FINA Committee Meeting

Notices of Meeting include information about the subject matter to be examined by the committee and date, time and place of the meeting, as well as a list of any witnesses scheduled to appear. The Evidence is the edited and revised transcript of what is said before a committee. The Minutes of Proceedings are the official record of the business conducted by the committee at a sitting.

For an advanced search, use Publication Search tool.

If you have any questions or comments regarding the accessibility of this publication, please contact us at accessible@parl.gc.ca.

Previous day publication Next day publication

37th PARLIAMENT, 2nd SESSION

Standing Committee on Finance

EVIDENCE

CONTENTS

Tuesday, November 5, 2002

0900

The Vice-Chair (Mr. Nick Discepola (Vaudreuil—Soulanges, Lib.))

Dr. Allan Tupper (Associate Vice-President, University of British Columbia)

0905

The Vice-Chair (Mr. Nick Discepola)

Dr. Jean-Michel Poutissou (Associate Director, TRIUMF)

0910

0915

0920

The Vice-Chair (Mr. Nick Discepola)

Mr. Daryl Smith (Chief Executive Officer, Pacific Coastal Airlines Limited)

The Vice-Chair (Mr. Nick Discepola)

Mr. Daryl Smith

The Vice-Chair (Mr. Nick Discepola)

Mr. Daryl Smith

0925

0930

The Vice-Chair (Mr. Nick Discepola)

Mr. Doug McCallum (Chair, Mayor of Surrey, Greater Vancouver Transportation Authority)

0935

0940

The Vice-Chair (Mr. Nick Discepola)

Mr. Philip Owen (Mayor, City of Vancouver)

0945

0950

The Vice-Chair (Mr. Nick Discepola)

Ms. Sophia Leung (Vancouver Kingsway, Lib.)

Mr. Philip Owen

Ms. Sophia Leung

Mr. Philip Owen

Ms. Sophia Leung

Mr. Philip Owen

Ms. Sophia Leung

0955

Mr. Doug McCallum

Ms. Sophia Leung

Dr. Allan Tupper

1000

Ms. Sophia Leung

The Vice-Chair (Mr. Nick Discepola)

Ms. Sophia Leung

Dr. Jean-Michel Poutissou

Ms. Sophia Leung

Dr. Jean-Michel Poutissou

The Vice-Chair (Mr. Nick Discepola)

Mr. Roy Cullen (Etobicoke North, Lib.)

Mr. Dave Menzies (President, Hawkair)

1005

Mr. Roy Cullen

Mr. Dave Menzies

Mr. Roy Cullen

Mr. Daryl Smith

1010

Mr. Roy Cullen

Mr. Daryl Smith

Mr. Roy Cullen

Mr. Philip Owen

The Vice-Chair (Mr. Nick Discepola)

Mr. Philip Owen

The Vice-Chair (Mr. Nick Discepola)

Mr. Roy Cullen

1015

Mr. Doug McCallum

The Vice-Chair (Mr. Nick Discepola)

Mr. Shawn Murphy (Hillsborough, Lib.)

1020

Mr. Daryl Smith

Mr. Shawn Murphy

Mr. Daryl Smith

Mr. Shawn Murphy

Mr. Daryl Smith

Mr. Shawn Murphy

Mr. Daryl Smith

Mr. Shawn Murphy

Mr. Daryl Smith

Mr. Shawn Murphy

Mr. Daryl Smith

Mr. Shawn Murphy

1025

Mr. Daryl Smith

Mr. Shawn Murphy

Mr. Daryl Smith

Mr. Shawn Murphy

Mr. Daryl Smith

Mr. Shawn Murphy

The Vice-Chair (Mr. Nick Discepola)

Mr. Shawn Murphy

Mr. Daryl Smith

Mr. Shawn Murphy

1030

Mr. Daryl Smith

Mr. Shawn Murphy

The Vice-Chair (Mr. Nick Discepola)

1045

Mrs. Janice Loomer Margolis (Communications Manager, Canadian Association of Gift Planners)

1050

The Vice-Chair (Mr. Nick Discepola)

Ms. Sheila Davidson (Executive Director of Child Care, SFU Children's Centre, Simon Fraser University; Coalition of Child Care Advocates of B.C.)

1055

The Vice-Chair (Mr. Nick Discepola)

Ms. Penny Perlotto (Executive Director, Houston Friendship Centre Society)

Mr. Carl Mashon (Senior Programs Director, B.C. Association of Aboriginal Friendship Centres)

1100

The Vice-Chair (Mr. Nick Discepola)

Mr. Keith Peterson (President, Nunavut Association of Municipalities)

1105

1110

1115

The Vice-Chair (Mr. Nick Discepola)

Mr. Keith Peterson

The Vice-Chair (Mr. Nick Discepola)

Mr. Shawn Murphy

Ms. Janice Loomer Margolis

Mr. Shawn Murphy

Ms. Janice Loomer Margolis

Mr. Shawn Murphy

1120

Ms. Penny Perlotto

Mr. Shawn Murphy

Ms. Penny Perlotto

Mr. Shawn Murphy

Ms. Penny Perlotto

Mr. Shawn Murphy

Ms. Penny Perlotto

Mr. Shawn Murphy

Ms. Penny Perlotto

Mr. Shawn Murphy

Mr. Keith Peterson

Mr. Shawn Murphy

Mr. Keith Peterson

Mr. Shawn Murphy

Mr. Keith Peterson

Mr. Shawn Murphy

Mr. Keith Peterson

Mr. Shawn Murphy

The Vice-Chair (Mr. Nick Discepola)

Ms. Sophia Leung

1125

Ms. Sheila Davidson

Ms. Sophia Leung

Ms. Sheila Davidson

Ms. Sophia Leung

Ms. Penny Perlotto

1130

Ms. Sophia Leung

Ms. Penny Perlotto

Ms. Sophia Leung

Ms. Penny Perlotto

Ms. Sophia Leung

Mr. Keith Peterson

Ms. Sophia Leung

Mr. Keith Peterson

Ms. Sophia Leung

Mr. Keith Peterson

Ms. Sophia Leung

The Vice-Chair (Mr. Nick Discepola)

Mr. Roy Cullen

Ms. Janice Loomer Margolis

The Vice-Chair (Mr. Nick Discepola)

Ms. Janice Loomer Margolis

The Vice-Chair (Mr. Nick Discepola)

Mr. Roy Cullen

Ms. Janice Loomer Margolis

1135

Mr. Roy Cullen

Ms. Janice Loomer Margolis

Mr. Roy Cullen

Ms. Sheila Davidson

Mr. Roy Cullen

1140

Ms. Sheila Davidson

Mr. Roy Cullen

Mr. Keith Peterson

Mr. Roy Cullen

Mr. Keith Peterson

Mr. Roy Cullen

Mr. Keith Peterson

Mr. Roy Cullen

1145

Mr. Keith Peterson

Mr. Roy Cullen

Mr. Keith Peterson

Mr. Roy Cullen

The Vice-Chair (Mr. Nick Discepola)

Ms. Sheila Davidson

1150

The Vice-Chair (Mr. Nick Discepola)

Ms. Sheila Davidson

The Vice-Chair (Mr. Nick Discepola)

CANADA

Standing Committee on Finance

NUMBER 016

2nd SESSION

37th PARLIAMENT

EVIDENCE

Tuesday, November 5, 2002

[Recorded by Electronic Apparatus]

¿ (0900)

[English]

The Vice-Chair (Mr. Nick Discepola (Vaudreuil—Soulanges, Lib.)): Pursuant to Standing Order 83(1), we will now resume the pre-budget consultations.

This morning I am pleased to welcome, from the City of Vancouver, Mr. Philip Owen; and from the Greater Vancouver Transportation Authority, Mr. Robert Paddon, vice-president, corporate and public affairs. We are awaiting the arrival of His Worship, Mayor of Surrey, Doug McCallum.

From Pacific Coastal Airlines Limited we have Mr. Quentin Smith, president; Mr. Daryl Smith, CEO; and Mr. Dave Menzies, operations manager from Hawkair. From TRIUMF, we have Dr. Jean-Michel Poutissou; and from the University of British Columbia, Dr. Allan Tupper, associate vice-president, government relations. Welcome to all of our presenters.

The format is roughly seven- or eight-minute presentations by everyone, in order to leave ample room for our members of Parliament to ask questions.

There won't be any members of the opposition parties here today. There were two yesterday. They were called back for the vote at 3:30 p.m., Ottawa time.

This is our second day of hearings. We'll move on this afternoon to Calgary, then to Saskatoon and Winnipeg. My colleague, the chairman, Sue Barnes, is heading a similar group out east, culminating in hearings in Montreal and Toronto.

I'd like to welcome everyone. We'll probably start in reverse order, to try to accommodate the arrival of His Worship McCallum. So maybe we'll start with Dr. Tupper. Welcome.

Dr. Allan Tupper (Associate Vice-President, University of British Columbia): Bonjour mesdames et messieurs. Bienvenue à Vancouver.

I'm Allan Tupper from the University of British Columbia, and I want to thank the committee for meeting with me this morning. I'd like to pass on Dr. Piper's regrets. She was delayed in Toronto yesterday and regrets being unable to attend.

There are essentially two points I'd like to make, and I'll try to make them quickly, so the other colleagues here can speak.

First, as committee members know, the Government of Canada has made major investments in Canadian universities over the past decade. These major investments include the Canada Foundation for Innovation, the Canada Research Chairs, and the Canadian Institutes of Health Research, to cite just a few. These bold programs allow Canadian universities to undertake pioneering research at the highest international levels. In turn, stronger university research builds Canada's economic competitiveness.

I want to give you some sense of the results of the expenditures that have been put in place over the last seven or eight years.

First of all, research infrastructure at Canadian universities is much stronger. Secondly, Canada is now much more attractive to outstanding researchers. We can recruit and retain top talent at a time of unprecedented competition. In many instances, Canadian researchers have returned home to take advantage of the greatly enhanced research capacity in our universities and in the private sector.

Improved research infrastructure and a capacity to recruit top talent reinforce each other. Canada is becoming a magnet for new research investment and top researchers.

Another thing has happened, and this is very important. These substantial federal investments over the last decade allow universities to better commercialize their research. That means university research more frequently and more quickly becomes commercially viable goods, services, and therapies.

I just want to speak briefly about University of British Columbia's record in this area. Canadian Business Magazine noted in September 2002 that UBC registered more patents than any other jurisdiction in Canada. UBC research has also produced large numbers of spinoff companies, and over the past five years we have consistently ranked among the top ten North American universities. Over the last five years as well, more than 45 spinoff companies have resulted in biotechnology firms in greater Vancouver. So the proof is there.

With this greater federal investment in recent years, regional and provincial economies have also benefited. Federal investment, through Genome Canada and provincial initiatives, make British Columbia a prime location for transformative life sciences research. So we've made substantial progress.

The question is, what is the next step? We need to maintain the momentum, and that leads to the major proposal we advance today. We're here to reinforce the general proposal that's been advanced nationally for a federal program that funds the indirect cost of research.

Just very briefly, I want to explain the issue of the indirect cost of research. It's quite simple. The federal research granting agencies that fund most university research in Canada pay for only certain costs of research. They do not fund such things as wear and tear on laboratories and the physical plant, costs for expensive computing and library resources, compliance costs associated with more complex regulation, and costs associated with the research and transfer of research to business. These are just a few of the examples. The full cost of research, in other words, is the sum of the federal grants to universities and the indirect and unfunded costs I just spoke to.

Consider the following. UBC estimates that each $100 million of federal research grants generates $40 million of unfunded indirect costs. Remember too that shortfalls of this magnitude have persisted across Canadian universities for decades.

A program of federal funding for the indirect costs of university research would first of all strengthen Canada's economic competitiveness and research and development capacity.

¿ (0905)

The point I'd like to stress to members is that Canada's major economic competitors, notably but certainly not exclusively the United States, have paid the indirect costs of university research for many years. I'd also indicate to the committee that private firms that contract with Canadian universities for research also pay indirect costs. So this would put us on a level playing field with the other advanced countries of the world.

Secondly, a program of indirect cost funding would further strengthen university research. We'd be able to capture even more research funding and build closer links with governments and industries.

Finally, and very importantly, a program of funding for indirect costs will greatly benefit Canadian students. Here a very simple question arises. Who has paid the unfunded costs of research in Canada for decades? The answer is pretty straightforward, in one sense, that a generation of students has indirectly borne the burden of indirect costs.

That is a result that is very unintended. Let me explain very briefly. To fully fund essential research, universities have to use money that ought to have gone to student services, teaching, and libraries, just to cite a few examples. Just think of it in terms of operating a large enterprise of any sort that continues to go forward, year after year, having in effect to reallocate moneys to pay for something that's not fully funded.

Then the question is, with an indirect cost program in place, think of what universities can do about the very heavy questions of access to them and the quality of education within them.

The last point I want to make, and very quickly, is that in the 2001 federal budget, the Government of Canada provided universities with a one-time allocation of funds for the indirect cost of research, to the tune of $200 million. It was a very substantial allocation in light of the arguments you've just heard. UBC's share was about $14 million.

What I want to show you is this document, and I've distributed it. It's a very modest one, but it shows that even before the end of the fiscal year, we have put out a statement of public accountability about how we spent those $14 million. This is something that gives a very, very detailed allocation of the benefits received by the students, by the university community, and by the public at large, such that governments and taxpayers will know exactly where their moneys are going.

As I said, if you study the document, you'll see it's not a general statement. It can tell you how much money went into student space renovation in the business building at UBC, which is getting right down to the heart of it.

In conclusion, a program for funding the indirect costs of research is our first priority for the next federal budget. With your support, a substantial program for indirect costs will finally become a reality. Our present and future students will be in your debt.

Thank you very much.

The Vice-Chair (Mr. Nick Discepola): Thank you, Dr. Tupper.

[Translation]

I will now ask Mr. Jean-Michel Poutissou to make his presentation.

Welcome.

[English]

Dr. Jean-Michel Poutissou (Associate Director, TRIUMF): Merci beaucoup.

I would like to give you a presentation on TRIUMF, on behalf of our director, who is actually in Ottawa today seeing some of your colleagues and could not be here. So he asked me to represent the laboratory.

I'm here before you because TRIUMF is a large laboratory on the campus of UBC, which receives funding from the federal government every five years. It is a laboratory on subatomic physics, which is a field of physics dealing with the smallest component of matter. It's funded by the federal government on a five-year plan basis. We are just in the middle of the plan from 2000 to 2005, and getting ready to put a submission to define our operation over the next five-year plan from 2005 to 2010.

The Province of British Columbia matches some of this funding and provides us with the building for housing the facilities. We are managed by a consortium of 11 universities at the moment. It's a unique arrangement in Canada, and we are monitored by the National Research Council of Canada.

The laboratory employs 350 employees and 40 graduate students. It's a user facility, meaning we are open to any user who has a good idea that can go through an international peer review. We typically have 500 users who come from all over the world. We also employ 70 undergraduate co-op students from various universities every year. So that's, very quickly, the laboratory.

The universities involved are UBC--obviously the founding member--the University of Alberta, Simon Fraser University, the University of Victoria, and Carleton University, which just joined two years ago. These are the universities that have formed the joint venture and are fiscally responsible for the laboratory.

We have associate members. These are universities that have a large interest in subatomic physics. They include the University of Manitoba, McMaster University, the University of Montreal, Queens University, the University of Regina, and the University of Toronto.

This is the framework. We do subatomic research, which is based on a large cyclotron accelerator. It includes not only subatomic research per se, but derived activities that use the same technologies and techniques of nuclear physics, in material science and life sciences.

Recently, we developed a facility that is unique in the world called ISAC. It is a radioactive beams facility that is acknowledged as being the best of its kind in the world. It is attracting many users from all over the world.

We have also been charged by the Canadian government to contribute to the global accelerator project being built in Geneva, in which Canadian physicists want to participate.

We also have a mandate to provide major infrastructure support to Canadian physicists who want to participate in physics in accelerators abroad. In our field, there are only a few large accelerator systems being developed in the world, and you have to go to the facility that caters to your physics the best.

We are also charged by the federal government to pay attention to the transfer of technologies that could arise from our activities, and maintain a good interaction with Canadian industries.

Unfortunately, my talk was prepared for a visual presentation, so I have very nice pictures that I won't be able to show you.

On what we are studying, there are a number of fundamental questions that we are trying to address in our research. We are trying to understand the origin of matter in the universe: where we came from, and where the matter we are made of came from. You may know that we are made from the ashes of a big star that exploded in the universe, so although we have access to the ashes, we are trying to understand where the fires are that are producing these ashes in the universe. That's what we call nuclear astrophysics.

The ISAC facility we just developed allows us to get access to unique materials that we call radioactive material, unstable nuclei, which are key in defining the composition of the ashes we are made of.

¿ (0910)

If you want to understand why we have so much oxygen and carbon in the present environment, it's because of certain properties of certain novas, certain supernova explosions that occurred in the universe many billions of years go. That's what we are trying to understand with this facility.

There are many other questions that I mention here. Why do we exist in the first place? If you look at the composition of the universe, right after the big bang it had as much antimatter as matter, and there must been a small deficiency in antimatter to make sure there was a surplus of matter from which we are made. So these are very fundamental questions that we are trying to address.

The tools we are using to do that are the most powerful microscopes we can build. These are based on particle accelerators. These are very powerful machines that are accelerating tiny, tiny objects to speeds that are very close to the speed of light. Essentially, we are just hitting some other elements and trying to understand the various components in these elements.

We also use the most sophisticated detection systems. To look at these very tiny components, we are now producing detectors that are in the $500-million type of expenditure range and are built by global teams all over the world. Most of our teams are multidisciplinary and international. Because of that, we need global communication, and it's our field that essentially developed, in the 1960s and in the beginning of the 1970s, a means of communication called the World Wide Web, just to be able to link all these teams and be able to operate together. Recently we have developed at TRIUMF a means of communicating with our colleagues at CERN, in Geneva, through a lightpath, which I will talk about a little bit later.

So what is our scientific impact? The main scientific impact at the moment is trying to understand the nuclear reactions that occur in very big explosions, like supernovas, novas, x-ray bursters, gamma ray bursters. We are trying to bridge the gap between the astronomical observations, which are made in certain wavelengths--visible, x-rays, and so on--and the basic physics that operate in these very explosive events in the universe. This is the fundamental research we do.

On the other hand, we have some techniques, some technologies, that allow us to do very unique research--I cited two examples in particular in my written presentation--involving the tracers that are used to determine the properties of high-temperature superconductors, which will probably form the next generation of magnet and transport for electricity in the future.

We're also using our capability of producing these very unusual isotopes to do medical research. Tracers in medical research at the moment are used both for diagnostics and for therapies. It's considered that in the U.S., for example, one in three diagnostic procedures involves a nuclear procedure. We are one of the main centres for producing isotopes in the world. We have a company on site, which is essentially MDS Nordion, that is generating about $20 million worth of products that are sold all over the world, in terms of medical diagnostic tools.

Obviously, I cannot show you nice pictures of supernovas and all those things.

We are linked also with the space program. The first reaction we just studied at the new ISAC facility gives direct information to a mission that was just launched on October 17 from the Baikonur site in Russia by the European Space Agency, which will be looking for these very same gamma rays, following nova explosions in the universe. We provide them very basic information for understanding what they will be able to observe, for this is fundamental physics.

I have to skip a few things. In terms of international collaboration, we are providing components for this global accelerator at CERN in Geneva, where about 70 Canadian physicists would like to participate in a global experiment that will start in 2007. As an entry fee, if you want, in this $3 billion accelerator, Canada has pledged to produce some components. Some of them are being built by Canadian industry, in particular a company called ALSTOM in Tracy, Quebec, where we are producing $11 million worth of magnets, which are very high-precision magnets. We had to train the company to build these sophisticated elements, and these magnets are now being shipped at the rate of two per month to Geneva. That will be completed in about two years.

¿ (0915)

Why is this type of fundamental research important? It's because of the expertise we have brought to the laboratory to be able to produce these results--accelerator technologies, radio frequencies, vacuum systems, magnets, superconductors, diagnostic tools--which then have found their way to other fields. There are about 100,000 accelerators in the world. Only about 100 of them are used for fundamental research. All the others are used in various other activities--medical, production of isotopes, all kinds of things.

The difficult technologies we are using are developed to the point where they then can be transferred almost immediately to research in other branches. For example, the camera you use when you are undergoing a positron emission tomography is exactly the detector we used twenty years ago in our experiments, and we have transferred this technology to the medical field now.

Information technology is obviously a very key part of our operations, because we have these international teams. Two months ago we demonstrated that we can transfer the equivalent of one CD per second to CERN, which is 12,000 kilometres away. We did that for three hours, as a test. That's what we will have to do when we get our new facility in Geneva and we have to interact with our colleagues over there. This was a world record for the amount of information transferred per second across the world, and that involved many participants, such as CANARIE, BCNET, all kinds of information technologies.

Just to conclude, since I'm at the end of my seven minutes, we are involved in global research. We are a user facility, open to anyone in the world as long as they have a good idea and they can demonstrate through the international committee that this is a unique experiment. We are involved in a global project in CERN, which will have the most powerful accelerator built by 80 countries and 500 universities, and we'll start to operate in 2007.

TRIUMF is a leading laboratory in subatomic physics. We are the world leader in exotic beams from the ISAC facility. There is no capability like that in the world. We provide national and international leadership in advanced technologies. We provide all Canadian universities with a springboard to be able to collaborate in these international enterprises, and we have excellent linkages with Canadian industry to transfer the knowledge that is developed in our sophisticated environment.

Thank you very much for your attention.

¿ (0920)

The Vice-Chair (Mr. Nick Discepola): Thank you very much, Doctor.

It's not that you were at the end of your first seven minutes, it's that you were approaching the end of your second seven minutes. I had to put a little pressure on you. I apologize.

Who will be presenting on behalf of Pacific Coastal Airlines?

Mr. Daryl Smith (Chief Executive Officer, Pacific Coastal Airlines Limited): I will.

The Vice-Chair (Mr. Nick Discepola): Thank you. Go ahead, Mr. Smith.

Mr. Daryl Smith: Thank you, Mr. Chairman.

I'm here on behalf of seven regional carriers in addition to Pacific Coastal Airlines. They've asked me to tell you that they support the statements I'm about to make. They are: North Vancouver Airlines, Shuswap Air, North Caribou Flying Service, Northern Thunderbird Air, Central Mountain Air, Canadian Western Airlines, and Kelowna Flight Craft.

Mr. Menzies is here on behalf of Hawkair, and we will be available for questions following my talk, and I'll try to keep it under 25 or 30 minutes.

This makes a total of eight....

The Vice-Chair (Mr. Nick Discepola): [Editor's Note: Inaudible]

Mr. Daryl Smith: I'd be too; it's amazing, you know. I've been limping around for several weeks with a very badly sprained ankle and I just found out it's broken, so my doctor and I had a good laugh.

That makes eight regional carriers, Mr. Chairman, that are in full agreement that the air travellers' security charge introduced in the last budget is unfair and discriminatory, and that's the main purpose for our presence here today. We delivered our submission to the committee in Ottawa last week. This morning, in the limited time available, I'm simply going to highlight the main points of our submission to you.

First, I'd like to refer to this committee's pre-budget report last year. The committee made an argument that the government should be involved in airline security, and the need was stressed to make current practices more effective. Let me tell you what happened in our experience.

The government is involved in security by levying a charge of $24 for a return ticket. At airports we serve, security practices have not improved. In most cases there was no security screening before this charge was imposed, and there is still no security screening.

My own airline operates from the south terminal at Vancouver International Airport, which is distinctly different from the main terminal. There is no passenger screening at the terminal. Security has not been enhanced in the last year. I'd like to elaborate on this issue during a question period, if you would like to ask us questions about that. We do not use security screening at the other airports we serve in British Columbia. Similar situations apply to the other airlines who are supporting this message.

In reply to our letter of December 12, 2001, former finance minister Paul Martin stated: “The charge will not apply at airports where the government will not be providing enhanced security.” I'm here to tell you that security has not been enhanced at our airports, and the fee has been collected since it went into effect in April. That is just the first issue. The charge makes a liar out of Paul Martin and the Liberal government.

We've raised several other equally valid concerns. One, the charge is extremely regressive for short-haul carriers like ourselves. It's not fair to levy the same charge on a ticket from Vancouver to Victoria as, for example, from Vancouver to Halifax.

Two, the charge amounts to double taxation for many journeys that require two tickets. This includes connecting travel that doesn't fall within Air Canada's code-sharing system.

Three, the charge is unfair and inconsistent compared with security charges for other forms of transportation. Why should the air traveller be singled out for user-pay treatment? The international truckers, the bus passengers, the drivers of automobiles don't face user charges for enhanced cross-border security. It's just airline people who pay.

We're about to conclude that the government policy discourages air travel through charges. Officially the government says it encourages air travel. In fact the government is driving away business from the air carriers--I have statistics available as a handout, so we have actual proof--particularly since April 1 last year.

Let me tell you about the communities we serve, Mr. Chairman. Most of them depend on the forest and fishing industries. These industries are virtually on their knees in this province. Mills are closing down all the time. Our tourist travel industry is also suffering. You could confirm that through the Victoria tourist bureau, to see how dramatically tourism has been down in the last year in Victoria.

Every little community is scratching to make ends meet. We've had regular customers tell us they will no longer be flying between Vancouver and the outlying communities with their families because the round-trip charges for security fees exceed the cost of the ferry ride plus the fuel for their car.

We agonize every time we have to raise our fares by even two dollars. Yet in the past few years, we've had Nav Canada thrust upon us, which is a navigational service we thought we'd already paid for. We paid the federal government, for years, landing fees and taxes to provide for navigation. The feds decided to sell it, and now we're paying for it again. As an example, for six of our aircraft it costs me $3,600 a day--just for the six airplanes.

The feds have divested themselves of airports; ergo, we get user fees, taxes, landing fees, terminal fees, and airport improvement fees levied from each and every airport we go to.

¿ (0925)

The fuel tax, which goes directly to general revenue, remains unchanged, yet we get nothing in return. Everywhere we turn we have new user pay charges, and now this exorbitant $12 security fee.

The Mayor of Port Hardy has pointed out that many residents of his community depend on air travel, and a security charge will force them to curtail travel for medical care and food supplies. This is true of many communities we serve.

Quotes from other communities are included in the schedule provided. I have it here for anyone who is interested. I think it's been distributed.

The committee has a responsibility for the legislation that's enacted to enforce tax policy and user charges, including this charge. That responsibility, I submit, includes ensuring that the statutes are sufficiently clear and precise to provide citizens with an understanding of what is expected of them by the law.

Mr. Chairman, let me quote for you part of section 5 of the Air Travellers Security Charge Act:

A journey that would, if this Act were read without reference to this section, be a continuous journey of an individual that includes more than one chargeable emplanement by the individual at a particular listed airport is, despite any other provision of this Act, deemed

(a) not to be a continuous journey; and

(b) to be a series of separate continuous journeys each of which commences with the second and any subsequent chargeable emplanement from the particular listed airport.

I don't understand what this says. Our lawyer doesn't understand what it means. Four months have passed since we asked Mr. Manley what it means. He doesn't know either, I guess, because he's never replied to our letter. The whole thing is disgraceful.

Mr. Chairman, I have with me a schedule of I think 17 supporting documents. With your permission, I'll table them for the information of the members. As some of these documents show, we were pleading with the government not to impose this charge well before it went into effect. We continued to make our case throughout the past year. We have not been heard. The government, it seems, is not interested in listening, and it makes me damned angry.

I'll conclude my comments by referencing the particular questions you've asked all witnesses to address in these hearings.

The government can best assure the highest quality of life for all, including even those in remote communities; best assure greater levels of prosperity widely shared by all Canadians, including even those in remote communities; and create and maintain a business environment favourable to growth and trade, including even in remote communities, by eliminating the air travellers security charge.

We ask that you do what you can as a committee and as individual members of Parliament to correct this grossly unfair punitive measure.

Thank you. We will be glad to answer questions.

¿ (0930)

The Vice-Chair (Mr. Nick Discepola): I'm sure there will be some questions, Mr. Smith. I thank you very much for your presentation.

From the Greater Vancouver Transportation Authority, His Worship McCallum. Welcome.

Mr. Doug McCallum (Chair, Mayor of Surrey, Greater Vancouver Transportation Authority): Thank you very much, Mr. Chairman and members of the committee.

The Greater Vancouver Transportation Authority is pleased to provide this submission to the House of Commons Standing Committee on Finance, setting forth our advice on how Canada can best assure greater levels of economic prosperity widely shared by all Canadians, and how the government can best assure the highest quality of life for us all.

By way of background, the Greater Vancouver Transportation Authority, which is also known as TransLink or the GVTA, was established in 1999, as a single, accountable authority exercising local government control over transportation planning, policy, service levels, budgets, and financial arrangements. I might add that it's also an integrated approach, meaning that some bridges and roads are also part of the system, and not just transit. We truly are an integrated transportation agency.

First of all, the GVTA develops required public transportation infrastructure. Second, it coordinates and ensures the delivery of transit services throughout its operating subsidiaries and contracts. Third, it supports and develops a network of 2,100 lane-kilometres of regional roads and bridges. Fourth, it administers the region's vehicle emissions testing system, which is called AirCare.

The GVTA represents 21 municipalities—and that's a feat in itself—that comprise the Greater Vancouver Regional District, Canada's third-largest urban region, with a population of over 2 million people. We also work to support the overall regional plan for attracting and accommodating growth.

On behalf of our member municipalities, the GVTA urges the Standing Committee on Finance to recommend to the federal government: first, that it become a major partner in the development of new transportation capacity infrastructure in Greater Vancouver by assisting in the development of the Fraser River corridor highway project; second, that it support rapid transit development between Richmond, the airport, and Vancouver, and also rapid transit development between Port Moody and Coquitlam; and third, that it assist Greater Vancouver to fight greenhouse gas emissions by funding the replacement of our electric trolley fleet.

The GVTA endorses recommendations also made by the Federation of Canadian Municipalities, urging the federal government to: establish a new program of investments in multimodal integrated transportation systems, including urban transit, in collaboration with provincial, territorial, and municipal governments, with up to $1 billion in federal funds per year within five years; consider funding its contribution to such systems by allocating a portion of the fuel tax and encouraging provincial and territorial governments not yet doing so to match the federal contribution; supporting municipal governments' investments in comprehensive transportation management plans, including assessments of financial options, low-cost solutions, user fees, and vehicle and parking restrictions; and committing to eliminating excise taxes and the GST on fuels used in municipal transit systems and on transportation and initiatives aimed at increasing the use of public transit, such as making employer-provided transit passes a non-taxable benefit.

The GVTA is also a member of the Canadian Urban Transit Association and endorses the recommendations submitted to the committee in September. Those recommendations included establishing a substantial program of direct investment in public transportation, in partnership with provincial and municipal governments; amending the Income Tax Act to eliminate the inequity between employment benefits for drivers and transit users, making employer-provided transit benefits income tax exempt; and investing $5 million annually in measures to improve public awareness of transit and toward research and development of measures to improve transit effectiveness and efficiency.

¿ (0935)

Greater Vancouver is Canada's Pacific gateway, and we believe that, in this century, Canada's largest port and Pacific gateway will be the portal through which our nation gains secure access to the rapidly developing Chinese economy, in addition to maintaining our important economic links to Japan, Korea, and the balance of the Asian nations along the Pacific Rim.

It is important to Canada that we continue to be able to move our natural resources—fish, agriculture, forestry, and mining—through Greater Vancouver and to the Asian markets. If access to our ports and airports is not equal to or better than those in Seattle, Portland, or Los Angeles, both the regional and national economies will suffer.

In addition to our east-west trade, Vancouver's strategic position next to the United States border makes our north-south trade just as important. Improvements to our regional road system in the Fraser River corridor will improve access to the border and contribute to our nation's ability to ensure that access to our major trading partner is safe and secure.

Greater Vancouver is one of the world's most livable urban regions. All around the world, people are moving into urban centres. Greater Vancouver is widely recognized as one of the most livable urban centres, a model of the modern city. While our natural assets contribute to that title, our human efforts to ensure that we grow responsively are what have secured our top ranking. Among the 3.5 million tourists who visit our region every year, many are delegations from around the globe who come to see firsthand what we have done right. Many of them want to talk about how we are managing growth and transportation. In Greater Vancouver, we are developing considerable expertise in how to make cities work. Our architects, engineers, developers, and planners are in demand.

Locally our livability is attracting new economic players in the high-tech and biotech fields. These companies employ highly educated workers who desire to live and work in a modern city that works. In order to keep our urban region livable, we are investing $250 million in clean transit, in trolleys powered by hydroelectricity. This will help Canada to offset greenhouse gases.

The federal government can help. In the 2000 budget, after having successfully tackled the deficit, the federal government turned its attention to our cities and introduced the municipal infrastructure program and the green municipal funds program. In 2001, the federal government enhanced its infrastructure program initiative with the establishment of a $2 billion Canadian strategic investment fund. The throne speech announcement of a 10-year commitment to environmentally friendly infrastructure projects was more welcome news for our municipal leaders.

We hope the federal government will look at providing long-term, substantial infrastructure funding for major urban regions. Certainly, each project must stand on its own merits, but project-by-project funding is problematic for urban regions, given our 10-year capital plans. We have an $8.9-billion list of projects for our region. The people of Greater Vancouver have said they want all levels of government to agree to a single plan, and to invest in that plan. It would be helpful to know how much the federal government is prepared to invest in the region over the next decade.

In summary, without the assurance of sustained and predictable federal funding, we cannot fund as effectively as possible. We would like to see the federal government require plans for each urban area. The plans must deal with their economies and the environment as a condition for funding. When these plans are in place, we need our assured partnership.

Thank you for considering our recommendations. Locally our public opinion polls tell us again and again that transportation is important to people. I hope we can forge a new partnership between the federal government and our urban region by working together to address our transportation issues. If we can do this, I believe the people of Canada will be the beneficiaries of our efforts.

Thank you very much.

¿ (0940)

The Vice-Chair (Mr. Nick Discepola): Thank you, Mayor McCallum.

We'll now turn to Mayor Owen, from the City of Vancouver.

Mr. Philip Owen (Mayor, City of Vancouver): Good morning. Thank you very much.

On behalf of the council of the City of Vancouver, I'd like to thank you for the invitation to participate in this pre-budget communication. It's very important. We've done it before.

From the City of Vancouver's point of view, just to set the context, previous to five years ago, I think the urban centres felt abandoned. I know Vancouver did. But in the last five years things have changed in a positive way. There's much more positive reaction from Ottawa now. They're focusing on urban centres. They're talking about urban centres. We're getting funding from areas we didn't get funding from before.

I'd like to give you a brief outline to support that kind of statement. We certainly support the objectives to assure widely shared economic prosperity and the highest quality of life for all Canadians.

The federal government has shown its commitment to many objectives in the past, through such initiatives as the Infrastructure Canada program. It started as a one-time only program, but has been renewed and renewed. It's been very helpful, and it gets us in on the one-third cost sharing. We support that totally.

The national crime prevention program and the Vancouver Agreement, which was signed in March 2000, engaged the federal, provincial, and city governments on urban renewal issues, primarily around crime and safety. That's proving to be an excellent model. It is a five-year program that extends to 2005.

Local government in Canada is the key partner in addressing quality-of-life issues. When citizens look for services and programs that affect their quality of life, they most often come to local government first because this level of government is closest to them. Local government has a strong interest in the communities it serves and works hard every day to improve the circumstances of its citizens.

As you know, we get our revenue from property tax and fees. We don't have access to any revenue streams. Yet in the early and mid-nineties, an awful lot of programs were being closed by the provincial and federal governments. We had to pick up the necessary shortfall in many social service areas. That was very serious and a great detriment. But that has changed now. I just want to emphasize the fact there's been a real paradigm shift in Ottawa.

We are faced with many programs, but in order to ensure continuous sustainability of Canadian communities and retain our world-class reputation, there are a number of priorities we request the federal government consider in the development of the 2003 budget.

One is to foster a business environment of economic growth through incentives to promote innovation in key urban centres and to support small businesses.

Another is ongoing funding to address social housing needs and the issue of homelessness in Canada's urban centres. This has been responded to in a great way. Ms. Claudette Bradshaw got a commitment from the Minister of Finance for $680 million over a five-year period. British Columbia will get approximately $90 million of that. We have already received some money in Vancouver for several projects. We have funding for four projects already in the city of Vancouver, under this new homelessness program, under Minister Bradshaw's direction.

On social housing needs, it's the same thing. There has been a shift, and I just hope they continue emphasizing and bringing that into your party, because it makes a huge difference in urban centres. It's been a welcome change in the last three years.

Next is financial support for the needs of the multicultural communities. That's kind of a general, broad statement. Vancouver is a multicultural city, but that's not one of our strongest concerns at the moment.

The issue of ongoing funding to municipalities to cover the costs of providing municipal and social services to aboriginal people living off reserves is a big one right across the country. If you speak to the mayor of Saskatoon, the mayor of Regina, and the mayor of Winnipeg, it's the same thing. That needs continued attention.

Next is ongoing funding for crime prevention, drug treatment, and community safety programs.

¿ (0945)

I'm leaving for Ottawa tonight, to be there with several ministers. Minister Allan Rock is making arrangements to show a movie that was filmed here in Vancouver, called Fix. It's about drug addiction. It involves me and a police officer, a drug addict, and several social service agencies. That's going to be shown in Ottawa at 7:15 p.m., on Thursday, November 7. Already we have 60 people coming to see that movie.

I have a meeting with Minister McLellan and several other ministers on this issue, and there's starting to be a change. It's an ongoing major issue. Crime prevention, drug treatment, and community safety programs are probably the number one thing in urban centres, in the cities now. The doors are opening, and things are improving, as far as we're concerned in Vancouver, in our relationship with Ottawa.

Another is community support for the Infrastructure Canada program. I hope this continues. It has been very good, and it has strong support right across the country, certainly in British Columbia.

Next is support for the preservation of cultural heritage buildings. Minister Sheila Copps is working on that, and there's a program in place. I hope that stays in. Her heritage activity is starting to work its way into our community, and we hope that is maintained and support continued for this year and future years.

Support for the renewal and maintenance of parks and recreational infrastructure is another issue that keeps coming up, but it's not the major one for us in the city of Vancouver, to be honest with you. It's not the biggest issue.

I'm trying to give you some priorities here, and I think that's what you're looking for, areas to maintain, things that are important but not that important, and things that we really think are vital for this next budget.

And of course another is ongoing funding for the cultural community.

Increasingly, the good sense of government in Canada is measured by our competitive advantage in the global economy, and the satisfaction of our citizens will depend on partnerships, ongoing consultation among the various levels of government. We have more and much better partnerships.

I think Mayor McCallum of Surrey would agree we have had tremendous response to an awful lot of partnership programs. There isn't time to go into them all here at this moment.

We sincerely request that the Standing Committee on Finance show support for the partnership of governments as the best means of addressing our common needs and that you continue to support local government access to federal funding--the word is “continue”, and I as say, that has been a change in the last five years--to address specific municipal concerns, many of which I've identified in this letter.

Thank you very much.

¿ (0950)

The Vice-Chair (Mr. Nick Discepola): Thank you, Mayor Owen.

We'll allow 10-minute questions and answers, please, colleagues. We'll start with Sophia.

Ms. Sophia Leung (Vancouver Kingsway, Lib.): Thank you, Mr. Chair.

I want to thank you all for your very interesting and very fine presentations. I'm going to start in reverse order by asking questions of Mayor Owen, who has been so patient in sitting there.

First, I want to thank you, Mayor Owen, for your hard work and your contributions to the City of Vancouver for many years. Because I've followed the Vancouver Agreement very closely, I also know you were really one of the initiators of that, so I want to congratulate you on this crime and safety partnership with the federal government. I'm also glad the homelessness program is getting on, with the federal government's $90-million contribution.

I think the Vancouver Agreement has really been very well supported overall in almost every sector. but there are some concerns. You'll agree that the partnerships with the business sectors are very important, specifically in the needle exchange centre. But there's a great deal of controversy. Can you enlighten us on the different sectors in which there are some concerns with that? How do we resolve them?

Mr. Philip Owen: The fact is, it's all centralized in the city of Vancouver, when those facilities have to be throughout the city and throughout the region. I mean, 66% of the people in the downtown east side of Vancouver don't live there. They come in during the day, dealing in drugs and dealing with needle exchanges.

The Vancouver Coastal Health Authority, a provincial body, is decentralizing these things. They will be moving not only throughout the city but throughout the region. Several municipalities have already picked up on that and picked up on the need for that kind of activity.

So it's grown. It's concentrated in Vancouver, but there are a lot of programs in place to change that. We're heading toward a point where we're going to have zero tolerance for open drug dealing and consumption in the public realm in the city of Vancouver. It's getting major attention because we haven't dispersed it throughout the city; we've kept it concentrated so we can manage it.

Regarding drugs, you can't incarcerate your way out of it. The war on drugs in the United States has failed. You can't liberalize your way out and give people the drugs they want. You can't ignore it, so you manage it, and that's what we're doing. There's not a fifth choice, there are only four. That's why we produced the 85-page document, A Framework for Action, with a four-pillar approach. And we need all pillars. The needle exchange you referred to is just one of the many things that are needed. You have to implement it all--prevention, treatment, enforcement and justice, and harm reduction. Harm reduction is where the needle exchange part comes in.

We need the whole comprehensive package. It's going to change in the downtown east side Chinatown area.

Ms. Sophia Leung: Thank you, Mayor Owen. I hope you have a nice trip to Ottawa.

Mr. Philip Owen: I was going to leave tomorrow at noon, but I'm attending a meeting at 4:30 p.m. tomorrow in Ottawa, and the first plane gets in at 4:10 p.m. So an hour ago I changed my plans to take that awful red-eye flight tonight, as it's the only way I can get there on time.

Ms. Sophia Leung: Oh, you're very courageous. I know how travel is.

Mr. Philip Owen: I hate that flight.

Ms. Sophia Leung: My second question is for Mayor McCallum. Welcome. I know you are doing an excellent job on the GVTA. It's really a massive plan that involves so many different departments. We have been working very closely with you and support you, but now the question is, how are you going to get the resources?

In 2001, the federal government allocated $2 billion for infrastructure. Have you tapped into some of that? I think it still stands. In the meantime, you say you require $1 billion a year for five years. Will that funding come from a three-level joint effort? Will you expand on that?

¿ (0955)

Mr. Doug McCallum: I'll be happy to. When we look at some of these very expensive infrastructure projects right across Canada, not just here in the greater Vancouver area, we will need different partners to be able to build them. Those partners will have to be, to a certain degree, on an equal basis. That means the federal government, the provincial government, municipal governments, and regions will have to participate. Only by having a number of partners working together on these major transportation projects will we be able to achieve and build them.

I think we can do a lot of the regional projects--and in TransLink's case, our main mandate is to operate them--with our particular resources. But in a lot of the capital projects that are needed--and in our case we have transportation, meaning roads and bridges--we will need to have partnerships.

On one of our concerns, a little over $300 million that people pay just in gas taxes flows out of the greater Vancouver area to Ottawa. We see very little of that coming back. The people who pay those taxes--the people in their cars and the truckers--want to see some of that tax money come back to their region. So there's that accountability to our residents.

I think it's the same across Canada. I sit with Philip on the Big City Mayors' Caucus, and we meet twice a year. The same concern is expressed right across Canada that from the public's point of view--from the raw person out there using the transportation systems, the ones who are paying the taxes--they need to see some of that money coming back.

Ms. Sophia Leung: Thank you.

Welcome to Dr. Tupper from UBC. I'm happy to see someone from my alma mater.

I'm happy to hear that our funding for R and D and innovation has really worked very well. We will reverse the trend of brain drain. We're going to attract better researchers to this country.

As you know, we already supported the indirect cost last year with $2 million. We recognize the need, and so this committee is already converted. I want to know...it's almost a growing, an increasing, need. Can you roughly suggest if there's any other way, instead of constantly trying to listen to your needs? I'm not disputing this. All this is very logical.

I know this year you have increased your tuition quite a bit. Has that increased the revenue? Of course, it's perhaps not enough. We also hear from the students on the increase in tuition. What kind of increase in revenue has there been from tuition, in percentage, for your income?

Dr. Allan Tupper: I don't have those data, but I can easily get them to you. What we've done on the tuition side--and I think it's a very important question. Essentially, by way of a brief background, the situation varies in each province, this being essentially a matter of provincial responsibility. The fee structure and tuition in British Columbia were regulated by law for a long time. The incoming Liberal government deregulated it, and we have moved our fees up.

The incremental generation of revenue is not nearly as large as most people think.

The other thing we've done in a quite unique way is to present a document on the tuition side that's very comparable to this. We're basically saying to our students that any tuition revenue increase will go to student services and to financial assistance for people coming to the university. So in that sense we've dealt with that matter.

The question of indirect costs is related, to a degree, as it's part of the revenue flow, but it's also quite a separate request. The concern there is that there be a stable, long-term program. Generally, other countries do this on a percentage basis relative to the total flow of research grants. The American norm is about 40%.

À (1000)

Ms. Sophia Leung: Thank you.

I have a very short, quick question for Dr. Poutissou of TRIUMF.

The Vice-Chair (Mr. Nick Discepola): Your question will be short, I'm sure. It's the answer I'm worried about.

Ms. Sophia Leung: I know, being from Vancouver, TRIUMF is really the leading atomic research centre in the world.

Just quickly, I believe you have applications for medical research, even for Parkinson's disease. Would you just quickly give a little bit more of a description?

Dr. Jean-Michel Poutissou: The unique feature we can bring to this field is the fact that we have developed some compounds that are like the ones the brain is using when it consumes energy, and we can tag a radioactive tracer on that same compound. So the brain doesn't know that this thing has a radioactive tracer on it; it functions normally, and when the radioactive compound decays, you can tag exactly where that product was. That allows us to disentangle the mechanism by which the brain transports information.

We have discovered--

Ms. Sophia Leung: A tracer?

Dr. Jean-Michel Poutissou: It's a tracer, a medical tracer, that gives you an image of the brain while it's functioning, so you can see which part of the brain is affected when someone has Parkinson's disease. You can even detect Parkinson's in patients before they get any external symptoms. The hope is that we can also detect if a drug we build can affect the symptoms and see how it affects the brain. So it's a dynamic probe. It's not something that just takes a picture at one time.

You can follow the patient through a crisis. There are also people in psychiatry who are using these same tracers to see what is happening during a crisis and where the brain changes functions and what products are consumed in the brain. It's a very, very detailed research probe, to understand illnesses and disease.

Ms. Sophia Leung: Thank you very much.

The Vice-Chair (Mr. Nick Discepola): Mr. Cullen, please.

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you, Mr. Chair, and thank you to all the presenters.

I'll go to Mr. Smith and Mr. Menzies, and I'd like to come back in a moment to the fact that you've indicated that there has not been any improvement, or there has been no noticeable improvement, in the security at the airports that you work out of. I live right next to Pearson airport, and frankly, I haven't seen much there either, but there have been some delays with equipment, and so on. But I'd like to come back to that.

You know the former Minister of Finance has indicated that he had suggested the whole fee come back to this committee once we have a bit of experience, and maybe we're getting closer to that time, to look at the fee, its appropriateness and the level, and so on, given that it was put together very quickly. I'm sure this committee will be doing that.

But after September 11, and given the fact that we do have some terrorist threats around the world, on your airline and the airlines that are part of this brief, do you see any security threats at all? I would expect that you'd be concerned about your crew and your passengers.

I lived in B.C. for 12 years...in the forest industry. I've flown on probably all these airlines, and I must say, I have problems envisaging some kind of al-Qaeda sitting in one of these seats. But the world has changed. It has become much more complicated, and for us to say that on your airlines there's no security threat.... Maybe you could take us through that, why you might feel that, if indeed you do feel that.

Mr. Dave Menzies (President, Hawkair): It's not that there is no security threat, but we do have what we feel are appropriate measures for the level of risk that we're exposed to. A 757 weighs about half a million pounds, will move 600 knots, and carries about 130,000 pounds of fuel. My Dash 8 weighs 34,000 pounds and typically runs around with about a tonne and a half of fuel in it. If you want to start a fire, which airplane are you going to attack? That's fairly much a no-brainer.

In terms of security on board the aircraft, we're complying with the new rules in terms of cockpit door reinforcements and closures. Within the company, all of the flight attendants—you're going to get a laugh out of this—are all taking.... And it's not only the flight attendants, but the flight crews and the counter customer service people are all being trained in managing and handling unruly passengers, even to the point of physical intervention. That goes to the extent of someone trying to actually take over the aircraft. We actually have equipment on board the aircraft now that we're using. So it's not that we have no.... These are measures that we, as the airline, are taking.

At this point, we have no regulatory requirement for our passengers to be screened, and not a single one of our passengers has received any form of enhanced security whatsoever since the tax came into effect. To this date, though, we have paid—and I figured it out exactly—$490,000 in the ATSC.

À (1005)

Mr. Roy Cullen: Are you expecting something to come, or are you assuming there will be no enhanced security in dealing with the routes you're dealing with?

Mr. Dave Menzies: What comes may. But I have a serious problem with the idea that the passengers on the airplane—and this has been the government's stated position over and over again—are the only beneficiaries, the only people who receive a benefit from the security on the aircraft. If you're sitting in a tall office building and you look out the window and see an airplane bearing down on you, I think you might think you may be receiving some benefit from good security. But this is not the government's position. It has been stated over and over again that 100% of the costs of airport security should be borne by the people who ride the airplanes.

Incidentally, this is very contrary to the position the government outlined in explaining the cockpit door reinforcement. For that, they stated very clearly—and I have it here if you want to see it—that the benefits of improving security onboard the airplane will accrue to all participants in the economy, because everyone recognizes the damage that is done to the economy by a terrorist attack. Well, the U.S. economy is still on its knees and the markets haven't come back since last September.

Really, it's an outrageous position to say that the only people benefiting from good security are the people on the airplane. It's a societal responsibility and we ought to consider it a matter of national defence, not a user charge.

Mr. Roy Cullen: You do remember, though, that $7 billion—I think that was the amount—was set aside for enhanced security. This was one component that the government, in its wisdom or lack of wisdom, decided to put in as a user fee. There is logic to your argument, but I think there is logic to saying this is more closely assigned as a user fee as opposed to something out of general revenues.

I'd like to come back to the notion of the people who enter into your airline system at the south terminal. For example, are most of the passengers coming in, parking their cars, and going to south terminal, Mr. Smith? Are they coming off flights from the main Vancouver terminal? How does that affect you, or does it affect your views on this whole matter at all?

Mr. Daryl Smith: I'd say probably two-thirds park their cars there and get on the aircraft at the south terminal. The other group comes from the main terminal. They're secured at that side, so we take them between the two terminals unsecured.

I'd like to make something clear here. We do not quarrel with the idea of security. With security, safety is motherhood. The problem is the methodology used to derive the fees. We made a strong case—and so did WestJet—to go to something like a 3% flat fee on every ticket that everybody bought from every airline, regardless of size and description. We weren't heard.

The $12 fee...on a round trip to Victoria, for example, we had a promotional trip there for $99 return. We added 25% to it, which blew that one out of the water.

The methodology that has been used has been very overbearing. There has been no input from the industry. If there has been, we haven't been heard. So we'd like that cleaned up.

We would also like the regulatory side of it, such as the cockpit doors requirement.... That's a made-in-American program. You have to understand that Americans don't build any airplanes under 60 seats, or between 19 passengers and 60 seats. None. Zero. They therefore just blanketed everything above 19 seats. What did Canada do? We copied the rule. We didn't go by where the 19- to 60-seat passenger airplanes are built, which is in Canada and Europe. In Europe, the JARs, which is the regulatory body for all of Europe, says turboprop airplanes below 60 seats don't need to have the secured cockpit doors. But what do we do? We just follow along. We're saying we need some input from the industry into this stuff.

À (1010)

Mr. Roy Cullen: I appreciate that, and I'm sure this committee is going to be looking at that. The American solution, it seems to me, might be to give the pilots and aircrew guns.

Interestingly, I think we're meeting with WestJet in Calgary, and I notice they're making some huge profits. Cutting short-haul flights has helped them to boost profits. It will therefore be interesting to hear what they have to say in Calgary. As a politician, though, I'm not sure that's the end result that we want, but it seems to have helped in terms of their bottom line.

Mr. Daryl Smith: We do all short-haul flights.

Mr. Roy Cullen: Thank you. It's a serious issue, and I think we'll be seized with that very soon.

Mayor Owen, I'm glad to hear that some of these programs are working with the federal government. There has been a lot of discussion lately about a new deal for municipalities. On the one hand, you could stick more with the status quo--infrastructure programs, joint programs on affordable housing, the homeless, the kind of programming you've talked about. If that seems to be working well, maybe that's all that's needed.

On the other hand, there are those who argue that we need a new deal. I think is a harder sell to talk about ceding tax room from the federal government to municipalities, because they are creatures of the provinces. I think it would be more of a challenge to look at dedicated taxes, but maybe those are the areas that one should be exploring.

Are there any new ways of thinking and looking at how the federal government interacts with municipalities, or are things working now, as they are?

Mr. Philip Owen: With specific new programs that are coming on, some are terrific and they're a great benefit and others are very nice, not that important, and they should just carry on. The Federation of Canadian Municipalities makes submissions, and all the municipalities are members of that. With a new deal of reinventing a relationship or taxing authorities or funding sources, all that kind of thing, I think it's best to coordinate it through the Federation of Canadian Municipalities. That's going to take some time and some debate and discussion at all levels. I was more or less focusing on imminent areas for this next budget, but I think working closely with the committee and the Federation of Canadian Municipalities is better, because we all have input into that and that's where the reinventing of the relationship is coming from.

The C-5, the five cities that meet, are talking that way also, and I haven't got any specifics on that. That's quite a big, long, complicated subject, and I think it's something that's going to work its way through the system over a period of time. I hope it still gets the federal government's attention and the federal government works closely with FCM on that whole discussion.

The Vice-Chair (Mr. Nick Discepola): They're making a presentation, I believe, in Montreal tomorrow.

Mr. Philip Owen: Are they?

The Vice-Chair (Mr. Nick Discepola): On Thursday, rather.

Mr. Roy Cullen: Thank you, Mayor Owen.

I had a quick one for Mayor McCallum. It sounds as if you're accessing the various infrastructure programs and you've got some projects in the hopper. Then there is the latest one, the strategic infrastructure program Minister Manley announced. I don't think all the details have been worked out, but I would presume you're using those. If you would expand on that, it would be helpful.

The Canadian Urban Transit Association has been promoting this idea of the tax rules with respect to transit passes, and I think a lot of us on the Hill intuitively think it's a good idea. But there are other instruments to encourage better use of public transit. The argument is often that this particular instrument rewards people currently using public transit, but it doesn't get you many more people using public transit, and there may be more effective vehicles to increase public ridership. Do you have any views on that?

À (1015)

Mr. Doug McCallum: I think it would be a good tool to encourage people who currently might use their car to go to work. People will start to think they have to use transit rather than going in their cars, because it benefits them financially. I do think it's a really good incentive. We have found that these transit passes aren't just for people who use transit anyway. A lot of it is encouraging, especially in the Greater Vancouver area, people to get out of their cars and use transit. I think we do need to look at marketing ways to encourage that.

The Greater Vancouver area, geographically, is a real problem. We have a lot of waterways that divide us, right through the heart of us. We have a major river, a harbour that divides us, we have agricultural lands that divide us. So it's very difficult for us to put transit into our region overall. A good example is my driving in today. Usually it takes 45 minutes, but it took me two hours because the traffic was heavier. It's a case of growth in our region. Surrey alone is growing at 1,000 new people every single month. With that kind of growth, you can imagine the pressures that are on the transportation system.

We need to look at a whole basket of options to do it. Certainly, the transit pass is one option that I think the federal government should look at with regard to the tax status.

The Vice-Chair (Mr. Nick Discepola): Thank you, Mayor McCallum.

I'd like to turn to Mr. Murphy.

Mr. Shawn Murphy (Hillsborough, Lib.): Thank you very much, Mr. Chairman.

My first question is to Mr. Smith and Mr. Menzies. First of all, I want to say that I agree with your submission. I don't know if you've been following this issue with the finance committee, but I'm the one who got myself in all kinds of trouble last year by saying I would agree with an opposition motion to reduce the fee from $24 to $12 when the budget implementation bill was presented to this committee. My view at the time was that the finance committee did not give us any information to support the size of the fee, that it wasn't allocated among other people in the airline business, such as the air courier and air cargo business, that the sophisticated equipment the state was going to buy wasn't going to be available within one, two, or three years down the road. And it was my fear at the time that this would have a detrimental effect on short-haul airlines and on regional airports. I take no glee in finding out that the exact things I said were going to happen have happened, and you have statistics here that indicate that.

Mr. Vice-Chairman, Mr. Clerk, I should add also that at the time I met with Mr. Martin and other senior officials at the Department of Finance and the agreement was made that I would vote for the budget implementation bill, but that the matter would come back before this committee prior to the end of November of this year, which is in 26 days. I'd like, through you, Mr. Vice-Chair, to the chair, and through you, Mr. Deputy Clerk, to the clerk, ask that the agreement made by the previous finance minister be accepted and that this committee review the matter as soon as possible. That's a statement I'd like to make.

Mr. Daryl Smith, you indicated that you have statistics. Are you talking about the statistics you alluded to in your letter of September 12, or do you have more up-to-date statistics?

À (1020)

Mr. Daryl Smith: That's just a month and a half old, so it was fairly recent, but we can certainly elaborate on it. Any question you have further to it we can provide an answer to. That was asked for by a consulting firm on behalf of the federal government, and Quentin Smith is the guy who put that together. So those are actual facts. The truth of the matter is, if you go over the period of the whole year, the traffic has dropped off enormously, particularly from Vancouver to Victoria, which is our shortest route. It dropped immensely right at April 1. It's coming back slowly. We also cut back two round trips a day, so we're getting a somewhat better load factor, but it's pretty onerous--$24 for the round trip on a 40-mile flight.

Mr. Shawn Murphy: You don't have the actual cities, you just have the initials. YBR is Vancouver?

Mr. Daryl Smith: Yes.

Mr. Shawn Murphy: YYB is Victoria, is it?

Mr. Daryl Smith: YYJ is Victoria.

Mr. Shawn Murphy: YBL is--

Mr. Daryl Smith: Campbell River. YQQ is Comox.

Those are some of the 90 named airports in Canada we're obliged to have security at. We don't avail ourselves of the security at any of them. Because we weren't using it before, we don't have security at the south terminal. We made a strong lobby to not have security put in the south terminal, because we're treating it as a small commuter market. The answer we get back is that it's a named airport. Vancouver is named as one of the 90, and the south terminal is part of Vancouver, so we get it. We think that's a bit regressive. There are three runways there, and we're on a different side of the airport with a different type of service.

Mr. Shawn Murphy: So I can get this clear in my own mind, there's no security right now in Comox?

Mr. Daryl Smith: Yes, there is, but we don't have to go through it, because we don't have security at the south terminal. If you go to the main terminal at Vancouver Airport, then you go through security. It's the same at Campbell River, the same at Victoria.

Mr. Shawn Murphy: So if somebody takes a flight in a small regional airline from there to Vancouver, the passenger pays the $24, and if he took an Air Canada to Vancouver, he'd pay it again.

Mr. Daryl Smith: He presently pays $12 to go from Comox to Vancouver with us. However, he doesn't get any security for it, because it's not necessary yet. But because it's a named airport, he's paying. If he transfers to another carrier and he doesn't have anything that proves he has already paid--he doesn't have an ongoing ticket--then he would be obliged to pay again, where it clearly says...and that's the part I read that's kind of gobbledygook, if you caught my meaning. But if he goes again, he shouldn't have to pay. It said clearly in the act that he doesn't, but how are you going to prove that he did? So he pays.

They're saying the crown corporation that has been put together to collect the fees has no provision for refunds where a carrier has been obliged to collect from somebody who says, look, I already paid; here's my ticket from point A to point B, and I'm going from point B to point C, so I've already paid today. The airline is going to cover itself and say, we're sorry, we can't prove anything; we're going to charge you $12. They submit it and tell you to apply to CATSA for your refund, and CATSA doesn't have any provision for it.

So I'm suggesting, if we go to a flat tax--let's get away from “fees” for a minute and call it a “tax”, because that's what it really is--and we just tax everybody a small percentage of whatever their ticket is, you don't need a big crown corporation to administer it; we don't have to have a bunch of bookkeeping; it's just done.

Mr. Shawn Murphy: But to follow that up, Mr. Smith--and I disagree with you on that point, even though I do agree with everything else you've said--isn't that giving an unfair advantage to the low-fare point-to-point discount carrier as opposed to the mainline carrier?

There are three methodologies we can use. One is the ad valorem charge you're talking about, or the ad valorem tax. The second is a fee based upon the miles. It might be $5 for 500 kilometres, going to $10, and then maybe to $15 for the long-haul routes here to Toronto. The third methodology is to exclude passengers travelling in planes of, say, 60 passengers, which would I think take care of all your problems. Quite frankly, that's the methodology I would support.

The point I'm making is that the ad valorem charge would favour a carrier such as WestJet, a low-fare point-to-point carrier, and would certainly be.... Would it be detrimental to the passenger carrier?

À (1025)

Mr. Daryl Smith: They would be on the same playing field with the Air Canadas of this world, as they were before the tax, or the $12 fee, was initiated. So if they had an advantage then, they have an advantage now. That's their business. If Air Canada wants to do short-haul low-cost with Zip, Jazz, Tango, or Jetsgo, they're welcome to enter that market. There's nothing stopping them.

Mr. Shawn Murphy: But if a person went from, say, Vancouver to Victoria, going through the Vancouver airport, or they took a plane to Toronto, the cost of the security would be exactly the same. We assume it's not $12, but there is a price out there, probably in the $3 or $4 range. Do you agree with that?

Mr. Daryl Smith: In actual fact, that's the truth. It's just that the proportion of the fare...it comes to a point where....

I live in the community of Powell River. I commute to Vancouver, and my office is at Vancouver airport. Our traffic between Powell River and Vancouver, for a variety of reasons, is off by about 22%, year over year. Yet B.C. Ferry's traffic on several of the little routes is up, and it takes two ferries to get here from Powell River.

So I rest my case. I have proof there. That's right in our backyard.

Mr. Shawn Murphy: That's being seen right across Canada. You're competing with the tire traffic. The Edmonton-Calgary route is down substantially.

Mr. Daryl Smith: But our fares haven't changed dramatically for the route; people have changed. I guess people have less discretionary money these days, for other reasons. I go back to the statement I made that communities in this province are struggling. The lumber industry has been terrible, and fishing is almost non-existent, so there isn't a lot of discretionary money. It hurts the airline.

We're big boys; we can understand that. We have to modify our methods to combat that type of thing. But it's really difficult when we have to pay $3,600 a day to NAV CAN, for just six of our airplanes--and we have 17--for a service we think we've already paid for.

I've been in the business for 38 years, and I think I've paid for NAV CANADA several times over. Now the feds have gotten rid of it, put the money in the bank, and we're paying a not-for-profit society to provide the same services we used to get. We still pay 4¢ a litre for every litre of fuel we burn, and that does not come back to the industry.

I've heard that about the gas taxes here in town, too. We get no recognition for that 4¢. The little airports out there, like the Powell Rivers of this world, have no funding from the federal government, unless they go to ACAP, and that's a long, drawn-out process. They used to get federal funding to help them. They can't even afford to put another strand of barbed wire on their fences to keep the deer off their runways. It's a pretty sad state for the small communities. They don't have the money.

Mr. Shawn Murphy: Now, at the time this was implemented, one of the issues was--

The Vice-Chair (Mr. Nick Discepola): This is your last question, Mr. Murphy.

Mr. Shawn Murphy: --the expensive bomb-sensing equipment that was back-ordered, I understand. Has there been any indication that it is in Vancouver now?

Mr. Daryl Smith: I don't think so. I think they're quite a way away from it, which is another problem with your latitude, Mr. Chairman: the amortization of that equipment. We're talking about several billion dollars worth of equipment here. Why are we going to amortize it over about two years? Normally in business, when you buy something like that you'd amortize it over 10, 12, or 15 years, but we're going to pay for it right away. If you're using that type of program, you have to have a lot of money fast.

I heard at the annual general meeting of the B.C. Aviation Council--there were a lot of people from the fed there--that $12 isn't going to make it. We're spending it too fast.

Mr. Shawn Murphy: I know I'm over time, Mr. Chair. I just want to make one more request to the association. If you don't mind and if you have the resources to do it, could you give us these statistics so that we can have the ammunition when we go back to Ottawa, based upon the actual name of the thing and up to date, bringing in the months of September and October, if you have them?

À (1030)

Mr. Daryl Smith: We'll get the information for you.

Mr. Shawn Murphy: Okay, I'd appreciate that.

The Vice-Chair (Mr. Nick Discepola): Thank you, colleagues. Thank you for your patience.

I would like to thank our guests for giving us an awful lot of feedback and food for thought as we prepare our recommendations to the minister.

We've been pretty good in the past nine years in our batting average. I think if I were a baseball player, I or our committee members would be able to exact maybe $20 million annual salaries, because we've probably been hitting over .600.

Some of the things you might say today may not be reflected in the budget, but I want you to know that the committee is certainly listening, and I think in respect to the airline tax we will probably revisit it very shortly.

So thanks again to each and every one of you for being here and giving us your feedback. We look forward to seeing some of your recommendations in our budget also.

Members, we're suspended for five minutes while the next group sets up.

À (1031)

À (1044)

The Vice-Chair (Mr. Nick Discepola): Pursuant to Standing order 83(1), we'll now resume our pre-budget discussions.

This morning we welcome, from the Canadian Association of Gift Planners, Janice Loomer Margolis, communications manager and government relations committee member; from the Coalition of Child Care Advocates of British Columbia, Sheila Davidson; from the Houston Friendship Centre Society, Penny Perlotto, executive director, and Carl Mashon, senior programs manager; and from the Nunavut Association of Municipalities, Keith Peterson, president, and David General, chief executive officer.

We'll start with Ms. Margolis, please.

À (1045)

Mrs. Janice Loomer Margolis (Communications Manager, Canadian Association of Gift Planners): Thank you.

Good morning, and thank you for the opportunity to address you today. I am the senior director of major and planned gifts at the BC Cancer Foundation, but today I'm speaking to you on behalf of the Canadian Association of Gift Planners.

The Canadian Association of Gift Planners is an association of 1,200 individuals across Canada who work for charities or are in the estate-planning-related professions of law, accounting, and financial planning. All of us are looking at generating philanthropic support for a wide variety of charitable causes across the country. We represent bringing things into the community for a variety of different kinds of areas.

We have a number of recommendations, and they are fully laid out in our submission. I believe there are copies here, so I hope you have it. I'm just going to highlight a couple of our recommendations today, the big ones being completely eliminating capital gains on gifts of publicly listed securities; eliminating capital gains on gifts of real estate; and extending the special capital gains treatment to private foundations. Those are the three main things I'm going to focus on.

First of all, on eliminating the capital gains on gifts of publicly listed securities to charities, by way of background, the 50% reduction of the capital gains inclusion rate on gifts of publicly listed securities was introduced in 1997 as a trial incentive. In December 2001, this was extended and was made permanent. We really appreciated that move, as it showed how important this provision was and it showed the government's acknowledgment of the importance of this provision.

We believe the complete elimination of capital gains is really the way to go. It was what we proposed first of all in 1996. It mirrors what occurs currently in the United States; any gift of securities and capital gains on appreciated property in the States is transferred to charities without any capital gains realized.

When this was proposed initially in 1996, the government and the Department of Finance looked at how the numbers played out. In those days, when the tax rates were higher in Canada and the capital gains rates were higher in Canada—remember it was 75% inclusion, but it's now down to 50%—the numbers matched. The way things worked out in terms of numbers for the U.S. and the way things worked out in terms of numbers for Canada were about the same. Now, however, with the reduced capital gains inclusion rate generally, and with our lower tax rates, we're not on an even playing field with the U.S., we're higher. In order to make us similar to the U.S. again—which was the whole goal in 1996—we are advocating for the complete elimination of capital gains for publicly listed securities, just to make it exactly what was intended in the first place. That's the first point.

The second point is eliminating capital gains on gifts of real estate. As we know, and as I just discussed, having the reduced capital gains for publicly listed securities has really encouraged gifts of those kinds in Canada. That was the reason it was made a permanent provision. We see no reason why this shouldn't be extended to real estate. The committee should be looking forward and considering that real estate is really one of the most highly held assets by individuals across Canada, so this is something that could very much benefit organizations.

The government has seen fit to make incentives for gifts of ecologically sensitive property. We really think that's a great idea, but level the playing field yet again by making those kinds of benefits available to all charities. We believe and recommend that an elimination of capital gains on real estate gifts should also be provided.

Thirdly, and very importantly, we would like the extension of special capital gains treatment—and generally all provisions that are available for public charities—to also be available for private foundations. Private foundations are clearly the leading way of philanthropy in the country. They are the way in which the majority of people who have wealth like to donate, in order to retain a little bit of privacy and some control, but they do wonderful things. We think levelling the playing field to allow private foundations to have the same benefits as public foundations is very important, and that's clearly something we are advocating strongly for.

À (1050)

Those are the three points that I'd like to emphasize. At the end of this whole thing, I'd be happy to answer any questions that anybody has.

The Vice-Chair (Mr. Nick Discepola): Thanks very much.

Ms. Davidson, would you like to continue, please?

Ms. Sheila Davidson (Executive Director of Child Care, SFU Children's Centre, Simon Fraser University; Coalition of Child Care Advocates of B.C.): Good morning. I'm representing the Coalition of Child Care Advocates. I'm the executive director of child care at Simon Fraser University, and I'd like to speak to you about the support required for a national child care plan.

What the coalition is advocating is the development of a comprehensive, accessible, and affordable non-profit child care system in British Columbia and across Canada. We believe it's the right of every child and family to have access to quality care. We're looking for a range of inclusive child care choices, including licensed and regulated family- and centre-based care.

We know stable, adequate government funding is necessary to sustain child care. We know adequate wages and benefits are an indicator of quality child care. We know Canadians believe that the quality of care that their children receive during their early years affects them throughout their lives. We know effective child care services that meet the needs of families, communities, and society support adults in their caregiving and nurturing roles, enable adults to participate in the labour force and educational and training programs, and contribute to women's capacity for a more equitable role in society.

Canadians have said—and polls have confirmed that 90% of Canadians believe this—that high-quality child care is important to ensuring Canada's social and economic well-being. A significant majority of Canadians—some 81%—believe government should develop a plan for a comprehensive child care system. Canada and the United States are the only developed nations in the world that do not have a comprehensive system of child care.

We're recommending to you that Canada develop a federal budget for 2003-04 that will enhance the health of Canadian families and communities by reinvesting tax dollars to implement a federally funded, comprehensive child care system that will enable all children, regardless of their family's income level, geographic location, or employment status, to access a range of regulated, high-quality, financially sustainable child care programs in their communities.

We're recommending a policy framework to build a pan-Canadian child care system in partnership with provincial and territorial governments that work with the municipalities and community-based non-profit organizations, in order to design and implement a regionally responsive child care system.

We're recommending that Canada designate federally budgeted funds solely for a publicly funded child care system in each of the five years in order to ensure that these funds are available to the provinces and territories that commit to the policy framework, timelines, and principles to move Canada toward a publicly funded child care system for all. We're calling on the federal government to make a substantial investment and to commit to a five-year action plan to develop a comprehensive child care system, with a new expenditure of at least $2 billion in year one, and a further $500 million in each of the following four years, for a total of $4 billion annually by 2008-09.

I thank you for the opportunity to present this information. I look forward to your questions.

À (1055)

The Vice-Chair (Mr. Nick Discepola): Thank you, Ms. Davidson.

From the Houston Friendship Centre, we'll hear from Penny Perlotto and Carl Mashon.

Ms. Penny Perlotto (Executive Director, Houston Friendship Centre Society): Good morning. I'm Penny Perlotto. I am from the Houston Friendship Centre. I would like to thank you all for giving us the time to allow us to do our presentation on behalf of friendship centres across B.C. and Canada.

Currently, 65% of the aboriginal people are residing in urban areas. The friendship centres deliver programs and services to aboriginal people while assuring and abiding by all the business codes, and one of the requests I have is incorporating capital costs into core-funded centres. Capital cost is extremely important and needed to provide a professional and appropriate location to deliver the programs and services.

There were 17 non-core-funded centres in Canada, but recently $1.5 million has been negotiated to support non-core-funded centres. There are 118 friendship centres in Canada; the first one was opened in 1948.

The programs and services the friendship centres offer are prevention and intervention that is culturally sensitive and community-based to aboriginal people. The organizations service the interests of aboriginal people living off reserve, in areas of social, cultural, and economic community development.

Houston is centrally located in the north. We have the highest teen pregnancy rate, highest suicide rate, highest rate of children in care, and highest rate of car accidents related to alcohol and drug abuse.

Currently there is a $3.5 million restoration negotiation happening to restore previous levels of the aboriginal friendship centre program transfer agreement. It's part of a memorandum to cabinet that's currently in process.

One of the things we feel is critical that friendship centres offer is the retention of aboriginal culture and identity.

On wage parity, friendship centres continue to prove themselves as a viable aboriginal organization operating with a minimum budget and wages. Statistics give strong testimony for centres. Friendship centres constitute the organization that provides frontline workers and assists and provides programs and services to urban aboriginal people. Friendship centres and the provincial or territorial association are the organizations that link the government to urban aboriginal people. Currently there are about 800 employees employed through friendship centres across B.C.

Basically we're asking to have secured funding for friendship centres. We're also requesting the reimplementing of capital funding to the friendship centres and also core funding for the provincial office, the B.C. Association of Friendship Centres.

Carl.

Mr. Carl Mashon (Senior Programs Director, B.C. Association of Aboriginal Friendship Centres): Good morning, everyone. I'm Carl Mashon. I'm the senior programs director for the B.C. Association of Aboriginal Friendship Centres.

I'd just like to acknowledge the people of this territory, specifically the Musqueam and Squamish peoples. I'll be speaking to two parts of the urban multi-purpose aboriginal youth centres initiative, a federal program, and a proposed national raven youth tech initiative. I'll start with the UMAYC, which is the acronym for that first program.

The success stories of the UMAYC are really overwhelming in communities where the funding has been adequate and consistent, but the funding needs to be stabilized and expanded. We're running into a lot of problems because of the competition. There's a very fierce competition for funds at this point, and there's a need for more funds to be available because of the increasing demographics of urban aboriginal youth across the province and across the country.

We also recognize that there's an urgent need for remote urban communities to be adequate resourced, as well as urban communities, to help contribute to a decrease in migration of aboriginal peoples, youth especially, to larger urban centres, where the problems are much more critical. When youth are able to stay in their communities, they have a higher rate of success in contributing to them.

The dollars that reach the UMAYC program have been significantly reduced from what the initial allocations were. That program had $100 million over five years, and the Department of Canadian Heritage took $10 million right off the top for their own purposes. We've never understood all the accountability concerning those dollars. And different allocations were taken off that money. So we'd like to see an increase in the funding available, so that we can actually work with more progressive programs.

The raven youth tech program has been a B.C. program for the past year, and we're proposing that we expand that to a national model. I'll just refer to the Prime Minister's words: “We will ensure that our youth employment programs reach out to youth at risk to help those who have the most difficulty in making the transition from school to work”. The B.C. raven youth tech program has been a model of success and is a community-driven initiative that has been applauded at two national government-sponsored IT conferences as a best practices initiative. There are 120 friendship centres across Canada we'd like to put that program in. Those centres reach about 50,000 client visits per week. They represent one of the largest NGO socio-economic program infrastructures in Canada.

This program is an information technologies program and it offers significant career development opportunities. The raven youth tech program is a proven platform of access for aboriginal youth. The National Association of Friendship Centres voted overwhelmingly in favour of a national raven youth tech program. That may be part of a memorandum to cabinet submitted this week by Human Resources Development Canada.

And that's it, I guess.

Thank you.

Á (1100)

The Vice-Chair (Mr. Nick Discepola): Thank you.

We'll move on the Nunavut Association of Municipalities, Mr. Peterson.

Mr. Keith Peterson (President, Nunavut Association of Municipalities): Thank you, Mr. Chair, for the opportunity today to meet you again. This is our third presentation to you folks. It's interesting coming down here to Vancouver, because where we come from, in Nunavut, we're deep into winter, with blizzards raging across the north today. You've got some maps in front of you to show you where we're from.

I'm the mayor of Cambridge Bay in Nunavut, and the president of the Nunavut Association of Municipalities. David General, who is with me, is our CEO. We represent 25 communities in Nunavut. The entire population of Nunavut is 28,000 people. It's not a lot of people, but it's one territory.

We've considered a number of different approaches we could take to make our presentation today that would reinforce how serious our situation is. We've mentioned this a couple of times before in presentations, and we seem to come across as repetitive and complaining, but we're not; we're just trying to point out the reality of life in Nunavut. The sad reality is that the social and economic conditions we face are characteristic of some of the conditions you might find in a third world country. I think you'll be shocked by some statistics we're going to provide regarding Nunavut today, particularly some very alarming information regarding our housing situation. It was interesting to listen to the folks here talking this morning about child care, friendship centres, youth, things like that. They're some of the problems we have up north as well.

To begin with some basic population statistics, Nunavut has one of the highest population growth rates in Canada. We have a very young population, with 47% of our residents being below 20 years of age, compared to the national average of 30%. Half our population is comprised of children and youth. This statistic received national press coverage recently with the release of the census data, and rightly so. It represents an obvious demographic time bomb unique to Nunavut, which requires a unique set of programs and solutions. Imagine if this were true for the rest of Canada.

The most recent data indicate an unemployment rate for Nunavut of over 20%. The rate rises to 27% when we count individuals who didn't look for work because no jobs were available. These folks are again out trying to find work. On this basis, Inuit unemployment was 36%. For Inuit in the 15-24 age group, the rate was 48%. Our youth need jobs.

Health statistics are particularly disturbing and cause you to wonder why the residents of Nunavut aren't as important in the eyes of the federal government as other Canadians. The life expectancy is 68.6 years in Nunavut, compared to the national average of 78.8 years. On average, our residents are dying 10 years earlier than other Canadians. This is a third world statistic.

Here's another third world statistic. Nunavut has the highest infant mortality rate in Canada, 15 per 1,000 live births, compared to a national average of 4.4. That's 10 more children per 1,000 who do not survive.

We also suffer from the highest mortality rate from lung cancer, 226 deaths per 100,000 males, compared to the national average of 70. That's over three times the national average.

I guess I am being a little bit repetitive, because I've said this before, but I'll keep saying it.

We have the highest rate of suicide in the nation, over five times the national average.

We also have the highest crime rate in Canada. In fact, we're the only jurisdiction in Canada that has a higher rate of violent crime than of property crime.

As to housing, consider the fact that in Nunavut 45% of dwellings are social housing units, compared to the rest of Canada with only 6% of dwellings. Approximately 60% of our residents live in public housing, and there's a waiting list of over 1,100 families, representing 15% of the population. Nunavut's average residents-per-dwelling rate is 50% higher than the Canadian average. Largely on the basis of this overcrowding, the Government of Nunavut estimates that an additional 3,000 units are needed today. This represents an increase of 37% over the current number of homes in our territory and investment of about $700 million just for housing alone. The Government of Nunavut estimates that $1.5 billion will have to be invested in housing infrastructure in Nunavut over the next 20 years.

Mr. Chair, there's a housing crisis in Nunavut and it is very serious. Inadequate and overcrowded housing conditions contribute to social and health problems, such as disease, marriage breakdown, alcoholism, and child and spousal abuse. Increasing the number of homes and improving the condition of the existing homes would help us, at a minimum, begin to address the other important social problems children and families face. As long as housing problems exist in Nunavut, our communities will not be able to achieve wellness.

Á (1105)

I might add that the cost of housing construction per square foot is almost double the cost of construction in southern Canada. Much of this additional cost results from the extensive distances and the fact that, except for a relatively short shipping season, our communities are accessible only by air. There are no roads to Nunavut. That map will show you this as well.

By the way, I was interested when an earlier presenter talked about NAV CANADA and how they're not helping us either up in Nunavut.

Our communities are remote, but they're still very much a part of Canada. Our existence gives Canada a claim to sovereignty over the north and its resources. These are grim statistics, but we have to think in terms of solutions. There are two areas we would like to focus on, infrastructure and economic development.

First, we think it's important to note that a jurisdiction cannot have meaningful economic development with inadequate infrastructure, and without economic development, community infrastructure is nothing more than a government handout that cannot be supported or sustained. Likewise, without either of these, there's no meaningful social development. Our social issues will simply be perpetuated. We believe we need to focus on investment in infrastructure and economic initiatives in order to break this cycle. We've said this twice before: invest in Nunavut, don't just give us money.

We would begin with infrastructure, broadening the discussion from the drastic need for additional housing. When we speak of basic infrastructure, we include not only water and sewage infrastructure but also schools, health centres, hospitals, roads, ports, and even recreational needs such as community halls and arenas.

Our community infrastructure is sadly deficient in every respect. Nunavut's basic infrastructure needs greatly exceed the capacity of existing initiatives and funding agreements. Nunavut's recent allocation of only $2 million under the Canada infrastructure program, out of a total program cost of $2 billion, was, at 0.1% of these funds, inappropriate. As we've said before, per capita allocations do not work, and never will, where population bases are so small.

This program is now to be followed by the Canada strategic infrastructure program. We listened to a number of presentations by the Government of Canada stating that this would not be another per capita allocation by jurisdiction; it would be entirely project-based. We revised our focus on large strategic projects. When our mayors met in Ottawa in late April, we met with many ministers and their advisers. This is what they were telling us face-to-face in their offices.

Our government recommended two large projects on this basis. The first was the construction of three regional health centres in Nunavut. We don't have any hospitals in Nunavut. Well, we have one in Iqaluit, but it's old and dilapidated. It's 2,000 miles from my hometown to get our capital of Iqaluit.

As I said, the first was the construction of three regional health centres in Nunavut that, as you can easily recognize from the health statistics noted above, are badly needed. The second was a strategic development project, the Bathurst road, port, and mining development project, which would help open up an area of Nunavut believed to contain some of the richest deposits of zinc, copper, lead, and silver in North America.

Mr. Chair, we're tabling a document today that deals with the economic benefits for Nunavut and Canada of the aforementioned projects, using Stats Canada's own Canada interprovincial input-output models. It shows how significant investment in this project would be for Canada and Nunavut.

The third project that was also considered but not put forward was the Kivalliq-Manitoba transportation corridor, a road that will link the Kivalliq region of Nunavut with Manitoba--and Canada. Again, that would have major economic impacts for Nunavut and Canada.

After a number of trips to Ottawa by various territorial politicians and group leaders from the Kitikmeot region in Nunavut, we were informed that our share of funding under the strategic infrastructure fund is now capped at $20 million, based on the limitation that appears to do more with population than it does with the selection of strategic projects. This funding is insufficient to fund even one large strategic project in Nunavut.

A recent news report by CBC North, entitled “The Feds Change Their Mind on Infrastructure Funding”, quotes Nunavut's finance minister as saying:

We were told it was going to be based on the merits of each proposal...it wasn't going to be per capita, or based on any allocations for each province or territory. Now it seems like [the feds] have totally reversed their position.

That's an example of the false expectations raised in Nunavut.

Mr. Chair, Canada will reap the major share of benefits by strategically investing in Nunavut, in Canada's north, in their resources. The recent throne speech announced the establishment of a ten-year infrastructure program. The real question is whether the needs of the north and other rural and remote areas will be addressed in this program. We saw very little reference to the north. We had to really read between the lines to see if we will benefit. We've been assured by our MP, Nancy Karetak-Lindell, that we will.

Á (1110)

Based on what we've seen to date, we have our doubts. The Government of Canada must do a better job of including Nunavut, indeed the entire north, in its plans. When I say the entire north, I'm talking Yukon, Northwest Territories, and Nunavut. We're all in the same boat here together up north.

Our association worked with the Government of Nunavut to assemble a detailed version of the collective municipal infrastructure needs in Nunavut's communities. At our last appearance before this committee, we estimated requirements in the order of $250 million. Further research indicates that this figure may be as high as $350 million, and possibly higher. This is not including the schools, hospitals, or housing that I mentioned earlier.

We gave this list to former Minister of Finance Paul Martin when we met him in Ottawa in late April. We know he's not the Minister of Finance anymore, but he may be the next Prime Minister.

Again, thinking in terms of solutions, we recommend that a unique northern infrastructure fund be included in the upcoming federal budget, possibly as a distinct component of the 10-year infrastructure fund that the federal government committed to in the throne speech. Nunavut and the entire north are a unique part of Canada, and our infrastructure requirements should be addressed as such.

Contrary to written correspondence from federal ministers, Nunavut's unique circumstances are not being recognized in our formative finance agreements, and that's a common issue right across the three northern territories.

With respect to digital infrastructure, the recent announcement of broadband for rural and northern development pilot program appears to be a step in the right direction. We're interested in seeing how this will be implemented in Nunavut.

Committee members should be aware that approximately 60% of our communities have no local connectivity. You must dial long distance to go online. The cost of this is prohibitive to most Nunavut residents. It is also ruining the quality of local governance. We've just established a website for our organization, and we have member municipalities that cannot access the information on the site, so it is of no value to them. Many federal government programs and databases are also provided online. Again, they are of little value to most of our communities if we can't access them.

Given the geographic distances that characterize Nunavut, we're as reliant on good communication as we are on air travel. The absence of the digital infrastructure is having serious impacts on us up north.

The second issue we'd like to deal with is economic development. Recently, an economist friend, who's also dean of a university, tactfully told me that the federal government is losing interest in the north and that the implications of this are quite serious--I won't mention the university; I don't want to get him in trouble--and that there's very little evidence that the north will have the capacity to step apart from government dependency for the foreseeable future unless more appropriate policies are developed. What we need is a model for the economy that makes sense over the long term.

Mr. Chair, I want to quote an unfunded federal budget commitment from 1998. This is a direct quote from your own budgets. The government is committed to:

working with territorial governments and other northern partners to develop a modern economic development strategy that recognizes the dynamics of the North and the need to establish more diversified economies....

The government used this to begin work on the northern economic development strategy, NEDS, a three-part strategy to make northerners more self-reliant and in control of their destiny.

I'll just mention the points, three pillars, they had in there. The first was to get the fundamentals right, which included putting in regulatory regimes, enhancing certainty, and leveling the playing field. The second pillar was northern control over northern resources, which is the evolution of self-government, Inuit impact-benefit agreements. The third pillar is new regional economic investment, which is to build a knowledge base, strengthen the infrastructure, economic development and diversification.

The target date for NEDS was February 2000. We expected a decision as part of the February budget, with a flow of dollars by December 2000. It never made it that far. The government withdrew it from further development. Since then, we have heard no further discussion of a NEDS, yet the evidence clearly shows that Nunavut and the entire north need one, or we will continue to languish behind the rest of Canada and remain dependent on the federal transfer payments that we currently receive.

As we mentioned in previous presentations, the north needs a regional development agency, and Nunavut desperately needs an economic development agreement with Ottawa. Without investment tools like these, most major investments required to stimulate economic growth will be inefficient or totally ineffective in Nunavut and the north.

We know there are politicians and bureaucrats who question the value of these initiatives in the north. We ask these folks to consider them or provide alternatives to help us, instead of criticizing or throwing up obstacles in our path.

Á (1115)

We ask why there's no regional economic development agency for northern Canada--Nunavut, Northwest Territories and the Yukon. Provincial jurisdictions in southern Canada have federal government regional economic development agencies. Northern and southern Ontario are the only jurisdictions that don't have any. The mandate of these regional economic development agencies includes business development, innovation, economic development, and partnership and coordination activities.

The Vice-Chair (Mr. Nick Discepola): Could I ask you to wrap it up in 30 or 40 seconds?

Mr. Keith Peterson: Yes. I'm coming to the end here.

We are tabling a discussion paper, entitled, “Challenge: A New Vision for Northern Economic Development”. It pertains to the need for an EDA or a regional development agency. This document is being made available to all members.

Mr. Chair, our communities want to break the cycle of financial dependence and make a significant contribution to the economy of Canada. The economic potential in Nunavut is tremendous. We think this is being overlooked.

Thank you.

The Vice-Chair (Mr. Nick Discepola): Thank you.

We'll now turn to the committee members. You have 10 minutes each for your question and the answer.

Go ahead, Mr. Murphy.

Mr. Shawn Murphy: I want to thank everyone for appearing today and making their presentations.

My first question is to the presenters for the Canadian Association of Gift Planners. On the recommendations you have made, has there been any costing done? I think it was Don Johnston who gave a similar presentation in Toronto last year.

Ms. Janice Loomer Margolis: He did not appear on behalf of the Canadian Association of Gift Planners, but I think Don Johnston has also been working for the elimination.

Mr. Shawn Murphy: Yes, he has. But is there any up-to-date information on what the total elimination of the capital gains on securities would cost?

Ms. Janice Loomer Margolis: I do not have those figures, but I believe the full information has been provided to the committee.

There's been a lot of dialogue between the Department of Finance and the Canadian Association of Gift Planners and other organizations. Those kinds of costs, with a full analysis and full surveys, have been provided. Of course, you realize they extended the provision and made it permanent. That was based on a lot of information being provided. This elimination piece will also have numbers behind it.

Mr. Shawn Murphy: My next question is to Ms. Perlotto on the Houston Friendship Centre Society. Right now, are the centres in urban areas funded exclusively? Is there any shared funding from the municipalities or the provincial governments?

Á (1120)

Ms. Penny Perlotto: No, the funding they receive is from the Department of Canadian Heritage. I don't believe I know of any centres that are funded through municipalities.

Mr. Shawn Murphy: Right now, I assume one of your biggest difficulties is there is only a three-year commitment on the moneys that come from the Department of Canadian Heritage.

Ms. Penny Perlotto: Yes, that's what I believe.

Mr. Shawn Murphy: Is it your experience that a lot of times they'll extend it for another three years, or do they just drop it at the end of the three years?

Ms. Penny Perlotto: I guess there was question in regard to the aboriginal friendship centre program that provides core funding to all the friendship centres. I believe that's just been renewed and we got another three-year extension. My fear is what will happen when those three years are up. We're just thinking ahead here and trying to ensure that we can secure some funding.

Mr. Shawn Murphy: So your request to this committee is that the three-year funding leads to a lot of planning problems, and you want permanent sustainable funding.

Ms. Penny Perlotto: Yes.

Mr. Shawn Murphy: What has been the response from the Department of Heritage so far?

Ms. Penny Perlotto: They've just been looking at three years. The lobbying strategy's actually done through the national friendship centres in Ottawa. They're doing continuous lobbying on that.

Mr. Shawn Murphy: Next is Mr. Peterson, on the transfer payments. I agree with a lot of what you're saying about the need for an economic development strategy there, but are there any strings attached to the transfer payments that are made now? Is there anything allocated to economic development?

Mr. Keith Peterson: When the Department of Indian Affairs and Northern Development transfers the money to the government in Nunavut, the Government of Nunavut can use the money for whatever it likes.

Mr. Shawn Murphy: I assume that money is just to provide basic services.

Mr. Keith Peterson: Yes, it's for basic services and a little bit of infrastructure. A lot of it is to operate the Government of Nunavut.

Mr. Shawn Murphy: Has there been any substantial increase in these transfer payments over the last five years?

Mr. Keith Peterson: Nunavut has only been in existence for three and a half years, so there's been no substantial increase.

Mr. Shawn Murphy: A lot of the federal funding for some programs, whether it's affordable housing or a lot of the different programs out there, comes in under 50¢ dollars to the territories. Is that a problem for Nunavut?

Mr. Keith Peterson: Matching funds is a problem for the municipalities. For example, in Cambridge Bay we can't match the funds; we can't find the 50%. The government says we can use in-kind contributions or funds from other programs, if we can find them, but it's difficult to find funds.

An example is the green funds. The Federation of Canadian Municipalities is in charge of that program, but only the City of Iqaluit has been able to access the funds. They're the only municipal taxing authority in Nunavut. Consequently, the other communities don't bother. They can't find the funds.

Mr. Shawn Murphy: I have nothing further, Mr. Chairman.

The Vice-Chair (Mr. Nick Discepola): Thank you, Mr. Murphy.

Ms. Leung, please.

Ms. Sophia Leung: Thank you, Mr. Chair.

I also want to thank you all for your fine presentations.

I want to start my questioning with Ms. Davidson. I couldn't agree more that the child care plan is very important for Canadians, and the government has responded. You probably know we have a social policy committee, and we also have the kids program, which is another subcommittee of the caucus, for all the MPs, especially for Liberal MPs. We discuss weekly concerns about children. So I just want to reassure you that it is very high on our agenda.

Last year we did put $2.7 billion into early childhood development. We get many very positive responses. Yesterday we heard another presentation concerning the shortage of child care facilities and the long waiting list. The needs are so great. Can you pinpoint how we can improve this? I don't think money is the only remedy. Can you focus on how we meet that desperate need and cut down the waiting list?

Á (1125)

Ms. Sheila Davidson: And you want me to respond in a nutshell, right?

Ms. Sophia Leung: Yes.

Ms. Sheila Davidson: Child care is a very complex issue, and I think one of the problems with governments being able to move with a social policy agenda is that when you look at child care, you start to see how complex it is. Most of us believe it should be simple.

The waiting lists in the province and in the country are quite astronomical. Part of the problem is affordability; part of the problem is that the waiting lists are really high in the infant toddler and the school age pieces. Infant toddler care in the city of Vancouver is anywhere from $900 to $1,100 per child per month. For many families that's more than they pay for rent. Then there's a shortage of care after school. There's difficulty for families who work in getting their children to school age programs. So unfortunately, there are two pieces that have to happen simultaneously.

There has to be a framework developed with federal jurisdiction, and the federal government must tell the provinces very explicitly that child care has to take place within the provinces and territories. The federal government has to put in some more dollars. The $2.2 billion that's going into the early childhood development initiative over five years is a very good start, but that is a four-pillared approach, and only one piece of it is child care. Some provinces, such as Ontario, Alberta, and--I hate to say it--British Columbia, are not putting any dollars into child care. In the first year of the ECDI agreement all we can ascertain in British Columbia is that $6 million was spent on child care out of $39 million that came to us. That is not enough.

So the federal government has to take leadership, and we, the child care community, both in B.C. and in the country have been asking this of our federal government for years. It started with Brian Mulroney saying Canadians favoured poverty over child care, and when you ask a Canadian that question, of course they're going to favour poverty. However, child care is a system that can help to defeat child poverty.

Ms. Sophia Leung: Thank you.

Penny and Carl, I really think your raven youth tech program is excellent, the idea to mobilize, motivate, and help youth's participation.

I have two questions. Your culture is very strong on elders. Are the elders very involved in some of the programs? Because this will bring in continuity of the cultural aspects, will restore some of your pride and identity.

Second, do you evaluate every one of your programs? There's a lot of effort and energy put in. Do you have a system to evaluate the outcome?

Ms. Penny Perlotto: Thank you for your comments.

At the Houston Friendship Centre, for example, we do use our elders. We have an elders program. We have an elders luncheon, and the staff actually cook for the elders.

Á (1130)

Ms. Sophia Leung: Do you involve the elders in teaching the youth?

Ms. Penny Perlotto: Yes, we do have the elders come in and teach the youth in several different ways.

Ms. Sophia Leung: And on the evaluation?

Ms. Penny Perlotto: When we deal with funding, there's a pretty extensive final report that's included. One of the things we do make sure of is to track all the statistics, all the activities, and all the financial expenditures to a point where we don't leave anything out. The evaluation process is also included in that final report. We do a final report that includes everything. We have an internal evaluation as well.

Ms. Sophia Leung: Thanks.

I just have a short question for Mr. Peterson. I'm aware of some of your meetings, because your MP, Nancy, is in my caucus, and she is very good. I just want to assure you that every week she will present your needs, and we really listen. Ottawa does pay a lot of attention. I don't want you to have the notion that we are not interested, because Nancy gives strong representation for you.

I can see there are very many needs. Can you quickly identify some of the top priorities? Are they infrastructure and transportation?

Mr. Keith Peterson: Infrastructure is our pressing priority, and that would be on both sides, the municipal side and the investments in roads and ports. We feel they go hand in hand. If we get some investment in roads and ports, that will help to develop our economy.

Ms. Sophia Leung: Yes, that would create jobs.

Mr. Keith Peterson: It is all about community wellness. I could give you a big lecture on it here.

Ms. Sophia Leung: Can you name the three top priorities?

Mr. Keith Peterson: The top priorities right now are housing, health, and I'd say infrastructure for the roads and ports.

Ms. Sophia Leung: Thank you.

Thank you, Chair.

The Vice-Chair (Mr. Nick Discepola): Thank you.

Mr. Cullen.

Mr. Roy Cullen: Thank you, Mr. Chair, and thank you to all the presenters.

I'd like to go first to Ms. Loomer Margolis. You mentioned that the cost of the government's moving to the complete elimination of the capital gains on the donation of marketable securities to charitable organizations was submitted to the committee. I don't seem to have that.

Ms. Janice Loomer Margolis: Oh, not here; over the years, in other discussions, the members of the Canadian Association of Gift Planners and the Department of Finance have looked at all these issues.

The Vice-Chair (Mr. Nick Discepola): For the benefit of committee members, if you do have any costs it would be nice if you could forward them to the clerk. That way every member gets a copy.

Ms. Janice Loomer Margolis: I will get those numbers and forward them to you. I made a note of it when I got Mr. Murphy's question.

The Vice-Chair (Mr. Nick Discepola): Thank you, because our researcher is unaware of any of those statistics.

Mr. Roy Cullen: We've had other witnesses present this recommendation. I think what I heard is that it's very difficult, in one sense, to estimate the cost, because it's hard to estimate what the take-up would be. How many people would be inclined to donate market...? I mean, people can run various scenarios. In any case, if you have any information on that, it would be useful to the committee.

On levelling the playing field in terms of private foundations, I know there's been a lot of discussion with the Department of Finance over that as well. Is there any light in the tunnel, or any new information that would indicate that this is something that should or shouldn't be done from the point of view of the Department of Finance?

Ms. Janice Loomer Margolis: There's just a sense that there's.... We don't know why, actually, private foundations were discriminated against in the first go. Partly it was because, possibly, of who was making those applications. I think there was a big push during those initial consultations with public foundation organizations and others. I don't think the private foundations have been organized.... Well, there is a Canadian association of private foundations now, but I don't think they had as organized a voice, maybe, as some other organizations.

I personally work for a public charity. I work for the B.C. Cancer Foundation. I just know how much less we see from private foundations than used to be seen and how much less activity goes on with private foundations. I know we're losing because of that. I think there would be a lot more significant charitable activity if this were provided to people.

Actually, it goes into things like gifts of private shares that are not allowed to private foundations and are allowed to public foundations. It's unusual for an individual to make a gift of private shares to a public charity. It just allows too much invasion into that private company by a public entity.

I have a couple of those kinds of gifts, but they're few and far between. There would be lots more opportunities if those kinds of things were offered to private foundations--with rules around them to make sure there's proper evaluation and proper accountability. That needs to be there, but they should open it up.

Á (1135)

Mr. Roy Cullen: This committee supported that last year.

Ms. Janice Loomer Margolis: I know.

Mr. Roy Cullen: Hopefully we can do that again. Thank you.

Ms. Davidson, one of the things we're often accused of in Ottawa is trying to tell the provinces how to run things and what their priorities are. We've heard other witnesses talk about the need for child care. My colleague, Ms. Leung, talked about the early childhood development agreement of about $2.7 billion. Within that framework there is the opportunity to do child care.

In my riding in Toronto, when I have people coming to me talking about the need for child care, I'll talk to my local MPP and say this seems to be a priority. But in Ontario it doesn't seem to be surfacing as a priority either, and within the whole early childhood development envelope there are a number of different tools and techniques: nutrition programs, prenatal classes, breakfast programs, etc.

This is not my discipline, but it seems to me if child care is not popping up as a priority, doesn't it say something, that the professionals and the program people are saying these other programs are more important than child care?

Ms. Sheila Davidson: Click! That's a great question, and I'm really, really happy to respond to it. Seventy per cent of women with children under the age of five are in some form of paid work. Do you know how many children that is in Canada? It's hundreds and hundreds of thousands. Parents who work are spending their whole lives working and taking care of their children. It's very difficult for them to organize and to be able to talk to people such as you--to even write the letter to their MLA or their MP.

I don't disagree that programs based on prenatal nutrition, family visits, family supports, family resource and family drop-in centres are not good uses of our dollars. But the fact of the matter is we have research--stronger and stronger research--that very clearly outlines early childhood development, including quality child care, is good for Canada's children: we have less teenage pregnancy; we have less crime; we have healthy outcomes and lifelong learning; we have children who are better prepared to enter the school system. We know all of these things, but as a country and as individual provinces we are ignoring Canada's children.

And it has to stop. We are seeing the breakdown of families and we are seeing very heavy things happening to young children. The damage we are doing to those children under the age of five is irreparable. Somewhere we have to see leadership. That's why I say to you the federal government has to stand up and be counted.

Mr. Roy Cullen: I think another thing you might want to do is encourage--admittedly these people don't have a lot of time to write letters, but we get a lot of form letters; you know, just fill in the blanks--and persuade the people to write to their MPs and their provincial legislators to say that under that envelope of early childhood development child care should be a priority. For it doesn't seem to be popping up. A lot of people come into my office, and I'll call the provincial MPP, but maybe there are not enough of them coming forward.

Á (1140)

Ms. Sheila Davidson: I'll give you two more pieces of information, Mr. Cullen.

In 1999, the previous provincial administration here developed a discussion paper called Building a Better Future for BC's Kids. Ten thousand people responded to that discussion paper; 95% of them said we need a publicly funded child care system. In 2000 a similar discussion paper was done in Manitoba. Twenty-two thousand people--and the population of Manitoba, I think, is approximately one million people--responded and said we need a publicly funded child care system.

Mr. Roy Cullen: A lot of us in this caucus fought for the flexibility for the provinces to say that day care would fit into that framework of early childhood development. It's in there, and yet it doesn't seem to be coming forward. Anyway, I need to thank you for your comments. I need to move on, if I have time, for one quick one.

Mr. Peterson, thank you for coming back again, both of you. In our last report, we heard you speak about the per capita problem involving infrastructure, and it was in the report. Of course, we don't win them all; we have a pretty good track record, as our vice-chair pointed out. The strategic infrastructure program--and you comment on it in your brief--it seems to me would offer more scope for northern Canada to package it up in a way that says “This is a strategic infrastructure requirement”--package it up that way.

Now you're saying you've talked about it, that you started work on it, but the feedback you're getting is for a strategic infrastructure program that will be divvied up on a per capita basis as well. I find that surprising, but I'm not doubting what you're saying.

Mr. Keith Peterson: They told us there'd be large strategic projects in all provinces and territories, one to three.... I'm familiar with the one project. The Bathurst Inlet road and port project was going to cost $216 million and was going to create 17,000 person years of employment in Nunavut and contribute significantly to Canada. We have our economic models on the table there. The Government of Nunavut met with Minister Manley and then Minister Rock and was told they were looking for $108 million--half. We had private sector funding lined up and arranged, and that would have put a lot of people to work. Then there was a change in ministers, and about three or four weeks ago we were told that the cap on that was $20 million to each territory: $20 million to Yukon; $20 million to the Northwest Territories, and $20 million--

Mr. Roy Cullen: Minister Rock?

Mr. Keith Peterson: Minister Rock announced it. It came out of his office that it was going to be $20 million, and we're looking for $108 million in our territory. I'm not sure what they're looking for across the other territories, but $20 million isn't a lot. It is 1% of the total of $2 billion.

Mr. Roy Cullen: In the more traditional infrastructure programs there's always this problem of how you divvy up the available funds, but if we're talking about strategic infrastructure, there should be a way to package something up for the north. And there will be other projects as well, big projects, that are strategic in nature. This basically says the north has an infrastructure deficit that is greater and needs some serious money. So I'm surprised you're getting that kind of feedback, and it's something I think we should follow up as a committee and help you with. I thought the strategic infrastructure program was to get away from the sort of conventional per capita idea of making sure everybody gets their share, because there are regions of Canada that have greater needs, and I think the north is probably one of them.

Mr. Keith Peterson: It would not only have benefited the north, but would have brought significant benefits to southern Canada, the provinces of Alberta, Ontario, Quebec, with substantial jobs created. All the materials that go to build things like this come from southern Canada, so it's not as if it's just for us, it's for everybody in Canada.

Mr. Roy Cullen: I have a quick question on housing. In years past, when I did some management consulting work up in the Northwest Territories, I was exposed to the Northwest Territories Housing Corporation. They had a program--and this is going back a few years before the creation of Nunavut--called a sweat equity program, where the Northwest Territories Housing Corporation provided materials to aboriginal people, and then they put in the sweat equity; they built the place to live. They said that worked very well, better, in fact, than straight social housing, where there was a lot of decay in the upkeep of the housing etc., because people didn't have as much of a vested interest. Is that model still around? Do you think it works?

Á (1145)

Mr. Keith Peterson: It's not around any more, but people do get packages from the housing corporation. What we're finding is that they are building them, they go to the bank to get some financing, they move in, and because they don't have work, they can't pay the bills. A lot of these houses are being returned to the housing corporation. Then they become social housing or something, where the people pay $32 a month rent, as opposed to utilities costing what could be $1,000 a month, and a mortgage on top of that.

Mr. Roy Cullen: Is there any way the federal government, through CMHC or whatever, could provide support to a kind of sweat equity housing program?

Mr. Keith Peterson: We have looked at it ourselves. The housing corporation looks at those things all the time, but again, it gets down to the homeowner having to pay some of the bills, and the price of fuel and the price of electricity are just astronomical up north, so people can't afford to pay the bills.

Mr. Roy Cullen: Okay. Thank you.

The Vice-Chair (Mr. Nick Discepola): Are there any other questions from colleagues? No?

Ms. Davidson, I just want to make a comment, because your recommendation certainly is a huge one in respect of financial commitment from the federal government. Like Mr. Cullen, any time I can avoid the provinces, I dearly love to. So when you make a recommendation that we should insist and tell the provinces what to do, I'd much rather try to find an alternative way.

In Quebec, for example, my home province, after the federal government introduced its early childhood program, the government decided to claw back its benefit to families. I think it was something in excess of $100 per month they clawed back.

I also recall that in 1993, when we had our election program, one of our commitments was that in any year of economic growth in excess of three point something, we would participate with the provinces in putting together child care spaces. I think something like 3,000 or 4,000 were needed then, and there was no uptake from the provinces at all. And we got the flak because we didn't do our share, but it was very clearly written that in those provinces that wanted to participate the federal government would. We had no province partaking.

That's why I think that Mr. Cullen's message is very clear. You're going to have to put pressure on the provincial governments if you want the federal government to participate. This $4 billion annually is a huge sum and I'm not sure it fits into Canadians' priorities--again, another message Mr. Cullen is sending. My preference would be, since you say 75% of child care spaces are needed by working mothers, to start looking at the Income Tax Act to give a higher break to working single-family parents, for example, who then could use that money at their discretion for whatever needs they had.

Ms. Sheila Davidson: That is something many people have recommended, that we do a voucher system. I think the principal point is that in Canada we have a public education system that starts at age five, and every child in Canada is entitled to that system.

What we're failing to recognize is that the research is very clear that the first five years of life are critical, that in essence we're starting at age five to pay attention to children when we should be starting at birth. We are missing a critical developmental time. Once that time has stopped, we can't go back and fix it.

The research also tells us that licensed quality child care, early childhood experiences, are important for children, that bad child care harms children. When parents don't have choice in terms of quality child care environments, they go to unregulated child care. Unregulated is not good for children, on the whole. When I say the federal government has to take leadership, that's what I'm talking about.

I appreciate very much that you do not want to get into another battle with the provinces in terms of telling the provinces “Thou shalt do”. I know what would happen if you did that. But the leadership to say we believe early childhood development in all its forms, including quality child care, is good for our children and will make a difference is something you can do. I don't think the federal government has done that enough.

I remember the offer that was made to the provinces in 1993. The provinces, however, felt that the cost-sharing was not adequate, and that's why the provinces didn't go into it. I talked to the minister about that here in 1993. They would have gone in partnership, but there weren't enough resources available.

Á (1150)

The Vice-Chair (Mr. Nick Discepola): It's not easy dealing with other levels of government.

Ms. Sheila Davidson: No, it isn't.

Thank you very much.

The Vice-Chair (Mr. Nick Discepola): Thank you very much.

Does anyone else want to make any closing comments that they were unable to make?

In that case, I'd like to thank our committee members and staff and our guests for their presentations.

This concludes our two-day hearings in Vancouver. We will adjourn, colleagues, until tomorrow morning in Calgary.

This meeting is adjourned.