st century is going to look quite different from the energy economy of today. If Canada wants to be, and to continue to be, a leading player in the world's energy economy, it has to start looking at making investments in these areas. Other countries are going ahead in these areas—I'll try to demonstrate that in the demonstration—and we have to move as well.

There are three strategies the federal government can pursue in this area with respect to the budget. I call the first strategy the levelling of the playing field.

Two years ago the Department of Finance and the Department of Natural Resources completed a study that examined how we treat different forms of energy investment through the tax system. It found that investments in conventional energy supply are given more favourable tax treatment than investments in renewable energy supply. It found that investments in energy efficiency are actually discriminated against in the current tax system, as compared to a neutral tax system. Some initial steps have been taken in the last couple of budgets to try to rectify this imbalance, but more needs to be done.

In the paper I've left with the clerk of the committee, there are some examples with respect to providing more equitable treatment for investments in biofuels like ethanol, more equitable treatment for investments in district energy. District energy is a system in which you use one central system to heat or cool a large number of buildings instead of having separate systems in each building. Sixty to eighty percent of buildings in urban areas in Scandinavia are heated and cooled this way, but it's very rare in Canada. Part of the reason is that the capital cost allowance depreciation you can get for district energy in Canada is four percent, and not the thirty percent provided many other energy investments.

There's also a need to investigate some new incentives for investment in energy efficiency and renewable energy technologies by industry. Some of you will have heard that the United States came out with a position on climate change in the last couple of weeks. One key element of that position outlined by President Clinton was a commitment in the next budget for his administration to bring forward $5 billion worth of tax credits and tax incentives to spur investment in these technologies. Other countries are moving ahead. They see that this is the way the energy economy is going. Canada has to do the same.

Aside from levelling the playing field, the government can take action in a couple of other areas. The first one relates to new government spending. Research, development, demonstration and commercialization for these new technologies, and particularly renewable energy technologies, are very important. We have a long history in Canada—whether we want to admit it or not—of this type of support.

We have a nuclear energy industry in Canada only because it has received significant government support for many years. We have oil sands development in northern Alberta only because it has received 25 years' worth of government support. We know now about the environmental impacts of these energy sources, and it's time to redirect and shift the priorities and focus of our research and development spending to renewable energy technologies.

The last thing I want to talk about briefly is taxation. This is a tricky one, obviously. You have economists from all over the world who will tell you that the most cost-effective and most economically efficient way to deal with climate change is to impose a carbon tax. That's obviously very difficult to do in Canada. The federal government has indicated that it has no interest in putting a carbon tax in place, although it has now indicated that it is now willing to consider some forms of energy taxation. At the same time, there's a tremendous amount of pressure for tax cuts in the economy.

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I think there is a way to resolve both of these issues, to provide an incentive that reduces greenhouse gas emissions and to cut taxes. Frankly, that's through a tax shift, or what we call ecological tax reform.

What that means is that we would like to see new taxes on things we don't want in the economy, like greenhouse gas emissions, like pollution. But we want those taxes to be offset by things that we do want in the economy, like employment, like investment, like consumer spending. So we're saying if you are going to impose taxes on energy use or taxes on carbon, then that should be coupled with reductions in sales taxes or income taxes for low-income Canadians, or perhaps payroll taxes to help us get more people working.

This obviously is something that the federal government is not going to implement in time for the next budget, but I would like to recommend, and leave as a recommendation for your committee, that one of the issues that you might consider examining in the next year is this concept of a tax shift and whether there are ways in which we can shift the emphasis in the tax system to put more taxes on things that we want to decrease and less tax on things that we want to encourage.

Numerous studies have indicated that the economic benefits for the economy as a whole from such a strategy will be positive.

I'll stop there. Thank you.

The Chairman: Thank you.

Now we'll proceed to the question and answer session. I'm going to extend this session by 15 minutes. Mr. Harris.

Mr. Dick Harris: I have two questions, one that I will address to Ms. Atkin, Mr. Ross and Martha O'Connor as a group and one that I'll address to Cecilia Forsyth.

As we've had these committee hearings, we have had a number of organizations here representing the well-being of children, and I don't think anyone in this room could not honestly say that how our children are brought up, the environment they are brought up with, is of absolute importance to us all.

The thing that is strangely missing from the presentations of these groups is that very seldom do you hear the role of parents and the responsibility of parents brought up as an important part of child-raising. In other words, the emphasis seems to be on more government programs, more getting the state involved with the raising of the children. It just seems to me that as we increase government programs that bring government more into the role of raising children, it makes it all the easier for parents to abdicate their responsibility to ensure that the children are brought up in healthy environments.

I would like to ask the first group how they would feel about a government program that would ensure that parents would recognize and accept their responsibilities to raise the children; in other words, to be directed toward parents reminding them that their number one responsibility when they bring children into the world is to be good and effective, loving and caring parents and ensure that their children are brought up right.

The second question is directed to Cecilia Forsyth. I read her submission and I would like to ask her, after we'll have heard the other answers, if she would care to elaborate on the benefit of parents who are able to stay at home, have one parent stay at home and raise the children, and the value, and also how the government taxation regulations discriminate against the ability of parents who make sacrifices to have one parent stay at home.

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Mr. David Ross: I mentioned in my remarks that we did not feel that public investments would solve all the social problems. In fact we're quite clear in the work we do at the council that there are four partners in most social issues, and certainly four partners in creating healthy environments for children. They are, first, parents—the home environment is crucial. The community environment is crucial—there's no use being caring at home and then sending the kids out onto mean streets. The third is the workplace, because parents who are working outside the home need more flexible arrangements so they can care for their children and so they can earn the money from the work to care for the children. The fourth is government.

We have explicitly focused on public investments here today because that's what we were asked to do. We weren't asked to comment on things for families.

I would like to make it quite clear that the public investments I've talked about and that our council is recommending here are in no way substitutes for parental care. We have to make that understood. Kindergarten, child care, the kinds of programs for low-income kids such as feeding programs, access to medical drugs and dental care—these are things that help parents raise children. I don't know why people would consider them to be parental substitutes for children.

We turn out a magazine every year called The Progress of Canada's Children, and in that we emphasize the role that must be played by all four of those partners in creating good children. It's like a table: if you have one leg too short, then the table doesn't stand up; you have to have all four.

So I have no problem with that, but I think there are some needed public investments that are required to facilitate, to complement the role of parents, not to take away from them.

The Chairman: Ms. Atkin.

Ms. Wendy Atkin: I'd just like to point out that a recent Statistics Canada survey showed that more than 60% of mothers having children under five also needed to be in the paid labour force. With increasing reliance on the wages of the mother to support even double-income families, I don't think we can ignore the importance of public investment in family support such as child care. I also certainly don't think we should resort to blaming individual parents for making “bad” choices such as child care, because I for one believe that choosing to use quality child care is a good choice.

I would also like to remind you that for parents who choose to stay home, first of all, they obviously have the luxury of a high enough income that gives them that choice, and they are few and far between. Secondly, they are accessing a variety of community-based resources that enable them to get the kind of assistance they need to get their child through the day in a way that's going to stimulate their early learning potential. That includes community centres, recreation centres, public libraries, drop-in groups, family resource centres—a whole host of things that rely on a combination of volunteer and public investment.

Thank you.

The Chairman: Ms. O'Connor.

Ms. Martha O'Connor: Thank you for the question.

Certainly we at the foundation have experienced the very real and heartfelt responsibility that parents feel for their children. In no way do the programs that we espouse and support take away from that, especially in feeding children—that's a basic parental responsibility. The programs we are supporting and having out there have parents at the core, and parental control, and an openness to parental contribution. Parents want that control and they want that opportunity to contribute, because they feel that feeding children is a primary responsibility of theirs.

We do not want to be usurping parental responsibility, but rather, as the other people here have suggested, supporting them in fulfilling their responsibility in a way that doesn't usurp it.

Thank you.

The Chairman: Thank you. Ms. Forsyth—a very short answer.

Ms. Cecilia Forsyth: As I indicated in our presentation, Revenue Canada does clearly discriminate against single-income families, which by and large are the families where one parent chooses to stay at home to care for the children. This is a great contribution to Canadian society, for a parent to make that financial sacrifice. The majority of single-income families with a parent at home are struggling on a very limited income. They make that choice because they feel it is important to have one parent at home with their child to provide the ongoing, secure, constant emotional and loving care that only a parent can provide. No matter what amount of money anyone puts into paid child care, it cannot replace parental child care.

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I should also mention—and I think I touched on this—because of the high taxation, families are under great pressure, and that is a major reason that most women work. In a 1991 Decima poll, 70% of women said they would rather be at home with their children if they had the financial choice. That is why lowering taxes to leave more money in the hands of the taxpayer is so important. That will strengthen families more than anything.

Government programs have been around a long time. We have not addressed the root causes of poverty. All this other talk about children... Children belong in families. We support children by supporting families. The family is the only department of health, education, and social services that works.

The Chairman: Thank you very much, Ms. Forsyth.

[Translation]

Mr. Loubier.

Mr. Yvan Loubier: My question is for Mr. Trent or Mr. Laurencelle.

First of all, I would like to know if your organization, Dialogue Canada, believes in democracy. If it does, why is it that you were suggesting that $31 million extra be spent on the anti- sovereignist campaign in Quebec, on the pro-federalism campaign? Why are you suggesting that $31 million be added to the $100 million already spent by Information Canada, by Privy Council, for the distribution of flags and for the Canada Day budget, that has gone from $1.4 million in 1995 to $15 million this year, which is an increase of 1000%? How is it that your organization, that believes in democracy, as you seem to be saying, can make such a suggestion?

Mr. John E. Trent (Dialogue Canada): I believe that it is obvious that it is individuals who lie at the root of democracy. Individuals must be informed, they must have experience, they must have knowledge and they must have the possibility to know one another.

If you read our brief, or even the summaries that we handed out, you will see that we have no intention of increasing government spending to offer information or, as you say, to carry out propaganda. On the contrary, what we are suggesting is an exchange program that would allow Canadians to meet with and get to know each other. It is our hope that in this way we will be able to alleviate the tensions between regions, between linguistic groups and between different communities.

Mr. Yvan Loubier: Mr. Trent, does your policy also include giving out information to the rest of Canada on the sovereignist movement, on its deep roots, on the sovereignist project per se, on the democracy surrounding this project, on the partnership offer made by the sovereignists to the rest of Canada, on good agreements such as the Franco-German treaty that you mentioned as an example and that worked nicely? Have you read all of your texts from A to Z? Is your propaganda aimed in only one direction, its sole purpose being to extol federalism and, thus, to circumvent the Quebec referendum act, as was done in the past thanks to millions of dollars? In this case, it would be $31 million.

Mr. John E. Trent: Mr. Loubier, I hope that the Canadians who go and visit Quebec will get an understanding, among other things, of the aspirations of both sovereignty supporters and federalism supporters. They will draw lessons from the words of those who talk of partnership as well as from those who believe that this country, Canada, is the best country possible.

I also hope that Quebeckers will travel elsewhere in Canada to get an appreciation of the benefits they have already achieved in this great country and that they will also see that there is a lot of friendship and a lot of ignorance. All of this will benefit both these groups of citizens who will meet each other.

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Mr. Yvan Loubier: Your group, Dialogue Canada ,advocates the values of tolerance and democracy. How is it then that in the third paragraph of appendix B, you lump together the Bloc Québécois, the Parti québécois, the Ku Klux Klan, the Heritage Front and the Reform Party?

Mr. John E. Trent: I will have to read that again.

Mr. Yvan Loubier: In the third paragraph of appendix B, you state:

[English]

“There are many strong and active groups”...

[Translation]

Mr. John E. Trent: Excuse me. Is this in appendix B?

Mr. Yvan Loubier: Yes, in the third paragraph, and I read here that in the 1990s:

[English]

There are many strong and active groups representing the cleavages in our society. The separatism of the PQ and the Bloc Québécois...

[Translation]

Further down, you talk of the Mouvement national des Québécois, of the Reform Party, of the Heritage Front and of the Ku Klux Klan.

Mr. John E. Trent: On what page again?

Mr. Yvan Loubier: It is the third paragraph of the first page of appendix B. You talk in the same paragraph of what you call the strong and very active groups that represent the cleavages in our society. You lump together the Parti québécois, the Bloc Québécois, the Mouvement national des Québécois, the Heritage Front and the Ku Klux Klan, the latter being groups that believe in the supremacy of Whites.

Mr. John E. Trent: I believe that it is obvious when we talk of cleavages in our society.

Mr. Yvan Loubier: And you lump together political parties, created by like-minded people and that voters have voted for, and racist and White supremacist groups. You find that normal and obvious?

Mr. John E. Trent: Perhaps it is the groups themselves who should be looking at what is obvious. It is our belief that some members of our society are fostering cleavages. Our meaning here covers both anglophones and francophones.

Mr. Yvan Loubier: And you believe that in laying things out in this way and in presenting yourselves as a group that believes in democracy and tolerance, you are going to succeed in diminishing these cleavages? You believe that you are enlightening people when you put duly constituted political parties and Canadian and international racist groups in the same bag? Is that how you see yourselves contributing to the education of the public and to a rapprochement between Canadians and Quebeckers?

Mr. John E. Trent: I believe that you have seen in here that we are placing these groups that have racist attitudes back to back, on both sides, be they anglophone or francophone. I believe that what is important...

[English]

The Chairman: Mr. Harris.

Mr. Dick Harris: On a point of order, Mr. Chairman, I have now begun to read this document presented by Dialogue Canada, prepared by Mr. Chris Gill and Mr. John Trent, who is with us today, and I have to tell you that I find the third paragraph of this brief absolutely unacceptable and it deserves no place at these committee hearings.

Mr. Chairman, I ask that this document be withdrawn immediately and a formal apology be received from Mr. Trent for the presentation of this document, right now.

To link the Reform Party and the Bloc Québécois and other groups with organizations like the Heritage Front, the Ku Klux Klan... I am ashamed that you have come to this meeting with this type of a document, sir.

[Translation]

The Chairman: Mr. Loubier.

Mr. Yvan Loubier: Mr. Chairman, I support the request made by the Reform Party. I find it most unfortunate that an organization that presents itself as one aimed at fostering rapprochement would lump together racist groups, criminal groups and duly constituted political parties, driven by a deep attachment to democracy, that wish to promote their ideas through democratic means and not through confrontation, that want the democratic debate to be enlightened and not muddied, contrary to what Dialogue Canada is attempting to do while having us believe the contrary. I find that absolutely unacceptable and I agree with my colleague from the Reform Party. This document must be withdrawn. I find it abominable that this type of thing be tabled here.

I apologize to our other guests, because with this type of stupidity, one overlooks those problems which are fundamental in Quebec and Canadian society.

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[English]

Ms. Paddy Torsney: If I might, I haven't had a chance to read the whole document. And while I certainly might not agree with its content, I'm not sure how you ask someone to withdraw something from the public record. You can disagree with it—I can disagree with many of the organizations, but I'm not sure how you ask them to withdraw something.

Mr. Dick Harris: Mr. Chairman, in my point of order I'm very specific and clear. I want this document withdrawn and I would like a formal apology from the Dialogue Canada group.

The Chairman: Your point of order is duly noted.

Mr. Trent.

Mr. John Trent: I would just like to repeat that if one reads the language of the document clearly, there is only one intent, and that is to say that there are many groups in Canada—and the language is used—that push for division and cleavages within the Canadian community. We are not putting these groups back to back for other purposes than that. That is the only thing we have claimed and it's the only thing we say in the document. We are underlining the one issue.

I think it's about time that we recognize, Mr. Chairman, that there are groups that are promoting cleavages in Canadian society and that because of that we need to invest in elements that permit citizens of Canada to know each other and to rise above the cleavages. That is all we have said and we say no more. We are not talking about other elements of these organizations.

The Chairman: Thank you, Mr. Trent.

A final comment from Mr. Loubier.

[Translation]

Mr. Yvan Loubier: Mr. Chairman, the fact is that, in this paragraph, mention is made of active and strong groups representing the cleavages in our society and political parties are lumped in with White supremacist groups such as the Ku Klux Klan and the Heritage Front. This is absolutely unacceptable. In politics, appearances count for 95% and content counts for 5%. In the case of this paragraph, both appearances and content place the Bloc Québécois, the Parti québécois, the Reform Party and the Ku Klux Klan on the same plane.

I will never accept that a standing committee of the House of Commons... The House of Commons represents our representativeness. Our democratic system respects our representativeness and, by extension, I will never accept that a committee of the House refuse our democratic representation and treat us as racists, on the same footing as racist groups such as the Ku Klux Klan. I therefore renew the request made by my colleague from the Reform Party that appendix B be withdrawn. I find it absolutely unacceptable.

Furthermore, they add fuel to the fire by saying that we must recognize that there are groups that are fostering cleavages. Frankly...

[English]

The Chairman: We heard the presentation. The witness may withdraw the document if he would like to do so.

Mr. John Trent: Mr. Chairman, if it has created misunderstanding, which is not our intent and we do not believe is the intent of the words, and they wish the appendix B to be withdrawn, we would be in agreement with that, if they wish to do that, because we think that what is of essence in it and which we fear the two parties are trying to overcome is what we are proposing in our program for exchanges. We find it very sad that taking one paragraph out of context and out of intent is avoiding the discussion of our real objective, which, as you can see from our primary document, is the promotion of exchanges between Canadians.

The Chairman: I think the point is well taken.

Mr. Loubier.

[Translation]

Mr. Yvan Loubier: We are not trying to overlook anything. We are trying to get at the heart of the matter. If I had not read all of the document and seen how you treat political parties and democracy, lumping all of us together with the Ku Klux Klan, I might have been somewhat complacent. But I would not have accepted your project because for me, these $31 million will be spent on directly countering the Quebec sovereignist project.

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As I read the document, I saw what lies behind your request. I saw what type of analysis you do. I saw what type of analysis is hidden behind your noble feelings of compassion and your desire of a rapprochement between the various elements of Quebec and Canadian society. That is what completely turned me off. That is not circumventing things, it is calling things by their name. That paragraph has really enlightened me as to the nature of your group.

[English]

The Chairman: Thank you very much for your comment. I think the document has been withdrawn, so this issue has been dealt with.

Mr. Dick Harris: Mr. Chairman, the second half of my point of order has not been dealt with yet—

The Chairman: Which is—

Mr. Dick Harris: —requesting a formal apology from the organization for presenting this document.

The Chairman: I think Mr. Trent has stated that he's withdrawing it based on a misunderstanding.

Mr. Dick Harris: No, it's not based on misunderstanding. I understand very clearly what paragraph three says and I understand very clearly what the intent of the inclusion of that paragraph was, and I did ask for an apology as well.

The Chairman: Mr. Trent, is there an apology forthcoming?

You don't feel that the withdrawal of the document will suffice?

Mr. Dick Harris: No.

The Chairman: Ms. Torsney.

Ms. Paddy Torsney: Are we on to another round of questions?

The Chairman: No, this will be it.

Ms. Paddy Torsney: I really think that while I may disagree with certain aspects of a presentation, there are other presentations that have been presented to this committee that I disagree with vehemently as well. In all fairness, this committee is not about censorship and we can't limit people's thoughts and writings and it's tabled as an appendix to the document. It's already been withdrawn, so it's not even on the table. I think the person already has said they are sorry if there was any misunderstanding in their presentation.

The Chairman: That's what I heard.

Ms. Paddy Torsney: Am I going to ask one of the other groups whose position I disagree with to please withdraw it, I disagree with you? That's inexcusable. You just disagree. You ask them questions to highlight the differences and you move on.

The Chairman: Mr. Loubier.

[Translation]

Mr. Yvan Loubier: Mr. Chairman, I would like to add something. If it had been the Liberal Party of Canada, the Parti québécois, the Bloc Québécois, the Reform Party and the Ku Klux Klan that had been lumped together, would Ms. Torsney have had the same conciliatory attitude?

[English]

The Chairman: Ms. Torsney, I'm going to deal with this by myself.

In my opinion, the issue has been resolved by the withdrawal of the document.

On behalf of the committee I would like to thank all members of this round table. You've raised some very interesting points. The challenge we face on this committee, of course, is that we do live in a new economic era and that for the first time in a long time we're looking at the issue of fiscal dividends. The suggestions you have made have given us some important information to review, and I'm sure that some of the thoughts and ideas expressed by this round table will form part and parcel of the report to the Minister of Finance. On behalf of the committee, thank you very much.

The meeting is adjourned.